Trial Magazine

You filed your products liability case and sent the defendant manufacturer written discovery requests. But instead of responsive answers, it sent objections, claiming that it can’t provide anything until a protective order is on file to safeguard its “legitimate business interests.” This is a common scenario in various types of litigation—not just products liability. So be careful not to accept unduly restrictive protective orders that allow the defendant to circumvent discovery obligations and avoid full disclosure.¹

Like similar rules in most state jurisdictions, Federal Rule of Civil Procedure 26(c) allows courts “for good cause” to enter a protective order “to protect a party or person from annoyance, embarrassment, oppression, undue burden or expense” or to restrict the dissemination of “a trade secret or other confidential research, development, or commercial information.”² Under federal law, “trade secret” can cover a variety of material—including plans, formulas, methods, and codes, among other items—that the owner has “taken reasonable measures” to keep secret and that derive “independent economic value, actual or potential” from being secret.³

But defendants often abuse protective orders and spin tales of the perils of arming plaintiffs with confidential information. Unlike in business litigation, however, plaintiffs in personal injury cases are not competing with the manufacturers. And plaintiff attorneys are not giving away trade secrets—they are trying to find the truth about why and how a product failed and harmed their clients.

Without a legitimate threat that a defendant’s business interests will be disclosed to a competitor, the terms of a protective order should not be so broad that they allow a manufacturer to hide the truth about a dangerous product from injured plaintiffs and the public.

Manufacturers have a valid interest in avoiding the disclosure of trade secrets, but their motivation for seeking protective orders is often a desire to prevent the disclosure of bad facts and prevent similarly situated plaintiffs from comparing what they receive to ensure the manufacturer is disclosing the same information in cases involving the same or similar products. The fact that a document looks bad for a manufacturer does not make it confidential. Some documents that manufacturers are loathe to disclose are not trade secrets. Often, they are simply evidence that a manufacturer made profit-motivated­ decisions that risked safety when designing or manufacturing a product.

Remember, for example, Ford’s infamous “Pinto Memo,” which compared the costs of correcting a car defect to those related to injuries and deaths caused by the defect.⁴ Documents such as this are critical in a products liability case, but you can expect the manufacturer to claim expansive confidentiality and attempt to shield these kinds of materials and many others under overly broad protective order language. We are aware of manufacturers that have designated the following as “confidential”: owner’s manuals, advertisements and marketing materials, warning labels, invoices for repairing the roof of a manufacturing plant, consumer complaint forms, and design documents for products more than 20 years old.

Whether the information at issue is a trade secret is not the only factor courts weigh when considering a protective order. In Haeger v. Goodyear Tire and Rubber Co., an Arizona judge vacated a protective order and chronicled the manufacturer’s egregious discovery abuse.⁵ The court explained how the manufacturer had entered into protective orders in various cases involving the same tire model but then chose to respond to discovery differently, producing documents in some cases while claiming those documents did not exist in others. The court noted that because “protective orders prevented plaintiffs from communicating or sharing information,” Goodyear could control the information provided to each plaintiff, and the plaintiffs did not know what the defendant was holding back.⁶ Be aware of these tactics when negotiating a protective order.

Protective orders should not prevent the sharing of documents with litigants in other lawsuits involving the same or similar products and claims.

Protecting Public Safety

Seeking justice for your client is not the only reason to fight restrictive protective orders—you should also consider public safety concerns. Specifically, protective orders should not prevent the sharing of documents with litigants in other lawsuits involving the same or similar products and claims.

In Haeger, the judge emphasized the importance of considering the public interest when negotiating any protective order. Although Goodyear tried to minimize the consequences of its discovery decisions by claiming that the tire in question posed no safety risk to consumers, the court rejected that argument: “Goodyear’s contention that ‘there is no safety risk’ . . . illustrates the public interest in disclosure. Goodyear emphasizes that the allegations of these and other plaintiffs ‘were never tested at trial’. . . . The reason, of course, is that Goodyear has settled every [case] confidentially. Thus, Goodyear has avoided exposure to a finding of public safety risk and spun the outcome as ‘there is no risk.’”⁷

One of the best explanations of how public policy supports full disclosure is in the National Highway Traffic Safety Administration (NHTSA)’s recommended best practices for protective orders. The bulletin states that “to the extent protective orders, settlement agreements, or other confidentiality provisions prohibit information obtained in private litigation from being transmitted to NHTSA, such limitations are contrary to Rule 26 . . . , its state corollaries, and sound principles of public policy.”⁸ NHTSA notes that its ability to identify defects relies on manufacturers’ ­self-reporting and emphasizes that—because manufacturers do not always make these reports—“safety-related information . . . discovered in private litigation is an important resource” for the agency.⁹ For courts on the fence about whether to enter an overbroad ­protective order, this bulletin is an invaluable tool to illustrate the practical danger of continuing to rely on manufacturers to self-report.

Negotiating Protective Orders 

To combat potential discovery abuse, address the protective order issue early. Send the manufacturer your proposed protective order with your initial discovery requests. Manufacturers rely on the gravity of the term “trade secret” to persuade judges that the potential release of their information would be catastrophic, and you must be prepared to challenge this argument and walk the court through the proper analysis in your jurisdiction.

For example, many defendants assume that information will qualify as a trade secret without providing the evidence the court must evaluate to make that determination.¹⁰ Make sure the defendant has evidence to support its claim that each document constitutes a trade secret that qualifies for the privilege.

If you and the defendant cannot agree on the language in the protective order, then file a motion to enter your proposed protective order as soon as possible—before the defendant files its motion. This will ensure that the issue is handled early enough in the discovery process to allow documents to be produced well in advance of key depositions.

In your motion to enter your proposed ­protective order, emphasize the requirement that the defendant satisfy Rule 26’s “good cause” standard by showing that a specific prejudice or harm will result if no protective order is granted.¹¹ A form of this rule exists in every jurisdiction.¹² Broad and conclusory allegations of potential harm are not enough.¹³

In addition, use the protective order to manage practical and logistical issues that may arise in your case. For example, you can craft the protective order to preemptively cover the production of documents by third parties who might require a court order to disclose information.

Here’s what to keep in mind when negotiating the terms:¹⁴

Information sharing. Include a provision for sharing produced information with similarly situated litigants, and make sure the limitations on who qualifies are not unreasonably narrow. The sharing should include, at a minimum, other products made with the same component parts or designs. For example, for engineering purposes, the Ford Explorer is virtually the same vehicle as the Mercury Mountaineer. Defendants often refuse to include a sharing provision, but research the law in your jurisdiction for support.¹⁵

Define scope. Near the sharing provision, insert something similar to this statement: “This Protective Order does not define the scope of discovery in this case, and no party has agreed to limit or broaden the scope of discovery by agreeing to this Protective Order.” You want to prevent any claim that the sharing provision limits the scope of what is discoverable in your case.

Also confirm that your client’s confidential documents and information are protected, including personal financial records, Social Security information, and medical records.

Ensure access. The definition of who can access confidential information should include your firm’s contract staff and copy services. This will become particularly important when you need to create exhibits and demonstratives for trial. Do not agree to any restrictions on your ability to save documents to a secure network or external hard drive or to send or save them electronically.

Beware of requirements to disclose the identities of your consulting experts. Otherwise, the defendant will gain the unfair advantage of knowing who your experts will be or even knowing which experts you’ve consulted but have no intention of designating as testifying experts. Consider agreeing to keep a log of the consultants to whom documents were provided, and offer to provide a copy of the log after trial or settlement if necessary.

Streamline the process. To avoid arguments over basic evidentiary issues, include a provision that every document produced by the manufacturer is authentic and meets the “business record” requirements for purposes of the applicable hearsay rule.

Also include a requirement that confidentiality designations must be made in good faith. This combats the blanket designation of all documents as confidential—for example, the manufacturer that stamps “CONFIDENTIAL” across a publicly available owner’s manual.

If appropriate, you may need to agree that any produced documents will be returned after trial or settlement. This will be a judgment call you must make based on the particular circumstances in your case, such as the type of information contained in the documents at issue and the likelihood that the court would rule in your favor regarding their return. But do not agree to return attorney work product, such as your annotations, summaries, and indexes.

Damages. Delete any liquidated damages clauses, particularly for inadvertent disclosures. By definition, you cannot anticipate an inadvertent disclosure, and forcing payment if an accident happens is simply unfair.

Never allow the burden of establishing the confidentiality privilege to be shifted—that burden is always on the party asserting the privilege, and simply saying something is confidential doesn't make it so.

Prevent burden shifting. Never allow the burden of establishing the confidentiality privilege to be shifted—that burden is always on the party asserting the privilege, and simply saying something is confidential doesn’t make it so.¹⁶

No matter how hard you try to combat an unreasonable protective order, the court may decide to enter it anyway. Of course, you must comply with the order as written. But do not forget you can always challenge the defendant’s designation of documents if you do not believe the designation is legitimate or supported by sufficient evidence. You can also file a motion to modify or reconsider the protective order if you discover new facts that you believe might support a change.

A defendant’s demand that you agree to a restrictive protective order should be met with an equally forceful demand that the defendant prove the need for one. Negotiating a reasonable protective order that protects only the parties’ legitimate interests is the first step toward combating obstructive discovery tactics.

April Strahan and Karen Kennedy are attorneys with The Ammons Law Firm in Houston. They can be reached at april@ammonslaw.com and karen@ammonslaw.com. Jacob Cukjati is an attorney with Padilla & Rodriguez in Houston.

Notes

1. This article does not cover every potential protective order pitfall. One very helpful resource with more information about these issues is Full Disclosure: Combating Stonewalling and Other Discovery Abuses by Francis H. Hare Jr., James L. Gilbert, and Stuart A. Ollanik (1995).
2. Fed. R. Civ. P. 26(c); see also Colo. R. Civ. P. 26(c); Tenn. R. Civ. P. 26.03. 
3. 18 U.S.C.A. §1839(3) (West 2016).
4. Ernest S. Grush & Carol S. Saundy, Fatalities Associated With Crash Induced Fuel Leakage and Fires, Ford Envtl. & Safety Eng’g, www.autosafety.org/wp-content/uploads/import/phpq3mJ7F_FordMemo.pdf.
5. Est. of Leroy Haegar v. Goodyear Tire & Rubber Co., No. 2013-052753 (Ariz. Super. Ct. Maricopa Cnty. Apr. 3, 2018), www.autosafety.org/wp-content/uploads/2018/04/04032018-Order.pdf.
6. Id. at 13.
7. Id. at 12 (internal citation omitted).
8. 81 Fed. Reg. §13026 (Mar. 11, 2016), www.federalregister.gov/documents/2016/03/11/2016-05522/nhtsa-enforcement-guidance-bulletin-2015-01-recommended-best-practices-for-protective-orders-and.
9. Id. 
10. Pincheira v. Allstate Ins. Co., 190 P.3d 322, 330 (N.M. 2008) (“Establishing a privilege requires a showing that the information comprises a trade secret.”) In re Cont’l Gen. Tire, Inc., 979 S.W.2d 609, 612 (Tex. 1998) (“[T]he party resisting discovery must establish that the information sought is indeed a trade secret.”).
11. Fed. R. Civ. P. 26(c).
12. See, e.g., Fla. R. Civ. P. 1.280(c); N.M.R. Ann. 1-026(c).
13. See, e.g., Cipollone v. Liggett Grp., Inc., 785 F.2d 1108, 1121 (3d Cir. 1986) (“Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, do not satisfy the Rule 26(c) test.”); Woo v. Fireman’s Fund Ins. Co., 154 P.3d 236, 240 (Wash. Ct. App. 2007).
14. Tire Defect Litigation (Robert E. Ammons ed., 2016).
15. See, e.g., Dustin B. Benham, Proportionality, Pretrial Confidentiality, and Discovery Sharing, 71 Wash. & Lee L. Rev. 2181 (2014) (discussing this issue and other sources to consult).
16. See, e.g., Spectrum Sys. Int’l Corp. v. Chem. Bank, 581 N.E.2d 1055, 1059 (N.Y. 1991); Peeples v. Fourth Sup. Judicial Dist., 701 S.W.2d 635, 635 (Tex. 1985).