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December 03, 2015 Articles

Maintaining Privacy and Confidentiality in Litigation: Can It Be Done?

What considerations guide the use of private or confidential information, and what should an attorney do to protect it?

By Ronald J. Hedges

This year, privacy and confidentiality have become hot topics as government surveillance and data breaches are making headlines daily. Privacy and confidentiality, however, take on a different dimension for civil litigation attorneys who prosecute or defend causes of action for which “private” or “confidential” information may be discoverable or relevant in judicial proceedings. What considerations guide the use of such information during litigation and what should an attorney do to protect privacy or confidentiality?

The Initial Question
Whenever an attorney represents a client in litigation, the attorney should, among other things, inquire whether the client has information that might implicate privacy interests or raise confidentiality concerns. Two simple examples should suffice here:

  1. Assuming the attorney represents an individual plaintiff in a personal injury action, might the plaintiff have images that are relevant to permanency and that are intermingled with images of an intimate nature?
  2. Assuming the attorney represents a corporate plaintiff in an action arising out of the alleged theft of a trade secret by a former employee, is there in fact a trade secret and would disclosure of that trade secret work a competitive injury to the plaintiff?

Individuals as well as business entities may have legitimate interests to protect, and attorneys should, in the first instance, ascertain what these might be. One note is in order: The attorney should think about what might or might not be “legitimate.” To use an example in the Freedom of Information Act context, a corporation might have a privacy right of sorts, but it cannot have one that is “personal.” See FCC v. AT&T, 131 S. Ct. 1177 (2011).

The Basic “Divide” in Litigation

Once the attorney is satisfied that there are legitimate privacy or confidentiality interests at stake, the next question is whether such information is discoverable. Rule 26(b)(1) of the Federal Rules of Civil Procedure defines what is discoverable in the broadest terms:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense—including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.

(The scope of discovery may change on December 1, 2015, the effective date of pending amendments to the federal rules, but such amendments should not affect the analysis offered in this article.) Thus, information that implicates legitimate privacy or confidentiality concerns is subject to discovery if relevant to any party’s claim or defense.

Rule 26(b)(1) raises another basic concern for the attorney: Is the attorney requesting or responding to requests for the production of private or confidential information for the purpose of discovery or is the information such that it may be used in motion practice or at trial? Different standards apply depending on the answer to that question, and the possible consequences of the answer are enormous.

Privacy and Confidentiality in Discovery
There is no presumption of public access to unfiled discovery materials. Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984). On the other hand, there is nothing that prohibits a party from sharing the “fruits” of discovery with others absent an agreement, an order, or a statute that protects and precludes disclosure of private or confidential information. This article focuses on orders intended to restrict the dissemination of discovery materials.

Federal Rule of Civil Procedure26(c)(1)(A) permits a federal court to “issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Among other things, an order can provide that “a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.” Fed. R. Civ. P. 26(c)(1)(G). “Blanket” protective orders are allowed, at least in the first instance, and the standard for issuance of a protective order is a showing of “good cause.” See, e.g., Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994); Poliquin v. Garden Way Inc., 989 F.2d 527 (1st Cir. 1993). Confidential orders can be entered over the objection of a party and can be challenged by nonparties who seek to intervene. However, given the “private” nature of discovery, Rule 26(c)(1)(A) orders can easily accommodate privacy and confidentiality concerns. But when discovery materials are filed for substantive motion practice or used at trial, such privacy and confidentiality concerns are harder to accommodate by way of an order.

Privacy and Confidentiality in Filed Materials and at Trial
Not surprisingly, the standard changes when we move from unfiled discovery materials to filings and trial:

[T]he ordinary showing of good cause which is adequate to protect discovery material from disclosure cannot alone justify protecting such material after it has been introduced at trial. This dividing line may in some measure be an arbitrary one, but it accords with long-settled practice in this country separating the presumptively private phase of litigation from the presumptively public.

Poliquin, 989 F.2d at 533.

There may be a distinction to be drawn between filed discovery motions that relate to non-dispositive rather than dispositive motions (see, e.g., Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304 (11th Cir. 2001); Leucadia, Inc. v. Applied Extrusion Techs., Inc., 998 F.2d 157 (3d Cir. 1993)), but, as a general proposition, private or confidential information cannot be filed under seal absent a showing of a compelling need. Likewise, judicial proceedings such as oral argument on motions or trial must be conducted in public, absent a showing of compelling need and a showing that there are no alternative means to closure. Attorneys should be aware of recent decisions by federal courts of appeals that have addressed the issue of access to judicial proceedings. See Del. Coal. for Open Gov’t v. Strine, 733 F.3d 510 (3d Cir. 2013), cert. denied, 134 S. Ct. 1551 (2014); FTC v. AbbVie Prods., LLC, 713 F.3d 54 (11th Cir. 2013). These principles derive from a common-law right of access as well as the First Amendment and, regardless of lamentations that are occasionally heard about the “unfairness” of having to litigate in the sunshine, are recognized by every state and federal court and show no sign of retrenchment.

What’s the Attorney to Do?
Assuming that legitimate privacy or confidentiality interests are at stake and that information that implicates those interests is discoverable under Federal Rule of Civil Procedure26(b)(1), an attorney should seek the entry of a protective order under Rule 26(c)(1). Alternatively, an attorney could seek a confidentiality stipulation under Rule 29(c). Such a stipulation, however, would lack the judicial compulsion of an order. Notwithstanding, the attorney must consider (1) whether any information that is private or confidential will be filed or admitted and, if so, (2) whether the information or any testimony surrounding it can be sealed. That is an extremely difficult burden imposed by the common law and the First Amendment.

Keywords: litigation, pretrial practice, privacy and confidentiality, protective orders, Rule 26, discovery

Ronald J. Hedges is with Ronald J. Hedges LLC in Hackensack, New Jersey.


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