Summary
In Koval, the court denied a protective order, concluding that the materials sought in discovery were not competitively valuable and that the request for a protective order had more to do with avoiding other litigation and bad publicity than protecting sensitive documents.
Summary of this case from Hope Acad. Broadway Campus v. White Hat Mgmt., LLCOpinion
No. 137016.
Decided May 15, 1990.
Spangenberg, Shibley, Traci Lancione, John D. Liber and David L. Mast, for plaintiff. Weston, Hurd, Fallon, Paisley Howley, Mark O'Neill and Gary Johnson; George G. Lavin Assoc., Basil DiSipio, Joseph O'Neil and George G. Lavin, Jr., for defendant.
This matter came on for hearing on the motion of defendant, General Motors Corporation ("General Motors"), pursuant to Civ.R. 26(C), for a protective order covering documents responsive to plaintiff's discovery requests. For the reasons that follow, the motion is denied.
Plaintiff, James Koval, was injured when his General Motors vehicle, a 1981 Buick Century, was struck from behind by a second vehicle. Plaintiff alleges that upon impact the gas tank of plaintiff's vehicle ruptured and burst into flames. Plaintiff's action is brought under, inter alia, strict liability in tort, with a specific allegation that the fuel system of plaintiff's vehicle was defectively designed.
Plaintiff sought discovery from General Motors and, in response, General Motors filed the present motion, with support in the form of the affidavit of William Cichowski, a General Motors engineer. Plaintiff opposed the motion by brief and with the affidavit of Billy Peterson, an automotive engineer and an expert retained by plaintiff in this case.
Thereafter, the matter came on for oral hearing on March 15, 1990. At the hearing General Motors presented four exhibits and the live testimony of Cichowski. Plaintiff opposed General Motors' motion, presenting a number of exhibits and affidavits and the live testimony of Harley Copp, a retired Ford Motor Company Executive and automotive engineer. Among the exhibits produced by plaintiff were two gas tanks, one made by General Motors for a 1981 Buick Century, and a virtually identical tank made by a Canadian Company called "The Gas Tank Factory, Ltd." Also included were two gas caps: one, a "genuine GM part," and a virtually identical cap that was sold as a replacement part. Both caps were made by a company called "Stant Engineering." The court thereafter recessed the hearing for three weeks in order to give General Motors the opportunity to depose Copp.
Thereafter, this matter came on for final hearing on April 25, 1990. At this hearing, General Motors presented, in support of its motion, the affidavits of Peter L. Welsher (a lawyer from Miami); Warren E. Finken (Director of the Patent Section of General Motors); Robert C. Lang (a former Ford Motor Company engineer); Robert S. Harris (Vice President of Stant Engineering); and Paul R. Mutty (another General Motors engineer). Plaintiff then presented an article from the May 1988 issue of Newsweek magazine, explaining how General Motors tears down and inspects its competitors' cars, and two videotape reproductions of television commercials, one by General Motors and one by Mercedes Benz, both concerning and displaying their respective test facilities and crash test procedures, all of which General Motors claims in this case to be confidential and competitively sensitive information.
General Motors seeks a protective order under the provisions of Civ.R. 26(C), claiming that some 2,200 documents that it is prepared to produce contain confidential commercial information and constitute trade secrets. General Motors argues and Cichowski testified that the information requested by plaintiff is confidential, available to only a limited number of General Motors employees for specified purposes and only under a specific distribution plan, that the documents requested are not made available to the general public, that they contain design criteria and elements of General Motors' design philosophy, and that these criteria and philosophy had been developed over a period of time at considerable expense. General Motors further argues that the unrestricted dissemination of these documents could improve the quality and performance of its competitors' products and could put General Motors at a competitive disadvantage. General Motors claims that it has met the prerequisites for a protective order, and that the court should enter the order it has proposed.
Plaintiff countered these arguments with testimony and exhibits, arguing that General Motors had not shown good cause as required by Civ.R. 26(C), that the documents at issue are twelve to twenty years old, that they are ancient history in a business that was and is continually evolving, and that they are of no present value to any competitor of General Motors. Plaintiff further demonstrated that there already exists competition with General Motors in the after-market or replacement-parts market, specifically, as to gas caps and tanks.
Civ.R. 26(C)(7) provides the foundation for General Motors' motion:
"Protective orders. Upon motion by any party or by the person from whom discovery is sought, and for good cause shown, the court in which the action is pending may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: * * * (7) that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way * * *."
The court has found no Ohio case law interpreting the "good cause" requirement of Civ.R. 26(C)(7); however, the parties have submitted case law from other jurisdictions which the court finds persuasive in this matter.
Several courts have held the requirement of "good cause shown" means that the applicant "will have to demonstrate that disclosure of allegedly confidential information will work a clearly defined and very serious injury to his business." Yurko v. Nissan Motor Corp. in U.S.A. (C.P. 1984), Lackawanna Cty., Pa. No. 756, unreported; United States v. Internatl. Business Machines Corp. (S.D.N.Y. 1975), 67 F.R.D. 40, 46; Zenith Radio Corp. v. Matsushita Elec. Indus. Co., Ltd. (E.D.Pa. 1981), 529 F. Supp. 866, 891. Other courts have held in order to show good cause, the injury which allegedly will result from disclosure must be shown with specificity, and that conclusory statements to this effect are insufficient. United States v. Hooker Chemicals Plastics Corp. (W.D.N.Y. 1981), 90 F.R.D. 421, 425. See, also, Waelde v. Merck, Sharp Dohme (E.D.Mich. 1981), 94 F.R.D. 27, 28; Hendricks v. Jeep Corp. (D.Mont. June 3, 1986), case No. CV-82-092-M-PGH, unreported (a clear and serious injury must be identified).
Additionally, other courts have required the movant to show "`a particular and specific demonstration of fact as distinguished from stereotyped conclusory statements.'" Garcia v. Peeples (Tex. 1987), 734 S.W.2d 343, 345 (involving General Motors), quoting United States v. Garrett (C.A.5, 1978), 571 F.2d 1323, 1326, at fn. 3. In recent cigarette litigation the Third Circuit stated: "* * * Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning'" do not justify a protective order. Cipollone v. Liggett Group, Inc. (C.A.3, 1986), 785 F.2d 1108, 1121. See, also, Parsons v. General Motors Corp. (N.D.Ga. 1980), 85 F.R.D. 724, 726 ("* * * GM's allegations of competitive harm are vague and conclusory when specific examples are necessary. * * *")
The court, having reviewed the case law submitted by the parties, agrees with the above interpretations of the requirement "for good cause shown." The court, therefore, adopts the position that in order to show "good cause" a party requesting a protective order must demonstrate that disclosure of allegedly confidential information will work a clearly defined injury to the requesting party's business. See United States v. Internatl. Business Machines Corp., supra. The court is of the opinion that any lesser standard would be insufficient, and would compromise our system of justice. Under the most basic principles of democracy, our government and our courts are open. To change this status quo, to seal this or any other case, or to hide from scrutiny the conduct of a litigant, should not, and must not, be permitted without such a showing. See Parsons, Hendricks, and United States v. Hooker Chemicals Plastics Corp., supra.
After due and extensive consideration of General Motors' motion, the affidavit and testimony of its engineer, Cichowski, the affidavits of all of its witnesses and the exhibits it produced at the hearings, as well as the briefs, affidavits, testimony and exhibits submitted by plaintiff, and the arguments of counsel, this court finds that General Motors has failed to carry its burden of showing good cause, pursuant to Civ.R. 26(C)(7), and its motion must be denied.
The court finds that no evidence has been submitted to justify court-imposed protection over the documents sought by plaintiff. General Motors has not given specific examples of competitive harm. It simply argues that the information was costly to develop and that if the materials were to fall into the hands of its competitors, it might or could result in its competitors obtaining information concerning how they how might improve the quality and performance of their products. Such vague conclusions regarding the value of these documents and their possible use by General Motors' competitors are insufficient grounds for a protective order, and fall short of the good cause requirement of the rule. See Parsons.
The court is convinced that these documents do not, and for some time have not, been representative of what is currently happening in the automotive industry. These documents are ancient history given today's technology. Anything General Motors makes can be purchased by one of its competitors, inspected, torn apart, tested and recreated. General Motors does this to its competitors' vehicles.
Anything made by General Motors twelve to twenty years ago has either been torn apart and had its secrets discovered at that time (assuming there were secrets back then), when the information might have been fresh, or its competitors determined, at that time, that the information was not worth obtaining. Even assuming that there was, at one time, something valuable and secret about this 1981 car, a copy of the 1978 version, the court is convinced that there is nothing presently secret about the car in question, and nothing about the car or General Motors' practices at and prior to its introduction that would be of value to a General Motors' competitor today. Good cause has not been shown by General Motors, and its motion must be denied.
Additionally, it is apparent to the court that one of General Motors' primary concerns and reasons for its motion for a protective order motion is that it fears these documents might fall into the hands of a similarly situated plaintiff suing General Motors in a different forum. Based on the case law and articles written on this subject, the court is of the opinion that this is the driving force not only behind the present motion, but also behind General Motors' request that the documents be returned to it at the close of the litigation. The fact that similarly situated plaintiffs may see and even use the documents at issue in other lawsuits does not justify the issuance of a protective order. Even assuming General Motors had demonstrated that these documents were competitively valuable, which the court finds it has not, for the reasons that follow it would not be entitled to a protective order that would preclude such information sharing or require the return of these documents.
There exists much case law supporting the sharing of discovery which General Motors so obviously abhors. See, e.g., Garcia, Yurko and Parsons, supra. All three of these cases involve products liability actions against automobile manufacturers in which the sharing of discovery information was approved. In Garcia the Texas Supreme Court, in mandamus, held that the refusal of a trial court to permit the sharing of such information was an abuse of discretion. These and other courts have noted the efficiencies, in terms of time and cost, that are created when two similarly situated litigants share discovery, and have further noted that such sharing imposes on the producing party, such as General Motors, the duty to provide full, fair and consistent disclosure of documents to each similarly situated plaintiff.
More important than any efficiency created, however, is that the public will derive an indirect benefit from a practice permitting sharing. The court notes that products have been modified and even taken off the market as a whole following the public outcry that the products are dangerous. Such revelations of a product's dangerous propensity occur mainly through litigation. Three-wheel, all-terrain vehicles, jeeps tending to roll over, and what was once called the "explode-on-impact" Pinto are all examples of products which are no longer sold due to their respective dangers.
The court concludes that this motion for a protective order has more to do with other litigation and bad publicity than with what the court finds to be but vague and conclusory allegations of competitively sensitive documents. The court "must consider the need for public dissemination, in order to alert other consumers to potential dangers posed by the product." See Hendricks and United States v. Hooker Chemicals Plastics Corp., supra. If the sharing of discovery can possibly save lives and stop injuries such as occurred here by forcing this defendant to act, then no protective order should prohibit it. As pointed out in plaintiff's brief in opposition: "The analogous question to be asked here is whether the documents produced in the Ford Pinto Fuel tank cases should have been kept from the public." The answer there, as here, must be a resounding "No."
The court finds that the sharing of documents is beneficial, that requiring the return of these documents would hamper such practice, and, of utmost importance, that the decisions as to these matters and the denial of this motion comport with the spirit of our Civil Rules. As Civ.R. 1(B) states: "These rules shall be construed and applied to effect just results by eliminating delay, unnecessary expense and all other impediments to the expeditious administration of justice." The court can think of nothing more violative of this rule than the protective order that General Motors has proposed and argued for in this case and, thus, its motion must be denied.
In conclusion, General Motors has failed to demonstrate that the documents at issue are valuable and that it would be competitively injured by the disclosure of same and, thus, has not shown good cause for a protective order. Moreover, the court is clearly convinced that these documents are without competitive value. For the reasons stated above, General Motors' motion is denied. General Motors is hereby ordered to produce the documents requested by plaintiff within thirty days of the entry of this order.
Reporter's Note: A settlement entry was filed on October 20, 1992 and there was no appeal.