Opinion
CASE NO. 3:20-CV-00796-RGJ-LLK
2021-06-21
Patricia VIGNES-STARR, Plaintiff v. LOWE'S HOME CENTERS, LLC, d/b/a Lowe's Home Improvement, Defendant
Justin B. May, Lindsey C. Goetz, Dixie Law Group, PSC, Louisville, KY, for Plaintiff. Gregory A. Jackson, Laura L. Mays, Steptoe & Johnson PLLC, Lexington, KY, for Defendant.
Justin B. May, Lindsey C. Goetz, Dixie Law Group, PSC, Louisville, KY, for Plaintiff.
Gregory A. Jackson, Laura L. Mays, Steptoe & Johnson PLLC, Lexington, KY, for Defendant.
ORDER
Lanny King, Magistrate Judge
Judge Rebecca Grady Jennings referred this matter to U.S. Magistrate Judge Lanny King for resolution of all litigation planning issues, a scheduling conference, entry of scheduling orders, consideration of amendments thereto, and resolution of all non-dispositive matters, including discovery issues. [DN 5].
On May 18, 2021, Defendant filed their Motion for Protective Order. [DN 18]. On June 1, 2021 Plaintiff filed their response. [DN 21]. On June 8, 2021 Defendant filed their reply. [DN 22]. Having received the parties briefing on the issue, the motion is now fully briefed and ripe for adjudication. As the Defendant failed to meet their burden in establishing good cause for the entry of a protective order, this Court DENIES Defendant's Motion for Protective Order. [DN 18].
LEGAL STANDARD
Rule 26 of the Federal Rules of Civil Procedure affords the Court with broad discretion to grant or deny protective orders. Procter & Gamble Co. v. Banker's Trust Co. , 78 F.3d 219, 227 (6th Cir. 1996). This Court, however, has increasingly scrutinized motions for protective order that do not make the necessary showing of good cause required by the Rules of Civil Procedure and case authority. See Bussell v. Elizabethtown Independent School Dist. , 3:17-cv-00605-GNS (W.D. Ky. Oct. 23, 2018) (discussing why the Court will enter the second proposed agreed protective order because it develops why a protective order is necessary) (Pacer); see also Wellmeyer v. Experian Info. Sols. , 3:18-cv-94-RGJ (W.D. Ky. May 30, 2018) (Pacer); Middleton v. Selectrucks of America, LLC , 3:17-cv-602-RGJ (W.D. Ky. Sept. 21, 2018) (Pacer); Mitcham v. Intrepid U.S.A., Inc. , 3:17-cv-00703-CHB (W.D. Ky. Oct. 1, 2018) (Pacer); Roberson v. KentuckyOne Health, Inc. , 3:18-cv-00183-CRS-RSE (Aug. 29, 2018) (Pacer); Savidge v. Pharm-Save, Inc. , 3:17-cv-000186-CHB (W.D. Ky. July 9, 2018) (Pacer); Effinger v. GLA Collection Co. , 3:17-cv-000750-DJH (W.D. Ky. March 28, 2018) (Pacer); Fleming v. Barnes , 3:16-cv-264-JHM (W.D. Ky. Feb. 27, 2017) (Pacer).
Under Federal Rule of Civil Procedure 26(c)(1)(G), "[t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including ... requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way...." Good cause exists when the party moving for the protective order "articulate[s] specific facts showing ‘clearly defined and serious injury’ resulting from the discovery sought...." Nix v. Sword , 11 Fed. App'x 498, 500 (6th Cir. 2001) (citing Avirgan v. Hull , 118 F.R.D. 252, 254 (D.D.C. 1987) ).
In the context of trade secrets and confidential information, courts have looked as six different factors to determine whether there is a need to protect that information:
(1) the extent to which the information is known outside of [the] business;
(2) the extent to which it is known by employees and others involved in [the] business;
(3) the extent of measures taken ... to guard the secrecy of the information;
(4) the value of the information to [the business] to [its] competitors;
(5) the amount of effort or money expended ... in developing the information; and
(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.
Williams v. Baptist Healthcare Sys. , No. 3:16-CV-00236-CRS, 2018 WL 989546, at *2 (W.D. Ky. Feb. 20, 2018) (citing Nash-Finch Co. and Super Food Servs., Inc. v. Casey's Foods, Inc. , 2016 WL 737903, at *2 (E.D. Ky. Feb. 23, 2016) (citing Stout v. Remetronix, Inc. , 298 F.R.D. 531, 535 (S.D. Ohio Jan. 17, 2014) )); see also Specialty Auto Parts USA, Inc. v. Holley Performance Products, Inc. , No. 1:17-cv-147-JRW-LLK, 2020 WL 1914817 (W.D. Ky. April 20, 2020).
"The burden of establishing good cause for a protective order rests with the movant." Nix v. Sword , 11 Fed. App'x 498, 500 (6th Cir. 2011) ; see also In re Skelaxin Antitrust Litig. , 292 F.R.D. 544, 549 (E.D. Tenn. 2013) ("To show good cause, the moving party must articulate specific facts that show a clearly defined and serious injury resulting from the discovery sought; mere conclusory statements will not be sufficient.").
Because entry of a protective order is contrary to the basic policy in favor of broad discovery, the party that seeks a protective order has a heavy burden to show substantial justification for withholding information from the public. See Williams , 2018 WL 989546, at *2 ; see also, Procter & Gamble Co. v. Banker's Trust Co. , 78 F.3d 219, 227 (6th Cir. 1996) ("While District Courts have the discretion to issue protective orders, that discretion is limited by the careful dictates of Fed. R. Civ. P. 26 and is circumscribed by a long-established tradition which values public access to court proceedings."); Meyer Goldberg, Inc. of Lorain v. Fisher Foods, Inc. , 823 F.2d 159, 162 (6th Cir. 1987) ("As a general proposition, pretrial discovery must take place in the public unless compelling reasons exist for denying public access to the proceedings.").
For a protective order to be granted, the movants must establish "that (1) the interest for which protection is sought is an actual trade secret or other confidential business information, and (2) there is good cause for the entry of a protective order." Mitchell v. Home Depot U.S.A. , 2012 WL 2192279, at *2 (W.D. Ky. June 14, 2012).
ANALYSIS
Defendant seeks a protective order pursuant to Federal Rule of Civil Procedure 26(c) for its policies, procedures, and employee training materials. Specifically, Defendant requests protection of its ‘Daily Safety & Hazmat Review Policy,’ ‘Daily Safety and Hazmat Review Checklist,’ ‘New Hire Safety Training Materials’ and ‘Document and Report a General Liability Claim.’ These materials contain policies on review process, checklists providing potential safety issues and details, materials detailing safety training, and policies on incident reporting and response. [DN 18 at 5-6]. Defendant contends that these materials "constitute confidential commercial information." Id. at 11. Plaintiffs object to the protective order for these materials, arguing they are not entitled to protections and that Defendant does not provide evidence of particularized harm.
TRADE SECRET
The Court must evaluate six factors to determine if the information is an actual trade secret. Williams v. Baptist Healthcare Sys., 2018 WL 989546, at *2 (W.D. Ky. Feb. 20, 2018). Here, both parties addressed each of the six factors. The Court will analyze each of those six factors in order.
First, the Court must analyze the extent to which the information is known outside of Defendant's business. Defendant contends that employees may only access the information on company computers with a login and password, and that they routinely seek protective orders to protect the information. [DN 18 at 12]. Plaintiff responds that "the same and similar materials have been repeatedly produced in various courts[,]" which Defendant does not refute. [DN 21 at 8]. The Defendant argues that "production in other cases pursuant to court order is irrelevant." [DN 22 at 7]. This is not the case. It is at least as relevant, if not more, than the fact that Defendant seek protective orders. This factor does not weigh in Defendant's favor.
It appears that Defendant's retract this argument in their reply, instead arguing that seeking protective orders, and courts denying the motions was irrelevant to the present motion. [DN 22 at 8].
Second, the Court must determine the extent to which the information is known by Defendants employees and others involved in its business. For the same reasons, this does not weigh in Defendant's favor.
Third, the Court must analyze the extent of measures taken to guard the information's secrecy. Defendant argues that the company expends resources on technology and resources to protect the information and through litigations to protect the information's confidentiality. Plaintiff correctly argues that there is nothing unique about a company storing documents on its own system, nor should employing a tactic common among commercial litigants entitle them to their preferred outcome. In Specialty Auto Parts USA, Inc. v. Holley Performance Prod., Inc. , this Court was persuaded of the company's secrecy, in part, because "[Defendant's] trade secret information is limited even amongst its employees" 2020 WL 1914817, at *5 (W.D. Ky. Apr. 20, 2020). The same cannot be said here.
Fourth, the Court must evaluate the value of the information to Defendant and to its competitors. Defendant contends that these materials provide an economic advantage to the company and that their disclosure would provide value to their competitors. [DN 18 at 14]. Here, "[Defendant] has done nothing more than [provide] a general recitation that ... the disclosure of the documents would provide competitors with an advantage." Borum v. Smith , 2017 WL 2588433, *3 (W.D. Ky. June 14, 2017). This harm is too generalized and "could apply to all businesses that develop policies and procedures." Mitchell v. Home Depot U.S.A. , 2012 WL 2192279 at *4 (W.D. Ky. June 14, 2012). Thus, this factor does not weigh in Defendant's favor.
Fifth, the Court must examine the amount of effort or money expended in developing the information. Defendant states that a team of associates evaluates its confidential revenue and sales information and that it "spends substantial sums" to develop the materials. [DN 18 at 14]. Plaintiff contends that this is both irrelevant and not controlling. [DN 21 at 10]. To be sure, the expenditure is relevant and is weighed in favor of Defendant for that reason alone. Specialty Auto Parts USA, Inc. v. Holley Performance Prod., Inc. , 2020 WL 1914817, at *7 (W.D. Ky. Apr. 20, 2020). However, Plaintiff is correct, that "this factor alone is not controlling." [DN 21 at 21 (citing Mitchell v. Home Depot U.S.A. , No. 3:11-CV-332, 2012 WL 2192279, at *5 (W.D. Ky. June 14, 2012)) ]. This Court in Mitchell found that the documents were not entitled to protection despite the significant expenditure by Defendant in that case.
Sixth, the Court must look at the ease or difficulty with which the information could be properly acquired or duplicated by others. As with the third factor, it cannot be said that Defendant has taken any unique measures with regards to these materials, and for that reason the factor does not weigh in Defendant's favor.
Here, only one factor weighs in Defendant's favor. The cumulative effect of this analysis demonstrates that the information need not be protected. Ultimately, these are routine materials and "[r]outine business materials that do not provide a financial or business advantage do not fall within these confines." Williams v. Baptist Healthcare Sys., Inc. , No. 3:16-CV-00236-CRS, 2018 WL 989546, at *2 (W.D. Ky. Feb. 20, 2018) (citing Mitchell v. Home Depot, USA , 2012 WL 2192279 (W.D. Ky. June 14, 2012)).
GOOD CAUSE
As set out above, good cause exists when the parties moving for the protective order "articulate specific facts showing ‘clearly defined and serious injury’ resulting from the discovery sought ..." Nix v. Sword , 11 Fed. App'x 498, 500 (6th Cir. 2001) (citing Avirgan v. Hull , 118 F.R.D. 252, 254 (D.D.C. 1987) ).
First, Defendant has not met their burden in establishing good cause because they failed to articulate any specific facts that would show a clearly defined and serious injury would result from the disclosure of the documents and information sought. As demonstrated above, generalized claims of harm from litigants and the potential advantage to a competitor are insufficient reasons to demonstrate good cause. Specifically, the fact that a competitor could potentially adopt the Defendant's policies does not constitute a "clearly defined and very serious injury" for purposes of good cause. Mitchell v. Home Depot U.S.A., 2012 WL 2192279, at *5 (W.D. Ky. June 14, 2012). Defendant's attempt to distinguish Mitchell as portions of the materials had been available on the internet. [DN 22 at 10]. However, this is insufficient to distinguish the case. That Court found that, availability notwithstanding, these were not the type of documents that could be protected. Mitchell v. Home Depot U.S.A., 2012 WL 2192279, at *5 (W.D. Ky. June 14, 2012). These are the exact type of documents at issue before the Court in this case.
Nowhere does the Defendant state how their policies are unique from other stores. Defendant asserts that "Lowe's in-house development of its own polices, procedures, and training modules from its own confidential information, lessons, and business experience makes the materials at issue unique to Lowe's, and not ‘run of the mill’ or ‘industry-standard’ documents. [DN 22 at 8]. But saying it does not make it so. Nothing in the briefing suggests that the materials are anything more than standard to the industry.
Defendant did not demonstrate a clearly defined and serious injury and failed to meet their burden in establishing good cause for the entry of a protective order, thus, the Court must DENY the Motion for Protective Order, [DN 18].