Opinion
CIVIL ACTION NO. 03-3579
April 5, 2004
ORDER AND OPINION
I. Introduction
Buzoiu seeks relief for herself and for a class of consumers who, she claims, received debt collection letters from Risk Management Alternatives, Inc., ("RMA"), which violated the Federal Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. The parties are subject to a Consent Protective Order ("the Order") which permits the parties to designate discovered materials as confidential. Confidential documents may be used by the parties, but are protected from the public.
Buzoiu has challenged RMA's designation as confidential of its (a) employee training materials, (b) file regarding Buzoiu, and (c) insurance policy. In accordance with the procedure outlined in the Order, RMA has moved to enforce the Order with respect to those documents. As discussed below, I will grant RMA's motion.
II. Legal Standards
The Third Circuit has said that "[i]n the context of discovery, it is well-established that a party wishing to obtain an order of protection over discovery material must demonstrate that `good cause' exists for the order of protection." Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994), citing Fed.R.Civ.Pr. 26(c) andSmith v. Bic Corp., 869 F.2d 194, 199 (3d Cir. 1989). It explained:
Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity. Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, do not support a good cause showing. The burden of justifying the confidentiality of each and every document sought to be covered by a protective order remains on the party seeking the order.Id. (Internal citations omitted).
Essentially, whether disclosure will be limited depends on a judicial balancing of the harm to the party seeking protection and the importance of disclosure to the public. Pansy, supra, at 787. Courts have looked at the following factors: (1) whether disclosure will violate any privacy interests; (2) whether the information is being sought for a legitimate purpose or for an improper purpose; (3) whether disclosure of the information will cause a party embarrassment; (4) whether confidentiality is being sought over information important to public health and safety; (5) whether the sharing of information among litigants will promote fairness and efficiency; (6) whether a party benefitting from the order of confidentiality is a public entity or official; and (7) whether the case involves issues important to the public. Glenmede Trust Co. v. Thompson; Pansy at 788-89. However, this list is not exhaustive. Pansy, supra at 788.
III. Discussion
A. RMA's Training Material
The training material RMA seeks to protect is an approximately 1-inch thick compilation of outlines, work sheets, internal policy statements and the like, designed to familiarize an employee with RMA's approved collection practices, with reference to both federal and state law. Exhibit A to RMA's Motion, filed under seal. RMA maintains that this material reflects proprietary and confidential business strategies and policies, and it was compiled by the expenditure of hundreds of hours of time and by drawing on the company's vast experience. It argues that the disclosure of this material to its competitors would place it at a competitive disadvantage.
RMA's position appears to be justified. At the most basic level, it is clear that a competitor could simply photocopy the documents and use them in its own training program. In Source Services Corporation v. Gaul, Civ. A. No. 89-8826, 1990 WL 14461 (E.D. Pa. Feb. 15, 1990), the Honorable Clarence Newcomer, in granting a preliminary injunction, recognized the unfairness of permitting competitors access to a business's training material:
All of the training methods, video and audio tapes, training checklists and other materials had been developed over many years by Source's effort and expense, including extensive and expensive data collection, statistical analysis in marketing research so that Source . . . is able to provide efficient and effective service to the public.
1990 WL 14461 at *3. It is not clear whether RMA went to "extensive and expensive" lengths in developing its training material. Nevertheless, as in Source, its work deserves protection.
Buzoiu argues that RMA has made only a blanket argument, and has not shown what clearly defined and serious injury it believes would result from disclosure. She points out that this is RMA's burden. See,McKenna v. City of Philadelphia, Civ. A. No. 98-5835, 2000 WL 1521604 at *6 (E.D. Pa. Sep. 29, 2000). citing Pansy at 786; Pullen v. Arrow Financial Services. LLC, Civil 3:02-CV-647, slip op. at 8-13 (D. Conn. Oct. 17, 2002).
However, the cases Buzoiu cites are not on point. In bothPullen and McKenna, the parties seeking protection made only the barest of statements regarding their assertion of privilege. In McKenna, a decision I wrote, the defendants made no argument whatsoever regarding the requested training materials in their response to the plaintiff's discovery motion. 2000 WL 1521604 at *6. For this reason, I wrote "the defendants have . . . left the court little choice but to require disclosure of the information sought in [the request for training materials] without a confidentiality order." If the defendants had made any argument at all, my analysis would have been more complex.
Similarly, in Pullen, the defendant's objection to the plaintiffs discovery request for training materials was simply a boilerplate statement that the material was "irrelevant, proprietary and confidential" and that it included material that was "proprietary and confidential, and protected by the attorney client privilege or the work product doctrine." Slip. op. at 8. The District Court for the District of Connecticut was annoyed by the defendant's failure to offer any further explanation, and particularly by its failure to specify which privilege covered which specific document. It wrote:
It is not incumbent on the party seeking discovery to show that the claimed privilege is inapplicable. Nor is it incumbent on the court to rule at least twice on each claim of privilege: first, when the party asserting it fails to sustain its burden, and then a second time when the party makes another stab at it. . . . It is simply not fair for a party to withhold discovery under a blanket claim of multiple privileges, leaving the court to shoulder the burden of isolating arguably privileged material, and then divining which privilege is being asserted with respect to what information.Id. at 11. Thus, the result in Pullen was a product of factors which are not present in this case.
Pullen is further distinguishable on the basis that it concerned a party's absolute refusal to produce requested documents, rather than the more limited protection RMA seeks, which would only preclude disclosure of the documents to the general public.
Finally, many of the Pansy factors weigh in favor of protection. Some of the concerns reflected in those factors are addressed here by the fact that RMA seeks only to protect its material from the general public, and not from Buzoiu. Thus: (1) disclosure will violate RMA's right to keep its in-house materials private; (2) although Buzoiu clearly has a legitimate interest in obtaining the material sought, it is not clear what interest is served by making it available to the public; (3) the information sought is not important to public health or safety; (4) it is already agreed that the information will be shared among the litigants; and, finally, (5) while the case itself involves issues which are important to the public, it is not apparent that the public would benefit from the disclosure of the exact documents at issue. In summary, I find that RMA's training materials are entitled to the protection of the Order.
B. RMA's Files Regarding Buzoiu
The above argument applies for the most part to RMA's notes on Buzoiu's account, as well as to the training materials. The only complicating factor is that RMA's account files are so heavily encoded that it is difficult to determine what precise information they contain. Exhibit B to RMA's Motion, filed under seal. It is apparent, however, that the notes are a record of RMA's contacts with Buzoiu, and efforts to collect her debt. In its reply memorandum, RMA explains:
Plaintiff suggests that public disclosure of the Account Notes is permissible because they are maintained in "shorthand, and cannot be deciphered by the average reader." Clearly, RMA is not concerned about the "average reader's" ability to decode the Account Notes. Rather, it is concerned about disclosure to competitors who do understand the collection business "shorthand" that is employed in the Account Notes. How RMA maintains its notes of communications with its customers and debtors is precisely the kind of information that a competitor would love to have.
Reply Memorandum at 4.
Based on the foregoing, and considering the limited nature of the protection which RMA seeks, I find that RMA has met its burden of showing that the competitive injury from the disclosure of its files outweighs the public benefits of disclosure.
C. RMA's Insurance Policy
In her response, Buzoiu specified that she did not contest RMA's motion as it related to its insurance policy. Response Memorandum of Law at 3. Accordingly, I will enter an Order granting RMA's motion in its entirety: