Opinion
No. C 03-3804 MJJ.
March 22, 2005
ORDER ON DEFENDANTS' OBJECTIONS TO ORDER DENYING MOTION TO UPHOLD CONFIDENTIAL DESIGNATION OF DOCUMENTS
INTRODUCTION
Before the Court are Defendants' objections to Magistrate Judge Bernard Zimmerman's February 7, 2005 Order denying Defendants' motion to uphold the confidential designation of certain documents. For the following reasons, the Court finds that Judge Zimmerman did not err and ADOPTS the report and recommendation in its entirety.
FACTUAL BACKGROUND
Defendants have produced, in discovery, hundreds of thousands of pages of documents, the vast majority of which they designated as confidential pursuant to the protective order operative in this case. Plaintiff objected to the blanket confidentiality designations. Defendants filed a motion to uphold the confidentiality designations of thirteen documents, explaining that the documents at issue contain valuable proprietary business information and reflect ongoing confidential discussions between Defendants, researchers and developers of Intergel anti-adhesion gel, and the Food and Drug Administration ("FDA") regarding Intergel. The issue was fully briefed and following a hearing, Judge Zimmerman issued an Order denying Defendants' motion to uphold the confidentiality of the documents. Defendants now object to that Order.
LEGAL STANDARD
A magistrate judge's order may be set aside or modified by the district court if the order is "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A). The district court shall make a de novo determination of those portions of a magistrate's report to which objection is made. Id.; United States v. Shami, 754 F.2d 670, 672 (9th Cir. 1989).
ANALYSIS
Defendants argue that Judge Zimmerman erred when he denied Defendants' motion in four respects. First, Defendants argue that contrary to established law, Judge Zimmerman failed to define "trade secret" under Federal Rule of Civil Procedure ("FRCP") 26(c). Second, Defendants contend that Judge Zimmerman erroneously ruled that Rule 26(c) protection is limited to certain types of information. Third, Defendants claim that Judge Zimmerman found that the only way to establish that information is protectable under Rule 26(c) is by affidavit and that that finding was error. Fourth, Defendants argue that Judge Zimmerman erred when he failed to reach the issue of whether Plaintiff had demonstrated any need for disclosure of the documents at issue. The Court examines each argument separately.
A. "Trade Secrets" Definition
Defendants contend that Judge Zimmerman erred because he failed to consider California law on the definition of "trade secrets." The Court disagrees. As discussed more fully below, Defendants failed to meet their initial burden of establishing good cause for Rule 26 protection of the documents in question. They provided no factual support for their very general assertion that the documents plainly constitute confidential documents entitled to protection and they identified no specific secret or otherwise showed the specific harm that would result from the disclosure of each document. The nuances of various definitions of "trade secrets" did not enter and need not have entered into Judge Zimmerman's calculus here.
B. Limited Rule 26(c) Protection
Defendants claim that Judge Zimmerman erred in holding that Rule 26(c)'s protections apply only to "proprietary formulas," "financial information," or "research plans or procedures." Defendants contend that Rule 26(c) also contemplates the protection of "confidential research, development or commercial information," as well as trade secrets. The Court disagrees with Defendants' characterization of Judge Zimmerman's understanding of the breadth of Rule 26 protection. After reviewing each document at issue in camera, Judge Zimmerman concluded that "none of the documents defendants seek to protect contain trade secrets or other confidential research, development, or commercial information that Rule 26 protects." (Order at 9:2-5.) He did not limit Rule 26(c) protection as Defendants contend. Moreover, Defendants fail to refute, or even address the cases cited by Judge Zimmerman in which similar documents were found not subject to protection under Rule 26(c). See, e.g., Verizon California, Inc. v. Ronald A. Katz. Tech. Licensing, 214 F.R.D. 583 (C.D. Cal. 2003); Grundberg v. Upjohn Co., 137 F.R.D. 372 (D. Utah 1991); Waelde v. Merck, Sharp Dohme, 94 F.R.D. 27, 29-30 (E.D. Mich. 1981).
Furthermore, Defendants' argument that case law supports protecting from disclosure any information where the disclosure of that information would have a "chilling effect" is inapposite here. In Rivera v. Nibco, Inc., 364 F.3d 1057 (9th Cir. 2004), the case Defendants cite for this proposition, the Ninth Circuit addressed the chilling effect that disclosure of the immigration status of immigrant workers in an employment discrimination lawsuit would have on future immigrants from reporting an employer's abuse for fear of being exposed as an illegal immigrant and deported. The case at bar does not contemplate any comparable circumstances.
C. Role of Declarations
Defendants claim that Judge Zimmerman held that to uphold the confidentiality of documents, Defendants were required and failed to submit, for each document they sought to protect, a declaration demonstrating the specific prejudice or harm that would result if no protective order is granted. Judge Zimmerman did not so hold. He actually held as follows:
Defendants must first show `for each particular document it seeks to protect . . . that specific prejudice or harm will result if no protective order is granted.' Foltz v. State Farm Mut. Aut. Ins. Co., 331 F.3d 1122, 1130 (9th Cir. 2003).)
[D]efendants have not established that `specific prejudice or harm' will result with respect to each of the thirteen documents if they are disclosed. In support of their motion defendants submitted a single declaration from counsel. The declaration fails to explain why the exhibits attached thereto should be protected and fails to identify any specific prejudice or harm that will result from disclosure of each individual document. . . . Nowhere do they identify any specific secret or otherwise show the specific harm that will result from disclosure of each document. Defendants' broad allegations of harm with respect to either the documents as a whole, or categories of documents, do not satisfy the standard set forth in Foltz.
(Order at 5:8-7:3.) The Court finds that Judge Zimmerman accurately articulated the standard and did not hold that Defendants should have provided a declaration for each document in question.
Moreover, the Court finds that Judge Zimmerman did not err in finding that Defendants failed to meet that standard. Defendants contend that they provided a specific showing as to the significance of maintaining the confidentiality of communications between Defendants and the FDA. Defendants argue that regulatory submissions, exemplified by some of the documents in question, contain extensive data, including full reports of pre-clinical and clinical investigations submitted to demonstrate the safety and effectiveness of the device for its intended use, and that such data should remain confidential. To support their argument, Defendants cite to Citizens Comm'n on Human Rights v. FDA, No. 92CV5313, 1993 WL 1610471 (C.D. Cal. May 10, 1993). Defendants contend that that case held that such regulatory submissions contain trade secrets and commercial information, the public disclosure of which would "likely" cause a manufacturer substantial harm. This is not the holding of that case. In actuality, the case held that information regarding FDA disclosures is confidential if it is "likely" to cause substantial harm. It does not say that such documents are per se confidential. Here, as Judge Zimmerman said, Defendants have not demonstrated that disclosing the documents in question is likely to cause Defendants substantial harm. Defendants have provided only broad conclusory allegations of potential harm to support their contention that the documents at issue should be protected and such a showing is insufficient under Foltz.
Finally, Defendants' contention that harm due to disclosure (demonstrating that Rule 26(c) protection is warranted) "is properly established through citations to caselaw and newspaper accounts" is flawed. (Objection at 14:22-24.) Defendants cite to Rivera, the immigration case described above, to support their proposition. In Rivera, however, the court only examined newspaper articles in the context of engaging in the balancing phase of the analysis — balancing the public interest in the information versus the need to keep it secret — a phase that Judge Zimmerman did not reach and need not have reached since Defendants did not meet their initial burden of demonstrating good cause for protection.
D. Failure to Address Plaintiff's Lack of Showing
Defendants argue that Judge Zimmerman erred by failing to examine whether Plaintiff had shown any need to disclose the documents in question. However, Defendants apparently misunderstand the burden when the confidential designation of documents is at issue. Defendants, as the party seeking protection from disclosure of the documents, has the burden of showing why protection under Rule 26(c) is appropriate. Only then does the burden shift to Plaintiff to show why disclosure is appropriate. Here, Judge Zimmerman properly found that Defendants had not met their initial burden.
CONCLUSION
For the foregoing reasons, the Court finds that Judge Zimmerman did not err when he denied Defendants' motion to uphold the confidentiality of documents. The Court ADOPTS Judge Zimmerman's February 7, 2005 Order in its entirety.
The Clerk of Court shall unseal Magistrate Judge Zimmerman's Order of February 7, 2005.
IT IS SO ORDERED.