Bobrick Washroom Equip., Inc. v. Scranton Prods., Inc.

BOBRICK WASHROOM EQUIPMENT, INC. Plaintiff, v. SCRANTON PRODUCTS, INC. Defendant.

3:14-CV-00853

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

March 8, 2017

(JUDGE MARIANI)

MEMORANDUM OPINION

Pending before the Court is Plaintiff Bobrick Washroom Equipment Inc.'s ("Bobrick") Motion to Modify the Protective Order currently in place in this litigation. (Doc. 203), For the reasons that follow, Plaintiff's Motion will be denied.

I. FACTUAL BACKGROUND

The parties have stipulated to two protective orders in this litigation; the original Stipulated Protective Order dated August 11, 2014 (Doc. 31), and the Modified Stipulated Protective Order ("MSPO") entered on March 26, 2015. (Doc. 60). The MSPO provides that each party may designate as "Attorneys' Eyes Only" ("AEO") information "comprised of trade secrets, confidential research and development, or other confidential technical information." (Doc. 60, ¶ 2). The MSPO also limits the disclosure of AEO information to outside counsel for the receiving party, experts and consultants and "one (1) in-house counsel for the receiving party or (1) other individual designated by the receiving party in advance of disclosure." (Id. at ¶ 9).

On two prior occasions Bobrick has asked the Court to expand Paragraph 9(d) of the Stipulated Protective Order in order to permit it to share AEO designated information with two individuals: Mr. Gettelman, Bobrick's Vice President of External Affairs and current AEO designee, and Bobrick's President and CEO Mark Louchheim. (Docs. 45, 57). The Court has denied both requests. (Docs. 53, 88). Now, on its third attempt, Bobrick seeks modification of the MSPO "to permit disclosure of information designated Attorneys' Eyes Only . . . to two representatives of the receiving party, instead of one representative as in the current order."¹ (Doc. 203, at 1).

II. ANALYSIS

In Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994), the Third Circuit held that a Court considering whether to modify an existing protective order must "use the same balancing test that is used in determining whether to grant such orders in the first instance." Id. at 790. A Court should grant a protective order in the first instance where "good cause" exists, and upon consideration of 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, 56 F.3d 476, 483 (3d Cir. 1995) (citing Pansy, 23 F.3d at 787-91). These factors, however, are "neither mandatory nor exhaustive." Id. In addition, a Court deciding whether to modify an existing protective order must consider the parties' reliance on the protective order. Pansy, 23 F.3d at 790.

As an initial matter, Bobrick, as "[t]he party seeking to modify" the MSPO must "come forward with a reason to modify the order." Id. Bobrick spends much of its time in its briefs, and spent much time at the February 23, 2017 Status Conference, lamenting over the fact that a provision of the MSPO (which it agreed to on two occasions) permits only one of its representatives to view AEO information, noting that it only agreed to this provision based on SP's "representation that the AEO designation would be used sparingly." (Doc. 204, at 5). Thus, Bobrick claims that:

Under Third Circuit law, the Protective Order should now be modified because Bobrick's need to access the information at issue outweighs SP's need to prevent disclosure to Mr. Louchheim. Bobrick's need is substantial—Mr. Louchheim has the ultimate fiduciary responsibility to make decisions for Bobrick regarding litigationstrategy and expenditures and requires complete information to do so effectively. Bobrick is obviously disadvantaged when the primary decision-maker in the company has no information about key factual issues due to SP's designation of critical discovery material as AEO.

(Id. at 6). But Bobrick's grievances are both overstated and entirely of its own making. Bobrick twice agreed to the terms at issue in both the Stipulated Protective Order and the MSPO. And Bobrick further chose to designate Mr. Gettelman, not Mr. Louchheim, as its sole AEO designee to date. There is no dispute that for any of the upcoming productions Mr. Louchheim may view AEO information if he is so designated by Bobrick. The decision is up to Bobrick, and the Court does not believe that Bobrick has set forth a good reason for modification of the MSPO. See Crum & Crum Enters., Inc. v. NDC of California, L.P., Civil No. 09-145 (RBK), 2011 WL 886356, at *3 (D. Del. Mar. 10, 2011) (denying motion to modify the protective order where the moving party "fails to provide an adequate reason for modifying the protective order, and, even if Plaintiff provided an adequate reason, [Defendant] demonstrated good cause for maintaining" the protective order). Nevertheless, the Court will address whether Bobrick's claimed need for Mr. Louchheim to view AEO information outweighs SP's need for limiting the disclosure AEO information to only one individual within Bobrick's organization.

Turning to the Pansy factors, the Court will first address whether the modification Bobrick seeks would violate any privacy interests. A party's "interest in privacy is very important to the balancing test." Zurich Am. Ins. Co. v. Rite Aid Corp., 345 F. Supp. 2d 497, 506 (E.D. Pa. 2004) (citing Pansy, 23 F.3d at 787). This Court has already found that theinformation which SP has designated as AEO—which includes highly sensitive information about pricing and the chemical composition of its products—constitutes trade secrets and commercially sensitive information warranting AEO designation under the MSPO. See Scranton Prods., 190 F. Supp. 3d at 439-440. Information about SP's pricing and the chemical composition of the products it manufactures no doubt is highly sensitive commercial information that a competitor like Bobrick could use to its advantage in the marketplace, and is the very type of information the parties contemplated would be designated as AEO and that Courts in this Circuit have found warrant protection under a protective order. See Eisai Inc. v. Sanofi-Aventis U.S., LLC, Civil Action No. 084168 (MLC), 2015 WL 1138400, at *4 (D.N.J. Mar. 11, 2015) (denying motion to modify protective order where, as here, the party opposing modification "demonstrated that the disclosure of specific confidential business documents contained in the record would likely lead to significant competitive or commercial disadvantage"); United States v. Chromatex, Inc. Civil No. 91-1501, 2010 WL 2696759, at *6 (M.D. Pa. July 6, 2010) (concluding that "disclosure may very well violate the privacy interest" of those relying on the protective order because "[t]he information at issue could be of value to competing businesses . . . and disclosure likely would result in significant harm"). Accordingly, the first factor of the Pansy balancing test weighs against modification of the MSPO.

Second, the Court cannot say that Bobrick is seeking this information for an entirely legitimate purpose. True, disclosing this information to Mr. Louchheim in order for him tomake necessary and appropriate decisions concerning the course of this litigation is a legitimate purpose. Equally true is that there is a very real potential "for the unconscious, but improper use of technical information" by Bobrick "in the future, in spite of any protective order." Phillips Petroleum Co. v. Rexene Prods. Co., 158 F.R.D. 43, 46 (D. Del. 1994); see also C.A. Meur Corp. v. Big River Fish Co., Nos. Civ A. 97-5402, Civ. A. 97-6073, Civ. A. 97-7154, 1998 WL 488007, at *4 (E.D. Pa. Aug. 10, 1998) ("Steven Coren is a decision-maker for Big River Fish Co. If he were to be allowed access to [plaintiff's] proprietary business records, he could through no conscious fault of his own, base future business decisions on the information obtained during discovery. The information would become part of a residue of knowledge which Mr. Coren would not shed after the termination of litigation."). The Court finds that this factor is neutral.

Third, there has been no argument from either party with respect to whether disclosure will cause SP embarrassment. As the Third Circuit recognized, "it may be especially difficult for a business enterprise, whose primary measure of well-being is presumably monetizable, to argue for a protective order on this ground." Pansy, 23 F.3d at 787. Accordingly, this factor weighs in favor of modification.

Fourth, the Court must consider whether the information is important to public health and safety. In Pansy, the Third Circuit instructed that "[c]ircumstances weighing against confidentiality exist when confidentiality is being sought over information important to public health and safety." Id. The Court is cognizant that this litigation involves issues important tothe public health and safety; namely, whether the toilet partitions sold by Defendant SP actually comply with NFPA-286.² Nevertheless, the fact that this litigation may have some importance to public health and safety does not mean that disclosure of SP's trade secrets and confidential business information to the CEO of its competitor is warranted. Bobrick does not seek modification of the MSPO in order to widely disseminate information and documents to the public for the public benefit. Rather, the modification is sought solely for the benefit of the CEO of a private litigant who, if Bobrick chooses, is entirely able to see...