Don't Assume A Strong Discovery Protective Order Means Your Client's Confidential Information Will Not End Up In The Public Record

Author:Mr John Hayworth and Valerie Diden Moore
Profession:Butler Snow LLP

The scenario is pretty common. A company is served with a subpoena duces tecum in a lawsuit to which it isn't a party. Among the categories of documents requested are some that clearly include information the non-party deems confidential. But, the non-party or its counsel checks with the counsel of record in the case and determines that the parties already have negotiated, and the court has entered, a discovery protective order. The order, among other things, provides that any documents produced by parties or non-parties that are marked "Confidential" must be filed under seal. Assuming there are no other bases for objection, the non-party produces documents, marks many "Confidential" pursuant to the protective order, and goes about its business, taking comfort in the belief that its confidential information is protected and will not make its way into the public court record. All is good, right? Think again.

With the Sixth Circuit's recent emphasis on public access to court records, including reversing orders filing documents under seal, parties and third parties can no longer rely on broad discovery protective orders that require documents designated confidential to be sealed when filed with the court. Rather, as discussed in our prior two blogs on this subject ( here and here), the Sixth Circuit requires that (1) a party or non-party wanting documents filed under seal must meet a substantial burden of justifying the filing and (2) the district court must conduct a detailed analysis before permitting filings under seal.

In Shane Group, Inc. v. BlueCross Blue Shield of Michigan, 825 F.3d 299 (6th Cir. 2016), the Sixth Circuit found that each and every document filed under seal in the district court was sealed improperly. This finding included documents from more than 100 third parties provided pursuant to subpoena and subject to the protective order entered by the district court. The appellate court noted that the third parties were not on notice to object to the unsealing of the records and directed the district court to deal with any potential objections on remand.

The Sixth Circuit did provide some guidance for protection of third party documents, however. First, the court found that third party "financial and negotiation information" in this case was not properly sealed. The lawsuit was an antitrust case, and the information soughtrelated to the allegedly anticompetitive contractsinvolved a practice outlawed by the Michigan legislature...

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