Monday, September 20, 2010

Lack of Confidence

We trust that you are familiar with the typical life-cycle of confidentiality protective orders in mass tort litigation. It is as predictable (and maudlin) as an ABC after-school special. It invariably begins with plaintiffs seeking discovery of millions of pages of internal company documents. Mind you, the plaintiffs will never use more than one percent of the documents, but the process is fun for them and enormously difficult and expensive for the defendant. To facilitate such discovery, the plaintiffs grudgingly agree to a protective order that permits the defendant to designate documents as confidential, usually on trade-secret or commercial sensitivity grounds. Under the agreement, the plaintiffs obtain access to those documents, but cannot distribute them willy-nilly. And filings that include confidential documents must be under seal. Simple, right?

Well, no. The plaintiffs eventually decide that the defendant designated too many documents as confidential. There's usually some truth to this accusation, because it's hard to analyze the confidentiality of millions of documents and get every call exactly right. If one errs on the side of underdesignation, some confidential documents will end up in the hands of competitors and that sort of damage can't be undone. But if one errs on the side of overdesignation, the documents can be dedesignated and nobody is hurt. But the plaintiffs want to inflict pain. More out of sadism than any legitimate litigation concern, the plaintiffs start challenging confidentiality designations en masse, forcing the defendant to submit detailed, particularized justifications for hundreds, or even thousands, of documents. Meanwhile, the court gets upset when documents are filed under seal. Judges and court clerks hate the whole filing-under-seal process.

We still haven't even gotten to the most grotesque part of the pageant. Because the plaintiffs want to create additional pressure and cook the jury pools by disseminating company documents to the press, they coax the press into intervening and challenging confidentiality designations. In comes a media lawyer wrapping him or herself in the First Amendment, all the while playing the stooge for plaintiff lawyers hankering for a new Maybach. Those plaintiff lawyers affect a tone of righteous exasperation, and beg the court to undo the protective order to which they had earlier agreed. That protective order is no longer convenient. When documents are dedesignated, the plaintiff lawyers put on a dog-and-pony show for the press. By contrast, the defendant either doesn't talk to the press or offers dull platitudes. Instead of doing a truly independent investigation about whether the documents really mean anything, the press ends up going with the garish tale told by the plaintiffs. All in all, it's not a pretty sight and it doesn't inspire much confidence in the system (litigation or press).

Something very like this dance seems to be taking place in In re Aredia and Zometa Products Liability Litigation (MDL No. 1760) (M.D. Tenn). The plaintiffs' steering committee last week filed a motion to set aside the protective order. The PSC claims that the defendant engaged in "wholesale" confidentiality designations. Motion at 1. The plaintiffs apparently filed heaps of confidential documents under seal in opposing summary judgment. According to the plaintiffs, the "preferred remedy" is to scrap the protective order entirely. As "the next best remedy" the court should unseal all of the documents filed by the plaintiffs to oppose summary judgment because they are now "public records." The third and "least desirable remedy" proposed by the plaintiffs is that the defendant should have to justify the confidentiality of all the documents filed under seal. Motion at 2-3.

Now we don't have any role in the Aredia-Zometa MDL and don't know what documents were designated as confidential or filed under seal. But it's plain that the "preferred remedy" is nothing short of outrageous. It's well-established that there is no public or press right of access to discovery documents. Rather -- and as the plaintiffs seem to acknowledge -- there is a presumptive right of access to civil proceedings and judicial records. Motion at 7. Most of the confidential documents don't fit into that category, so the plaintiffs' preferred remedy is wildly overbroad.

But we're frankly suspicious even of the "next best remedy" or the "least desirable remedy." It is way too easy for plaintiffs to file all sorts of documents ostensibly in opposition to a motion – we’ve seen this all the time in our own cases. Too often the reality is that many of the documents are not germane at all; they were merely filed so as to transform them into "judicial records." That’s not a “voluntary” disclosure by the party protected by the order, so there’s no presumptive access where the adversary made a document dump. E.g., Chicago Tribune Co. v. Bridgestone/Firestone, 263 F.3d 1304, 1315 (11th Cir. 2001). Like we say, we’ve done this before. Courts can and should look through the form into the substance and decide whether some of the sealed documents were improperly filed. Courts need to ask whether parties seek dedesignation in the service of a legitimate litigation need, which is fine, or something else, which is not. And that "not" might amount to an effort to apply leverage via the press or stock price impact. How does that sort of thing square with your local ethics rules?

We don't disagree with each and every word in the plaintiffs' motion. They rightly observe that "protective orders can facilitate and expedite discovery. They are often essential to the proper functioning of civil discovery." Motion at 5-6. That's correct. If every internal document produced in discovery is immediately fair game for public disclosure there will inescapably be many more discovery disputes. But if plaintiffs can abrogate protective orders when it suits them, it's going to be harder and harder to enter into those agreements in the first place. It's fine and good for plaintiffs to complain that defendants "abuse" the confidentiality process via overdesignations. But some plaintiffs commit a worse "abuse" by shopping documents to their friends in the press.

We're talking about confidential documents. One of our high school English teachers thought that etymologies were instructive. "Confidence" comes from the Latin, meaning "with trust" or "trust in." The problem with confidentiality agreements and protective orders is that the parties don't really trust each other. Plaintiffs think that defendants are trying to keep the good stuff under wraps and defendants are convinced that plaintiffs want to disseminate proprietary information and play loosey-goosey with the press. When plaintiffs file motions like the plaintiffs' in Aredia and Zometa, they confirm all the worst fears.

Interestingly, the Aredia and Zometa plaintiffs rely heavily on In re Southeastern Milk Antitrust Litigation, 666 F. Supp. 2d 908, 914 (E.D. Tenn. 2009). That case also involved a dispute over application of a protective order. According to the plaintiffs in Aredia and Zometa, Southeastern Milk "is a prime example of what happens when the practice of sealing gets out of hand." Motion at 11. The plaintiffs quote some of the rhetoric from the Southeastern Milk opinion but in the end the court referred the sealing issue to the magistrate. We're not working on that case but we know some people who are. From what we hear, the magistrate has not found that the defendant abused the process and has certainly not seen fit to undo the protective order.

One of the more comical and disingenuous lines in the Motion is this one: "The PSC should have fought for a better protective order ab initio." Motion at 11. Really? Better how? The fact is that the Protective Order permitted the plaintiffs to get access to more documents sooner than ever would have happened absent such an Order. Now that they have the documents, the plaintiffs' idea of a "better" protective order is no protective order. That’s classic heads-I-win-tails-you-lose thinking. We're confident the court will see through the plaintiffs' effort to have it both ways.

2 comments:

Anonymous said...

I've litigated this extensively in the product liability context for auto companies. I've seen it play out exactly as you describe. See, e.g., Phillips v. General Motors (9th Circuit 2002).

One key point is that the presumption in favor of public access is only supposed to apply to documents that form the basis for a judicial decision. The theory is that the public is entitled to see how or why the court arrived at a particular decision. But if summary judgment has not been decided yet, the presumption should not attach at all.

Unfortunately, a lot of the cases in this are use some pretty loose language which can be quoted out of context. If you're opposing a motion to unseal like this, you need to really dig deep into the cases and lay it out for the court.

Cocaine Princess said...

RE: The plaintiff lawyers put on a dog-and-pony show for the press

That's a pretty funny way of putting it.