New Jersey Federal Judge Says It’s Not So Easy to Preserve Confidentiality of Discovery Documents

by Reed Smith
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Fifty-seven years ago the Music Died.  On Feb 3, 1959, a small aircraft carrying rock and roll legends Buddy Holly (“Everyday,” ”It’s So Easy,” “Peggy Sue,” and a whole lot of other, crucial early rock and roll tunes), Ritchie Valens (“La Bamba,” “Come On, Let’s Go”), and J.P. Richardson, aka the Big Bopper (“Chantilly Lace”) crashed in Clear Lake, Iowa.  It is the precipitating event in Don McLean's eight and a half minute 1971 pop hit “American Pie.”  (Hence, “But February made me shiver/with every paper I’d deliver/bad news on the doorstep/I couldn’t take one more step.”) The plane was a four-seater, so only three passengers could join the pilot for the short flight to the next stop, which was Moorhead, Minnesota – through a blizzard.  One of Holly’s backing musicians, Waylon Jennings, was also supposed to be on the plane, but he gave up his seat to the Big Bopper, who was suffering from the flu.  In some versions of the story, Jennings lost a coin toss.  But that is not the story on the official Waylon Jennings website.  In any event, Jennings rode the bus.  As a result, he lived another 43 years.  Fate gave Jennings a second chance.  He didn't waste it.  Jennings had a fine career as an outlaw C&W star. His catalogue is impressive:  “Luckenbach, Texas,” “Are You Sure Hank Done it this Way, “ “Mamas, Don’t Let Your Babies Grow Up to be Cowboys,” and many more.  Jennings was also the balladeer/narrator on the Dukes of Hazzard tv show. 
 
Jennings was also for a while part of a supergroup called The Highwaymen, which included a few other fellas you might have heard of:  Johnny Cash, Willie Nelson, and Kris Kristofferson.  And now our little account must take a legal detour.  There was an earlier musical group called The Highwaymen.  Some Wesleyan students got together to perform folk music.  Turns out they were pretty good.  They had a hit record in 1961 with their version of "Michael, Row the Boat Ashore."  Those original Highwaymen were an impressive lot.  Several went on to graduate school.  Stephen Trott was one of the Highwaymen.  He attended Harvard Law School, became a prosecutor, and later became a Ninth Circuit Judge.  So maybe it's not much of a surprise that these original, collegiate Highwaymen filed a lawsuit against Waylon, Willie, et al. for appropriating their group's name.  Like most cases, it settled.  Unlike most cases, the settlement included a provision permitting the original Highwaymen to share the stage with the more famous folks during a 1990 concert in Hollywood.  
 
Back to the main branch of our story.  Maybe Jennings never quite entered the pantheon alongside Holly.  Or maybe he did.  Either way, he did okay.  He used his second chance well.   
 
Holly, of course, was a genuine musical genius and had attained stardom by 1959.  Jennings back then was a sometime dj and sometime musician who had been given a big break when Holly invited him along on the Winter Dance Party tour.  As the musicians gathered outside that little plane on that cold, blustery Iowa night, Holly jokingly told Jennings he hoped the bus would break down and that Jennings would freeze.  Just as jokingly, Jennings said, “I hope your ol’ plane crashes.”  Understandably, Waylon was always haunted by that near miss back in 1959.  You can see a video of Jennings telling the story here
 
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Today’s case is about a second chance.
 
We are talking about the dismal topic of document confidentiality.  Many -- definitely too many -- documents are produced in mass tort litigations.  Almost all those documents are produced by the corporate defendants.  Most end up having nothing to do with the case.  If two million documents are produced in an MDL, fewer than 200 are likely ever to be marked as exhibits at trial.  But producing all those documents is wickedly expensive for the company, a lot say things that no company would want to become public, so what the hey, why shouldn’t the plaintiff lawyers have a little fun?  A lot of those documents involve proprietary information about marketing, pricing, new avenues of scientific research, etc. – all things that a competitor would enjoy reading.  (We remember a professor in law school suggesting that companies wishing to engage in joint-pricing arrangements would be smart to file bogus law suits against each other occasionally and then use document discovery as a way of learning, and then coordinating, pricing strategies.  Yes, our law school had as many cynics as scholars.) 
 
Any right-thinking, diligent company will mark some discovery documents as confidential so as to limit dissemination.  Parties, their lawyers, and experts might be entitled to see the documents, but discovery documents need not be fair game for other assorted nosy Nellies.   Why did we call this topic “dismal”?  Because Judges are often hostile to the notion of document confidentiality.  Maybe they truly think that any case before them is necessarily a matter of public interest.  Or maybe they simply hate the administrative difficulties of sealing documents.  This much is clear: plaintiff lawyers revel in the opportunity to hand discovery documents over to press toadies who can help poison jury pools.  We know plaintiff lawyers who spend more time holding press conferences than cuddling up with the Rules of Civil Procedure or Evidence.  Sometimes a bloviating lawyer representing the press will intervene to get access to confidential discovery documents.  The plaintiff lawyer will pretend to honor the confidentiality order that he or she signed off on, but will also do a bad job of disguising the glee at the fact that the intervenor will do its best to undo the protections bargained for in the confidentiality order.  Here’s the point: maintaining confidentiality of litigation documents is an uphill battle. 
 
That uphill battle was on display in In Re:  Benicar (Olmesarten) Products Liability Litigation, 2016 U.S. Dist. LEXIS 7977 (D. N.J. January 21, 2016).  The defendants sought to seal some exhibits attached to the plaintiffs’ motion to compel discovery.   As is fairly typical in mass tort litigation, the parties had agreed to a confidentiality order that permitted a party producing proprietary, trade secret and/or highly sensitive commercial information to designate the material as “protected” if disclosure of the materials being produced could cause competitive harm to the producing party.  The documents at issue here included MedWatch forms, internal emails, study summaries, presentations on foreign regulatory requirements, correspondence with licensing partners, and various other materials.  The plaintiff opposed the sealing of those documents, arguing that the documents contain no personal patient information, trade secrets, proprietary information or sensitive commercial information.  The plaintiffs also argued that the defendants had not established that there is “legitimate private or public interest which would warrant sealing” and that the plaintiffs would suffer “a clearly defined and serious injury if their requested relief is not granted.”  The defendants argued that disclosure of the materials would reveal sensitive personal information of patients and the defendants’ business practices to competitors, as well as cause harm to the defendants’ reputation in the market-place.  The defendants also argued that disclosure of at least some of the documents was barred by federal regulations.

After applying a dreaded balancing test (public’s right to know vs. company’s interests in confidentiality), the court denied the defendants’ motion.  (Local Civ. Rule 5(c)(2) lists four factors, but take our word, it adds up to a balancing test.)  We say “dreaded” balancing test because, as Justice Black said long ago, application of a balancing test is often just a fig leaf covering a court’s  determination to do what it simply wants to do.  That’s inevitable and that’s okay – just realize that most courts will end up wanting not to keep litigation documents sealed.  In Benicar, the court based its denial of the motion to seal on its conclusion that the defendants did not include a competent affidavit or certification to support the elements of confidentiality.  There was a supporting affidavit, but the court held it to be insufficient because it was too generalized.  The affidavit, which was not drafted for the purposes of this motion but rather in support of a proposed discovery confidentiality order, established that the market for hypertension drugs is competitive, that defendants would be harmed by disclosure of some information sought by the plaintiffs, and that the defendants went to great lengths to maintain security.  Nevertheless, the court found that the affidavit failed to demonstrate the affiant’s personal knowledge as to how disclosure of the exhibits in question would create a “clearly defined serious injury.”  What more was needed? One example supplied by the court was that the affidavit needed to “address how a competitor viewing defendants’ internal analysis of foreign regulatory compliance would harm defendants.”  Even aside from the lack of specific, concrete evidence of competitive harm, the court questioned whether such competitive harm could overcome the public’s “paramount interest” in learning about side effects or “the operation of public agencies.” 

We do not agree with the court's reasoning, not even a little.  For example, the FDA has taken the position that MedWatch forms should be confidential.  But the court's undervaluing of confidentiality concerns hardly arrives as a bolt from the blue. 
 
Anyway, that’s the bad news.  The good news is that the court denied the defendants’ motion without prejudice regarding all of the exhibits save one.  The court made it clear that this dispensation of mercy was not “prompted by meritorious arguments, but rather the Court’s abundance of caution in the face of insufficient information.”  It will be an uphill battle for the defendants.  It always is.  We’re not sure we’ll ever encounter a judge who is truly open-minded on the issue of document confidentiality.  As Buddy Holly sang, “That’ll be the day.”   

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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