[co-authors: Justin B. Weiner, Zakary A. Drabczyk, Brian D. King]*

Imagine you’re back at school with a box full of Legos. Chances are you had a teacher that insisted on everyone sharing their pieces when playing together. Some kids might need the bigger pieces, she said, while others might prefer the smaller ones. But rest assured, when recess is over, everyone takes their own Legos home with them.

In most cases, that’s how discovery works, too—though discovery is rarely as fun as building with Legos. Discovery is intended to let each side discover the information it needs to build its case. The last word of the previous sentence is important. The documents and information are intended for use in that case to resolve that dispute. The rules of procedure in every jurisdiction make this clear, when they describe relevance in terms of “the case” or “action.” See e.g. Fed. R. Civ. P. 26(b)(1) (“proportional to the needs of the case”); N.Y. C.P.L.R. 3101 (“matter material and necessary in the prosecution or defense of an action”); Tex. R. 192.3 (“relevant to the subject matter of the pending action”).

But sometimes litigating the facts of a case requires disclosure of confidential information. That presents a special problem for litigants and courts, because even though the discovery is intended to facilitate the litigation of a particular case, disclosure of the confidential information may have ramifications beyond that lawsuit. For example, companies and individuals sometimes have property-like interests in their information, which the law recognizes in various intellectual property regimes. To balance the needs of resolving a case while recognizing the protection needed for intellectual property and other concerns, courts are authorized to enter protective orders. A standard term of such orders is a “return or destroy” provision: When the case is over, everyone takes their confidential information back with them.

“Not so fast,” some plaintiff’s counsel would say. “Those documents belong to us now.” This plaintiff-takes-all view of discovery has become increasingly popular among lawyers who want to stockpile commercially sensitive data for future use. While their legal rationale varies from case to case, their goal remains the same: keep the defendant’s data for as long as possible—long enough to exchange it with another attorney, use it in another case, or forget about it in some computer folder that intruders might later access. This tactic turns the intuitive view of discovery on its head. Losing control of confidential information risks broader exposure and cuts into hard-earned intellectual property rights. In an age where even minor data breaches can lead to serious consequences, clients cannot afford to spare their security for the convenience of opposing counsel.

This article explores the arguments that plaintiff’s counsel raise in favor of keeping documents after the case—from ethics codes to insurance agreements to public policy—and explains how defense counsel can keep client data secure.

End-of-Matter Terms and Why They Matter

Protective orders, now “routinely entered in civil litigation.” Acosta v. Heritage, 332 F.R.D. 347, 349 (D. Haw. 2019), commonly contain “end-of-matter” terms which require a receiving party return the confidential information produced in the case to the producing party or destroy the information. Here is an example from the U.S. District Court for the Western District of Missouri form protective order:

Return of Confidential Documents. Within __ days after this litigation concludes by settlement, final judgment, or final order, including all appeals, all documents designated as containing Confidential Information, including copies as defined above, must be returned to the party who previously produced the document unless: (1) the document has been offered into evidence or filed without restriction as to disclosure; (2) the parties agree to destruction of the document to the extent practicable in lieu of return; or (3) as to documents bearing the notations, summations, or other mental impressions of the receiving party, that party elects to destroy the documents and certifies to the producing party that it has done so.

Agreed Protective Order Guidelines and Form, https://tinyurl.com/mtkjvydt (last visited Oct. 3, 2023).

Those provisions make good sense. The information is being produced to facilitate the litigation. Once the litigation is over, the opposing party’s need for the information ends. But that is not the end of the matter, because the opposing party is represented by an attorney. And some attorneys have a strong interest in acquiring as much confidential data as they can to facilitate their next case. This misalignment of incentives can lead to protracted, time-consuming, and expensive discovery disputes. The following three sections outline some of the arguments that plaintiff’s counsel have offered against return-or-destroy provisions, and how defense counsel can respond.

Argument One: Ethics

Perhaps the most common argument for retaining information hinges on ethics rules. Some counsel have argued that the rules of professional conduct prohibit them from destroying records obtained during discovery. See, e.g., Cruz v. Dollar Tree Stores, Inc., No. 07-02050-SC, 2012 WL 1745539, at *1 (N.D. Cal. May 16, 2012). The theory goes like this: Materials received during discovery—confidential or otherwise—become the client’s property. And because counsel must safekeep client property and produce it upon request, see Model R. Prof’l Conduct 1.15(d), returning information obtained during discovery would violate the lawyer’s ethical obligations.

There are at least two problems with this theory. The first is the assumption that the duty to safekeep client property extends to records produced in discovery. As a threshold matter, the model rule that most plaintiffs’ counsel cite—Rule of Professional Conduct 1.15—appears to apply only to client funds and other personal property. See Model R. Prof’l Conduct 1.15(d) (speaking only of “client funds and other property”). Numerous courts have reached the same conclusion. See e.g. Bolden v. Walmart Stores, Inc., No. 20-CV-150-DWD, 2020 WL 8258243, at *2 (S.D. Ill. Nov. 6, 2020) (“Rule 1.15 primarily concerns the obligation for attorneys to properly safeguard and retain financial property.”); Cruz, 2012 WL 1745539, at *1 (holding that analogous California rule “deal[t] primarily with preserving the identity of funds and other property held in trust”).

Equally tenuous is the assumption that a plaintiff somehow acquires a property interest in the confidential documents by receiving them during discovery. As the court in Cruz remarked, “it strains credulity to suggest that another party’s confidential materials become the property of a client when they are produced in discovery pursuant to a protective order.” Cruz, 2012 WL 1745539, at *1; accord Rhodes v. Pfeiffer, No. CV 14-7687-JGB (KK), 2017 WL 11048475, at *3 (C.D. Cal. Sept. 12, 2017). After all, discovery is “a matter of legislative grace,” “provided for the sole purpose of assisting in the preparation and trial, or the settlement, of litigated disputes.” Seattle Times Co. v. Rhinehart, 467 U.S. 20, 34 (1984). It would be quite odd if parties could obtain a property interest in documents by suing the rightful owner.

The second problem with this plaintiff-takes-all theory is the notion that an attorney-grievance commission would (or could) punish counsel for returning information as directed. Along with duties to clients, attorneys owe duties to the court, including the duty to obey court orders. See, e.g., Vallejo v. Amgen, Inc., 903 F.3d 733, 750 (8th Cir. 2018) (“Attorneys are entitled to advocate zealously for their clients, but they must do so in accordance with the law, the court rules, and the orders of the court.”). This principle is enshrined in the Model Rule of Professional Conduct, which authorize counsel to refuse to return client property when “permitted by law.” Model R. Prof’l Conduct 1.15(d); see also Restatement (Third) of the Law Governing Lawyers § 46 (2000), cmt. c. (counsel need not furnish documents to a client when doing so “would violate... a court’s protective order”). Even the American Bar Association has stated that when obligations to the court and client conflict, “the lawyer’s duty to the system of justice must transcend the lawyer’s duty to the client.” See ABA Comm’n on Professionalism, “... In the Spirit of Public Service”: A Blueprint for the Rekindling of Lawyer Professionalism 30 (1986). Simply put, a lawyer’s obligations to her client cannot prevent the court from entering a return-or-destroy provision any more than it could prevent the court from managing other aspects of discovery. See, e.g., Tenet Healthcare Corp. v. Louisiana F. Corp., 538 S.E.2d 441, 445 (Ga. 2000) (trial court did not abuse discretion in ordering attorney to disclose client identity despite attorney’s obligation to maintain client secrecy); United States v. Woods, No. 5:17-CR-50010, 2017 WL 11380132, at *2 (W.D. Ark. Nov. 6, 2017) (rejecting ethical-obligation argument against return-or-destroy provision because court order “supersede[d]” ethical obligation).

There is also a practical response to the argument that return-or-destroy provisions violate ethical rules: These provisions are common in model protective orders used by courts across the country. See, e.g., Guidelines for Agreed Protective Orders for the District of Kansas, https://tinyurl.com/bdea624t (last visited Oct. 3, 2023) (similar return-or-destroy provision); Example Protective Order, https://tinyurl.com/3x9vczsw (last visited Oct. 3, 2023) (same). It would be strange if each of these courts were encouraging ethical violations by every attorney that practices before them.

Argument Two: Insurance

The next argument carries a similar duty-bound complexion—not ethical duties to the client, but contractual duties to the malpractice insurer. Many lawyers carry malpractice insurance that requires them to cooperate in malpractice investigations. Destroying information received during discovery, some counsel argue, would impair their ability to cooperate. See, e.g., Velasquez v. Phillips Electronics N. Am. Corp., 6:13-cv-01463, slip op. at 3 (D. Kans. Apr. 10, 2014).

There is no support for this argument. The case law is devoid of any instance where a court held that counsel breached its insurance agreement by destroying confidential information at the conclusion of a case. Beyond that, very few cases result in a malpractice claim or disciplinary action. And for those that do, there is no reason to believe that a malpractice insurer would expect counsel to produce confidential information received from a defendant, much less fault them for complying with a return-or-destroy provision.

More practically, it blinks reality to suggest that a malpractice claim could somehow turn on the defendant’s confidential documents. Many states have “attorney judgment rules” or similar doctrines that immunize attorneys from honest errors in judgment. Practically speaking, any dispute about how a plaintiff’s attorney made use of the defendant’s confidential information will fall within this rule, because the kinds of “errors” that a plaintiff’s attorney could make relative to these documents are nitty-gritty tactical decisions that could not be the subject of a malpractice claim. Beyond that legal duties of cooperation typically arise when the attorney has notice of the claim. It is difficult to imagine plaintiff’s attorney has notice of a malpractice claim against her when negotiating a protective order—i.e. near the outset of the litigation.

Argument Three: Public Policy

The final argument is premised on public policy—or at least how some lawyers conceive of it. Some counsel have argued that return-or-destroy provisions run contrary to public policy because they might prevent future plaintiffs from discovering the same information.

The basic problem with this argument is it overstates the plaintiff’s interest in discovery. Plaintiffs have no right to wage “hypothetical future discovery battles for hypothetical future plaintiffs.” See Strough v. Gen. Motors LLC, No. 18-CV-03303-PAB-NRN, 2019 WL 2357306, at *4 (D. Colo. June 4, 2019). Discovery is intended to assist parties to develop their cases for trial, Seattle Times, 467 U.S. at 34, not to afford “an opportunity to seek information for an unasserted claim,” or to permit fishing expeditions for “documents to be used outside the instant litigation,” Strough, 2019 WL 2357306, at *3. So regardless of whether public policy favors indefinite retention, no plaintiff has the right to demand indefinite retention for the benefit of some hypothetical future plaintiff.

Making the Case for Return-or-Destroy Provisions

Dismantling the arguments by plaintiff’s counsel is only half the battle. The other half is convincing the court that return-or-destroy provisions are necessary to safeguard the client’s data. This is where illustrating the risk of harm becomes crucial. Most jurisdictions require the party seeking protection to demonstrate that disclosure would inflict “a specific prejudice or harm.” See, e.g., Phillips ex rel. Ests. of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1210 (9th Cir. 2002). On this point, legal analysis is no substitute for hard facts. The best approach is to submit an affidavit from a knowledgeable employee who can explain how disclosure would harm the company. See, e.g., Smith v. BIC Corp., 869 F.2d 194, 200 (3d Cir. 1989) (finding that design information was entitled to protection and emphasizing general counsel’s testimony that design information is kept “on a need-to-know basis”). This on-the-ground insight is especially important when the dispute is over a discrete topic like end-of-matter terms. While the risk of competitive harm is arguably the easiest to explain given its widespread acceptance, see, e.g., Miles v. Boeing Co., 154 F.R.D. 112, 114 (E.D. Pa. 1994) (risk of competitive harm justifies entry of protective order), the same strategy applies to other harms.

Another point to emphasize for the court is the prevalence of return-or-destroy provisions. Numerous of these orders have been entered by district courts across the country. Many courts also publish standardized protective orders containing return-or-destroy provisions, such as protective orders published by the Western District of Missouri. Few courts are willing to take the position that a discovery practice adopted throughout the country, and which works well for parties and courts alike, is somehow incorrect. See, e.g., Waters v. Fuji Heavy Indus. Ltd., No. 19-2525-KHV-GEB, 2020 WL 1433494, at *5 (D. Kan. Mar. 24, 2020) (granting defendant’s request for return-or-destroy provision based in part on similar language incorporated in the district’s standard protective order).

Finally, counsel should emphasize the benefits to judicial economy. Returning or destroying confidential documents at the end of the case means less friction during discovery. As the court noted in Cruz, “[p]arties might be unwilling to stipulate to protective orders or otherwise disclose confidential documents if they know that those documents could be retained by opposing counsel indefinitely.” Cruz, 2012 WL 1745539, at *1. Returning or destroying information also means that the court will not be called on years after the case has ended to decide whether plaintiff’s counsel shared the information improperly. See Williams v. Taser Int’l, Inc., No. CIVA1:06-CV-0051-RWS, 2006 WL 1835437, at *2 (N.D. Ga. June 30, 2006) (refusing to permit plaintiffs to share confidential information or retain it after the case concludes as doing so would make it “more difficult for the Court to enforce the terms of its protective order”).

* * * *

With discovery growing more complex and data breaches more frequent, the stakes have never been higher for defense counsel looking to protect client information. Nor has controlling the disposition of information on the back end of the case, through return-or-destroy provisions, ever been more important. Taken together, the points above should help defense counsel ensure that every piece of confidential information returns exactly where it should.

* Justin B. Weiner is a member at BSP Law. He focuses his practice on complex business litigation, including work as National Discovery Counsel in product liability and class action cases. He also has an extensive background in litigation regarding intellectual property. Justin has experience earning favorable results for his clients in state and federal courts in motion practice, on appeals, and in trials.

Zakary A. Drabczyk is an associate at BSP Law. He focuses his practice on critical motions and appeals.

Brian D. King is an associate at BSP Law. He focuses his practice on product liability. Brian also has extensive litigation experience in insurance and commercial motor vehicle matters.