United States District Court, S.D. New York
OPINION AND ORDER
GABRIEL W. GORENSTEIN, Magistrate Judge.
Plaintiff Liyan He brings this action under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), seeking long-term disability benefits under a policy issued by Cigna Life Insurance Company of New York ("Cigna"). Before the Court is Cigna's motion for a protective order, which would require plaintiff to maintain the confidentiality of sections of Cigna's Policies and Procedures manual (the "P&P") produced in this action. For the reasons stated below, Cigna's motion is granted.
Plaintiff was employed by Cornell University. See Complaint, filed Mar. 27, 2014 (Docket # 2), ¶ 7. Cigna issued a group long-term disability insurance policy to Cornell to benefit eligible Cornell employees, including plaintiff. Id. ¶¶ 8-10. Plaintiff filed a claim with Cigna for long-term disability benefits on July 2, 2012. See id. ¶¶ 12, 14. Cigna denied the claim, plaintiff appealed, and Cigna issued a decision upholding its denial of the claim on January 24, 2014. See id. ¶¶ 17-19. Plaintiff filed the instant action on March 27, 2014.
Cigna has produced to plaintiff certain portions of the P&P pursuant to an interim confidentiality agreement. See Def. Mem. at 1; Lodi Decl. ¶ 13; see also Ex. D to Lodi Decl. (list of the sections of the P&P that Cigna has produced in this action). We do not have before us any disputes about the scope of that production. Instead, plaintiff objects to Cigna's insistence that this production be maintained as confidential.
II. APPLICABLE LAW
Fed. R. Civ. P. 26(c)(1) provides that "[t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." As the Second Circuit has stated, "protective orders issued under Rule 26(c) serve the vital function... of secur[ing] the just, speedy, and inexpensive determination' of civil disputes... by encouraging full disclosure of all evidence that might conceivably be relevant." SEC v. TheStreet.Com, 273 F.3d 222, 229 (2d Cir. 2001) (quoting Martindell v. Int'l Tel. & Tel. Corp., 594 F.2d 291, 295 (2d Cir. 1979)) (alterations in original). While there is a presumption of public access to "judicial documents, " e.g., Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006), "[d]ocuments that play no role in the performance of Article III functions, such as those passed between the parties in discovery, lie entirely beyond the presumption's reach, " United States v. Amodeo, 71 F.3d 1044, 1050 (2d Cir. 1995) (citation omitted).
Pursuant to Fed.R.Civ.P. 26(c)(1)(G), the court may issue a protective order "requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way." "Good cause" for the issuance of a protective order is established "when a party is able to show that a clearly defined, specific and serious injury' will occur in the absence of such an order." Qube Films Ltd. v. Padell, 2015 WL 109628, at *2 (S.D.N.Y. Jan. 5, 2015) (quoting McDonnell v. First Unum Life Ins. Co., 2012 WL 13933, at *1 (S.D.N.Y. Jan. 4, 2012)); accord Cohen v. Metro. Life Ins. Co., 2003 WL 1563349, at *1 (S.D.N.Y. Mar. 26, 2003) (citing Bank of N.Y. v. Meridien Biao Bank Tanz., Ltd., 171 F.R.D. 135, 143-44 (S.D.N.Y. 1997)); cf. Levy v. Ina Life Ins. Co. of N.Y., 2006 WL 3316849, at *1 (S.D.N.Y. Nov. 14, 2006) ("Where the party seeking a protective order does not demonstrate the materials to be actually sensitive, courts are not obliged to enter orders that limit the freedom of opposing counsel and require the court to police future use or public disclosure of materials obtained in discovery."). "The party seeking a protective order has the burden of showing that good cause exists for issuance of that order." E.g., Gambale v. Deutsche Bank AG, 377 F.3d 133, 142 (2d Cir. 2004) (citation and alteration omitted).
Cigna argues that the portions of the P&P it has produced should be subject to a protective order because "[t]he P&P is not publicly available and it would be valuable to Cigna's competitors, because it would give them information that they could not otherwise obtain." Def. Mem. at 2. To support this argument, Cigna offers the sworn declaration of Richard M. Lodi, Cigna's Senior Operations Representative. See Lodi Decl. ¶ 1. Lodi represents that "Cigna does not disseminate the P&P to the general public or to its competitors." Id. ¶ 17. Indeed, according to Lodi, the P&P is not even made available to all Cigna employees - only those employees within the "Disability Management Solutions" department. See id. ¶ 9; Release of Information from DMS Policies and Procedures (annexed as Ex. A to Lodi Decl.) ("Rel."), at 00105. Authorized employees access the P&P "via the company's password-protected intranet system, " wherein users "have a user identification number and password and must agree not to disclose their password to others." Lodi Decl. ¶ 4. The P&P itself states that it is "proprietary and confidential, " id. ¶ 4; accord Rel. at 00103, and that Cigna employees should not distribute the P&P to anyone outside Cigna except for "limited sections of the P&P to claimants under limited circumstances, " Lodi Decl. ¶¶ 4-5 (footnote omitted); see Rel. at 00103-04 (excerpt from the P&P outlining those limited circumstances). If Cigna does distribute information from the P&P in response to a claimant's request, it provides "only relevant information" as defined by its "Legal Referral Specialists" on a case-by-case basis. See Rel. at 00105.
As to the risk of injury to its business, Lodi avers that Cigna has "invested significant time and money in developing, maintaining and updating the P&P, " which has occurred "over the course of many years, and at great expense." Lodi Decl. ¶¶ 4, 18. If the P&P were produced in this action without protection, Cigna contends that the P&P would likely become available to one of its competitors, which "could use that information to gain a competitive advantage by copying and implementing the[se] procedures, " resulting in a "cost savings" for competitors and a "disadvantage for Cigna." Def. Mem. at 5-6; accord Lodi Decl. ¶ 18.
There is no factual record contradicting these assertions. Plaintiff's main argument in opposition to a protective order arises from the fact that Cigna has previously disclosed portions of the P&P in letters to claimants. Plaintiff has placed in the record letters sent by Cigna to various non-party claimants, in which certain paragraphs of the P&P were quoted. See Plaintiff's Reply Memorandum of Law in Further Support of Motion to Compel, filed Nov. 10, 2014 (Docket # 32) ("Pl. Second Mem."), at 13 & Ex. 2; Newfield Decl. ¶¶ 3-4 & Ex. A. Essentially, plaintiff argues that because Cigna has previously disclosed these paragraphs from the P&P, no part of the P&P warrants protection here. See Pl. Opp'n at 1, 6. Cigna has undertaken a search for letters disclosing excerpts of the P&P and found that it has disclosed one or more portions of the P&P in 192 letters to claimants. See Lodi Decl. ¶ 11; accord Def. Mem. at 5. Analysis of these letters reveals that "only ten of the sections of the P&P that are at issue in this case have ever been disclosed to a claimant." Lodi Decl. ¶ 12; see Ex. C to Lodi Decl. (chart detailing the results of this analysis); Ex. D to Lodi Decl. (chart listing the sections of the P&P produced in this action and indicating whether they had been previously disclosed in letters to claimants).
We are satisfied that the statements from Lodi show that Cigna takes reasonable steps to maintain the confidentiality of the P&P and that competitive harm would result from the disclosure of the P&P. The letters from Cigna to claimants that are in evidence contain what are merely excerpts from the P&P. See Lodi Decl. ¶¶ 5, 12; Pl. Opp'n at 4; Pl. Second Mem. at 13. Generally, these excerpts describe aspects of Cigna's evaluation of disability, staffing and referral of claims, and procedures for notification and documentation. See Ex. 2 to Pl. Second Mem. at 3-12, 14-17, 21-37; Ex. A to Newfield Decl. at 3-7. Cigna represented in these letters that it was disclosing only those portions of the P&P that were relevant to its handling of the particular claim at issue. See Ex. 2 to Pl. Second Mem. at 2, 13, 20; Ex. A to Newfield Decl. at 3. Notably, while the P&P as a whole "contains hundreds of sections" and would be over 1, 000 pages long if printed, Lodi Decl. ¶ 3, the portions of the P&P excerpted in the letters in evidence span only a few pages, see Ex. 2 to Pl. Second Mem. at 3-12, 14-17, 21-37; Ex. A to Newfield Decl. at 3-7. Thus, the portions of the P&P that were distributed to claimants in the letters are relatively circumscribed in content and comprise a relatively small percentage of the document as a whole. See Lodi Decl. ¶ 14. Cigna's conduct in sending these letters does not undermine its claim that the P&P as a whole is kept confidential.
Analogizing to attorney-client privilege, plaintiff argues that Cigna's dissemination of portions of the P&P to claimants has resulted in a "waiver" of its right to seek a protective order pursuant to Rule 26(c). See Pl. Opp'n at 4-6. But the correct test is not one of "waiver" but whether the unfettered disclosure of the sections of the P&P sought by plaintiff here would result in a "clearly defined, specific and serious injury" to Cigna E.g., Qube Films, 2015 WL 109628, at *2 (citation omitted). Cigna's actions to limit distribution of the P&P - by circumscribing the P&P's dissemination among its own employees, by requiring those employees to access it with a secret password, and by explicitly limiting the circumstances in which select portions of the P&P are to be distributed to claimants - show that Cigna makes reasonable efforts to keep the P&P confidential, and that ...