United States District Court, W.D. New York
DECISION AND ORDER
Elizabeth A. Wolford United States District Judge
Steuben Foods, Inc. ("Plaintiff) has sued Defendants
Shibuya Hoppmann Corp., Shibuya Kogyo Co. Ltd., and HP Hood
LLC (collectively "Defendants") for patent
infringement under 35 U.S.C. §§ 100 et
seq. (Dkt. 1). On April 15, 2013, this matter was
referred to Magistrate Judge Jeremiah J. McCarthy for hearing
and disposition of all non-dispositive motions or
applications, supervision of discovery, and to hear and
report upon dispositive motions for consideration by the
district judge. (Dkt. 112). Judge McCarthy subsequently
entered a protective order dated April 16, 2014, which
permits a party producing material to designate such material
as either "CONFIDENTIAL" or "HIGHLY
CONFIDENTIAL." (Dkt. 148) (hereinafter the
"Protective Order"). Material designated
"HIGHLY CONFIDENTIAL" may be disclosed only to
certain enumerated persons, including up to three in-house
counsel. (Id.). Defendants had requested that the
Protective Order provide that "HIGHLY CONFIDENTIAL"
materials be disclosed only to outside counsel and experts,
but Judge McCarthy denied that request, holding that
Defendants had failed to articulate any reason to justify
this heightened level of protection. (See Dkt. 140
at 2; Dkt. 144 at 16).
27, 2016, Defendants filed a motion seeking to amend the
Protective Order, again asking Judge McCarthy to allow
designation of documents for "outside attorneys'
eyes only" (hereinafter "OAEO"). (Dkt. 227).
Specifically, Defendants stated that Plaintiff had refused to
produce certain material on the basis that it had a
contractual obligation to a third party to maintain such
material as confidential, and argued that inclusion of an
OAEO designation in the Protective Order would resolve this
discovery dispute. (See Dkt. 227-1 at 5). In the
alternative, Defendants asked that the Court compel Plaintiff
to produce the withheld material without an OAEO designation.
(Id.). Plaintiff opposed the motion (Dkt. 236), and
on September 23, 2016, Judge McCarthy entered a Text Order
holding that while a party could not utilize an OAEO
designation for its own materials, third parties would be
permitted to intervene and request that their materials be
designated OAEO. (Dkt. 255). Defendants appealed Judge
McCarthy's determination to the undersigned on October 7,
2016. (Dkt. 260). For the reasons set forth below,
Defendants' appeal is denied.
Standard of Review
district court will reverse a magistrate judge's ruling
on a non-dispositive issue only where it was "clearly
erroneous or contrary to law." See Thurmond v.
Bowman, 199 F.Supp.3d 686, 689 (W.D.N.Y. 2016).
"The clearly erroneous/contrary to law standard of
review is 'highly deferential' and 'a district
court may reverse the order only if on the entire evidence,
the district court is left with the definite and firm
conviction that a mistake has been committed.'"
Id. (quoting Rodriguez v. Pie of Port Jefferson
Corp., 48 F.Supp.3d 424, 425 (E.D.N.Y. 2014)).
Defendants rely on two unpublished, out-of-circuit decisions
to argue that the Court should afford no deference to Judge
McCarthy's ruling because he did not issue a written
opinion or detailed explanation for his order. (See
Dkt. 260-1 at 5-6). The Court disagrees. Judge McCarthy had
already explained, on the record, his reasons for not
including an OAEO designation in the Protective Order.
(See Dkt. 144 at 16). He was not required to repeat
that ruling in response to Defendants' most recent
request. Instead, he entered a Text Order dealing with the
specific issue raised by Defendants' motion-namely, how
to protect the interests of third parties with
confidentiality interests in material relevant to this
litigation. Under these circumstances, the Court has no
trouble discerning the rationale behind Judge McCarthy's
ruling and, accordingly, reviews it under the deferential
clear error/contrary to law standard.
Judge McCarthy's Ruling was Free from
to lift or modify a protective order is a decision committed
to the sound discretion of the trial court." In re
Agent Orange Prod. Liab. Lit., 821 F.2d 139, 147 (2d
Cir. 1987). The Court weighs four factors when considering a
request to modify a protective order: "(1) whether good
cause exists for the modification, (2) the nature of the
protective order, (3) the foreseeability, at the time of
issuance of the order, of the modification requested, and (4)
the parties' reliance on the order." Lee
Shuknecht & Sons, Inc. v. P. Vigneri & Sons,
Inc., 927 F.Supp. 610, 614 (W.D.N.Y. 1996).
Judge McCarthy properly concluded that modification of the
Protective Order to provide for an OAEO designation was not
warranted. The Protective Order at issue has been in place
for more than four years, and the parties have conducted
extensive discovery under its provisions. The foreseeability
of Defendants' request is amply illustrated by the fact
that they previously requested an OAEO designation at the
time the Protective Order was initially entered. Defendants
had the opportunity at that time to present a full case for
why such a designation was needed, and could have asked for
district judge review of the Protective Order at that time,
but chose not to do so. Additionally, Defendants have failed
to show good cause for creation of a general OAEO
designation, because the procedure established by Judge
McCarthy (namely, allowing third parties to seek protection
of their confidential materials) addresses the precise issue
raised by Defendants in their motion.
claim that Judge McCarthy's order was somehow
"unfair, " because it "affords non-parties
greater protection for their highly sensitive materials than
parties." (Dkt. 260-1 at 11). This argument is without
merit. As other courts have noted, "the risk of harm to
non-parties from disclosure is significant due to their
inability to be present at day-to-day proceedings. . .
." In re Northshore Univ. Healthsystem, 254
F.R.D. 338, 342 (N.D. 111. 2008); see also Equal
Emp't Opportunity Comm'n v. Kronos Inc., 694
F.3d 351, 368 (3d Cir. 2012) (finding no error in providing
additional protection to business interests of a third
party); Crane Plastics Co. v. Louisiana-Pac. Corp.,
119 F.Supp.2d 749, 751 (S.D. Ohio 2000) ("[T]he Court
assigns greater weight to the confidentiality interests
asserted by a non-party to the litigation. . . ."). In
other words, it is appropriate to provide additional
protections for non-parties who are uninvolved in the
day-to-day litigation of this matter and, therefore, are
disadvantaged with respect to their ability to protect their
business interests. This is precisely what Judge McCarthy did
in this matter.
on the foregoing, the Court concludes that Judge
McCarthy's resolution of Defendants' motion to modify
the Protective Order was free from error. Moreover, and for
the same reasons, the Court would reach the same conclusion
Judge McCarthy reached were it to consider the issue de
Defendants' Alternative ...