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In Products Liability Cases, What Do Protective Orders Really Protect?

It is commonplace in products liability cases for defendants, generally large corporations, to seek confidentiality agreements and protective orders with regard to the production of documents they consider sensitive and do not want in the public domain.  Although there are valid reasons for corporations to protect the public disclosure of certain information, sometimes the purpose of obtaining a protective order is to prohibit the release of information that is damaging to the defendant in litigation, and that may help other litigants with similar complaints against the corporation prosecute their claims. Plaintiffs’ attorneys need to be very cautious when agreeing to a stipulated protective order, and should make every effort to limit the terms of such agreements and to contest, where appropriate, overly broad confidential designations.

New York courts have taken a strict approach to the use of protective orders and require that they be limited to trade or business secrets.  Mann v. Cooper Tire Company, 33 A.D.3d 24, 37, 816 N.Y.S.2d 45, 56 (1st Dep’t 2006); lv denied 7 N.Y.3d 718, 860 N.E.2d 990, 827 N.Y.S.2d 688 (2006); Bristol, Litynski, Wojcik v. Queensbury, 166 A.D.2d 772, 773-774, 562 N.Y.S.2d 976, (3rd Dep’t 1990).  The Court in Mann listed several items that it did not consider to be trade or business secrets, and not the proper subject of a protective order, such as job descriptions of identified personnel, pleadings and bills of particulars for similar litigation, customer complaints, and sources of parts and materials.

In Ashland Management Inc. v. Janien, 82 N.Y.2d 395, 624 N.E.2d 1007, the New York Court of Appeals adopted the definition of “trade secret” as contained in section 757 of Restatement of Torts, comment b.  It defines “trade secret”, as “any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it”.  The Court went on to list the factors suggested by the Restatement to be considered in deciding whether something is a trade secret.  They include, (a) the extent to which the information is known; (b) the extent to which it is known by employees and others involved in the business; (c) the extent of measures taken by the business to guard the secrecy of the information; (d) the value of the information to the business and its competitors; (e) the amount of effort or money expended by the business in developing the information; (f) the ease or difficulty with which the information could be properly acquired or duplicated by others”.

The burden of establishing that the information sought is a trade secret lies with the party objecting to the disclosure.  If that burden is met, then the party seeking disclosure must show that the information appears to be indispensable and cannot be obtained in any other way.  Curtis v. Complete Foam Insulation Corp., 116 A.D.2d 907, 909, 498 N.Y.S.2d 216, 217 (3rd Dep’t 1986); Xand Corp. v. Reliable Sys. Alternatives Corp., 25 A.D.3d 795, 807 N.Y.S.2d 574 (2d Dep’t 2006).   Similarly, the burden of establishing that documents designated as confidential meet the criteria for such, lies with the party making the designation.

In cases involving exposure to toxic substances, such as benzene cases (where plaintiffs can develop life-threatening blood cancers, including acute myeloid leukemia (AML)), and asbestos cases, (where plaintiffs can develop mesothelioma or lung cancer), plaintiffs frequently sue the same companies who manufactured products to which they were exposed.  The purpose of our legal system is to seek a just resolution of claims, in as speedy and inexpensive a manner as possible.  Collaborative use of discovery materials between cases and law firms furthers that purpose.  Sharing of discovery is also an effective way to insure complete disclosure, as it forces defendants to be consistent in their discovery responses.  The basis for a protective order should not be to prevent information from being disseminated to other litigants. It is our role as plaintiffs’ attorneys to fight efforts by defendants to prevent relevant information from being disclosed. A protective order used for the wrong reasons protects defendants in concealing sometimes bad behavior, but damages plaintiffs and the pursuit of justice.