United States District Court, D. New Mexico
MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF'S
MOTION TO DE-DESIGNATE DISCOVERY MATERIAL MARKED
“ATTORNEYS' EYES ONLY”
STEPHAN M. VIDMAR, UNITED STATES MAGISTRATE JUDGE
MATTER is before the Court on Plaintiff's Motion to
De-Designate Discovery Material Marked “Attorneys'
Eyes Only” [Doc. 68], filed on November 8, 2016. The
Court has considered the briefing on the motion [Docs. 73,
88, 89, 100, 119], the relevant portions of the record, the
oral argument of February 27, 2017, and the relevant law.
Being otherwise fully advised in the premises, the Court
finds that Defendants fail to show that the discovery
material at issue constitutes trade secrets or that they
might be harmed if Dr. Augé sees it. Thus, the motion
should be granted to the extent that the materials should be
de-designated, but no expenses or fees are warranted.
1990's, Wayne Augé, II, M.D., (the originally
named Plaintiff in this action) made innovative developments
in orthopedic medicine and surgery. Defendants were
interested in his inventions, and they entered into a series
of confidentiality agreements with him for their common
benefit. Defendants utilized Dr. Augé's inventions
in several products that went to market. Over the years,
however, as Defendants marketed new products with his
inventions, Dr. Augé came to believe that Defendants
were not fulfilling their agreements to honor his ownership
rights or to pay him what they owed. So, Dr. Augé
filed this lawsuit in 2014.
parties anticipated that some materials disclosed in
discovery would be sensitive, and they entered into an Agreed
Protective Order (“APO”) early on. [Doc. 59]. The
APO provided for two tiers of protection:
“Confidential” and “Attorneys' Eyes
Only.” Id. at 1, 4. Confidential information
may be accessed by the parties, including Dr. Augé,
but cannot be used for any purpose outside this litigation.
Id. at 1, 3. Material designated
“Attorneys' Eyes Only” (“AEO”)
may not be accessed by the parties, including Dr.
Augé, and is intended to protect “trade secrets
or highly confidential, non-public, personal or proprietary
business information, disclosure of which could be especially
detrimental or harmful to the designating party if disclosed
to opposing parties.” Id. at 4.
August 26, 2016, Defendants produced 86, 802 pages of initial
disclosures. [Doc. 88] at 8. Of those, approximately 63, 335
pages (or 3, 809 documents) were designated AEO. Id.
Plaintiff first objected to the designations in writing on
September 30, 2016. [Doc. 89-12] at 4. That same day, defense
counsel explained that the designations were necessary
because the materials constituted “internal [research
and development] and product development files.”
Id.; [Doc. 88] at 9. Counsel conferred at least
twice more. See [Doc. 88] at 8-9, 9 n.12; [Doc. 68]
at 5; [Doc. 102] at 2. Although the APO instructs the
producing party (i.e., Defendants) to submit the dispute by
formal motion within ten calendar days of the parties'
“conference” on the dispute, Plaintiff actually
filed the instant motion on November 8, 2016. [Doc. 68].
Plaintiff asks the Court to de-designate the materials and to
award attorney fees. Id. at 11.
is no absolute privilege for trade secrets and similar
confidential information.” Centurion Indus., Inc.
v. Warren Steurer & Assocs., 665 F.2d 323, 325 (10th
Cir. 1981) (alterations omitted) (quoting Fed. Open Mkt.
Comm. v. Merrill, 443 U.S. 340, 362 (1979)). Under
Fed.R.Civ.P. 26(c)(1)(G), a court may, for good cause, issue
a protective order (or permit a party to avail itself of an
already issued protective order) to require that “a
trade secret or other confidential research, development, or
commercial information not be revealed or be revealed only in
a specified way.” In re Cooper Tire & Rubber,
Co., 568 F.3d 1180, 1188 (10th Cir. 2009). A party
seeking that its information only be revealed in a certain
way, such as limiting who can view or access the materials,
under this Rule “must first establish that the
information sought is a trade secret [or other confidential
research, development, or commercial information].”
Id. at 1190; Fed.R.Civ.P. 26(c)(1)(G). Further, that
party must additionally “demonstrate that its
disclosure might be harmful.” In re Cooper
Tire, 568 F.3d at 1190 (quoting Centurion, 665
F.2d at 325). To establish the requisite harm, the party
seeking protection must make a “particular and specific
demonstration of fact, as distinguished from stereotyped and
conclusory statements.” E.g., Layne Christensen Co.
v. Purolite Co., 271 F.R.D. 240, 245 (D. Kan. 2010)
(quoting Gulf Oil Co. v. Bernard, 452 U.S. 89, 102
n.16 (1981)); accord Jenner & Block, Moore's
AnswerGuide Federal Discovery Practice § 16.29(b) (2017
ed.) (a showing of “specific prejudice or harm”
is required to limit the disclosure of trade secrets).
example, in McKellips v. Kumho Tire Co., a products
liability case, the parties had entered into a protective
order that prohibited the plaintiffs and their counsel from
sharing certain discovery material (e.g., “confidential
research, development, or proprietary business
information”) outside the litigation. 305 F.R.D. 655,
661 (D. Kan. 2015). The protective order notwithstanding, the
defendant Kumho opposed producing certain discovery
materials, such as the number of tires produced; the
specifications and blueprints for the subject tire; skim
stock compounds and formulas; manufacturing processes;
manufacturing or design defects found; tread separation
studies and testing; speed rating; and driver response,
effects, risk, and causes of tread separation. Id.
at 661, 664. Kumho considered these materials to be trade
secrets. The Court agreed, but only in part.
had submitted an affidavit in support of its position that
the skim stock compounds and formulas for its tires
constituted trade secrets. Id. at 663. The court was
persuaded that the skim stock materials constituted trade
secrets. Id. However, the court found that Kumho had
not met its burden to establish that the other material
constituted trade secrets. Id. at 664. For example,
the court found that Kumho's vague characterization of
the disputed material as “manufacturing
processes” was not enough. Id. Kumho had not
identified any particular aspect of its manufacturing
processes that was unique to it, closely guarded, and if
disclosed, would be valuable to competitors. Id.
Further, the court found that the protective order already in
place provided sufficient protection for Kumho's
information. Other than the skim stock materials, therefore,
the court ordered Kumho to produce the discovery materials.
Northern Natural Gas Co. v. L.D. Drilling, Inc., the
District of Kansas similarly addressed whether materials
sought in discovery constituted trade secrets. 2010 U.S.
Dist. LEXIS 145522; 2010 WL 9519354 (D. Kan. Mar. 26, 2010)
(unpublished). The plaintiff Northern wanted entry onto L.D.
Drilling's land in order to collect natural gas samples
from certain gas wells. U.S. Dist. LEXIS 145522 at *12. L.D.
Drilling submitted an affidavit supporting its claim that
allowing such sampling would expose its trade secrets.
Id. at 27. The affiant, Mr. Davis, explained that
information about the physical and chemical composition of
material produced from the wells was economically valuable
especially because the information was not generally known or
readily ascertainable to those who might otherwise make use
of it. Id. The court did not indicate whether the
affidavit was convincing. Instead, the court assumed without
finding that the gas samples were trade secrets and went on
to hold that LD Drilling failed to show that it would be
harmed by disclosure of the samples. Id. at 30-31.
the party seeking protection for its trade secrets has met
its initial burden-to show that the materials constitute
trade secrets and disclosure of them might cause harm-the
burden then shifts to the party seeking disclosure to
establish that such disclosure is “relevant and
necessary to the action.” Centurion, 665 F.2d
The need for the trade secrets should be balanced against the
claim of harm resulting from the disclosure. “It is
within the sound discretion of the trial court to decide
whether trade secrets are relevant and whether the need
outweighs the harm of disclosure.” If the party seeking
discovery cannot prove that the information is relevant and
necessary, then discovery should be denied. However, if the
party meets its burden, “the trade secrets should be
disclosed, unless they are privileged or the subpoenas are
unreasonable, oppressive, annoying, or embarrassing.”
In re Cooper Tire, 568 F.3d at 1190 (internal
citations omitted) (quoting Centurion, 665 F.2d at