United States District Court, D. New Mexico
ENVIRONMENTAL DIMENSIONS, INC., A New Mexico Corporation, Plaintiff,
ENERGYSOLUTIONS GOVERNMENT GROUP, INC. (n/k/a Atkins Energy Government Group, Inc., ) a foreign for profit corporation, Defendant.
MEMORANDUM OPINION AND ORDER
H. RITTER U.S. MAGISTRATE JUDGE
matter comes before the Court on Energysolutions Government
Group, Inc.'s (“ESGG”) Motion to Enforce
Protective Order and Maintain Confidentiality Designation
[Doc. 141], filed July 18, 2019. At issue in the Motion is
whether the Court should protect a confidential settlement
agreement between Los Alamos National Security
(“LANS”) and ESGG - which the Court ordered
produced to EDi when it denied ESGG's Motion to Quash
EDi's subpoenas seeking the same - and whether ESGG has
standing to move for a protective order in these
circumstances. Relatedly, the Court must determine whether to
award attorney's fees to either party for the present
motion practice. The Court has reviewed Environmental
Dimensions, Inc.'s (“EDi”) Response to the
Motion [Doc. 142], and ESGG's Reply [Doc. 144]. Having
done so, the Court concludes that ESGG's Motion must be
granted in part.
in the business of providing environmental services to the
United States Department of Energy and other governmental
agencies. [Doc. 1-1, p. 3');">p. 3');">p. 3');">p. 3]. As such, during the relevant time
period it was competing for contracts with Los Alamos
National Laboratory (“LANL”) which were set aside
for small businesses in New Mexico. [Id.].
Ultimately, EDi was awarded a contract with LANS which
provided that EDi would manage, treat, and package
radioactive waste for LANS at the LANL facility.
[Id., p. 4]. Prior to the award of the LANS
contract, EDi contracted with ESGG, the prior prime
contractor to LANS, to “provide expert waste management
personnel experienced in the LANS [Transuranic] Waste Program
and knowledgeable of specific processes and
procedures.” [Id.]. Included among these
duties was “waste treatment and packaging for shipment
to the DOE Waste Isolation Pilot Plaint (hereinafter
‘WIPP').” [Id., p. 5].
WIPP facility is an underground repository for the disposal
of transuranic and other radiological waste. [Doc. 87, p. 4].
Prior to the contract underlying this case, ESGG was the
prime contractor responsible for remediating and repackaging
waste at LANL under LANS' direction. [Id.]. On
February 14, 2014, there was a release of radiological
materials at the WIPP facility “allegedly from” a
drum of transuranic waste that had been repackaged and
shipped to WIPP from LANL by ESGG. [Id., p. 6]. In
the meantime, on April 16, 2014, LANS notified EDi that it
had been awarded the prime contract relating to waste
disposal. [Id.]. After the parties' relationship
soured, EDi sued ESGG in New Mexico State Court.
[See Doc. 1-1]. ]. ESGG timely removed this matter
to federal court on September 23, 2016. [See
generally Doc. 1].
in this case has been fraught with discord, and the Court has
issued seven substantive Orders addressing the parties'
discovery disputes, not counting Orders addressing motions
for attorney fees associated with such disputes.
[See Docs. 50, 73, 74, 76, 123, 124, 139]. Many of
these disputes have centered around a settlement agreement
between ESGG and LANS resulting from the WIPP release. After
the Court denied ESGG's Motion to Quash EDi's
subpoenas seeking the settlement agreement from non-parties,
[see Docs. 123, 138], and before the non-parties
produced the settlement agreement, ESGG produced it subject
to the Agreed Order Governing the Confidentiality of
Discovery Materials (“the Protective Order”),
entered by the Court on October 3, 2017. [See Doc.
37');">37]. The Protective Order has a two-tiered designation
system; documents may be labeled “Confidential”
or “Attorneys Eyes Only” (“AEO”).
[Doc. 37');">37, p. 2');">p. 2]. Pertinent here, ESGG labeled the settlement
agreement AEO. [See Doc. 141-1]. The next day, the
attorney representing the subpoenaed non-parties also
produced the settlement agreement to EDi, also subject to the
AEO designation. [Doc. 141-2].
now moves the Court to maintain the AEO designation for the
settlement agreement. [See generally Doc. 141]. EDi
opposes and argues bad faith, asserting that ESGG has not met
its burden under the Protective Order and that, even if it
did, ESGG does not have standing to move for such protection
given that the Court denied its Motion to Quash the subpoenas
seeking the settlement agreement. [See generally
Doc. 142]. ESGG's Reply points out that EDi's
Response brief was filed a day late under this Court's
Local Rules, and argues that it has standing to move for
protection as a signatory to the settlement agreement.
[See generally Doc. 144].
Rule of Civil Procedure 26(c) expressly limits who may move
for a protective order to parties or the person from whom
discovery is sought.” S.E.C. v. Dowdell, 144
Fed.Appx. 716, 722 (10th Cir. 2005) (unpublished). Moreover,
“[a]t least one court has recognized that objecting
non-parties have a legitimate interest in obtaining a
protective order to protect their confidential commercial
documents from disclosure.” High Point SARL v.
Sprint Nextel Corp., 280 F.R.D. 586, 592 (D. Kan. 2012)
(citing In re Northshore Univ. Healthsystem, 254
F.R.D. 338, 342-43 (N.D. Ill. 2008)).
Rule 26(c), the court “may, for good cause, issue an
order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or
expense[.]” Fed.R.Civ.p. 2');">p. 26(c)(1). If it concludes that
a protective order is warranted, the Court may take a variety
of action, including limiting the scope of disclosure or
discovery to certain matters. See Fed. R. Civ. P.
26(c)(1)(D). “It is the party seeking the protective
order who has the burden to show good cause for a protective
order.” Clower v. GEICO Ins., CV 12-0472
JB/WDS, 2013 WL 1897832, at *6 (D.N.M. Apr. 16, 2013)
district courts have broad discretion over discovery.”
Id. As with all of the Federal Rules of Civil
Procedure, the discovery rules are to be “construed,
administered, and employed by the court and the parties to
secure the just, speedy, and inexpensive determination of
every action and proceeding.” Fed.R.Civ.P. 1.
“Protective orders serve the vital function of securing
the just, speedy, and inexpensive determination of civil
disputes by encouraging full disclosure of all evidence that
might conceivably be relevant.” S.E.C. v. Merrill
Scott & Associates, Ltd., 1262');">600 F.3d 1262, 1272 (10th
Cir. 2010) (quoted authority omitted). “The starting
point for interpretation of a protective order lies in its
plain language.” Id. at 1271. “As long
as a protective order remains in effect, the court that
entered the order retains the power to modify it[.]”
United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d
1424, 1427 (10th Cir. 1990). By extension, the court that
entered the protective order has the power to construe it.
“The modification of a protective order, like its
original entry, is left to the sound discretion of the
district court.” Rohrbough v. Harris, 549 F.3d
1313, 1321 (10th Cir. 2008).
Tenth Circuit has recently noted, a “settlement's
confidentiality does not bar [its] discovery.”
Burke v. Regalado, 935 F.3d 960, 1048 (10th Cir.
2019) (citation omitted). However, the court did encourage
district courts to “take appropriate measures such as a
protective order to safeguard any legitimate privacy
interests in the settlement.” Id.
37');">37(a)(5) applies to the award of expenses where a protective
order is sought. Fed.R.Civ.p. 2');">p. 26(c)(3). Under Rule
37');">37(a)(5)(A), the Court must award expenses against the
nonmovant or its attorney if such a motion is granted unless
the nonmovant's position was substantially justified or
other circumstances make an award of expenses unjust.
Fed.R.Civ.p. 3');">p. 3');">p. 3');">p. 37(a)(5)(A). If the motion is denied the Court
instead must award expenses against the movant. Fed.R.Civ.P.
37');">37(a)(5)(B). If a motion to compel or for protective order is
granted in part and denied in part, the Court may apportion
the parties' reasonable expenses. Fed.R.Civ.P.
37');">37(a)(5)(C). Thus, “[t]he great operative principle of
Rule 37');">37(a)(5) is that the loser pays, ” In re
Lamey, 2015 WL 6666244 at *4 (D.N.M. 2015) (quoting
Wright, Miller & Marcus, Federal Practice and Procedure
(3d ed. 2010), § 2288, n.17), unless the losing position
was substantially justified or an award of expenses would
otherwise be unjust. Id. at *5. Moreover, any motion
seeking an order from the court must “state with
particularity the grounds for seeking the order[.]”