DOUGLAS F. McCORMICK, Magistrate Judge.
The Court finds that good cause exists for issuance of this Protective Order ("Order") pursuant to Rule 26(c) of the Federal Rules of Civil Procedure to establish a procedure for use and/or disclosure of Confidential Information and to govern the inadvertent production of Privileged Information, as those terms are defined herein, and that entry of this Order is appropriate. In particular, the Court's finding of good cause is based on the following good cause statements by the parties:
Plaintiffs Aptus USA, LLC ("Aptus") and Dutch Garden Supplies Int LLC ("DGSI"; collectively with Aptus, "Plaintiffs") anticipate that in the course of discovery they may be required to produce documents that would reveal information regarding the development and formulation of their FaSilitor product, which is a silicon-based solution used in hydroponics. The formula for FaSilitor was developed through many years of research and development and the investment of substantial resources. The secrecy of this information provides Plaintiffs with a competitive advantage over other companies selling silicon-based solutions. If information regarding the development and formulation of FaSilitor was publicly disclosed, third parties would be able to develop a competing product, or Plaintiffs' competitors would be able to improve their existing competing product, without incurring the substantial time and expense that Plaintiffs incurred in research and development to create FaSilitor.
Plaintiffs further anticipate they may be required to produce documents in discovery that disclose non-public information concerning Plaintiffs' customers, including their order history, volumes, pricing and sales. Plaintiffs invested substantial time and expense developing a customer list from the thousands of hydroponics retailers and commercial growers in the United States in order to identify the approximately four hundred retail and commercial grower customers interested in silicon-based solutions such as FaSilitor, as well as learning each of their specific requirements. Disclosure of such information would allow Plaintiffs' competitors to undercut Plaintiffs in their sales efforts.
Finally, Plaintiffs anticipate they may be required to disclose non-public information in discovery concerning their employees. Plaintiffs have an obligation not to publicly disclose private information concerning their employees.
Plaintiffs respectfully submit that there is good cause to permit Plaintiffs to designate as "CONFIDENTIAL" documents produced in the course of discovery that (1) relate to or would disclose Plaintiffs' confidential information relating to the development and formulation of the FaSilitor product; (2) relate to or would disclose Plaintiffs' confidential information relating to sales of FaSilitor, including the identity of certain customers and their order history, volumes, pricing and sales; and (3) relate to our would disclose Plaintiffs' confidential information relating to Case 8:16-cv-00413-DOC-DFM Document 28 Filed 11/08/16 Page 3 of 12 Page ID #:148 human resources and personnel issues.
Plaintiffs acknowledge that their ability to designate documents as "CONFIDENTIAL" when produced in discovery is without prejudice to Defendants' ability to challenge any such designation and is not alone determinative of whether such documents should remain under seal if filed with the Court. See, e.g., Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33 (1984) ("[P]retrial depositions and interrogatories are not public components of a civil trial . . . . Much of the information that surfaces during pretrial discovery may be unrelated, or only tangentially related, to the underlying cause of action. Therefore, restraints placed on discovered, but not yet admitted, information are not a restriction on a traditionally public source of information."); Kamakana v. Honolulu, 447 F.3d 1172, 1179-80 (9th Cir. 2006) (applying different standards to "sealed discovery document[s] [attached] to a non-dispositive motion" and discovery documents attached to dispositive motions because "[t]he public policies that support the right of access to dispositive motions, and related motions, do not apply with equal force to non-dispositive materials"); Bond v. Utreras, 585 F.3d 1061, 1066 (7th Cir. 2009) ("Unfiled discovery is private, not public.").
Certain materials, information, Documents (as defined in paragraph 1 below) or testimony (collectively "Discovery Materials") produced or given by the parties or non-parties in the course of pre-trial discovery or used or produced at trial in this action will involve disclosure of confidential, proprietary, financial, technical, scientific, personnel, and business information ("Confidential Information"). Moreover, despite the reasonable precautions taken by the parties, Confidential Information and/or documents protected by the attorney-client privilege, attorney work product or any other privilege ("Privileged Information") may be inadvertently disclosed. Accordingly, the parties agree that the following provisions shall govern disclosure and use of all such Discovery Materials containing Confidential Information and the return of inadvertently disclosed Privileged Information.
1. As used herein, "Documents" shall include data (including electronic data) and any other material (and their contents) produced through discovery by the parties, as well as any portion of a transcript of a deposition or other proceeding, exhibit, affidavit, declaration, answers to interrogatories, or responses to requests for admission.
2. Confidential Information may be found in, but not limited to, all or any of the following specifically designated "Confidential" or "Confidential — Attorney's Eyes Only" Documents and the content thereof: (a) Documents, depositions or testimony, responses to written discovery, and any other information or material produced or otherwise made available to the parties in this action; (b) copies, extracts, reports, studies, notes, complete or partial summaries and other Documents or materials made or prepared from Confidential Information except that it shall exclude attorney work product; and (c) transcripts, exhibits and other pleadings or writings that summarize or otherwise disclose Confidential Information.
3. This Order covers Documents and/or information or material designated by the disclosing party or non-party (hereinafter, the "Source") as containing or consisting of Confidential Information. Any Source may, in good faith, designate any such materials or portions thereof as being subject to the provisions of this Order by means of a stamp or other designation on the Document of the word "Confidential" or "Confidential — Attorney's Eyes Only." The parties must undertake a good faith effort to make confidentiality designations on a document-by-document basis. Confidentiality must be assessed with respect to each individual document, and no category of documents is entitled to a presumption of confidentiality, other than as provided by law. Case 8:16-cv-00413-DOC-DFM Document 28 Filed 11/08/16 Page 5 of 12 Page ID #:150
4. The parties shall apply the designation "Confidential" to information or materials that the Source in good faith believes to constitute proprietary business information, private personnel information and/or data, and/or any information that implicates or may implicate the privacy rights of the Source and/or a third party, and that is not otherwise publicly available (unless such information or materials were placed in the public domain as a result of a violation of any duty, law, or agreement, in which case the "Confidential" designation may still apply).
5. The parties shall apply the designation "Confidential — Attorney's Eyes Only" only to a limited amount of Confidential Information that the Source is obligated, by agreement or statutory obligation or the privacy rights of any third-party, to keep confidential in a manner consistent with that designation, or that the Source believes to be a trade secret so sensitive that disclosure to employees of the receiving party would cause irreparable damage to the Source, such that the producing party has a reasonable basis for concluding that the protections afforded to documents designated "Confidential" would not be adequate.
6. In designating materials, Documents or portions thereof as "Confidential" or "Confidential — Attorney's Eyes Only" the Source shall mark every page and/or significant component, which contains Confidential Information with the appropriate "Confidential" or "Confidential — Attorney's Eyes Only" stamp. Transcripts of deposition or other testimony shall be designated by reference to the page and lines being designated. Designation shall be made at the time such materials are produced or given, except that: (a) in the case of testimony upon deposition or hearing, such designations shall be made within twenty (20) business days after the transcript of such deposition or hearing is available; (b) any such transcript of a deposition or hearing shall provisionally be treated as "Confidential — Attorney's Eyes Only" until the twenty (20) business day period for serving confidentiality designations has expired; and (c) a reasonable extension of any applicable time period hereunder may be agreed to in writing among counsel for the Case 8:16-cv-00413-DOC-DFM Document 28 Filed 11/08/16 Page 6 of 12 Page ID #:151 respective parties. Designations may be withdrawn by the Source at any time.
7. Unless otherwise ordered by the Court, any Document or material designated by any source as containing Confidential Information shall be safeguarded and shall not be disclosed by non-designating counsel, except, subject to the provision of this Order, to:
8. Confidential Information designated "Confidential — Attorney's Eyes Only" may be disclosed only to persons described in ¶ 7, subparagraphs b, c, d, e, f, g, and h and to deposition witnesses only as provided in paragraph 10 below.
9. Nothing in this Order shall prevent any party from producing any Document or information in his, her or its possession in response to a lawful subpoena or other compulsory process, provided that written notice shall be given to all other parties at least ten (10) business days prior to the return date of the subpoena or other compulsory process seeking discovery of the designated Case 8:16-cv-00413-DOC-DFM Document 28 Filed 11/08/16 Page 8 of 12 Page ID #:153 materials.
10. Subject to the terms of this Order any party may utilize Confidential Information designated as "Confidential" in the course of a deposition provided that, prior to his or her examination, the witness is furnished a copy of this Order and has executed the Undertaking attached to this Order as Exhibit A. Any party may utilize Confidential Information designated as "Confidential — Attorney's Eyes Only" in the course of a deposition provided that the deponent either prepared or reviewed the "Confidential — Attorney's Eyes Only" document prior to its production and prior to his or her examination, the witness is furnished a copy of this Order and has executed the Undertaking attached to this Order as Exhibit A. If a deponent refuses to sign the Undertaking, disclosure of such information to the witness during the deposition shall not be a waiver of confidentiality and shall not prevent examination of the witness on Documents or other information containing Confidential Information. Such witness shall not be allowed to retain copies of either the Confidential Information or any portions of their deposition transcript containing Confidential Information. If disclosure of Confidential Information is opposed, nothing in this Paragraph 10 shall preclude a party from continuing the deposition until the matter can be raised before and ruled upon by the Court.
11. The parties agree to take reasonable precautions to prevent disclosure of Confidential Information without the "Confidential" or "Confidential — Attorney's Eyes Only" designation provided for in this Order. However, it is possible that inadvertent or mistaken disclosures will still be made, despite all reasonable precautions. If Documents containing Confidential Information are inadvertently or mistakenly disclosed, the parties agree that the Source may request the return of such Documents or materials within ten (10) business days after the discovery of their inadvertent or mistaken disclosure to allow the designation of the Documents or materials as Confidential Information consistent with the provisions of this Order. If the receiving party fails to return such Documents or materials, the Case 8:16-cv-00413-DOC-DFM Document 28 Filed 11/08/16 Page 9 of 12 Page ID #:154 Source may move the Court for an Order compelling their return.
12. If Confidential Information is made an exhibit to or the subject of examination during a deposition, arrangements shall be made (a) to bind separately said exhibits, as well as confidential portions of the transcript or pleading and (b) to place them in a sealed envelope appropriately marked.
13. Nothing in this Order shall prevent either party from using Documents designated as "Confidential" or "Confidential — Attorney's Eyes Only" or from referring to or reciting any information contained in such materials, in connection with the litigation in this matter including any hearing, motion, brief, trial, or other proceeding in this action, provided the relevant portions of Paragraph 14 and 15 below are complied with in full.
14. Any party filing pleadings, motions, or other papers with the Court that contain or make reference to Confidential Information shall file an Application and Order to Seal seeking to have the Confidential Information filed under seal pursuant to Local Rule 79-5 and following the procedures outlined therein, as well as any applicable procedures of Magistrate Judge Douglas F. McCormick and the Honorable David O. Carter.
15. Nothing herein shall prevent a receiving party from challenging any designation of a Document as "Confidential" or "Confidential — Attorney's Eyes Only." Any such challenge shall be raised through the procedures outlined in Local Rule 37. Notwithstanding a challenge or application to the Court pursuant to Paragraph 15, all Documents designated as "Confidential" or "Confidential — Attorney's Eyes Only" shall be subject to this Order until the Source withdraws the designation or until the Court determines that the Document is not appropriately designated as "Confidential" or "Confidential — Attorney's Eyes Only."
16. Within thirty (30) days after the final determination of this action (i.e., after all appellate rights have been exhausted), all Documents designated as containing Confidential Information and all copies thereof shall, upon written request, be returned to counsel for the Source who initially produced such Documents, or shall be permanently discarded, in which case, counsel for the receiving party shall certify in writing to counsel for the Source that such Documents have been permanently discarded. Notwithstanding this provision, Counsel are entitled to retain archival copies of all pleadings, motion papers, transcripts, legal memoranda, correspondence or attorney work product, even if such materials contain Confidential Information.
17. The parties further agree to take reasonable precautions to prevent the inadvertent or mistaken disclosure of Documents containing Privileged Information. The parties further agree that "reasonable precautions" shall include, by way of example and not limitation, a multi-level review of documents for production, including searching for and gathering documents from offices, businesses and other locations where responsive information might be located and having lawyers or paralegals carefully review the documents for Privileged Information, redacting those portions of Documents where only a portion is protected and preparing detailed privilege logs reflecting any withheld material.
Despite all reasonable precautions, the parties recognize that inadvertent or mistaken disclosures of Privileged Information may still be made. If Documents containing Privileged Information are inadvertently or mistakenly disclosed, the parties agree that the following procedure shall govern:
For purposes of this Paragraph 17, the Parties agree that the return of Case 8:16-cv-00413-DOC-DFM Document 28 Filed 11/08/16 Page 11 of 12 Page ID #:156 inadvertently or mistakenly disclosed Documents shall be reasonably prompt if returned within fifteen (15) business days after the Source or receiving party learns of the inadvertent or mistaken disclosure. If the receiving party fails to return such Documents or materials, the Source may move the Court for an Order compelling their return. Notwithstanding any such motion to the Court, all Documents containing Privileged Information that are inadvertently or mistakenly disclosed shall be subject to this Order until the Source withdraws its request for their return or until the Court determines that the Document is not appropriately claimed as Privileged Information.
18. This Order may be amended by written agreement between counsel for the parties, subject to approval of the Court, or may be modified by motion to the Court.
19. This Order shall survive the termination of this litigation. The Court shall retain jurisdiction, even after the termination of this litigation, to enforce this Order.
I, ________________________________, declare as follows:
1. My present address is: _________________________________________.
2. My present occupation or job description is: ________________________.
3. My present employer is: ________________________________________.
4. Having carefully read and understood the provisions of the Stipulated Protective Order in place in Aptus USA, LLC, et al., v. Schneider, et al., Case No. 8:16-cv-00413-DOC-DFM, United States District Court for the Central District of California, I agree to be bound by its terms.
5. I will hold in confidence and not disclose to anyone not qualified under the Stipulated Protective Order, and will use only for purposes of this action, any Documents designated as "Confidential" or "Confidential — Attorney's Eyes Only" as set forth in the Stipulated Protective Order, which are disclosed to me. I will maintain any such information in a safe and secure place.
6. I will return all Documents designated as "Confidential" or "Confidential — Attorney's Eyes Only" which come into my Possession and Documents or things I have prepared relating thereto, to counsel of the party that provided such materials to me. I acknowledge that such return shall not relieve me from any continuing obligation imposed on me by the Stipulated Protective Order.
7. I agree to submit to the jurisdiction of the United States District Court for the Central District of California, for purposes of enforcement of this Declaration and Undertaking.
Executed this ____ day of _______________ 20__, in the County of ___________________________, State of __________________________.
I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.
