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In Re: Kolon Industries Inc., 11-1568 (2012)

Court: Court of Appeals for the Fourth Circuit Number: 11-1568 Visitors: 21
Filed: May 02, 2012
Latest Update: Feb. 12, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 11-1568 In Re: KOLON INDUSTRIES INCORPORATED, Petitioner. On Petition for Writ of Mandamus. (3:09-cv-00058-REP) No. 11-1570 E. I. DUPONT DE NEMOURS & COMPANY, Plaintiff – Appellee, v. KOLON INDUSTRIES INCORPORATED, Defendant – Appellant, and KOLON USA INCORPORATED, Defendant, and ARAMID FIBER SYSTEMS LLC, Third Party Defendant. Appeal from the United States District Court for the Eastern District of Virginia, at Richmond. Rob
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                               UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT


                               No. 11-1568


In Re:   KOLON INDUSTRIES INCORPORATED,

                 Petitioner.



     On Petition for Writ of Mandamus.       (3:09-cv-00058-REP)



                               No. 11-1570


E. I. DUPONT DE NEMOURS & COMPANY,

                 Plaintiff – Appellee,

           v.

KOLON INDUSTRIES INCORPORATED,

                 Defendant – Appellant,

           and

KOLON USA INCORPORATED,

                 Defendant,

           and

ARAMID FIBER SYSTEMS LLC,

                 Third Party Defendant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond.   Robert E. Payne, Senior
District Judge. (3:09-cv-00058-REP)


Argued:   January 24, 2012                 Decided:   May 2, 2012


Before SHEDD, DAVIS, and DIAZ, Circuit Judges.


Affirmed by unpublished opinion. Judge Shedd wrote the opinion,
in which Judge Davis and Judge Diaz joined.


ARGUED: Stephen Blake Kinnaird, PAUL HASTINGS LLP, Washington,
D.C., for Kolon Industries Incorporated.           Clifton Scott
Elgarten, CROWELL & MORING, LLP, Washington, D.C., for E.I. du
Pont de Nemours & Company.    ON BRIEF: Jeffrey G. Randall, Igor
V. Timofeyev, PAUL HASTINGS LLP, Washington, D.C., for Kolon
Industries Incorporated.   Michael J. Songer, Stephen M. Byers,
CROWELL & MORING, LLP, Washington, D.C.; Brian C. Riopelle,
Rodney A. Satterwhite, Thomas M. Beshere, MCGUIREWOODS LLP,
Richmond, Virginia, for E.I. du Pont de Nemours & Company.


Unpublished opinions are not binding precedent in this circuit.




                                2
SHEDD, Circuit Judge:

     Kolon Industries (“Kolon”) appeals from the modification of

a protective order in a civil action brought against it by E.I.

Dupont    De    Nemours      &      Co.       (“DuPont”)        for      trade         secret

misappropriation.           In    an      effort        to     respond       to    related

proceedings     brought     by    South          Korean      governmental         agencies,

DuPont sought a modification of a previously entered protective

order    in    this     action.         The       district      court        granted     the

modification     and     exempted      the       following     from   the      protective

order’s scope:

     (i) a party’s own documents provided to the Korean
     federal prosecutor or Korean Federal Trade Commission
     (“KFTC”); (ii) documents requested by the Korean
     federal prosecutor or KFTC; (iii) deposition testimony
     of any witness in this case provided to the Korean
     federal prosecutor or KFTC; or (iv) documents that a
     party provides to the Korean federal prosecutor or
     KFTC to address allegations against that party.

J.A. 501-502.

     Kolon     now     appeals    the     district         court’s    entry       of    this

modified protective order.             Before addressing Kolon’s challenge,

we must decide whether we have jurisdiction to hear this appeal.

We have jurisdiction to hear “appeals from all final decisions

of the district courts of the United States.”                     28 U.S.C. § 1291.

“Consequently,        appellate   review         will     generally     be    limited      to

those decisions which end the litigation on the merits and leave

nothing for the court to do but execute the judgment.”                                  MDK,


                                             3
Inc. v. Mike’s Train House, Inc., 
27 F.3d 116
, 119 (4th Cir.

1994)(internal      citations      and    citation   marks     omitted).     While

“[d]iscovery orders generally do not meet this requirement,” the

collateral order doctrine provides an exception to this rule.

Id. It recognizes that
“final decisions . . . also include a

small set of prejudgment orders that are ‘collateral to’ the

merits of an action and ‘too important’ to be denied immediate

review.”      Mohawk Indus., Inc. v. Carpenter, 
130 S. Ct. 599
, 603

(2009) (citing Cohen v. Beneficial Industrial Loan Corp., 
337 U.S. 541
, 546 (1949)).             We have articulated the standard for

application of the collateral order doctrine as follows:

       In this circuit, an order will fall within this
       limited exception only if the order [1] conclusively
       determines the question in the trial court, [2]
       resolves an important question independent of the
       subject matter of the litigation, [3] is effectively
       unreviewable on appeal from a final judgment or so
       important that review should not wait upon final
       judgment, and [4] presents a serious and unsettled
       question upon appeal.

MDK, 27 F.3d at 120
.   (internal    citations    and    citation   marks

omitted).

       On appeal, the parties do not dispute that the modification

order    satisfies       the   first,    second,   and   fourth    prong   of    our

collateral     order     doctrine.       Therefore,      the   only   question   is

whether the modification order fulfills the third prong.                         In

analyzing this prong, “[t]he crucial question, however, is not

whether an interest is important in the abstract; it is whether

                                          4
deferring review until final judgment so imperils the interest

as   to    justify       the   cost    of     allowing       immediate       appeal         of   the

entire class of relevant orders.”                    
Mohawk, 130 S. Ct. at 606
.

      In       Mohawk,     the   Court       recognized           two     avenues      in    which

discovery       disputes       can    be    addressed        in    the    normal       course     of

litigation.          A party can “defy a disclosure order and incur

court-imposed         sanctions.”              
Id. at 608. Alternatively,
“[a]ppellate         courts      can       remedy     the     improper       disclosure           of

privileged material in the same way they remedy a host of other

erroneous evidentiary rulings:                  by vacating an adverse judgment

and remanding for a new trial.” 
Id. at 606-607. However,
neither of these approaches is effective in this

case.      First,        the   modified       protective          order    does     not     compel

Kolon     to    do   anything;         it    merely     allows          DuPont    to    disclose

documents it already possesses.                     Thus, Kolon itself cannot force

reviewable sanctions by its own actions.                                 Second, the normal

course of appellate review cannot remedy the harm that could

befall a party with the release of privileged documents which

could lead to possible criminal investigation and prosecution by

a foreign government.

      Therefore,          we   find     that    when        privileged       documents           are

released        to   a    foreign          government        in    these     circumstances,

deferring review imperils the interest of justice because no

other mechanism exists to sufficiently protect the litigants’

                                               5
rights.    In short, the district court’s order is effectively

unreviewable    and,      thus,    we   have    jurisdiction       to    review    it

pursuant to the collateral order doctrine.                  See 
Cohen, 337 U.S. at 546
(finding a collateral order appealable when the “claims

of right separable from, and collateral to, rights asserted in

the action, [are] too important to be denied review and too

independent    of   the     cause    itself     to   require      that    appellate

consideration be deferred until the whole case is adjudicated”).

     Having concluded that we have jurisdiction, we now turn to

Kolon’s    substantive          challenge      to    the     district       court’s

modification order.         Federal Rule of Civil Procedure 26(c)(1)

permits a district court to enter a protective order “for good

cause.”   A district court has inherent “discretionary authority

to modify [a protective order] for what it deems good cause

shown.”    United States v. (Under Seal), 
794 F.2d 920
, 928 n.6

(4th Cir. 1986).        We review the exercise of such authority for

an abuse of discretion.           See Pittston Co. v. United States, 
368 F.3d 385
, 406 (4th Cir. 2004).

     In the present case, Kolon and DuPont voluntarily entered

into an agreed protective order.               Later, upon DuPont’s motion,

the district court conducted a thorough analysis of the facts

and the changed situation between DuPont and Kolon.                       The court

decided   to   modify     the   protective     order   so    as   to     “level   the

playing field and enable full fair and efficient consideration

                                         6
of issues pertinent to the [Korean] investigations.”             J.A. 497.

After reviewing the district court’s analysis, we find that the

court did not abuse its discretion in finding good cause to

modify the protective order.      See, Gambale v. Deutsche Bank AG,

377 F.3d 133
, 141 (2nd Cir. 2004) (“[A] protective order . . .

is always subject to the inherent power of the district court .

. . This retained power in the court to alter its own ongoing

directives   provides    a   safety    valve   for   .   .   .     changed

circumstances[.]”).     Thus, we affirm the district court’s order. *



                                                                  AFFIRMED




     *
       Kolon also filed a petition for a writ of mandamus.
Because we have granted appellate review in this matter, we deny
that petition.



                                   7

Source:  CourtListener

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