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Core Laboratories LP v. AMSPEC

United States District Court, Southern District of Alabama, Southern Division

August 18, 2017

CORE LABORATORIES LP f/k/a/ Core Laboratories, Inc., et al. Plaintiff,
v.
AMSPEC, et al., Defendants.

          ORDER

          CALLIE V. S. GRANADE, SENIOR UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiffs' objection (Doc. 156) in accordance with Federal Rule of Civil Procedure 72(a) to the Magistrate Judge's order of July 12, 2017 (Doc. 151), Defendants' response thereto (Doc. 158), and Plaintiffs' reply (Doc. 159). For the reasons explained below, the Court finds that Plaintiffs' objections should be overruled and that the Magistrate Judge's order should be affirmed.

         BACKGROUND

         Plaintiffs object to the Magistrate Judge's order, dated July 12, 2017, which addressed Plaintiffs' motion to clarify the Magistrate's prior ruling regarding the confidentiality requirements of Plaintiffs' expert reports. The prior order, dated June 16, 2017, granted Defendants' request to compel Plaintiffs to produce all documents reviewed by their experts and compelled the Plaintiffs to remove “Attorneys' Eyes Only” (AEO) designations from their expert reports. The Magistrate Judge included the following reasoning:

As required by the Court's Order Protecting Confidentiality, counsel for the Defendants have convinced the undersigned that such designation prejudices their ability to adequately consult with their clients, especially in the case of the Compton expert report, which has been entirely designated AEO.
* * * *
The Plaintiffs are the parties who have put trade secrets and otherwise sensitive financial information at issue through the claims in their complaint (Doc. 1). Having done so, they may not then prejudice the Defendants' ability to defend against those claims by insisting that the Defendants not be able to examine and consult with their counsel about such key evidence that is being presented against them.

(Doc. 138 pp. 5-6). Plaintiffs moved for clarification of the June 16 order requesting that they be allowed to produce laptop images and other data its experts relied upon to Defendants on an AEO basis. (Doc. 144). The Magistrate Judge ruled that the material, including the “ ‘working copies' of the forensic images[, ]' must be produced without an ‘Attorneys' Eyes Only' designation.” (Doc. 151, p. 2, emphasis in original). Plaintiffs object to the clarification order on the basis that the underlying facts and data that support their expert reports contain proprietary information and Plaintiffs maintain serious concerns over allowing Defendants to view such sensitive data.

         DISCUSSION

         Rule 72(a) of the Federal Rules of Civil Procedure permits a district court to refer any non-dispositive pretrial matter to a magistrate judge for disposition. A party may object to a magistrate judge's order on a non-dispositive pre-trial matter within fourteen days after service of the order. Fed.R.Civ.P. 72(a). Upon a party's objection to any non-dispositive matter assigned to the Magistrate Judge, the district court “must consider timely objections and modify or set aside any portion of the order that is clearly erroneous or is contrary to law.” Fed.R.Civ.P. 72(a); Accord, San Shiah Enterprise Co., Ltd. v. Pride Shipping Corp., 783 F.Supp. 1334, 1335 (S.D. Ala. 1992); see also 28 U.S.C. § 636(b)(1)(A) ("A judge of the court may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.”). “A finding is ‘clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948). “An order is contrary to law ‘when it fails to apply or misapplies relevant statutes, case law or rules of procedure.' ” S.E.C. v. Kramer, 778 F.Supp.2d 1320, 1326-27 (M.D. Fla. 2011) (quoting Tompkins v. R.J. Reynolds Tobacco Co., 92 F.Supp.2d 70, 74 (N.D.N.Y.2000)). The “clearly erroneous or contrary to law” standard of review is “extremely deferential.” Pigott v. Sanibel Dev., LLC, 2008 WL 2937804, at *5 (S.D. Ala. July 23, 2008) (citations omitted). This standard is considered a “very difficult one to meet.” Thornton v. Mercantile Stores, 180 F.R.D. 437, 439 (M.D. Ala. 1998) (citing Tai-Pan Inc. v. Keith Marine, Inc., 1997 WL 714898, *11 (M.D. Fla. 1997)). The Magistrate Judge's orders “should not be disturbed absent a clear abuse of discretion that leaves the reviewing court with ‘the definite and firm conviction that a mistake has been committed.'” Rowlin v. Alabama Dept. of Public Safety, 200 F.R.D. 459, 460 (M.D. Ala. 2001)(citations omitted).

         Plaintiffs contend that they should not be compelled to produce the material unless it is designated AEO because discovery has revealed that Defendants want to shut down Plaintiffs by taking their Chevron business. Plaintiffs quote statements in Defendants' emails that state they “will take a large amount (if not all) of Saybolts work at Chevron” and [w]e could basically shut Saybolt down.” (Doc. 156-3, p. 2). Plaintiffs cite an Eleventh Circuit case to show that “in complicated cases where document-by-document review of discovery materials would be unfeasible, an ‘umbrella' protective order, … should be used to protect documents designated in good faith by the producing party as confidential.” In re Alexander Grant & Co. Litig., 820 F.2d 352 (11th Cir. 1987) (citation omitted). However, the Court notes that the protective order in In re Alexander made the material designated as confidential available to the parties for use in litigation, it was merely inaccessible to non-parties. Id. at 354. A protective order is in place in this case that would prohibit the disclosure of confidential information (Doc. 132), but Plaintiffs seek to prohibit even the Defendants from viewing documents Plaintiffs' experts relied upon.

         Plaintiffs are correct that designating confidential documents as for “Attorneys' Eyes Only” has been used in other cases for certain confidential information. The Second Circuit explained the rational for designating documents as AEO as follows:

The disclosure of confidential information on an “attorneys' eyes only” basis is a routine feature of civil litigation involving trade secrets. See Fed.R.Civ.P. 26(c)(1)(G) (“The court may, for good cause, issue an order to protect a party or person requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way ....”). The purpose of this form of limited disclosure is to prevent a party from viewing the sensitive information while nevertheless allowing the party's lawyers to litigate on the basis of that information.

In re The City of New York, 607 F.3d 923, 935-36 (2d Cir. 2010) (footnote omitted).[1] But the fact that an AEO designation may sometimes be appropriate does not mean it must be used in all cases involving sensitive or confidential information. “The burden is on the movant to show the necessity of the protective order, and the movant must meet this burden with a ‘particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements.' ” Ekokotu v. Fed. Exp. Corp., 408 F.App'x 331, 336 (11th Cir. 2011) (quoting United States v. Garrett, 571 F.2d 1323, 1326 n. 3 (5th Cir.1978)). Thus, it is Plaintiffs' burden to show by specific facts that the designation is necessary. The Court must both find there is “good cause” ...


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