Fred Schultz Torts Law Blog on Lawyers.com

I recently had an experience that has forced me to look closely at defense counsel demands for confidentiality (or non-disclosure) agreements.  It got me thinking that this is far more important than I’d ever given consideration.  In truth, part of why defense attorneys want confidentiality agreements has less to do with the documents they are trying to protect and more to do with dividing and conquering Plaintiff’s counsel and the injured people we represent.

Indiana law allows for protective orders of trade secrets and other matters which might cause harm to a party if disclosed, but only after a showing of good cause when a party from whom discovery is sought requests judicial protection.  See Wright v. Mount Auburn Daycare/Preschool, 831 N.E.2d 158, 163 (Ind.Ct.App. 2005).  See also, Allstate Insurance Company v. Scroghan, 851 N.E.2d 317 (Ind.App. 2006).  At the same time, our discovery rules are designed to allow a liberal discovery procedure, the purpose of which are to provide the parties with information essential to the litigation of all relevant issues, to eliminate surprise and to promote settlement.  Canfield v. Sandock, 563 NE2d 526, 528 (IN. 1990)

II.                ;  HOW TO FORCE THE ISSUE WITH THE JUDGE

First, you obviously have to propound discovery requests on defense counsel, seeking documents related to the case.  Once defense counsel demands a confidentiality agreement before producing the documents, you must then attempt to informally resolve the dispute.  If you can reach an agreement on the terms of the confidentiality agreement, then fine (see below for my suggested content of such an agreement).  However, should that effort fail, you simply follow Indiana Rule of Trial Procedure 37 and file a Motion to Compel.  Set forth that you’ve attempted to resolve the matter informally and advise the Court of whether or not you are seeking attorney fees. Along the way, you may be able to reach an agreement as to how to proceed with allegedly confidential documents.  If not, the issue is then with the judge to decide and either deny their request for a protective order or enter one pursuant to Trial Rule 26(C).

III.               WHAT THE CONFIDENTIALITY AGREEMENT NEEDS TO INCLUDE

Whether you agree to a confidentiality agreement or argue the matter in front of a judge over the entry of a Protective Order, the first item that needs to be addressed is Plaintiff counsel’s ability to challenge the alleged confidentiality of a document.  The mere fact that defense counsel claims certain documents need to be kept confidential does not mean that they really should be kept confidential.  Therefore, there must be a mechanism by which Plaintiff’s counsel can challenge that designation. Allstate Insurance Company v. Scroghan, Supra.  suggests that if counsel for both parties cannot agree, the appropriate way to resolve the dispute is to have the judge review records in camera and decide what documents are to be given confidential status. 

Second, Plaintiff’s counsel must be allowed to confer with other counsel who have similar cases pending against the defendant.  This is really what defense counsel is trying to avoid.  They don’t want us talking with each other, because they don’t want us to share what we are finding out about these large corporate defendants.  They want to divide and conquer the Plaintiff’s bar. 

In order to avoid this, any confidentiality agreement must have a provision that allows Plaintiff’s counsel to contact other counsel with similar cases filed against the defendant and provide a simple way to (1) protect the confidentiality of the defendant’s trade secret, and (2) allow Plaintiff’s counsel to coordinate efforts with other counsel involved in litigation against the defendant.  The best way to do this is have counsel for each defendant sign onto each other’s respective protective orders or confidentiality agreements.  This allows Plaintiffs’ counsel to view the protected documents that have been produced and be part of the confidentiality agreement.  In other words, the other plaintiff’s counsel simply signs on to the agreement, binding them to confidentiality and the enforcement powers of the court where the case is pending.  Likewise, you sign onto the agreement they have with the defendant, assuming there is one.  This way, there is no legitimate claim by the defense that their trade secrets can be leaked to their competitors. It also allows you to determine whether the defendant is truly disclosing all the documents germane to your requests, and you are better able to understand the overall size and scope of the Defendant’s conduct as a corporation. 

In contrast, if you are bound to a unilateral agreement, you have no way of knowing whether or not the defendant has fully complied with all your requests, nor does the Court.  After all, it is the defendant who decides what documents to produce and, potentially, what not to produce.  Without the ability to consult with other counsel, Plaintiff’s counsel simply doesn’t know if the defendant is being compliant

Remember, defense counsel will argue to the Court that their client’s documents include trade secrets that they don’t want their competitors having access to.  They will argue that, should these secrets get out, it could hurt their client’s competitive advantage, much like the secret recipe for Coca-Cola being exposed.  In other words, they need the protective order to shield their client’s interests.  What they are often really after, though, is to use the protective order as a sword to cut the communication line between you and other Plaintiff’s counsel. By proposing an agreement or provision of a protective order that binds everyone to the agreement, you give credence to their concern about competitors gaining the information, while not allowing defense counsel to use the agreement or order as a sword. 

Finally, in the event that a particularly egregious practice is uncovered, Plaintiff’s proposed confidentiality agreement allows for the Court to decide whether it is in the public’s best interest that a particular practice be exposed.  However unlikely this scenario may be, it is still true that civil litigation is a means by which the public’s interest can be protected.  Plaintiff’s proposed confidentiality agreement simply allows for this possibility.

Additional research compiled by Lori M. Craig, R.P.