Court Declines to Require Plaintiff to Designate Specifically Confidential Portions of Documents during Discovery where Entire Document does not Rise to that Level

Containment Tech. Group, Inc. v. Am. Soc’y of Health Sys. Pharmacists, 2008 WL 4545310 (S.D. Ind. Oct. 10, 2008)

In this defamation case, the parties disagreed over the scope of a protective order sought by plaintiff prior to production of proprietary information, among other things.  The parties attempted to negotiate the terms of such an order, but could not agree on several issues, including whether only portions of documents should be designated as “confidential” if the entire document did not rise to that level.  Under the parties’ proposed terms, materials designated “confidential” would have automatically been sealed if filed with the court.

Defendants argued that particularized designation of confidential materials was required by the Seventh Circuit.  Plaintiff disagreed and argued that the approach would be “unduly burdensome and costly.”  The plaintiff also argued that the court had previously approved an order in a different matter allowing entire documents to be designated as confidential.  While unpersuaded by plaintiff’s argument regarding the order in another matter, the court acknowledged the “painstaking” nature of a mandatory “document-by document (or even paragraph by paragraph)” review of materials to ensure accurate designation before production.  Moreover, the court recognized that “[m]assive electronic discovery production has significantly added to this challenge.”

Turning to the merits of whether and when such painstaking designations should be made, the court discussed the necessity of such an undertaking at the discovery phase.  The court noted that from its perspective, it made little difference whether a document was designated “confidential” at discovery “provided it is not permitted to be filed under seal without some separate justification for doing so.”  Acknowledging that a practitioner’s perspective was different, the court nonetheless determined that the appropriate time to be concerned with the particularity of a “confidential” designation was when filing a document with the court.

In support of its ruling, the court first explained that even during discovery, counsel is charged with acting in “good faith” to designate confidential information accurately.  Second, requiring counsel to scour each document in a “massive electronic discovery production” to determine which portions of each document were properly designated “confidential” “undoubtedly adds additional burdens and expense to the litigation.”  The court went on to note that the “recent creation of Federal Rule of Evidence 502, which places limitations on waivers of the attorney client and work product privileges, represents a specific response to the costs involved in extensive document review necessitated by electronic discovery.”

Anticipating some disagreement in the designations of plaintiff’s production, the court advised the parties to confer regarding disputed designations to attempt to resolve the issues and again reiterated that the more appropriate time for heightened attention to designations was at the time of filing with the court.

Accordingly, the court ordered the parties to modify their proposed protective orders to remove the provisions requiring that portions of documents be designated “confidential” if the entire document was not and the provision requiring that all confidential materials would automatically be filed under seal if submitted to the court.  “Rather,” the court stated, “the protective order…should simply provide that parties act good faith in designating documents as confidential, and that parties seeking to file documents under seal make a separate showing to the Court that good cause exists to do so.”