Court Enforces Agreement to Delete Defendants’ Confidential Materials Despite Cost

Oxxford Info. Tech., Ltd. v. Novantas, LLC, 910 N.Y.S.2d 77 (N.Y. App. Div. 2010)

In this case, the parties stipulated to a Confidentiality Order requiring that business information exchanged during the course of discovery would be returned or destroyed at the end of litigation.  Relying on the agreement, defendants provided access to “their core business secrets.”  When the case settled, plaintiff’s counsel discovered that defendants’ information had been backed up to “numerous back-up tapes” on their law firm’s computer system.  Plaintiff then sought to modify the confidentiality agreement to allow the firm to retain the information “subject to proposed safeguards designed to protect the confidentiality of the information” in light of the cost of deleting the information from the tapes.  The motion was denied and plaintiff appealed.

On appeal, the court found that “such cost does not outweigh defendants’ bargained-for interest in the post-litigation destruction of its business information in outsider’s hands, or otherwise warrant the proposed modification” and reasoned that “[p]laintiff voluntarily consented to the Confidentiality Order” and that “its counsel, who have demonstrated experience in and sophisticated knowledge of electronic discovery matters, should have foreseen the problem and addressed it” when the agreement was negotiated.  Accordingly, the denial of plainitff’s motion was unanimously affirmed.