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State, Local Government Property Insurance Fund v. Lexington Insurance Co.

United States District Court, E.D. Wisconsin

May 17, 2017



          J.P. Stadtmueller U.S. District Judge.

         On May 9, 2017, the parties filed a letter indicating that they have stipulated to the entry of a protective order submitted to the Court's proposed order e-mail address. (Docket #81). The parties request that the Court enter a protective order so that they may avoid the public disclosure of confidential information and documents. Rule 26(c) allows for an order “requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.” Fed.R.Civ.P. 26(c)(1)(G), Civil L. R. 26(e).

         The Court sympathizes with the parties' request and will grant it, but, before doing so, must note the limits that apply to protective orders. Protective orders are, in fact, an exception to the general rule that pretrial discovery must occur in the public eye. Am. Tel. & Tel. Co. v. Grady, 594 F.2d 594, 596 (7th Cir. 1979); Fed.R.Civ.P. 26(c); see also Citizens First Nat'l Bank of Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 945-46 (7th Cir. 1999). Litigation must be “conducted in public to the maximum extent consistent with respecting trade secrets…and other facts that should be held in confidence.” Hicklin Eng'r, L.C. v. Bartell, 439 F.3d 346, 348 (7th Cir. 2006).

         Nonetheless, the Court can enter a protective order if the parties have shown good cause, and also that the order is narrowly tailored to serving that cause. Fed.R.Civ.P. 26(c); see, e.g., Citizens First Nat'l Bank of Princeton, 178 F.3d at 945, Jepson, Inc. v. Makita Elec. Works, Ltd., 30 F.3d 854, 858 (7th Cir. 1994) (holding that, even when parties agree to the entry of a protective order, they still must show the existence of good cause). The Court can even find that broad, blanket orders-such as the one in this case-are narrowly tailored and permissible, when it finds that two factors are satisfied:

(1) that the parties will act in good faith in designating the portions of the record that should be subject to the protective order; and
(2) that the order explicitly allows the parties to the case and other interested members of the public to challenge the sealing of documents.

County Materials Corp. v. Allan Block Corp., 502 F.3d 730, 740 (7th Cir. 2006) (citing Citizens First Nat'l Bank of Princeton, 178 F.3d at 945).

         The parties have requested the protective order in this case in good faith. This action involves a dispute over insurance coverage for a fire at the Milwaukee County Courthouse. (Docket #1-2). The discovery process will involve the exchange of sensitive business and insurance-related materials. The Court thus finds that there is good cause to issue the requested protective order.

         However, the Court finds that a slight change is necessary to maintain compliance with the above-cited precedent. The proposed order requires sealing, in whole or in part, of all confidential documents. This departs from the Court's desire to ensure that every phase of the trial occurs in the public eye to the maximum extent possible. See Hicklin Eng'r, L.C., 439 F.3d at 348. While the Court understands that some documents will need to be sealed entirely, other documents may contain only small amounts of confidential information, and so redaction of those documents may be more appropriate. The Court has modified the parties' proposed language to that effect. See supra Paragraph 7.

         Finally, the Court must note that, while it finds the parties' proposed order to be permissible and will, therefore, enter it, the Court subscribes to the view that the Court's decision-making process must be transparent and as publicly accessible as possible. Thus, the Court preemptively warns the parties that it will not enter any decision under seal.

         Accordingly, IT IS ORDERED that based on the parties' stipulation, (Docket #81), the Court finds that exchange of sensitive information between or among the parties and/or third parties other than in accordance with this Order may cause unnecessary damage and injury to the parties or to others. The Court further finds that the terms of this Order are fair and just and that good cause has been shown for entry of a protective order governing the confidentiality of documents produced in discovery, answers to interrogatories, answers to requests for admission, deposition testimony, and the inadvertent production of privileged material.

         IT IS THEREFORE ORDERED that, pursuant to Fed.R.Civ.P. 26(c), Civil L. R. 26(e), and Federal Rule of Evidence 502:

         1. Nondisclosure of “Confidential” Documents.

         Any party or third-party may designate information disclosed as “CONFIDENTIAL”. A “Confidential” document means any document produced in this litigation which bears the legend (or which shall otherwise have had the legend recorded upon it in a way that brings it to the attention of a reasonable examiner) “CONFIDENTIAL” to signify that it contains information believed to be subject to protection. “Confidential” material shall include non-public commercial or financial information, proprietary information, confidential data and other commercially sensitive business information. For purposes of this order, the term “document” means, all written, recorded, or graphic material, including electronically stored information, whether produced or created by a party or another person, whether produced pursuant to subpoena, by agreement, or otherwise, and shall include interrogatory answers, responses to requests for admission, and other discovery responses that quote, summarize, or contain material entitled to protection.

         Except with the prior written consent of the party or other person originally designating a document produced in this litigation to be stamped as a “Confidential” document, or as hereinafter provided under this Order, no document produced and designated as ...

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