Moller v. Martian Sales, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

KATHLEEN MOLLER * CIVIL ACTION

VERSUS * NO. 24-228

MARTIAN SALES, INC., ET AL. * SECTION “D” (2)

ORDER AND REASONS

Pending before me is Plaintiff Kathleen Moller’s Motion for Protective Order and

Objections. ECF No. 55. Defendants Martian Sales, Inc., JOpen, LLC, LP Ind., LLC, CAG

Holdings, LLC, and RMH Holdings, LLC (collectively, “Defendants”) filed a response. ECF No.

57. These filings reflect that the parties agreed entry of a protective order to govern discovery is

appropriate in this case, but disagreed on whether the protective order should include one tier of

protection for all confidential information or two tiers of protection, with one tier limited to highly

confidential information produced for “attorney’s eyes only.” Despite filing the Motion for

Protective Order, Plaintiff appears to retreat from that agreement in her Reply, arguing that no

protective order is necessary at all. ECF No. 58. No party requested oral argument in accordance

with Local Rule 78.1, and the court agrees that oral argument is unnecessary.

Having considered the record, the submissions and arguments of counsel, and the

applicable law, Plaintiff’s Motion for Protective Order and Objections is GRANTED IN PART

AND DENIED IN PART for the reasons stated herein.

I. BACKGROUND

Plaintiff filed suit asserting negligence and products liability claims against Martian Sales,

Inc., JOpen, LLC, Johnson Foods, LLC, LP Ind., LLC, CAG Holdings, LLC, RMH Holdings,

LLC, and Olistica after the death of her 36-year-old daughter, whom she contends died as a result

of ingesting Defendants’ Kratom products. ECF No. 1 ¶¶ 17-20, 45-50. Plaintiff’s duplicative

state court suit was removed to this court (Civ. No. 24-781) and consolidated with this federal suit.

ECF No. 40. During a July 16, 2024, status conference, the Court granted Plaintiff’s counsel’s

oral motion to dismiss without prejudice Civ. No. 24-781 as duplicative of Civ. No. 24-228. ECF

No. 54. The Court authorized jurisdictional discovery and established a January 27, 2025, deadline

for completion of same. Id. at 3.

Plaintiff agreed to entry of a protective order in the form provided as a sample on this

Court’s website, but Defendants requested a two-tiered protective order that includes an

“Attorneys-Eyes Only” (“AEO”) provision because many of the Defendants are competitors, or

work with competitors, of one another. ECF Nos. 55-1 at 1-2; 57-1 at 2; see ECF Nos. 55-2

(sample order); 55-3 (modified order). Plaintiff contends that an AEO tier is not necessary because

the sample form “already contains every conceivable protection” and an AEO provision gives

Defendants unrestricted and unilateral freedom to designate any and all documents produced as

AEO, without justification or explanation. ECF No. 55-1 at 2, 4. Plaintiff argues that Defendants

have not identified “clearly defined and serious injury” necessitating an AEO provision and posits

that the true motive is to prevent Plaintiff’s counsel from using the documents in other lawsuits

throughout the country. Id. at 4.

Defendants argue that good cause exists because responding to Plaintiff’s discovery

requests relating to their manufacturing or distributing of kratom products will entail production

of “sensitive and proprietary business information.” ECF No. 57-1 at 3. The AEO provision thus

allows Defendants to protect confidential commercial information (such as product ingredients,

specifications or standard operating procedures) from Defendants’ competitors because disclosure

of such information would cause substantial competitive harm. Id. at 4-5.

II. APPLICABLE LAW

A court may, for good cause, issue a protective order under Rule 26(c)(1) of the Federal

Rules of Civil Procedure. “Good cause” exists when disclosure will result in a clearly defined and

serious injury to the party seeking the protective order.1 The party seeking protection bears the

burden of showing that a protective order is necessary, “which contemplates a particular and

specific demonstration of fact as distinguished from stereotyped and conclusory statements.”2 In

determining good cause, the court must balance the risk of injury without the protective order and

the requesting party's need for information.3 Rule 26 offers a variety of potential options that the

court may use to protect the moving party, including forbidding or limiting the scope of discovery

into certain matters or requiring that a trade secret or other confidential commercial information

not be revealed or be revealed in only a certain way. FED. R. CIV. P. 26(c)(1)(D), (G).

“There are essentially three types of protective orders in terms of the amount of information

covered. The narrowest is a protective order covering specific, identified information.”4 Before a

court issues a “narrow” order of protection, it first reviews the material to be designated

confidential, so it is clear in that case that “good cause” for the order exists.5 On the other end of

the protective-order spectrum is the so-called “umbrella” protective order, which predesignates all

discovery as protected6 and does not require a specific showing of good cause before the

1 Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994).

2 In re Terra Int'l, Inc., 134 F.3d 302, 306 (5th Cir. 1998) (internal quotations and citation omitted); see also E.E.O.C.

v. BDO USA, L.L.P., 876 F.3d 690, 698 (5th Cir. 2017) (citation omitted).

3 Blanchard & Co. v. Barrick Gold Corp., No. 02-3721, 2004 WL 737485, at *5 (E.D. La. Apr. 5, 2004).

4 Id. (quoting Bayer AG & Miles, Inc. v. Barr Labs., Inc., 162 F.R.D. 456, 465 (S.D.N.Y. 1995), overruled on other

grounds by S.E.C. v. TheStreet.Com, 273 F.3d 222 (2d Cir. 2001)).

5 Id. (citation omitted).

6 Id. (same); see also 8A CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE AND PROCEDURE § 2044.1 (2d ed.

2008) (“In general, [protective orders] are to be entered only on a specific showing of good cause, but on many

occasions they are embodied in ‘umbrella’ orders entered on stipulation in advance of discovery and apply to all

materials deemed confidential by the producing party.”).

designation.7 The third type is the “blanket” protective order, which permits either party to deem

confidential any documents he or she believes in good faith contain confidential information.8 “As

a general proposition, a district court [may] exercise its sound discretion in determining how far

to restrict discovery; and, in particular, the decision whether to grant or deny a request for a

protective order is entrusted to the district court's sound discretion.”9 The court enjoys wide

discretion in setting the parameters of a protective order.10

The orders at issue in this case are both “blanket” protective orders as they permit the

parties “to protect documents that they believe in good faith contain confidential information.”11

See ECF Nos. 55-2 ¶ 3 at 2; 55-3 ¶ 3 at 2. “Such protective orders are routinely agreed to by the

parties and approved by the courts in commercial litigation . . . [and] are essential to the functioning

of civil discovery.”12 Protective orders are characterized as “flexible devices,”13 and are “designed

to shape the changing needs of the litigation and subject to continued modification.”14 “Parties

may seek modification of a protective order to gain access to previously deemed confidential

materials.”15

The Federal Rules of Civil Procedure do not expressly define the terms “trade secret” or

“confidential commercial information” as used in Rule 26(c)(1)(G). Courts have defined these

7 Blanchard & Co., 2004 WL 737485, at *5 (citation omitted).

8 Id. at *6 (same).

9 Nguyen v. Excel Corp., 197 F.3d 200, 209 n.27 (5th Cir. 1999) (citations omitted).

10 See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984) (“To be sure, Rule 26(c) confers broad discretion on the

trial court to decide when a protective order is appropriate and what degree of protection is required.”).

11 Blanchard & Co., 2004 WL 737485, at *6 (internal quotations omitted) (quoting Bayer AG, 162 F.R.D. at 465).

12 Id. (internal quotations omitted) (quoting Bayer AG, 162 F.R.D. at 465).

13 WRIGHT, supra note 6.

14 Granger v. Slade, 90 F. App’x 741, 742 (5th Cir. 2004).

15 Schafer v. State Farm & Fire Cas. Co., No. 06-8262, 2009 WL 650263, at *2 (E.D. La. Mar. 11, 2009); see also

Holland v. Summit Autonomous, Inc., No. 00-2313, 2001 WL 930879, at *2 (E.D. La. Aug. 14, 2001) (citing Pansy,

23 F.3d at 784) (holding that the court retains the authority to modify confidentiality orders that it previously entered),

aff’d sub nom. Holland v. Summit Tech., Inc., 2001 WL 1132030 (E.D. La. Sept. 21, 2001).

terms as “information which, if disclosed, would cause substantial economic harm to the

competitive position of the entity from whom the information was obtained.”16

When litigation involves disclosure of a party’s commercially valuable information to a

competitor, courts often employ a dual tier designation system: “Ample precedent exists for

limiting disclosure of highly sensitive, confidential or proprietary information to [outside]

attorneys and experts, particularly when there is some risk that a party might use the information

or disseminate it to others who might employ it to gain a competitive advantage over the producing

party.”17 To protect against any predatory practices, while still recognizing the broad scope of

discovery in a federal action, courts often require entry of a protective order that limits access to

certain documents on an “Attorneys’ Eyes Only” basis and restricts use of the information to the

present litigation only.18

III. ANALYSIS

Initially, the Court recognizes the significant distinction between treating documents

confidential during discovery versus seeking to seal filings in the judicial record.19 At the

discovery stage, when parties are exchanging information, a protective order may well be proper

to honor a legitimate privacy interests while facilitating the efficient exchange of information.20

In addition to the parties’ apparent initial agreement that good cause exists for issuance of a

16 Riverkeeper v. Taylor Energy Co., 309 F.R.D. 381, 388 (E.D. La. 2015) (citations omitted).

17 Westside-Marrero Jeep Eagle, Inc. v. Chrysler Corp., No. 97-3012, 1998 WL 186728, at *2 (E.D. La. Apr. 17,

1998) (citing cases). “[D]isclosure to clients may be prohibited where, for example, the information has commercial

value and the parties are competitors; alternatively, the order may (1) limit disclosure to named individuals not

involved in the relevant corporate activity, (2) create a special class of highly confidential documents that only

attorneys and non-client experts may view, . . . and (4) require individual undertakings by those receiving such

information not to misuse it.” MANUAL FOR COMPLEX LITIGATION (Third) § 21.432 n.146 (1995).

18 Blanchard & Co., 2004 WL 737485, at *10 (citing Asch/Grossbardt. Inc. v. Asher Jewelry Co., No. 02-5914, 2003

WL 660833, at *2-3 & n.2 (S.D.N.Y. Feb. 28, 2003) (noting that the procedure was used in Drexel Heritage

[Furnishings Inc. v. Furniture USA, Inc., 200 F.R.D. 255, 262-63 (M.D.N.C. 2001)] and Liberty Folder v. Curtiss

Anthony Corp., 90 F.R.D. 80, 82–83 (S.D. [Ohio] 1981))).

19 Binh Hoa Le v. Exeter Finance Corp., 990 F.3d 410, 419 (5th Cir. 2021).

20 Id. at 420 (citations omitted).

protective order, the Court finds the existence of good cause given the nature of the litigation and

necessary production of information regarding numerous Defendants’ competitive information

(i.e., manufacturing process and ingredients). The remaining issue is thus whether a one-tier or

two-tier protective order is appropriate in this case.

Plaintiff fails to present any compelling argument against entry of a two-tiered protective

order in this case. Contrary to Plaintiff’s argument that an AEO provision would result in

unjustified designations, the protective order already expressly prevents a party from unjustified

confidentiality designations:

The designation of materials as Confidential Information is a certification . . . that

the document contains Confidential Information as defined in this order. The parties

shall take care to limit any confidentiality designation to specific material that

qualifies under the appropriate standards. . . . Designations that are shown to be

clearly unjustified or that have been made for an improper purpose . . . expose the

designating party to sanctions.”

ECF No. 55-3 ¶ 3(d) at 4. To ensure that AEO designations are included within that certification,

with potential sanctions for any unjustified designations, that provision may be modified to read:

“The designation of materials as Confidential Information or Confidential-Attorneys’ Eyes Only

is a certification . . . .” Likewise, the order’s general protections already prohibit the use of

confidential information for any purpose other than this litigation. Id. ¶ 5(a) at 5. Thus, whether

the protective order includes an AEO tier or not, counsel would be prohibited from using

documents produced in this litigation in other cases (absent production of same through discovery

in such other cases or further order of this court).

As proposed by Defendants, Plaintiff’s counsel and her experts are authorized to review

both confidential and AEO materials because they fall within subsections (1) and (6) of Paragraph

5(b) of the protective order. ECF No. 55-3 ¶ 5(c) at 6-7. Thus, an AEO provision would not

appear to impact Plaintiff in any material respect. Rather, it would appear to simply restrict access

among the Defendants by precluding access by the individual parties and officers, directors,

employees, agents or representatives of a party. While Plaintiff's Reply indicates that an AEO

designation will unfairly impede depositions, that objection is remedied by including those falling

within subsection (7) of Paragraph 5(b) within the list of authorized viewers of AEO materials in

Paragraph 5(c), thus modifying that paragraph to read: “shall be limited to individuals and entities

in Paragraph 5b., subsections (1), (3), (4), (5), (6) or (7).”

IV. CONCLUSION

Accordingly, for the foregoing reasons,

IT IS ORDERED that Plaintiff's Motion for Protective Order and Objections (ECF No. 55)

is GRANTED IN PART AND DENIED IN PART as stated herein. Defendant shall revise the

proposed Protective Order (ECF No. 55-3) consistent with this Order and submit same for entry

within 7 days.

New Orleans, Louisiana, this 9th day of December, 2024.

resol batiyy (mau

UNITED STATES MAGISTRATE JUDGE