Protecting Private Information in California Litigation

Discovery in California litigation can be expansive to the point where defendants feel they have no ability to protect against overreaching from an aggressive plaintiff. At trial, only admissible evidence may be considered, but in discovery, the standard is much broader: that which is reasonably calculated to lead to the discovery of admissible evidence.

This presents a particular problem for cases involving a defendant’s confidential or otherwise private information that once shared, is no longer quite as private, and in some instances may even extinguish the value of the proprietary information for the party that wants to protect it.

But the standard of reasonably calculated to lead to the discovery of admissible evidence is not without its inherent limitations. The California Constitution recognizes a protected right to privacy in several areas, including tax returns, medical history that the party has not put at issue based on its allegations or affirmative defenses, sexual history, religious affiliations, and many more. California also recognizes a right of businesses to protect their proprietary information, such as trade secrets, even during discovery. Sometimes a simple redaction of confidential information is all that is needed. Less is then more.

But particularly in litigation involving trade secrets or otherwise confidential information, protective orders play a very important role to shield from view documents or information so that it is only viewed on a need-to-know basis. Many courts in California encourage the parties to enter a stipulation on a protective order that is then signed by the judge. For example, Los Angeles Superior Court has a Model Protective Order that parties can stipulate to use as-is or customize to their specific needs to avoid costly discovery battles and reach mutual agreement to promote the flow of relevant information while protecting legitimate privacy and business interests. Documents, written discovery responses or portions of depositions may be designated “Confidential,” “Highly Confidential” or in more extreme cases, “ Highly Confidential - Attorney’s Eyes Only” (AEO).

Sometimes the parties cannot reach agreement even after attempting in good faith to do so. In this situation, it is important that the party trying to protect its information “move promptly” for a protective order, because the Code of Civil Procedure requires it for each type of discovery protection. Parties that are already facing expensive discovery will often balk at incurring the additional cost of a protective order motion. But the high cost of delay is that the delinquent party is likely to have waived its objections to production of the information in unprotected form with the judge denying the ill-timed motion for protective order. As the maxim goes, you snooze, you lose.

The protection of a party’s confidential information may become the very essence of a dispute, as it did recently for Apple, Inc.

In October, Apple secured a significant discovery victory in Santa Clara Superior Court in a trade secret dispute it is defending against Envirodigm Inc. for allegedly misappropriating Envirodigm’s design for a scratch-resistant aluminum shell that is the staple of Apple’s iPhone. (Envirodigm Inc. v. Apple, Inc., 20CV373138.) Over the objections of Envirodigm, which insisted that its expert and its principal key witness needed to see Apple’s manufacturing documents to make Envirodigm’s case, the judge granted Apple’s motion to seal 93% of the produced documents from public view and from the other party as AEO.

You don’t have to be Apple to get fair results. With savvy counsel and a timely engagement, there are still ways even in the wasteland of broad discovery for a party to keep its confidential information confidential.