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Southern District of Florida Orders Review and Re-Designation of Highly Confidential Documents

Posted on August 3rd, 2015

In Procaps S.A. v. Patheon, Inc., Case No. 12-24356 (S.D. Fl., July 20, 2015), the parties entered into a stipulated confidentiality agreement whereby they designated confidential documents as either “Confidential Information” or “Highly Confidential Information.” The parties agreed that the party receiving the confidential information could disclose documents designated as “Confidential Information” to counsel and to select employees if counsel believed in good faith that the employee needed access to the information for purposes of the litigation. The parties agreed that only counsel could view the “Highly Confidential Information”. The parties agreed to use the “Highly Confidential Information” category only for “information that truly requires highly sensitive protection.”

Defendant challenged Plaintiff’s manner of producing the “Highly Confidential Information” designation, claiming that because Plaintiff had not OCR’ed the designation, it could not search for the term “highly confidential”. Defendant alleged that its inability to do so significantly prejudiced its defense of the case. Plaintiff had marked 95% of its electronic production as Highly Confidential.

The court noted that all protective orders contain a good faith requirement, and that, accordingly, other courts have held that “indiscriminate use” of a highly confidential label creates a “significant handicap on the restricted litigant” because the litigant’s attorney cannot disclose these facts to its client (i.e., one of the parties to the case), which impedes effective representation (citing Arvco Container Corp. v. Weyerhaeuser, Case No. 08-cv-548, 2009 WL 311125, at page 6 (W.D. Mich. Feb. 9, 2009). The court also noted that most cases settle at mediation or through other methods, and without disclosure to enough information about the merits of the case, the litigants may have difficulty settling.

Based on the forgoing, the court held that Plaintiff had unreasonably used the Highly Confidential Information designation, and the tight deadline in which it had produced the documents and alleged inadvertence in over-applying the designation offered no excuse. The court stated that Plaintiff should have conducted an ESI analysis and search earlier, rather than delaying and needing to conduct an expedited forensic search. The court ordered Plaintiff to re-review, redact if necessary, and re-designate the documents.

ILS – Plaintiff eDiscovery experts

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