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dismissing counterclaim for breach of contract premised on violation of covenant not to sue where counter-defendant alleged fraud
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07 Civ. 9600 (BSJ) (DF)
04-13-2012
WILLIAM I. KOCH, an individual, Plaintiff, v. ERIC GREENBERG, an individual, Defendant.
MEMORANDUM AND ORDER
DEBRA FREEMAN, United States Magistrate Judge :
By motion dated November 20, 2010 (Dkt. 118), plaintiff William I. Koch ("Koch") sought to vacate or modify the Confidentiality and Protective Order entered by this Court on August 7, 2009 (the "Protective Order"), or, in the alternative, to remove certain confidentiality designations made by defendant Eric Greenberg ("Greenberg") pursuant to the Protective Order. By Order dated May 24, 2011, this Court denied Koch's motion to the extent it sought to vacate the Protective Order in its entirety. (See Dkt. 179.) As to Koch's alternative application, the Court directed him to serve and submit to the Court representative samples of the particular documents (including deposition transcripts or portions thereof) that, in his view, were improperly designated as either "Confidential Information" or "Confidential - Attorneys' Eyes Only Information," together with a document-by-document explanation as to the basis for his position that the documents did not warrant confidential treatment. (See id.) Koch proceeded to make a supplemental submission the Court; Greenberg filed an opposition to that supplemental submission; and Koch filed a reply. The Court having now considered both the parties' original and supplemental submissions, Koch's application to remove Greenberg's confidentiality designations is granted in part and denied in part, as set forth below.
See Plaintiff's Memorandum in Response to Order Dated May 24, 2011 Re: Defendant's Designation of Documents Under the Protective Order, dated June 3, 2011 ("Koch Supp. Mem.") (Dkt. 180 (redacted); Dkt 181 (unredacted, filed under seal)); Declaration of Adam L. Pollock in Support of Plaintiff's Memorandum in Response to Order Dated May 24, 2011 Re: Defendant's Designation of Documents Under the Protective Order, dated June 3, 2011 ("Pollack Decl.") (Dkt. 180-1 (redacted); Dkt. 181 (unredacted, filed under seal)).
See Defendant's Memorandum in Opposition to Plaintiff's Memorandum in Response to Order Dated May 24, 2011 Re: Defendant's Designation of Documents Under the Protective Order, dated June 17, 2011 ("Greenberg Supp. Opp. Mem.") (Dkt. 185 (filed under seal)); Declaration of Roey Z. Rahmil in Support of Defendant's Memorandum in Opposition to Plaintiff's Memorandum in Response to Order Dated May 24, 2011 Re: Defendant's Designation of Documents Under the Protective Order, dated June 16, 2011 ("Rahmil Decl.") (Dkt. 185 (filed under seal)).
See Plaintiff's Reply in Support of Memorandum in Response to Order Dated May 24, 2011 Re: Defendant's Designation of Documents Under the Protective Order, dated June 24, 2011 ("Koch Supp. Reply Mem.") (Dkt. 188 (redacted); Dkt. 187 (unredacted, filed under seal)); Declaration of Adam L. Pollock in Support of Plaintiff's Reply in Support of Memorandum in Response to Order Dated May 24, 2011 Re: Defendant's Designation of Documents Under the Protective Order, dated June 24, 2011 ("Pollack Reply Decl.") (Dkt. 189 (redacted); Dkt. 187 (unredacted, filed under seal)).
DISCUSSION
I. APPLICABLE LEGAL STANDARDS
A. Protective Orders Under Rule 26(c)
Rule 26 of the Federal Rules of Civil Procedure provides that "[t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, undue burden or expense." Fed. R. Civ. P. 26(c)(1). The rule "confers broad discretion on the trial court to decide when a protective order is appropriate and what degree of protection is required." Zyprexa Litig., 474 F. Supp. 2d 385, 415 (E.D.N.Y. 2007) (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984)). The party that seeks a protective order bears the burden of establishing good cause for issuance of that order. Gambale v. Deutsche Bank AG, 377 F.3d 133, 142 (2d Cir. 2004) (quoting In re "Agent Orange" Prod. Liab. Litig., 821 F.2d 139, 145 (2d Cir. 1987)). It follows that, "if good cause is not shown, the discovery materials in question should not receive judicial protection and therefore would be open to the public for inspection." Id.
At times, at the parties' request, a court may opt to issue a protective order that sets out general categories of information (such as "trade secrets") that are usually considered appropriate for confidentiality protection, and then allow the parties to designate produced documents and deposition testimony as "confidential" based on the parties' good faith belief that the documents and testimony fall within the specified categories. In such a case, the "good cause" showing is temporarily postponed "until a party or intervenor challenges the continued confidential treatment of certain particular documents" or testimony, at which point "the burden of establishing good cause then lies with the party seeking to prevent the disclosure." In re Parmalat Sec. Litig., 258 F.R.D. 236, 243 (S.D.N.Y. 2009) (citations omitted); see also U2 Home Entm't, Inc. v. Kylin TV, Inc., No. 06-CV-2770 (DLI), 2008 WL 1771913, at *2 (E.D.N.Y. Apr. 15, 2008) ("'[T]the party seeking to maintain confidential treatment for the challenged document will have the burden of establishing good cause for the continuation of that treatment.'") (quoting Lachica v. City of New York, 94 Civ. 7379 (LAK), 1995 WL 77928, at *1 (S.D.N.Y. Feb. 23, 1995)).
Where a party seeks to maintain the confidential treatment of business information on the ground that it is commercially sensitive and would cause harm if known by a competitor, the party must make "a particular and specific demonstration of fact showing that disclosure would result in an injury sufficiently serious to warrant [continued] protection." Parmalat, 258 F.R.D. at 244. Simply because the disclosure of information "might result in adverse publicity" does not, in itself, suffice to render it proprietary or commercially sensitive, sufficient to justify judicial protection from disclosure. Id. (citation omitted).
B. The Protective Order in this Case
Although, early in the discovery process, the parties to this action agreed, in principle, that a protective order should be entered by the Court to protect certain types of confidential information that would be produced in discovery, they were unable to agree as to the categories of information that could properly be covered by such an order. After each party submitted a proposed definition of "Confidential Information," the Court determined that a reasonable definition would include "trade secrets; proprietary, non-public, and competitively sensitive business information, such as customer lists and contracts; non-public financial information (whether personal or corporate); and personal identifying information." (See Dkt. 78.) The parties did agree as to the type of information that could be designated "Confidential - Attorneys' Eyes Only Information." Their proposed definition was "highly sensitive 'Confidential Information,' that is reasonably likely to interfere with a person's business or personal affairs if seen by persons other than attorneys," and the Court adopted that proposed language. (See id.)
The Protective Order also provides that,
[s]hould any counsel for a party object to the designation of any information as Confidential Information or Confidential - Attorneys' Eyes Only Information, such counsel shall notify all other counsel of the objection. If notice of such an objection is received at any time, counsel for the parties shall promptly confer in an attempt to resolve the matter. If the matter remains unresolved, objecting counsel may then apply to the Court for a determination of whether the designation should be removed. . . .(Dkt. 78, at ¶ 5.) Further, the Protective Order states:
This Protective Order is entirely without prejudice to the right of anyone to apply to the Court for an order permitting the disclosure of Confidential Information or Confidential - Attorneys' Eyes Only Information other than as set forth herein, or to apply for an order modifying or limiting any designation pursuant to this Protective Order in any respect.(Id., at ¶ 12.)
II. KOCH'S CHALLENGES TO GREENBERG'S CONFIDENTIALITY DESIGNATIONS
In his motion, Koch challenges Greenberg's confidentiality designations for a number of categories of documents and for portions of the deposition testimony of a number of witnesses. Although, as a threshold matter, Greenberg argues that Koch did not make a sufficient effort to "meet and confer" in good faith about these designations, the Court is persuaded that further discussion between the parties would not have resulted in resolution of the fundamental differences between them as to the intended scope of the Protective Order and the propriety of Greenberg's confidentiality designations. The Court will therefore consider each category of documents and testimony in turn.
A. Documents at Issue
1. Documents Related to Sotheby's' Inspection of Greenberg's Cellar
The first category of documents at issue relates to a review by representatives of the auction house, Sotheby's, of at least certain bottles of wine in Greenberg's wine cellar. The parties dispute whether that review consisted of a cursory walk-through of Greenberg's cellar or a full "inspection," but the distinction is immaterial for the purpose of determining whether Greenberg has appropriately designated these documents "Confidential" under the Protective Order.
Greenberg concedes that there is "public" information in at least certain of the documents put forward by Koch (Greenberg Supp. Opp. Mem., at 6; see also Pollack Decl., Exs. 1, 2 (containing results of prior public auction)), but argues that any of the documents that he and Sotheby's' staff exchanged in connection with Sotheby's' visit to his cellar, whether or not the information reflected on those documents was publicly available, were exchanged "with an express or implied expectation of confidentiality" (id). Greenberg notes that, where, in this litigation, Sotheby's has been called upon to produce the exchanged documents, Sotheby's has acted with this same understanding and has likewise designated the documents "Confidential." (See id.)
Confidentiality agreements, however, should not be used to shield otherwise public information. By Greenberg's own concession, the contents of the first two sample documents submitted by Koch (Pollack Decl., Exs. 1 and 2) are public, and thus these documents should be de-designated. The confidentiality designation on the third sample document submitted by Koch (id., Ex. 3) should also be lifted, as the document, which contains an email message that was apparently sent by Greenberg to both Sotheby's and another auction house, Acker Merrall & Condit (thus demonstrating a lack of an expectation of privacy), does not contain trade secrets or information that could be deemed competitively sensitive, such as customer lists or contracts. The mere fact that this document reveals factual information that may have been learned by Sotheby's during its representatives' visit to Greenberg's cellar, and that Greenberg may have insisted that Sotheby's sign a non-disclosure agreement with respect to any such learned information (see Rahmil Decl., Ex. F), is insufficient to transform the document into "Confidential Information" under the terms of the Court's Protective Order.
Taking the position that the particular documents selected by Koch to place before the Court are not actually "representative samples" of the produced documents relating to Sotheby's' visit to his wine cellar, Greenberg places other sample documents before the Court for additional consideration. (See Greenberg Supp. Opp. Mem., at 6-7.) The documents submitted by Greenberg include emails from Sotheby's to Greenberg (Rahmil Decl., Exs. P, Q) and an extensive draft marketing proposal, apparently prepared by Sotheby's, for the promotion of Greenberg's wine collection (id., Exs. R, S). These documents seem to have been produced in substantially identical form by both Greenberg and Sotheby's (the latter, presumably pursuant to subpoena), and both have marked them "Confidential." (See id., Exs. Q, S (produced by Greenberg); Exs. P, R (apparently produced by Sotheby's).) The issue with these documents is that Sotheby's may have a confidentiality interest in them, not because of any non-disclosure agreement that Greenberg may have asked Sotheby's' representatives to sign, but rather because of its own independent interest in protecting its proprietary materials. "Privacy interests of non-parties resisting disclosure may weigh heavily against public access to the information at issue." KingPharm, Inc. v. Eon Labs, Inc., No. 04-CV-5540 (DGT), 2010 WL 3924689, at *9 (E.D.N.Y. Sept. 28, 2010) (citing United States v. Amodeo, 71 F.3d 1044, at 1050-51 (2d Cir. 1995)). In this instance, the marketing proposal submitted to the Court states on its front page that it is "strictly confidential" and may not be disclosed "without the explicit authorization of Sotheby's." (Rahmil Decl., Ex. R.) This document contains, inter alia, proposals on the subjects of Sotheby's' commissions, expenses, and payment. (Id.)
The Sotheby's materials submitted to the Court by Greenberg, however, are all approximately 10 years old, and where commercially sensitive information is stale, this can undermine the party's (or non-party's) claim that disclosure will create a competitive disadvantage. See Zenith Radio Corp v. Matsushita Elec. Indus. Co., Ltd., 529 F. Supp. 866, 891 (E.D. Pa. 1981); id. at 906 ("Much of the economic data is stale, moreover, and it would take a Herculean effort for a competitor to put it to use."); United States v. Int'l Bus. Machines Corp., 67 F.R.D. 40, 47-49 (S.D.N.Y. 1975) (finding data compiled from three-to-15 years earlier to be stale). In some circumstances, competitors may be able to extrapolate from outdated information to learn information that would still afford them a competitive edge. See id.; see also Grand River Enters. Six Nations, Ltd. v. King, No. 02 Civ. 5068 (JFK), 2009 WL 222160, at *3-4 (S.D.N.Y. Jan 30, 2009) (noting that 10-year-old commercial information could still be sensitive, where business plans identified trends and strategies that could be "extrapolated out to the present day and show how [a party] intends to compete"). Generally, though, a court will not protect several-year-old information without a specific explanation of the harm that would be caused by disclosure. See Parmalat, 258 F.R.D. at 250 (noting that party had failed to explain "why the seven-year-old information concerning its marketing strategy ha[d] any continued value to the firm today or why the information might otherwise cause [the party] harm if it was disclosed"); see also id. (rejecting, in the absence of supporting evidence, party's argument that, from stale financial information, a "competitor could determine the strength or relative vulnerability of [the party's] financial condition," "gain insight into [its] financial processes," and "target certain member firms and attempt to lure them away . . . by offering them more competitive fees").
In this case, given the age of the information contained in the documents relating to Sotheby's' 2002 visit to Greenberg's cellar and Sotheby's' resulting marketing proposal, and Greenberg's failure to make any particularized showing as to why that information remains commercially sensitive, this Court concludes that Greenberg has not satisfied his burden of demonstrating good cause for continued confidentiality. The documents in question should therefore be de-designated. Nonetheless, as to any documents in which Sotheby's itself asserts a confidentiality interest, this aspect of the Court's Order will be stayed for 14 days, so as to allow Sotheby's an opportunity to be heard before any marketing proposals it generated may be made public. Koch is directed to give Sotheby's prompt notice of this Order, so that Sotheby's, if it wishes, may address its concerns to the Court within those 14 days.
2. Documents Related to William Edgerton's Inspection of Greenberg's Wine Cellar
The second category of documents as to which Koch has challenged Greenberg's confidentiality designations relates to an inspection of Greenberg's wine collection by Greenberg's then-consultant William Edgerton ("Edgerton"). Greenberg maintains that the bulk of the work performed for him by Edgerton was in the nature of "work product," created at the direction of Greenberg's counsel in preparation for a lawsuit that Greenberg anticipated commencing against Royal Wine Merchants ("Royal"), which Greenberg came to believe had sold him counterfeit wine. (See Greenberg Supp. Opp. Mem., at 7.) Sometime after Greenberg's counsel retained Edgerton to perform this work, Edgerton was separately retained by Koch, and - without permission from Greenberg - disclosed the claimed work product to Koch. Greenberg now argues that, while he recognizes that this work product can no longer be kept entirely confidential, his designating it "Confidential" under the Protective Order was appropriate to prevent further disclosure.
Although Koch lists as a category of challenged documents those "[r]elated to Bill Edgerton's [i]nspection of Greenberg's and Koch's [c]ellar" (Koch Supp. Mem., at 4 (emphasis added)), Koch then goes on to describe only documents relating to Edgerton's inspection of Greenberg's wine cellar, not Koch's own (see id.), and the Court will only consider the category of documents placed before it.
As explained by Koch's counsel in a conference before the Court on February 8, 2010, the disclosure to Koch came about when Greenberg subpoenaed documents from Edgerton (Greenberg's then-former consultant), and, as Edgerton had begun working for Koch by that time, Koch's attorneys decided to represent Edgerton in connection with responding to that subpoena. (See Transcript of Civil Cause for Conference, dated Feb. 8, 2010 ("2/8/10 Conf. Tr."), at 70.) Edgerton accordingly turned over his documents - including the claimed Greenberg work product - to Koch's counsel. (Id.)
As an initial matter, the Court notes that Greenberg has himself acknowledged that not every document in Edgerton's produced file constitutes work product (including, apparently, the only sample document that Koch has submitted to the Court (Pollack Decl., Ex. 4)), and yet Greenberg designated the entire Edgerton file as "Confidential," seemingly on the ground that, where the large majority of documents in a file can be classified as confidential, it is acceptable to treat the entire file as such. Greenberg offers no support for such a proposition, and, as a general matter, blanket confidentiality designations are improper. See, e.g., Fears v. Wilhelmina, 56 Fed. R. Serv. 3d 426 (S.D.N.Y. 2003) (noting impropriety of blanket designations, and reminding the designating party that it "b[ore] the burden of proving the propriety of [its] confidentiality designations as to each document"). Certainly, Greenberg has made no showing that the burden of making document-by-document confidentiality designations justified his overly-inclusive approach in this instance. Greenberg is therefore directed to review all of his confidentiality designations - both with respect to the Edgerton file and any other category of documents for which Greenberg made blanket designations - on a document-by-document basis, and to make good-faith revisions to his designations, consistent with this Memorandum and Order.
Further, even apart from the question of whether material once entitled to protection as work product can maintain any confidential status once it is disclosed to an adverse party, Greenberg has made no showing that the key information at issue here - Edgerton's report as to whether certain of Greenberg's wine was counterfeit - would have qualified as work product in the first instance.
Taking a step back, the work product doctrine, as codified at Rule 26(b)(3) of the Federal Rules of Civil Procedure, is designed to shield from discovery "documents and tangible things . . . prepared in anticipation of litigation or for trial by or for another party or its representative" unless a showing of substantial need and lack of undue hardship is made. Fed. R. Civ. P. 26(b)(3)(A). The work product doctrine "is intended to preserve a zone of privacy in which a lawyer can prepare and develop legal theories and strategy 'with an eye towards litigation,' free from unnecessary intrusion by his adversaries." United States v. Adlman, 134 F.3d 1194, 1196 (2d Cir. 1998) (quoting Hickman v. Taylor, 329 U.S. 495 (1947)). A party asserting work product protection bears a "heavy" burden of establishing that material it seeks to protect (1) was prepared in anticipation of litigation and (2) was prepared by or for a party, or by his representative. In re Grand Jury Subpoenas Dated March 19, 2002 and August 2, 2002, 318 F.3d 379, 383-84 (2d Cir. 2003).
A document is said to be prepared in anticipation of litigation if, "in light of the nature of the document and the factual situation in the particular case, [it] can fairly be said to have been prepared or obtained because of the prospect of litigation." Adlman, 134 F.3d at 1202 (emphasis in original) (citation and internal quotation marks omitted). Where documents have been prepared for both litigation and business purposes, the question of whether the documents are entitled to immunity under the work product doctrine turns on whether the material "would have been prepared irrespective of the expected litigation." Id. at 1204. "Indeed, even where '[t]here is little doubt under the evidence that a party had the prospect of litigation in mind when it directed the preparation of the document,' or that 'such documents might also help in preparation for litigation,' work product protection is not available for documents 'that are prepared in the ordinary course of business or that would have been created in essentially similar form irrespective of litigation.'" Allied Irish Banks v. Bank of Am., N.A., 240 F.R.D. 96, 106 (S.D.N.Y. 2007) (quoting Adlman, 134 F.3d at 1202-04).
Here, this Court does not doubt that, at the time of Edgerton's wine inspection and report, Greenberg was anticipating litigation against Royal; nor does the Court question Greenberg's assertion that his counsel directed Edgerton's work with that anticipated litigation in mind. Greenberg, however, has not demonstrated that, but for the prospect of litigation, the Edgerton report would not have been prepared in the ordinary course of business or in substantially the same form. Surely, if Greenberg had concerns regarding the authenticity of some of the wine in his inventory, then, as a business matter, he would have wanted to engage an expert to inspect the bottles, regardless of whether the results might be useful in anticipated litigation. Indeed, any prudent business owner would have been expected to take such a step. Under the circumstances, the report prepared by Edgerton could not be afforded work product immunity from disclosure, even if it were not already in Koch's hands. Thus, Greenberg cannot sustain his principal reason for seeking to maintain the confidentiality of that report, and related documents, under the Protective Order.
Moreover, even if some of the Edgerton documents (or portions of those documents) were prepared strictly because of anticipated litigation with Royal and would not have been prepared otherwise, Greenberg has not shown that he took sufficient steps to safeguard the material so as to avoid waiver of work product protection. Certainly, a party that wishes to avoid waiver may not voluntarily disclose its work product to an adverse party. See In re Steinhardt Partners, LP., 9 F.3d 230, 235 (2d Cir. 1993) ("The waiver doctrine provides that voluntary disclosure of work product to an adversary waives the privilege as to other parties." (citations omitted)). In the prior conference before the Court (see n.5, supra), Greenberg's counsel confirmed that a summary volume of Edgerton's report, showing Edgerton's conclusions and merely redacting his name, was voluntarily produced by Greenberg to Royal - the very party with which Greenberg anticipated litigation - in connection with their discussions of a possible settlement of their dispute (see 2/8/10 Conf. Tr., at 69; see also Koch Supp. Reply Mem., at 3-4 (stating that Greenberg "shared the Edgerton information with . . . Royal itself")). As a result of this voluntary production, any work product protection for the disclosed portion of the report is most certainly waived.
In addition, where a party inadvertently discloses work product, or where disclosure is made by a party's agent without authorization, the party seeking to avoid waiver must take prompt and reasonable steps to rectify the situation upon learning of the disclosure. See Fed. R. Evid. 502(b)(3). In order to maintain an argument that any other Edgerton documents remain entitled to any type of confidentiality protection because of their character as work product, Greenberg bears the burden of showing that, once he learned of Edgerton's unauthorized disclosure of the documents to Koch, he took reasonable steps to seek the documents' recovery, suppression, or destruction. Greenberg has not even attempted to meet this burden. When the issue of the disclosure of Edgerton's documents to Koch was first raised with this Court, over two years ago, the Court itself noted that any documents constituting work product might have to be returned to Greenberg or destroyed, and the Court noted that it could benefit from briefing on the subject. (See 2/9/10 Conf. Tr., at 72-75.) It is true that, at that time, in an attempt "to head off motions," the Court urged the parties to confer as to a solution (id. at 105), but the Court also told Greenberg's counsel that he could depose Edgerton "about the circumstances of disclosure of the [Edgerton] report . . . and any other information gained from that prior consulting service," and that, if counsel believed that the matter warranted the Court's further attention, counsel could again raise the issue (see id. (instructing counsel, "if you think there's something on that transcript [of Edgerton's deposition] that warrants bringing to my attention, do some research about it[, and tell me] what . . . you want me to do about it")). The record does not reflect that Greenberg's counsel, at any time thereafter, actually made a request of Koch to have the documents in question returned or destroyed, or followed up by seeking such an order from the Court. Accordingly, for all the reasons described above, Greenberg's "work product" argument fails.
Despite the flaws in that argument, the Court has still reviewed the Edgerton documents placed before it to determine whether any should nonetheless retain their status as "Confidential Information" because of the nature of their contents. In this regard, the Court notes that one of the exemplar documents submitted by Greenberg (Rahmil Decl., Ex. C) contains a great deal of information regarding Greenberg's wine inventory, as of a date in 2002, and the prices Greenberg paid for the wine that was then in his collection. Greenberg has declared, under penalty of perjury, that such information is non-public and commercially valuable to him. (Declaration of Eric Greenberg in Support of Opposition to Motion for Elimination or Modification of Protective Order and for Removal of Confidentiality Designations, dated Dec. 9, 2010 ("Greenberg 12/9/10 Decl.") (Dkt. 126), ¶ 3.) Greenberg, however, has offered little or no explanation as to why (a) his wine inventory list, and (b) the prices he paid for that wine prior to the date of Edgerton's 2002 report (i.e., more than 10 years ago) would, in fact, constitute "proprietary, non-public, and competitively sensitive business information," appropriately covered by the Protective Order. All Greenberg offers on the subject is the following:
The documents and deposition testimony that I have designated "Confidential" contain non-public information about my wine business, including what wines I own, my sources and potential sources for purchasing wine, my customers and potential customers, my negotiating strategies and the prices at which I buy and sell particular wines. This information is valuable to my business and would also be valuable to my competitors. If my competitors obtained this confidential information, it would give them an unfair advantage over me in the market. For example, if my competitors knew my sources for purchasing wine, they could obtain such wine themselves and prevent me from doing so. This risk is compounded by the fact that there is a limited supply of the fine wines I buy and sell. Similarly, if my competitors knew the prices I paid for particular bottles of wine, they could outbid me and prevent me from purchasing such wine, or, in the context of a sale, they could underbid me and thereby take sales away from me.(Id.)
To counter Greenberg's bare assertion that he would be competitively harmed if "what wines [he] own[s]" were known, Koch asserts that Greenberg has not, in fact, kept his wine inventory confidential. To support this assertion, Koch has submitted, on reply, copies of emails sent by Greenberg to wine distributors and others, enclosing lists of his inventory. (See Koch Supp. Reply Mem., at 6; Pollack Reply Decl., Exs. 1-3.) One of those emails reflects that, in 2005, Greenberg sent a lengthy inventory list by mass distribution to about 80 email recipients, offering his wine for sale, and inviting the email recipients to "feel free to pass [his offer] to others that may be interested." (Pollack Reply Decl., Ex. 3.) Especially in the face of such evidence of blatantly non-confidential treatment of the contents of his wine cellar, Greenberg's single statement that his inventory is "non-public" and that it constitutes "valuable" information that could give others "an unfair advantage" in the market if known is patently insufficient to satisfy his burden to demonstrate good cause for maintaining the confidentiality of that information under the Protective Order.
The Court also notes that the cited document, which appears to show the names of approximately 80 of Greenberg's customers, was seemingly produced by Greenberg without a confidentiality designation. (See id. (containing no "Confidential" mark).) This suggests that Greenberg has not taken a consistent position that the disclosure of his customers' identities would cause him commercial harm.
As for the sensitivity of the prices Greenberg paid for his wine, his general argument is too conclusory. While this Court accepts that the prices at which Greenberg buys and sells wine may, in some instances, constitute commercially sensitive information that, if known, could benefit his competitors, the Court cannot accept that all prices paid or charged, in any circumstances and at any point in time, would be sufficiently sensitive to warrant blanket protection. Prices paid at public auctions are obviously publicly known, and prices paid years ago may well constitute stale information that is not meaningful in a current market. As the prices contained in the Edgerton document in question are apparently at least 10 years old, and as Greenberg has not made any particularized showing that his competitors could undercut him in future purchases if they knew these 10-or-more-year-old prices, Greenberg has not satisfied his burden to show good cause for the continued maintenance of this information as "Confidential" under the Protective Order.
3. Documents Related to Greenberg's Dispute with Royal Regarding Allegedly Counterfeit Wine
Koch next challenges Greenberg's confidentiality designations relating to Greenberg's dispute with Royal, over whether Royal had sold Greenberg counterfeit wine. This dispute was eventually settled, and the Greenberg-Royal settlement agreement contains a confidentiality provision. (See Rahmil Decl., Ex. G.) In light of that provision, while both Greenberg and Royal have produced documents in this litigation that relate to their dispute, both have designated those documents "Confidential Information" and, in some instances, "Confidential - Attorneys Eyes Only Information."
According to Greenberg, these designations are appropriate, not only because of the confidentiality provision of the settlement agreement, but because Royal had an expectation of confidentiality in the settlement communications between them. Greenberg also argues that the documents at issue actually contain sensitive business information, such as "lists of [his] wine and the prices he paid for them." (Greenberg Supp. Opp. Mem., at 7-8.)
This Court has reviewed both the relevant provision of the settlement agreement and the sample documents submitted by the parties as exemplars of this category of documents. As a result of that review, the Court concludes that the settlement agreement itself, as well as its material terms, may be maintained as confidential, based on the legitimate business interests of both Greenberg and Royal (now a non-party) in protecting the contents of their private settlement from public disclosure. For the same reason, the Court will uphold Greenberg's and Royals' confidentiality designations of their negotiations of any potential settlement terms. The Court is not persuaded, however, that factual averments made by Greenberg or Royal, on the subject of whether the wine purchased by Greenberg from Royal was counterfeit, should be similarly protected. Even if the Greenberg-Royal settlement could be read broadly enough to sweep such statements within its confidentiality clause, such statements cannot be deemed to reveal proprietary information, or otherwise to fall within the confines of the Protective Order in this case. See Kalinauskas v. Wong, 151 F.R.D. 363, 367 (D. Nev. 1993) (drawing distinction between discoverability of the specific terms of a settlement agreement ("i.e., the amount and conditions of the agreement") and factual information surrounding the case, and holding that party "should not be able to conceal basic facts of concern to [the plaintiff] in her case, and of legitimate public concern"); see also Fireman's Fund Ins. Co. v. Cunningham Lindsey Claims Mgmt., Inc., No. 03-CV-0531 (DLI) (MLO), 2005 WL 1522783, at *3 (E.D.N.Y. June 28, 2005) (citing Kalinauskas).
While Koch argues that Greenberg has disclosed the fact of the Royal settlement to others (see Koch Supp. Reply Mem., at 8), Koch does not show that Greenberg (or Royal) has disclosed the material terms of the settlement agreement.
Further, with respect to his communications with Royal, Greenberg has again failed to satisfy his burden of demonstrating that the information that he has identified as confidential - i.e., the particular wines in his inventory, the sources of that wine, and the prices he paid for the wine - is actually commercially sensitive. In communications with Royal regarding their dispute, Greenberg (or his counsel) appears to have provided Royal with lists of the bottles of allegedly counterfeit wine that Greenberg purchased from Royal and the prices Greenberg paid for that wine. Koch makes a valid point that any particular bottles of wine claimed by Greenberg to be counterfeit cannot also be claimed by him to have commercial value. (See Koch Supp. Mem., at Appendix, p. 2 (re Ex. 6); Koch Supp. Reply Mem., at 7.) Even if the prices paid by Greenberg for wine that he believed, at the time, to be genuine could be competitively sensitive, Greenberg has again failed to demonstrate why that price information is not now stale. Koch also points out that Greenberg has maintained no secrecy regarding the fact that Royal has been one of his sources of wine in the past, and states that Greenberg has not purchased any wine from Royal for many years. (See Koch Supp. Mem., at Appendix, p. 2 (re Ex. 6).) As Greenberg does not refute that he no longer does business with Royal, he cannot contend that, if his competitors knew that Royal was a source of Greenberg's wine, they would try to steal future Royal business away from him.
In sum, of the Greenberg/Royal information that has been placed before the Court, the Court finds that the only information that warrants continued confidentiality protection under the Protective Order is information regarding the material terms of the Greenberg-Royal settlement agreement.
4. Documents Related to Greenberg's Fireman's Fund Insurance Claim
Koch argues that documents provided by Greenberg to Fireman's Fund Insurance ("Fireman's Fund"), in connection with a claim for the lost value of wine that was allegedly counterfeit, have also been improperly designated by Greenberg as "Confidential." According to Koch, these documents contain no trade secrets or other information that is propriety, non-public, and competitively sensitive. Again, Koch makes the point that wine believed to be counterfeit (the subject of Greenberg's claim with Fireman's Fund) cannot be considered to have commercial value. (Koch Supp. Mem., at Appendix, pp. 3-6 (re Exs. 9-12).) Koch also asserts that, for the reasons discussed above, Greenberg can have no legitimate basis for seeking to designate as "Confidential" the mere fact that he previously bought wine from Royal. (See id.)
Greenberg mostly side-steps these arguments, primarily asserting that he stood in a "confidential relationship" with Fireman's Fund, which, he contends, "owed him fiduciary duties" as his insurer. (Greenberg Supp. Opp. Mem., at 8.) Greenberg cites no law, however, for the proposition that, merely because of an insurance relationship, all communications exchanged between insurer and insured should be afforded confidentiality protection by the Court. For the most part, it appears that the particular communications at issue, as well as the underlying documents provided by Greenberg to Fireman's Fund, are neither proprietary nor sensitive in a competitive sense. If, as stated in the documents, Greenberg believed, at the time of his insurance claim, that certain bottles of wine were counterfeit, then he could not have expected to sell those bottles later, and thus, to that extent, disclosure of the prices Greenberg paid for the bottles could not be commercially damaging. Further, while those prices might reflect what Greenberg was, at one time, willing to pay for authentic wine of the same label, variety and vintage, and while such information could have been, at that time, valuable to Greenberg's competitors, Greenberg, once again, has made no particularized showing to justify confidentiality protection for pricing information that is more than 10 years old. Greenberg has also again failed to provide support for his vague argument that his inventory list, much less a part of it claimed to include counterfeit wine, is commercially sensitive. Accordingly, the bulk of the Fireman's Fund documents should be de-designated.
The Court cautions the parties that nothing in this ruling should be read to obviate, in any way, this Court's prior finding that the conduct of Koch's counsel in disclosing Fireman's Fund documents, without first affording Greenberg the required opportunity to make confidentiality designations, was sanctionable.
To the extent Greenberg has shown that the Fireman's Fund documents contain personal financial or identifying information, such as information regarding the value of Greenberg's home, descriptions of other personal assets and their declared value, or Greenberg's date of birth and Social Security number (see Greenberg Supp. Opp. Mem., at 8; see also Rahmil Decl., Ex. BB), such information is properly covered by the Protective Order and may be redacted by Greenberg under that Order, regardless of whether the documents were produced by Greenberg or by Fireman's Fund. Indeed, personal identifying information must, in any event, be redacted prior to public filing, pursuant to Rule 5.2 of the Federal Rules of Civil Procedure.
5. Documents Related to Greenberg's AIG Insurance Claim
The parties' arguments regarding the documents related to Greenberg's insurance claim with AIG parallel their arguments regarding the documents related to Greenberg's insurance claim with Fireman's Fund, and are thus resolved in the same manner.
6. Documents Related to Greenberg's Wine Consignment to Zachys
Koch contends that documents relating to Greenberg's consignment of certain wine to Zachys Wine Auctions, Inc. ("Zachys"), a former defendant in this case, are not properly designated "Confidential" because the documents contain no information that can be characterized as trade secrets or as proprietary, nonpublic, and commercially sensitive. (Koch Supp. Mem., at Appendix, pp. 7-8 (re Exs. 15-17.) Greenberg, however, argues that this group of documents contains sensitive information regarding "the contents of [his] cellar, the appraised value of [his] wines, and [his] sources of wine." (Greenberg Supp. Opp. Mem., at 9-10.) Greenberg also argues that he "exchanged these documents with Zachys with an expectation of confidentiality," that Zachys has "honored that privacy interest" by also designating the relevant documents as "Confidential," and that at least one of the documents at issue "contains the draft results of a Zachys auction, which includes Zachys' appraisal of the wines at issue and the overall revenue from the auction." (Id. at 10.) Having reviewed the three sample documents submitted by Koch, the Court agrees with Koch that the documents do not appear to contain proprietary, non-public, competitively sensitive business information.
The first two documents (Pollack Decl., Exs. 15, 16) are email strings from 2005, in which Zachys primarily appears to be seeking information regarding the provenance of certain wine. In general, the parties' statements are not of a commercially sensitive nature, but the first of these documents does contain appraisal estimates for certain wine in Greenberg's collection, and the second identifies two of Greenberg's sources of wine. The appraisal information, however, would appear to be stale, and Greenberg has not shown otherwise. Thus, the first of these documents should be de-designated. As to the identities of Greenberg's sources, as contained in the second document, the Court notes that, unlike the situation with Royal (a supplier with which Greenberg apparently no longer seeks to do business), there is no suggestion in the record that Greenberg has ceased buying wine from the sources identified in the Zachys emails. By the same token, though, Greenberg has not shown that he has done business with these sources at any time within the last seven years. As the burden is on Greenberg to demonstrate, with a "particular and specific" showing of fact, that the disclosure of these sources "would result in an injury sufficiently serious to warrant [continued] protection," Parmalat, 258 F.R.D. at 244, and as Greenberg has not provided the Court with any facts from which the Court is capable of determining the present, commercial sensitivity to Greenberg of the identities of these suppliers, the Court concludes that the second sample document should also be de-designated.
The third sample document (Pollack Decl., Ex. 17) is purportedly a draft report, by Zachys, of the results of a 2005 public auction. (See Koch Supp. Mem., at Appendix, pp. 7-8 (re Ex. 17)); Greenberg Supp. Opp. Mem., at 10.) Although this document appears to contain Zachys' appraisals of certain bottles of Greenberg's wine, it again appears that these appraisals represent stale information. It also appears that all of the appraised bottles were then sold, at a public auction, at publicly-known prices. Even though Greenberg stresses that the document is a confidential "draft," he has made no showing that the sale prices reflected on the document are not, in fact, public information. Further, Greenberg has not demonstrated that the disclosure of Zachys' appraisals of the value of Greenberg wine that has now been sold could, if revealed, cause Greenberg any sort of commercial harm. Nor can the Court conceive of any commercial harm to Zachys, now a non-party, that could result from the disclosure of this document. The document should be de-designated.
7. Documents Related to Greenberg's Communications with Rudy Kurniawan
Koch submits two documents to the Court that he contends are representative of documents relating to Greenberg's communications with wine dealer Rudy Kurniawan ("Kurniawan"). (See Koch Supp. Mem., at 7; Pollack Decl., Exs. 18, 19.) Greenberg argues that
Greenberg and Kurniawan entered into contracts to buy and sell wine. The emails between them contain the facts and the terms of those agreements, and are 'contracts' for the purposes of the Protective Order. The emails also contain competitively sensitive business information because they reflect Greenberg's determination of the values of certain bottles of wine, and Greenberg's private relationships with his suppliers and customers.(Greenberg Supp. Opp. Mem., at 10.)
The first of the documents submitted by Koch, however, is not an email exchange between Greenberg and Kurniawan, and it certainly cannot be considered a "contract." Greenberg has advanced no argument specifically directed to this document (Pollack Decl., Ex. 18), and, upon examination, the Court sees no basis for the document to be maintained as confidential. The second document (id., Ex. 19) is a 2004 email that, for the most part, does not contain concrete terms for the purchase, sale (or even offering for sale) of specific wine at a specific price, or any wine appraisals, or any other information that could legitimately be characterized as proprietary. In small part, the email does seem to confirm an agreement by Greenberg to purchase a few particular bottles of wine at a particular price, but, at this point, that agreement would be more than seven years old. Absent a particularized showing of harm, the pricing information contained in this email does not warrant confidentiality protection. Further, while the document shows that Greenberg did business with Kurniawan, it is the Court's understanding that, as a general matter, this was well known, and Greenberg has not demonstrated that he could suffer commercial harm from the disclosure of Kurniawan's identity. These documents should also be de-designated.
8. Documents Related to the Deposition Testimony of Stephen Selover
Koch challenges that Greenberg has designated as "Confidential - Attorneys Eyes Only Information" documents regarding Greenberg's payment of an outstanding debt to Stephen Selover ("Selover"), a general contractor who had once performed some work for Greenberg and who, according to Koch, may have knowledge regarding issues in this case. According to Koch, Greenberg's payment to Selover was suspicious in its timing, as it was made shortly before Selover's deposition. (See Koch Supp. Mem., at 7-8.) Greenberg suggests that this payment is a red herring, noting that, at his deposition, Selover testified consistently with a written declaration that he had given well before the payment was made. (See Greenberg Supp. Opp. Mem., at 10-11.)
Regardless of the impeachment value (if any) of Greenberg's payment to Selover, only one document has been placed before the Court as "representative" of the documents at issue here, and it appears that Greenberg does not now object to this document being de-designated, provided that Selover's personal identifying information is redacted. On the assumption that any other documents in this category are similar, the Court sees no basis for confidentiality protection for any information other than Selover's bank account number (and the routing number for payment), and notes that such information must, in any event, be redacted prior to any public filing, pursuant to Rule 5.2.
9. Invoices for Wine at Issue in this Litigation
Koch also argues that Greenberg has improperly designated as "Confidential" Royal invoices for bottles of wine that are the subject of this litigation. While, once again, the Court appreciates the potential commercial sensitivity of the prices that Greenberg is prepared to pay for certain labels, varieties, and vintages of wine, the Court again notes that, where such prices are several years old, it is incumbent upon Greenberg to demonstrate good cause for continued confidentiality protection. Here, the invoices in question are all dated in the year 2000 (see Pollack Decl., Exs. 21-22), and Greenberg has simply made no showing that 12-year-old pricing information is still sensitive. While Greenberg also argues that the Royal invoices should be considered confidential because they identify "which bottles" he chose to buy, and "from . . . whom" he chose to buy them (Greenberg Supp. Opp. Mem., at 11), the bottles identified in these particular documents are the very subject of this litigation, and, as such, they have already been identified publicly as having been part of Greenberg's collection. Further, as discussed above, Greenberg can claim no commercial harm from the revealing of Royal as one of his sources of wine, when he has apparently ceased buying wine from Royal. The invoices should be de-designated.
10. Other Documents Reflecting Greenberg's Alleged Awareness that Wines in His Cellar Were Counterfeit
Finally, Koch identifies three additional documents (Pollack Decl., Exs. 23, 24, 25) that he contends have been inappropriately designated as "Confidential" by Greenberg. Koch describes these documents as "reflecting [Greenberg's] awareness that particular wines in his cellar were counterfeit prior to selling the wines to [Koch]." (Koch Supp. Mem., at 8.) Greenberg responds by arguing that
These documents are all exchanges with individuals from whom Greenberg has purchased wine. Each of these documents reflects Greenberg's communications with these wine suppliers regarding particular bottles of wine that he had purchased, and the steps he took to authenticate them. Greenberg's purchases are competitively sensitive business information - which wines he has, how he authenticates them, and from where he purchased them, are kept confidential and not made available to the public.(Greenberg Supp. Opp. Mem., at 11.)
The first of these documents (Pollack Decl., Ex. 23) is a 2002 email exchange between Greenberg and an individual from whom he appears to have purchased a particular bottle of wine identified in the email. Greenberg has not demonstrated that, more than 11 years later, he would be commercially harmed by the disclosure of the identity of this seller or any of the details of their transaction. The remainder of the document involves a brief exchange between the parties regarding determining provenance for the bottle, and, despite Greenberg's argument regarding the confidential nature of "the steps he took to authenticate [his wine]," the Court does not agree that making inquiries about a wine's authenticity is proprietary and competitively sensitive information. Thus, the entire document should be de-designated.
The second of these documents (Pollack Decl., Ex. 24) is a 2003 email confirming the return by Greenberg of purchased wine thought to be counterfeit. The only conceivably commercially sensitive information contained in this document is the identity of the seller of the wine, but, as in the other instances described above, Greenberg has failed to come forward with facts sufficient to show that such information is actually, and currently, sensitive. Accordingly, this document should be de-designated, as well.
The third of these documents (Pollack Decl., Ex. 25) does not reference any wine transaction; to the contrary, it appears to be an email from Greenberg to a potential seller, informing the seller that Greenberg did not wish to purchase the wine described in the document, based on his suspicions regarding its genuineness. The email is dated 2003, and Greenberg has not demonstrated that he even considers this once-potential seller to be an ongoing source of wine. Thus, this document, too, should be de-designated.
B. Deposition Testimony
Koch has also challenged Greenberg's confidentiality designations of portions of the deposition testimony of a number of witnesses. The Court has reviewed all of the deposition excerpts placed before it, and resolves the presented issues as follows:
1. Testimony of Lori Atherton
Deponent Lori Atherton ("Atherton") apparently worked for Greenberg, and she testified regarding interactions with Greenberg during her employment. Greenberg has not adequately demonstrated good cause for maintaining the confidentiality of the Atherton testimony presented by Koch to the Court. (Pollack Decl., Ex. 26.) While, at one point in her deposition, Atherton testified regarding the identity of a bottle of wine sold by Greenberg, on a particular occasion, and the identify of the buyer (see id., at 77-78), the exhibit referenced by that testimony (Rahmil Decl., Ex. GG) shows that this sale was in February 2005, and Greenberg, once again, has made no showing that the information, even if commercially sensitive at that time, remains so. For this reason, the deposition excerpt should be de-designated.
2. Testimony of Richard Brierley
The submitted excerpts of the deposition of Richard Brierley ("Brierley"), who, at some point, toured Greenberg's wine cellar, primarily relate to Brieley's discussions with Greenberg as to whether any of Greenberg's wine was suspected of being counterfeit. Greenberg has not adequately shown that any of this testimony constitutes the type of proprietary, sensitive commercial information that should remain confidential, and, accordingly, the excerpt provided to the Court (Pollack Decl., Ex. 27) should be de-designated.
3. Testimony of Jaime J. Cortes
Greenberg has designated as "Confidential" portions of the deposition of his former house manager, Jaime J. Cortes ("Cortes") (Pollack Decl., Ex. 28), on the purported ground that the testimony reveals privileged attorney-client communications, as well as protected work product, to which Cortes testified over Greenberg's counsel's objection and, with respect to privilege, over counsel's attempted instruction not to answer (see id.; see also Greenberg Supp. Opp. Mem., at 13). If Greenberg had a colorable claim of either privilege or work product with respect to this testimony, this Court would agree that the testimony could remain confidential, pending a ruling at trial, should Koch seek to introduce the testimony at that time. Having reviewed the testimony in question, however, this Court concludes that Greenberg has no such colorable claim.
First, jurisdiction in this case is based on diversity, and thus the New York law of privilege applies. See Mount Vernon Fire Ins. Co. v. Try 3 Bldg. Servs., No. 96 Civ. 5590 (MJL) (HBP), 1998 WL 729735, at *3 (S.D.N.Y. Oct. 16, 1998). "In New York, the attorney-client privilege protects confidential communications between attorney and client relating to legal advice." Id. (citing N.Y.C.P.L.R. § 4503(a); Rossi v. Blue Cross & Blue Shield of Greater N.Y., 73 N.Y.2d 588 (1989)). There is not a single attorney-client communication referred to in the portion of Cortes's testimony that has been placed before the Court. Certainly, there is no testimony in the presented excerpt that could remotely be characterized as revealing any communication seeking or giving legal advice, or even of a legal character. Accordingly, there is absolutely no merit to Greenberg's position that the de-designation of this testimony could reveal privileged information.
Second, any argument that Greenberg may seek to advance that the testimony would reveal protected work product fails for the same reasons discussed above. The testimony in question relates to work performed by Greenberg, his staff, and Edgerton to inspect Greenberg's wine collection for potential counterfeits. Even if litigation with Royal was anticipated at the time of the inspection, Greenberg cannot reasonably show that he would not have performed such an inspection regardless of potential litigation, and thus the nature of the inspection cannot be shielded as work product.
Greenberg also states that he has designated portions of Cortes's deposition testimony as "Confidential - Attorneys' Eyes Only Information" where the testimony "relate[s] to [Greenberg's] wife and to unsupported accusations by Cortes that [Greenberg] engaged in illegal activity having nothing to do with the issues in this case." (Greenberg 12/9/10 Decl., ¶ 8.) Greenberg states that, "[o]bviously, if it were publicly (and falsely) disclosed that I engaged in illegal activity, this would interfere with my personal and business affairs, including possibly irreparably damaging my reputation." (Id.) It seems that the Court does not currently have before it the testimony to which Greenberg is referring, so it may be that Koch agrees that it is not relevant to this case and is not contesting Greenberg's confidentiality designation in this regard. If a dispute remains between the parties on this point, they may submit the particular testimony in question to the Court for review. The deposition excepts that have been placed before the Court thus far, however, should be de-designated.
4. Testimony of Jim Elroy and Brad Goldstein
Greenberg has not demonstrated that anything in the presented excepts of the depositions of Jim Elroy and Brad Goldstein, both of whom worked for Koch, is sensitive commercial information that would appropriately fall within the Protective Order's definition of "Confidential Information." These excerpts (Pollack Decl., Exs. 29, 30) should be de-designated. (But see n.8, supra.)
5. Testimony of Greenberg
The except of Greenberg's testimony that Koch has placed before the Court (Pollack Decl., Ex. 31) relates to Greenberg's insurance claim with Fireman's Fund. For essentially the same reasons discussed above, neither the subject of that claim nor Greenberg's testimony regarding the claim can be properly designated as "Confidential." The designation should therefore be lifted.
6. Testimony of Theirry Lovato , Jamie Ritchie, and Serena Sutcliffe
Koch has challenged the confidentiality designation made by Greenberg to an excerpt of the deposition testimony of Theirry Lovato ("Lovato"), one of Greenberg's employees. (Pollack Decl., Ex. 32.) This excerpt relates to the visit by Sotheby's' staff to Greenberg's wine cellar. According to Greenberg, the confidential nature of his own dealings with Sotheby's extended to his employees and agents, as well. The Court has already found, though, that factual information learned by Sotheby's from visiting Koch's cellar is not "Confidential Information" within the meaning of the Court's Protective Order (see supra at Point II(A)(1)), and the same is true for Lovato's observation of, or participation in, tasks performed during that visit. For the most part, Lovato's testimony relates to what he, Greenberg, or Sotheby's' staff did to examine bottles of wine in Greenberg's cellar, and to Lovato's understandings as to whether any of the wine was determined to be counterfeit. The testimony does not reveal information that could be used by a competitor of Greenberg's to underbid him, to raid his sources, or to steal his customers. Nor does the Lovato testimony at issue reflect information that could be commercially sensitive to Sotheby's. Greenberg has also not demonstrated that his own or Sotheby's' particular methods of examining wine for authenticity constitute trade secrets or are otherwise proprietary. Considering the deposition excerpt in its entirety, the Court concludes that the testimony should be de-designated.
For similar reasons, the submitted excerpts of the depositions of Jamie Ritchie ("Ritchie") (Pollack Decl., Ex. 33) and Serena Sutcliffe ("Sutcliffe") (id., Ex. 35) should also be de-designated. Ritchie and Sutcliffe were the Sotheby's representatives who visited Greenberg's cellar. The submitted portions of these witnesses' testimony relate to their conversations with Greenberg regarding the possibility that certain wine in his collection was counterfeit. This testimony is not appropriately characterized as containing information that is "proprietary" and potentially valuable to Greenberg. Nor could the information be deemed commercially valuable to Sotheby's. In short, Greenberg has not demonstrated the propriety of his confidentiality designations of any of this testimony.
7. Testimony of Jeff Sokolin
Greenberg has designated as "Confidential" certain excerpts of the deposition testimony of Royal witness Jeff Sokolin ("Sokolin") (Pollack Decl., Ex. 34), on the ground that Solokin's testimony, at least in part, relates to a purportedly confidential deposition exhibit. More specifically, Sokolin's testimony relates to a draft "Answer and Counterclaims" that was presumably prepared by Royal's counsel in response to a draft legal "Complaint" against Royal that was presumably prepared by Greenberg's counsel. It does not appear that a lawsuit between Greenberg and Royal was ever actually commenced; rather, it seems that counsel exchanged these draft legal documents to set out their factual contentions and potential legal claims, as an aid to effectuating a pre-litigation settlement between the parties. The "Answer and Counterclaims" that is the subject of Sokolin's deposition testimony is, in fact, marked on its face with the legend "Discussion Draft for Settlement Purposes Only." (Rahmil Decl., Ex. NN.) Koch challenges Greenberg's designation of Solokin's testimony, arguing that the testimony does not reveal proprietary, competitively sensitive business information. (See Koch Supp. Mem., at Appendix, pp. 14-15 (re Ex. 34).)
While the Court is sensitive to the fact that parties engaged in a private dispute may wish to exchange their contentions confidentially, so as to promote a settlement outside of court, the issue here is not whether Greenberg and Royal wished to have such private discussions. Rather, the question for this Court is whether Greenberg has demonstrated good cause for the Court to afford the Sokolin testimony and, by extension, any draft legal documents underlying that testimony, continued confidentiality protection under the Court's Protective Order. Nothing in the presented excerpt of Sokolin's testimony, or in the underlying deposition exhibit, relates to the material terms of the Royal settlement itself. Nothing in the testimony or exhibit reveals information that has been shown by Greenberg to be proprietary, sensitive business information. Moreover, much of the testimony at issue does not even refer to the supposedly confidential exhibit; rather, a fair amount of that testimony relates to the witness's assertions as to whether Greenberg has ever threatened him in any way. Assuredly, this is not the type of information that can fairly be classified as confidential business information, within the scope of the Protective Order. The testimony, as well as the underlying draft pleadings prepared by Greenberg and Royal, should, with the one exception set forth below, be de-designated.
In the course of reviewing Royal's draft counterclaims against Greenberg (Rahmil Decl., Ex. NN), the Court noted a paragraph that alleges facts of a personal nature regarding individuals other than the parties to this suit, and of no apparent relevance to the claims and defenses asserted in this action (id., ¶¶ 46, 47). While not falling within the definition of "Confidential Information" contained in the Protective Order, the Court will permit these particular allegations to be redacted from the document and treated as confidential for purposes of this litigation. If Koch disputes the propriety of confidential treatment for these particular allegations, he may address the matter in a further submission to the Court. --------
8. Testimony of Jeff Zacharia
The submitted excerpt of the deposition testimony of Zachys principal Jeff Zacharia ("Zacharia") (Pollack Decl., Ex. 36) principally relates to the content of a conversation that Zacharia had with Greenberg, in which Greenberg reportedly told him of Sutcliffe's visit to Greenberg's wine cellar. Greenberg argues that this testimony "reflects Greenberg's discussions with Zacharia in the course of negotiating a consignment contract," that "Greenberg would not have disclosed this information absent an expectation of confidentiality," and that "both parties [i.e., Greenberg and Zachys] [had] such an expectation." (Greenberg Supp. Opp. Mem., at 16.) Regardless of whether the reported conversation was held in the course of contract discussions, however, nothing in the submitted testimony - regarding Sutcliffe's visit to Greenberg's cellar or anything else - can be described as proprietary business information. The testimony should be de-designated.
CONCLUSION
For the foregoing reasons, most of the "sample" documents and testimony submitted to the Court should be de-designated as "Confidential Information" or "Confidential - Attorneys' Eyes Only Information" under the August 7, 2009 Protective Order. Greenberg is directed to review the remainder of his confidentiality designations and to withdraw or modify them, consistent with this Memorandum and Order.
In addition, given that a large number of judicial documents - including pleadings, motion papers and exhibits - have, in whole or in part, been filed in this action under seal, based on confidentiality designations that this Court has now found to be over-broad and unwarranted, it is hereby ORDERED that:
1. No later than 10 days from the date of this Memorandum and Order, the parties shall re-file, on the public Docket of the Court, copies of (a) the operative pleadings in this case, and (b) all papers filed in connection with any currently-pending motions, with only such limited redactions as would be consistent with the reasoning of this Memorandum and Order.
2. No later than 30 days from the date of this Memorandum and Order, the parties shall also re-file, on the public Docket of the Court, copies of all other judicial documents previously filed under seal in this case, again with only such limited redactions as would be consistent with the reasoning of this Memorandum and Order.
3. Counsel for the parties are directed to confer in good faith prior to re-filing any previously sealed papers, and any disagreements as to the meaning or scope
of this Court's Memorandum and Order shall be brought to this Court's attention promptly, so that the deadlines set out above can be met.Dated: New York, New York
April 13, 2012
SO ORDERED
/s/_________
DEBRA FREEMAN
United States Magistrate Judge Copies To: All counsel (via ECF)