Fifth Circuit affirms confidentiality of Ford Motor Co. documents, dissenting justice says decision “encourages gamesmanship”

NEW ORLEANS – The U.S. Court of Appeals for the Fifth Circuit has upheld a district court’s finding that documents deemed confidential by Ford Motor Company are protected by a pre-existing protection order.

In 2004, independent plaintiffs Moore and Bonilla entered into identical protective orders with Ford Motor Co. that provided a contractual procedure for the treatment of confidential Volvo documents. Volvo is an indirect subsidiary of Ford Motor Co.

The protective order outlines the procedure necessary to waive the confidentiality of any documents, and calls for the producing party (Ford) to first designate documents as confidential, then for the receiving party (Moore/Bonilla) to inform the producing party of any disagreement. The protective order then instructs the two parties to negotiate between themselves to resolve disagreements, finally allowing the producing party 15 days to move to enforce the protective order if the dispute continues.  If the party fails to file said motion, it thereby waives the confidentiality of all documents in question. The present dispute arose when determining at what particular moment the ambiguous 15-day time period began.

Following the procedure outlined in the protective order and over the course of discovery Ford produced approximately three boxes of confidential documents pertaining to Volvo. On May 11, 2004, plaintiffs’ counsel challenged the confidentiality of the documents. Ford responded 24 days later, agreeing to drop the confidentiality of 12 documents. Nineteen days later, plaintiffs’ counsel responded with its position that all of the produced documents were “no longer confidential.” Correspondence between the two parties regarding the documents’ confidentiality status continued throughout 2006.

On Feb. 1, 2012, Ford received an affidavit informing it of the plaintiffs’ counsel’s belief that Ford had waived the confidential status of the Volvo documents because it did not file for an additional protective order within the predetermined 15-day time limit. Ford then moved to enforce the protective order. Plaintiffs opposed this motion, alleging that Ford had waived the Volvo documents’ confidentiality by failing file to enforce protection after the first email correspondence, when plaintiffs allege the dispute arose. Ford argued that the protective order’s 15-day limit was not intended to begin until the actual dispute arose.

The magistrate judge decided in favor of Ford, ruling that the correspondences in 2004 suggested that the dispute was resolved, leaving Ford with no reason to file for protection. Plaintiffs appealed to the district court, which upheld the magistrate judge’s ruling. The plaintiffs again appealed to the Fifth Circuit Court of Appeals.

In a 2-1 decision, the Fifth Circuit upheld the district’s court decision to enforce the protective order. The majority rejected the plaintiff’s argument that the district court’s understanding of the 15-day time limit was “clearly erroneous,” stating that the ambiguity of the original protective order does not clearly state at what time the 15-day period begins. Because the dispute’s originating date was unclear in itself, the majority did not find the district judge’s decision to contradict any clear fact. Additionally, the appeals court upheld the district court’s refusal to allow the plaintiff to depose additional parties, citing the difference in appeal types.

Judge Jennifer Walker Elrod, dissenting, conversely agreed with the plaintiff’s “plain” understanding of the original protective order, reasoning that because the purpose of discovery is to promote a “full disclosure” of evidence, protective orders should serve as “narrow exceptions” to an otherwise liberal flow of discovery. Thus, a protective orders should be read in the most limited sense, according to the normal understanding of its terms.s, she wrote.

The case was heard by Chief Judge Carl E. Stewart and Judges Patrick Higginbotham and Elrod.

Case no. 13-40761 c/w 13.40774.