IceMOS Technology Corp. v. Omron Corp.

          ORDER

          James A. Teilborg, Senior United States District Judge.

         On December 20, 2018, this Court granted Plaintiff IceMOS Technology Corporation (“IceMOS”) and Defendant Omron Corporation (“Omron”)'s request for a protective order. (Doc. 87). Pending before the Court now is IceMOS's Motion to Modify the Protective Order (Doc. 314). Omron filed an Opposition to Plaintiff's Motion to Modify the Protective Order (Doc. 284), and IceMOS filed a Reply in Support of its Motion to Modify the Protective Order (Doc. 316). The Court now rules on the motion. The Court will not address IceMOS's Motion to Seal (Doc. 313) its original Motion to Modify (Doc. 254) because the Court has only relied on the redacted Motion to Modify the Protective Order (Doc. 314) in reaching its conclusion. The same is true for the Response (Doc. 284).

         I. Background

         Pursuant to the parties' stipulation, the Court entered a protective order that permitted the parties to designate materials as “CONFIDENTIAL” or “ATTORNEYS' EYES ONLY.” (Doc. 86-1 at 3-4). The protective order provides that material so designated “shall not be used or disclosed by the parties, counsel for the parties, or any other persons identified in subparagraph (b) for any purpose whatsoever other than in this litigation and any appeals thereof.” (Id. at 3).

         On August 19, 2019, IceMOS filed a Motion to Modify the Protective Order, requesting to use information from confidential documents produced by Omron in a new lawsuit against third party Shindengen Electric Manufacturing Co., Ltd. (“ShinDengen”) for “theft of trade secrets, fraud, fraudulent inducement, patent infringement and civil conspiracy.” (Doc. 314 at 2, 8). IceMOS claims that those documents prove that ShinDengen “conspired with Omron in systematic efforts to misappropriate, misuse and profit illegally from the unauthorized use of IceMOS's Proprietary Information.” (Id. at 2). Accordingly, IceMOS moves to amend Paragraph 5(a) of the protective order to say:

Confidential Information shall not be used or disclosed by the parties, counsel for the parties, or any other persons identified in subparagraph (b) for any purpose whatsoever other than use in this or any collateral litigation (and any appeals thereof). Any use of material designated as Confidential Information in this case in collateral litigation is conditioned upon the material being designated for production in the collateral litigation with the same level of confidentiality as designated in this action.

(Id. at 7) (emphasis added).

         A. Legal Standard

         Federal Rule of Civil Procedure (“Rule”) 26(c) permits the Court to issue protective orders “for good cause” to “protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense” during the discovery process. Fed.R.Civ.P. 26(c)(1). “A party asserting good cause bears the burden, for each particular document it seeks to protect, of showing that specific prejudice or harm will result if no protective order is granted.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1130 (9th Cir. 2003).

         A party seeking the modification of a protective order to permit protected materials to be discoverable in collateral litigation must follow a three-step process. See Darby v. Safeco Ins. Co. of Am., 2012 WL 5512576, at *2 (D. Ariz. Nov. 14, 2012). “As an initial matter, the collateral litigant must demonstrate the relevance of the protected discovery to the collateral proceedings and its general discoverability therein.” Foltz, 331 F.3d at 1132. “Such relevance hinges ‘on the degree of overlap in facts, parties, and issues between the suit covered by the protective order and the collateral proceedings.'” Id. (citation omitted). Second, the court must be satisfied that “the protected discovery is sufficiently relevant to the collateral litigation that a substantial amount of duplicative discovery will be avoided by modifying the protective order.” Id. “The court that issued the [protective] order is in the best position to make the relevance assessment for it presumably is the only court familiar with the contents of the protected discovery.” Id. Finally, if the court modifies the protective order to permit the discovery, responsibility shifts to the court overseeing the collateral litigation to determine whether the collateral litigants may ultimately obtain the materials in discovery. Id. at 1132-33; see also Darby, 2012 WL 5512576, at *2.

         The interests of judicial economy “strongly favor access to discovery materials to meet the needs of parties engaged in collateral litigation.” Id. at 1131. “Allowing the fruits of one litigation to facilitate preparation in other cases advances the interests of judicial economy by avoiding the wasteful duplication of discovery.” Id. Thus, when determining whether to modify the protective order, the court must “weigh the countervailing reliance interest of the party opposing modification against the policy of avoiding duplicative discovery.” Id. at 1133. A party's interest in preserving secrecy against the public “can be accommodated by placing the collateral litigants under the same restrictions on use and disclosure contained in the original protective order.” Id. (quoting United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424, 1428 (10th Cir. 1990)).

         B. Analysis

         1. Relevance Analysis

         IceMOS bears the burden of showing that the confidential material in question is relevant to collateral litigation. See Foltz, 331 F.3d at 1132. Although IceMOS attached to its motion a list of hundreds of confidential documents it apparently plans to use in a new suit against ShinDengen, it never cited or discussed any of them, (compare Doc. 314, n.1- 29, with Doc. 314-1)-particularly neglecting to explain how these documents would support specific claims against ShinDengen. (See Doc. 314 at 2-6). Rather, IceMOS broadly referred to the whole ...