Lima Mem. Hosp. v. Almudallal , 2016 Ohio 5177 ( 2016 )

[Cite as Lima Mem. Hosp. v. Almudallal, 2016-Ohio-5177.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
ALLEN COUNTY
LIMA MEMORIAL HOSPITAL,
PLAINTIFF-APPELLEE, CASE NO. 1-16-05
v.
ALI ALMUDALLAL M.D.,
DEFENDANT-APPELLEE. OPINION
[ST. RITAS MEDICAL CENTER -
INTERVENOR-APPELLANT]
LIMA MEMORIAL HOSPITAL,
PLAINTIFF-APPELLEE, CASE NO. 1-16-11
v.
ALI ALMUDALLAL M.D.,
DEFENDANT-APPELLEE. OPINION
[ST. RITAS MEDICAL CENTER -
INTERVENOR-APPELLANT]
Appeals from Allen County Common Pleas Court
Trial Court No. CV20150329
Judgments Affirmed
Date of Decision: August 1, 2016
Case Nos. 1-16-05, 1-16-11
APPEARANCES:
Aaron L. Bensinger for Appellee, St. Rita’s Medical Center
Gerardo Opie Rollison for Appellee, Lima Memorial Hospital
ROGERS, J.
{¶1} Intervenor-Appellant, St. Rita’s Medical Center (“St. Rita’s”), appeals
the decision of the Court of Common Pleas of Allen County denying its motion for
an amended protective order and the decision granting Plaintiff-Appellee, Lima
Memorial Hospital’s (“Lima Memorial”), motion to compel. For the reasons that
follow, we affirm the judgments of the trial court.
{¶2} On June 1, 2015, Lima Memorial filed a complaint in the Court of
Common Pleas of Allen County against Defendant-Appellee, Dr. Ali Almudallal,
alleging one count of tortious interference with contract.1 The facts underlying the
claim were that Lima Memorial and St. Rita’s formed a contractual relationship in
which both parties agreed to hire doctors through a specific entity. Moreover,
Lima Memorial alleged that Dr. Almudallal enticed St. Rita’s to break the contract
by directly hiring him as a neurologist.
1
Although Dr. Almudallal has been designated as an Appellee, he has not filed a brief in this appeal and
has otherwise not participated in this appeal.
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{¶3} On June 19, 2015, Lima Memorial served a Subpoena for production
of documents upon St. Rita’s with a return date of July 8, 2015.
{¶4} On July 1, 2015, Lima Memorial filed its first amended complaint,
which alleged the same cause of action against Dr. Almudallal.
{¶5} On July 2, 2015, St. Rita’s filed a motion to intervene arguing that it
was a true party in interest with respect to the issues raised in Lima Memorial’s
complaint. St. Rita’s contemporaneously filed a motion to compel arbitration and
a request for attorney fees.
{¶6} Dr. Almudallal filed his answer to Lima Memorial’s first amended
complaint on the same day.
{¶7} On July 10, 2015, Lima Memorial filed its response in opposition of
St. Rita’s motion to intervene. The same day, Lima Memorial also filed its
response in opposition to St. Rita’s motion to compel arbitration.
{¶8} St. Rita’s filed an amended motion to intervene on July 14, 2015. St.
Rita’s attached a copy of a proposed complaint for declaratory judgment.
{¶9} Lima Memorial filed its response in opposition to St. Rita’s amended
motion to intervene on July 27, 2015.
{¶10} On July 29, 2015, the trial court filed an agreed protective order
between Lima Memorial and St. Rita’s. In the order, “Confidential Information”
was defined as
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all material, things or information which the producing party in good
faith considers to contain or to constitute trade secrets, or other
confidential research, development, proprietary or commercial
information which has been so designated by the producing party,
and any copies, abstracts, excerpts, or summaries of such
information. Confidential Information shall not be filed of public
record or used for any purpose not approved herein.
(Docket No. 23, p. 2). Further, the only people who could view “confidential
information” were designated as “Qualified Persons.” “Qualified Persons” were
limited to
The Board of either party, but only as necessary, to facilitate
evaluation of this Civil Action;
Inside or outside counsel for the Parties, including members of such
attorney’s staff (e.g., paralegals, legal secretaries, and law clerks)
who have a need to know;
Prospective witnesses who, in the judgment of counsel for a party,
require the Confidential Information for the purpose of preparing
their testimony;
Consultants and experts retained by the parties in this Civil Action to
assist in this Civil Action, and their respective staff;
The Court and Court personnel; and
Court reporters selected by the parties.
(Id. at p. 4). The agreed protective order also provided that confidential
information shall only be used in this case and not for “any commercial, business,
competitive, or other purposes, or in or for any other judicial or administrative
proceedings, disputes, or cases, unless a court order is issued to the contrary.” (Id.
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at p. 3). If confidential information was to be disclosed to a qualified person, then
the qualified person would have to sign a non-disclosure agreement before the
information would be disclosed to him or her. The agreed protective order would
survive the final conclusion of the case and the trial court retained jurisdiction
over the parties and any person bound by the agreed protective order. Further,
anyone who violated the agreed protective order would be subject to sanctions by
the court, including civil contempt. Finally, the order was without prejudice and
either party could apply at a later date for additional protection. However, first,
the parties needed to conference and negotiate in good faith before filing a motion
for additional protection.
{¶11} On July 31, 2015, the trial court denied St. Rita’s motions to
intervene and compel arbitration.
{¶12} On August 25, 2015, Dr. Almudallal filed a motion for judgment on
the pleadings pursuant to Civ.R. 12(B)(6) and (12)(C).
{¶13} St. Rita’s filed its notice of appeal of the court’s July 31, 2015 entry
denying its motions to intervene and compel arbitration on August 27, 2015.
{¶14} On September 4, 2015, Lima Memorial filed its response in
opposition to Dr. Almudallal’s motion for judgment on the pleadings.
{¶15} On September 11, 2015, St. Rita’s filed a motion to stay proceedings
pending this court’s decision on its appeal.
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{¶16} That same day, Dr. Almudallal filed his reply in support of his
motion for judgment on the pleadings.
{¶17} On September 15, 2015, Lima Memorial filed a motion for an order
striking Dr. Almudallal’s reply or, in the alternative, for leave to file a sur-reply.
That same day, Lima Memorial filed a motion for leave to file its second amended
complaint instanter. Lima Memorial also filed its response in opposition to St.
Rita’s motion to stay proceedings.
{¶18} On September 28, 2015, the trial court filed an entry ordering that
both Dr. Almudallal’s motion for judgment on the pleadings and St. Rita’s motion
to stay were moot as both withdrew their respective motions. In two separate
orders filed on the same day, the trial court granted Lima Memorial’s motions to
file its sur-reply and to file its second amended complaint.
{¶19} That same day, Lima Memorial filed its sur-reply to Dr. Almudallal’s
motion for judgment on the pleadings and its second amended complaint. In
addition to the tortious interference with contract count, Lima Memorial alleged
two additional counts: Violation of the Uniform Trade Secrets Act and
Interference with a Business Relationship.
{¶20} On October 6, 2015, this court dismissed St. Rita’s appeal.
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{¶21} Dr. Almudallal filed a motion to dismiss Lima Memorial’s second
amended complaint on October 9, 2015. That same day, Dr. Almudallal filed a
motion to stay discovery pending his motion to dismiss.
{¶22} Lima Memorial Filed its response in opposition to Dr. Almudallal’s
motion to stay discovery on October 16, 2015.
{¶23} On October 23, 2015, Lima Memorial filed its response in opposition
to Dr. Almudallal’s motion to dismiss the second amended complaint.
{¶24} That same day, St. Rita’s filed a motion for an order compelling
Lima Memorial to show cause as to why it should not be held in contempt for
violating the agreed protective order.
{¶25} Also that day, Dr. Almudallal filed a motion for leave to file his reply
in support of his motion to stay discovery. He attached a copy of his proposed
reply as an exhibit.
{¶26} On October 27, 2015, the trial court denied Dr. Almudallal’s motion
to dismiss the second amended complaint.
{¶27} On October 30, 2015, Dr. Almudallal filed a motion for leave to file
his reply in support of his motion to dismiss the second complaint. He attached a
copy of his proposed reply as an exhibit.
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{¶28} The trial court denied Dr. Almudallal’s motion for leave on
November 4, 2015, stating that the trial court had already denied the motion to
dismiss on October 27, 2015.
{¶29} On November 5, 2015, Lima Memorial filed its response in
opposition to St. Rita’s motion for an order compelling Lima Memorial to show
cause as to why it was not in violation of the agreed protective order.
{¶30} On November 10, 2015, the trial court denied St. Rita’s motion to
show cause.
{¶31} That same day, Dr. Almudallal filed his answer to St. Rita’s second
amended complaint.
{¶32} On December 7, 2015, an amended agreed protective order was
signed by Lima Memorial, St. Rita’s, and the trial court, which was similar in
substance, but also stated that the protective order governed settlement
negotiations as well. The protective order was filed the next day.
{¶33} On December 23, 2015, Lima Memorial filed a motion to compel.
{¶34} On January 11, 2016, St. Rita’s filed a motion to amend the
protective order to include an “Attorneys Eyes Only” (“AEO”) designation.
Specifically, St. Rita’s argued two points as to why good cause existed that
required the AEO designation. The first was that St. Rita’s and Lima Memorial
were competitors in a small market, and the second was that the information
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sought by Lima Memorial contained competitively-sensitive information
regarding St. Rita’s recruitment process, St. Rita’s physician compensation rates,
and a list of those physicians being sought or previously sought to be employed by
St. Rita’s.
{¶35} Regarding the first point, St. Rita’s argued that the (then) current
protective order did not adequately protect certain highly sensitive information
from the eyes of Lima Memorial’s Board of Directors, CEO, and any other
qualified person under the order. St. Rita’s argued that once these people learned
of this information it would be impossible to un-ring the doorbell when it came
time for Lima Memorial to make business decisions outside of this litigation.
{¶36} Regarding the second point, St. Rita’s argued that the information
sought was highly valuable to St. Rita’s and that it had spent significant amounts
of time and money in acquiring the information. St. Rita’s listed several ways in
which Lima Memorial could use the information to hurt St. Rita’s business. It
argued that the type of information sought was typically not disseminated
throughout employees at St. Rita’s, but was rather only provided on a need to
know basis. St. Rita’s attached several documents as exhibits, including a
proposed copy of the new amended agreed protective order and the affidavits of
Ronda Lehman, St. Rita’s Chief Operating Officer, and Michael Mayer, one of the
attorneys representing St. Rita’s.
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{¶37} In St. Rita’s proposed protective order, a new class of documents,
named “Highly Confidential Information,” was created. “Highly Confidential
Information” was defined as
all documents, material, things or information that the producing
Party in good faith considers to contain or to constitute
competitively sensitive technical, business, financial, competitive, or
personnel information, which is not generally known by third parties
and that the Producing Party would not normally reveal to third
parties or would cause third parties to maintain in confidence either
by agreements, policies, or procedures.
(Docket No. 76, Ex. 1, p. 2). Under the proposed order, any document classified
by the producing party as “Highly Confidential” would be labeled AEO. Any
documents that the producing party had already produced but considered highly
confidential would be designated “Highly Confidential Information,” even though
the documents would not be subject to the AEO designation. St. Rita’s proposed
that while the same people designated as “Qualified Persons” in the amended
protective order would still be able to observe “Confidential Information” under
their proposed order, only the following people would be able to view “Highly
Confidential Information” under the proposed order:
The Court, including court personnel, any court exercising appellate
jurisdiction over this Civil Action, and stenographers transcribing a
deposition;
Outside counsel of record in this Civil Action for a receiving Party
and employees of such attorneys and law firms to whom it is
necessary that the material be shown for purposes of this Civil
Action;
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Independent technical experts, consultants, investigators, or advisors
of a receiving Party, who are qualified by knowledge, skill,
experience, training or education and retained by outside counsel to
assist in the preparation or trial of this Civil Action and to whom it is
necessary that the information be disclosed, and who have signed a
Declaration in the form of [a non-disclosure agreement];
Document contractors, electronic discovery contractors, exhibit
contractors, graphic art contractors, and jury consultants who are
engaged to assist in the preparation of trial of this Civil Action and
to whom it is necessary that the material be shown for purposes of
this Civil Action, and who have signed a Declaration in the form of
[a non-disclosure agreement];
Potential witnesses to the extent the Highly Confidential Information
was authored by or addressed to the person or such person is
established as knowledgeable of such information prior to disclosing
the Highly Confidential Information.
(Id. at p. 6). The remainder of the proposed protective order was similar to the
(then) current order.
{¶38} In Lehman’s affidavit, she testified that competitors, such as Lima
Memorial, can use the type of information sought from St. Rita’s in ways that
could result in great harm to St. Rita’s. Lehman provided a list of ways in which a
competitor could harm St. Rita’s, including
blocking or hindering [St. Rita’s] potential business acquisitions;
blocking or hindering [St. Rita’s] recruitment efforts; improving its
own recruitment efforts; copying [St. Rita’s] business methods that
[St. Rita’s] has invested time and money to develop; determining
whether [St. Rita’s] is prospering or failing in various practice areas
(and therefore avoid, enter, increase or decrease its efforts in those
practice areas); knowing exactly who [St. Rita’s] patients and
referring providers are and contacting those patients and referring
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providers with direct marketing efforts in an effort to ‘steal’ those
patients and referrals sources; offering [St. Rita’s] physicians better
compensation than what they are receiving at [St. Rita’s] in order to
get them to leave [St. Rita’s]; learning the practice areas in which
[St. Rita’s] may be interested in developing, contracting, or
expanding, so that it can make strategic decisions on what it wants to
do in response; learning which doctors [St. Rita’s] has evaluated or
is evaluating so that it can make strategic decisions on what to do for
its recruitment efforts and whether to pursue or ignore those
physicians (or interfere with [St. Rita’s] recruiting efforts); and
learning what compensation [St. Rita’s] believes it will take to get
those doctors to come to [St. Rita’s] so that it can improve its own
recruitment efforts.
(Docket No. 76, Ex. 9, p. 2-3). Lehman stated that the type of information Lima
Memorial sought was typically only provided to those in St. Rita’s on a need to
know basis. Lehman specifically referenced two spreadsheets (“SRPS Active
Recruiting” and “SRPS Recruitment Worksheet”) that she believed if disclosed to
Lima Memorial could be used to harm St. Rita’s.
{¶39} In Mayer’s affidavit, Mayer described generally the type of
documents sought by Lima Memorial in its motion to compel. The only
documents specifically mentioned were a document “containing patient names and
identification numbers for patients referred to Mercy Health physicians” and “a
spreadsheet with a worksheet that contains personal information and job
descriptions for over 350 Mercy Health employees, used for Mercy Health
budgeting purposes.” (Docket No. 76, Ex. 10, p. 2).
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{¶40} Contemporaneously, St. Rita’s filed its response in opposition to
Lima Memorial’s motion to compel and request for attorney fees. In its response,
St. Rita’s argued that the motion should be denied because “(1) [Lima
Memorial’s] request for supplemental searches will cause undue burden and
expense to [St. Rita’s,] which [Lima Memorial] cannot overcome by a showing of
good cause; and (2) Ohio law requires the protection of [St. Rita’s] competitively-
sensitive information.”2 (Footnote omitted.) (Docket No. 77, p. 1). Regarding its
first argument, St. Rita’s argued that it had already produced over 5,000
documents and that additional searches would require weeks of time and hundreds
of thousands of dollars in expenses. It also argued that the information sought was
cumulative and duplicative as it was previously obtained from other sources.
{¶41} On January 19, 2016, the trial court granted Lima Memorial’s motion
to compel and denied St. Rita’s motion for attorney fees.
{¶42} On January 22, 2016, Dr. Almudallal filed a motion for summary
judgment as to Lima Memorial’s tortious interference claims.
{¶43} Lima Memorial filed its response in opposition to St. Rita’s motion
to amend the agreed protective order. In its response, Lima Memorial argued that
St. Rita’s motion should be denied for several reasons. First, Lima Memorial
argued that the issue had already been decided by the trial court once the court
2
In regard to its second argument, St. Rita’s incorporated its arguments in its motion to amend the agreed
protective order, which was filed contemporaneously with its response to Lima Memorial’s Motion to
Compel. Therefore, those arguments are omitted as they would be repetitive.
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granted Lima Memorial’s motion to compel, and, therefore, St. Rita’s motion was
moot. Second, Lima Memorial argued that St. Rita’s failed to prove the necessity
of an AEO designation. Specifically, Lima Memorial stated that although
Lehman, in her affidavit, identified two specific spreadsheets, she failed to show
where the competitively-sensitive information was located in those documents
sought by Lima Memorial. Additionally, Lima Memorial argued that St. Rita’s
had never asked the court for an in camera review of any of the documents sought
currently or in the past. It also pointed out that the proposed amended protective
order would allow St. Rita’s to retroactively stamp over 1,000 documents as AEO.
Furthermore, according to Lima Memorial, St. Rita’s had failed to show
specifically how the information sought was confidential. Rather, St. Rita’s had
only made general claims regarding confidentiality.
{¶44} The third argument Lima Memorial presented was that there was
essentially no difference between the terms “Confidential Information” and
“Highly Confidential Information” in the proposed protective order. Lima
Memorial posited that the latter definition actually described less sensitive
information than the former. Finally, the fourth argument Lima Memorial
presented was that the current protective order sufficiently protected St. Rita’s
interests.
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{¶45} On February 12, 2016, Lima Memorial filed a motion for a
continuance to conduct further discovery before responding to Dr. Almudallal’s
motion for summary judgment.
{¶46} On February 18, 2016, St. Rita’s filed its notice of appeal of the trial
court’s entry, dated January 19, 2016, granting Lima Memorial’s motion to
compel. It also filed a motion to stay the order pending its appeal.
{¶47} That same day, Dr. Almudallal filed a response in opposition to Lima
Memorial’s motion for a continuance.
{¶48} The trial court granted St. Rita’s motion to stay on February 24,
2016.
{¶49} That same day, the trial court denied St. Rita’s motion to amend the
protective order. In its entry, the trial court acknowledged that “ ‘[i]n determining
whether to grant a protective order, a trial court must balance the competing
interests to be served by allowing discovery to proceed against the harm which
may result.’ ” (Docket No. 92, p. 2, quoting Arnold v. Am. Natl. Red Cross, 93
Ohio App. 3d 564, 576 (8th Dist. 1994), citing Doe v. Univ. of Cincinnati, 42 Ohio
App.3d 227, 231 (10th Dist.1988)). The court continued,
An ‘Attorneys’ Eyes Only’ designation is not the only way to protect
information. Trial courts can regulate the discovery by ordering
‘that [the] use of the discovered information be limited to the
lawsuit’ and by ‘limit[ing] the persons who have access to the
information’ or limit the scope of discoverable trade secret
information to trial issues only and to restrain, under penalty of
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contempt, use of the disputed information for any purpose other than
the instant litigation. Alpha Benefits Agency, Inc. v. King Ins.
Agency, Inc., 134 Ohio App. 3d 673 at 683, 731 N.E.2d 1209 (1999);
Majestic Steel, 8th Dist. No. 76521. The Amended Agreed
Protective Order filed on December 7, 2015 already provides these
types of protections by defining ‘confidential information,’
providing for the limited purposes for which the confidential
information can be used in this lawsuit and providing for sanctions
for violations. Upon consideration of the motion and the
attachments thereto and plaintiff’s response, the Court finds that [St.
Rita’s] has not met the burden conferred on it by the above-cited
authorities to justify the requested amendment and ORDERS that
[St. Rita’s] motion to amend the protective order is denied.
(Emphasis and capitalization sic.) (Footnotes omitted.) (Id. at p 2-3).
{¶50} On March 8, 2016, St. Rita’s filed its notice of appeal of the trial
court’s entry, dated February 24, 2016, denying its motion for an amended
protective order.
{¶51} This court consolidated both appeals on March 10, 2016.
{¶52} On appeal, St. Rita’s presents this court with the following
assignments of error.
Assignment of Error No. I
THE TRIAL COURT ERRED IN GRANTING LIMA
MEMORIAL HOSPITAL’S MOTION TO COMPEL NON-
PARTY ST. RITA’S MEDICAL CENTER (“SRMC”) TO
PRODUCE DOCUMENTS THAT CONTAIN HIGHLY
CONFIDENTIAL, COMPETITIVELY-SENSITIVE
INFORMATION TO ITS DIRECT COMPETITOR WITHOUT
ADEQUATE PROTECTION OF THE SENSITIVE
INFORMATION. SPECIFICALLY, THE TRIAL COURT
ERRED WHEN IT REFUSED TO AMEND THE
PROTECTIVE ORDER TO INCLUDE AN “ATTORNEYS
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EYES ONLY” CONFIDENTIALITY DESIGNATION,
BECAUSE THE TRIAL COURT APPLIED INCORRECT
LAW, AND FAILED TO APPLY APPLICABLE OHIO LAW
REQUIRING A BALANCING OF THE COMPETING
INTERESTS TO BE SERVED BY ALLOWING DISCOVERY
TO PROCEED WITHOUT THE AEO DESIGNATION,
AGAINST THE HARM WHICH MAY RESULT.
Assignment of Error No. II
THE TRIAL COURT ERRED IN GRANTING LIMA
MEMORIAL HOSPITAL’S MOTION TO COMPEL NON-
PARTY SRMC TO PRODUCE DOCUMENTS THAT
CONTAIN HIGHLY CONFIDENTIAL, COMPETITIVELY-
SENSITIVE INFORMATION TO ITS DIRECT
COMPETITOR WITHOUT AMENDING THE PROTECTIVE
ORDER TO INCLUDE AN “ATTORNEYS EYES ONLY”
CONFIDENTIALITY DESIGNATION, WHERE THE TRIAL
COURT’S DECISION (a) FAILED TO BALANCE THE
COMPETING INTERESTS, (b) CONFERRED AN
IMPROPER BURDEN ON SRMC, (c) IGNORED EVIDENCE
THAT DEMONSTRATES GOOD CAUSE EXISTS TO
AMEND THE PROTECTIVE ORDER, (d) ADOPTED LIMA
MEMORIAL HOSPITAL’S PROPOSED ORDER WITHOUT
SUBSTANTIVE LEGAL ANALYSIS TO SUPPORT ITS
DECISION, AND (e) FAILED TO RECOGNIZE THAT THE
PROTECTIONS IN THE CURRENT PROTECTIVE ORDER
ARE INADEQUATE HERE.
{¶53} Due to the nature of St. Rita’s assignments of error, we elect to
address them together.
Assignments of Error Nos. I & II
{¶54} In its first and second assignments of error, St. Rita’s argues that the
trial court erred by denying its motion for an amended protective order and
granting Lima Memorial’s motion to compel. Specifically, St. Rita’s argues that
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the trial court failed to apply the applicable law and that it presented sufficient
evidence to warrant an amended protective order. We disagree.
{¶55} The Rules of Civil Procedure provide liberal discovery provisions.
Pursuant to Civ.R. 26(B)(1), the scope of discovery includes “any matter, not
privileged, which is relevant to the subject matter involved in the pending action,
whether it relates to the claim or defense of the party seeking discovery or to the
claim or defense of any other party.” Notwithstanding this wide scope of
permissible discovery, trial courts are given broad discretion in the management of
discovery. See State ex rel. Daggett v. Gessaman, 34 Ohio St. 2d 55, 57 (1973).
Thus, an appellate court reviews discovery issues pursuant to an abuse of
discretion standard. See Tretola v. Tretola, 3d Dist. Logan No. 8-14-24, 2015-
Ohio-1999, ¶ 31, quoting Stark v. Govt. Accounting Solutions, Inc., 10th Dist.
Franklin No. 08 AP-987, 2009-Ohio-5201, ¶ 14. A trial court will be found to
have abused its discretion when its decision is contrary to law, unreasonable, not
supported by the evidence, or grossly unsound. State v. Boles, 187 Ohio App. 3d
345, 2010-Ohio-278, ¶ 16-18 (2d Dist.). When applying the abuse of discretion
standard, a reviewing court may not simply substitute its judgment for that of the
trial court. Blakemore v. Blakemore, 5 Ohio St. 3d 217, 219 (1983).
{¶56} Civ.R. 26(C) governs protective orders in Ohio. The rule provides,
Upon motion by any party or by the person from whom discovery is
sought, and for good cause shown, the court in which the action is
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pending may make any order that justice requires to protect a party
or person from annoyance, embarrassment, oppression, or undue
burden or expense, including one or more of the following: (1) that
the discovery not be had; (2) that the discovery may be had only on
specified terms and conditions, including a designation of the time or
place; (3) that the discovery may be had only by a method of
discovery other than that selected by the party seeking discovery; (4)
that certain matters not be inquired into or that the scope of the
discovery be limited to certain matters; (5) that discovery be
conducted with no one present except persons designated by the
court; (6) that a deposition after being sealed be opened only by
order of the court; (7) that a trade secret or other confidential
research, development, or commercial information not be disclosed
or be disclosed only in a designated way; (8) that the parties
simultaneously file specified documents or information enclosed in
sealed envelopes to be opened as directed by the court.
Civ.R. 26(C). “In determining whether to grant a protective order, a trial court
must balance the competing interests to be served by allowing the discovery to
proceed against any harm which may result.” Montrose Ford, Inc. v. Starn, 147
Ohio App. 3d 256, 259 (9th Dist.2002), citing Arnold, 93 Ohio App. 3d at 576.
{¶57} “ ‘The burden of establishing good cause for a [P]rotective [O]rder
rests with the movant.’ ” Stout v. Remetronix, Inc., 298 F.R.D. 531, 534
(S.D.Ohio 2014), quoting Nix v. Sword, 11 Fed.Appx. 498, 500 (6th Cir.2001).
“To demonstrate good cause, the movant ‘must articulate specific facts showing
clearly defined and serious injury resulting from the discovery sought and cannot
rely on mere conclusory statements.’ ” Id. “ ‘The mere presence of “trade
secrets” does not automatically entitle the producing party to an AEO [P]rotective
[O]rder. The burden remains on the producing party to show that the AEO
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protection is warranted.’ ” Id. at 534-535, quoting Penn, LLC v. Prosper Business
Development Corp., S.D.Ohio No. 2:10-cv-0993, 2012 WL 5948363, *4 (Nov. 28,
2012). Further, the producing party must state the harm it will suffer with
“sufficient particularity,” which requires “ ‘specific demonstrations of fact,
supported where possible by affidavits and concrete examples.’ ” Id. at 535,
quoting Penn at *4.
{¶58} Before we address whether the trial court erred by denying St. Rita’s
motion for an amended protective order, we must first determine if the trial court
misapplied the law. Specifically, St. Rita’s argues that the trial court failed to
perform the proper balancing test and, therefore, de novo review, and not abuse of
discretion, is appropriate. St. Rita’s also claims that the trial court’s February 24,
2016 entry focused on the incorrect burden. We are not convinced.
{¶59} In its entry denying St. Rita’s motion for an amended protective
order, the trial court acknowledged that it is a court’s duty to balance the interests
of allowing discovery to proceed and any harm that could result from it. Further,
the court detailed how an AEO designation was not the only way to adequately
protect trade secrets from being disclosed in an improper way and cited cases in
support. The court indicated that it had considered the motion and all the
information attached by both St. Rita’s and Lima Memorial and found that St.
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Rita’s had failed to carry its burden.3 Additionally, the February 24, 2016 entry
was the court’s decision on St. Rita’s motion for an amended protective order. It
is well established that the party seeking the protective order has the burden to
show why protection is necessary. See, e.g., Stout, 298 F.R.D. at 534. Thus, the
trial court did not err by finding that St. Rita’s had the burden to show why its
motion should be granted. Accordingly, we will review the trial court’s denial of
St. Rita’s motion for an abuse of discretion.
{¶60} On appeal, St. Rita’s argues that the trial court’s decisions were
unreasonable, arbitrary, and unconscionable for two reasons: (1) the court failed to
balance the interests; and (2) St. Rita’s established good cause to amend the
protective order. Regarding the first reason, we have already found that the court
performed the proper balancing test when denying St. Rita’s motion for an
amended protective order.
{¶61} In support of its argument that it established good cause, St. Rita’s
relies on the affidavits of Lehman and Mayer. Where St. Rita’s argument fails is
that the affidavits fail to establish a specific showing of harm. Although Mayer
describes the content of the documents sought by Lima Memorial in its motion to
compel, he does not describe the documents specifically. Rather, they are given
general names such as “financial projections, strategic initiatives, salary
3
The statement that the court considered the motion and all attachments also dispels St. Rita’s argument
that the court failed to consider its arguments contained in the affidavits attached to its motion.
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information,” etc. (Docket No. 76, Ex. 10, p. 2). Importantly, Mayer did refer to
two specific documents, though the names of which were omitted, in which he
argued were not relevant to the case, for the most part.
{¶62} Lehman’s affidavit also lacks specificity. Although Lehman
provided a laundry list of ways in which competitors could use the information in
a way that harmed St. Rita’s, Lehman failed to show a specific harm that would
result from St. Rita’s disclosing the information to Lima Memorial. Moreover, the
only documents she specifically referred to were the “SRPS Active Recruiting”
and “SRPS Recruitment Worksheet” spreadsheets. Lehman also merely recited
the factors provided in Stout without providing any specific details. When a
company subject to a discovery request fails to provide specific showings of harm,
then it has failed to show a need for additional protection.
{¶63} Compare this case with Stout. In Stout, an employee brought a class
action lawsuit against his employer claiming that it had failed to pay applicable
minimum wage and overtime compensation under the Fair Labor Standards Act
and the Ohio Minimum Fair Wage Standards Act. 298 F.R.D. at 533. During
discovery, the employee sought information regarding how the defendants priced
their projects. Id. The employer objected arguing that the project hour sheets
contained trade secrets and that any disclosure would require an AEO designation.
Id. at 533-534. In support, the Vice President and Chief Operating Officer (“VP”)
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of the company filed an affidavit explaining that “the project hour sheets contain
estimated hours for the installation of various types of medical equipment.” Id. at
535. The VP stated that the estimates were used to provide quotes for its
customers. The estimates were maintained on a computer protected with a
password and were only given to employees when necessary to “plan a particular
installation.” Id. When disclosed, those employees were told not to share the
information with anyone. Id. Further, the estimates were never distributed to all
employees or anyone outside of the defendants’ companies. The VP identified
five former employees that currently worked for competitors. Id. Given the VP’s
testimony, the district court found that an AEO was appropriate.
{¶64} When one compares the information provided by the VP in Stout
with the information provided by Lehman and Mayer, it becomes clear that St.
Rita’s has failed to state with specificity and particularity the harm it will suffer by
disclosing its trade secrets with Lima Memorial. Thus, the trial court did not err
when it found that St. Rita’s failed to meet its burden.
{¶65} St. Rita’s also downplays the protections it currently has in the
amended protective order. The current agreed protective order limited the use of
trade secrets to this litigation only. It provided that only “qualified persons” were
able to view confidential information. The order required that any “qualified
person” that received confidential information would have to sign a non-disclosure
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agreement before receiving such information. Moreover, the order provided St.
Rita’s, the disclosing party, with a remedy in the form of contempt if anyone used
the information for anything other than the purposes of this litigation or settlement
negotiations. Finally, the amended protective order survives this litigation, and,
therefore, the trial court retains jurisdiction over Lima Memorial and St. Rita’s in
the event of a violation of the protective order.
{¶66} In its February 24, 2016 entry, the trial court highlighted some of
these protections when discussing the adequacy of the current protective order.
Other courts have considered these protections to adequately protect trade secret
information. See Majestic Steel Serv., Inc. v. Disabato, 8th Dist. Cuyahoga No.
76521, 1999 WL 1206573, *2 (Dec. 16, 1999); Alpha Benefits Agency, Inc. v.
King Ins. Agency, Inc., 134 Ohio App. 3d 673, 683 (8th Dist.1999). In Majestic
Steel, the appellate court found that the trial court had abused its discretion by
ordering the non-party appellant to disclose its trade secrets without any
protections in place. 1999 WL 1206573 at *2. The appellate court gave several
acceptable options for the trial court to consider on remand, which included “its
discretion to limit the scope of discoverable information to trial issues only and to
restrain, under penalty of contempt, use of the disputed information for any
purpose other then [sic] the instant litigation.” Id. Therefore, the trial court did
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not abuse its discretion when it denied St. Rita’s motion for an amended protective
order.
{¶67} Further, because St. Rita’s relies on the same arguments as to why
the court erred in granting Lima Memorial’s motion to compel, we find that the
trial court did not abuse its discretion in granting Lima Memorial’s motion.
{¶68} Accordingly, we overrule St. Rita’s first and second assignments of
error.
{¶69} Having found no error prejudicial to the appellant, in the particulars
assigned and argued, we affirm the judgments of the trial court.
Judgments Affirmed
PRESTON and WILLAMOWSKI, J.J., concur.
/jlr
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