Federal Court Weighs Trade Secret Concerns With Discovery Goals In Tire Blowout Case

In a products liability tire blowout case, the parties entered into an agreed protective order protecting the disclosure and use of confidential information.  The parties disagreed on whether to include a sharing provision and the court rejected the plaintiffs’ request for a sharing provision that would allow the plaintiffs to share designated confidential information with other “as-yet unnamed plaintiffs or potential plaintiffs in other litigation.”  As discovery proceeded, the defendant tire manufacturer withheld a significant amount of information on the grounds that the information was highly confidential, proprietary information.  Last week, the U.S. District Court for the District of Kansas considered the tire manufacturer’s objections to disclosing the information.

The court continually cited the protective order as providing adequate protection to the tire manufacturer’s concerns:  “A concern for protecting confidentiality does not equate to privilege.  While a confidentiality objection may be appropriate when a party seeks a protective order limiting the parties’ use or disclosure of confidential information, it generally is not a valid objection for withholding discovery altogether.”  Notably, the court concluded that the tire manufacturer had not expressly made a claim that the information sought to be protected was subject to the “trade secret privilege” recognized under Kansas law.  Instead, the tire manufacturer sought protection under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure, which allows a court, for good cause, to issue an order “requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.”  Under this rule, the party seeking to avoid disclosure must first establish that the information is a trade secret and then demonstrate that the disclosure might be harmful.

The court did conclude that the tire manufacturer established that the skim stock compounds and formulas of its tires were trade secrets deserving of protection but overruled most of the tire manufacturer’s objections to producing other information.  The court, for example, rejected the argument that the entire tire manufacturing process met the definition of a trade secret.  Examples of the information the court ordered the tire manufacturer to produce over the confidentiality objection included the number of tires the manufacturer produced, the subject tire’s specifications and blueprints, and correspondence exchanged with the car manufacturer.

Following the court’s guidance on what information could be withheld as a trade secret, the court rejected the plaintiffs’ request that the tire manufacturer be required to produce a trade secrets privilege log.

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