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Re: Electric Insurance Co. v. Electrolux North America

March 4, 2011

RE: ELECTRIC INSURANCE CO.
v.
ELECTROLUX NORTH AMERICA, INC.



The opinion of the court was delivered by: Michael A. Shipp United States Magistrate Judge

CHAMBERS OF MICHAEL A. SHIPP UNITED STATES MAGISTRATE JUDGE MARTIN LUTHER KING COURTHOUSE 50 WALNUT ST. ROOM 2042 NEWARK, NJ 07102 973-645-3827

Not for Publication

LETTER OPINION AND ORDER

VIA CM/ECF

All counsel of record

Dear Counsel:

This matter comes before the Court by way of Plaintiff Electric Insurance Company's ("EIC" or "Plaintiff") application to strike paragraph 7(f) of the July 1, 2010 Protective Order. Defendant Electrolux North America ("Electrolux" or "Defendant") opposes the application. For the reasons set forth below, Plaintiff's application is granted.

I.BACKGROUND

The contentious history of this case is well-known to the parties and only the facts relevant to the within application will be set forth herein. On March 3, 2010, the Court entered a Consent Protective Order, which included language that the parties had agreed upon. ("March 3rd Consent Protective Order.") In fact, Defendant submitted the proposed order and accompanying certification to the Court for consideration. Thereafter, on May 10, 2010, the Court conducted oral argument regarding several discovery issues, during which the Court found that Plaintiff was entitled to Electrolux's proprietary product design and claims information based upon the broad parameters of discovery set forth in Rule 26. In light of the Court's findings, Defendant raised its concern that the March 3rd Consent Protective Order does not preclude the use of confidential information by EIC's experts who work for competitors. Recognizing Defendant's concern, the Court ordered counsel to revisit the March 3rd Consent Protective Order and to submit an amended order. As the parties were unable to agree amicably upon how the order should be amended, on July 1, 2010, the Court entered the proposed form of protective order submitted by Electrolux. ("July 1st Protective Order.") However, the Court found it prudent to amend the proposed paragraph 7(f) to provide:

7. Confidential Information designated as "CONFIDENTIAL" may be disclosed Only to "Qualified Persons," defined as follows:

(f) At this point in the litigation, Confidential Information shall not be disclosed to any person described in ¶ 7(e) who is currently retained and/or employed by a competitor of Defendant, unless Defendant consents to such disclosure in writing. The Court will set a briefing schedule for this issue upon request of counsel. (See id. at ¶ 7(f).)

Plaintiff did not file a motion for reconsideration and did not appeal the Court's decision. The discovery process proceeded. Thereafter, on July 15, 2010, the Court ordered Electrolux to provide complete and responsive answers to a number of interrogatories and requests for production of documents. ("July 15th Order.") Defendant appealed certain provisions of the July 15th Order, which was affirmed on September 23, 2010. The Court subsequently held several status conferences regarding Defendant's production of the discovery and consistently and firmly required Defendant to comply with the discovery orders. While it did so somewhat belatedly, Defendant nonetheless appeared to make a concerted effort to comply with this Court's discovery orders. Plaintiff disclosed to Defendant on November 22, 2010 that its expert, Dr. Hoffman, performs work for Electrolux competitors. After Defendant would not agree to waive section 7(f) of the July 1st Protective Order, Plaintiff's current application ensued.

In support of its application to strike paragraph 7(f) of the July 1st Protective Order, Plaintiff argues that counsel for Electrolux drafted the original March 3rd Consent Protective Order and submitted the required supporting certification pursuant to Local Rule 5.3(b)(2). Plaintiff further argues that the mechanism set forth in the March 3rd Consent Protective Order ensures that any confidential information is only disseminated to "Qualified Persons" for use in the present lawsuit and, as such, Electrolux is unable to demonstrate that the enhanced protections of the March 3rd Consent Protective Order were necessary. Certainly, Plaintiff argues, enhancements that restrict Plaintiff's ability to prepare its case are unsupported. Moreover, Plaintiff notes that Defendant failed to submit the required certification under Local Rule 5.3(b)(2) in support of the July 1st

Protective Order, which alone warrants relief. This is particularly true in light of the fact that, according to Plaintiff, Electrolux's counsel has been aware that Plaintiff was using Dr. Hoffman as an expert and did not object to Dr. Hoffman reviewing confidential information until recently. According to Plaintiff, Electrolux seeks to preclude the expert Plaintiff retained almost two years ago from reviewing all documents produced in discovery by Electrolux. Furthermore, Plaintiff argues that certain documents ...


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