Thank you for sharing!

Your article was successfully shared with the contacts you provided.
A plaintiff’s posting of discovery material on his Web site violated a confidentiality and protective order, the U.S. District Court for the Eastern District of Pennsylvania held June 7 in granting the defendant’s motion for contempt and sanctions against the plaintiff, plaintiff’s lead counsel, and plaintiff’s local counsel ( Horizon Unlimited Inc. v. Silva, E.D. Pa., CA No. 97-7430, 6/7/00). The plaintiff, Horizon Unlimited Inc., through Paul Array, the company’s president, purchased a Seawind airplane kit manufactured by SNA Inc., of which Richard Silva is president. The plaintiff alleged that its Seawind airplane did not “perform according to specifications and building times” printed in the promotional materials. The plaintiff filed suit against Silva and SNA Inc. in the U.S. District Court for the Eastern District of Pennsylvania for negligence, negligent misrepresentation, fraud and deceit, breach of warranty, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Stat. Ann. �201-1. Following a protracted and contentious discovery period, the court dismissed all of the plaintiff’s claims against the defendants, except for its UTPCPL claim. The UTPCPL claim was voluntarily dismissed by the plaintiff after it became apparent it was baseless. The court permitted dismissal only with prejudice. PLAINTIFF POSTS DISCOVERY MATERIAL ON WEB During discovery, the plaintiff requested flight test data, and the defendants sought to withhold the data as confidential. This information was ultimately produced subject to a Sept. 16, 1998 confidentiality and protective order (CPO) limiting all discovery materials marked “confidential” to use by certain people, including the attorneys in this action, but not the parties themselves, unless otherwise approved by the court. On Oct. 9, 1998, the court issued an order permitting the plaintiff’s expert, Richard Adler, to review the confidential flight test data subject to his agreement to be bound by the CPO. Adler, having agreed to the CPO, was given a copy of the flight test data to prepare an expert report. On Nov. 16, 1998, the plaintiff’s local counsel, Tracey Oandasan, filed plaintiff’s pretrial memoranda, with Adler’s report, in the clerk’s office. This was done at the instruction of the plaintiff’s lead counsel, Martin Pedata, who had been admitted pro hac vice. Appendix A of the expert report, the flight test data itself, was not filed, but the pretrial memorandum and expert report were not filed under seal. The plaintiffs did not mark the report “Confidential.” On Nov. 28, 1999, Array wrote Oandasan to request a copy of the flight test data, Adler’s expert report, and other documents. Array erroneously believed the data was no longer confidential as a result of a memorandum and order issued by a different judge in another action involving the same parties. After consulting with Pedata, Oandasan informed Array on Dec. 2, 1999, that the flight test data remained confidential, but she enclosed a copy of Adler’s report — without Appendix A, the flight test data — as well as a copy of the CPO. In December 1999, the defendants discovered images from Adler’s report and commentary about the report on Array’s Web site. The defendants argued that filing Adler’s report of record and transmitting the report to Array permitted Array’s subsequent posting the report on his Web site, in violation of the CPO. The flight test data was not filed or otherwise disseminated in its original form, but the defendants argued that the body of the report referred to the data in sufficient detail that its dissemination was a violation of the CPO. PLAINTIFF KNEW MATERIAL WAS COVERED BY CPO Writing the opinion of the court, Judge Norma L. Shapiro stated that to establish contempt the petitioner must prove: (1) that a valid order of the court existed; (2) that the defendants had knowledge of the order; and (3) that the defendants disobeyed the order, citing Roe v. Operation Rescue, 54 F.3d 133, 137 (3d Cir. 1995). The court also noted that, while the availability of substantial compliance as a defense to civil contempt is still undecided in the Third Circuit, district courts have accepted substantial compliance as a defense. The court wrote, “There is no dispute in this action that a valid court order existed, and that the individual subjects of the contempt motion had knowledge of it. There is a dispute about whether the order was disobeyed, and whether, even if it were technically disobeyed, there was substantial compliance. In addressing this dispute, the court must consider two issues: (1) whether the filing of Adler’s report of record without marking it confidential and subsequently transmitting that report to Array violated the CPO; and 2) if so, which individuals are responsible for the violation and whether they ‘substantially complied’ with the order.” The court said that it was convinced from its own comparison between Adler’s report and the confidential flight test data that the former included information from the latter. “Plaintiff’s counsel knew full well that Adler based his report on the confidential data he was given. The assumption that the report did not refer to this confidential data in any way was completely unjustified. The CPO was violated when Adler’s report was filed of record, not under seal, when it was later provided to Paul Array, and when it was posted on Array’s website,” the court wrote. Even though Array never had access to the confidential flight test data in its original form, Adler’s report, like the data itself, was subject to the CPO, and so Array still violated the CPO when he posted portions of the report with commentary on his Web site, the court wrote. “The evidence is clear and convincing that Array was aware plaintiff’s counsel had erroneously provided him with Adler’s report. Array knew the flight test data itself was confidential since plaintiff’s counsel had informed him of this when she rejected his request for that data. But she still provided him with Adler’s report and a copy of the CPO; Array’s comments on his Web site suggest he knew the report contained confidential data he was not supposed to receive. The Web page where the report and commentary are displayed has the heading ‘Flight Test Data.’ Array writes on the site that although SNA attempted to withhold the flight test data as confidential, Horizon ‘finally got it.’ … Although his attorneys had refused to give him the data itself, Array obviously knew he had succeeded in getting portions of it through Adler’s report,” the court wrote. According to the court, Array was therefore aware of the CPO and disobeyed it by putting Adler’s report, with his commentary, on his Web site. There was no evidence that Array “substantially complied” with the CPO, and, instead, “all Array’s efforts were directed towards circumventing it,” the court wrote. The court ordered that Array would be prohibited from further communication of information concerning Adler’s expert report in any form and that he must compensate the defendant’s counsel for a portion of the fees incurred in filing and arguing the contempt motion. ATTORNEYS DID NOT TAKE ‘ALL REASONABLE STEPS’ The court wrote that Pedata, lead counsel for the plaintiff, testified he was responsible for all decisions pertaining to the filing and dissemination of Adler’s report; that he reviewed Adler’s report, the CPO, and the confidential flight test data and concluded that Adler’s report was not subject to the CPO; and that he sought no guidance from the court or permission from the defendant’s counsel before making the decision to file the expert report of record not under seal. The court concluded that there was clear and convincing evidence that Pedata violated the CPO by authorizing the filing of Adler’s report and directing local counsel to send the report to Array. Pedata did not take “all reasonable steps” to comply with the court order, and neither were his violations merely “technical” or “inadvertent,” the court wrote. Consequently, the court also held Pedata responsible for a portion of defendant’s counsel’s fees in filing and arguing the contempt motion. Finally, the court noted, Oandasan testified that as local counsel for plaintiff under Local Rule of Civil Procedure 83.5.2, her role was limited to following Pedata’s instructions. The court responded, “An attorney retained as local counsel is obliged to ensure that lead counsel comply with our local standards of practice. Oandasan’s role in this action was not consistent with that obligation. She testified that as local counsel she acted as nothing more than a ‘file clerk.’ Oandasan improperly referred all issues of CPO compliance to Pedata and relied on his decisions on compliance with a court order; she did not take all reasonable steps necessary to comply with her obligation as local counsel and shares some responsibility for the contempt,” the court wrote. The court concluded by holding Array and Pedata jointly liable for 75 percent of compensatory damages, which would be limited to fees and costs incurred by the defendant’s counsel in filing and arguing the contempt motion, while Oandasan would be liable for 25 percent of that amount.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.