Comtech v. Hon. Hicks/Paradise

Annotate this Case

Download PDF

NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE COMTECH EF DATA CORP., a Delaware corporation, ) ) ) Petitioner, ) ) v. ) ) THE HONORABLE BETHANY G. HICKS, ) Judge of the SUPERIOR COURT OF ) THE STATE OF ARIZONA, in and for ) the County of MARICOPA, ) ) Respondent Judge, ) ) PARADISE DATACOM, L.L.C., a ) Pennsylvania limited liability ) corporation; MARK CARLIN and ) LISA CARLIN, husband and wife, ) ) Real Parties in Interest. ) __________________________________) DIVISION ONE FILED: 05-18-2010 PHILIP G. URRY,CLERK BY: GH 1 CA-SA 10-0072 DEPARTMENT A Maricopa County Superior Court No. CV 2008-0248049 DECISION ORDER Comtech EF Data Corp. (Comtech) petitions this Court for special action review of the trial court s order excluding Real Parties in Interest, Mark Carlin and Lisa Carlin, husband and wife (collectively, Carlin), from the trial court s November 12, 2009 stipulated protective order (Protective Order). Judges Patricia A. Orozco, Daniel A. Barker and Lawrence F. Winthrop have considered the petition for special action and the 1 CA-SA 10-0072 (Page 2) memoranda presented by the parties. For the following reasons, we accept jurisdiction and grant relief. FACTS AND PROCEDURAL HISTORY Comtech filed suit against Real Parties in Interest, Carlin and Paradise Datacom, L.L.C. (Paradise), for claims alleging, among other things, the misappropriation of trade secrets. On November 12, 2009, the trial court signed the Protective Order binding all parties.1 The Protective Order was filed pursuant to Arizona Rule of Civil Procedure 26(c).2 Under the Protective Order, each party is permitted to designate certain discovery material as confidential and further designate some confidential material as attorneys eyes only (AEO). Material designated as confidential may be disclosed only to: the court; counsel for the parties; the parties; experts or consultants; court reporters; certain witnesses; and any other person the parties agree to in writing. AEO may be disclosed only to: the Material designated as court; counsel for 1 the Only Comtech and Paradise stipulated to the Protective Order. Even though Carlin s attorney did not sign the Protective Order, he concedes that he is bound by the order. 2 Unless otherwise specified, hereafter, an Arizona Rule of Civil Procedure is referred to as Rule ___. 1 CA-SA 10-0072 (Page 3) parties; experts or consultants; court reporters; and any other person the parties agree to in writing. Thus, material designated as AEO may not be disclosed to the actual parties. In reliance on the Protective Order, Comtech designated certain material as AEO and disclosed it to attorneys for Carlin and Paradise. Subsequently, at a telephonic conference on April 8, 2010, Carlin s counsel made an oral motion requesting the trial court limitation. exclude Carlin from the Protective Order s AEO Carlin s counsel argued that the AEO limitation should not apply to Carlin because Mr. Carlin needs to review the AEO material to fully understand the claims against him. Comtech responded that disclosure would be highly injurious and Carlin had not utilized a consultant, which, if employed, would satisfy the need to understand the claims. The trial court agreed with Carlin, stating: I don t see how a lawyer can ethically defend his client without being able to discuss with his client the allegations brought against his client. Comtech then asked the court to allow time for 1 CA-SA 10-0072 (Page 4) briefing, which the court denied3 and thereafter ordered that Carlin be excluded from the Protective Order. Later the same day, Comtech requested the trial court hold a stay hearing pending Comtech s special action with this Court. request. Comtech then filing of a petition for The trial court denied that filed an emergency request for a temporary stay pending its filing of a petition for special action with this Court. On April 12, 2010, we granted a temporary stay of the proceedings until further order. JURISDICTION We have jurisdiction to hear and determine this special action pursuant to Arizona Revised Statutes (A.R.S.) section 12120.21.A.4 Actions (2003) 8(a). discretionary and Arizona Special and is Rule action appropriate of Procedure for Special jurisdiction is highly no equally when there plain, speedy, and adequate remedy by appeal. is Ariz. R.P. Spec. Act. 8(a); State ex rel. Thomas v. Duncan, 216 Ariz. 260, 262, ¶ 4, 165 P.3d 238, 240 (App. 2007). 3 Additionally, special action The trial court further ordered a special master be appointed for discovery purposes. Comtech then asked the trial court to allow the special master to consider Carlin s original motion to review AEO material. The trial court denied Comtech s request. 1 CA-SA 10-0072 (Page 5) jurisdiction requiring is appropriate disclosure of to review a confidential trial court s information order because disclosing party would have no adequate remedy by appeal. the See Cervantes v. Cates, 206 Ariz. 178, 181, ¶ 8, 76 P.3d 449, 452 (App. 2003). Because Comtech would have no adequate remedy by appeal is if it required to disclose its trade secrets, we accept special action jurisdiction. DISCUSSION We review discretion. discretion a discovery-related Id. when at it ¶ 11. ruling [A] misapplies the trial law. for an court Id. abuse abuses In of its Arizona, discovery matters relating to protective orders and disclosure of confidential information are governed by Rule 26(c). Typically, before entering a protective order, a trial court shall direct [a] party seeking confidentiality to show why a confidentiality order should be entered. 26(c)(2). Ariz. R. Civ. P. Additionally, [t]he burden of showing good cause for an order shall remain with the party seeking confidentiality. The court shall then make findings of fact concerning any 1 CA-SA 10-0072 (Page 6) relevant factors. 4 Id. Furthermore, [t]rial judges should look to federal case law to determine what factors . . . should be weighed in deciding confidentiality order. whether to grant or modify a Ariz. R. Civ. P. 26(c) cmt. (emphasis added). We recognize that Rule 26(c) confers broad discretion on the trial court to decide when a protective order is appropriate and what degree of protection is required. v. Rhinehart, 467 U.S. 20, 36 (1984) Seattle Times Co. (discussing Washington Superior Court Civil Rule 26, modeled after the Federal Rules of Civil Procedure, proper safeguards secrets. Safe Control Inc., [c]ourts 4 similar dress should Flight 682 to attend Instrument F.Supp. technical Arizona s 20, 22 Rule the disclosure Corp. v. (D.Del. information 26). with of trade Sundstrand 1988). a However, heavy Data Indeed, cloak of No such findings of fact are needed where the parties have stipulated to such an order. Ariz. R. Civ. P. 26(c)(2). In this case, Comtech and Paradise stipulated to the Protective Order. Moreover, Rule 26(c) does not require the court make findings of fact when considering a motion to modify an existing protective order. However, the comment to Rule 26(c) does recommend weighing the same factors listed in Rule 26(c)(2), if relevant, when considering a motion to modify an existing protective order. 1 CA-SA 10-0072 (Page 7) judicial protection because of the threat of serious economic injury to the discloser of [confidential] information. [U]nder Rule 26(c), the appropriateness of Id. protective relief from discovery depends upon a balancing of the litigation needs of the discovering party and any countervailing protectible [sic] interests of the party from whom discovery is sought. Apex Oil Co. v. DiMauro, 110 F.R.D. 490, 496 (S.D.N.Y. 1985) (referring to Federal Rule of Civil Procedure 26(c)). review of federal confidential favored. F.R.D. information See 288, protective case law in Coca-Cola 300 order cases Bottling (D.Del. may indicates limit limiting such Co. 1985) as v. this to is Coca-Cola (suggesting disclosure disclosure a trial A of heavily Co., 107 prospective counsel and independent experts); Natta v. Zletz, 405 F.2d 99, 101-02 (7th Cir. 1968) (trade secret divulged only to trial counsel). Additionally, there is ample precedent for limiting disclosure to attorneys and experts, particularly if there is a risk that a party may use the material or disseminate it to others who would use it party. to gain See GTE a competitive Prods. Corp. advantage v. Gee, over 112 the F.R.D. disclosing 169, 171 (D.Mass. 1986); Doe v. District of Columbia, 697 F.2d 1115, 1120 1 CA-SA 10-0072 (Page 8) n.8 (D.C. Cir. 1983); Liberty Folder v. Curtiss Anthony Corp., 90 F.R.D. 80, 83-84 (S.D. Ohio 1981); Chesa Int l, Ltd. v. Fashion Assocs., Inc., 425 F.Supp. 234, 237 (S.D.N.Y. 1977), aff d, 573 F.2d 1288 (2d Cir. 1977). In this case, we cannot assume the trial court s order was made in consideration of Rule 26(c) federal case law, as the rule directs. or in contemplation of The trial court did not make findings of fact concerning any relevant factors the court may have examined.5 The court merely stated: I don t see how a lawyer can ethically defend his client without being able to discuss with his client. Based findings, we client on the this conclude allegations statement, the trial brought against and the absence court did not of perform his any a balancing test weighing the risk of disclosure against Carlin s need to prepare for the case. We note, however, that modifying a protective order is appropriate only when the protective order actually prejudice[s] presentation of the moving party s case, not [when it] merely increase[s] the difficulty of managing the 5 Furthermore, the trial court denied Comtech s request to brief the issue, effectively precluding the trial court s opportunity to look to federal case law to determine what factors . . . should be weighed in deciding whether to grant or modify a confidentiality order. Ariz. R. Civ. P. 26(c) cmt. (emphasis added). 1 CA-SA 10-0072 (Page 9) litigation. Intel Corp. v. VIA Techs., Inc., 198 F.R.D. 525, 528 (N.D. Cal. 2000). Accordingly, we hold that the trial court abused its discretion in denying Comtech s request to brief the issue and in not conducting a balancing test. CONCLUSION For the reasons previously stated, we accept jurisdiction and grant relief. We order the temporary stay granted by this Court on April 12, 2010 lifted. to the trial court for Further, we remand this matter proceedings consistent with this decision.6 /S/ ___________________________________ PATRICIA A. OROZCO, Presiding Judge 6 We express no opinion as to the resolution of whether this information should be disclosed to Carlin. We further observe that the trial court s order lifted all restrictions provided by the Protective Order, relative to Carlin. We doubt this was the court s intent; however, our decision does not preclude this outcome should the trial court find it to be an appropriate resolution after conducting a proper balancing test.

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.