Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-00906/USCOURTS-azd-2_09-cv-00906-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Breach of Contract

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The Court did not adopt the parties’ proposed confidentiality order when it was submitted.

Dkt. #30. The parties agreed, nonetheless, that the proposed order would constitute the

confidentiality agreement between them throughout the remainder of this litigation.

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

International Equipment Group, Inc., an

Arizona corporation, 

Plaintiff, 

vs.

Hartford Casualty Insurance Company,

an Indiana corporation,

Defendant.

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No. CV09-906 PHX DGC

ORDER

The Court held a discovery conference call with the parties on January 8, 2010. The

interpretation of the parties’ confidentiality agreement, which is identical to the

confidentiality order submitted to the Court on December 4, 2009 (Dkt. #29-1), became an

issue during the call.1

 The question is whether the scope of confidential information is

established by paragraph C or the third sentence of paragraph E.

Relevant portions of the confidentiality agreement read as follows:

C. Only documents containing trade secrets, special formulas,

company security matters, customer lists, financial data, projected sales data,

production data, matters relating to mergers and acquisitions, and data which

touch upon the topic of price may be designated as confidential, provided such

documents have not previously been disclosed by the producing party to

anyone except those in its employment or those retained by it. Such

documents or parts thereof will be designated after review by an attorney for

the producing party by stamping the word confidential on each page.

Case 2:09-cv-00906-DGC Document 44 Filed 01/14/10 Page 1 of 4
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D. If any party believes a document not described in the above

paragraph should nevertheless be considered confidential, it may make

application to the court or special master. Such application shall only be

granted for reasons shown and for extraordinary grounds.

E. Documents designated confidential shall be shown only to the

attorneys, the parties, parties’ experts, actual or proposed witnesses, and other

persons whom the attorneys deem necessary to review documents for the

prosecution or defense of this lawsuit and shall be used for the prosecution or

defense of this lawsuit only. Each person who is permitted to see confidential

documents shall first be shown a copy of this order and shall further be

advised of the obligation to honor the confidentiality designation. The parties

agree that no documents, depositions, discovery materials of any kind

produced by Plaintiff or defendant will be shared with anyone outside the

litigation except experts designated by the parties who acknowledge and sign

the confidentiality agreement as written. Also, the parties agree to the return

of any and all materials produced by Hartford at the conclusion of the

litigation.

Dkt. #29-1 at 1-2 (emphasis added).

Paragraph C describes a limited class of documents that may be treated as

confidential. Paragraph D states that any party seeking to expand this definition must apply

to the Court. Inconsistently, the third sentence of paragraph E states that all documents,

depositions, and discovery material produced in the litigation shall be treated as confidential.

Defendant Hartford contends that the third sentence of paragraph E was added by

Plaintiff’s counsel and is therefore binding on Plaintiff. Documents submitted by the

parties, however, suggest otherwise. At 11:23 a.m. on December 3, 2009, Plaintiff’s counsel

sent an email to defense counsel attaching a proposed confidentiality order. The email

contains this sentence: “The language which I believe is important to you has been added

at the end of the second sentence of paragraph (E).” Dkt. #43-1 at 2. At 1:37 p.m. that day,

defense counsel responded by stating that he was having trouble opening the attachment.

At 8:19 a.m. the next morning – December 4, 2009 – Plaintiff’s counsel sent an email stating

that he was attaching the proposed order in pdf format, presumably because defense counsel

could not open the attachment. Dkt. #42-2 at 1. At 9:01 a.m. on December 4, 2009,

Defendant Hartford’s counsel wrote this email:

I have no problem with the language, but I think we should add in paragraph

E that “The parties agree that no documents, depositions, discovery materials

of any kind produced by Plaintiff or defendant will be shared with anyone

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 Plaintiff’s counsel’s email of December 3, 2009, stated that he had added language

requested by Hartford “at the end of the second sentence of paragraph (E).” Dkt. 43-1 at 2.

This does not appear to refer to the current third and fourth sentences of paragraph E because

those were not proposed by Hartford’s counsel until the next day. See Dkt. 42-2 at 1.

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outside the litigation except experts designated by the parties who

acknowledge and sign the confidentiality agreement as written. Also, the

parties agree to the return of any and all materials produced by Hartford at the

conclusion of the litigation.” Let me know what you think. And thanks again

for taking the lead in getting this done. If you agree to add this language it will

be good to go and you can sign for me.

Dkt. #42-2 at 1. Plaintiff’s counsel responded with an email at 1:09 p.m. on

December 4, 2009 stating: “I have added the language that you requested and will be filing

the Stipulation and Order this afternoon.” Id. The proposed order and stipulation were filed

that day. Dkt. #29.

This exchange of emails makes clear that counsel for Hartford, not counsel for

Plaintiff, proposed the language found in the third sentence of paragraph E. The language

proposed in Hartford’s counsel’s email of December 4, 2009 is now contained word-forword in the third sentence of paragraph E. The Court concludes, therefore, that the disputed

language in paragraph E was requested by Defendant Hartford and drafted by its counsel.2

There can be no doubt that the language in the third sentence of paragraph E conflicts

with the language in paragraphs C and D. It also conflicts with the beginning language in

paragraph E, which states “documents designated confidential shall be shown only to the

attorneys . . . .” Dkt. #29-1 at 2. This language appears to carry forward the definition of

confidentiality and the method for designating confidential documents established in

paragraphs C and D.

The Court cannot conclude that the addition of Hartford’s proposed language to

paragraph E was intended to vitiate all of the language that preceded it in the confidentiality

agreement. To the contrary, the Court concludes that Plaintiff’s counsel reasonably would

have read the new language as applying to documents that could be designated as

confidential under paragraph C, rather than as applying to all documents or information that

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might be exchanged in this case.

The Court concludes that the parties’ confidentiality agreement must be construed

to apply only to the categories of information specified in paragraph C. The language added

to paragraph E must be read as limited to these categories. This is the most reasonable

reading of the document, and the most reasonable interpretation of Plaintiff’s understanding

of the agreement in light of the exchange that occurred between counsel.

In light of this interpretation, the parties shall follow the procedure set forth in

paragraph 1 of the Court’s order dated January 11, 2010. See Dkt. #41.

DATED this 14th day of January, 2010.

 

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