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Parties Involved:
Nissan Design International, Inc.
Not Party
Nissan Motor Company, Ltd.
Appellant
Nissan Motor Corporation in U.S.A.
Appellant
Marina M. Sears
Appellee

Document Text:

... 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

MARINA M. SEARS, individually and as 

Personal Representative of the Estate 

of JEFFREY SEARS, deceased, 

Plaintiff-Appellee, 

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FILED 

Uniced Statft Court of Appeals 

Tenrh Circuit 

MAY 16 1991 

.ROBERT L. HOECKER 

Clerk 

v. ) No. 90-2169 

NISSAN MOTOR COMPANY, LTD.; NISSAN 

MOTOR CORPORATION IN U.S.A., 

Defendants-Appellants, 

and 

NISSAN DESIGN INTERNATIONAL, INC., 

Defendant. 

) (D.C. No. 89-164-JB) 

) (D. N.M.) 

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ORDER AND JUDGMENT* 

Before ANDERSON, McWILLIAMS, and BRORBY, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrine of the law of the 

case, res judicata, or collateral estoppal. 10th Cir. R. 36.3 

Appellate Case: 90-2169 Document: 010110106520 Date Filed: 05/16/1991 Page: 1 
assist the determination of this appeal. See Fed. R. App. 

P. 34(a); 10th Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

This is an appeal from an order of the district court which 

vacated a protective order issued by a magistrate judge in a 

discovery matter. 

In response to 

sought and obtained 

plaintiff's discovery request, defendants 

a protective order from a magistrate judge 

which provided that all materials and documents were deemed "trade 

secrets" and prohibited disclosure to third parties. On appeal, 

the district court directed defendants in the underlying action to 

immediately produce any and all discoverable documents and 

materials. Further, the district court's order provided that the 

discovery materials "shall not be restricted from dissemination or 

from use, which may be deemed in the public interest and which may 

concern public health, safety, and welfare unless the court. after 

a hearing on the issue. determines otherwise." (Emphasis 

supplied.) The district court expressly found that the magistrate 

judge's protective order was against the public interest. 

It appears that plaintiff sought a variety of information 

ranging from reports, required by law to be kept by defendants, to 

technical engineering data. Defendants argued that the 

evidentiary support for their claim of trade secrets was 

self-evident. Further, they offered the affidavit of a senior 

official stating that technical information of the type sought by 

plaintiff was confidential and proprietary and that the materials 

sought were competitively sensitive documents which, if generally 

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Appellate Case: 90-2169 Document: 010110106520 Date Filed: 05/16/1991 Page: 2 
• 

disseminated to the public, might result in competitive 

disadvantage and harm to Nissan, Ltd. 

This case presents two questions. First, is the order 

appealed from immediately reviewable? And second, did the 

defendants support their claim of trade secrets with the requisite 

level of showing, and, if they did, was the claim properly 

considered by the district court? 

As a general rule, orders pertaining to discovery are 

interlocutory and not immediately appealable. Federal Trade 

Comm'n v. Alaska Land Leasing, Inc., 778 F.2d 577 (10th Cir. 

1985); United States v. Ryan, 402 U.S. 530 (1971). In limited 

circumstances, a district court's order may qualify as a final 

decision even though there has been no final adjudication on the 

merits. There is a well-established exception to the final 

judgment rule of 28 u.s.c. § 1291. Cohen v. Beneficial Indus. 

Loan Corp., 337 U.S. 541 (1949). In Cohen, the Supreme Court held 

that a "small class" of decisions may be exempted from the final 

judgment rule. However, the order must conclusively determine the 

disputed question, resolve an important issue completely separate 

from the merits of the action, and be effectively unreviewable on 

appeal from a final judgment. Further, the appeal may be only 

from orders affecting rights that will be irretrievably lost in 

the absence of an immediate appeal. Richardson-Merrell, Inc. v. 

Koller, 472 U.S. 424, 430-31 (1985). 

Here, the district court's order conclusively determined a 

disputed question. Further, the issue is completely separate from 

the merits and involves an important issue. Finally, if it is 

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Appellate Case: 90-2169 Document: 010110106520 Date Filed: 05/16/1991 Page: 3 
ultimately determined that the dissemination of trade secrets 

issue is viable, defendants' claimed right to a protective order 

will be irretrievably lost if immediate review is unavailable. 

Under these circumstances, we believe that the order appealed from 

is sufficiently final to justify immediate appellate review. See 

American Tel. & Tel. Co. v. Grady, 594 F.2d 594 (7th Cir. 1978), 

cert. denied, 440 U.S. 971, 979 (1979). 

Generally speaking, Fed. R. Civ. P. 26 creates a presumption 

of openness for discovery matters. Tavoulareas v. Washington Post 

Co., 724 F.2d 1010, 1015 (D.C. Cir. 1984). Pretrial discovery 

must take place in public unless there are compelling reasons 

otherwise. Meyer Goldberg, Inc. v. Fisher Foods, Inc., 823 F.2d 

159, 162 (6th Cir. 1987); In re Film Recovery Sys., Inc., 804 F.2d 

386, 388 (7th Cir. 1986). Further, it is well established that 

there is no absolute privilege for trade secrets or similar 

confidential information. Federal Open Market Comm. of Federal 

Reserve Sys. v. Merrill, 443 U.S. 340, 362 (1979)(quoting 

C. Wright and A. Miller, Federal Practice and Procedures, S 2043 

at 300). To resist disclosure under Rule 26(c)(7), a person must 

first establish that the information is a trade secret or other 

confidential research, development, or commercial information and 

then demonstrate that its disclosure might be harmful. If these 

requirements are met, the burden then shifts to the party seeking 

discovery to establish that disclosure of a trade secret or other 

confidential information is relevant and necessary to the action. 

Finally, the district court must balance the need for discovery of 

the trade secrets against the claim of injury resulting from 

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disclosure. Centurion Indus., Inc. v. Warren Steurer & Assocs., 

665 F.2d 323, 325 (10th Cir. 1981). 

It is within the sound of discretion of the trial court to 

decide whether trade secrets are relevant and whether the need 

outweighs the harm of disclosure. Whether disclosure may be 

required depends on the weighing of competing interests involved 

against the background of the total situation, including 

consideration of such factors as the dangers of abuse, good faith, 

adequacy of protective measures, and the availability of other 

means of proof. See c. Wright and A. Miller, Federal Practice and 

Procedure, S 2043 at 302. In a case such as this, the district 

court must weigh or balance the various competing interests in 

determining whether bonafide trade secrets or confidential 

information should be protected from disclosure to other litigants 

or third parties. From the record, it appears that the showing 

made by defendants was sufficient to qualify the requested 

discovery material as trade secrets 

information entitled to protection from 

third parties. 

or other confidential 

compelled disclosure to 

We conclude that the district court failed to balance or 

weigh the competing interests or to objectively view defendants' 

claim of injury that might result from disclosure and did not 

consider the factors of potential abuse, good faith, or the 

adequacy of protective measures. Further, the district court's 

finding that the magistrate judge's protective order was against 

the public interest is not supported by substantial evidence. 

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Accordingly, the order of the United States District Court 

for the District of New Mexico is VACATED, and the matter is 

REMANDED with instructions to reinstate the protective order of 

the magistrate judge. 

This order is without prejudice to renewal of plaintiff's 

application for modification of the protective order to permit 

disclosure to third parties prior to the entry of final judgment. 

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ENTERED FOR THE COURT 

PER CURIAM 

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