1

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA, :

:

Plaintiff, : Civil Case No. 91-1501

v. :

: (Judge McClure)

CHROMATEX, INC., THE :

VALMONT GROUP, ALAN :

CHERENSON, STANLEY SIEGEL, :

ALAN SHULMAN, JAMES :

COCHRAN and JOSEPH BYRNES, :

:

Defendants. :

MEMORANDUM

July 6, 2010

I. INTRODUCTION

Before the court are two motions for protective orders (Rec. Doc. Nos. 102

and 104), both of which were filed on May 11, 2010 by the United States of

America, the plaintiff, on behalf of the United States Environmental Protection

Agency (“EPA”). The United States has filed these motions so that it might

produce to the defendants allegedly confidential information that relates to cost

documentation supporting its future response cost bills incurred in connection with

the Valmont Industrial Park, Hazle Township, Pennsylvania (“The Site”). The

two instant motions arise out of an action begun in 1991 against defendants Alan

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 The defendants currently include, in addition to Alan Shulman and Stanley

Siegel, Ruth Cherenson as personal representative of the estate of Alan Cherenson

and Adrienne and M.F. Rolla, as executors of the estate of Joseph Byrnes. (Rec.

Doc. Nos. 106 and 107, n.1).

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 The parties are reminded that Middle District Local Rule 5.1(c) requires the

use of font that is at least 14 point, double-spaced, in the text of documents such as

briefs. Footnote text is to be the same size as the text found in the body of the

document.

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Cherenson, Stanley Siegel, and Alan Shulman (“The Valmont Partners”).1 This

action resulted in declaratory relief awarded to the United States in two orders

issued on October 27, 1993 and February 9, 1994 (the “1993 Order” and “1994

Order,” respectively). For the following reasons, we will grant the United States’

motion for a protective order regarding confidential business information. In

addition, we will order the government to provide to the court, in camera, the

document at issue in its motion for a protective order pursuant to the Privacy Act

of 1974, 5 U.S.C. § 552a. (Rec. Doc. Nos. 104 and 105).2

II. BACKGROUND

On October 30, 1991, the United States commenced this action by filing a

complaint under § 107 of the Comprehensive Environmental Response,

Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9607. The complaint

sought recovery of the costs incurred by the EPA responding to a release and

threatened release of hazardous substances from a manufacturing facility located at

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the Site. The complaint also sought a declaratory judgment on the defendants’

liability for future response costs pursuant to § 113(g)(2) of CERCLA, 42 U.S.C. §

9613(g)(2), and pursuant to 28 U.S.C. § 2201.

On October 27, 1993, this court issued an order granting the United States,

inter alia, declaratory relief providing that the defendants would be liable for future

response costs or damages incurred at the Site. (Rec. Doc. No. 43). On February

9, 1994, we issued a final judgment pursuant to Rule 54(b) of the Federal Rules of

Civil Procedure, finding all defendants liable for $682,002.16. (Rec. Doc. No. 50). 

In addition, we established a procedure for the payment of the future response costs

referred to in the 1993 Order. This procedure set forth the following method for

handling payment disputes:

Defendants may dispute payment of Additional Costs and Future

Response Costs if defendants determine that the United States has

made an accounting error or if they allege that a cost item that is

included represents costs that are inconsistent with the National

Contingency Plan (NCP), 40 C.F.R. Part 300. Any such dispute shall

specifically identify the contested costs and the basis for defendants’

objection to the costs and shall be sent to plaintiff at the addresses

specified above. The parties shall negotiate in good faith to resolve

disputed claims. If the parties fail to resolve a dispute within thirty

(30) days of defendants’ written notification to plaintiff of the dispute,

plaintiff may request by motion and supporting documentation that

this Court order defendants to pay the disputed costs.

 Id. (emphasis added). On September 29, 1994, the United States Court of Appeals

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for the Third Circuit affirmed our decision.

Beginning in 2005, the United States sent bills to the Valmont Partners

requesting payment for future response costs incurred at the Site. On May 3, 2006,

the former Valmont Partners filed a motion for further relief pursuant to 28 U.S.C.

§ 2202. (Rec. Doc. No. 65). Despite the explicit procedure already set out in the

1994 Order, the Valmont Partners moved this court to establish “a procedure by

which their liability and that of other potentially liable parties for new and

additional response costs . . . may be determined.” (Rec. Doc. No. 66 at 1-2). 

Specifically, the Valmont Partners requested that the court: (a) order the EPA to

file with the court its administrative record for its new and additional response

actions taken by the EPA after November 15, 1988; (b) issue a case management

order setting a schedule for discovery, pleadings, and dispositive motions; (c) grant

leave to the Valmont Partners to file a cross-claim for contribution and

indemnification against defendant Chromatex, Inc.; and (d) grant leave to the

former Valmont Partners to file a third-party claim for contribution and

indemnification against Rossville Industries, Inc., Culp, Inc., Chromatex

Properties, Inc., and any other successor of Chromatex, Inc. or subsequent owner

of the Site. Id. at 14-15. On June 22, 2006, plaintiff United States filed a brief in

opposition and defendants, the former Valmont Partners, filed a reply brief on July

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7, 2006.

This court, by a Memorandum and Order dated October 17, 2006, denied the

Valmont Partners’ motion. First, we found that the Valmont Partners did not have

statutory authority to move for further relief pursuant to 28 U.S.C. § 2202, as the

Valmont Partners were the unsuccessful party in the declaratory action. Therefore,

the Valmont Patners could not move for “further relief.” Second, even if the

Valmont Partners did in fact have such authority, we concluded that we had the

discretion, under § 2202, to decide the motion for further relief. Exercising such

discretion, we concluded that the relief requested by the Valmont Partners was

unnecessary in light of the 1994 Order, which provided an adequate procedure for

the handling of payment disputes concerning future response costs. Finally, we

found that that procedure, which provides the United States with the discretion to

pursue such costs by motion, had the effect of making the Valmont Partners’

challenge to costs not yet pursued by the United States premature, as well as

inconsistent with the procedure provided for in the 1994 Order.

III. PROCEDURAL HISTORY

A. The Instant Motion for Protective Order Regarding Confidential Business

Information

On May 11, 2010, the United States filed a motion for a protective order

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concerning confidential business information (“CBI”), as well as a brief in support. 

(Rec. Doc. Nos. 104 and 105). The proposed protective order is sought “to protect

the confidentiality of information, which may be entitled to treatment as

‘Confidential Business Information’ under 40 C.F.R. Part 2, that the [EPA] seeks

to produce to Defendants in accordance with [the 1994 Order].” (Rec. Doc. No.

104 at 1-2). According to the government, at issue is information provided by

EPA contractors which, the government argues, “can be of potential value to other

businesses competing for contracts with EPA, other agencies, or the private

sector.” (Rec. Doc. No. 105 at 8). The government contends that the EPA

typically has afforded confidential treatment to information relating to costs like

profit rates, labor, and overhead, as release of this type of information “is likely to

cause substantial competitive harm.” Id. at 8-9 (citing Environmental Protection

Agency, 58 Fed. Reg. 458, 459 (1993)). The government posits that the “EPA

routinely enters into a confidentiality agreement or seeks the entry of a stipulation

and protective order before releasing CBI.” Id. at 9 (citing 58 Fed. Reg. 458, 460

(“This regulation amends 40 CFR 2.310 to provide for limited release of CBI to

responsible parties . . . under a stipulation and protective order during litigation.”);

40 C.F.R. § 2.310). EPA regulations, the government notes, provide that

disclosure of “any information to which this section applies that may be entitled to

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may disclose any business information in any manner and to the extent ordered by

a Federal court.” Therefore, the government argues that if it was the court’s

intention for its 1994 order to preempt EPA regulations such as § 2.310, the

government “requests that the Court unambiguously order EPA to produce the

supporting cost documentation for the Future Response Cost Bills in spite of those

regulations.” Id. at 13, n.11.

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 In addition to arguing that substantial harm to its contractors’ competitive

positions could result if such information were to be released, the government also

notes that, in August of 2005, the controlling officer of Chromatex, as well as the

counsel for the Valmont Group, signed confidentiality agreements covering

potential CBI relating to supporting cost documentation concerning the Site. Id.,

Exhibits 1 and 2. Pursuant to these agreements, the defendants agreed that “the

cost documents to be produced by EPA will include documents which have been

submitted to EPA by various contractors . . . containing certain information which

may be entitled to confidential treatment under 40 CFR Part 2.” Id. at Exhibits 1

and 2 at 1. Since that time, the list of contractors has grown such that the entire list

is not covered, and Mr. Satterfield and counsel to the Valmont Group have not

signed documentation allowing for the incorporation of the expanded lists into the

existing confidentiality agreement. Id. at 5-7. In light of this fact, the government

argues that it cannot provide such information to the defendants and that, even

though the Valmont Partners do not have all of the supporting cost documentation,

as the EPA is unable to provide such information to the defendants absent a

protective order, “the Valmont Partners claim that all of EPA’s costs incurred at

the Site are inconsistent with the National Contingency Plan . . . .” Id. at 7-8

(emphasis included).

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confidential treatment . . . must be made pursuant to a stipulation and protective

order . . . .” 40 C.F.R. § 2.310(g)(6).3

 Therefore, so the government argues, it is

not seeking to add any conditions to its obligations under this court’s 1994 Order. 

The government contends that good cause exists for the issuance of a protective

order protecting the CBI at issue.4

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Defendants filed a brief in opposition on May 25, 2010. (Rec. Doc. No.

107). First, defendants contend that the government, by attempting to seek a

protective order concerning CBI, is seeking to impose conditions upon this court’s

1994 Order. (Rec. Doc. No. 107 at 5-6). Defendants also contend that Fed. R. Civ.

P. 26(c)(1)(G) cannot properly form the basis for any protective order issued by

this court, as this rule pertains to pre-trial discovery. Second, the Valmont Partners

claim that the United States must initiate an action to obtain the relief sought,

namely a CBI protective order relating to costs incurred at the Site. Id. at 6-8. 

Third, the defendants argue that the United States has failed to establish “good

cause” for the issuance of a protective order, as the government has failed to

“specifically demonstrate” that disclosure of the relevant documents pursuant to

the 1994 Order will cause a “clearly defined and serious injury.” Id. at 8-10. Even

if the United States did demonstrate such injury, defendants contend that a

protective order is still inappropriate based on the factor-balancing test, established

by the Court of Appeals for the Third Circuit, which is to be applied by a court in

considering whether to issue a protective order. Id. at 11-12.

In its reply brief (Rec. Doc. No. 109), the government again notes that the

defendants neither dispute the facts in support of its CBI protective order motion

nor allege that prejudice would be incurred as a result of having received the

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information at issue. The government also rebuts each of the three arguments

presented by the defendants in their brief in opposition. First, the United States

contends that the court has the clear authority to enter such a protective order,

whether pursuant to Fed. R. Civ. P. 26(c)(1)(G) or based upon its inherent

equitable powers. Id. at 109. The government also argues that, rather than seeking

to impose additional conditions on this court’s 1994 Order, the government is

instead seeking to both comply with the 1994 Order and abide by its own

regulations. Second, the government reiterates its contention that this court

“retains jurisdiction over the procedures regarding billing and the provision of

related cost documentation, payment of bills, and disputes arising from the

response costs incurred by the United States at the Site[.]” Id. at 6. Third, the

government contends that issuance of a protective order by this court is

appropriate, as good cause for such issuance exists based upon a balancing of the

relevant factors. See id. at 6-9.

B. The Instant Motion for Privacy Act Protective Order

Also on May 11, 2010, the United States filed a motion for a Privacy Act

protective order pursuant to 5 U.S.C. § 552a(b)(11), as well as a brief in support. 

(Rec. Doc. No. 102 and 103). The proposed protective order concerns information

allegedly protected from disclosure by the Privacy Act of 1974, 5 U.S.C. § 552a. 

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The United States claims the information that is the subject of the proposed

protective order “may impact the Defendants’ total Future Response Cost liability

for the Site.” (Rec. Doc. No. 103 at 4).

The Valmont Partners filed a brief in opposition on May 25, 2010, arguing

that the motion for protective order should be denied. (Rec. Doc. No. 106). First,

the Valmont Partners argue that the United States has failed to identify those

documents that are the subject of the proposed protective order and similarly has

failed to establish that the Privacy Act is applicable to any such documents. Id. at

4-6. Second, the Valmont Partners contend that the United States has failed to

provide the defendants, pursuant to the 1994 Order, with cost documentation

concerning costs incurred at the Site. In addition, the Valmont Partners claim that

the United States, with its motion for a protective order, is seeking to impose

additional conditions on the language of the 1994 Order relating to its compliance. 

Id. at 6-7. Third, the Valmont Parnters argue that the United States must begin a

new action seeking the recovery of future costs incurred for the United States to

impose such conditions on the 1994 Order. Id. at 8-10. Fourth, the defendants

aver that the United States has not established “good cause” for the issuance of a

protective order and that, even if it did demonstrate a “clearly defined and serious

injury,” a protective order is not warranted.

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 Section 552a(b)(11) of Title 5 of the United States Codes states that “[n]o

agency shall disclose any record which is contained in a system of records by any

means of communication to any person, . . . unless disclosure would be -- . . . (11)

pursuant to the order of a court of competent jurisdiction.”

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On June 3, 2010, the United States filed a reply brief in support of its motion

for a protective order pursuant to the Privacy Act. (Rec. Doc. No. 108). At the

outset, the government again contends that “[t]he Valmont Partners do not dispute

the facts presented in support of the United States’ motion, nor do they allege that

they or any of the Defendants will be prejudiced in any way by receiving the

information under the provisions of a protective order.” Id. at 2. In this brief, the

United States seeks to rebut each of the arguments presented by the Valmont

Partners in their opposition brief. First, the United States claims that it seeks to

disclose only one document that would otherwise be protected by the Privacy Act

from disclosure. Id. at 3. The United States notes that it has requested a court

order under 5 U.S.C. § 552a(b)(11) because it would otherwise be prohibited from

releasing information protected under the Privacy Act.5

 Id. Second, the United

States contends that the Valmont Partners’ argument that the information sought to

be disclosed is not a type of supporting cost documentation, and thus is beyond the

purview of the 1994 Order, “is entirely irrelevant since the United States is not

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 The United States contends that the information, though it “relates to

costs,” does not constitute “supporting cost documentation.” Id.

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seeking a Privacy Act protective order to disclose ‘cost documentation.’” Id. at 4.6

Third, the United States argues that this court “retains jurisdiction over the billing,

payment and disputes arising from the response costs incurred by the United States

at the Site by the plain language of its 1994 Order which remains in effect, in its

entirety.” Id. at 5. Fourth, the government avers that issuance of a protective order

by this court is warranted, as good cause for such issuance exists. See id. at 5-6.

IV. DISCUSSION

A. The Instant Motion for Protective Order Regarding Confidential Business

Information

First, the defendants imply that Rule 26(c)(1)(G) does not apply to the

instant motions, as discovery in the underlying action has long since passed. In

addition, the defendants argue that the United States is, in an untimely fashion,

attempting to modify this court’s 1994 Order by seeking to impose additional

conditions to disclosure of the relevant documents, and that “EPA’s regulations are

inapplicable here, because they pertain only to how EPA responds to requests

under the Freedom of Information Act.” (Rec. Doc. No. 107 at 6).

We find the defendants’ arguments unavailing. As noted above, “courts

have inherent equitable power to grant confidentiality orders, whether or not such

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orders are specifically authorized by procedural rules.” Pansy v. Borough of

Stroudsburg, 23 F.3d 772, 785 (3d Cir. 1994). In addition, the government is not

seeking to modify any pre-existing order, but instead is attempting to comply with

this court’s 1994 Order while also abiding by EPA regulations. We also find the

contention that EPA regulations are inapplicable because they only pertain to EPA

responses to Freedom of Information Act (“FOIA”) requests, a contention made by

defendants with no citation to any legal support, to be without merit. See 40

C.F.R. § 2.310(g)(6).

Second, the defendants suggest that the government’s attempt to obtain a

protective order is improper, as it seeks to re-open a closed case instead of

instituting a new action for further costs, as allegedly required by this court’s 1994

Order. As we noted in our order dated October 17, 2006, in which we denied the

Valmont Partners’ motions seeking further relief, the 1994 Order offers an

adequate procedure for managing and resolving disputes over future response

costs. (Rec. Doc. No. 99 at 4-5). This order does not require the United States to

“begin an action for further costs claimed”; instead, the order sets up a procedure

by which the EPA bills the defendants, with such bill including “the documentation

supporting the costs, including invoices, treasury vouchers, and work performance

documents.” Id. The government appears simply to be attempting to comply with

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 While Rule 26(c) is found among those rules pertaining to discovery, the

Third Circuit has noted that the Supreme Court, in Seattle Times Co. v. Rhinehart,

467 U.S. 20, 35 (1984), “made clear that courts have inherent equitable power to

grant confidentiality orders, whether or not such orders are specifically authorized

by procedural rules.” Pansy, 23 F.3d at 785 (3d Cir. 1994).

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this order and EPA regulations by both seeking to disclose the documentation at

issue while also attempting to protect potential confidential business information. 

In light of the above, the court remains unconvinced that the instant motion is an

improper attempt to re-open the judgment in this case.

Third, defendants claim that the United States has failed to demonstrate that

the issuance of a protective order is warranted in this case. For the following

reasons, we disagree.

Federal Rule of Civil Procedure 26(c), which governs protective orders

during discovery,7

 establishes that a “court may, for good cause, issue an order to

protect a party or person from annoyance, embarrassment, oppression, or undue

burden or expense . . . .” As the Third Circuit has indicated, “[g]ood cause is

established on a showing that disclosure will work a clearly defined and serious

injury to the party seeking closure.” Publicker Industries, Inc. v. Cohen, 733 F.2d

1059, 1071 (3d Cir. 1984) (citing Zenith Radio Corp. v. Matsushita Electric

Industrial Co., 529 F. Supp. 866, 891 (E.D. Pa. 1981)). However, a good cause

showing cannot be supported by “[b]road allegations of harm, unsubstantiated by

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 In Pansy, the court emphasized that “simply because courts have the power

to grant orders of confidentiality does not mean that such orders may be granted

arbitrarily.” 23 F.3d at 785.

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specific examples or articulated reasoning.’” Pansy, 23 F.3d at 786 (quoting

Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3d Cir. 1986), cert. denied,

484 U.S. 976, 108 S. Ct. 487, 98 L. Ed. 2d 485 (1987)).

The parties agree that the factor-based test announced by the Third Circuit in

Pansy bears upon this court’s determination concerning both of the instant

protective order motions.8

 In Pansy, the Third Circuit found that the following are

factors, though they are neither mandatory nor exhaustive, to be considered by a

court in deciding whether a protective order should be issued:

1) whether disclosure will violate any privacy interests;

2) whether the information is being sought for a legitimate

purpose or for an improper purpose;

3) whether disclosure of the information will cause a party

embarrassment;

4) whether confidentiality is being sought over information

important to public health and safety;

5) whether the sharing of information among litigants will

promote fairness and efficiency;

6) whether a party benefitting from the order of confidentiality is a

public entity or official; and

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7) whether the case involves issues important to the public.

Glenmede Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995) (citing Pansy,

23 F.3d at 787-91.

First, disclosure may very well violate the privacy interests of those

contractors employed by the EPA. Certainly, it appears as though outright

disclosure, unless made pursuant to a court order, would violate the regulations of

the EPA. The information at issue could be of value to competing businesses

seeking EPA contracts, and disclosure likely would result in significant harm to the

contractors. The second factor under Pansy is “whether the information is being

sought for a legitimate purpose or for an improper purpose.” In the instant case,

the party seeking to disclose the information at issue is also the party seeking the

protective order. Here, the United States is seeking to disclose the information for

a legitimate purpose, namely, to comply with the procedure described in this

court’s 1994 Order. Third, more than mere embarrassment is potentially at stake. 

Instead, the government seeks to prevent from disclosure to the public information

relating to costs like profit rates, labor, and overhead from contractors employed by

the EPA for cleanup at the Site. We believe that release of this type of information

weighs more heavily in favor of an entry of a protective order than mere

embarrassment. See Glenmede Trust, 56 F.3d at 484 (noting that the

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embarrassment factor typically has been viewed “in terms of non-pecuniary harm

to individuals,” but that “the primary measure of the well-being of a business is

pecuniary”); see also Cipollone, 785 F.2d at 1121 (noting than “an applicant for a

protective order whose chief concern is embarrassment must demonstrate that the

embarrassment will be particularly serious”). Here, the government is concerned

not with embarrassment that might befall the EPA’s contractors, but instead the

potential destruction of the competitive advantage maintained by the contractors. 

This type of destruction is of the pecuniary type that is “the primary measure of the

well-being of a business”: the type of specific and serious injury that supports the

issuance of a protective order. See Glenmede Trust, 56 F.3d at 484. In light of the

above, the first three Pansy factors weigh in favor of the issuance of a protective

order.

Fourth, it is not clear whether the information at issue is important to public

health and safety; while the costs incurred at the Site clearly were undertaken in

association with a polluted area, the CBI in particular is only tangentially related to

public health or safety, as such information pertains to costs like profit rates, labor,

and overhead from the EPA’s contractors. Therefore, this factor appears to be a

neutral one.

Fifth, this court believes that the sharing of the CBI at issue will promote

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 These two issues represent the two ways in which the defendants may

dispute the required payments for additional costs and future response costs. (See

Rec. Doc. No. 50).

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fairness and efficiency among the United States and the defendants, and therefore

this factor weighs in favor of issuing a protective order. By providing such

information to the defendants, even pursuant to a protective order, the government

will assist the defendants in determining whether an accounting error in calculating

the related costs was made or whether the costs incurred were inconsistent with the

NCP.9

 We fail to see how the government’s attempt to affirmatively provide the

defendants with this information could somehow be described as unfair or

inefficient; quite to the contrary, the government’s attempts to provide this

information appear to be the most reasonable and efficient means for both

documenting the costs incurred, as well as acting within the dictates of EPA

regulations by protecting EPA contractors.

Sixth, the Valmont Partners argue that “it appears that the protection

requested by the government is merely so that it - a public entity - need not conduct

a review of its own documents.” (Rec. Doc. No. 107 at 11). This contention

appears disingenuous, as the protective order would concern “trade secrets or

commercial or financial information submitted by a contractor to the United States

or EPA and which may be entitled to confidential treatment under 40 C.F.R. Part

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2.” (Rec. Doc. No. 104, Protective Order Regarding Confidential Business

Information, at 2-3). In addition, the protective order indicates that “[t]his

information has not been determined by EPA under 40 C.F.R. Part 2, subpart B,

not to contain information entitled to confidential treatment.” Id. at 3. Regardless

of the burden, it appears to this court that the government is seeking to comply

with EPA regulations. In addition, the sixth factor specifically pertains to whether

the party that benefits from the order is a public official or entity; here, the

individuals who most directly benefit from the protective order are the EPA’s

contractors, who are neither public officials nor a public entity. Therefore, the

court concludes that this factor weighs in favor of entry of a protective order.

Finally, pursuant to the seventh factor, this court looks to whether the matter

involves issues that are of importance to the public. Here, clearly, the underlying

matter involves issues of great importance to the public. The EPA, for well over a

decade, has been attempting to remedy contamination at the Site. The public is

well aware, especially in light of the recent oil spill in the Gulf of Mexico, of the

great costs associated with contaminated land, waterways, and drinking water. 

Certainly, the defendants are right to point out that “millions of dollars of taxpayer

money . . . spent by the government during a fifteen-year cleanup” are at issue. 

(Rec. Doc. No. 107 at 12). In addition, the defendants cite to Pansy, in which the

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Third Circuit noted that “privacy interests are diminished when the party seeking

protection is a public person subject to legitimate public scrutiny.” 23 F.3d at 787. 

However, the court in Pansy also noted the following:

[W]here it is likely that information is accessible under a relevant

freedom of information law, a strong presumption exists against

granting or maintaining an order of confidentiality whose scope would

prevent disclosure of that information pursuant to the relevant

freedom of information law. In the good cause balancing test, this

strong presumption tilts the scales heavily against entering or

maintaining an order of confidentiality. To avoid complicated

inquiries as to whether certain information would in fact be available

under a freedom of information law, courts may choose to grant

conditional orders. For example, . . . a court could grant an order of

confidentiality while specifying that the scope of the confidentiality

order does not extend so as to prevent disclosure pursuant to any

freedom of information law. Courts have discretion to fashion such

orders according to the needs and circumstances of each case.

Id. at 791.

In light of the Third Circuit’s guidance in Pansy, this court believes that a

protective order is warranted in this case. After weighing the factors provided by

the Third Circuit in Pansy, we believe that the government has established good

cause for the issuance of a protective order, as disclosure of the CBI at issue would

work both a clearly defined and a serious injury on the EPA’s contractors. 

However, while we will grant the government’s motion for a protective order

regarding confidential business information (Rec. Doc. No. 104), we also believe

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that any protective order issued should not impede the public’s right to

information, that the public is entitled to, concerning how and for what purposes

taxpayer money was spent concerning cleanup efforts at the Site. Therefore, while

we will grant the motion for a protective order, we do so with an important caveat;

the scope of the protective order issued shall “not extend so as to prevent

disclosure pursuant to any freedom of information law.” Pansy, 23 F.3d at 791.

B. The Instant Motion for Privacy Act Protective Order

With a number of notable exceptions, pursuant to the Privacy Act, “[n]o

agency shall disclose any record which is contained in a system of records by any

means of communication to any person, or to another agency, except pursuant to a

written request by, or with the prior written consent of, the individual to whom the

record pertains . . . .” 5 U.S.C. § 552a(b). An individual, for purposes of the

Privacy Act, is defined as “a citizen of the United States or an alien lawfully

admitted for permanent residence . . . .” 5 U.S.C. § 552a(a)(2). A record is “any

item, collection, or grouping of information about an individual that is maintained

by an agency,” which includes “his [or her] education, financial transactions,

medical history, and criminal or employment history,” in addition to the person’s

name or “identifying number, symbol, or other identifying particular . . . .” 5

U.S.C. § 552a(a)(4). Last, a system of records is defined as “a group of any

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records under the control of any agency from which information is retrieved by the

name of the individual or by some identifying number, symbol, or other identifying

particular . . . .” 5 U.S.C. § 552a(a)(5).

First, defendants claim that the Privacy Act is inapplicable to the

information sought to be disclosed and that the averment made by the government

“is wholly insufficient to demonstrate that the information is protected from

disclosure under the Privacy Act.” (Rec. Doc. No. 106 at 5). The defendants also

seek to characterize the protective order requested as being a “blanket protective

order,” id. at 6, n.3, and that the information sought to be protected - supporting

costs information required to be disclosed by this court’s 1994 Order - is not

protected, as such information is information that is to be disclosed “pursuant to

the order of a court of competent jurisdiction.” 5 U.S.C. § 552a(b)(11).

The documentation sought to be disclosed by the government pursuant to the

proposed protective order is in fact one document that contains, as represented to

by the United States, “sensitive personnel information which is relevant to the

Defendants’ response cost liability, but which is protected from disclosure by the

Privacy Act, 5 U.S.C. § 552a.” (Rec. Doc. No. 108 at 3). We see no basis for the

defendants’ contention that the information sought to be disclosed is not a “record”

contained in “a system of records” that pertains to “an individual.” See 5 U.S.C. §

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10 The government also notes that, while the personnel information that is the

subject of the proposed protective order may relate to costs, such information is not

supporting cost documentation and, therefore, does not fall within the purview of

the 1994 Order. (Rec. Doc. No. 108 at 4).

232

552a(b). Similarly, the protective order sought by the government is not a “blanket

order”; instead, the order simply limits those who would have access to the

document and the parameters attached to such access. (See Rec. Doc. No. 102,

Attachment No. 1).

Second, the defendants contend that, by its motion, the United States is

seeking to impose additional conditions upon the government’s compliance with

this court’s 1994 Order. This argument is similar to that posited by the defendants

in opposition to the government’s motion concerning the CBI protective order, and

it fails for those reasons set forth above. Quite simply, the government does not

seek to modify any pre-existing order.10

Third, defendants contend that, pursuant to this court’s 1994 Order, the

government must initiate a new action for cost recovery to obtain the relief sought. 

Again, this argument is similar to that made by the defendants in their brief filed in

opposition to the CBI protective order motion and, for those reasons set forth

above, must similarly fail.

Based upon the relevant factors announced in Pansy, though, we believe that

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good cause has not been established, in this case, for the issuance of a protective

order. First, it does appear as though the proposed protective order would protect

the privacy interests of a third party, not a public entity or official, a consideration

that weighs in favor of the issuance of a protective order, based on the first and

sixth factors in Pansy. The government seeks to disclose the documentation at

issue for a legitimate purpose, namely, to provide the defendants with

documentation “that will result in their reduced response cost liability,” a

consideration that weighs in favor of the issuance of a protective order based on the

second factor. This purpose, as the government notes, will also assist in promoting

fairness and efficiency among the litigants, the fifth factor to be considered under

Pansy. (Rec. Doc. No. 108 at 6).

The defendants contend that there is insufficient information to determine

whether disclosure will cause embarrassment to a party or whether the information

is important to public health and safety, but that the case does involve issues

important to the public, a factor that weighs “heavily against a protective order.” 

(Rec. Doc. No. 106 at 4). We agree with the defendants that there exists

insufficient information to determine whether the information is important to

public health or safety or embarrassment to a party. In addition, we also agree with

the defendants that the case involves issues important to the public. Although the

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government contends that it does not seek to disclose supporting cost

documentation, it does state that the information sought to be disclosed is

“sensitive personnel information” that “‘relates to costs’ in the sense that the

Defendants’ total liability for the United States’ response costs incurred at the Site

will be reduced as a result of the disclosure . . . .” (Rec. Doc. No. 108 at 4, n.4, and

6). The court believes that this type of information is an issue that is important to

the public and weighs against the issuance of a protective order; in fact, such

information is of paramount importance, as it relates to the degree of total liability

the defendants face concerning response costs undertaken at the Site.

The court has not been provided the information sought to be disclosed, or

even the type of information, beyond the government’s description of “sensitive

personnel information.” Without this documentation, the court cannot make a

determination that a protective order is warranted based upon the Pansy factors. 

Therefore, we will order the government to provide to the court, in camera, the

document at issue in its motion for a protective order pursuant to the Privacy Act

of 1974, 5 U.S.C. § 552a. Disclosure of this documentation, in camera, will allow

the court to determine whether a protective order pursuant to the Privacy Act may

properly be issued.

V. CONCLUSION

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Based on the above, we will grant the government’s motion for a protective

order regarding confidential business information (Rec. Doc. No. 104). The scope

of the protective order, however, will “not extend so as to prevent disclosure

pursuant to any freedom of information law.” Pansy, 23 F.3d at 791. In addition,

we will order the government to provide the documentation, in camera, sought to

be disclosed pursuant to 5 U.S.C. § 552a, in order for the court to properly

determine whether a protective order concerning the information may be issued.

s/James F. McClure, Jr.

James F. McClure, Jr.

United States District Judge

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

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UNITED STATES OF AMERICA, :

:

Plaintiff, : Civil Case No. 91-1501

v. :

: (Judge McClure)

CHROMATEX, INC., THE :

VALMONT GROUP, ALAN :

CHERENSON, STANLEY SIEGEL, :

ALAN SHULMAN, JAMES :

COCHRAN and JOSEPH BYRNES, :

:

Defendants. :

ORDER

July 6, 2010

For the reasons set forth in the accompanying memorandum, IT IS

HEREBY ORDERED THAT

1. The United States’ Motion for Protective Order Regarding

Confidential Business Information is GRANTED, to the extent

provided for in the accompanying memorandum. (Rec. Doc. No.

104). An appropriate Protective Order is entered in conjunction with

this Order.

2. The government is directed to provide to the court, in camera, the

information at issue in the government’s Motion for Privacy Act

Protective Order (Rec. Doc. No. 102) within fourteen (14) days of the

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date of this Order.

3. The court defers a decision as to the government’s Motion for Privacy

Act Protective Order (Rec. Doc. No. 102) until a review of the

information sought to be disclosed is made.

s/James F. McClure, Jr.

James F. McClure, Jr.

United States District Judge

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