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ADVANCE SHEET HEADNOTE

December 5, 2016

2016 CO 77

No. 16SA38, In Re Rumnock v. Anschutz—Pretrial Procedure—Protective Orders—

Trade Secrets; Commercial Information.

The supreme court discharges its rule to show cause and affirms the trial court’s 

partial denial of defendant American Family Mutual Insurance Company’s request for a 

protective order to restrict plaintiff’s use of alleged trade secrets. The supreme court 

holds that American Family failed to meet its burden to show that the documents were 

in fact trade secrets or other confidential commercial information. 
The Supreme Court of the State of Colorado

2 East 14th Avenue • Denver, Colorado 80203

2016 CO 77

Supreme Court Case No. 16SA38

Original Proceeding Pursuant to C.A.R. 21

District Court, City and County of Denver, Case No. 11CV1387

Honorable A. Bruce Jones, Judge

In Re

Plaintiff:

Stephen Rumnock,

v.

Defendants:

Dennis Anschutz and American Family Mutual Insurance Company, a Wisconsin company 

licensed to do business in Colorado.

Rule Discharged

en banc

December 5, 2016

Attorneys for Plaintiff:

Taussig & Taussig, P.C.

John G. Taussig, III

Deborah L. Taussig

Scott D. Smith

Boulder, Colorado

Attorneys for Defendants:

Campbell, Latiolais & Averbach, LLC

Rebecca Wagner

Kirstin M. Dvorchak

Denver, Colorado

Attorneys for Amicus Curiae Colorado Trial Lawyers Association

Keating Wagner Polidori Free, P.C.

Zachary C. Warzel
2

Melissa A. Hailey

Denver, Colorado

Attorneys for Amicus Curiae United Policyholders

Merlin Law Group

William F. Merlin, Jr.

Tampa, Florida

Amy Bach

San Francisco, California

JUSTICE HOOD delivered the Opinion of the Court.

JUSTICE COATS dissents, and JUSTICE EID joins in the dissent.
3

¶1 This original proceeding involves a discovery dispute between plaintiff Stephen 

Rumnock and defendant American Family Mutual Insurance Company (“American 

Family”). After being ordered to produce documents that Rumnock had requested, 

American Family disclosed some of the documents but almost simultaneously moved 

for a protective order. The motion sought to preclude Rumnock from using or 

disclosing the documents—alleged to be trade secrets—outside of this litigation. The 

trial court granted the motion in part and denied it in part, ordering that the alleged 

trade secrets not be shared with American Family’s competitors but declining to further 

limit their use.

¶2 American Family petitioned this court under C.A.R. 21 to direct the trial court to 

enter a protective order limiting the use and disclosure of the documents to the needs of 

this litigation. American Family asserted the existing protective order was insufficient

because it would allow Rumnock to share the alleged trade secrets with non-competitor 

third parties, who could in turn share them with American Family’s competitors. We 

issued our rule to show cause.

¶3 We now discharge our rule because American Family failed to present to the trial 

court evidence demonstrating the documents are trade secrets or otherwise confidential 

commercial information. 

I. Facts and Procedural History

¶4 An uninsured driver crashed into Rumnock’s company car, injuring him. 

Rumnock brought negligence claims against the driver and uninsured/underinsured 

motorist claims against his insurers, including American Family. American Family 
4

opposed Rumnock’s efforts to recover under the policy but eventually paid him the 

policy limits. He then amended his complaint to add bad-faith and abuse-of-process 

claims against American Family, alleging unreasonable litigation conduct. 

¶5 Rumnock requested that American Family produce documents showing, among 

other things, its procedures, policies, and guidelines for handling uninsured motorist 

claims. American Family’s responses were due September 10, 2015. Rumnock emailed 

American Family regarding the discovery requests on September 2, 11, 23, and 25, but 

American Family did not respond or seek an extension or protective order. Rumnock 

requested a discovery hearing, and on October 8 the court scheduled a hearing for 

October 29. Rumnock continued to email American Family requesting discovery 

responses up to the morning of the October 29 hearing.

¶6 When the hearing was held—seven weeks after American Family’s discovery 

responses had been due—American Family still had not responded or requested an 

extension or protective order. The trial court awarded Rumnock attorney fees, ordered 

American Family to “respond fully, completely and responsibly to the pending 

discovery” by the “close of business on November 6th,” and ruled, “All objections are 

waived.”

¶7 At 5:06 p.m. on November 6th, American Family disclosed some of the requested 

documents; two hours later, it filed a motion for a protective order. The motion 
5

asserted the internal documents governing claims handling were trade secrets and 

sought to limit their use and disclosure to the needs of the current litigation.1 

¶8 The trial court conducted another discovery hearing, at which American Family 

asserted the claims-handling materials were proprietary and stressed that the requested 

protective order would only limit use or disclosure beyond the current litigation. 

Neither party presented evidence at the hearing.

¶9 The court ordered Rumnock not to share the alleged trade secrets with American 

Family’s competitors but refused to order the broader limitations American Family had 

requested. It reasoned that granting the full protection sought would be inconsistent 

with its earlier order imposing discovery sanctions against American Family.

II. Analysis

¶10 The trial court partially denied American Family’s request for a protective order 

because it determined its previous discovery order had limited American Family’s 

ability to seek a protective order.2 American Family now challenges that determination. 

We conclude that, even if the court had fully considered the merits of American 

Family’s request, American Family could not have prevailed because it failed to present 

 

1 The motion also sought to protect confidential information about individual 

employees. Rumnock agreed, and the trial court ordered, that Rumnock would not use 

or disclose the individual-employee information other than as necessary for this 

litigation. American Family does not challenge this portion of the order.

2 We cannot discern from the record whether the trial court determined American 

Family forfeited the opportunity to seek a protective order by waiver, by sanction, or by 

some combination of the two. For purposes of our analysis, the distinction is irrelevant. 

To be clear, we do not address whether a party may be deemed to have waived the 

right to seek a protective order by failing to timely object to a request for production of 

documents.
6

evidence that the documents allegedly in need of protection as trade secrets were, in 

fact, trade secrets or otherwise confidential commercial information.

¶11 The party opposing discovery bears the burden of proving the need for a 

protective order. Williams v. Dist. Court, 866 P.2d 908, 912 (Colo. 1993). This generally

means showing “good cause” for a protective order. See C.R.C.P. 26(c). But when the 

protective request concerns allegedly confidential commercial information, the court 

must first determine whether “the information requested is a trade secret or other 

confidential information.” Direct Sales Tire Co. v. Dist. Court, 686 P.2d 1316, 1319 n.5 

(Colo. 1984) (emphasis added); see C.R.C.P. 26(c)(7); cf. Centurion Indus., Inc. v. Warren 

Steurer & Assocs., 665 F.2d 323, 325 (10th Cir. 1981) (“To resist discovery under 

[analogous Federal] Rule 26(c)(7), a person must first establish that the information 

sought is a trade secret and then demonstrate that its disclosure might be harmful.”)

(footnote omitted); 8A Charles Allen Wright, Arthur R. Miller & Richard L. Marcus, 

Federal Practice & Procedure § 2043 (3d ed. 2010) (“It is for the party resisting discovery 

to establish, in the first instance, that the information sought is within this provision of 

the rule.”).

¶12 Whether a particular piece of information is confidential commercial information 

is a question of fact to be determined by the trial court. See Gognat v. Ellsworth, 259 

P.3d 497, 502 (Colo. 2011) (“[T]he nature of any particular piece of proprietary 

information . . . may be heavily dependent on scientific or historical facts . . . .”); Saturn 

Sys., Inc. v. Militare, 252 P.3d 516, 521 (Colo. App. 2011) (“What constitutes a trade 

secret is a question of fact for the trial court.”). Where there is no genuine dispute of 
7

fact, however, we may decide as a matter of law whether the information is a trade 

secret or otherwise confidential. See, e.g., Gognat, 259 P.3d at 505 (ruling as a matter of 

law on undisputed facts that proprietary information constituted a single trade secret).

¶13 Here, American Family had the burden to establish the need for the protective 

order, yet it tendered no evidence from which the court could have determined that the 

documents actually are trade secrets3 or otherwise confidential. What few documents 

American Family affixed to its pleadings regarding the motion—Rumnock’s requests 

for production, American Family’s responses to Rumnock’s discovery requests, and an 

email chain—shed no light on whether the documents were confidential. American 

Family failed to present any affidavits or testimony or submit the alleged trade-secret 

documents under seal for in-camera review.

4 In fact, the only evidence presented to the 

 

3 The rules of discovery do not define “trade secret,” but the term is defined in statutes, 

see § 7-74-102(4), C.R.S. (2016) (“‘Trade secret’ means the whole or any portion or phase 

of any scientific or technical information, design, process, procedure, formula, 

improvement, confidential business or financial information, listing of names, 

addresses, or telephone numbers, or other information relating to any business or 

profession which is secret and of value. To be a ‘trade secret’ the owner thereof must 

have taken measures to prevent the secret from becoming available to persons other 

than those selected by the owner to have access thereto for limited purposes.”); 

§ 18-4-408(d), C.R.S. (2016) (same), and in the common law, see Julius Hyman & Co. v. 

Velsicol Corp., 233 P.2d 977, 999 (Colo. 1951) (“Generally it may be said that a trade 

secret is any plan or process known only to its owner, and those of his employees to 

whom it is necessary to confide it.”). Under any definition of trade secret, American 

Family’s showing falls short.

4 American Family filed an affidavit as an exhibit to its petition to this court. That 

affidavit was not filed in the trial court. Consequently, we ignore it. See Panos Inv. Co. 

v. Dist. Court, 662 P.2d 180, 182 (Colo. 1983) (“[W]e will not consider issues and 

evidence presented for the first time in original proceedings.”).
8

court bearing on whether the documents were confidential—a deposition excerpt 

provided by Rumnock—indicated they were not confidential.

¶14 To the extent American Family suggests it had insufficient opportunity to 

present evidence of trade secrets at the hearing, we disagree. Although the trial court 

announced before any argument that it was “leaning” towards determining American 

Family had waived its ability to seek a protective order for trade secrets, it allowed 

American Family “to make a further argument about the proprietary information . . . to 

lean [the court in] a different direction.” At that point American Family could have 

sought to introduce evidence or made an offer of proof, see C.R.E. 103(a)(2), but it did 

neither. Further, American Family had already passed up the opportunity to attach an 

affidavit to its pleadings leading up to the hearing.

III. Conclusion

¶15 Because American Family failed to show that the alleged trade secrets were, in 

fact, trade secrets or otherwise confidential commercial information, we affirm the trial 

court’s partial denial of American Family’s request for a protective order. And though 

American Family’s petition was unsuccessful, we conclude it was not frivolous, so we 

deny Rumnock’s request for attorney fees. We discharge our rule to show cause and 

remand the case to the trial court for further proceedings. 

JUSTICE COATS dissents, and JUSTICE EID joins in the dissent.
1

JUSTICE COATS, dissenting.

¶16 I respectfully dissent, not only because I find the majority’s ruling today to be 

both misguided and mischievous but also because I disagree with the majority’s choice 

to dodge the more meaningful question actually posed by the order being challenged in 

this original proceeding. In the face of a discovery order ostensibly protecting 

assertedly proprietary information by barring the plaintiff from disclosing it to 

competing insurers, but simultaneously permitting its disclosure to other plaintiffs’ 

lawyers, who would be unconstrained from doing precisely that, the majority’s 

discharge of our rule effectively allows to stand the very order it holds should never 

have issued in the first place. Quite apart from the majority’s failure to resolve the 

question expressly posed by the trial court’s rationale for limiting its protective order, 

and as explicitly argued to this court by the amici United Policyholders and Colorado 

Trial Lawyers Association with the concurrence of the plaintiff—that is, whether 

discovery provided by the civil rules is intended solely for the benefit of opposing 

parties or rather must remain subject to dissemination to others outside the litigation 

also seeking information about the practices of the disclosing party—I believe the 

majority’s decision to deprive the insurer of protection against dissemination beyond 

this litigation, while simultaneously ignoring the trial court’s actual rationale for doing 

so, may not turn out to be as deft or cost-free as the majority seems to think. Assuming 

that it is viewed as more than simply a quick way of disposing of the instant petition, it 

appears more likely to me that the majority’s rationale for discharging our rule today 

must have the odd effect of imposing on parties asserting a claim of proprietary 
2

information an obligation to ensure that they have proven as much to the satisfaction of 

a potential reviewing court, notwithstanding the acquiescence of both trial court and 

opposing party to the issuance of a protective order.

¶17 The order specifically challenged in the petition for relief pursuant to C.A.R. 21 

was an order of the district court granting the defendant–insurer’s motion for a 

protective order concerning proprietary corporate information ordered disclosed to the 

plaintiff, but only to the extent of barring the plaintiff from further disclosing that 

proprietary corporate information to the insurer’s competitors. The court’s order 

simultaneously denied the defendant’s request that the use of its proprietary corporate 

information be limited to the current litigation, which would have effectively barred the 

plaintiff from disseminating it to others who would not be similarly constrained from 

disclosing it to the defendant’s competitors. Although the district court initially denied 

any protective order at all, on the sole ground that entitlement to such an order was 

waived as a sanction for earlier discovery violations, upon hearing the insurer’s 

challenge to the appropriateness of this blanket waiver sanction, it relented and 

partially granted the insurer’s motion for protection. In doing so, however, the court 

made clear that its continued unwillingness to further limit the scope of its discovery 

order resulted not from any failure of the insurer to establish the proprietary nature of 

its documents, which would of course have been contradictory of its grant of a partial 

protective order, but instead reflected its accession to the plaintiff’s assertion of an 

entitlement to share the insurer’s proprietary corporate information with “fellow 

Plaintiffs lawyers” or to use it in possible future litigation of his own.
3

¶18 The district court did not more specifically determine which of the documents 

actually contained proprietary corporate information, and given both the nature of its 

ruling and the fact that the multitudinous documents at issue had already been ordered 

turned over to the plaintiff as a sanction, little purpose would have been served by 

doing so. The fact that the disclosed documents, as a group, contained proprietary 

information was clearly accepted by both the court and the parties as the premise for 

the ensuing debate over the court’s discretion to limit their disclosure directly to 

competitors, on the one hand, while permitting their disclosure to plaintiffs’ lawyers in 

unconnected litigation, on the other. Whether or not the district court would have even 

entertained additional evidence on the proprietary nature of this corporate information, 

there was simply no need for it. By that stage of the discovery process, the district court 

had made eminently clear that the only issues with which it was concerned were the 

scope of its “waiver” sanction and, contained within that question, whether disclosure 

of the insurer’s proprietary information should be limited to use in the current 

litigation.

¶19 The propriety of an order acknowledging good cause for protecting the insurer’s 

commercial information from being revealed to its competitors and, at one and the 

same time, permitting the dissemination of that information to the plaintiffs’ bar 

generally, for use without limitation in other litigation, was ever the only reason for our 

interference at the discovery stage of the current litigation. Unlike the majority, I would 

make clear that providing for the benefit of other litigants, in unconnected litigation, is 

not a proper basis for ordering the disclosure of, or denying a protective order for, 
4

information otherwise meriting protection according to C.R.C.P. 26(c); nor is it a proper 

sanction for discovery violations, as permitted by C.R.C.P. 37. Whether or not the 

“waiver” of all objections, as ordered by the district court in this case, might under 

some circumstance be considered a sanction within the contemplation of Rule 37 for 

recalcitrance in complying with discovery rules, an order permitting the dissemination 

of a party’s proprietary corporate information for use in other, unconnected litigation, 

either to punish that party or benefit potential future litigants, clearly implicates matters 

of both policy and process extending far beyond the contemplation of the Rule.

¶20 I therefore take this opportunity to briefly, but emphatically, express my 

disapproval not only of the result reached by the majority today but also of the grounds 

upon which it rests its current disposition. Were I to agree with the majority that a 

procedural default or inadequacy of proof by the defendant actually made it untenable 

for us to reach the issue upon which we granted the petition (which I do not), I believe 

dismissal of the petition as improvidently granted would be the proper course of action. 

In any event, whatever might be considered an appropriate technique for lower courts, I 

consider it unworthy of a high court to dispose of matters we have ourselves found 

sufficiently significant to merit the exercise of our original jurisdiction, on the basis of 

such a mechanical, “gotcha” rationale.

¶21 I therefore respectfully dissent.

I am authorized to state that JUSTICE EID joins in this dissent.