Hulstrunk v. Ultracell Insulation, LLC, No. 110-7-18 Oecv (Harris, J., Oct. 11, 2018).

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the 

accompanying data included in the Vermont trial court opinion database is not guaranteed.]

STATE OF VERMONT

SUPERIOR COURT CIVIL DIVISION

Orange Unit Docket No. 110-7-18 Oecv

William Hulstrunk,

Plaintiff

v.

Ultracell Insulation, LLC,

Defendant

ENTRY ORDER AS TO CONVERTED MOTION TO DISMISS

AND AS TO

PROPOSED STIPULLATED PROTECTIVE ORDER

Defendant, Ultracell Insulation, LLC (“Ultracell”) filed a supplemental memorandum in 

support of its motion for summary judgment and a proposed stipulated protective order (signed 

by both parties and their counsel) for the court’s consideration1. The court addresses each of 

them as they relate to this stage of the litigation.

Supplemental Submission in Support of Defendant’s Motion for

 Summary Judgment 

Ultracell originally filed a Rule 12 motion to dismiss, but provided the court with 

materials in addition to the pleadings in support of its motion. As Ultracell notes in its 10/2/18 

recent filing, in its 9/18/18 Order the court converted that motion to one for summary judgment, 

and as required by Vermont case law. The court gave the parties (in particular the Plaintiff) 

notice of its conversion of the motion. Such notice in effect forewarns the responding party 

(Plaintiff here) of its opportunity (and obligation) to provide additional materials as it responds to 

the motion. Where a movant frames its motion as one for judgment on the pleadings alone, 

 

1 Strictly speaking the “Stipulated Protective Order” was filed with the court with no separate 

Rule 7(b)(1) motion to approve it. The document has the parties’ counsel signatures (showing it 

is a stipulated agreement), but no court signature line. In its provisions, the document facially has 

some court “findings”. While the court approves aspects of the proposed order, as discussed in 

this opinion, such approval is subject to the limitations described in this order, and only the 

findings made in this entry order are being made as to the requested order. 
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normally the responding party must base its opposition on the allegations of the pleadings, and 

has no right (or obligation) to adduce facts to rebut the claimed factual assertions of the moving 

party that involve alleged facts not contained in the pleadings. In deciding to convert the motion 

to one for summary judgment, the requirement that the court give the nonmovant notice of the 

conversion, is intended to alert the nonmovant that [a] the court is considering the materials 

provided by movant, outside of the pleadings, [b] the summary judgment standards will apply to 

the motion, and consequently [c] the non-movant has the opportunity (and obligation) to provide 

the court with any non-pleading materials nonmovant believes will raise material issues of fact in 

response to the pleadings and alleged undisputed material facts the movant has presented to the 

court.

Strictly speaking, the motion conversion allows the non-movant, 30 days instead of 14 

days (plus the three days after service – see V.R.C.P. 6, 56, 78) to make its opposition, and the 

movant 14 days (plus three days after service, Id.) to file its reply brief.

Ultracell here has in essence re-filed its motion as a newly supported summary judgment 

motion, as its “supplemental” submission was filed before any opposition memo by Plaintiff. 

Because the court set out its initial analysis of certain case issues in its prior order, the 

court allows Ultracell the opportunity to have its now “supplemented” motion as its original 

summary judgment filing. Plaintiff shall have 33 days from that filing (presuming the three day 

provision of Rule 6 applies - V.R.C.P. 6 and 56) to file its opposition memo, and thereafter, 

Defendant 14 days (plus three days after service as applicable- V.R.C.P. 6 and 78) to file its 

reply memo.

As to Defendant’s request to have its entire motion for summary judgment sealed, the 

court denies that request. The court and provides opportunity for limited portions of the court 

filings to be sealed, as further described below under the court’s analysis of the proposed 

stipulated protective order. 

Proposed “Stipulated Protective Order”

The proposed Stipulated Protective Order is designed to provide a flexible and 

appropriate means for the parties to exchange and use actual and/or potential trade secrets, and 

sensitive/ proprietary financial information. It allows this litigation to fairly proceed, with such 

materials protected against disclosure and use from the opposing party, the public or third 

parties, where such disclosure or use would create substantial economic harm or damage to the 

producing party. 
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While the court extends considerable latitude to the parties as to how they fashion and 

protect information and materials they exchange in discovery and trial or hearing preparation, 

competing public interests are at stake whenever claimed protected materials may be used in 

court.

Vermont courts, and in particular civil division proceedings, are generally open to the 

public. When a document is submitted to the superior court, the court possesses the judiciary's 

common law “supervisory power over its own records and files and access has been denied 

where court files might have become a vehicle for improper purposes.” In re Sealed Documents, 

172 Vt. 152, 159 (2001) (internal quotation omitted), Under the Vermont Rules for Public

Access to Court Records, as to materials the parties choose to file in court, the presumption and 

starting proposition is that court records are “open” and available to the public. See Vermont 

Rules for Public Access to Court Records (“VRPACR”), Rule 6(a). This presumption 

underscores and helps advance the goal of accountability to the public. As the Reporter Notes to 

VRPACR Rule 1 state, “[t]he judiciary, like the other branches of state government, is 

accountable to the public. Open access to its records and proceedings is essential to maintaining 

public trust and confidence in the operation of the court system.” The presumption of public 

access to court records also applies in the federal court system, based on similar principles. See 

example, Westmoreland v. Columbia Broad. Sys., Inc., 752 F.2d 16, 23 (2d Cir.1984) (“Public 

access to civil trials enhances the quality and safeguards the integrity of the factfinding process, 

fosters an appearance of fairness, and heightens public respect for the judicial process.”) (internal 

citations and quotation marks omitted).

The VRPACR has certain exceptions to the open records presumption. Included is 

VPRACR Rule 6(b)(35), allowing for an exception for “any other record to which public access 

is prohibited by statute”. 

As the parties’ proposed stipulated protective order notes, under the Vermont Trade 

Secrets Act (Title 9, Chapter 143, §§ 4601 - 4609)(“VTSA”) courts may enter protective orders 

sealing certain court records to help preserve the secrecy of trade secrets. 

Under the VTSA, “trade secrets” are defined as follows:

"Trade secret" means information, including a formula, pattern, compilation, program, 

device, method, technique, or process, that:

(A) derives independent economic value, actual or potential, from not being generally 

known to, and not being readily ascertainable by proper means by, other persons who can 

obtain economic value from its disclosure or use; and
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(B) is the subject of efforts that are reasonable under the circumstances to maintain its 

secrecy.’

§ 4601(3).

In the context of court proceedings and court records, the VTSA statute, at § 4605, allows 

the court to prohibit public access to certain court records:

In an action under this chapter, a court shall preserve the secrecy of an alleged trade 

secret by reasonable means, which may include granting protective orders in connection 

with discovery proceedings, holding in-camera hearings, sealing the records of the action, 

and ordering any person involved in the litigation not to disclose an alleged trade secret 

without prior court approval.

While the VTSA generally authorizes the court to seal court records with “trade secrets”,

the VRPACR, at Rule 7(a), provides exceptions to public access to court records should be 

based on “good cause specific to the case before the judges and exceptional circumstances”.

Given the presumption of public access to court proceedings and records, in entering 

protective orders to protect trade secrets, the court should be cautious against ordering overly 

broad orders to seal documents filed in court. See example, In re Manchester Square Partners, 

L.P., 2012 WL 3064512, Docket 471-11-10 Bncv (1/19/12)(Hayes, J.)(denying motion to seal, as 

a trade secret, certain information about commercial property that was the subject of a property 

tax appeal, concluding that when it comes to records filed in the court, under the principles 

behind the VRPACR the “public disclosure of trade secrets in the context of judicial records is 

generally one of openness, and should only be overcome in exceptional circumstances”)

(emphasis in original). 

Even when a particular item is found to constitute a “trade secret” that should be 

protected, this does not mean that any document that makes reference to such a trade secret item 

also needs protection. For example, inclusion of a single affidavit exhibit containing trade 

secrets, in an affidavit, that is filed with a motion and a host of other materials, does not render 

the entire motion and all materials filed in support of the motion a “trade secret” from which 

public access should be barred. In the example given, a protective order that seals the affidavit 

exhibit may suffice.

The court turns to the parties’ proposed Stipulated Protective Order. In essence its two 

categories of “Protected Material” include information and documents that the Producing Party 
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claims are or may be trade secrets2. The proposed Stipulated Protective Order is structured in 

essence so each party may designate claimed trade secrets, and have the opposing party honor 

such initial designation, while reserving the right to later challenge such designation under 

certain circumstances – such as if the Protected Material may be filed with, or used in, this court 

proceeding. See proposed Stipulated Protective Order at pp. 14 to 16.

There is a distinction between the principles behind the parties stipulating to a protective 

order to guide discovery versus the public access principles that come into play when records 

and information are used in court proceedings. As Judge Hayes observed in In re Manchester 

Square Partners, supra:

The fact that a protective order was issued in this case has little bearing on whether this 

motion [to seal certain court-filed documents] should be granted under the Vermont 

Rules for Access to Court Records. Protective orders are issued liberally to aid in the 

discovery process, and allow all parties to obtain full and fair discovery. While protective 

orders are issued liberally to encourage full disclosure among parties, very different 

standards apply to information presented in court proceedings.

See also Green Mountain Chrysler Dodge Jeep v. Crombie, 2:05-CV-302, 2007 WL 922255 (D. 

Vt. Mar. 23, 2007) (Sessions, Chief Judge)(“Crombie I”), slip op. at *3 (noting the fact a 

document or portion of a document has been designated as a trade secret under the VTSA for 

discovery purposes does not answer the ultimate question if it is entitled to protection when 

weighed against the interests of public access to court documents). 

While the court gives latitude to the “Protected Material” status the parties may use in 

designated actual or claimed trade secrets in their discovery and court proceeding preparation, 

the court must consider the public assess issues when items are used in open court proceedings. 

Judge Hayes, in Manchester Partners, supra, and Judge Sessions, in the follow up 

opinion to Crombie I above, namely, Green Mountain Chrysler Plymouth Dodge Jeep v. 

Crombie, 205-CV-302, 2007 WL 1074933 (D. Vt. Apr. 6. 2007) (“Crombie II”), required a 

specific showing to trade secret designation status and applied an “exceptional circumstnaces” 

showing standard to overcome the presumption of public access to court records. See also, 

VRPACR, Rule 7(a).

Moreover, overly broad use of trade secrets designations leads to other practical results 

when the court, in a proceeding, has to make rulings, that should be available to the public, using

secret information submitted under seal. Making rulings based on broadly claimed trade secrets 

 

2 The court’s use of the term “trade secrets” refers to the term as defined in the VTSA.
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and information not available to the public interferes with the public’s strong interest to see and 

understand how their public courts decide disputes, such as construing contracts and commercial 

transactions, and applying the law to disputes. See Crombie I at *7; Manchester Partners, 

supra.

In carrying out its duties, to afford public access to court records, while appropriately 

limiting public access exclusion for trade secrets under the VTSA, the court applies these 

principles and rulings:

1. Generally the court will accept the parties’ designations of “Protected Materials”, 

where such designations are stipulated to or not opposed by the non-“Producing 

Party” for their discovery material exchange purposes. The Stipulated Protective 

Order is approved as an order in that respect. Obviously if a dispute arises as to the 

trade secret status of “Protected Materials” the court can decide the issue on motion. 

While such a motion is pending the court will treat the purported “Protected 

Materials” as trade secrets, to be placed under seal, until the motion as to their status 

is decided.

2. In making any other court filings containing “Protected Materials” that ta party claims 

are trade secrets, the filing party is to identify the portions of the filing (memos, 

affidavits, specific exhibits) the filing party (or Producing Party) contends constitute

trade secrets, for which the filing party requests the court to place under seal. A 

particularized description of why the party clams “trade secret’ status for certain 

information needs to be provided. This will allow the court to conduct its initial seal 

request review. 

3. Parties’ submissions, to explain why court filed materials should be treated as “trade 

secrets” must be made within 15 days of the court filing. The court will hold filed 

materials, as to which “trade secret” designation is claimed, temporarily restricted 

from public access until the court makes its in camera review. 

4. The court makes these initial general observations as to what may constitute “trade 

secrets”:

A. Memos or affidavits that merely identify the existence or general nature of other 

“Protected Materials” trade secrets are unlikely to be approved as a sufficient 

trade secret to warrant placing the document making such a reference under seal. 

The very (public) nature of this action includes claims by Ultracell that it has 

proprietary trade secrets, that its restrictive operating agreement provisions are 

meant to protect, and which are or may be disclosed or used by Plaintiff in 

contradiction of those protective provisions. A court-filed document making 

reference to the existence of, for example, pricing strategies or product 
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specifications, is not itself a trade secret. The internal pricing policy memo or inhouse technical product specification manual, can be trade secrets.

B. The court will not afford automatic “trade secret’ statue to routine type LLC 

organizational documents (operating agreements, unit purchase agreements) 

merely because those types of documents are not generally publicly available. All 

kinds of non-public contracts and agreements are routinely litigated in court, and 

the fact a normally non-public document may become publicly available does not 

typically fall within the “formula, pattern, compilation, program, device, method, 

technique, or process” formulation of the trade secret statute. See Manchester

Partners, supra (noting information about company product lines are much more 

in keeping with traditional definitions of trade secrets than the broad range of 

information, about the operation of a commercial rental property, for which 

protection was sought). Public access to a document showing the structure of a

LLC, unlike a technical product specification sheet, has minimal “independent 

economic value that is not readily ascertainable to others” which is a component 

of trade secret designation. Dicks v. Jensen, 172 Vt. 43, 47 (2001).

5. The court may in some instances seal a document that contains Protected Material

that includes a protected trade secret, but then have the clerks make a copy of that 

document (with the Protected Material trade secret content redacted) to place in the 

non-sealed court file. For example, if a 40 page motion brief that has a small portion 

describing in detail the content of some sensitive proprietary information which might 

be used if the claimed covenant not to compete is not enforced, the court may seal the 

original brief (even the relevant page(s)), but make part of the public file a redacted 

version of the brief with the Protected Material/ trade secret portion redacted. 

6. The Parties are free to confer and discuss other approaches they would like the court 

to use to review and make rulings on VPRACR Rule 6(b)(35) trade secret designation 

requests.

7. The court will preliminarily hold for in camera review, Defendant’s motion for 

summary judgment, with its attachments, for Defendant to have 15 days from the date 

of this order, to provide proof of “trade secrets” designation status for materials filed 

with its motion. 

Electronically signed on October 10, 2018 at 05:00 PM pursuant to V.R.E.F. 7(d).

_________________________________________
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Michael J. Harris

Superior Court Judge