Opinion ID: 3000360
Heading Depth: 2
Heading Rank: 1

Heading: Summary Judgment on the Confidentiality

Text: Agreement We review summary judgments de novo, taking all the facts and their reasonable inferences in the light most favorable to the nonmovant, Tax Track in this case. Valentine v. City of Chi., 452 F.3d 670, 677 (7th Cir. 2006). We affirm summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Accordingly, assuming Tax Track’s version of events is true, summary judgment is appropriate if NIW is nevertheless entitled to judgment as a matter of law. Confidentiality agreements like the one in this case are restrictive covenants and under Illinois law are reviewed with a suspicious eye. Springfield Rare Coin Galleries, Inc. v. Mileham, 620 N.E.2d 479, 485 (Ill. App. Ct. 1991); Label Printers v. Pflug, 564 N.E.2d 1382, 1387 (Ill. App. Ct. 1991). An Illinois court, in whose place we sit, will enforce such agreements only when the information sought to be protected is actually confidential and reasonable efforts were made to keep it confidential. Curtis 1000, Inc. v. Suess, 24 F.3d 941, 947 (7th Cir. 1994); 6 Nos. 05-2149 & 05-4287 N. Am. Paper Co. v. Unterberger, 526 N.E.2d 621, 624-25 (Ill. App. Ct. 1988). The information need not always be kept under lock and key only for the viewing eyes of company officials with the highest security clearance. See Rockwell Graphic Sys., Inc. v. DEV Indus., Inc., 925 F.2d 174, 180 (7th Cir. 1991) (noting “perfect security is not optimum security” given the costs involved). Some disclosure of confidential information is often necessary to profitably exploit the information. Rockwell Graphic Sys., 925 F.2d at 177. Tax Track need not show its information rises to the level of a trade secret, but it must nevertheless establish that it engaged in reasonable steps to keep the information confidential. Tower Oil & Tech. Co. v. Buckley, 425 N.E.2d 1060, 1066 (Ill. App. Ct. 1981). If the party seeking to protect its information “did not think enough of it to expend resources on trying to prevent lawful appropriation of it, this is evidence that it is not an especially valuable interest.” Curtis 1000, Inc., 24 F.3d at 947. The question here is how much effort to keep information confidential is enough to be considered reasonable? Courts evaluate this question on a case-by-case basis, considering the efforts taken and the costs, benefits, and practicalities of the circumstances. See, e.g., id. at 947-48; Rockwell Graphic Sys., 925 F.2d at 179. As we have noted, some disclosure is usually necessary. Typically, what measures are reasonable in a given case is an issue for a jury. Rockwell Graphic Sys., 925 F.2d at 179-80. In some circumstances, however, it may be readily apparent that reasonable measures simply were not taken. Id. at 179. It is not entirely clear what exactly Tax Track is trying to protect. At times, Tax Track appears to claim the concept of leveraged life insurance is protected, but that cannot be so. The evidence overwhelmingly demonstrates Nos. 05-2149 & 05-4287 7 (and Tax Track does not contest) that leveraged life insurance is widely known and has been around for decades. Tax Track also appears to claim that its business relationships were confidential, but it has come forward with nothing to substantiate that. Tax Track also suggests that its specific method of selling leveraged life insurance—by using term policy riders—is confidential. But those policies and their riders are issued by the insurance companies who underwrite them, and the documents are generally required to be on file as a public record with the states where the insurance is sold. Based on the evidence Tax Track has produced, the only material even conceivably falling within the confidentiality agreement is the GCT memo. According to Tax Track, the GCT memo is referred to in the agreement as “the Leverage Overview memo” and is part of the Licensed Material the parties specifically agreed to keep confidential. Although NIW contests this, we assume (as we must) that Tax Track’s assertion is true. Regarding the efforts Tax Track made to protect the GCT memo, both sides claim support from this court’s decision in Rockwell Graphic Systems. Rockwell Graphic Systems, a trade secrets case, involved “piece part” drawings, which were detailed drawings of parts for Rockwell machines that indicated materials used, dimensions, tolerances, and methods of manufacture. Id. at 175. Rockwell stamped the drawings “Confidential” and kept them in a vault with limited access. The drawings could be used by Rockwell’s 200 engineers, who had to sign them out and replace them after use. All photocopies had to be destroyed. Id. at 177. Rockwell also gave some third-party manufacturers copies of the drawings because it sometimes hired them to build the parts. Everyone who had access to a drawing signed a confidentiality agreement. Id. Noting that disclosure of confidential information is often necessary to profit off the information, 8 Nos. 05-2149 & 05-4287 id. at 177, we held in Rockwell Graphic Systems that the mere fact the drawings were shared with third- party manufacturers did not necessarily destroy the confidential nature of the documents as a matter of law. Id. at 180. We reversed summary judgment and re- manded the case for a jury to decide whether Rockwell’s confidentiality efforts were reasonable. Id. at 180. Tax Track maintains that it, like Rockwell, took reasonable measures to protect its GCT memo, strategically disclosing it to outsiders only to profit. But Tax Track behaved nothing like Rockwell. Tax Track concedes that Gray distributed the GCT memo to 600-700 people and sought confidentiality agreements from only 190 of them at most, and that Gray cannot identify the people he gave the memo to. The GCT memo was not stamped “Confidential.” Tax Track emphasizes that the memo was stored exclusively on Gray’s password-protected computer, but that effort was entirely undermined by Gray’s widespread nonconfidential disclosure of the memo to hundreds of outsiders. No reasonable jury could find Tax Track took reasonable efforts to keep its GCT memo confidential so as to warrant protection under the restrictive covenant.