In Episode 160, Kelly Twigger discusses whether counsel was subject to sanctions under Rule 37(b) for the inadvertent production of documents covered by a protective order in Cahill v. Nike, Inc.
Introduction
Welcome to this week’s episode of the Case of the Week series, brought to you by eDiscovery Assistant in partnership with ACEDS. My name is Kelly Twigger. I am the CEO and founder at eDiscovery Assistant, your GPS for ediscovery knowledge and education, and the Principal at ESI Attorneys. Thanks so much for joining me today.
Each week here on the Case of the Week, I choose a recent decision in eDiscovery case law and talk to you about the practical implications of that decision for you and your clients. This week’s decision is a key lesson for counsel when providing documents to third parties where a protective order is in place, the importance of intent, and the sanctions that can result when a counsel violates that order.
A couple of announcements before we dive in.
First, our team will be at the Master’s Conference in Atlanta on November 12th, which is being hosted by King & Spalding. If you’re planning to attend, we do have some discount codes that are available, so please drop us a line at support@ediscoveryassistant.com, and we’ll get those over to you.
Please save the date on your calendars for the 2025 University of Florida eDiscovery Conference that will be held on February 12-13, 2025. Registration will be open soon, and we’ll provide a link for you to register when that happens. We’ll also be releasing our annual case law report for 2024 to all of the attendees and speakers at the event, and it will be available for download immediately preceding the UF Conference.
Let’s dive into this week’s decision.
This week’s case comes to us from Cahill v. Nike, Inc. This is a decision from August 26, 2024, from United States Magistrate Judge Jolie Russo. Magistrate Judge Russo has 12 decisions in our eDiscovery Assistant database, and as always, we tag each of our decisions with the issues pertinent to the analysis in that case. This week’s issues include bad faith, redaction, protective order, cost recovery, exclusion of evidence, proportionality, special master, and sanctions.
Facts
This is a proposed class action alleging that Nike systematically discriminated against plaintiffs and other similarly situated women regarding salary and promotions. While the plaintiffs’ motion for class certification was pending, Nike moved to seal certain portions of the documents filed in relation to the motion that included certain Nike employee information. At the same time, in April 2022, a group of non-media party organizations, including the Oregonian, moved to intervene and sought access to the sealed documents.
The Court granted the motion to seal in part, and the Court also granted the motion to intervene in part, for the limited purpose of challenging the party’s stipulated redactions regarding the briefing surrounding plaintiffs’ motion for class certification. But the Court did deny the media organizations’ — so kind of collectively, all of the different media groups that were trying to get access to the information —denied their request for further briefing and to unseal or access the documents produced pursuant to the protective order that was in place in the case. The Court did, however, invite those media organizations to renew their motion following the resolution of the class certification motion.
In September 2022, so a few months later, the Court denied the motion for class certification and then granted the media organizations’ motion to unredact a number of documents. Nike appealed that order, and the matter was stayed pending appeal to the Ninth Circuit. The documents remained sealed pursuant to the protective order pending that appeal with the Ninth Circuit.
On January 19, 2024, so fast forward to about 10 months ago, one of the plaintiffs’ counsel met with a reporter for the Oregonian at the reporter’s request. At that meeting, the reporter told counsel that he had received a declaration made in connection with the action containing allegations of sexual harassment and sexual assault that an employee experienced while working at Nike, and the reporter inquired whether the plaintiffs’ counsel could comment on those allegations.
Counsel told the Court that she responded by limiting her comments to information contained in the publicly available records in the case and that she asked her team to compile a pdf of surveys that Nike had propounded to its employees about workplace culture. Some of the responses were sealed pursuant to the protective order in place. But counsel’s submission to the reporter, which she sent him via email, was not limited to the publicly available information that was available through Pacer. Instead, counsel emailed the packet of survey responses to the reporter with an index referencing where in the documents the allegations were found that supported the declaration he had brought to her attention. Shortly after receiving the packet, the reporter told counsel that he had not read it, but that the pdf file contained many more documents than he had seen previously from those that were publicly available.
That caused counsel to reconfirm with her office what had been included in the packet, and she then realized that the packet included additional items that were received from Nike in discovery, but that were not publicly available — otherwise noted that she had inadvertently disclosed documents that were protected by the protective order in the case. The reporter would not immediately return the inadvertently disclosed documents but agreed not to run a story over that weekend while the office was closed.
Counsel continued to contact the reporter about returning the documents multiple times until January 25, 2024 — six days after the inadvertent disclosure — at which point the reporter informed counsel that the paper did not intend to return the documents, but that they would provide notice before any publication of the contents of the documents that she had inadvertently disclosed. Counsel then sought the Court’s assistance in obtaining the return of the documents on January 25, 2024. Again, that’s six days after she found out about the inadvertent disclosure. Nike found out about the inadvertent disclosure as a result of the motion filed by the plaintiffs. Plaintiffs’ counsel did not separately call Nike’s counsel to inform them of the inadvertent disclosure, according to the facts that are in the decision.
Nike then filed a motion for sanctions against counsel pursuant to Rule 37(b) for a violation of a court order and sought very harsh sanctions in the form of monetary sanctions, costs and fees, exclusion of evidence related to the documents, the disclosure of identities of women in the case, a venue transfer, and additional associated costs based on the news stories, as well as counsel’s disqualification from the case. All very harsh sanctions.
Analysis
What is the Court’s analysis here?
The Court began its analysis by finding a clear violation of the protective order as a result of the inadvertent disclosure. It stated:
At the heart of the improperly disclosed materials are excerpts from an internal survey conducted by female executives at Nike containing unredacted names that for now remain sealed pending an appeal of this Court’s order unsealing the documents and revealing the names. While the Oregonian has published some articles regarding the disclosed documents, the names redacted in the Court filings have not been published. Nonetheless, the privacy interest of those named in the documents, who are not parties to this litigation and who are still subject to protection pending appeal of this Court’s order to unredact, have had their names revealed to a news organization. The violation of the protective order, regardless of its inadvertence, requires some form of sanction.
The Court then looked at Rule 37(b)(2), which provides for the sanctions for failure to comply with a court order, including a protective order, and found that “[t]he ideal remedy is one that advances both the remedial and deterrent goals of sanctions” by balancing the level of harm caused and the evidence of bad faith or willful conduct. We already heard from the Court in the quote that I read you earlier, where it said “regardless of inadvertence”, so we know pretty much where the Court is going to come down on intent.
Nike sought to paint a picture of bad faith and willful violation of the protective order, but the Court was unable to find any evidence of intent by counsel:
It would be an understatement to note that the conduct of both parties to this litigation during discovery has been incendiary to the point that any objective observer might be tempted to attribute a nefarious intent to all such conduct. However, the Court has enough experience to note that significant cases involving well-funded representatives often results in heavy-handed tactics in an attempt to advocate for their clients and does not indicate deliberate attempts to violate ethical rules or Court orders. Nonetheless, when parties engage in scorched-earth tactics, they must exercise caution especially when engaging in activity that is extracurricular to the case to avoid stepping over the line from zealous advocacy to violation of a Court order. Counsel failed in that regard. However, the Court is unable to determine the disclosure of the unredacted version of the survey was anything more than inadvertent.
Having found that the disclosure was inadvertent, the Court then considered the available sanctions. The Court looked first at whether the sanctions were appropriate for civil contempt, where they may be imposed to encourage compliance with court orders, and the Court awarded the fees related to both defendant’s efforts to recover the documents as well as the motion for sanctions. According to the Court:
Counsel was under an obligation to ensure protection of the unredacted document and chose to engage in conduct with a third party, unrelated to the case, that resulted in the release of information. Given the confidential nature of the information, counsel should have reviewed the documents before providing them to a news organization. This is not an instance in which [counsel] believed the unredacted document was not confidential, but rather, an instance in which [counsel] did not ensure the material she knew to be subject to the protective order was not included in the documents provided to a third party.
The Court denied additional monetary sanctions, finding that the redacted names had not been published and that the Oregonian will not publish them until its own investigation justifies it. As such, the Court found no additional harm to Nike and declined to order any sanctions other than the costs on the motion.
The Court also declined to disqualify counsel, finding that the case was now ready for trial and disqualification would be significantly disruptive. For the Court, disqualification was not necessary to address the violation of the protective order. Also on the table for sanctions was the exclusion of evidence and a proposed change of venue by Nike, who alleged that the coverage by the Oregonian had tainted the jury pool. The Court declined to issue both sanctions. The Court noted that the exclusion of evidence was a sanction that was not warranted by inadvertent disclosure, and that the proposed change of venue was to a location in which the Oregonian was also available and that would not cure any potential prejudice. Therefore, the change of venue was unwarranted.
Takeaways
What are our takeaways?
I chose this case today because it is a set of circumstances that any counsel could find themselves in, and it raises several great practice points that we want to consider.
There are always going to be times when there are outside forces at play in litigation. Public companies have to file 10-K reports about existing litigation, and there may be, as there was in this case, significant press coverage. Goodwill of companies depends on their response to customer complaints about a product that isn’t working as expected.
Nike is perhaps the most prominent employer in Oregon, and the allegations here are very serious. They are potentially very damning to the company, as well as to the women alleging the circumstances. Managing the press and what is said and what is disclosed as information is very critical to both sides. The point here is that as counsel you need to understand the gravity of these types of situations, and you need to tread very carefully and very thoughtfully. Based on what we see in this decision, counsel met with a reporter and agreed to provide documents that were already publicly available, but with references to where in those documents the allegations were made to support the declaration obtained by the reporter. That’s a slippery slope to go down as counsel and one you’ve got to be very, very careful with.
The other issue here was the timing with which counsel advised the Court. Counsel waited six days to advise the Court of the inadvertent disclosure and didn’t tell Nike at all. Nike found out when the motion was filed. That’s not the best approach. You’re going to make mistakes and you have to own them. Waiting, as we’ve seen multiple times here on Case of the Week, gets you in more hot water. Counsel lucked out here that the Oregonian did not publish anything more. Telling Nike, which has the resources to address these kinds of public relations issues, was critical here. I think it’s only the lack of publication by the paper that saved plaintiffs’ counsel from further sanctions.
If you are going to provide documents to a third party any time in litigation, and it is you who are subject to the protective order, you need to be the one to review them before they go out the door. Do not abdicate that responsibility, as you are the one who signed the protective order. You are the one on the hook. Counsel here, as the Court noted, should have reviewed that file that was put together before it went to the reporter. Now, I’m going to guess that she wishes she never talked to him in the first place, but hindsight is always 20/20.
So take what we can away from this decision and these mistakes that were made so that we can learn for going forward. We don’t learn a lot of these kinds of situations in law school. It’s really incumbent upon you as counsel, as an advisor to your client, to think about the totality of the circumstances involved in any situation. Yes, legal strategy is one piece of it, but there are other pieces that matter and should be incorporated into what your strategy is going forward.
This is a high-profile situation between who the parties are as well as the nature of the allegations. But the same principles apply to every case you have. You might be a family law lawyer with a high-profile client, or a manufacturer needing to protect its reputation in the community, or an individual who cannot risk having their name attached to a complaint. The point is that how you practice can have a dramatic effect on you, your clients, and on the other side. Don’t get so caught up in your schedule and moving things forward that you miss important details like reviewing this file before it goes out. It’s a really hard thing to avoid in today’s crazy world where we are expected to respond at a moment’s notice and to have as many irons in the fire as possible.
You’ve got to be able to step back. Make sure you’re thinking about all of the attributes of a particular situation and how best to proceed and what the potential consequences are.
In this situation, we’ve got a couple of key takeaways.
- Make sure you’re paying attention to what’s covered by a protective order and what information you’re providing, whether it’s to an expert, to a third party, to anyone.
- You need to understand timing. Make sure you’re informing people of inadvertent disclosure that needs to be made. We have to own our mistakes.
- Take time, take a breath, sit down, think about what are the consequences of sitting down with a reporter, of disclosing information to a third party. Do the benefits really outweigh the potential risks?
Conclusion
That’s our Case of the Week for this week. Thanks for joining me. Be sure to tune in next week, whether you’re watching us via our blog, YouTube, or downloading it as a podcast on your favorite podcast platform. Have a great week!
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