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Commonwealth ex rel. Beshear v. Marathon Petroleum Co., LP

United States District Court, W.D. Kentucky, Louisville Division

May 23, 2017

COMMONWEALTH OF KENTUCKY, EX REL., ATTORNEY GENERAL, ANDY BESHEAR, Plaintiff
v.
MARATHON PETROLEUM CO., LP, Defendant

          MEMORANDUM OPINION AND ORDER

          Colin Lindsay, Magistrate Judge

         Introduction

         The parties are the Commonwealth of Kentucky (the “Commonwealth”), and Marathon Petroleum Company LP (“Marathon”). The Court held a telephonic status conference in this matter on May 12, 2017. Elizabeth Natter, Helen Maher, Michael Endler, Ronald Parry, and Andrew Downey appeared for the Commonwealth. Matthew Blickensderfer, Michelle Fischer, Tiffany Lipscomb-Jackson, and Theresa Canaday appeared for Marathon.

         During the conference, the Court inquired about the parties' joint motion for a protective order and their proposed agreed protective order. (See DNs 62 & 62-1.) In their motion, they acknowledged the Court's general hesitance in entering a protective order unless there is a good reason to do so. (DN 62.) The Court will grant in part and deny in part the joint motion.

         Legal Standards

         Rule 26 requires that motions for a protective order “include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action.” Fed.R.Civ.P. 26(c)(1) (emphasis added). Thus, under Rule 26, the Court can only grant a motion for a protective order when there is a dispute, and the movant has shown good cause. See id.

         Similar to Rule 26, Local Rule 37.1 says:

Prior to filing a discovery motion, all counsel must make a good faith effort to resolve extrajudicially any dispute relating to discovery. The Court will not entertain discovery motions unless counsel have conferred-or attempted to confer-with other affected parties in an effort to resolve their dispute. The moving party must attach to every discovery motion a certification that counsel have conferred and are unable to resolve their differences. The certification must detail counsel's attempts to resolve the dispute.

LR 37.1 (emphasis added).

         Discussion

         Together, the parties argue that entry of their proposed protective order is appropriate because discovery “may involve confidential or proprietary information” of Marathon or of third parties. (DN 62 ¶ 2.) They argue that a private agreement between the Commonwealth and Marathon to protect certain information “would not be practical and may not be effective in protecting this information from potential disclosure.” (Id.) Additionally,

As a public entity, the Commonwealth is subject to Kentucky's open records law (KRS 61.70 et seq.). If the Commonwealth receives an open records request that seeks the production of something exchanged in discovery, the Commonwealth may not refuse to produce it on the basis of a private agreement with the Defendant. As a result, entry of a protective order is necessary to ensure that discovery materials that warrant protection under applicable law and Fed.R.Civ.P. 26(c)(1)(G) receive that protection. Moreover, if a Protective Order is not entered, the Kentucky Circuit Court would need to rule on the confidentiality of discovery materials responsive to an open records request. Entering the Protective Order avoids the situation of two courts dealing with confidentiality issues arising from discovery in this case, and ensures that this Court, which will be more familiar with the issues, makes those determinations.

(Id.) Ultimately, without a Protective Order, they argue, this Court and the Kentucky Circuit Court could both be “involved in issues relating to protection of discovery materials in this action.” (Id. ¶ 8.) Altogether, good cause exists for the entry of their proposed protective order “to protect the Parties or other persons from annoyance, embarrassment, oppression, undue burden or expense.” (Id.)

         Analysis

         I.

         During the telephonic status conference, the Court noted its general disinclination to enter agreed protective orders. Almost by definition, a proposed protective order signed by both parties cannot comply with either Rule 26's or Local Rule 37.1's certification requirements.

         The Court asked the parties if they have a dispute. They agreed that even though they submitted a joint motion, they did so because they have a discovery dispute. In short, the Commonwealth seeks certain documents from Marathon, and Marathon will not disclose them without an agreement to keep the documents confidential. The Commonwealth says that its obligations as a public entity limit its ability to privately agree to keep documents confidential. The parties agree that this dispute has impeded their efforts to prepare for the July 12, 2017 settlement conference. Accordingly, the Court finds that the parties have shown that a discovery dispute exists between them, notwithstanding their joint motion.

         The parties described their extensive efforts in attempting to resolve this dispute between them without Court intervention. Those extensive efforts included seven or eight phone calls in which they conferred about potential solutions to their dispute. The proposed agreed protective order they jointly filed was the result of their extensive efforts to come to a resolution. They ask the Court to enter a protective order to resolve this dilemma and to expedite discovery as they prepare for the settlement conference.

         Specifically, the Commonwealth argued that an exception to the Open Records Act exists for “public records or information the disclosure of which is prohibited by federal law or regulation.” Ky. Rev. Stat. § 61.878(1)(k). Then, the Commonwealth argued that “federal law” under that statute includes Federal Rules of Civil Procedure. The Court finds that there is good cause for entry of a protective order because the Commonwealth has shown that a private agreement between the Commonwealth and Marathon may not be effective in resolving the parties' discovery dispute. Accordingly, the Court will enter a protective order in this matter, subject to the two exceptions that follow.

         II.

         First, in support of their joint motion, the parties cited Federal Rule of Evidence 502(d). (DN 62, ¶¶ 9 - 10.) They said a protective order is “necessary to afford the Parties the protection allowed under Federal Rule of Evidence 502(d).” (Id. ¶ 9.) They say, “Indeed, orders issued pursuant to Rule 502(d) have become common in complex civil litigation.” (Id.)

         Rule 502 applies “to the disclosure of a communication or information covered by the attorney-client privilege or work-product protection.” Fed.R.Evid. 502. Specifically, Rule 502(d) says, “A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court-in which event disclosure is also not a waiver in any other federal or state proceeding.” Fed.R.Evid. 502(d) (emphasis added). The parties included no case law on this rule.

         Rule 502(d) protects parties who unintentionally disclose information protected by the attorney-client privilege or work-product protection. Fed.R.Evid. 502. Its drafters intended Rule 502 to alleviate the costs of privilege review and retention. Fed.R.Evid. P. 502(d) advisory committee notes. The parties have not argued that entry of their proposed protective order is necessary to protect information protected by the attorney-client privilege or work-product protection. Nor have they shown that Rule 502(d) ...


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