Raymond A. Hinerman
Hinerman & Fahey
Weirton, West Virginia
Counsel for Petitioners
Scott W. Blass
Bachermann, Hess, Bachmann & Garden
Wheeling, West Virginia
Brian D. Sieve
Kirkland & Ellis
Counsel for Hitachi, Ltd., Inc.
Elba Gillenwater, Jr.
Seibert, Kasserman, Farnsworth,
Gillenwater, Glauser & Richardson
Wheeling, West Virginia
Counsel for Wheeling-Nisshin
JUSTICE WORKMAN Delivered the Opinion of the Court.
The following six-factor test should be applied in
determining whether there is "good cause" pursuant to Rule 26(c)(7)
of the West Virginia Rules of Civil Procedure to issue a protective
1. The extent to which the information is known outside of the defendant's business;
2. The extent to which it is known by employees and others involved in the defendant's business;
3. The extent of the measures taken by the defendant to guard the secrecy of the information;
4. The value of the information to the defendant and competitors;
5. The amount of effort or money expended by the defendant in developing the information; and
6. The ease or difficulty with which the information
could be properly acquired or duplicated by others.
Petitioners Eric Johnson and Sandra Johnson seek a writ of
prohibition to prevent the enforcement of a protective order issued
by the Circuit Court of Brooke County. Having determined that the
Honorable Callie Tsapis did not abuse her power in issuing a
protective order in the underlying products liability action, we
deny petitioners' request for a writ of prohibition.
As a result of a workplace injury sustained by Eric Johnson on
October 9, 1989, petitioners instituted a civil action on December
21, 1990, against respondents Wheeling-Nisshin, Inc., Mr. Johnson's
employer, and Hitachi, the manufacturer of the product which
allegedly caused Mr. Johnson's injuries. In their civil action,
petitioners alleged claims based on products liability and breach
of warranty. On April 5, 1991, petitioners served their first set
of discovery requests on Hitachi seeking work orders, blueprints,
technical bulletins, and other diagrams detailing the operation and
design of the squeeze roll which allegedly caused Mr. Johnson's
By letter dated April 26, 1991, Hitachi's counsel informed petitioners' counsel that he objected to producing documents responsive to the discovery requests prior to the entry of an appropriate protective order. Petitioners' counsel indicated to Hitachi's counsel that he did not normally object to protective
orders, but would like to see a proposed draft before further
comment. After reviewing the proposed protective order prepared by
Hitachi, petitioners' counsel stated by letter dated June 19, 1991,
that he would not approve the proposed protective order based on
his opinion that the order as drafted was "overly broad," but he
further indicated that he had "no problem at all with an Order that
briefly provides that your trade secrets and confidential
information shall remain confidential." In a subsequent letter
dated July 8, 1991, petitioners' counsel advised Hitachi regarding
the terms to which they would agree. Petitioners would
"acknowledge that there may be trade secrets or confidential
information which will be provided in the discovery process" and
that, following Hitachi's identification of such trade secrets or
confidential information, petitioners would agree that such
information be kept secure in the circuit court clerk's office.
When the parties could not resolve their disputes regarding
the terms of an appropriate order, Hitachi filed a motion with the
circuit court on August 9, 1991, seeking the court's entry of a
protective order. Following two hearings and the circuit court's
review of proposed orders submitted by petitioners and Hitachi, the
circuit court issued an order dated December 12, 1991, which
adopted verbatim the terms of the protective order drafted by
Hitachi. Petitioners seek to be relieved from compliance with the
protective order entered by the circuit court.
Like any well-drafted protective order, the order at issue
identified which documents or information could be categorized as
confidential and the procedure for designating such documents as
confidential. Consistent with cases involving trade secrets, the
order limited the use of materials designated as confidential to
the underlying lawsuit. Finally, the order provided a mechanism
for the parties to bring any objection regarding disclosure of
discovery materials to the circuit court for resolution.
Rule 26(c)(7) of the West Virginia Rules of Civil Procedure
provides for the issuance of a protective order restricting
disclosure of a party's trade secrets and other confidential
Upon motion by a party . . . and for good
cause shown, the court in which the action is
pending . . . may make any order which justice
requires to protect a party or a person from
annoyance, embarrassment, oppression, or undue
burden or expense, including . . . (7) That a
trade secret or other confidential research,
development, or commercial information not be
disclosed or be disclosed only in a designated
That restrictions may be placed on the use of confidential information disclosed through discovery is well-established.
Even when discovery is allowed, the
courts usually impose conditions intended to
protect the possessor of the asserted trade
secret from use of the secret for purposes
other than the litigation, and from wholesale
dissemination. Thus, the courts have limited
disclosure of the information obtained through
discovery to party's counsel and such others
necessary for preparation of the action.
4 James W. Moore et al., Moore's Federal Practice ¶ 26.60, at
26-214 to -215 (2d ed. 1991) (footnote omitted).
In seeking the writ of prohibition, petitioners rely primarily
on the "good cause" requirement of Rule 26(c). Specifically,
petitioners assert that Judge Tsapis entered the protective order
based solely on "the bald assertions of counsel." In response to
this contention, Hitachi posits that the court did not require an
evidentiary showing of "good cause" based on its position that
petitioners had previously conceded that "much of the information
they were seeking constituted trade secrets." Not having a
transcript reflecting the proceedings below, we are forced to make
a ruling as to the "good cause" showing based on the limited record
before us. In reviewing the procedural history of the protective
order and its eventual issuance, it appears to this Court that
there was little disagreement among the parties regarding the need
for a protective order for the purpose of protecting both trade
secrets and other confidential information pertaining to the
machinery which allegedly caused Mr. Johnson's injuries. From the
correspondence between the parties which has been made a part of
the record in this case, it is more than apparent that the terms of
the protective order rather than the need for its issuance was the
focus of the parties' dispute.
In deciding whether the circuit court had proper grounds for entering the protective order, we follow the court's decision in
United States v. International Business Machines Corp., 67 F.R.D.
40 (S.D.N.Y. 1975), [hereinafter referred to as I.B.M.] to rely on
the factors set forth in Section 757 of the Restatement of Torts as
a test for determining whether a protective order should be issued
with respect to commercial information which may rise to the level
of a trade secret. See id. at 46-47. Accordingly, the following
six-factor test should be applied in determining whether there is
"good cause" pursuant to Rule 26(c)(7) of the West Virginia Rules
of Civil Procedure to issue a protective order:
(1) the extent to which the information is
known outside of the defendant's business;
(2) the extent to which it is known by employees and others involved in the defendant's business;
(3) the extent of the measures taken by the defendant to guard the secrecy of the information;
(4) the value of the information to the defendant and competitors;
(5) the amount of effort or money expended by the defendant in developing the information; and
(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.
See I.B.M., 67 F.R.D. at 47.
While not submitted in evidence at the circuit court
proceedings, Hitachi has submitted the affidavit of one of its
engineers in an ex post facto attempt to show compliance with the
I.B.M. standard. The affidavit of Mr. Hitoshi Ohkoshi avers that:
(1) the design drawings and other information
Petitioners seek are not publicly available
and are not known to anyone outside of
Hitachi and Wheeling-Nisshin, both of whom are
required to maintain them in confidence;
(2) only a limited number of Hitachi personnel
know the contents of the documents at issue;
(3) Hitachi has taken numerous substantial, explicit, and costly steps to maintain the confidentiality of the documents in question;
(4) the information is of great economic value both to Hitachi and its competitors;
(5) Hitachi has expended considerable sums of money over the course of thirty years developing the information its seeks to protect; and
(6) the information in question cannot be acquired or duplicated by others without substantial expenditures of capitol and resources.
The information contained in the Ohkoshi affidavit addresses each of the elements of the six-part I.B.M standard which we have adopted as the test for the "good cause" requirement of Rule 26(c). The fact that this affidavit was not introduced in evidence in the proceedings below is of little or no moment since this Court remains firm in its opinion that the dispute brought to the circuit court centered not on the need for the issuance of a protective order, but on the terms of a protective order. Nonetheless, the Ohkoshi affidavit satisfies any lingering question that Hitachi has established the "good cause" prerequisite for obtaining a protective order.
As an additional ground for seeking a writ of prohibition, petitioners assert that the protective order as entered by the circuit court is burdensome. Petitioners' primary objection on the grounds of burden appears to be the aspect of requiring petitioners' expert witnesses to comply with the terms of the protective order. What petitioners are really complaining about is
the requirement that they first disclose to Hitachi the identity of
any expert witness whom they wish to provide access to information
which qualifies as confidential or super-confidential pursuant to
the protective order and the further requirement that the expert
witness not disclose such information nor make copies of such
information except as needed for trial purposes. The order seeks
to permit the identification of confidential and trade secret
information and to prevent that information from being disseminated
for use other than in connection with the underlying civil action.
Numerous courts have recognized the discretion imposed on a trial
court to place limitations upon the disclosure of trade secrets or
other confidential information. See 4 Moore et al., supra ¶ 26.75
at 26-486 to -488 and cases cited therein; Harris v. Amoco Prod.
Co., 768 F.2d 669, 684 (5th Cir. 1985), cert. denied, 475 U.S. 1011
(1986) (upon a showing of "'good cause,' the presumption of free
use dissipates, and the district court can exercise its sound
discretion to restrict what materials are obtainable, how they can
be obtained, and what use can be made of them once obtained").
While the protective order is unquestionably drafted in legalese
and is therefore more verbose than necessary, we find petitioners'
objection that the protective order is burdensome to be meritless.
In approving the protective order at issue, we note that the order provides a mechanism to resolve any disputes regarding whether a particular document is subject to the terms of the order. The order clearly states that upon objection by the non-producing
party, any dispute regarding disclosure is to be resolved by court
order. Having fully reviewed this procedural matter, we can find
no evidence that the circuit court abused its discretion in issuing
the protective order.
For the reasons stated in this opinion, the writ of
prohibition requested by petitioners is hereby denied.