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Grant Heilman Photography, Inc. v. Pearson Education, Inc.

United States District Court, E.D. Pennsylvania

May 29, 2018

GRANT HEILMAN PHOTOGRAPHY, INC. Plaintiff,
v.
PEARSON EDUCATION, INC. and JOHN DOE PRINTERS 1-10, Defendants.

          MEMORANDUM

          SCHMEHL, J.

         Defendant Pearson Education, Inc. (“Pearson”) moves to enforce the Protective and impose sanctions against Plaintiff Grant Heilman Photograhpy, Inc.'s (“GHP”) counsel Harmon, Seidman, Bruss & Kerr LLC (“HSBK”). Pearson alleges HSBK violated this Court's Protective Order. Pearson argues HSBK violated the Protective Order when HSBK, representing plaintiffs in the District of New Jersey, used confidential information that Pearson produced in the above-captioned case.[1] Pearson moves this Court to enforce the Protective Order and impose sanctions on HSBK and GHP. HSBK objects and argues the “use” of Pearson's information amounts to a technical or inadvertent violation of the Protective Order and does not warrant Pearson's extraordinary relief. (ECF Docket No. 117, at 1-2.) For the reasons that follow, Pearson's Motion to Enforce Protective Order and Impose Sanctions will be granted.

         I. BACKGROUND

         During this case, GHP - represented by HSBK - filed numerous documents containing Pearson's Confidential Information in support of GHP's Motion for Partial Summary Judgment; specifically, exhibits attached to Alex Kerr's Declaration.[2] Pearson moved to seal certain documents, including the exhibits attached in Alex Kerr's Declaration used in GHP's Partial Summary Judgment. (ECF Docket No. 72.) This Court granted Pearson's request and sealed the documents. On July 20, 2012, this Court entered a Protective Order under Federal Rule of Civil Procedure 26(c)(1)(G), which requires “a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.” Fed.R.Civ.P. 26(c)(1)(G). Pearson argues HSBK's use of the confidential information in Yamashita violates Paragraph 2 of the Protective Order:

[D]ocuments containing any party's non-public financial data; sales and marketing projections and/or forecasts; print quantities and dates, including the “print quantity report, ” and non-public internal process, procedure and systems shall be marked ‘CONFIDENTIAL, ' shall be used solely for the purpose of this litigation, and shall not be disclosed to any person except for the following individuals: (1) Attorneys actively working on this case and persons employed by or Case 5:11-cv-04649-JLS Document 40 Filed 07/19/12 Page 1 of 3 2 associated with them; (2) Witnesses and deponents of the disclosing party; (3) Judges, Magistrate Judges, law clerks and other personnel of this Court; (4) Court reporters recording or transcribing testimony; (5) Independent experts and persons employed by or associated with them who have been shown a copy of this Order and agree to be bound by it; (6) Parties in this action, including their employees or agents; and (7) Other persons agreed to in writing by and between counsel of record.

(ECF Docket No. 40, 1-2) (emphasis added).

         Currently, counsel for Pearson and counsel for GHP are involved in similar litigation in the District of New Jersey, Yamashita v. Pearson Education, Inc. In October 2017, counsel for Yamashita - HSBK - allegedly “used” the confidential information that Pearson produced in this case. (ECF Docket No. 114, 1-2.) The plaintiffs in Yamashita served supplemental Rule 26(a)(1) disclosures under Federal Rule of Civil Procedure 26(e), where plaintiffs, according to Pearson: “(1) identified Pearson's Confidential Information that Plaintiff had filed under seal in this action as information that Yamashita Plaintiffs had in their possession, custody, or control that they were using to support their claims in the Yamashita action; and (2) the Yamashita Plaintiffs purported to analyze Pearson's Confidential Information produced in this action in asserting that it supported certain of the Yamashita Plaintiff's claims.” (Id. at 2.)

         Pearson objects to HSBK's disclosure of Pearson's Confidential Information in the Yamashita litigation given the documents were expressly subject to this Court's Protective Order. According to Pearson, “[HSBK] affirmatively represented that these four documents filed under seal were in their possession, custody, or control and that they intended to use them to support their claims in the Yamashita action.” (ECF Docket No. 114, at 10.) Pearson moves to impose sanctions and asks this Court to: 1) order HSBK to identify all uses of Pearson's Confidential Information since the termination of this action; 2) require HSBK to retrieve and destroy any copies of Pearson's Confidential Information it has disseminated in violation of the Protective Order; 3) bar HSBK from making any further use of Confidential Information Person introduced in this action; 4) order HSBK and Plaintiff to destroy all Confidential Information Pearson produced in this action; and (5) award Pearson attorneys' fees and costs it incurred in connection with this Motion. (ECF Docket No. 114, at 2-3.)

         According to HSBK, it only identified and internally “used” the confidential information produced by Pearson in Yamashita, “but never intended to publicly reveal that information without (1) obtaining the information separately in discovery in Yamashita or (2) modifying the Protective Order to permit their use.” (ECF Docket No. 117, at 2.) Specifically, HSBK alleges it never disclosed information to the Yamashita plaintiffs themselves and never used the information in any public or sealed filing. (Id.) HSBK argues this dispute could have been avoided if Pearson “had not asserted unreasonable objections and refused to produce information in Yamashita” and “agreed that the information in this case could be used in Yamashita subject to the protective order.” (Id. at 3.) HSBK alleges the court in Yamashita directed Pearson to provide information concerning its use of Yamashita's photographs. (Id. at 5.) Pearson allegedly refused and HSBK, “to ensure that as many as possible of Yamashita's meritorious copyright claims would be resolved on the merits, ” disclosed the four confidential documents at the center of this dispute. (Id.) HSBK justifies its use of the four confidential documents claiming they are relevant to establish Pearson's pattern of infringement and identified “documents that might be used in the Yamashita litigation, pursuant to Fed. R. Civ. Pro. 26.” (Id. at 6.) HSBK argues the use or disclosure of Pearson's confidential documents is nothing more than a technical violation and should not be subject to extraordinary relief. (Id. at 13.)

         II. ANALYSIS

         Under Federal Rule of Civil Procedure 37(b)(2)(A)(vii), the court may find a party in civil contempt and impose sanctions if the party fails to obey a discovery order. Fed.R.Civ.P. 37(b)(2) (“treating as contempt of court the failure to obey any order except an order to submit to a physical or mental examination.”); see also DiGregorio v. First Rediscount Corp., 506 F.2d 781 (3d Cir. 1974) (“Rule 37(b)(2) . . . authorizes the imposition of sanctions, including dismissal of an action, against a party who fails to comply with a discovery order.”).

         In order to prove contempt, the moving party must show: “(1) a valid order of the court existed; (2) the opposing party had knowledge of the order; and (3) the opposing party disobeyed the order.” York Group, Inc. v. Pontone, 2014 WL 3811014, at *5 (W.D. Pa. 2014) (citing John T. ex. rel. Paul T. v. Del. Cnty., 318 F.3d 545, 552 (3d Cir. 2003)). But, the moving party is not required to show the violating party willfully violated the court order in order to establish civil contempt and “good faith is not a defense to civil contempt.” Id. (citing Robin Woods Inc. v. Woods, 28 F.3d 396, 400 (3d Cir. 1994)).

         While civil contempt sanctions are not punitive in nature, attorneys' fees may be awarded against a party held in contempt. Id. at 6 (citing John T., 318 F.3d at 554; Robin Woods, 28 F.3d 396 at 400). “Sanctions for civil contempt may be imposed to coerce obedience to a court order, or to compensate the party pursuing the contempt action for injuries resulting from the contemptuous behavior, or both.” General Signal Corp. v. Donallco, Inc., 787 F.2d 1380 (9th Cir. 1986). But, if the violating party has taken all reasonable steps to comply with the court's order, a technical or inadvertent violation will not support finding the party in civil contempt. Id. at 1376.

         GHP and HSBK were aware of the Protective Order and its application to Pearson's Confidential Information. Pearson argues GHP and HSBK were aware of this ...


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