A Business Perspective on Local Civil Rule 5.3 and The Sedona Guidelines on Best Practices for Protective Orders, Confidentiality & Public Access in Civil Cases

Two recent developments in the federal courts in New Jersey have put confidential business information at risk.  The first development, the advent of electronic filing, allows instant access to the Court's dockets and filings. While civil court dockets were always available to the public absent a sealing order, there was no easy way to access dockets and search them without knowledge about a particular case or filing.  Now, with only a few computer mouse clicks, a business can "data mine" court dockets by searching for cases involving a competitor and then extracting confidential information from the filings. Once located, such sensitive information can be used surreptitiously or disseminated broadly, for example by placing it on the internet.

The second development is the amendment of Local Civil Rule 5.3, to require the filing of a motion each time a party seeks to restrict public access to confidential materials "filed with the Court or utilized in connection with judicial decision-making." While parties may still enter into a stipulated protective order to designate discovery documents as confidential for "good cause," these orders must be justified under criteria set forth in the Rule. Moreover, the entry of a protective order no longer guarantees that confidential documents will be protected from public access.  Now, each time a party seeks to prevent public access to confidential materials filed with the Court, for example in support of a motion to amend a complaint or for summary judgment, the party must file an independent motion to seal those materials.  Each such application will be scrutinized by the Court on a particularized basis to determine if there is a proper basis for maintaining the confidentiality of the information at issue. Accordingly, the outcome of any such application is uncertain at best.