UNITED STATES DISTRICT COURTEASTERN DISTRICT OF NEW YORK------------------------------------------------------x
For the Petitioner, Eli Lilly & Company:
PEPPER HAMILTON, LLP3000 Two Logan SquareEighteenth and Arch StreetsPhiladelphia, PA 19103BY:
SEAN P. FAHEYNINA M. GUSSACKGEORGE A. LEHNERANDREW R. ROGOFF
MCCARTER & ENGLISH245 Park AvenueNew York, NY 10167BY:
For the Respondent Alliance for HumanResearch Protection:
SHERMAN, SILVERSTEIN, KOHL,ROSE & PODOLSKY4300 Haddonfield RoadSuite 311Pennsauken, NJ 08109BY:
TED CHABASINSKI2923 Florence StreetBerkeley, CA 97405
SHERMAN, SILVERSTEIN, KOHL,ROSE & PODOLSKY4300 Haddonfield RoadSuite 311Pennsauken, NJ 08109BY:
ELECTRONIC FRONTIERFOUNDATION454 Shotwell StreetSan Francisco, CA 94110BY:
KOOB & MAGOOLAGHANSouth Street Seaport19 Fulton StreetNew York, NY 10038BY:
EDWARD W. HAYES, P.C. 515 Madison Avenue30th FloorNew York, NY 10022
JOHN MCKAY117 East Cook AvenueAnchorage, AK 99501
JOHN MCKAY117 East Cook AvenueAnchorage, AK 99501
TED CHABASINSKI2923 Florence StreetBerkeley, CA 97405
SHERMAN, SILVERSTEIN, KOHL,ROSE & PODOLSKY4300 Haddonfield RoadSuite 311Pennsauken, NJ 08109BY:
TED CHABASINSKI2923 Florence StreetBerkeley, CA 97405
LAURA ZIEGLERP.O. Box 722Montpelier, VT 05601PRO SE
JACK B. WEINSTEIN, Senior United States District Judge:
Table of Contents
B. Protective Order, Case Management Order No. 3.17
C. Agreement by Egilman to be Bound by Protective Order.20
D. Conspiracy of Berenson, Egilman, and Gottstein.21
H. Dissemination of Documents Pursuant to Conspiracy.27
2. Protectable Distributed Documents.29
I. Attempts by Special Master Woodin to Retrieve Documents .30
1. Argument Before Magistrate Judge Mann.31
2. Temporary Restraining Order by Judge Cogan.32
3. Order to Show Cause for Deposition of Egilman by Judge Weinstein.33
4. Evasive Actions of Enjoined Persons.34
5. Preliminary Injunction by Judge Cogan.35
6. Hearing on Permanent Injunction By Judge Weinstein.36
7. Invitation to Berenson to Appear by Judge Weinstein.37
A. Public Right of Access to Documents Produced in Discovery.45
4. First Amendment Implications of Protective Orders.53
3. Enjoining Dissemination of Stolen Protected Documents.58
A. The Documents are Properly Protected Under CMO-3.61
1. CMO-3 is a Valid Umbrella Protective Order.61
2. Documents Contain Information Protectable by Rule 26(c) and CMO-3.61
B. Court has Power to Order Return of Stolen Documents.63
C. Restrictions on Dissemination Do Not Violate First Amendment Rights.65
1. CMO-3's Restriction on Dissemination of Confidential Documents Does Not Implicate First Amendment Rights.65
2. The Injunction’s Restriction on Dissemination Does Not Impinge on First
D. Enjoining Persons Who Refuse to Return the Documents is Necessary to Prevent
E. Enjoining Persons Who Returned the Documents is Not Necessary to Prevent
G. All Named Persons are Bound by the Injunction.71
3. N.Y. Times, National Public Radio and Snighdha Prakash.73
7. Persons Who Have Not Returned the Documents.74
C. Lack of Appreciable Harm to Those Bound.77
This case raises intriguing questions of when it is appropriate to conduct aspects of civil
litigation in secrecy, and of what are appropriate limits on civil disobedience by newspaper
reporters, forensic experts, and attorneys.
Over the past two and a half years, some thirty thousand related personal injury suits
have been before this court as part of a large multidistrict litigation, and in state courts. People
suffering from schizophrenia were prescribed the anti-psychotic drug Zyprexa distributed by
defendant, Eli Lilly & Company (“Lilly”). Plaintiffs allege that as a result of inadequate
warnings by Lilly they became obese and suffered from diabetes.
The court ordered internal documents of Lilly sealed on consent of the parties so that
discovery could be expedited and the individual cases promptly settled or otherwise disposed of
on their merits. See In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596, 2004 WL 3520247
(E.D.N.Y. Aug. 9, 2004) (“Case Management Order No. 3" or “CMO-3") (hereinafter
“protective order”); see also Fed. R. Civ. P. 26(c)(7) (“the court . . . may make any order which
justice requires to protect a party or person from annoyance, embarrassment, oppression, or
undue burden or expense, including . . . . that a trade secret or other confidential research,
development, or commercial information not be revealed or be revealed only in a designated
way”); S.E.C. v. TheStreet.com, 273 F.3d 222, 229 (2d Cir. 2001) (“protective orders issued
under Rule 26(c) serve the vital function of securing the just, speedy, and inexpensive
determination of civil disputes by encouraging full disclosure of all evidence that might
conceivably be relevant”) (quotation omitted); Parts III.B and IV.A, infra.
Almost all of the cases have now been settled. Millions of documents obtained from
Lilly by the court-appointed Plaintiffs’ Steering Committees I and II (“PSC”) have been made
available to all plaintiffs’ attorneys in pending federal and state cases. See In re Zyprexa Prods.Liab. Litig., No. 04-MD-1596, 2006 WL 3495667, *3 (E.D.N.Y. Dec. 5, 2006) (“All materials
obtained by PSC I and PSC II in pretrial discovery have been ordered to be made available to all
plaintiffs, state and federal.”). A large number of documents supplied by Lilly are subject to
CMO-3; they are stamped, “Confidential - Subject to Protective Order.” Other documents
supplied by plaintiffs’ counsel involving medical records of individual plaintiffs have been
A New York Times reporter, Alex Berenson, was aware of the protective order. He
discussed with a plaintiffs’ expert, Dr. David Egilman, means of escaping the order’s restrictions
and obtaining protected documents in the expert’s possession, see Part II.D, infra, –– even
though Egilman had agreed in writing to be bound by the order. See Part II.C, infra.
Both Berenson and Egilman were cognizant of the fact that paragraph 14 of CMO-3 took
account of the possibility that the protected documents could be subpoenaed by courts or
executive agencies. So Berenson provided Egilman with the name of an Alaska attorney, James
Gottstein, unconnected to the instant litigation, who might be willing to employ a pretense to
subpoena the documents and help disseminate them in violation of the protective order. See Part
To carry out the scheme for obtaining and disseminating the protected documents,
Gottstein intervened in a state case in Alaska wholly unrelated to Zyprexa. In that case, he then
subpoenaed from Egilman confidential documents he knew to be under the protective order
which bore no relevance to the Alaska litigation. The subpoenaed documents were sent by
Egilman to Gottstein pursuant to an expedited amended subpoena about which Lilly was
deliberately kept in the dark so that it would be unable to make a timely objection. See Part II.E,
infra. Gottstein immediately sent the confidential documents on to Berenson and others. See
Parts II.E and II.H.1, infra.
None of the three conspirators, Berenson, Egilman, and Gottstein, sought a lifting or
modification of the protective order, despite the declassification procedures provided for in
paragraph 9 of CMO-3. See In re Zyprexa, No. 04-MD-1596, 2004 WL at *5.
Intending that they be published extensively, Gottstein distributed the sealed documents
to various organizations and individuals. No distribution to newspapers other than the New
York Times was made because of Berenson’s explicit warning to his co-conspirators that if the
Times was not given “an exclusive” on the story, it would not publish anything at all about the
documents. See Part II.H.1, infra.
Almost at once, the New York Times published excerpts from, and summaries of, the
protected documents in a series of lead articles under Berenson’s byline. See, e.g., Alex
Berenson, Eli Lilly Said to Play Down Risk of Top Pill, N.Y. Times, Dec. 17, 2006, at A1; Alex
Berenson, Drug Files Show Maker Promoted Unapproved Use, N.Y. Times, Dec. 18, 2006, at
A1; Alex Berenson, Disparity Emerges in Lilly Data on Schizophrenia Drug, N.Y. Times, Dec.
21, 2006, at A1; see also Part II.J, infra.
Upon being informed of the breach, the court ordered Gottstein to retrieve the documents
and return them to the court-appointed Special Master for Discovery. See In re Zyprexa Prods.Liab. Litig., No. 04-MD-1596, 2006 WL 3877528 (E.D.N.Y. Dec. 19, 2006). See Parts II.I and
Learning that some of the individuals to whom the conspirators had sent the documents
had refused to return them and were attempting widespread dissemination, the court issued a
preliminary injunction. It enjoined individuals and organizations who had received the
documents from Gottstein –– except for Berenson; Snighda Prakash of National Public Radio;
and congressional staffers Steve Cha and Amelia Desanto (none of whom had been included by
Lilly among those from whom it sought return) –– from further disseminating them.
The injunction also ordered specified websites not to publish the documents. See In reZyprexa Prods. Liab. Litig., No. 04-MD-1596, 2007 WL 27117 (E.D.N.Y. Jan. 4, 2007); Parts
II.K.5 and II.K.6, infra. The documents may possibly be available on other websites. Their gist
can be obtained from stories in the press. See, e.g., Alex Berenson, Eli Lilly Said to Play DownRisk of Top Pill, N.Y. Times, Dec. 17, 2006, at A1; Alex Berenson, Drug Files Show MakerPromoted Unapproved Use, N.Y. Times, Dec. 18, 2006, at A1; Editorial, Playing Down theRisks of a Drug, N.Y. Times, Dec. 19, 2006; Julie Creswell, Court Orders Lawyer to ReturnDocuments About an Eli Lilly Drug, N.Y. Times, Dec. 20, 2006; Alex Berenson, DisparityEmerges in Lilly Data on Schizophrenia Drug, N.Y. Times, Dec. 21, 2006, at A1.
A final injunction is now being issued against two of the conspirators –– Egilman and
Gottstein –– and others who have not returned the documents they obtained from Gottstein;
some of these individuals are mentioned in the court’s prior orders. See Parts IV.D and IV.H,
No newspaper or website is directed to do anything or to refrain from doing anything.
See Parts IV.F, IV.H.4, and IV.H.7, infra. No person is enjoined from expressing an opinion or
speaking or writing about the documents. See Part VII, infra.
A perplexing issue is presented by Lilly’s request for an injunction against websites to
which the conspirators sent the documents or which might have been used for further
dissemination by those to whom the documents were originally sent. See Part IV.F, infra. The
internet, with its almost infinitely complex worldwide web of strands and nodes, is a major
modern tool of free speech and freedom both here and abroad. Its reach extends as far as, and
perhaps exceeds, that of newspapers and other traditional media. The law is rightly hesitant
about allowing government –– including the courts –– to inhibit and restrict the use of such
modern instruments of communication. See U.S. Const. amend. I. Cf. Jeffrey S. Klein and
Nicholas J. Pappas, When a Private Sector Employer Fires Worker for Blogging, N.Y. L.J., Feb.
5, 2007, at 3 (pointing out that with over 60 million blogs in existence –– a blog being a type of
online diary posted to a website –– whistleblowing via the internet, on and off business and
government premises, is becoming increasingly common).
Irresponsible people may exercise their own right and opportunity to speak in a manner
abusive and constrictive of the rights of others on the internet, in the press, and in other fora.
Those whose rights have been abused by the conspirators in violation of the court’s protective
order include Lilly and tens of thousands of plaintiffs and their attorneys who depended upon
CMO-3 and sealing orders of the court to effectively prosecute this important litigation without
unnecessary breach of the parties’ privacy. It is significant that both the PSC and Lilly support
the issuance of the injunction now being issued.
Problems with restrictions by authorities on dissemination of knowledge are not new.
They trace back to the Garden of Eden and Socrates’ Athens. Most recently they were
manifested when people physically disrupted a meeting at Columbia University, preventing
speakers from exercising an opportunity to convey their views in an academic setting on a
controversial matter. Columbia’s President, Lee C. Bollinger, himself a student of free speech,
[T]he disruption of that event constituted a serious breach of faithagainst an academic community built on the freedom to think, speak,debate, and disagree. . . .[E]very idea poses a risk of action, for goodor bad. But what is hard to learn and hard to live by is the single ideathat words are the better way in which to work through conflict anddanger. This is certainly true for universities, but also for healthy,free societies. . . .
See Paul Hond, Fighting Words, Columbia, Winter 2006-07, p. 13, 16 (sidebar). Notably, in the
Columbia University case, the disrupters were sought out for discipline to prevent future
assaults on the freedoms of others. Id.
Orders for sealing of documents are designed to permit litigants and the courts to
examine a party’s internal records, which may include embarrassing personal medical
information, or valuable business secrets and commercial data, without unnecessarily exposing
them to the public’s and competitors’ view. See Fed. R. Civ. P. 26(c)(7); Parts III.B and IV.A,
infra. Cf. Nat’l Ass’n for Advancement of Colored People v. State of Ala. ex rel. Patterson, 357
U.S. 449, 462 (1958) (holding compelled disclosure of organization’s membership list
unconstitutional given “inviolability of privacy in group association”).
Such protective orders take account of the public’s interest in seeing the documents.
After balancing the public’s right to know and the parties’ privacy rights, should the documents
sealed by an order such as CMO-3 be found not to warrant continued protection, the order can
be modified. See, e.g., In re Agent Orange Prod. Liab. Litig., 104 F.R.D. 559, 572 (E.D.N.Y.
1985) (declassifying documents upon a showing “that the need for disclosure outweighs the
need for further protection”), aff’d 821 F.2d 139 (2d Cir. 1987). On motion of a party –– or of a
non-party –– who can demonstrate a need to know, sealed documents may be unsealed pursuant
to general policy and the terms of the protective order itself. See CMO-3 at ¶¶ 9, 16;Part IV.A,
infra; see also In re Agent Orange Prod. Liab. Litig., 821 F.2d 139, 145 (2d Cir. 1987) (“It is
undisputed that a district court retains the power to modify or lift protective orders that it has
entered.”); Monograph, Individual Justice in Mass Tort Litigation, 66-72 (1995); Aaron
Twerski, et al., Secrecy and the Civil Justice System, 9 J. of L. & Pol’y, 51, 51-107 (2000);
Note, Secrecy in Civil Trials: Some Tentative Views, 9 J. of L. & Pol’y, 53 (2000); Catherine
Wimberly et al., Secrecy in Law and Science, 23 Cardozo L. Rev. 1 (2001).
Conspirators in the instant case who deliberately thwarted a federal court’s power to
effectively conduct civil litigation under the rule of law, as well as those in concert with them,
should be enjoined to deter further violations of this and other courts’ orders. See Part IV.D,
infra. In a democracy it is important to craft any injunction as narrowly as possible so that in
protecting essential court processes free speech is not unnecessarily restricted. See Parts IV.E-
F, infra; Cf., e.g., Ronald L. Goldfarb, The Contempt Power, 3 (1963) (“The summary and
comparatively unlimited exercise of the [contempt] power compounds the danger to individual
freedom which its mere existence implies.”). But cf. id. at 89 (finding a “sound reason” to use
contempt power to prevent dissemination by the media of evidence which will be used at trial
because of adverse impact on the right to a fair trial).
Here, an expert hired by plaintiffs agreed in writing not to distribute documents sealed
by court order. See Part II.C, infra. He was given access to those documents so that he could
assist plaintiffs –– people suffering from serious disabilities, mental and physical –– in pressing
their civil suit against defendant, a major pharmaceutical company. The litigation resulted in an
enormous cache of documents made available, subject to CMO-3, to plaintiffs and courts ––
state and federal –– across the country. Tens of thousands of cases have been settled based on
these documents with the assistance of all the states and the federal government. See In reZyprexa Prods. Liab. Litig., No. 04-MD-1596, 2006 WL 3501263, at *1 (E.D.N.Y. Dec. 4,
2006) (“In compliance with this court’s instructions . . . all fifty states as well as the federal
government have resolved their Medicare and Medicaid liens.”); In re Zyprexa Prods. Liab.Litig., 451 F. Supp. 2d 458 (E.D.N.Y. 2006) (Memorandum Order & Judgment Regarding Liens
Egilman, in violation of his legal obligations, and in conspiracy with a reporter,
Berenson, and an attorney unconnected to the litigation, Gottstein, deliberately violated this
court’s protective order and published sealed documents, intending that they be widely
distributed. See Part II.D, infra. Conspirators Egilman and Gottstein took particular pains to
deny Lilly an opportunity to prevent the breach; they made the documents public before Lilly
could move to preclude their release, after they had in effect assured Lilly that it had time to
protect itself in court before any release would occur. Egilman, in violation of his obligations
under CMO-3, did not inform Lilly about a second subpoena procured by Gottstein that
contained an accelerated production date.
It is not necessary now to decide whether in the long run the public was better served by
this conspiracy to flout CMO-3 than by seeking direct and open revelation through amendment
of the court’s protective order. Even if one believes, as apparently did the conspirators, that
their ends justified their means, courts may not ignore such illegal conduct without dangerously
attenuating their power to conduct necessary litigation effectively on behalf of all the people.
Such unprincipled revelation of sealed documents seriously compromises the ability of litigants
to speak and reveal information candidly to each other; these illegalities impede private and
This is not a case of a government employee, whistleblower, protestor, or juror who
faces the difficult choice of "conform[ing his] behavior to the official 'law' while protesting that
the law was 'wrong' . . . or . . . conform[ing] to [his] interpretation" of the law, absorbing
whatever legal sanctions are a consequence of the choice. Robert M. Cover, The SupremeCourt, 1982 Term, Foreword: Nomos and Narrative, 97 Harv. L. Rev. 4, 47 (1983); see also,e.g., Mark Juergensmeyer, Gandhi vs. Terrorism, Daedalus, 30 (Winter 2007); Note,
Considering Jury “Nullification”: When May and Should a Jury Reject the Law to Do Justice,
30 Am. Crim. L. Rev. 239, 254 (1993) (“There is . . . a deep and profound sense of many
Americans that they have the duty to revolt in large and small ways. This is our ultimate
protection against tyranny and injustice. Nullification is one of the peaceful barricades of
freedom.”). For here, the "law," i.e. the protective order, contained an explicit means of escape
for those who believed they had a reasonable justification for not complying; the court reserved
the power to modify and declassify sealed documents in the public interest. See CMO-3 at ¶¶ 9,
16. In any event, the whistleblower or concerned citizen “defense” should be raised during
possible contempt, rather than injunction, stages of this proceeding.
Nor is this a case of a newspaper obtaining, with clean hands, documents provided to it
by government employees, whistleblowers, or protestors. See Smith v. Daily Mail Publ’g Co.,
443 U.S. 97, 103 (1979) (“[I]f a newspaper lawfully obtains truthful information about a matter
of public significance then state officials may not constitutionally punish publication of the
information, absent a need . . . of the highest order.”) (emphasis supplied). It is unlike NewYork Times Co. v. United States, 403 U.S. 713 (1971) (hereinafter “Pentagon Papers”). In the
Pentagon Papers case, there was no suggestion that the documents were purloined at the New
York Times’ or Washington Post’s instigation. Here, a reporter was deeply involved in the
effort to illegally obtain the documents. See Part II.D, infra. Affirmatively inducing the stealing
of documents is treated differently from passively accepting stolen documents of public
importance for dissemination. See III.D.3, infra. But see Bartnicki v. Vopper, 532 U.S. 514,
528-29 (2001) (noting that the issue has been left open). The New York Times itself appears to
recognize the distinction. See The New York Times, Ethical Journalism: A Handbook ofValues and Practices for the News and Editorial Departments, 9 (Sept. 2004) (“Staff members
must obey the law in pursuit of news. They may not break into buildings, homes, apartments,
or offices. They may not purloin data, documents or other property, including such electronic
property as databases and e-mail or voice mail messages. They may not tap telephones, invade
computer files or otherwise eavesdrop electronically on news sources. In short, they may not
commit illegal acts of any sort.”). But see Parts II.D. and II.K.7(b), infra (noting Berenson’s
and the Times’ position in the instant case).
In the United States the media is, in effect, the fourth branch of government. It enables
the people to knowledgeably exercise their sovereignty. But neither members of the media, nor
of any other branch of our government, are authorized to violate court orders. See Dietemann v.Time, Inc., 449 F.2d 245, 249 (9th Cir. 1971) (“The First Amendment has never been construed
to accord newsmen immunity from torts or crimes committed during the course of
newsgathering.”). Cf. Pentagon Papers, 403 U.S. at 733 (White, J. concurring) (“Prior
restraints require an unusually heavy justification under the First Amendment; but failure by the
Government to justify prior restraints does not measure its constitutional entitlement to a
conviction for criminal publication.”).
At this point in the litigation there is no need to measure the actions of the conspirators
against the ethics rules for journalists, forensic experts, or lawyers. Holmes’ punitive view of
the law prevails when a specific order of the court is deliberately flouted. See, e.g., John C.
Goldberg & Benjamin C. Zipursky, Seeing Tort Law from the Internal Point of View: Holmesand Hart on Legal Duties, 75 Ford. L. Rev. 1563 (2006) (discussing “morality,” Holmes’ “bad
man” rule, and Hart’s “internalization” view). It is enough to find that three individuals ––
Berenson, Egilman, and Gottstein –– conspired to obtain and publish documents in knowing
violation of a court order not to do so, and that they executed the conspiracy using other people
as their agents in crime. See Parts II.D–II.H, infra.
The injunction requires the return of the protected documents. See Parts IV.B and VIII,
infra. It is limited to individuals who participated in the conspiracy or aided the conspirators.
See Parts II.D-II.F, II.H, and VIII, supra. No one is restricted from discussion of documents
To extend the reach of the injunction further might involve the court in attempting to
control a constantly expanding universe of those who might have, or will have, access by reason
of the original breach. That such an amplified injunction could be enforced effectively is
doubtful. Even if enforcement were possible, on policy grounds the risk of unlimited
inhibitions on free speech should be avoided when practicable. See People of N.Y. v. OperationRescue Nat’l, 80 F.3d 64, 70 (2d Cir. 1996) (“in exercising its equitable powers, a court ‘cannot
lawfully enjoin the world at large’”) (quoting Judge Learned Hand in Alemite Mfg. Corp. v.Staff, 42 F.2d 832, 832 (2d Cir. 1930)). II. Facts
Litigation against Eli Lilly & Co. for injuries allegedly caused by the use of the anti-
psychotic drug Zyprexa was initiated in this court in March 2004. See Benjamin v. Eli Lily &Co., Docket No. 04-CV-00893. Many thousands of other cases were then transferred to this
court from federal district courts throughout the United States pursuant to an order of the
Judicial Panel on Multidistrict Litigation. See Letter from Multidistrict Litigation Panel to Clerk
of the Eastern District of New York, No. 04-MD-1596 (Apr. 14, 2004). In addition, there are
pending in state courts a considerable number of related cases. See In re Zyprexa Prods. Liab.Litig., No. 04-MD-1596, 2007 WL 160923 (E.D.N.Y. Jan. 18, 2007) (“Memorandum on
Cooperation Between Federal and State Judges”).
B. Protective Order, Case Management Order No. 3
To facilitate prompt discovery in these cases, a protective order agreed to and submitted
by the parties was issued in August 2004 pursuant to Rule 26(c) of the Federal Rules of Civil
Procedure. See In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596, 2004 WL 3520247, *1
(E.D.N.Y. Aug. 9, 2004) (stating purposes of protective order are “[t]o expedite the flow of
discovery material, facilitate the prompt resolution of disputes over confidentiality, adequately
protect confidential material, and ensure that protection is afforded only to material so entitled .
. .”). Preventing disclosures of documents served the added purpose of protecting a vulnerable
plaintiff patient population and avoiding prejudice of potential jurors in any jury trial. See Tr.
of Hr’g on Application to Issue CMO-3 (July 2, 2004) (magistrate judge Chrein: “material that
might be misunderstood by the lay reader . . . might do some harm or prejudge a case that is still
pending”). CMO-3 was signed by both the district judge and magistrate judge.
The protective order permits parties to designate as “confidential” materials produced in
discovery that the producing party believes in good faith are properly protected under Rule
26(c)(7) of the Federal Rules of Civil Procedure. CMO-3 at ¶ 3. All confidential documents
are required to be stamped, “Zyprexa MDL 1596: Confidential-Subject to Protective Order.”
Id. at ¶ 4(b). Once a document is so marked, it “shall be used by the receiving party solely for
the prosecution or defense of this Litigation, to the extent reasonably necessary to accomplish
the purpose for which disclosure is made.” Id. at ¶ 2.
Except with the prior written consent of the producing party, or in circumstances
described in paragraphs 6 and 14 of CMO-3, “no [c]onfidential [d]iscovery [m]aterials, or any
portion thereof, may be disclosed to any person.” Id. at ¶ 5. Parties are permitted to share
confidential materials with “outside consultants or outside experts retained for the purpose of
assisting counsel in the Litigation.” Id. at ¶ 6(i). An expert to whom disclosure is made must
“sign, prior to such disclosure, a copy of the Endorsement of Protective Order, attached as
Exhibit A” to CMO-3. Id. at ¶ 6(m).
Should a court or administrative agency subpoena the confidential discovery materials,
CMO-3 provides a specific procedure for the subpoenaed person to follow:
[T]he person to whom the subpoena . . . is directed shall promptlynotify the designating party in writing of all of the following: (1) thediscovery materials that are requested for production in the subpoena;(2) the date on which compliance with the subpoena is requested; (3)the location at which compliance with the subpoena is requested; (4)the identity of the party serving the subpoena; and (5) the case name,jurisdiction and index . . . number or other designation identifying thelitigation . . . in which the subpoena . . . has been issued. In no eventshall confidential documents be produced prior to the receipt of writtennotice by the designating party and a reasonable opportunity to object. Furthermore, the person receiving the subpoena or other process shallcooperate with the producing party in any proceeding relating thereto.
Paragraph 6 of CMO-3 describes thirteen situations, apart from the issuance of a
subpoena, where confidential documents may be disclosed to listed persons. When the person
receiving the confidential materials is a customer or competitor of the producing party, “the
party wishing to make such disclosure shall give at least three (3) business days advance notice
in writing to the counsel who designated such discovery materials as Confidential.” Id. at ¶ 6.
The terms “customer” and “competitor” are defined by the order. Id.
The designation of particular discovery material as confidential does not require that it
permanently remain subject to the protections of CMO-3. Rather, any party or aggrieved entity
(even if not a party) can petition the court for declassification of confidential discovery
If at any time a party (or aggrieved entity permitted by the Court tointervene for such purpose) wishes for any reason to dispute adesignation of discovery materials as Confidential made hereunder,such person shall notify the designating party of such dispute inwriting, specifying by exact Bates number(s) the discovery materialsin dispute. The designating party shall respond within 20 days ofreceiving this notification.
If the parties are unable to amicably resolve the dispute, the proponentof confidentiality may apply by motion to the Court for a ruling thatdiscovery materials stamped as Confidential are entitled to such statusand protection under Rule 26 of the Federal Rules of Civil Procedureand this Order, provided that such motion is made within forty five(45) days from the date the challenger of the confidential designationchallenges the designation or such other time period as the parties mayagree. The designating party shall have the burden of proof on suchmotion to establish the propriety of its Confidential designation.
If the time for filing a motion . . . has expired without the filing of anysuch motion, or ten (10) business days (or such longer time as orderedby this Court) have elapsed after the appeal period for an order of thisCourt that the discovery material shall not be entitled to Confidentialstatus, the Confidential Discovery Material shall lose its designation.
A petition for wholesale modification of the protective order is expressly permitted:
“Nothing in this Order shall prevent any party or other person from seeking modification of this
Order or from objecting to discovery that it believes to be otherwise improper.” Id. at ¶ 16.
C. Agreement by Egilman to be Bound by Protective Order
In August of 2006, The Lanier Law Firm (“Lanier”), representing plaintiffs in this
litigation, began consulting with Dr. David Egilman, M.D., M.P.H. Aff. of Richard D. Meadow
at ¶ 3 (January 2, 2007) (“Meadow Aff.”). Lanier decided in October of 2006 that Egilman’s
active involvement would assist plaintiffs. Before granting Egilman electronic access to the
document depository maintained by the PSC, the firm asked him to sign the “Endorsement of
Protective Order” attached to CMO-3. Id. at ¶¶ 4-5.
On November 10, 2006, Egilman signed the protective order after making numerous
deletions and edits to its text. The following line had been crossed out by him: “I also
understand that my execution of this Endorsement of Protective Order, indicating my agreement
to be bound by the Order, is a prerequisite to my review of any information or documents
designated as Confidential pursuant to the Order.” After the sentence reading “I further agree
that I shall not disclose to others, except in accord with the Order, any Confidential Discovery
Materials, in any form whatsoever, and that such Confidential Discovery Materials and the
information contained therein may be used only for the purposes authorized by the Order,” he
added the words “unless release is needed to protect public health.” Tr. of Hr’g on Preliminary
Injunction at 203 (January 16-17, 2007) (“Tr.”).
Lanier immediately informed Egilman that his amendments to the executed protective
order were unacceptable, and that he was required to sign an unamended copy of the order if he
wished to gain access to the confidential discovery documents. Id. at 205; Meadow Aff. at ¶ 6.
On November 14, 2006 Egilman signed a fresh Endorsement of Protective Order. The order was
unedited except for the addition of a clause after the line beginning “I further agree that I shall
not disclose to others . . .,” reading “unless this conflicts with any other sworn statements.”
When questioned by Richard Meadow of the Lanier Law Firm about why the addition of this
Dr. Egilman explained that if he were to be subpoenaed by the FDA orCongress, he wanted to ensure that the Protective Order would notpreclude providing testimony concerning Zyprexa. Since thatexplanation did not conflict with my [Meadow’s] understanding of thepurposes behind the Protective Order, nor did it conflict with myunderstanding that the Protective Order would not –– in any event ––have precluded such testimony by Dr. Egilman, and because Dr. Egilman assured me that he understood the Protective Order, [theLanier Law Firm] accepted this Protective Order [signed by Egilman]. Id. at ¶ 7; see also Tr. at 208, 221-22. Lanier did not inform Lilly about the addition Egilman
After he executed the Endorsement of Protective Order, Egilman was given access to the
PSC-maintained database of materials produced in discovery. The confidential materials
maintained in that database were stamped, as already noted, “Zyprexa MDL 1596: Confidential-
Subject to Protective Order.” See CMO-3 at ¶ 4(b).
D. Conspiracy of Berenson, Egilman, and Gottstein
About the time that Egilman was retained as a plaintiffs’ expert in the Zyprexa litigation,
he began discussing Zyprexa with New York Times reporter Alex Berenson. Berenson wanted
to review the confidential Zyprexa documents, which he knew were subject to this court’s
protective order. The two conferred about the possibility of obtaining the protected documents
Neither Berenson nor Egilman were aware of any pending case where the Zyprexa
documents were likely to be subpoenaed. To circumvent this barrier, Berenson suggested that
Egilman contact James Gottstein, an attorney in Alaska who heads the Law Project for
Psychiatric Rights (“PsychRights”). Tr. at 94-97. Gottstein had spoken to Berenson in the past
about drug-related news items. Id. at 95. Based on these conversations, Berenson believed that
Gottstein would be a willing ally in an attempt to avoid the court’s protective order by finding a
case which could be used as a pretense for subpoenaing the protected documents. Id. at 96
(Gottstein: “[Berenson] said that Dr. Egilman had some documents that he wanted to get to the
New York Times and that [Berenson] had, you know, thought that I might be someone who
would subpoena them.”). But cf. Tom Zeller, Jr., Documents Borne by Winds of Free Speech,
N.Y. Times, Jan. 15, 2007 (“[Gottstein] somehow got wind (and precisely how is the subject of
separate legal jujitsu) that Dr. Egilman had some interesting documents . . . . Mr. Gottstein was
also apparently in a sharing mood, which is how hundreds of pages ended up with a Times
On November 28, 2006, Egilman called Gottstein. See Tr. at 23. After telling Gottstein
that Berenson had suggested that Egilman contact him, Egilman indicated that he had access to
confidential Lilly documents pertaining to Zyprexa, and was in possession of those documents
subject to a protective order that precluded him from disseminating them.
Q: [Y]our understanding based on your conversation with Dr. [Egilman] was that he called you so that you could assist him indisseminating the documents that were subject to a protective order,right?
[Mr. Gottstein]: I think that is probably correct.
Egilman informed Gottstein that under the terms of the protective order the documents
could be produced pursuant to a subpoena if certain procedures were followed including
notifying Lilly. Id. at 24-30, 73-74 (Gottstein: “[Egilman] suggested that I subpoena [the
documents] . . . . I think because he thought they should become public.”). Gottstein asked
Egilman to send him a copy of the protective order, but according to Gottstein, “[Egilman] said I
didn’t want it and I didn’t push it . . . . My kind of sense of [Egilman’s reasoning] was that if I
didn’t have it, then I wouldn’t be charged with the knowledge of it.” Id. at 27-28.
Gottstein was not involved in any litigation in which it would have been appropriate to
subpoena the Zyprexa documents. Id. at 31-32, 76. He told Egilman, however, that he would try
to find a case in which it would be possible to justify a subpoena directed to Dr. Egilman. On
December 5, 2006, Gottstein filed intervention papers in a proceeding where the public guardian,
the Alaska Office of Public Advocacy, had been granted guardianship over an individual,
including the power to approve administration of psychotropic medications; the administration
of Zyprexa was not at issue. Id. at 33.
Pursuant to Gottstein’s request, the Alaska superior court ministerially and ex parte
issued a deposition subpoena in the guardianship proceeding on December 6, 2006 to Egilman
requiring him to participate in a telephonicdeposition on December 20, 2006 and “bring withhim” all documents in his possession relating to fifteen drugs, including Zyprexa. Id. at 34-35.
Egilman faxed a copy of this subpoena to Lilly’s General Counsel on December 6, 2006. He did
not notify the Lanier Law Firm, which had retained him as an expert, about the subpoena.
On December 11, 2006, Gottstein –– ex parte and without notice to Lilly –– procured an
“amended subpoena” that required Dr. Egilman to deliver the documents to Mr. Gottstein “priorto” his deposition on December 20, 2006. Gottstein emailed a copy of the second subpoena to
Dr. Egilman, asking him to “please deliver the subpoena’d [sic] materials to me as soon as you
Neither Egilman nor Gottstein informed Lilly, or Lanier, about the second subpoena or
Q: [Y]ou had told Dr. [Egilman] repeatedly that he should send thesecond subpoena to Lilly, correct?
Q: And you knew he planned not to send it to Lilly, correct?
[Mr. Gottstein]: Yeah, I think – he told me he didn’t see that it madeany difference.
Q: And you decided that it was not important for you to send thesubpoena to Lilly either, correct?
[Mr. Gottstein]: My . . . position is that it was his responsibility underthe CMO and not mine.
The excuse offered to justify the issuance of the second “forthwith” subpoena –– that
Gottstein needed to study the documents before the telephonic appearance of Egilman took place
–– was a subterfuge. Tr. at 47-48. Gottstein and Egilman deliberately misled Lilly and violated
the terms of CMO-3 by not informing Lilly about the second subpoena. Gottstein attempted to
Q: You moved the date of the production of documents up, correct?
[Gottstein]: Well, I mean, what it said was –– it’s like I put in the E-mail, it didn’t make any sense for him to bring the documents withhim in Attelboro, Massachusetts for me to try to examine them inAnchorage, Alaska. So I had an amended one that said to give it to meprior to the deposition and [to] give it to me as soon as he could so Iwould have a chance to review them before the deposition.
Q: When you issued the subpoena . . . you . . . said you needed thesubpoena . . . so that you could review the documents in advance of[Egilman’s] deposition, correct?
Q: And instead of reviewing the documents you start making copiesof them as soon as you received them, correct?
Q: And you proceeded to make copies for the next two days and sendthem out to the people on your and [Egilman’s] list, correct?
Q: This is the question I want to make clear. You were so busy[making] copies of these documents that you never got to reviewthem, did you?
[Gottstein]: I looked at some of them. The deposition was quite –– afew days off which is, I think, your complaint. So I would pull upsome of them and look at them and I –– and it wasn’t that I was sobusy making copies. I had my laptop burning DVDs and my maincomputer burning DVDs, another laptop . . . .
On December 13, 2006, Lilly contacted the Lanier Law Firm to discuss the first subpoena
issued to Dr. Egilman, the only subpoena about which Lilly had been informed. Upon
ascertaining that Lilly intended to file a motion to quash that subpoena in the Alaska Superior
Court, Richard Meadow of the Lanier Firm spoke to Egilman and instructed him “not to do
anything” in response to the subpoena until Lilly had a chance to address the Alaska court.
Egilman agreed, see Meadow Aff. at ¶ 9, although he had already begun the transfer to Gottstein.
The next day, December 14, 2006, Lilly sent a letter to Egilman and Gottstein, asking
“Dr. Egilman to refrain from producing [the confidential documents] and Mr. Gottstein to refrain
from further seeking production of the materials unless and until the Superior Court [of Alaska]
rules that production is required.” Egilman, as a signatory to the protective order, was further
asked to confirm to Lilly that he would refrain from producing the materials.
Unbeknownst to Lilly or Lanier, Egilman had already begun transferring the documents
to Gottstein on December 12, 2006, supposedly pursuant to the second subpoena, immediately
after that subpoena was issued. In response to Lilly’s letter of December 14th, Egilman wrote to
Lilly’s counsel that he had already produced the confidential documents that were subject to the
subpoena. Egilman stated his view that he had given Lilly a “reasonable opportunity to respond”
to the subpoena as required by CMO-3, and was therefore not in violation of his obligations
when he produced the documents six days (out of which three were business days) after he had
received the first subpoena. He did not address the question of why he never notified Lilly about
the second subpoena with its revised production date.
On December 15, 2006, after learning that Egilman had produced the documents to
Gottstein pursuant to a second subpoena about which Lilly had never been informed, Lilly wrote
to Gottstein, asking him to (1) identify the protected materials in his possession and return them
to Lilly, (2) refrain from further publishing or publicizing the protected materials, (3) request the
return of the materials from anyone to whom he had sent them, and (4) identify those individuals
to whom he had sent protected materials.
As soon as Lanier learned of Egilman’s disclosure of the confidential documents to
Gottstein, the firm demanded that Egilman return all Zyprexa-related documents in his
possession. It terminated his consultancy. Id. at ¶ 11; Tr. at 200.
H. Dissemination of the Documents Pursuant to Conspiracy
During their initial conversation in November 2006, Egilman told Gottstein that when he
eventually received the documents –– pursuant to a yet-to-be-procured subpoena issued in a yet-
to-be-determined case –– he should pass them along to certain individuals. That group included
Berenson of the New York Times, Steve Cha from the United States House of Representatives
Committee on Government Reform, United States Senate staffer Amelia Desanto, and Snighda
Prakash of National Public Radio. Id. at 35-37.
Q: Dr. Egilman understood that once [the documents] weresubpoenaed, that you were going to disseminate them to the individualsthat you later certified as having disseminated them to?
Q: Did he share with you anybody that he would like to have themdisseminated with?
As soon Egilman started electronically transferring the documents to Gottstein via
Gottstein’s file transfer protocol (“FTP”) server on December 12, 2006, Gottstein began sending
them to individuals to whom he thought they would be of interest. He had spoken with some of
these people beforehand to inform them that an arrangement to obtain and publish confidential
Lilly documents was underway. Id. at 57 (Gottstein: “Some people knew [the documents] were
coming”). That group included Berenson, Steve Cha, Vera Sharav, Will Hall, and Robert
On December 12th, 13th, and 14th, Gottstein provided DVDs containing the documents to
Berenson, as well as Dr. Peter Breggin, Steve Cha, Judi Chamberlin, Dr. David Cohen, Terri
Gottstein, Will Hall, Dr. Grace Jackson, Dr. Stephen Kruszewski, Snigdha Prakash, Vera
Sharav, Robert Whitaker, Bruce Whittington, James Winchester, and Laura Ziegler. Id. at 47-
Q: [Y]ou were anxious to get [the documents] out as quickly as youcould, right?
[Mr. Gottstein]: Anxious, yes, I thought it would be good to get themout.
Q: Before the Court could enter an order telling you you shouldn’t?
[Mr. Gottstein]: Well, I don’t know. I mean I guess . . . . I knew thatEli Lilly would want to try to stop it.
Q: Right, and you wanted to get them out as quickly as you could tomake that harder?
[Mr. Gottstein]: Well, I would say yeah, I wanted to get them out [ina] way that would make it impossible to get them back. Id. at 48-49. To simplify and hasten co-conspirator Berenson’s review and use of the
documents, Gottstein had provided Berenson with a password to Gottstein’s personal FTP server
on which he had electronically posted the documents.
Gottstein and Berenson spoke to each other repeatedly during the week of December
12th. Id. at 99. Berenson urged Gottstein not to send the documents to any news or media
outlets, because he wanted to ensure that the New York Times would have a “scoop” on the
story. Id. at 82-83. He threatened that the Times would not write about the Zyprexa documents
if any news organization published a story based on them before the Times printed its first
article. Id. at 83 (Gottstein: “[Berenson] said basically that if anybody else breaks it, they are not
Because he wanted a newspaper with an outstanding national reputation such as the New
York Times to publish the documents, Gottstein acceded to Berenson’s request. Id. at 82-83
(Gottstein: “[T]here were other news outlets that I was going to send them to. And I ended up
not doing that . . . . [t]o accommodate the New York Times’s desire to break the story.”).
Egilman agreed with the decision to refrain from sending the documents to any other news
organizations until Berenson was able to break the story. Id. at 83.
2. Protectable Distributed Documents
The court has examined a sampling of the documents distributed by the conspirators. It
has viewed portions of the materials returned to the Special Master for Discovery, Peter Woodin,
pursuant to his and the court’s orders. Among them are a substantial number whose publication
would be annoying, embarrassing, oppressive, and burdensome to Lilly; they reveal trade
secrets, confidential preliminary research, development ideas, commercial information, product
planning, and employee training techniques. See also, e.g., Alex Berenson, Eli Lilly Said to PlayDown Risk of Top Pill, N.Y. Times, Dec. 17, 2006, at A1; Alex Berenson, Drug Files ShowMaker Promoted Unapproved Use, N.Y. Times, Dec. 18, 2006, at A1; Editorial, Playing Downthe Risks of a Drug, N.Y. Times, Dec. 19, 2006; Alex Berenson, Disparity Emerges in Lilly Dataon Schizophrenia Drug, N.Y. Times, Dec. 21, 2006, at A1.
These documents are covered by CMO-3. They are included within the kind of
documents protectable under Rule 26(c) of the Federal Rules of Civil Procedure. See Part IV.A,
A small portion of the documents disseminated have been, or may be, declassified under
CMO-3. Lilly has taken steps towards declassifying them. See Pet’r Br. at 12 n.10 (“Prior to
this dispute, Lilly had de-designated following [sic] bates ranges, each of which is among those
at issue here: [listing bates ranges]”).
I. Attempts by Special Master Woodin to Retrieve Documents
On December 15, 2006, Lilly informed the Special Master for Discovery, Peter
Woodin, that confidential documents subject to CMO-3's protection had been disseminated
pursuant to a subpoena of which Lilly had never been notified. Lilly and the PSC jointly
requested that the Special Master issue an order requiring return to him by Gottstein of the
After trying unsuccessfully to reach Gottstein by telephone, Special Master Woodin
issued the order requested by the parties. A copy of that order was emailed to Gottstein by the
Special Master. Upon receiving it, Gottstein replied that he had voluntarily ceased disseminating
the documents after reading Lilly’s faxed letter of December 15th. See Part II.F, supra. He
objected to the ex parte nature of the order, and questioned both this court’s jurisdiction over
him and Special Master Woodin’s authority to issue such an order. Gottstein informed Berenson
about the Special Master’s order, but made no further efforts to comply with its terms. Tr. at
On December 17, 2006, the New York Times began publishing front page articles under
Berenson’s byline about information contained in the confidential Lilly documents. See Alex
Berenson, Eli Lilly Said to Play Down Risk of Top Pill, N.Y. Times, Dec. 17, 2006, at A1; Alex
Berenson, Drug Files Show Maker Promoted Unapproved Use, N.Y. Times, Dec. 18, 2006, at
A1; Alex Berenson, Disparity Emerges in Lilly Data on Schizophrenia Drug, N.Y. Times, Dec.
21, 2006, at A1; see also Editorial, Playing Down the Risks of a Drug, N.Y. Times, Dec. 19,
2006; Julie Creswell, Court Orders Lawyer to Return Documents About an Eli Lilly Drug, N.Y.
Since Gottstein had not complied with Special Master Woodin’s order by December 18th
–– although Gottstein had provided a lengthy response to the order detailing some of the facts of
his collaboration with Egilman and suggesting jurisdictional objections –– Lilly and the PSC
jointly petitioned the court for an injunction requiring Gottstein to return the documents. 1. Argument Before Magistrate Judge Mann
The parties first sought an injunction from magistrate judge Mann. At the hearing the
magistrate judge made the following comment:
I think that what happened here was an intentional violation ofJudge Weinstein’s orders. I think it was inappropriate . . . .
I personally [as a magistrate judge, without authority to grantinjunctive relief] am not in a position to order you [Gottstein] toreturn the documents. I can’t make you return [the documents], but
I can make you wish you had because I think this is highlyimproper not only to have obtained the documents on short noticewithout Lilly being advised of the amendment but then todisseminate them publicly before it could be litigated. It certainlysmacks [of] bad faith.
Tr. of Hr’g on Preliminary Injunction at 10 (Dec. 18, 2006). 2. Temporary Restraining Order by Judge Cogan
On the basis of Judge Mann’s findings, the parties brought their request for an injunction
on December 18th to Judge Cogan, who, as emergency judge, acted in the absence of Judge
Weinstein. After hearing from Lilly, the PSC, and Gottstein through his counsel, Judge Cogan
issued a temporary restraining order based upon his finding that “Mr. Gottstein has deliberately
and knowingly aided and abetted Dr. David Egilman’s breach of CMO-3.” See In re ZyprexaProds. Liab. Litig., No. 04-MD-1596, 2006 WL 3877528, *1 (E.D.N.Y. Dec. 19, 2006). Judge
I think it’s clear not only that the facts are as stated in the Magistrate’sreport and recommendation, but I can tell from the December 17thdraft letter from Mr. Gottstein that he was aware that these documentswere restricted, and that he undertook procedures to help the expert,Mr. Egilman, try to circumvent the restrictions that were on him. Hedeliberately aided and abetted Dr. Egilman in getting these documentsreleased from the restriction that they were under, under the protectiveorder. He knew what he was doing, and he did it deliberately. Thoseare my findings, and it’s on that basis that I grant the relief.
Tr. of Hr’g on Preliminary Injunction at 19-20 (Dec. 18, 2006).
Gottstein was ordered not to further disseminate the documents; to return them to Special
Master Woodin; to provide a list of all individuals and organizations to whom he had sent them;
to identify to Special Master Woodin which of the confidential documents he passed on to other
individuals; to take steps to retrieve them; and to preserve all communications relating to them or
Egilman. In re Zyprexa, supra, 2006 WL 3877528.
Over the next few days, Gottstein took steps to comply with the terms of the court’s
order. He emailed or called each of the people to whom he had sent the documents informing
them of the court order and asking that the documents be returned to Special Master Woodin.
Tr. at 101-02. Those individuals included: Dr. Peter Breggin, Steve Cha, Judi Chamberlin (of
MindFreedom International), Dr. David Cohen, Terri Gottstein, Will Hall, Dr. Grace Jackson,
Dr. Stephen Kruszewski, Snigdha Prakash, Vera Sharav (of the Alliance for Human Research
Protection), Robert Whitaker, Bruce Whittington, James Winchester, and Laura Ziegler. See
On December 21, 2006, Gottstein issued a written certification stating he had complied
with the terms of Judge Cogan’s injunction. Dr. Peter Breggin, Dr. Grace Jackson, Dr. Stephen
Kruszewski, Bruce Whittington, Laura Ziegler, and the House Committee on Government
Reform (through Congressman Henry Waxman, for Steve Cha) returned the documents they had
received from Gottstein to Special Master Woodin. See Letter of Rep. Henry A. Waxman (Dec.
21, 2006); Letter of Special Master Woodin (Feb. 1, 2007). Gottstein also retrieved the copies
he had given to Terri Gottstein, Jerry Winchester, and Will Hall and sent them to the Special
Master. See id. Berenson, Dr. David Cohen, Judi Chamberlin, Vera Sharav, Robert Whitaker,
and Snighda Prakash have not returned their copies of the confidential documents. At the court’s
direction, Ms. Sharav gave her attorney the DVDs containing her copies of the documents to be
held in escrow. Tr. at 194; see Part IV.H.8, infra.
3. Order to Show Cause for Deposition of Egilman by Judge Weinstein
On December 26, 2006, Lilly petitioned for an order requiring Egilman to show cause
why he should not submit to a deposition and produce documents relating to his possession and
dissemination of the confidential Zyprexa documents. A hearing was held on December 28,
2006 by Judge Weinstein at which Egilman was ordered to be deposed within five days and to
Egilman began producing documents to Lilly on January 1, 2007. An as-yet-unresolved
question is whether this production has been complete.
Egilman has invoked what he claims to be a Fifth Amendment privilege against self-
incrimination. See Letter of Edward W. Hayes (Jan. 23, 2007). He has neither been deposed nor
4. Evasive Actions of Enjoined Persons
Individuals to whom Gottstein sent the documents began devising schemes to evade court
orders to return the documents even before any such orders had been issued. In an email dated
December 16, 2006, Robert Whitaker wrote to Gottstein: “I would consider building a website
that would, ahem, make all the documents available. What could they do to me? And how could
they know how the documents got to me? There are several channels apparently that could be
the source. You should proceed now in whatever way makes it easiest for you, and let others
worry about getting this information out or making it public.” Pet’r Findings of Fact, supporting
On December 29, 2006, Lilly learned that despite Gottstein’s communication of the
court’s order requesting the documents’ return by those to whom Gottstein had sent them, some
recipients had declined to comply and were attempting to widely distribute the documents. In
particular, MindFreedom, an organization whose board of directors includes Judi Chamberlin,
Tr. at 236, to whom Gottstein had sent the documents in his attempt to “get [the documents] out
[in a] way that would make it impossible to get them back,” id. at 49, was attempting widespread
David Oaks, the Director of MindFreedom, sent an email alert to the organization’s
members informing them of a “grassroots internet campaign” to disseminate the documents. See
Pet’r Findings of Fact, supporting ex. 24. The email, which included a link to a website from
which the documents could be downloaded, was sent on December 25, 2006. According to this
message, the organization was “counting on the fact that many courts are closed today.” Id. Eric
Whalen, a member of MindFreedom, made the documents available for downloading at the
After the preliminary injunction was issued on December 29, 2006, several of the
enjoined persons continued their efforts to ensure that the documents remained publicly
accessible. In an email exchange on January 2, 2007 among Robert Whitaker, Vera Sharav, Will
Hall, David Oaks, and Gottstein, Whitaker offered his gratitude to those who had helped
disseminate the documents notwithstanding court orders prohibiting them from doing so:
“[K]udos should go to others who have helped get this information out – Will Hall, David Oaks,
Vera Sharav, MindFreedom. This is a fight very much worth fighting.” See Pet’r Findings of
Fact, supporting ex. 28. Sharav responded, “It’s important to keep track of where/when the
documents may surface again on cyberspace and let people know.” Id. (emphasis supplied).
Will Hall added, “what a great new years gift . . . massive eli-lilly psych drug scandal.” Id.
5. Preliminary Injunction by Judge Cogan
Lilly and the PSC jointly applied for an injunction ordering the people who had received
the documents directly from the conspirators (omitting, however, Berenson and the New York
Times) to refrain from disseminating them. On December 29th, a preliminary injunction was
issued by Judge Cogan barring Terri Gottstein, Jerry Winchester, Dr. Peter Breggin, Dr. Grace
Jackson, Dr. David Cohen, Bruce Whittington, Dr. Stephen Kruszewski, Laura Ziegler, Judi
Chamberlin, Vera Sharav, Robert Whitaker, and Will Hall from disseminating the documents,
requiring that they remove the documents from any website to which they had posted them, and
instructing them to communicate the terms of the order to anyone to whom they had sent the
documents. In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596, 2006 WL 3923180, *1
After receiving notice of the injunction, Vera Sharav put the following message on
See the court injunction several of us received below but the internetis an uncontrolled information highway. You never know where andwhen the court’s suppressed documents might surface. Thedocuments appear to be downloadable at [two websites for which theaddresses are provided].
6. Hearing on Permanent Injunction by Judge Weinstein
The December 29, 2006 preliminary injunction issued by Judge Cogan expired by its
terms on January 3, 2007, on which date a hearing was commenced by Judge Weinstein to
consider whether the injunction should be extended or modified. The parties who were present
–– Lilly, the PSC, Terri Gottstein and Judi Chamberlin –– agreed to extend the preliminary
injunction until January 16, 2007, at which time a full evidentiary hearing would be held. Tr. of
Preliminary Injunction Hr’g at 15-18 (Jan. 3, 2007).
On January 4, 2007, at Lilly’s request, Judge Weinstein expanded the enjoined parties to
include two organizations –– MindFreedom and AHRP ––, five websites –– www.joysoup.net,
www.mindfreedom.org, www.ahrp.org, www.ahrp.blogspot.org, and zyprexa.pbwiki.com ––,
and one individual, Eric Whalen, all of whom were allegedly attempting to disseminate the
confidential documents. Id. at 18, 28-30; In re Zyprexa Prods. Liab. Litig., No. 04-MD-1596,
2007 WL 27117, *1 (E.D.N.Y. Jan. 4, 2007). On January 12, 2007, Lilly indicated to the court
its intent to initiate contempt proceedings against both Egilman and Gottstein.
The scheduled evidentiary hearing was held on January 16 and January 17, 2007. All
enjoined parties, with the exception of Jerry Winchester, Dr. Peter Breggin, Dr. Grace Jackson,
Dr. Stephen Kruszewski, Laura Ziegler, Will Hall, Eric Whalen, and the five websites, were
represented at the hearing. Counsel for “John Doe,” an anonymous person who yearned to post
the documents on the enjoined website zyprexa.pbwiki.com, was present.
Lilly called four witnesses: James Gottstein, Richard Meadow of the Lanier Law Firm,
Vera Sharav, and David Oaks. No other party called witnesses. The witnesses were allowed to
be cross-examined by attorneys for each of the parties, including Egilman.
On January 16, 2007, the expanded preliminary injunction of January 4th was extended
until there was a decision on the motion for a permanent injunction. In re Zyprexa Prods. Liab.Litig., No. 04-MD-1596, 2007 WL 160925, *1 (E.D.N.Y. Jan. 16, 2007) (“The temporary
mandatory injunction issued on January 4, 2007 is extended until the court rules on the motion to
modify the injunction which is currently pending.”).
7. Invitation to Berenson to Appearby Judge Weinstein
Berenson had not appeared in these injunction proceedings. To allow him to appear and
confront the evidence of conspiracy offered against him at the January 16-17, 2007 hearing, the
court invited him to appear and testify as to his involvement. See In re Zyprexa Prods. Liab.Litig., No. 04-MD-1596, 2007 WL 276185 (E.D.N.Y. Jan. 29, 2007).
The invitation issued to Berenson in the form of an order is set forth below:
Alex Berenson, reporter for the New York Times, is invited to voluntarily appearon February 7, 2007 at 10:00 a.m. in the Federal Courthouse, 225 Cadman PlazaEast, Brooklyn, New York, Courtroom 10B South, to explain the circumstancesof his obtaining documents sealed by the court. If Mr. Berenson chooses toappear, he may be accompanied by his attorney, will be sworn, and will be subjectto cross-examination.
This invitation is intended to permit Alex Berenson to confront testimony
received at a hearing in this court on January 16-17, 2007 implicating him in aconspiracy to obtain and publish confidential documents sealed by this court.
The attention of Mr. Berenson is directed to the following portions of a
transcript of the January 16-17, 2007 hearing. References to “Gottstein” are toJames Gottstein, an attorney in Alaska who allegedly forwarded documentsreceived from Dr. David Egilman to Mr. Berenson. Dr. Egilman was a plaintiffs’expert who had agreed not to violate this court’s order sealing these documents,but who then sent them to Mr. Gottstein, who in turn transmitted them to Mr. Berenson and others.
Q [attorney for Eli Lilly & Company]: . . . Did youever have communications with Dr. Egilman betweenthe time that you received the documents andDecember 17 when the New York Times published aportion?
A [Gottstein]: Did I have communications with Dr. Egilman?
A: I think most of it was around the New York Times
story and their desire to have – to break it.
The Court: You say their, who do you mean?
A: The New York Times desire to be able to break thestory.
I mean there were other news outlets that I was goingto send them to. And I ended up not doing that.
A: To accommodate the New York Times’s desire tobreak the story. Q: Who communicated that desire?
A: Well, Alex Berenson called me about that.
A: He said basically that if anybody else breaks it,they are not going to run the story.
Q: So what? Why was that important to you?
A: Well, because I think the New York Times ismaybe the best place to have had this happen from myperspective.
Q: And from Dr. Egilman’s perspective also?
A: I think he wanted the New York Times to be thefirst to publish it.
A: Because he wanted me to not send it to other newsoutlets.
Q: What did he tell you about why you shouldn’t sendit to other news outlets?
A: Basically, the same thing, that the New YorkTimes wouldn’t run it if someone else broke it.
Tr. of Hr’g, 81-83 (January 17, 2007).
Q: . . . . Before you talked to Dr. Egilman onNovember 28, did you have any discussions withAlex [Berenson] about the Zyprexa documents in thislitigation?
Q: After that conversation with Dr. Egilman onNovember 28th, how soon after that conversation didyou start to have communications with Alex Berensonabout the Zyprexa documents?
Q: How did that communication start? Did you callhim or did he call you?
Q: And how did he get your name, do you know?
A: Do I know how? I think that he was independentlyaware of what I was doing.
Q: How do you think he became independently awareof what you were doing?
A: I believe that I had e-mailed him before.
A: Maybe earlier in the year or a couple of years agosometime because I had been trying to get publicityabout this stuff for years really. So I made contactswith a lot of reporters and I believe that I hadcontacted Mr. Berenson before.
Q: What caused him to call you three days after yourconversation with Dr. Egilman?
A: This would be around what? The second ofDecember or something?
A: What caused him to call me? . . . . I think he wasworking on a story on this.
Q: Why did he call you? What did he tell you whenhe called you?
A: He told me that he had given Dr. Egilman myname.
Q: Alex Berenson had given Dr. Egilman your name?
Q: Is that how Dr. Egilman came to contact you onNovember 28?
Q: And you said that he had told you that he hadgiven Dr. Egilman your name. Help me understandthat. What did he say?
A: He said that Dr. Egilman had some documents thathe wanted to get to the New York Times and that hehad, you know, thought that I might be someone whowould subpoena them.
Q: . . . . Alex Berenson told you that Dr. Egilman
thought you would be someone who would help him,meaning Dr. Egilman, get the Zyprexa documents tothe New York Times, right?
A: Well . . . . what I said was that he thought I wassomeone who might subpoena the documents.
Q: And so how – so Alex Berenson gives Dr. Egilmanyour name, correct, that’s what he said?
Q: Then Dr. Egilman calls you on November 28 andsays I have some documents you might want tosubpoena, right?
A: Did he say that exactly? I think that’s the importof it.
Q: And did the two of you when you were talking onNovember 28 talk about this relationship you bothhad with Alex Berenson?
A: I may have mentioned that I tried to contact himbefore, that I might have tried to contact him before.
Q: Did you tell Dr. Egilman that you had spoken withAlex [Berenson] and that you understood that he hadgiven Dr. Egilman your name?
A: Yes, I think at some point that was communicatedone way or another.
Q: . . . . But . . . you learned that [Dr. Egilman callingyou] was not out of the blue, it was actuallyorchestrated by Dr. Egilman and Alex Berenson,right?
A: Well, I don’t know how that is inconsistent withwhat I wrote in my letter. It was out of the blue.
Q: It was out of the blue for you, right?
Q: But it was not out of the blue for Dr. Egilman orAlex Berenson?
A: So I mean out of the blue –– I mean –– it seemedthat –– it’s like I said, what Alex Berenson told mewas that he had told Dr. Egilman that I might besomeone who would subpoena the documents so Idon’t know where out of the blue comes into that.
Q: After the conversation that you had with Dr. Egilman on November 28, you agreed to subpoena thedocuments, correct?
A: Yes. Well, to at least try to. To try and find a caseto do that.
Q: Okay. And you continued to communicate withAlex Berenson prior to your receipt of the documentsrelating to the articles that he was planning or hopingto write about Zyprexa, correct?
Tr. of Hr’g, 95-99 (January 17, 2007).
Lilly shall forthwith serve a copy of this invitation on Alex Berenson,
together with all papers filed in the current proceedings to obtain an injunction,including the full transcript of the January 16-17, 2007 hearing. Copies of thisorder, but not the accompanying papers, shall be served by Lilly via fax, email, or
mail on all attorneys who appeared at the January 16-17, 2007 hearing. In re Zyprexa Prods. Liab. Litig., 2007 WL 276185 (E.D.N.Y. Jan. 29, 2007).
By letter dated February 5, 2007, the New York Times responded on behalf of Berenson
Hon. Jack B. WeinsteinUnited States District CourtEastern District of New York225 Cadman Plaza EastBrooklyn, New York 11201
Re: In re Zyprexa Products Liability Litigation 04-MDL-1596Dear Judge Weinstein:
I write in response to your Invitation and Order of January 29, 2007
(“1/29 Order”) which, in accordance with Your Honor’s instructions, was providedto us by counsel for Eli Lilly, together with other materials pertinent to the motionfor a preliminary injunction now pending before the Court.
We have reviewed the materials forwarded to us by counsel and most
particularly the 1/29 Order and understand that there has been testimony presentedto the Court by others concerning their perceptions of the circumstances that gaverise to The New York Times’s receipt of certain materials referenced in a series ofarticles published in the Times over the course of the last several weeks concerningZyprexa and the controversy concerning it. On behalf of The Times and AlexBerenson, I would like to thank the Court for offering Mr. Berenson the opportunityvoluntarily to appear before the Court and, in Your Honor’s words, to “confront[that] testimony.”
We know that Your Honor will appreciate the reasons that lead us to decline
your invitation. As a matter of long-held principle, we believe that it would be
inappropriate for any of our journalists voluntarily to testify about news gatheringat the Times, our reporters’ communications with their sources or the editorialjudgments that are made in deciding what is and what is not published by the Times,just as we would vigorously resist any effort by any party to compel such testimony. We guard quite zealously our role as a member of a free and independent press andbelieve quite passionately that, consistent with the principles embodied in the FirstAmendment, it is not the role of the newspaper or its reporters to submit to cross-examination about such matters even where it may otherwise serve our particularinterests in a particular case to do so. I want to emphasize as clearly as I can thatin declining Your Honor’s invitation we mean absolutely no disrespect whatsoeverto the Court.
Consistent with the procedures set forth in the 1/29 Order, by copy of this
letter I am requesting counsel for Eli Lilly to forward this correspondence to allinterested counsel as I do not have contact information for all concerned.
Thank you for your time and consideration.
George Freeman[Assistant General Counsel, N.Y. Times]
A. Public Right of Access to Documents Produced in Discovery
A presumption of public access applies to judicial proceedings and documents.
Open courts are critical to a democratic society. Access to judicialproceedings and documents is necessary for federal courts to have ameasure of accountability and for the public to have confidence in theadministration of justice. The rule of law and public acquiescence injudicial decisions demand that courts reveal the bases for their rulings. Without monitoring, the public could have no confidence in theconscientiousness, reasonableness, or honesty of judicial proceedings. Such monitoring is not possible without access to testimony anddocuments that are used in the performance of Article III functions. In re NBC Universal, Inc., 426 F. Supp. 2d 49, 51 (E.D.N.Y. 2006) (quotations and citations
omitted). See also Nixon v. Warner Communications, Inc., 435 U.S. 589, 597 (1978) (“the
courts of this country recognize a general right to inspect and copy public records and
documents, including judicial records and documents”); United States v. Amodeo, 71 F.3d 1044,
The presumption of access varies according to the nature of the judicial document to
which access is sought. “Unlimited access to every item turned up in the course of litigation
would be unthinkable.” United States v. Amodeo, supra, at 1048. The Court of Appeals for the
Second Circuit has held that “the weight to be given the presumption of access must be governed
by the role of the material at issue in the exercise of Article III judicial power and the resultant
value of such information to those monitoring the federal courts.” Id. at 1049.
The claim of public access is strongest when the documents play a substantial role “in
determining litigants’ substantive rights.” Id. Fitting squarely within this definition are
“documents that served as the principal basis for a summary judgment motion; were introduced
at trial; or were material and important to a decision to approve a consent decree.” In re NBC,
426 F. Supp. 2d. at 53 (quoting Amodeo) (quotation marks omitted).
Falling outside the definition are documents produced by the parties in discovery.
Documents that play no role in the performance of Article IIIfunctions, such as those passed between the parties in discovery, lieentirely beyond the presumption’s reach, and stand on a differentfooting than a motion filed by a party seeking action by the court or,indeed, than any other document which is presented to the court toinvoke its powers or affect its decisions. Amodeo, 71 F.3d at 1050 (emphasis added) (quotation omitted). See also S.E.C. v.TheStreet.com, 273 F.3d 222, 232-33 (2d Cir. 2001); F.T.C. v. Standard Fin. Mgmt. Corp., 830
F.2d 404, 409 (1st Cir. 1987) (“Those documents which play no role in the adjudication process .
. . such as those used only in discovery, lie beyond reach [of the presumption of access].”);
Anderson v. Cryovac, Inc., 805 F.2d 1, 13 (1st Cir. 1986) (“There is no tradition of public access
to discovery, and requiring a trial court to scrutinize carefully public claims of access would be
incongruous with the goals of the discovery process.”).
The entry of a protective order for documents produced in discovery does not affect the
assumption of non-access which attaches to those documents. See S.E.C. v. TheStreet.com, 273
F.3d 222, 223 (2d Cir. 2001) (rejecting argument that “the very exercise by the District Court of
its power to enter a protective order and to seal the Confidential Testimony transformed the
Confidential Testimony into a ‘judicial document’ presumptively open to the public”); Pansy v.Borough of Stroudsburg, 23 F.3d 772, 782 (3d Cir. 1994) (“[W]hen a court enters an order of
protection over documents exchanged during discovery, and these documents have not been filed
with the court, such documents are not, by reason of the protective order alone, deemed judicial
records to which the right of access attaches.”).
The inherent equitable power of courts to grant confidentiality orders is well-established.
See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 35 (1984) (“we have no question as to the
court’s jurisdiction to [enter protective orders] under the inherent equitable powers of courts of
law over their own process, to prevent abuses, oppression, and injustices”) (quotation omitted);
Int’l Prods. Corp. v. Koons, 325 F.2d 403, 407-08 (2d Cir. 1963); Pansy v. Borough ofStroudsburg, 23 F.3d 772, 785 (3d Cir. 1994) (“Courts have inherent power to grant orders of
confidentiality . . . . whether or not such orders are specifically authorized by procedural rules.”).
Courts are endowed with broad discretion to tailor protective orders to the circumstances of a
particular litigation. See Seattle Times, 467 U.S. at 36 (“The unique character of the discovery
process requires that the trial court have substantial latitude to fashion protective orders.”).
The power to seal extends to court filings and documents produced in discovery. SeePansy, 23 F.3d at 785 (rejecting the argument “that the district court lacked the power to enter an
order of confidentiality over a document which is not in the court file nor incorporated into an
order of the court”). As civil discovery rules became more expansive over the course of the last
century, the role of the courts in protecting producing parties from undue invasions of privacy
The adoption of the Federal Rules of Civil Procedure in 1938fundamentally changed . . . American procedure. In particular, thediscovery system in Rules 26 through 37 revolutionized pretrialpreparation. The prior system had limited a litigant’s ability to acquireinformation largely to what was admissible at trial; since 1938, alitigant has been able to secure the production of information on avastly broadened scale –– essentially, any information thatconceivably could be of help in preparing the case . . . . The goalsunderlying the expansion of the discovery process were to facilitatepreparation, to avoid surprise at trial, and to promote the resolution ofcases on their merits –– not to enlarge the public’s access toinformation. Nonetheless, the expanded scope of discovery under theFederal Rules and the increased amounts of information theygenerated created side effects outside the adjudicatory system –– itposed a threat to privacy and confidentiality. To meet this newproblem, the discovery rules contain provisions, such as theauthorization for protective orders in Rule 26(c), to limit thediscovering party’s use of information beyond the litigation context.
Arthur R. Miller, Confidentiality, Protective Orders, and Public Access to the Courts, 105 Harv.
L. Rev. 427, 447 (1991); see also 8 Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 2036 (2d ed. 1994) (“Rule 26(c) was adopted as a safeguard for the protection
of parties and witnesses in view of the almost unlimited right of discovery given by Rule
Protective orders serve essential functions in civil adjudications, including the protection
of the parties’ privacy and property rights. See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 34-
35 (“It is clear from experience that pretrial discovery . . . has a significant potential for abuse.
This abuse is not limited to matters of delay and expense; discovery also may seriously implicate
privacy interests of litigants and third parties.”); see generally Miller, Confidentiality, at 463-77.
“Without an ability to restrict public dissemination of certain discovery materials that are never
introduced at trial, litigants would be subject to needless annoyance, embarrassment, oppression,
or undue burden or expense.” S.E.C. v. TheStreet.com, 273 F.3d 222, 229 (2d Cir. 2001) (citing
The Federal Rules of Civil Procedure govern the issuance of protective orders covering
discovery materials in civil cases. See Fed. R. Civ. P. 26(c). “[F]or good cause shown, the court
in which the action is pending . . . may make any order which justice requires to protect a party
or person from annoyance, embarrassment, oppression, or undue burden or expense.” Id. This
rule, like the remainder of the Federal Rules of Civil Procedure, must be interpreted in a manner
consistent with Rule 1: “These rules . . . . shall be construed and administered to secure the just,
speedy, and inexpensive determination of every action.” Fed. R. Civ. P. 1; see also Martindell v.Int’l Tel. & Tel. Corp., 594 F.2d 291, 295 (2d Cir. 1979) (“the vital function of a protective order
issued under Rule 26(c) . . . is to secure the just, speedy, and inexpensive determination of civil
disputes . . . by encouraging full disclosure of all evidence that might conceivably be relevant”)
The permissible scope of discovery in the federal courts is very broad: “Parties may
obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of
any party.” Fed. R. Civ. P. 26(b)(1). Much of the material produced in discovery is neither
incorporated in motions made to the court nor admissible at trial. In order to mitigate the
substantial risk to litigants’ privacy and other rights posed by the expansive scope of pretrial
discovery, courts are given broad discretion in Rule 26(c) to craft sealing orders “which justice
requires to protect a party or person from annoyance, embarrassment, oppression, or undue
burden or expense.” Fed. R. Civ. P. 26(c); Part II.B.1, supra; see also Fed. R. Civ. P. 26
comment (“The information explosion of recent decades has greatly increased . . . the potential
for discovery to be used as an instrument for delay or oppression.”).
Rule 26(c) provides a non-exhaustive list of eight types of protective orders that courts
may issue. See Fed. R. Civ. P. 26(c)(1)–(c)(8). “[A] court is not limited to the eight specified
types of orders . . . . [it] may be as inventive as the necessities of a particular case require in
order to achieve the benign purposes of the rule.” 8 Wright & Miller at § 2036; see also Ann L.v. X Corp., 133 F.R.D. 433, 435 (W.D.N.Y. 1990) (“an order of suppression is a permissible
remedy under the ‘catch all clause’ of Fed. R. Civ. P. 26(c)”). “Rule 26(c) confers broad
discretion on the trial court to decide when a protective order is appropriate and what degree of
protection is required.” Seattle Times, 467 U.S. at 36. The touchstone of the court’s power
under Rule 26(c) is the requirement of “good cause.” The burden to establish good cause is
placed on the party seeking protection. See 8 Wright & Miller at § 2035.
To determine whether good cause exists, courts balance “the need for information against
the injury that might result if uncontrolled disclosure is compelled.” See Pansy, 23 F.3d at 787
(quoting Miller, Confidentiality). Balancing requires taking into account litigants’ privacy
rights as well as the general public’s interest in the information. See TheStreet.com, 273 F.3d at
234. The balance struck should incorporate consideration of the overarching purpose of the
discovery process: “Discovery involves the use of compulsory process to facilitate orderly
preparation for trial, not to educate or titillate the public.” Joy v. North, 692 F.2d 880, 893 (2d
Cir. 1982); see also Richard L. Marcus, Myth and Reality in Protective Order Litigation, 69
Cornell L. Rev. 1, 57 (1983) (“The speculative possibility that in some cases the public would
benefit from dissemination of information garnered through discovery hardly warrants the
conversion of the process into an investigatory tool for inquisitive litigants.”).
Subsection (7) of Rule 26(c) provides for the issuance of a protective order requiring
“that a trade secret or other confidential research, development, or commercial information not
be revealed or be revealed only in a designated way.” This “open-ended series of terms . . . need
not be limited to ‘true’ trade secrets.” 8 Wright & Miller at § 2043. “Documents falling into
categories commonly sealed are those containing trade secrets, confidential research and
development information, marketing plans, revenue information, pricing information, and the
like.” Cumberland Packing Corp. v. Monsanto Co., 184 F.R.D. 504, 506 (E.D.N.Y. 1999).
Examples of protective orders covering commercial documents include: Sullivan Mktg. v.Valassis Commc’ns, 1994 U.S. Dist. LEXIS 5824 (S.D.N.Y.1994) (granting protective order to
defendant publisher that restricted access to sensitive business contracts, proposals and
negotiations); Moore U.S.A., Inc. & Toppan Forms Co., Ltd. v. Standard Register Co., 2000 U.S.
Dist. LEXIS 9137 (W.D.N.Y. 2000) (protecting documents containing trade secrets and
confidential research and development information); Vesta Corset Co. v. Carmen Founds., 1999
U.S. Dist. LEXIS 124, at *5 (S.D.N.Y.1999) (refusing disclosure of confidential commercial
information such as “pricing, profits, costs, overhead, manufacturing specifications, customer
lists, price structure, and dealings with a common customer”); DDS, Inc.v. Lucas Aero. PowerTransmission Corp., 182 F.R.D. 1 (N.D.N.Y. 1998) (protecting trade secrets of manufacturing
process and customer lists, and breakdown of annual sales figures).
In large complex cases, courts often enter “umbrella” protective orders, which permit
parties to designate in advance a large volume of discovery material as confidential. See
Campbell, Protective Order, supra at 777-79 (“The use of umbrella orders in complex litigation
has become commonplace.”); Pansy, 23 F.3d at 787 n.17 (“[B]ecause of the benefits of umbrella
protective orders in cases involving large-scale discovery, the court may construct a broad
umbrella protective order upon a threshold showing by the movant of good cause.”). Parties are
permitted to challenge that designation, and the burden of establishing that there is good cause to
protect the designated materials rests at all times with the party seeking protection.
In complicated mass cases the use of umbrella protective orders is recommended by the
When the volume of potentially protected materials is large, anumbrella order will expedite production, reduce costs, and avoid theburden on the court of document-by-document adjudication. Umbrellaorders provide that all assertedly confidential material disclosed (andappropriately identified, usually by a stamp) is presumptivelyprotected unless challenged. Such orders typically are made withouta particularized showing to support the claim for protection, but sucha showing must be made whenever a claim under an order ischallenged.
Manual for Complex Litigation, § 11.423 (4th ed. 2004).
The value of umbrella orders has been well-documented:
[T]he propriety and desirability of protective orders securing theconfidentiality of documents containing sensitive commercialinformation that are the subject of discovery in complex cases is toowell established to belabor . . . . We are unaware of any case in thepast half-dozen years of even a modicum of complexity where anumbrella protective order . . . has not been agreed to by the partiesand approved by the court. Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 529 F. Supp. 866, 889 (E.D. Pa. 1981). Seealso 8 Wright & Miller at § 2035.
4. First Amendment Implications of Protective Orders
The leading Supreme Court case addressing the question of how the First Amendment’s
protection of speech applies to protective orders is Seattle Times Co. v. Rhinehart. 467 U.S. 20
(1984); see also Part III.D.4, infra. During discovery in a state court action against a newspaper
for defamation, the defendant requested the production of documents relating to the financial
affairs of the plaintiff and his religious organization. Id. at 23-25. Plaintiffs sought a protective
order for the financial documents to limit their publication and dissemination by the newspaper.
The trial court entered a protective order prohibiting defendant “from publishing,
disseminating, or using the information [produced by plaintiffs] in any way except where
necessary to prepare for and try the case.” Id. at 27. Upholding the order, the Supreme Court of
Washington declared: “the information to be discovered concerned the financial affairs of the
plaintiff . . . in which he and his associates had a recognizable privacy interest . . . and the giving
of publicity to these matters would allegedly and understandably result in annoyance,
embarrassment and even oppression.” Id. at 28 (quotation and citation omitted).
In an appeal to the United States Supreme Court, the Seattle Times argued that the
protective order contravened rights under the First Amendment:
Petitioners argue that the First Amendment imposes strict limits on theavailability of any judicial order that has the effect of restrictingexpression. They contend that civil discovery is not different fromother sources of information, and that therefore the information is‘protected speech’ for First Amendment purposes. Petitioners assertthe right in this case to disseminate any information gained throughdiscovery . . . . They submit [that] [w]hen a protective order seeks tolimit expression, it may do so only if the proponent shows acompelling government interest. Id. at 30-31 (quotation omitted). Responding, the Court acknowledged that most information
obtained in civil discovery would rarely fall into the classes of speech unprotected by the First
Amendment, such as obscenity, defamatory statements, threats, and the like. Id. at 31. Yet, it
wrote, it “does not necessarily follow . . . that a litigant has an unrestrained right to disseminate
information that has been obtained through pretrial discovery.” Id.
Rejected by the unanimous Court was the contention that information obtained through
civil discovery is no different from information obtained through other means:
As in all civil litigation, petitioners gained the information they wishto disseminate only by virtue of the trial court’s discovery processes. As the Rules authorizing discovery were adopted by the statelegislature, the processes thereunder are a matter of legislative grace. A litigant has no First Amendment right of access to information madeavailable only for purposes of trying his suit.
Id. at 32; see also Zemel v. Rusk, 381 U.S. 1, 16-17 (1965) (“The right to speak and publish does
not carry with it the unrestrained right to gather information.”).
Protective orders prohibiting dissemination of materials discovered before trial are “not
the kind of classic prior restraint that require exacting First Amendment scrutiny.” SeattleTimes at 33. The type of restrictions deemed permissible are those that apply to information
obtained through the civil discovery process. While parties may be restrained from
disseminating information obtained through the discovery mechanism, they “may disseminate
the identical information . . . as long as the information is gained through means independent of
the court’s processes.” Id. at 34.
Courts have the inherent authority to enforce their orders. “[T]he power of a court to
make an order carries with it the equal power to punish for a disobedience of that order.” In reDebs, 158 U.S. 564, 594 (1895); see also In re Lafayette Radio Elec. Corp., 761 F.2d 84, 93 (2d
Cir. 1985) (“ancillary jurisdiction is recognized as part of a court’s inherent power to prevent its
judgments and orders from being ignored or avoided with impunity”). The power is a necessary
prerequisite to the administration of justice; without it, courts would be ill-equipped to ensure the
rule of law in a democratic society.
“It is one of the equitable powers, inherent in every court of justice so long as it retains
control of the subject-matter and of the parties, to correct that which has been wrongfully done
by virtue of its process.” See Arkadelphia Milling Co. v. St. Louis Sw. Ry. Co., 249 U.S. 134,
146 (1919); see generally Anderson v. Dunn, 6 Wheat. 204, 227 (1821) (“Courts of justice are
universally acknowledged to be vested, by their very creation, with power to impose . . .
submission to their lawful mandates”); In re Lafayette Radio, 761 F.2d at 92 (“it is established
that a federal court sitting in equity that has jurisdiction to issue a decree necessarily has
ancillary and supplemental jurisdiction to enter orders and judgments designed to effectuate that
The jurisdiction of a court to enforce its orders extends nationwide. “Nonparties who
reside outside the territorial jurisdiction of a district court may be subject to that court’s
jurisdiction if, with actual notice of the court’s order, they actively aid and abet a party in
violating that order.” Waffenschmidt v. Mackay, 763 F.2d 711, 714 (5th Cir. 1985); see alsoStiller v. Hardman, 324 F.2d 626, 628 (2d Cir. 1963) (“Violation of an injunctive order is
cognizable in the court which issued the injunction, regardless of where the violation
The authority to issue injunctions is derived from the courts’ inherent equity powers and
Rule 65 of the Federal Rules of Civil Procedure. “In most cases the determination whether to
issue an injunction involves a balancing of the interests of the parties who might be affected by
the court’s decision –– the hardship on plaintiff if relief is denied as compared to the hardship to
defendant if relief is granted.” 11A Wright & Miller at § 2942. Decision as to whether an
injunction is warranted on the facts of a particular case is committed to the sound discretion of
the trial court. See id.; Lemon v. Kurtzman, 411 U.S. 192, 200 (1973) (“In shaping equity
decrees, the trial court is vested with broad discretionary power”).
At common law, chancery courts in England provided extraordinary relief such as
injunctions and specific performance only when the parties could not obtain an effective remedy
from the courts of law. 11A Wright & Miller at § 2944; McClintock, Equity, § 21 (2d ed. 1948).
“Even though there no longer are separate law and equity courts . . . injunctive relief continues to
be viewed as ‘extraordinary’ and courts are reluctant to award it if the claimant can secure
adequate rectification of his grievance by an award of damages.” Id.
“[I]njunctive relief should be no more burdensome to the defendant than necessary to
provide complete relief to the plaintiffs.” Califano v. Yamasaki, 442 U.S. 682, 702 (1979). “A
plaintiff seeking an injunction must show that there is an imminent threat of harm and that the
threatened harm is ‘irreparable.’” Owen Fiss, Injunctions 59 (2d ed. 1984).
Rule 65(d) of the Federal Rules of Civil Procedure provides that an injunction “is binding
only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and
upon those persons in active concert or participation with them who receive actual notice of the
order by personal service or otherwise.” Fed. R. Civ. P. 65(d). The rule “is derived from the
common law doctrine that a decree of injunction not only binds the parties defendant but also
those identified with them in interest, in ‘privity’ with them, represented by them, or subject to
their control. In essence it is that [persons bound] may not nullify a decree by carrying out
prohibited acts through aiders and abettors, although they were not parties to the original
proceeding.” Regal Knitwear Co. v. Nat’l Labor Relations Bd., 324 U.S. 9, 14 (1945). See, e.g.,
2 Wayne R. LaFave, Substantive Criminal Law, § 13.2(a) (2d ed. 2003) (discussing criteria for
aiding and abetting); id. § 13.2(b) at 344; 4 Wharton’s Criminal Law § 685 (15th ed. 1996)
“[A]n issue of privity in the context of determining who is bound by an injunction . . . in
a particular case is often not easy to resolve.” 11A Wright & Miller at § 2956. A fact-sensitive
inquiry must be undertaken to determine whether persons not named in an injunction can be
bound by its terms because they are acting in concert with an enjoined party. Id.; Vuitton et FilsS.A. v. Carousel Handbags, 592 F.2d 126, 130 (2d Cir. 1979) (“Whether one not named in an
injunctive decree may nevertheless be bound by it depends on the facts of each case.”).
Those persons named in an injunction are considered “parties” for the purpose of Rule
65(d). See Madsen v. Women’s Health Ctr., Inc. 512 U.S. 753, 775 (1994). The party seeking
enforcement of an injunction against persons not named bears the burden of demonstrating that
those persons are bound by the order. See People of the State of N.Y. by Vacco v. OperationRescue Nat’l, 80 F.3d 64, 70 (2d Cir. 1996).
3. Enjoining Dissemination of Stolen Protected Documents
Recovering stolen documents obtained in violation of a court discovery order when
needed to protect a party to a litigation is well within the equitable power of a federal district
court. See 28 U.S.C. § 1651(a) (district courts “may issue all writs necessary or appropriate in
aid of their . . . jurisdiction and agreeable to the usages and principles of law”); Egri v. Conn.Yankee Atomic Power Co., 68 Fed. Appx. 249, 255-56 (2d Cir. 2003) (finding injunction
enforcing protective order permissible under the All Writs Act) (unpublished opinion); Fed. R.
Civ. P. 16(f) (failure to obey a pretrial order); see generally Part III.C, supra. Even if the order
were improperly issued, it must be modified or overturned and not deliberately violated when in
force. See, e.g., Walker v. City of Birmingham, 388 U.S. 307, 321 (1967) (“One may sympathize
with the petitioners’ impatient commitment to their cause. But respect for judicial process is a
small price to pay for the civilizing hand of law, which alone can give abiding meaning to
The Supreme Court, in Bartnicki v. Vopper, 532 U.S. 514 (2001), provided some
guidance on the right to publish material of public significance illegally obtained by a third
party. See also Part III.B.4, supra, on First Amendment implications of protective orders A cell
phone conversation had been illegally intercepted by private parties in violation of a state
wiretapping statute, and then turned over to a third person who published it. The third person
THE FUZZY FRONT END FOR INCREMENTAL , PLATFORM AND BREAKTHROUGH PRODUCTS AND SERVICES INTRODUCTION The innovation process may be divided into three areas: the Fuzzy Front End (FFE), the New Product Development Portion (NPD) and commercialization as indicated in the figure 1. Most projects, once the concept is defined in the FFE, are managed in the NPD portion using the traditional �
Horizontal Icicles Cling to Wreck: B encleugh Captain J. S.I. Thomson and his brother owned the whalingand sealing schooners, Bencleugh and Friendship . John Thomsonwas aboard the Bencleugh in 1877 when she was shipwrecked onMacquarie Island. Bencleugh was a schooner of 66 tons, built at Port Chalmers by Sutherland and Co. in 1872, registered at Dunedin in the namesof Andrew a