COVETRUS INC et al v. ACTIAN CORPORATION

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
COVETRUS INC., and VETERINARY )
DATA SERVICES, INC., 	)
)
Plaintiffs and Counterclaim 	)
Defendants, 	)
)
v. 	) 	No. 2:21-cv-00097-LEW
)
ACTIAN CORPORATION, 	)
)
Defendant and Counterclaim 	)
Plaintiff. 	)
ORDER CONCERNING HSD DESIGNATIONS, MOTION TO SEAL REPLY,
AND PROCEDURAL ORDER
The controversy in this case arises out of a software lease and copyright law. The
Court currently has before it certain motions, motion responses, and associated exhibits
that the parties filed in paper format, contending the materials constitute highly sensitive
documents (“HSD”) under General Order 2021-5. For reasons that follow, the HSD
designations are rejected, a related motion to seal is denied, and a procedural order is
entered to preserve confidentiality pending further action by the parties.
BACKGROUND
Pursuant to General Order 2021-5 (May 10, 2021), an HSD is a document “that
contains information that may be sought by malicious state actors and which, if revealed,
would create a high risk of imminent threat to an identifiable individual, would cause harm
to the interests of the United States, or would expose trade secrets of a serious nature.”
General Order at 1.
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When a party believes that one or more documents it intends to file are highly
sensitive, it can request that the document(s) receive the HSD designation by filing in paper
a motion, attaching the document(s) of concern, and serving the other parties with the same.
Authorization to request the HSD designation is an exception to the Court’s default
requirement that litigants make all filings though the Court’s electronic case filing system.
The General Order provides that a request for the HSD designation will be document
specific, not an omnibus request to shield entire filing and all associated exhibits. Pending
a judicial determination concerning the HSD designation request, the Clerk’s Office
maintains the filings in paper format and the electronic docket will not reflect the nature of
the filing, only the fact that a request for the HSD designation is pending. If a party requests
the HSD designation for an entire filing, the docket sheet suffers.
For example, the electronic docket reflects three filings by Plaintiff on April 11,
2022:
113 	*SEALED* SEALED DOCUMENT (no notice to counsel) HSD.
[clerk initials] (Entered: 04/12/2022)
114 	*SEALED* SEALED DOCUMENT (no notice to counsel) HSD.
[clerk initials] (Entered: 04/12/2022)
115 	*SEALED* SEALED DOCUMENT (no notice to counsel) HSD.
[clerk initials] (Entered: 04/12/2022)
But for counsel’s omnibus treatment of its entire April 11 filing, the docket entries would
have identified the nature of the filings, minimally by title. For obvious reasons, that would
have produced a far more coherent docket sheet and, accordingly, counsel are advised to
avoid requests for HSD designations that effectively seal entire filings rather than targeting
the allegedly sensitive documents.
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Perhaps because the HSD filings started as they did, Defendant’s responses took the
same approach. Without objecting to or otherwise commenting on the HSD designation
request, Defendant filed the entirety of its opposition briefs (ECF Nos. 131 and 135) in
paper, so the docket once again fails to identify the nature of the filings. More recently, on
August 5, the Clerk’s Office received for HSD filing Plaintiffs’ Motion to Exclude
Defendant’s 	New 	Supplementary 	Registrations 	or 	Alternatively 	to 	Refer 	Validity
Questions to the Register of Copyrights (ECF No. 162), alongside a new Motion to
Designate Documents as Highly Sensitive Documents (ECF No. 161). However, due once
again to over designation, a review of the electronic docket sheet provides no useful
information other than the fact of the HSD filing.
Finally, Plaintiffs filed a motion to seal when they filed the reply on their initial
motion, explaining that they did not request the HSD designation because the reply “does
not contain any source code itself and therefore is not a HSD.” Pls.’ Mot. to Seal Reply
(ECF No. 137). Although Plaintiffs provided an unredacted version of the reply for the
Court, they failed to file an unredacted version for the public.1
Plaintiffs have requested the HSD designation and Defendant has followed along
with this approach because the motion papers include reference to and excerpts of
Defendant’s “computer source code,” which source code allegedly qualifies for trade secret
protection.
DISCUSSION
1 The paper files associated with this case also include filings received on April 15, 2022, which filings evidently
eluded the docket sheet altogether. These include a motion to extend page limits, which does not contain any source
code.
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The Court’s General Order 2021-5 is a response to a request of the Judicial
Conference of the United States that each Judicial District adopt orders and procedures to
achieve heightened security for highly sensitive documents in the wake of the “SolarWinds
hack” of 2020, which is “suspected to have been carried out by foreign actors, according
to U.S. intelligence agencies.” Confidentiality issues—The SolarWinds breach, 2 Bus. &
Com. Litig. Fed. Cts. § 20:12 (5th ed.); see also Admin. Office of the U.S. Courts, Highly
Sensitive 	Document 	Procedures: 	Background 	FAQs 	(last 	updated 	June 	14, 	2022),
https://jnet.ao.dcn/court-services/highly-sensitive-document-procedures/background-faqs
(last viewed Aug. 23, 2022).
The standard set by the General Order is high. As worded, a document does not
qualify for the HSD designation simply because it may qualify for trade secret protection
under state law. To receive the designation, it is also necessary that a document “would
expose trade secrets of a serious nature.” General Order at 1. By “serious nature” the
General Order references trade secrets of a kind that would be of special interest to
malicious state actors. Id.
Plaintiffs have failed to support their request for HSD designations based on the
motion papers’ mere reference to Defendant’s trade secret source code. Specifically,
Plaintiffs fail to make a showing that the source code is of a “serious nature” of interest to
malicious state actors. Moreover, Plaintiffs requests are overbroad given that they failed to
isolate the allegedly sensitive documents for focused treatment and instead categorized
their entire filings as deserving of the HSD designation.
C ONCLUSION
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Plaintiffs’ Motions to Designate Documents as Highly Sensitive Documents (ECF
Nos. 161 and 113) are DENIED. Plaintiffs’ Motion to Seal Reply in Support of Motion to
Refer (ECF No. 137) is also DENIED for failure to conform to Local Rule 7A.
The parties are hereby granted leave to resubmit one or more requests for
confidential status designations through motions to seal that comply in all respects with
District of Maine Local Rule 7A. Any such filing(s) will be made on or before September
30, 2022. In the event one or both parties make such requests under Local Rule 7A, the
newly filed motion papers will serve as the operative filings and the existing HSD filings
will be treated as withdrawn. If no motion to seal is filed, the existing filings will be
scanned and uploaded to the electronic docket.
The parties are also granted leave to file a motion requesting a stay of the summary
judgment briefing deadlines (see ECF No. 158) pending action on the controversy
concerning referral of copyright registration questions to the Register of Copyrights. If a
party files such a motion and the motion is opposed, the Court will suspend the summary
judgment deadlines pending briefing of the motion to stay and establish new deadlines
upon resolution of the request.
SO ORDERED.
Dated this 24th day of August, 2022.
/s/ Lance E. Walker
UNITED STATES DISTRICT JUDGE
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