Appeal from the Circuit Court of Du Page County. No. 02-MR-0455. Honorable Edward R. Duncan, Jr., Judge, Presiding.
The opinion of the court was delivered by: Justice Kapala
This appeal comes before us on a certification of a question of law by the circuit court of Du Page County pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308). The question certified for appeal is : "What is the appropriate legal test or standard to determine whether a party to an action can obtain discovery of confidential information and documents from, and/or related to, a nonparty competitor?"
Although a full recitation of the specific facts underlying the case is not necessary to a resolution of this appeal, a basic recounting of the background will be helpful. The cause of action arose when plaintiff, International Truck and Engine Corp., filed suit against defendant, Caterpillar, Inc., under several theories, claiming that defendant breached an agreement that required defendant to sell plaintiff certain types of heavy-duty truck engines at a price determined by various contractual provisions. The trial court entered a stipulated protective order that applied to confidential information that was being sought during discovery. The order provided that certain information would be designated as confidential information and that access to such information would be limited to certain persons and entities. The order also stated that certain information could be designated by a party or nonparty as for "OUTSIDE COUNSEL'S EYES ONLY," which would further limit access to the information. In the course of discovery, defendant propounded upon plaintiff a document request that requested, in part, "[a]ll documents relating to International's negotiations, agreements or anticipated supply agreements with any third party, including but not limited to Cummins *** for the supply of engines." Cummins is a competitor of defendant.
Plaintiff objected to the request but responded that it would provide the documents requested by defendant after receiving approval from the third parties involved. Plaintiff subsequently contacted Cummins and informed it of plaintiff's intent to produce the requested documents with Cummins' approval. Cummins petitioned to intervene in the case and requested a protective order. Cummins claimed that it has signed an agreement with plaintiff requiring plaintiff to seek approval from Cummins before disclosing any of Cummins' confidential information. Cummins further claimed that the documents requested by defendant were confidential commercial documents that could not be disclosed to defendant because defendant is a competitor of Cummins. The trial court granted Cummins' petition to intervene. On January 23, 2003, after a hearing on Cummins' motion for a protective order, the court ordered that Cummins be included in the stipulated protective order and required plaintiff to produce redacted versions of some documents that contained Cummins information. The court also ordered plaintiff to bring all other Cummins-related documents to the next hearing so that it could determine what, if any, parts of those documents needed to be produced.
On January 30, 2003, plaintiff discovered that it had inadvertently disclosed unredacted Cummins-related documents. Plaintiff wrote to defendant, requesting the return of the documents. Defendant refused to return the documents. Plaintiff then filed a motion to enforce the protective order, seeking the return of the inadvertently disclosed documents. Defendant then filed a motion to modify the court's order regarding Cummins-related documents, seeking further Cummins-related documents from plaintiff. After a hearing on both motions, the court reversed its prior decision and ordered plaintiff to produce in unredacted form all documents previously produced in redacted form. The court reiterated that the documents would remain subject to the stipulated protective order with the modification that no consulting experts or retained opinion witnesses could view the documents. Furthermore, the trial court entered Supreme Court Rule 304(a) (155 Ill. 2d 304(a)) language so that an appeal could be pursued. Cummins then appealed to this court (No. 2--03--0317). This court dismissed the appeal for lack of jurisdiction. Cummins filed a petition for rehearing, subsequent to which this court withdrew its previous order but once again found the trial court's order unappealable because it was an interlocutory order. In that order, we suggested Supreme Court Rule 308(a) (155 Ill. 2d R. 308(a)) as a vehicle to appeal the discovery order.
On March 30, 2004, the trial court stated that its order as to the discovery of Cummins' confidential information satisfied the requirements of Rule 308(a) because it presented a question of law as to which there is substantial ground for difference of opinion and because an immediate appeal from the order may materially advance the ultimate termination of the litigation. The trial court certified the question of law as stated above. Cummins then petitioned this court for leave to appeal and we granted the petition on May 13, 2004.
The sole question before this court is the question certified for appeal by the circuit court, namely: "What is the appropriate legal test or standard to determine whether a party to an action can obtain discovery of confidential information and documents from and/or related to, a nonparty competitor?" As plaintiff points out, the certified question contains two separate inquiries. First, what is the appropriate test to determine whether a party can obtain discovery of confidential information from a nonparty competitor? Second, what is the test to determine whether a party can obtain discovery of confidential information related to a nonparty competitor? We first make clear that we read both inquires as referring to confidential information pertaining to a nonparty competitor. They differ only in that the first inquiry refers to the discovery of such information directly from the nonparty competitor itself while the second inquiry refers to discovery requests directed to a party. We will not address the situation in which discovery of confidential information pertaining to a nonparty competitor is sought from a different nonparty. This question is not presented by the facts of this case. Therefore, any answer to such a question would not materially advance this litigation. It is within the above framework that we answer the certified question.
Cummins urges us to adopt the balancing test employed by the federal courts in situations involving confidential or privileged information. Defendant urges that Supreme Court Rule 201(c) (166 Ill. 2d R. 201(c)) adequately covers the situations presented by the certified question and, hence, no further test is necessary. However, defendant also states that if we find that a further test is necessary, it agrees that the balancing test proposed by Cummins is appropriate. Plaintiff states that it takes no position as to what, if any, test we should adopt but simply urges us to answer the certified question completely and clearly so that the underlying litigation can move forward expeditiously. After reviewing the relevant case law, we choose to adopt a modified version of the balancing test employed by the federal courts.
First, we address defendant's argument that Rule 201(c) provides adequate guidance to the trial court in these situations. Rule 201(c)(1) provides, in relevant part:
"(1) Protective Orders. The court may at any time on its own initiative, or on motion of any party or witness, make a protective order as justice requires, denying, limiting, conditioning, or regulating discovery to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or oppression." 166 Ill. 2d R. 201(c)(1).
Defendant contends that Rule 201(c) provides a sufficient standard that is applicable to many situations. More specifically, defendant contends that the prevention of unreasonable annoyance, expense, embarrassment, disadvantage, or oppression should guide the court in deciding when a protective order should issue and the scope of such an order. According to defendant, a trial court can apply these factors just as well in a case involving the discovery of confidential information related to a nonparty ...