HERAEUS KULZER, GMBH, Plaintiff-Appellant, v. BIOMET, INC., et al., Defendants-Appellees, and Esschem, Inc. Intervenor-Appellee.
No. 17-1674
United States Court of Appeals, Seventh Circuit.
Argued January 9, 2018, Decided February 1, 2018
881 F.3d 550
Finally, as to the damages element, Meyer submitted insufficient evidence to show that Firestone‘s promise caused “several million dollars” in harm. Meyer submitted no business records from the relevant years to support his contention that Firestone caused any damage to his companies. Meyer replies that he lost the records when his computer was stolen and his email account was closed for non-payment. But this loss is not Firestone‘s fault and does not relieve Meyer of his evidentiary burden. Because a jury would have to speculate about damages, a reasonable jury could not conclude that Meyer was damaged as a result of any reliance on McAllister‘s alleged promise.
Meyer‘s brief concludes with an undeveloped argument. He contends that Firestone did not properly mitigate its damages because Firestone‘s sale of the laundry machine collateral to Pangea was not commercially reasonable. Under Massachusetts law, a secured party that disposes of collateral enjoys a rebuttable presumption of commercial reаsonableness. See
III. CONCLUSION
Because all three elements of Meyer‘s defense and counterclaim fail, we AFFIRM the district court‘s judgment in appeal 17-1611 and DISMISS appeal 17-1712 as duplicative.
Mark F. Criniti, Attorney, Ladue, Curran & Kuehn LLC, South Bend, IN, Michael P. Kornak, Dylan Smith, Attorneys, Freeborn & Peters LLP, Chicago, IL, for Defendants-Appellees.
Mark D. Boveri, Attorney, Krieg Devault, LLP, Mishawaka, IN, Mary F. Platt, Attorney, Fineman Krekstein & Harris, PC, Philadelphia, PA, for Intervenor-Appellee.
Before Flaum, Kanne, and Rovner, Circuit Judges.
Flaum, Circuit Judge.
Plaintiff-appellant Hеraeus Kulzer, GmbH (“Heraeus“) brought this action in
After obtaining discovery from Biomet and submitting it to the German court, the German court ruled in Heraeus‘s favor and enjoined Biomet from manufacturing or distributing any products developed using the misappropriated information. In its ruling, the German court cited and quoted several documents that were produced in this
Suspicious that Biomet was continuing to sell produсts made with Heraeus‘s trade secrets outside of Germany, Heraeus subsequently brought actions in several other European countries to enforce the German judgment. Heraeus also filed three motions to modify the district court‘s protective orders in this
Because Heraeus failed to timely appeal the district court‘s first and second orders denying the requested relief, we conclude that we lack jurisdiction to review those orders now. With respect to the district court‘s third and final order, we hold that the district court did not abuse its discretion by denying Heraeus‘s request to impose restrictions on Biomet‘s internal use of the documents it produced.
I. Background
A. The Alleged Trade Secret Misappropriation
Heraeus is a German company that specializes in the development and production of bone cements used in joint replacement surgery. Heraeus began developing and producing bone cements in the 1950s.
In the early 1970s, Heraeus contracted with Merck KGaA (“Merck“), a German pharmaceutical company, to distribute its bone cements. To help Merck obtain regulatory approval for its bone cements, Heraeus gave Merck confidential information. Merck was contractually obligated to use that information solely for the purpose of obtaining regulatory approval and to protect the information from disclosure.
In 1997, Merck entered into a joint venture with Biomet. In 2004, Merck sold its joint venture shares to Biomet without telling Heraeus. When Heraeus found out, it stopped delivering its bone cements to Biomet.
When the distribution relationship between Biomet and Heraeus ended in 2005, Biomet began manufacturing and selling bone cements that directly compete with Heraeus‘s products. After dominating the bone cement market for fifty years, Heraeus began losing its market share.
Heraeus sued Biomet in courts throughout Europe, alleging that Biomet developed its bone cements with Heraeus‘s proprietary information. Heraeus also claims that Biomet used the allegedly misappro-
B. The § 1782 Action
On December 30, 2008, Heraeus sued Biomet in Germany for trade secret misappropriation.1 Shortly thereafter, Heraeus commenced this proceeding in the Northern District of Indiana under
The Indiana district court initially denied the petition, but on appeal we reversed and remanded for the district court to oversee and manage the discovery process. See Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591, 599 (7th Cir. 2011) [hereinafter Heraeus I].
C. Stipulated Protective Orders
On remand, Biomet agreed to produce responsive discovery materials pursuant to an amended protective order, which was agreed to by the parties and entered by the district court. In recognition of the “highly competitive” bone cement industry, and to protect Biomet‘s trade secrets, that protective order allows Biomet to designate discovery materials as confidential. Once materials are designated as confidential, Heraeus may only use them in the German proceedings and in this
In August 2011, the district court allowed Esschem to intervene to protect its interests because some of the discovery materials produced contained communications between Esschem and Biomet. After Esschem intervened, the parties agreed to, and the district court entered, a second amended protective order. That protective order allowed Heraeus to use certain documents in the German proceedings provided that the documents were treated as confidential by the German courts.
The district court periodically entered additional protective orders to address particular concerns as they arose. Each successive protective order supplemented prior protective orders.2
D. The German Judgment
Meanwhile, Heraeus submitted the discovery it obtained in this
E. European Enforcement Proceedings
Heraeus claims that, despite the German court‘s injunction, Biomet continues to sell bone cement products that were made using misappropriated information in other European countries. Accordingly, Heraeus filed proceedings in several European countries—France, the Netherlands, Austria, Italy, Belgium, Finland, Denmark, Norway, and the United Kingdom—to enforce the German judgment.4
F. The District Court Excludes the German Judgment from the Proteсtive Orders’ Restrictions
Because the German judgment described and quoted portions of discovery materials that were subject to the protective orders, Heraeus asked the district court to clarify whether the German judgment was itself subject to the protective orders. To the extent it was, Heraeus asked the district court to exclude the German judgment from the scope of the protective orders so it could use the judgment in the European enforcement proceedings.
The district court granted Heraeus‘s motion on September 8, 2014. In doing so, it found “good cause for the continued protection of Heraeus‘s trade secrets and recogniz[ed] Heraeus‘s strong interest in enforcing the terms of the Judgment and protecting its trade secrets.” Accordingly, the district court excluded the German judgment from the restrictions imposed by the protective orders so Heraeus could submit the judgment to foreign tribunals “as needed to enforce its rights and protect its trade secrets from further use or misappropriation.”
G. Heraeus‘s First Motion to Modify the Protective Orders
Heraeus eventually determined that it would also need to submit the Cited Documents to some of the tribunals presiding over the European enforcement proceedings. However, the parties were operating under the seventh amended protective order, which expressly covered the Cited Documents and thus imposed restrictions on Heraeus‘s ability to use the documents.
On July 21, 2015, Heraeus moved to modify the protective orders to exclude the nine Cited Documents. Heraeus argued that case-by-case amendments to the protective orders were no longer “workable” because “Heraeus needs the flexibility to submit the Cited Documents as appropriate and to react quickly to the ever-changing enforcement situation.” Heraeus further argued that continued protection of the Cited Documents was not necessary
On September 22, 2015, the district court denied Heraeus‘s motion. In its order, the district court concluded that Heraeus had the burden of showing good cause for modification of the protective orders, and found that Heraeus had not met its burden. The district court applied the four-factor test that district courts in this Circuit regularly use when resolving motions to modify protective orders.
With respect to the first factor—the nature of the protective order—the district court noted that stipulated blanket protective orders like the one at issue here are “more difficult to modify or vacate.” However, the court also expressed concern that “the proceedings in this court shouldn‘t limit Heraeus‘s ability to avail itself of whatever the German judgment gives it.” And, because Biomet and Esschem represented that “they would be agreeable to less drastic alternatives for use of the nine documents,” the court concluded that “this factor favors at least a partial modification of the protective orders.”
The district court held that the second factor—foreseeability—was “a neutral factor.” Biomet and Esschem argued that Heraeus should have anticipated the need to file enforcement actions in other jurisdictions when it agreed to the protective orders because Heraeus knew that Biomet sold its bone cement products outside Germany. On the other hand, Heraeus argued that Biomet had shifted its operations to avoid the German court‘s jurisdiction. Ultimately, the district court was “unable to determine the import of this factor.”
The district court found that the third factor—the parties’ reliance on the protective order—weighed against modification. The district court noted that “[t]he parties have been cooperating in the discovery process for the past four years under the terms of the various amendments to the protective orders.” The district court also relied on the fact that “Heraeus was able to obtain a judgment in the German proceedings while the parties operated under the terms of the protective orders for the past four years.”
Finally, the district court determined that the fourth factor—good cause—also weighed against modification. Although Heraeus claimed that it might need to submit the Cited Documents to initiate enforcement proceedings in the future, the court noted that Heraeus had already initiated enforcement proceedings in the Netherlands, France, and the United Kingdom without having to submit the Cited Documents. Moreover, the court pointed out that “Heraeus has cited no instance where the current protective orders have impeded its pursuit of any foreign action.”
However, the court concluded that Heraeus had shown good cause to shorten some of the time periods in which the parties were required to rеspond under the existing protective orders. Accordingly, the district court gave the parties until October 9, 2015 “to submit an amendment to the Seventh Amended Protective Order permitting Heraeus to pursue enforcement actions outside Germany in a timely fashion without publically disclosing the confidential information contained in the cited documents.” The district court “strongly
H. Eighth Amended Protective Order
Heraeus did not appeal the district court‘s September 22, 2015 order. Instead, it negotiated with Biomet and ultimately agreed to an eighth amended protective order that outlines how Heraeus may use the Cited Documents in the enforcement proceedings. Specifically, paragraph 5 of that protective order only allows Heraeus to submit the Cited Documents in enforcement proceedings if several confidentiality safeguards are in place. For example, paragraph 5 requires that court files discussing the Cited Documents are sealed from public view and prevents Hеraeus from discussing the Cited Documents unless the courtroom is sealed.
In turn, paragraph 6 of that protective order outlines the procedure that Heraeus should follow “[i]n the event that Heraeus seeks to use the Cited Documents in an Enforcement Proceeding but cannot comply with one or more provisions in this Eighth Amended Protective order.” If the parties cannot reach an agreement, paragraph 6(d) permits them to request a telephone conference with the district court to resolve the dispute. The district court entered the eighth amended protective order on October 8, 2015.
I. Heraeus‘s Second Motion to Modify the Protective Orders
About a year later, on November 10, 2016, Heraeus filed its second motion to modify the protective orders. Again, Heraeus asked the court to exclude the Cited Documents from the protective orders and to restrict Biomet‘s and Esschem‘s use of the Cited Documents. Heraeus argued that these modifications were necessary because Biomet had opposed its efforts to implement the paragraph 5 confidеntiality safeguards in Belgium, Norway, and Denmark. As a result, Heraeus claimed that Biomet had prevented Heraeus from submitting the Cited Documents in those tribunals. Heraeus also raised many of the same arguments that it raised in its first motion to modify—namely, that the confidential information in the Cited Documents belonged to Heraeus and that Heraeus would take sufficient steps to protect the information from public disclosure.
On January 18, 2017, the district court denied Heraeus‘s motion. The court applied the same four-factor test as before and noted that “[m]uch of what Heraeus argues in its motion to modify are points that have been raised before.” In addition, the court stressed that, “without changed circumstances, there are no grounds to alter [its] determination last year that the reliance factors ‘weigh[] against modification.‘” The court found that, contrary to Heraeus‘s assertion, “the evidence before the court doesn‘t show that Biomet used the terms of the eighth amended protective order to obstruct court proceedings [in Belgium, Denmark, and Nоrway].” The district court further stated that, “[i]n Austria, the parties successfully negotiated a resolution to confidentiality issues by employing the procedure outlined in paragraph six of the eighth amended protective order,” and “encourage[d] the parties to consider the paragraph six procedure as a resource to resolve confidentiality disputes related to the cited documents.” The district court also rejected Heraeus‘s contention that the German judgment, which had since been affirmed by the German Supreme Court, warranted modification of the protective orders. The district court explained that, although the German court‘s factual findings were binding in other jurisdictions, this “doesn‘t get Heraeus across the finish line” because “issues of ownership, misappropriation, and viola-
J. Heraeus‘s Third Motion to Modify the Protective Orders
One month later, on February 17, 2017, Heraeus requested a telephone conference with the district court pursuant to paragraph 6(d) of the eighth amended protective order. In the alternative, Heraeus renewed its second motion to modify the court‘s protective orders.
In that motion, Heraeus argued that the proceedings in Belgium and Norway had been delayed as a result of Biomet‘s refusal to accept restrictions on its use of the Cited Documents. Heraeus attached correspondence between its counsel and Biomet‘s counsel in which Heraeus said that “[t]he crux of the confidentiality disputes in both proceedings [in Belgium and Norway] is Biomet‘s reluctance to accept any restrictions on Biomet‘s use and disclosure of the Cited Documents.” Heraeus also attached declarations from two of its attorneys involved in the litigation in Belgium and Norway, both of whom declared that the litigation was delayed because Biomet would not agree to restrictions upon its use and disclosure of the Cited Documents. In its response letter, Biomet said that “it has no objection to Heraeus‘s use of the Cited Documents in the identified ‘Enforcement Proceedings,’ but refused to agree to restrictions on how it could use its own documents.
On March 1, 2017, the district court denied Heraeus‘s motion in its entirety. First, the court concluded that Heraeus was not entitled to a conference under paragraph 6(d) of the eighth amended protective order. The court explained that paragraph 6 “is triggered only when ‘Heraeus seeks to use the Cited Documents in an Enforcement Proceeding but cannot comply with one or more provisions in the Eighth Amended Protective Order.‘” Because Heraeus did not seek “permission to use the documents itself,” but rather sought to “restrict Biomet‘s use of the documents,” the court concluded that the eighth amended protective order did not apply.
The district court also denied Heraeus‘s alternative request to modify the protective order to restrict Biomet‘s use of the Cited Documents. Relying on the standard articulated in its prior rulings, the court concluded that “Heraeus has shown neither good cause nor changed circumstances” to modify “an agreеd order that addresses different topics and which has governed the parties’ handling of litigation in about ten nations for more than a year.”
Lastly, the court noted that “it isn‘t clear that an order enjoining use of the fruits of discovery by the party from whom the discovery is sought falls within the scope of
K. Appeal
On March 30, 2017, Heraeus filed a notice of appeal seeking review of the district court‘s March 1, 2017 order denying its third motion to modify the protective orders. Heraeus also asks us to review “all other orders underlying that decision,” including the orders issued on September 22, 2015 and January 18, 2017.
A. Jurisdiction
First, we address the scope of our review on appeal. The parties agree that the district court‘s order from March 1, 2017 is a final dеcision over which this Court has appellate jurisdiction. However, they disagree about whether we may also review the “underlying orders” that were issued on September 22, 2015 and January 18, 2017.
Biomet and Esschem argue that those underlying orders were final and thus immediately appealable. Accordingly, they claim that Heraeus was required to appeal those decisions within thirty days after their issuance. Because Heraeus did not file a notice of appeal until March 30, 2017—approximately seventeen months after the first order and seventy days after the second order—Biomet and Esschem say we lack jurisdiction to review those decisions.
On the other hand, Heraeus argues that these underlying orders were not final, and thus not immediately appealable, because they “did not fully and finally resolve the dispute over the use of and restrictions upon the Cited Documents, but instead contemplated further action by the parties and the court.” Nevertheless, Heraeus claims that we may review those underlying orders now as part of this appеal because they “are part of the final decision and were stepping stones in reaching the district court‘s ultimate conclusion.”
1. Appealability of Discovery Orders In § 1782 Actions
Generally speaking, we have jurisdiction to review “appeals from all final decisions of the district courts.”
Because discovery orders do not end the litigation on the merits, they are usually not final and thus not immediately appealable. See Heraeus I, 633 F.3d at 593. However, in
2. The Underlying Orders Were Final and Immediately Appealable
With that in mind, we turn to the issue presented here: whether the underlying orders in this
First, in its September 22, 2015 and January 18, 2017 orders, the district court conclusively denied Heraeus‘s motions to modify the protective orders. Indeed, the court stated multiple times throughout both of those orders that it was denying the relief Heraеus sought—namely, to exclude the nine Cited Documents from the restrictions of the protective orders. Having conclusively denied the relief sought, those orders cannot fairly be characterized as “tentative, informal or incomplete.” Cohen, 337 U.S. at 546.
In arguing the contrary, Heraeus mischaracterizes those orders. For example, Heraeus says that in the September 22, 2015 order, “the district court determined that ‘at least a partial modification of the protective orders’ was warranted.” However, the district court actually said that just one of the four factors weighed in favor of partial modification. After determining 5 that two of the remaining factors weighed against modification, and one was neutral, the court ultimately concluded that, “[o]n balance, Heraeus hasn‘t shown good cause to remove the nine named documents from the protective order.” Accordingly, the court “DENIE[D] Heraeus‘s motion for modification of the protective orders.”
Heraeus also argues that the underlying orders were not final because they contemplated future negotiations and proceedings in the district court. Specifically, Heraeus points out that in the September 22, 2015 order the district court invited the parties to submit an amendment to the protective orders and “strongly encourage[d] the parties to work together towards a compromise.” And in the January 18, 2017 order the district court “encourage[d] the parties to consider the paragraph six procedure as a resource to resolve confidentiality disputes related to the cited documents.”5
However, the conclusion of all proceedings below is not a prerequisite to appealing a discovery order in a
In addition, Heraeus‘s proposed definition of finality in this context would be difficult, if not impossible, to apply in practice. After all, it will not always be clear when the proceedings below have concluded in a
The Tenth Circuit‘s reasoning in In re Republic of Ecuador, 735 F.3d 1179 (10th Cir. 2013), further suggests that discovery orders can be final and immediately appealable in a
Heraeus‘s theory of finality would also undermine the purposes of the final judgment rule. The Supreme Court has said that “finality is to be given a practical rather than a technical construction.” Microsoft Corp. v. Baker, 137 S. Ct. 1702, 1712, 198 L. Ed. 2d 132 (2017) (quoting Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 171 (1974)); see also Brown Shoe Co. v. United States, 370 U.S. 294, 306 (1962) (еndorsing a “pragmatic approach to the question of finality“). Specifically, the Court has instructed us to construe the finality requirement “in line with the[] reasons for the rule“—namely, to “preserve[] the proper balance between trial and appellate courts, minimize[] the harassment and delay that would result from repeated interlocutory appeals, and promote[] the efficient administration of justice.” Baker, 137 S. Ct. at 1712. On balance, those objectives support Biomet‘s position that the underlying discovery orders were final and immediately appealable. Of course, litigants should attempt to resolve discovery disputes through the district judge in the first instance. However, as explained supra, the district court conclusively denied the relief Heraeus sought in both its September 22, 2015 and January 18, 2017 orders. Instead of appealing those orders to this Court, Heraeus filed multiple repetitive motions in the district court. In doing so, Heraeus wasted valuable judicial resources and further delayed the efficient resolution of this case.
In sum, a discovery order issued in a
3. The Underlying Orders Do Not “Merge” With the Final Order On Appeal
Next, Heraeus argues that we may still review the underlying orders as part of this appeal because they were “stepping stones in reaching the district court‘s ultimate conclusion.” Put differently, Heraeus claims that “[t]he Final Order is cumulative, and the interlocutory Underlying Orders merge with it on appellate review.”
Heraeus is correct that, in the typical case where a party appeals the final judgment, we may review “all decisions that shaped the cоntours of that judgment,” including earlier interlocutory orders. Kamen v. Kemper Fin. Servs., Inc., 908 F.2d 1338, 1341 (7th Cir. 1990), rev‘d on other grounds, 500 U.S. 90 (1991). However, those principles do not apply to the atypical situation presented here.
To understand why, it is helpful to analogize to the collateral order doctrine. Under that narrow exception to the final judgment rule, we have jurisdiction to immediately review interlocutory orders that conclusively resolve an important issue that is “conceptually separate from the merits” and “effectively unreviewable on an appeal from a final judgment.” Herz v. Diocese of Fort Wayne-South Bend, Inc., 772 F.3d 1085, 1088-89 (7th Cir. 2014). Critically, the Supreme Court has said that collateral orders do not “merge[] in [the] final judgment” because they “[do] not make any step toward final disposition of the merits of the case.” Cohen, 337 U.S. at 546. Indeed, if we waited until final judgment to review such orders, it would be “too late” and the appellant‘s “rights... will have been lost, probably irreparably.” Id.
The same reasoning applies to discovery orders in
4. The March 1, 2017 Order Does Not Encompass Both Issues Raised in This Appeal
Finally, Heraeus argues that “it effectively does not matter whether the Court reviews only the Final Order or also the Underlying Orders, because the Final Order encompasses and finally resolves all of the issues on appeal.” Heraeus is wrong.
In this appeal, Heraeus argues that the district court erred in two ways: (1) by refusing to exclude the Cited Documents from the scope of the protective order; and (2) by refusing to impose restrictions on Biomet and Esschem‘s use of the Cited Documents. In its first and second motions to modify the protective order, Heraeus asked the court for both forms of relief.
But Heraeus did not ask for the same relief in its third motion. Heraeus fashioned that motion as a “notice of changed circumstances and renewed motion.” Heraeus argues that, by expressly renewing its second motion, it renewed its request to exclude the Cited Documents from the restrictions in the protective orders. However, with the exception of this single statement about renewing its second motion, nothing in the third motion asks the district court to remove the Cited Documents from the scope of the protective order.
Instead, the third motion focused on Biomet‘s refusal to accept restrictions on its use of the Cited Documents. Indeed, in the correspondence between Heraeus‘s counsel and Biomet‘s counsel that was attached to the third motion, Heraeus stated that “[t]he crux of the confidentiality disputes in both proceedings [in Belgium and Norway] is Biomet‘s reluctance to accept any restrictions on Biomet‘s use and disclosure of the Cited Documents.”
Moreover, at the hearing on the third motion, Heraeus‘s counsel said:
All we‘re hoping the Court can do is... either mediate some kind of solution here or enter a limited order that prevents the further disclosure publically of the cited documents... once they are produced to the Belgium and Norwegian courts and restricts Biomet from further disseminating those documents within Biomet on a going-forward basis for purposes other than this litigation, and that‘s all we‘re really asking for.
Based on this representation, the district judge said: “[I]t seems... we‘re on a different part of the playing field than we‘ve been before.” The court explained: “[W]hat we‘ve been dealing with before with respect to several countries is what use Heraeus can make of these documents because Heraeus said it needed to put these documents in front of courts in order to protect their rights and needed the authority to do that.” The court continued: “[W]e‘re at a different place, because now it appears to me that Heraeus is asking that Biomet‘s use of the documents be restricted when thеy weren‘t before and apparently didn‘t have to be before in order to get us through the first wave of countries.” The district judge proceeded to ask Heraeus‘s counsel: “Where am I going wrong here?” Heraeus‘s counsel responded that the district judge was “not too far off base,” but clarified that it had also asked to impose restrictions on Biomet‘s use in its previous two motions. If Heraeus was still seeking to exclude the Cited Documents from the scope of the protective orders as it had in previous motions, Heraeus‘s counsel could have corrected the district court‘s misconception at this point in time. Instead, Heraeus‘s counsel confirmed that it was just seeking to restrict Biomet‘s use of the Cited Documents.
In sum, Heraeus did not ask the district court to exclude the Cited Documents from the scope of the protective orders in its third motion, and it confirmed at the hearing on that motion that it was simply seeking to restrict Biomet‘s use of the Cited Documents. As a result, the district court‘s final order of March 1, 2017 does not address whether to exclude thе Cited Documents from the scope of the protective orders. Rather, it only addresses whether the eighth amended protective order should be amended to impose restrictions on Biomet‘s use of the Cited Documents. We therefore limit our review to that issue.
B. The District Court Did Not Abuse Its Discretion
“The trial court is in the best position to weigh fairly the competing needs and interests of parties affected by discovery.” Cty. Materials Corp. v. Allan Block Corp., 502 F.3d 730, 739 (7th Cir. 2007) (quoting Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984)). Moreover, “[t]he unique character of the discovery process requires that the trial court have substantial latitude to fashion protective orders.” Id. at 36. Thus, we review a district court‘s discovery decisions for abuse of discretion. Prestwick Capital Mgmt., Ltd. v. Peregrine Fin. Grp., Inc., 727 F.3d 646, 664 (7th Cir. 2013) (noting that our review is “extremely deferential“). In this context, a district court abuses its discretion if: “(1) the record contains no evidence upon which the court could have rationally based its decision; (2) the decision is based on an erroneous conclusion of law; (3) the decision is based on clearly erroneous factual findings; or (4) the decision clearly appears arbitrary.” Id. (quoting Sherrod v. Lingle, 223 F.3d 605, 610 (7th Cir. 2000)).
Heraeus argues that the district court abused its discretion by: (1) applying the wrong legal test; (2) placing the burden on Heraeus to show good cause to modify the protective orders; and (3) concluding that modification was not warranted under the four-factor test. We address each of these arguments in turn.
1. The District Court Applied the Correct Legal Test
The district court applied the four-factor test that courts in this Circuit regularly use when resolving motions to modify protective orders. See, e.g., Romary Assocs., Inc. v. Kibbi, LLC, No. 1:10-cv-376, 2012 WL 32969, at *1 (N.D. Ind. Jan. 6, 2012); Chi. Mercantile Exch., Inc. v. Tech. Research Grp., LLC, 276 F.R.D. 237, 239 (N.D. Ill. 2011); Braun Corp. v. Vantage Mobility Int‘l, LLC, 265 F.R.D. 330, 332 (N.D. Ind. 2009); Murata Mfg. Co. v. Bel Fuse, Inc., 234 F.R.D. 175, 179 (N.D. Ill. 2006). Under that test, courts consider the following four factors: “(1) the nature of the protective order; (2) the foreseeability, at the time of issuance of the order, of the modification requested; (3) the parties’ reliance on the order; and most significantly (4) whether good cause exists for the modification.” Chi. Mercantile Exch., 276 F.R.D. at 239 (quoting Trading Techs. Int‘l, Inc. v. GL Consultants, Inc., Nos. 05-cv-4120, 05-cv-5164, 2011 WL 148252, at *3 (N.D. Ill. Jan. 18, 2011)).
Heraeus argues that this test does not apply where a party seeks to modify the restrictions on a discrete group of documents. Although Heraeus does not directly identify an alternative legal test, it claims that the district court should have followed our decision in Jepson, Inc. v. Makita Electric Works, Ltd., 30 F.3d 854 (7th Cir. 1994). In that case, the district court denied a motion to modify a stipulated pro-
Jepson is distinguishable because Biomet is not using the protective orders as a shield to prevent the Cited Documents from being used in other tribunals. Although Heraeus claimed that Biomet was using the protective orders to obstruct proceedings in Belgium and Norway, the district court rejected that argument in its January 18, 2017 order. Specifically, the court found that “the evidence before [it] doesn‘t show that Biomet used the terms of the eighth amended protective order to obstruct court proceedings there.”
The district court‘s finding was not clearly erroneous. Heraeus admits that it has been able to use the Cited Documents in several countries: Austria, Denmark, Finland, France, and Italy. Moreover, Biomet repeatedly stated in its correspondence with Heraeus and at the hearing on these motions that it did not have any objection to Heraeus‘s use of the Cited Documents in the European enforcement proceedings, but rather objected to restrictions on its own use of the Cited Documents. And, as the district court pointed out, “Heraeus conceded... that the confidentiality disputes might have been the result of confusion, rather than an effort by Biomet to obstruct.” Therefore, Jepson does not apply.
2. The District Court Properly Placed the Burden on Heraeus to Show Good Cause to Modify the Protective Order
The district court correctly concluded that Heraeus, as the party seeking modification, has the burden of showing good cause to modify the protective order. See, e.g., Braun, 265 F.R.D. at 332 (“The party seeking to modify the protective order has the burden of demonstrating that good cause exists.“); Murata Mfg. Co., 234 F.R.D. at 179; Romary, 2012 WL 32969 at *1.
Nevertheless, Heraeus argues that, “[a]s the parties seeking protection for the Cited Documents, Biomet and Esschem bear the burden of showing, on a document-by-document basis, that the protection they seek is warranted.” In support of this argument, Heraeus relies on cases that resolved motions to seal or unseal court documents. See, e.g., Baxter Int‘l, Inc. v. Abbott Labs., 297 F.3d 544, 548 (7th Cir. 2002) (denying joint motion to maintain documents under seal); United States v. Pickard, 733 F.3d 1297, 1305 (10th Cir. 2013) (reversing district court‘s decision denying motion to unseal court records); In re Bank One Sec. Litig., 222 F.R.D. 582, 584 (N.D. Ill. 2004) (granting lead plaintiff‘s motion to unseal the district court record). Because there is a “strong presumption toward public disclosure of court files and documents,” courts resolving such motions have placed the burden on the party seeking confidentiality to show good cause for keeping the documents from public view. In re Bank One, 222 F.R.D. at 585-86; see also Baxter, 297 F.3d at 548 (noting “[t]he strong presumption of public disclosure” for “materials that formed the basis of the parties’ dis-
Here, Heraeus is not asking to unseal the Cited Documents so the public can view them. To the contrary, Heraeus stressed throughout this litigation that it wants to prevent public disclosure of the Cited Documents. Thus, the presumption in favor of public access to court documents is not implicated. Absent this presumption, the district court properly placed the burden on Heraeus to show good cause to modify the stipulated protective order.
3. The District Court Did Not Abuse Its Discretion In Applying The Four-Factor Test
Lastly, the district court did not abuse its discretion by concluding that Heraeus had not met its burden under the four-factor test to warrant modification of the eighth amended protective order.
With respect to the first factor—the nature of the protective order—the district court explained that Heraeus‘s burden was even higher because Heraeus agreed to the protective orders at issue. See Am. Tel. & Tel. Co. v. Grady, 594 F.2d 594, 597 (7th Cir. 1978) (“[W]here a protective order is agreed to by the parties before its presentation to the court, there is a higher burden on the movant to justify the modification of the order.“). Heraeus points out that paragraph 11 of the eighth amended protective order expressly contemplates modification because it reserves Heraeus‘s right to challenge Biomet‘s designation of any document as confidential and to seek relief from the court. However, as the district court noted in its January 18, 2017 order, most protective orders provide for the possibility of amendment. Moreover, because the eighth amended protective order outlines a detailed dispute-resolution process that the parties must follow before they ask the court for relief, it actually restricts Heraeus‘s right to seek amendment. Thus, this factor weighs against modification.
The district court also considered whether Heraeus had shown good cause for modification. The district court concluded that Heraeus had not, stating:
The only changed circumstance is that someone representing Heraeus (which has many lawyers in light of the number of jurisdictions in which it is trying to protect what it believes are its trade secrets) has decided that Biomet should be restricted in its use of the documents Heraeus wants to use and already has discovered. The only good cause is that the suspicions that motivate those lawyers might be correct.
The district court‘s conclusion was not an abuse of discretion. Indeed, Heraeus‘s third and final motion simply repeated arguments that the district court had already addressed (and rejected) in the underlying orders. In particular, Heraeus reiterated its claim that it owns the trade secrets contained in the Cited Documents. However, the district court had already rejected this argument in the ruling it issued just six weeks prior. In that order, the district court explained that the German court‘s conclusion on ownership was not binding because “issues of ownership, misappropriation, and violation of a trade secret are issues of law.” Moreover, although Heraeus claimed that Biomet‘s refusal to accept restrictions on its use of the Cited Documents caused delays in Belgium and Norway, enforcement proceedings had proceeded apace in several other countries despite a lack of such restrictions. Accord-
Finally, the district court considered the parties’ longstanding reliance on the eighth amended protective order. Specifically, the court noted that it “has governed the parties’ handling of litigation in about ten nations for more than a year.” Therefore, this factor also weighs against modification.
In sum, the district court did not abuse its discretion by denying Heraeus‘s request to modify the eighth amended protective order to impose restrictions on Biomet‘s use of the Cited Documents.7
III. Conclusion
For the foregoing reasons, we AFFIRM the judgment of the district court.