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Elizabeth Lofts Condominiums Owners' Association v. Victaulic Co.

Court of Appeals of Oregon

August 29, 2018

ELIZABETH LOFTS CONDOMINIUMS OWNERS' ASSOCIATION, an Oregon non-proft corporation, Plaintiff,
v.
VICTAULIC COMPANY, a foreign corporation Defendant. VICTAULIC COMPANY, a foreign corporation, Third-Party Plaintiff,
v.
SEAL DYNAMICS, a Florida Corporation and F&S DISTRIBUTORS, INC., a New Jersey Corporation, Third-Party Defendants. VICTAULIC COMPANY, a foreign corporation, Defendant-Appellant,
v.
Michelle McCLURE, Landye Bennett Blumstein LLP, Phillip Joseph, Ball Janik LLP, and Daniel Webert, Respondents.

          Argued and Submitted February 6, 2018

          Multnomah County Circuit Court 111014269; A162442 John A. Wittmayer, Judge.

          Sharlei Hsu argued the cause for appellant. Also on the opening brief were Anne Cohen, Chelsea Glynn, and Smith [293 Or.App. 573] Freed & Eberhard P.C. Also on the reply brief were Anne Cohen and Thenell Law Group, P.C.

          Ciaran P.A. Connelly argued the cause for respondents Phillip Joseph and Ball Janik LLP. Also on the brief were Phillip E. Joseph, Dwain M. Clifford, and Ball Janik LLP.

          Marilyn K. Hawkins argued the cause for respondent Daniel Webert. Also on the brief were Daniel Webert and Barker Martin PS.

          Stuart K. Cohen and Landye Bennett Blumstein LLP, and Michelle K. McClure and The Sieving Law Firm APC, California, fled the brief for respondents Michelle McClure and Landye Bennett Blumstein LLP.

          Before Lagesen, Presiding Judge, and DeVore, Judge, and James, Judge.

         Case Summary:

         Appellant, Victaulic Company, appeals an order denying its motion for an order to show cause why respondents should not be found in contempt for violating a protective order and nondisclosure agreement created in an earlier litigation. ORS 33.015(2); ORS 33.055. Appellant argues that its motion and supporting affidavits sufficiently established a prima facie case of remedial contempt and, thus, the trial court erred when it denied the motion. Respondents, a group of lawyers and law firms that represented Elizabeth Lofts Condominiums Owners' Association, contend that the trial court correctly denied the motion because the record did not sufficiently establish that they willfully violated the underlying protective order and nondisclosure agreement. Held: In this case, the question is not whether respondents did, in fact, act willfully, but rather whether the element of willful noncompliance was sufficiently established in satisfaction of a prima facie showing of contempt. Based on this record, a factual question as to the willfulness element was presented. Accordingly, when viewed in the light most favorable to appellant, a trier of fact could infer that respondents made the confidential disclosures willfully.

         Reversed and remanded.

         [293 Or.App. 574] JAMES, J.

         Appellant appeals an order denying its motion for an order to show cause why respondents should not be found in contempt for violating a protective order and nondisclosure agreement created in an earlier litigation. ORS 33.015(2); ORS 33.055. Appellant argues that its motion and supporting affidavits sufficiently established a prima facie case of remedial contempt and, thus, the trial court erred when it denied the motion. Respondents contend that the trial court correctly denied the motion because the record did not sufficiently establish that respondents willfully violated the underlying protective order and nondisclosure agreement. We agree with appellant and, accordingly, reverse and remand.

         The question on appeal is whether appellant's show of proof was sufficient to establish a. prima facie case of contempt. In a contempt proceeding, "[w]e review to determine whether the record contains evidence from which a rational trier of fact, drawing all reasonable inferences in the light most favorable to the [movant], could find all elements of contempt." State v. Beleke, 287 Or.App. 417, 420, 403 P.3d 481, rev den, 362 Or. 208 (2017) (internal quotation marks omitted). Therefore," [t] he question is not whether we believe that the [respondents were] in contempt, but whether the evidence is sufficient for the trier of fact to so find." Id. at 420-21. As such, we state the facts in the light most favorable to the movant. See Handy v. Lane County, 360 Or. 605, 608 n 1, 385 P.3d 1016 (2016) (stating the facts in the light most favorable to the plaintiff where the question on review was whether the plaintiff's evidence was sufficient to establish a prima facie case).

         Respondents are a group of lawyers and law firms that represented Elizabeth Lofts Condominiums Owners' Association in a products liability action against appellant, Victaulic Company. As part of that litigation ("Elizabeth Lofts"), the parties agreed to, and the court approved, a protective order and nondisclosure agreement to keep closely held trade secrets, patents, and testing material confidential as it was shared between appellant and respondents during discovery. The protective order directed that "qualified persons"-including experts used by the parties-were subject [293 Or.App. 575] to the protective order and nondisclosure agreement. As part of the order, respondents were to provide a copy of the protective order and "execute" a nondisclosure agreement with their experts before confidential documents and information were received. Ultimately, appellant and the condominium association settled the Elizabeth Lofts case and the court dismissed the matter. However, the stipulated protective order and nondisclosure agreement was still binding.

         The events giving rise to this contempt proceeding came years later. During a deposition in a different products liability case, an expert that respondents had retained in the Elizabeth Lofts action disclosed appellant's confidential documents and information. The documents and information disclosed by that expert were Bates stamped with "Confidential" and "VIC_LIZ." One of the attorneys in that later litigation alerted appellant's counsel to the disclosure.

         Appellant's counsel reviewed the disclosed documents and information and determined that the material was from the Elizabeth Lofts case and was protected by the protective order and nondisclosure agreement. Soon after the disclosure, appellant's counsel and respondents exchanged numerous letters and emails in an attempt to claw back and resolve the expert's disclosure of Victaulic's confidential documents and information. Appellant's counsel repeatedly requested a copy of the nondisclosure agreement executed by the expert retained by respondents. No executed nondisclosure agreement with the expert in the Elizabeth Lofts case was ever produced by any respondent in response to ...


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