Unreported / Non-Citable
Background
Four California environmental nonprofits sued Exxon Mobil Corporation over its production and marketing of single-use plastics, including its 'advanced recycling' program, which the operative complaint characterizes as an effort to divert attention from the inability to safely dispose of those plastics. The court entered a stipulated two-tier protective order on May 14, 2026, designating material as either 'Confidential' or 'Highly Confidential – Attorneys' Eyes Only' (AEO). In its first production of 5,886 documents, ExxonMobil designated about 4,500 as AEO.
The plaintiffs challenged 321 of those designations in an August 14, 2026 letter, arguing the documents did not appear to reflect trade secrets or present a risk of competitive or financial harm. ExxonMobil re-reviewed the documents, reclassified seventy-five as Confidential, and withdrew about 150 more during meet-and-confer plus one additional document, Exhibit C, in its reply. That left 171 documents by ExxonMobil's count, or 169 by the plaintiffs' count, in dispute. The plaintiffs conceded every document was at least Confidential and asked only that the designations be downgraded to that tier.
ExxonMobil filed eight exemplars under seal, two per category, with a declaration from Zachary Patterson, an ExxonMobil employee, describing them and the harm from disclosure, plus a chart assigning each disputed document to one of four categories: financial data, strategy, and projections; customer-acquisition information and marketing strategy and research; contracts with sensitive commercial terms; and feedstock, product, and engineering strategy and analyses. The plaintiffs filed five exemplars of their own.
The Court’s Holding
The court granted ExxonMobil's motion to retain the AEO designation for the challenged documents listed in Table 1 to the Sestito Declaration, except that the motion was moot as to Exhibit C to the Boutin Declaration, which ExxonMobil had de-designated. ExxonMobil bore the burden under Rule 26(c) and Ninth Circuit precedent and carried it: its declarations described the documents and the harm from disclosure, by category and by exemplar, with enough specificity to show a substantial risk of serious harm if the documents reached the wider group who may see Confidential but not AEO material — the plaintiffs' officers and employees, experts without prior notice to ExxonMobil, and deposition witnesses who are not authors, recipients, or custodians.
The court rejected the plaintiffs' lead argument that, as nonprofits that do not compete with ExxonMobil, they face no competitive harm from disclosure. The Protective Order turns on disclosure 'to another Party or Non-Party,' and a 'Non-Party' is anyone not a party; on the plaintiffs' reading, no ExxonMobil document could be AEO, reading the second tier out of the stipulated order. The case law does not require a competitive relationship between the parties, and harm can come from sources other than direct competitors. The court also rejected staleness: age is not dispositive, and ExxonMobil showed the two- to six-year-old documents remain useful now, with projections through 2026, 2028, and into the 2030s, crediting its sworn account that Cyclyx is a feedstock-gathering venture, not its advanced-recycling vehicle. Finally, the court found no actual prejudice: outside counsel may review every document, and the plaintiffs identified no specific person needing access to a specific document.
Key Takeaways
- ExxonMobil met its Rule 26(c) burden to show a substantial risk of serious harm from disclosure of the challenged Table 1 documents designated AEO, describing the documents and harm by category and exemplar with sufficient specificity.
- AEO protection does not require a competitive relationship between the parties; the risk of harm runs through the persons the Confidential tier admits — experts without prior notice and deposition witnesses who are not authors or recipients — not just the plaintiffs' staff.
- Documents two to six years old were not stale because they contained projections through 2026, 2028, and into the 2030s and could be extrapolated to predict future strategies.
- The plaintiffs showed no actual prejudice because outside counsel could review every document and they identified no specific person needing access to a specific document.
- The ruling was without prejudice to a later, document-specific request to permit disclosure on a showing of need, and the parties may agree to Confidential versions with sensitive portions redacted.
Why It Matters
This order illustrates how two-tier protective orders operate in environmental litigation over a defendant's internal business documents. Even when the receiving party is a nonprofit that does not compete with the designating party, AEO designations may be upheld if the designating party shows a substantial risk of serious harm from disclosure to third parties the Confidential tier admits, such as experts, deposition witnesses, or the receiving party's officers and employees.
The ruling also shows the importance of specific, exemplar-based showings in designation disputes. ExxonMobil succeeded with detailed declarations from a knowledgeable employee describing eight exemplars across four categories, not broad allegations. The court scrutinized designations document by document but recognized that designations attach at the document level: a document with extremely sensitive information does not lose AEO protection because it also contains routine content.