Unreported / Non-Citable
Background
Four California environmental nonprofits sued Exxon Mobil Corporation over its production and marketing of single-use plastics, including an "advanced recycling" program that the complaint alleges was meant to divert attention from the inability to safely dispose of those plastics. A stipulated protective order created two tiers: Confidential and Highly Confidential, Attorneys' Eyes Only (AEO). ExxonMobil designated about 4,500 of its first 5,886 documents AEO, and the plaintiffs challenged 321 of those designations.
ExxonMobil withdrew about 150 designations during meet-and-confer and one more, Exhibit C to the plaintiffs' counsel's declaration, in its reply. It moved to retain AEO status for the rest: 171 documents by its count, 169 by the plaintiffs'. The plaintiffs conceded every document is at least Confidential and asked only that the designations be downgraded to that tier, while reserving the right to challenge other designations.
Confidential material may go, after signing an acknowledgment, to the receiving party's officers and employees, experts, and witnesses where reasonably necessary. AEO material goes only to designated house counsel and experts after written notice and a chance to object, and to deposition witnesses only if they authored, received, or held the document or its information. ExxonMobil filed eight sealed exemplars across four categories (financial projections, customer and marketing strategy, sensitive contracts, and feedstock and engineering analyses) with an employee declaration. The plaintiffs offered five exemplars of their own.
The Court’s Holding
The magistrate judge granted ExxonMobil's motion to retain the AEO designation for the documents listed in Table 1 to the Sestito declaration, except that the motion was moot as to Exhibit C, which ExxonMobil had de-designated. Because the challenge arose under a stipulated protective order, ExxonMobil bore the burden, and the court found it met that burden: its declarations described the documents and the harm from disclosure, by category and exemplar, with enough specificity. The operative question was whether disclosure to those who may see Confidential but not AEO material would create a substantial risk of serious harm. The court concluded it would, because the Confidential tier would let witnesses such as industry third parties see pricing and margin data, and would let experts affiliated with competitors see it without notice to ExxonMobil.
The court rejected the plaintiffs' counterarguments. Their status as non-competitors was true but not controlling, because the order's definition turns on disclosure to any "Non-Party" and the plaintiffs' reading would nullify the second tier. Age was not dispositive: the documents date from the 2021-2022 start-up period, include projections into the 2030s, and one feedstock agreement is still running. The plaintiffs' press-release account of the Cyclyx venture did not outweigh ExxonMobil's sworn declaration. Of the plaintiffs' own exemplars, only Exhibit C should have been de-designated; the court called ExxonMobil's showing for Exhibits A and B a closer call but found it sufficient, and noted that designations attach at the document level. The plaintiffs showed no actual prejudice: outside counsel, house counsel, and noticed experts may review everything, and the plaintiffs identified no person needing access.
The ruling is without prejudice to a later document-specific request for a particular person to see a particular document on a showing of need, and the parties may agree on redacted Confidential versions. It does not resolve the plaintiffs' reserved challenges to other designations.
Key Takeaways
- A party defending an AEO designation should submit specific declarations, by category and with exemplars, explaining what the documents contain and who could use them.
- A receiving party's non-competitor status does not defeat AEO treatment when the lower tier lets competitors, suppliers, or counterparties see the material through witnesses or experts.
- Document age is not dispositive, because projections, ongoing contract terms, and technical data can remain commercially useful.
- A challenger claiming prejudice should identify who needs access to which document and why, since asymmetry and added expense alone were not enough.
- AEO designations attach to whole documents, so parties may negotiate redacted Confidential versions.
Why It Matters
This discovery order applies the Ninth Circuit's document-specific burden to a mass AEO dispute and shows that a court may accept category-and-exemplar proof rather than reviewing every document individually. The court treated the structural differences between the two tiers, rather than any likelihood that the plaintiffs would violate the order, as the source of risk.
The order is a magistrate judge's ruling, not a final judgment. It settles only the designations challenged, and the merits of the case and any further designation disputes remain open.