IN THE UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS AUSTIN DIVISION FUNDSXPRESS FINANCIAL NETWORK, INC., Plaintiff, v. DIGITAL INSIGHT CORPORATION, JOHN DORMAN, VINCENT BRENNAN, RONALD GOFFMAN, ERIC EDWARDS and STEPHEN CRAIN, Defendants. PLAINTIFF'S MOTION THAT DEFENDANTS' DESIGNATIONS OF DOCUMENTS HAVE BEEN WAIVED TO THE HONORABLE SAM SPARKS: Plaintiff FundsXpress Financial Network, Inc., hereby moves the Court to find documents designated as Attorneys Eyes Only by Digital Insight have had those designations waived by Digital Insight's failure to file a motion to retain the designations under the Protective Order entered in this lawsuit. A Protective Order was signed and entered by this Court on July 10, 2002. A copy of that Protective Order is attached to this Motion as Exhibit A for the Court's convenience. In the course of production in this litigation, all parties had the opportunity to designate documents as Attorneys Eyes Only or as confidential. Designations of Attorneys Eyes Only were to be reserved only for documents containing information of the most sensitive nature that if disclosed to persons of expertise in the relevant area of knowledge would reveal significant technical or business advantages or disadvantages of the producing or designating party, and that includes, as a major portion, subject matter that is believed to be unknown to the opposing party or parties .... Protective Order P9. The term "confidential" was not defined by the Protective Order but a party could designate a document as "confidential" only if it, "in good faith" believed the document to contain confidential information. Protective Order P2. Documents designated as Attorneys Eyes Only can be seen only by the attorneys for the parties to this lawsuit or by designated experts retained by the parties. Protective Order P6. Documents designated as confidential may be reviewed by one designated party representative. Protective Order P6. If a party disagrees with the designation of a document, it must "first try to resolve such dispute in good faith on an informal basis, such as by the production of redacted copies." Protective Order P8. If the parties cannot resolve their disagreement, "the objecting party may invoke this Protective Order by objecting in writing to the party who has designated the document." Protective Order P8. The designating party shall be required to move the Court for an Order preserving the designated status of such information or person within fourteen (14) days of receipt of the written objection and failure to do so shall constitute a termination of the restricted status of such item. Protective Order P8. In August, counsel for FundsXpress and Digital Insight began discussing the designations of emails produced by Digital Insight showing Digital Insight's possession and use of documents containing confidential information and trade secrets of FundsXpress that Digital Insight had obtained without authorization from FundsXpress. Digital Insight had also produced emails of its officers and employees asking FundsXpress employees and ex-employees for confidential information and documents and discussing how best to use that information in competing with FundsXpress in the marketplace. Although FundsXpress's own documents were attached to these emails, Digital Insight had designated the emails and the documents as Attorneys Eyes Only, so that FundsXpress could not show those emails and attachments to its own client. Although the attachments contained FundsXpress's competitive information, the attachments could not, under any conceivable argument, have been competitive information belonging to Digital Insight. Likewise, the emails themselves -- the words of Digital Insight's officers and sales people about how to solicit FundsXpress's confidential information and trade secrets and how to use that information -- were not "information of the most sensitive nature" that would have revealed "significant technical or business advantages" against Digital Insight to persons with expertise in the industry. On August 20, 2002, counsel for FundsXpress wrote Digital Insight counsel a letter asking that designations of specific documents be changed from Attorneys' Eyes Only to confidential. A copy of that letter is attached as Exhibit B. Digital Insight did not re-designate the requested documents. On Friday, September 6, 2002, counsel for Digital Insight and FundsXpress had an extended telephone conference about discovery issues including the designation of documents for which FundsXpress had requested redesignation. On September 9, 2002, counsel wrote a letter formally objecting to the designations "under the terms of the Protective Order under which discovery in this lawsuit is proceeding." That letter and its fax confirmation page showing receipt of the document on September 9, 2002 is attached as Exhibit C. On September 18, 2002, Digital Insight agreed to re-designate some emails as confidential.[1] A copy of that letter is attached as Exhibit D. Digital Insight did not offer to re-designate documents redacted, although that is an option clearly contemplated in the Protective Order. See Protective Order P8. Digital Insight, however, did not file a motion to retain the designations of the remaining documents, listed in Exhibit E. They included documents showing that FundsXpress's documents and contact information were passed among Digital Insight's sales personnel, analyzed, and used, and that Digital Insight engaged in libel. Many of these documents constitute a basis for FundsXpress's claims against Digital Insight. On September 30, 2002, counsel for FundsXpress wrote counsel for Digital Insight to inform them that FundsXpress would be providing a document Digital Insight had designated as Attorneys Eyes Only to a third party in preparation for a deposition dealing with the information forming the basis of one of FundsXpress's claims that was contained in that document. In the letter, FundsXpress pointed out that Digital Insight had failed to file a motion preserving its designations of documents FundsXpress had formally objected to and that FundsXpress considered the designations waived. A copy of that letter is attached as Exhibit F. Although Digital Insight has clearly waived its designations by failing to file a motion to protect those designations, the documents it refused to re-designate were improperly designated in the first place. FundsXpress has provided the Court with examples, under seal, of the documents it seeks to be able to show its client as attachments to Exhibit E. These documents are not Digital Insight's competitive information. An expert looking at these documents could not compete more successfully with Digital Insight in the marketplace. These documents are not suitable for designation as Attorneys Eyes Only -- or even as confidential in many cases. FundsXpress, however, has asked, at this point only that the documents be re-designated so that counsel may show their own client's single designated representative further basis of the claims FundsXpress has made against Digital Insight. Without reviewing these documents, the client cannot possess the knowledge necessary to help decide the direction and conduct of the litigation and assist in making informed settlement demands as required by the Scheduling Order. The client cannot even verify its own interrogatory responses because those responses necessarily reveal the content of many of these designated documents. FundsXpress has repeated its position since September 30 in telephone conversations with counsel for Digital Insight -- each time assuring Digital Insight that it had not yet begun to treat the documents as confidential rather than Attorneys Eyes Only but that it regarded the designations as having been waived under the Protective Order. On December 20, 2002, FundsXpress informed Digital Insight that it intended to treat the documents whose designations Digital Insight had waived as confidential rather than Attorneys Eyes Only. See Exhibit G. Even then, Digital Insight did not file a motion to retain these designations but, instead, asked FundsXpress to wait until January 6, 2003 before showing its client the documents that form much of the basis of the client's own claims. Finally, on December 31, at 3:13 p.m. Digital Insight's counsel faxed a letter saying it would agree to re-designate as confidential almost all of the documents FundsXpress had demanded be re-designated on September 9, 2002, but only "after redacting pricing, customer, sales strategy or other sensitive information." See Exhibit H. Digital Insight, however, still asserted its designations of Attorneys Eyes Only for 38 pages of documents. The time has passed for Digital Insight to make concessions while choosing the documents it wishes still to protect. FundsXpress has waited long enough. The Protective Order gave Digital Insight fourteen days to file its motion. Digital Insight has waited over four months before "offering" to re-designate with redactions. FundsXpress asks the Court to find that Digital Insight's designation of all these documents -- unredacted -- as Attorneys Eyes Only are waived. FundsXpress further asks the Court to determine, after review of the attached documents, whether they deserve any designation at all. WHEREFORE, plaintiff FundsXpress asks the Court to find that these designations are waived and that FundsXpress may treat these documents as confidential. FundsXpress also asks the Court to grant to it all further relief the Court finds appropriate. [1] Digital Insight even retained the Attorneys Eyes Only designations for a few blank pages. See DIN100424 and 101525 as examples. Digital Insight could have asked FundsXpress for additional time to review these designations had it been pressed for time to make a careful review. It did not ask. Respectfully submitted, R. James George Jr. State Bar No. 07810000 David H. Donaldson, Jr. State Bar No. 05969700 Peter D. Kennedy State Bar No. 11296650 Nanneska N. Hazel State Bar No. 12813500 114 W. 7th Street, Suite 1100 Austin, Texas 78701 (512) 495-1400 (512) 499-0094 (Fax) ATTORNEYS FOR PLAINTIFF FUNDSXPRESS FINANCIAL NETWORK, INC. GEORGE & DONALDSON, L.L.P. 114 West 7th Street, Suite 1100 Austin, Texas 78701 (512) 495-1400 FAX: (512) 499-0094 WINSTEAD SECHREST & MINICK, P.C. 100 Congress Ave., Suite 800 Austin, Texas 78701 (512) 474-4330 FAX: (512) 370-2850 CERTIFICATE OF CONFERENCE On December 31, 2002, counsel for FundsXpress conferred with counsel for Digital Insight about its Motion to Find Designations Waived. Counsel for Digital Insight made a proposal for re-designation of some of these documents. FundsXpress has reviewed the proposal and finds it unacceptable. FundsXpress has informed the defendant that it cannot accept the proposal and presumes that the defendant opposes this Motion. R. James George, Jr. CERTIFICATE OF SERVICE I hereby certify that on January 2, 2003, a true and correct copy of the foregoing was served on counsel of record as shown below: A. Boone Almanza Akin & Almanza, L.L.P. 1717 West 6th Street, Suite 230 Austin, Texas 78701 (via Hand Delivery) Barry K. Bishop Clark, Thomas & Winters, P.C. 300 West 6th Street, 15th Floor Austin, TX 78701 (via Hand Delivery) John Cotton Aaron C. Gundzik Cotton & Gundzik, L.L.P. 725 S. Figueroa St., 34th Floor Los Angeles, CA 90017 (via Certified Mail) Martha Dickie Jeffrey D. Miller Minton, Burton, Foster & Collins A Professional Corporation 1100 Guadalupe Street Austin, Texas 78701 (via Hand Delivery) R. James George