Zenith Electronics Corp. v. Ballinger

Citations: 204 P.3d 1106; 220 Ariz. 257; 551 Ariz. Adv. Rep. 34; 2009 Ariz. App. LEXIS 28Docket: 1 CA-SA 008-0282

Court: Court of Appeals of Arizona; March 5, 2009; Arizona; State Appellate Court

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In the case of Zenith Electronics Corporation v. Honorable Eddward Ballinger, the Arizona Court of Appeals addressed a post-judgment motion for permissive intervention by Public Citizen in a wrongful death lawsuit initiated by Barbara Cassidy against Zenith. The lawsuit, which alleged that a defective Zenith television caused a fire resulting in the death of Cassidy's father, had been settled and dismissed. Zenith had produced over 22,000 pages of documents under a broad protective order during the litigation.

After the case's dismissal, Public Citizen sought to intervene to access documents produced by Zenith under the protective order. Zenith opposed the intervention, arguing that the motion was untimely and that it violated the protective order intended to safeguard sensitive information. The superior court granted Public Citizen's motion, prompting Zenith to seek special action relief from the appellate court.

The appellate court accepted jurisdiction to consider the appropriateness of post-judgment intervention but ultimately denied relief, allowing Zenith the option to challenge any future modifications to the protective order. The protective order, signed by Judge Michael D. Jones, restricted access to confidential materials to the court, parties involved, their attorneys, and necessary consultants, while also mandating the return of confidential documents at the conclusion of the litigation. The order's confidentiality terms were designed to remain in effect post-termination unless altered by the court.

The court maintained jurisdiction to enforce and modify the Protective Order post-termination of the lawsuit. After Cassidy filed a notice of settlement on April 10, 2008, the case was dismissed with prejudice on May 1. Subsequently, on June 11, Public Citizen sought to intervene under Arizona Rule of Civil Procedure 24(b) to modify the protective order that limited public access to documents. Public Citizen's motion emphasized the public's right to access documents from Zenith, arguing that they were essential for understanding safety concerns related to certain projection televisions and the CPSC's actions during product recalls. Zenith opposed the motion, claiming it was untimely and lacked a common legal question with the Cassidy case. Zenith referenced several cases, including *Weaver v. Synthes, Ltd.*, which underscored that post-judgment intervention is generally disfavored and requires strong justification for any delay. The court ultimately granted Public Citizen's intervention despite not explicitly addressing the factors of Rule 24, citing Zenith's noncompliance with Rule 26(c) as the basis for its decision.

Zenith and Public Citizen were ordered by the court to meet and confer in an attempt to settle their dispute. A continued hearing on Public Citizen's request for relief was scheduled for December 15, 2008. However, on December 5, 2008, Zenith filed a special action petition and a notice of appeal concerning the superior court's decision to allow Public Citizen to intervene. The primary focus at this stage is the court's intervention decision, as no documents under the existing protective order have been ordered for disclosure. The ruling does not imply any specific outcome regarding Public Citizen's request to modify the protective order, and Zenith retains the right to seek further relief later.

The court notes that when considering protective orders, factors such as potential risks to public health, safety, or financial welfare may be relevant. Zenith argues for special action jurisdiction, claiming that an order requiring it to release information would leave it without an adequate appellate remedy. The court agrees, stating that there is no equally effective remedy through an appeal and that the legal issue at hand holds statewide significance.

On the merits, Zenith contends that the superior court abused its discretion by allowing intervention, which could force it to expend resources on a settled case and compromise the confidentiality of its documents. Zenith also argues that the court's decision effectively modified the protective order and required negotiations with Public Citizen over the protected documents. However, the court clarified that no disclosure has been mandated yet, limiting the analysis to the issue of intervention.

Zenith further claims that the motion to intervene was untimely and would severely prejudice its interests. The excerpt does not reference any Arizona cases specifically addressing post-judgment interventions aimed at accessing discovery materials under a continuing protective order, though it acknowledges that such motions are not automatically considered untimely.

Arizona case law is limited regarding the use of Rule of Civil Procedure, Federal Rule 24(b), to challenge protective orders in settled cases. However, several federal circuit courts have determined that this rule permits nonparties to seek permissive intervention for challenging such orders. Important cases include E.E.O.C. v. Nat'l Children's Ctr. and others that highlight this principle. Courts evaluate motions for permissive intervention based on timeliness, with findings reviewed for abuse of discretion. Arizona typically requires a strong justification for post-judgment intervention requests and assesses each case individually.

Federal courts also underscore the importance of timeliness in intervention requests, with the determination influenced by specific circumstances. For instance, in Liggett, the First Circuit assessed four factors regarding timeliness: the intervenor's knowledge of inadequate protection of their interests, potential prejudice to existing parties, the impact on settlements, and the intervenor's reasons for seeking participation. The court found minimal prejudice to existing parties since no relitigation was necessary, emphasizing that the burden to existing parties should not impede the right to intervene but inform the merits of the motion. Additionally, the court acknowledged the intervenor's lack of representation of public interests and deemed the documents' relevance to public health as an extraordinary circumstance favoring intervention. Ultimately, the court concluded that the intervenor had standing to pursue access to the documents post-judgment.

The superior court implicitly found that Public Citizen acted timely in filing its motion to intervene on June 11, following the May 1 dismissal of Cassidy's complaint. Public Citizen filed the motion after learning of the Cassidy settlement. Arizona law establishes that filing post-judgment does not negate timeliness. Public Citizen sought intervention for a limited purpose, aiming to understand public health risks associated with potentially defective Zenith televisions, and thus, it was unlikely to prejudice Zenith or Cassidy. Neither Zenith nor Cassidy represented the public's interest, which further supported Public Citizen's intervention.

Under Arizona Rule 24(b), Public Citizen's claim presented a common question of law or fact with the main action, despite a lack of directly applicable Arizona cases. Federal courts have recognized commonality in similar contexts, such as collateral litigation and cases involving public interest in access to court proceedings. Notably, in Jessup v. Luther, the court found that a newspaper's right to access a sealed settlement agreement was related to the underlying litigation, establishing a common question of law. Similarly, in Pansy, the Third Circuit ruled that a newspaper's challenge to a confidentiality order satisfied the commonality requirement.

In Public Citizen's case, a common legal question arises regarding the appropriateness of the protective order and its modifiability at this stage, confirming both the timeliness of the motion and its compliance with Arizona Rule 24(b).

No abuse of discretion was found in the superior court's decision to allow Public Citizen to intervene under Arizona Rule 24(b). However, Public Citizen has not been granted access to documents protected by a protective order, and the ruling permits Zenith to seek further remedies after the court decides on the merits. Special action jurisdiction is accepted, but relief is denied. 

A motion to modify the protective order was filed by Cassidy, citing a request from a Congressman for information on Zenith televisions and related communications. Cassidy contended that the required factual findings by Arizona Rule of Civil Procedure 26(c) were not made, specifically regarding public health or safety risks. This request was denied by Judge Eddward Ballinger, Jr. 

Rule 24(b) allows permissive intervention when a statute grants a conditional right or there are common questions of law or fact, with the court considering potential delays or prejudice to original parties. Rule 26(c)(2) outlines protective orders for discovery information, allowing courts to impose conditions to protect parties from undue burden or disclosure of confidential information. Courts must ensure a party seeking confidentiality demonstrates good cause and consider factors like the need for confidentiality versus the need for access by nonparties or interveners, as well as any public health risks related to the information.

Any order limiting the release of information to nonparties or interveners must employ the least restrictive means necessary to ensure confidentiality. No factual findings are required if the parties agree to such an order or if there is no opposition to a motion for intervention seeking access to materials under a confidentiality order. A comment on Rule 26(c) indicates that post-2002 amendments do not restrict trial judges' discretion to issue confidentiality orders in suitable cases. Additionally, Arizona courts are encouraged to consider federal case law when evaluating factors for granting or modifying confidentiality orders, especially when parties dispute the necessity of such orders or when assessing nonparties' requests for access to protected information.

In a specific case, when Public Citizen sought to intervene, the discovery materials were initially with Cassidy but had been returned to Zenith's attorneys by the hearing date, with an order for them to remain segregated, which did not affect the court's decision. Federal Rule of Civil Procedure Rule 24(b) allows intervention for those with a conditional right under federal statutes or who share common legal or factual questions with the main action, while also requiring the court to weigh the potential for undue delay or prejudice against the original parties' rights. Zenith did not contest Public Citizen's status as a public interest organization, which has been permitted to intervene in similar cases, such as Liggett.