Post-Termination Return Trumps Qualified Persons: Fifth Circuit Clarifies Protective Orders Permit Return of Protected Information to the Producing Party’s Counsel

Introduction

This consolidated appeal from the United States Court of Appeals for the Fifth Circuit addresses a recurring problem in protective-order practice: may a receiving party produce documents back to the producing party after the underlying litigation has ended when the protective order limits “Qualified Persons” and does not list the producing party’s counsel? In Ocwen Financial v. Boyd, the Fifth Circuit reverses a district court’s contrary ruling and holds that the post-termination “return or destroy” provision specifically authorizes return of protected material to the producing party’s counsel, notwithstanding earlier, more general “Qualified Persons” restrictions.

The dispute arises out of prior False Claims Act (FCA) qui tam litigation (the “Fisher” matters) concerning alleged misconduct by Ocwen in the federal Home Affordable Modification Program (HAMP). During Fisher, the court entered identical protective orders governing “Protected Information.” Years after the cases settled, counsel for relator (Samuel L. Boyd and Boyd & Associates, “Boyd”) retained large volumes of Ocwen’s productions and shared some with federal investigators in connection with a new qui tam matter. When Ocwen sought discovery in a later state-court suit, Boyd invoked the federal protective orders to block disclosure of Ocwen’s own documents back to Ocwen. The federal district court agreed. The Fifth Circuit, reviewing the protective orders de novo, disagreed and reversed.

Summary of the Opinion

The Fifth Circuit concludes that the protective orders’ plain text, structure, and purpose allow a receiving party to return Protected Information to the producing party’s counsel after termination of the litigation. The court harmonizes four key provisions:

• Paragraph 1 defines “Protected Information” as documents designated confidential by the producing (“Designating”) party and disclosed to a receiving party.
• Paragraph 4 restricts use of Protected Information to matters arising from the Fisher litigation “as provided below.”
• Paragraph 5 limits interim disclosures to “Qualified Persons” (which include counsel for the receiving party but, unusually, do not list counsel for the designating party).
• Paragraph 15, governing the post-termination period, commands the receiving party to “destroy or return the Protected Information to the counsel for the Designating Party” within 90 days, and permits retention of attorney work product that does not disclose Protected Information.

Reading these provisions together, the court holds that Paragraph 15 is a specific, post-termination directive that authorizes return to the producing party’s counsel and qualifies any earlier, more general Qualified Persons limitation. The court emphasizes common sense: protective orders are meant to prevent competitive harm from public dissemination, not to prevent a producing party from receiving its own documents. It reverses the district court and requires Boyd to return all documents and destroy none. Judge Dennis dissents in part, objecting to the “destroy none” relief on grounds that Ocwen did not request that particular remedy on appeal.

Analysis

Precedents Cited and Their Influence

• Moore v. Ford Motor Co., 755 F.3d 802 (5th Cir. 2014): Establishes that interpreting a protective order is a legal question reviewed de novo and that the plain language controls. The Ocwen court adopts the same interpretive posture, focusing on text first.
• S.E.C. v. Merrill Scott & Associates, Ltd., 600 F.3d 1262 (10th Cir. 2010): Cited for the “plain language” approach to protective orders, reinforcing the textualist methodology that the Fifth Circuit applies.
• Claimant ID 100218776 v. BP Exploration & Production, Inc., 712 F. App’x 372 (5th Cir. 2017): Supports the canon that courts should give effect to all clauses and prevent a general provision from undermining a narrower, specific provision. This is central to privileging Paragraph 15’s specific post-termination directive over Paragraph 5’s general interim audience limitation.
• Static Media LLC v. Leader Accessories LLC, 38 F.4th 1042 (Fed. Cir. 2022), quoting In re Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d 693 (9th Cir. 1993): Encourages interpreting protective orders with “common sense” tied to purpose. The Fifth Circuit uses this to underscore that the orders are about preventing public harm, not about blocking a producer’s access to its own data.
• Motor Vehicle Casualty Co. v. Atlantic National Insurance Co., 374 F.2d 601 (5th Cir. 1967) and United States v. Winstar Corp., 518 U.S. 839 (1996): Both stand for avoiding absurd or senseless results in contract interpretation. The court relies on this principle to reject Boyd’s reading that would make Paragraph 15 impossible to obey.
• Carter-Wallace, Inc. v. Hartz Mountain Industries, Inc., 92 F.R.D. 67 (S.D.N.Y. 1981): Rejects the “absurd tenet” that a protective order from an earlier case could be wielded to resist targeted discovery in later litigation, especially when it binds only the receiving party. The Fifth Circuit leverages this to show why Boyd’s position is untenable in practice.

Legal Reasoning

The court’s reasoning proceeds in three integrated steps.

1. Textual Harmonization: Paragraph 5’s “Qualified Persons” is framed as a limit while the case is pending. Paragraph 4’s phrase “as provided below” signals that later provisions qualify earlier ones. Paragraph 15 is the later, specific directive addressing what happens after the case ends—namely, that the receiving party must “destroy or return” Protected Information “to the counsel for the Designating Party.” Reading the provisions to give effect to all text, the court concludes Paragraph 15 specifically authorizes post-termination return to the producing party’s counsel, even if that counsel was not listed in Paragraph 5’s interim “Qualified Persons.”
2. Purpose and Common Sense: Protective orders aim to prevent public dissemination or competitive misuse, not to deny a producing party access to its own documents. Construing the order to forbid returning the documents to their producer would transform a confidentiality shield into an instrument of obstruction—contrary to purpose and common sense.
3. Anti-Absurdity and Practical Consequences: Boyd’s reading would (a) render Paragraph 15’s return obligation noncompliant because it names a recipient not on the Qualified Persons list; (b) expose parties to sanctions for giving the producing party its own materials; and (c) enable parties to stonewall discovery in new litigation by invoking an order that binds only the earlier receiving party. The court rejects these absurd results and enforces the return directive.

Finally, the panel’s remedy—“return all documents and destroy none”—ensures preservation and prevents spoliation risks, especially amidst related or subsequent proceedings. Judge Dennis’s partial dissent signals a procedural caution about granting relief beyond the specific ask on appeal, but the majority proceeds to provide a clear, administrable directive.

Impact

Although designated “not for publication,” the decision is a significant clarification within the Fifth Circuit on the interplay of protective-order provisions and will be persuasive elsewhere. The practical effects include:

• Protective Order Drafting: Counsel should expressly provide that post-termination return to the producing party’s counsel (and, if desired, the party itself) is permitted and required, and should coordinate that clause with the “Qualified Persons” list to avoid ambiguity. Inclusion of an “as provided below” or analogous harmonizing clause is helpful.
• Enforcement and Compliance: Receiving parties cannot invoke “Qualified Persons” lists to evade post-termination return obligations. Failure to return or destroy as required risks sanctions. Where litigation is ongoing or reasonably anticipated, courts may order “return and destroy none” to prevent spoliation and preserve evidence.
• Subsequent Litigation and Discovery: Parties cannot use prior protective orders as swords to resist targeted discovery in later cases, particularly where the order binds only the earlier receiving party. State courts may defer to the issuing federal court for authoritative interpretation, but the guiding principle is that protective orders do not bar a producer from receiving its own documents.
• FCA and Whistleblower Practice: Relators’ counsel who retain discovery from earlier cases must heed post-termination obligations. Sharing protected material with government investigators may be permitted during the pendency of the action (e.g., if covered by “Qualified Persons” such as U.S. attorneys monitoring the case), but retention and dissemination after termination are constrained by return/destroy clauses.
• Work Product Carve-Outs: Many orders, like the one here, allow counsel to retain attorney work product referencing protected materials, provided such work product does not disclose the protected content. Counsel should ensure derivative summaries or analyses do not reproduce confidential data verbatim and are stored separately from the protected materials.
• Appellate Practice: The panel’s decision to order “destroy none” despite a dissent highlighting the scope of requested relief reminds appellants to articulate the precise remedy sought. Parties should anticipate preservation or return directives and seek tailored relief explicitly.

Complex Concepts Simplified

• Protective Order: A court order that restricts how parties may use and disclose information exchanged in discovery, typically to protect confidentiality and prevent competitive harm.
• Designating Party: The party that produced and marked materials as confidential.
• Receiving Party: The party that receives the confidential materials in discovery.
• Qualified Persons: The limited group of individuals permitted to access protected materials during litigation (e.g., counsel of record, experts, court personnel).
• Return/Destroy Clause (Post-Termination): A standard provision requiring the receiving party, after the litigation ends, to either destroy all protected materials or return them to the producing party’s counsel, sometimes with a carve-out allowing retention of non-disclosing attorney work product.
• De Novo Review: An appellate court’s fresh review of a legal question without deference to the lower court’s interpretation.
• FCA Qui Tam Action: A lawsuit under the False Claims Act brought by a whistleblower (relator) on behalf of the United States, alleging fraudulent claims for government funds.
• Common-Sense/Anti-Absurdity Canons: Interpretation principles counseling courts to avoid readings that defy common sense or produce absurd results, especially when harmonizing contractual or order-based text.

Conclusion

Ocwen Financial v. Boyd establishes a clear interpretive rule within the Fifth Circuit: a protective order’s post-termination return clause authorizes return of confidential discovery to the producing party’s counsel and controls over earlier, general limitations on “Qualified Persons.” The decision advances a pragmatic, text-based approach that harmonizes provisions, respects the purpose of protective orders, and avoids outcomes that would render return obligations impossible to honor. For practitioners, the opinion underscores the need for careful drafting, faithful compliance with post-termination duties, and caution against leveraging protective orders to obstruct targeted discovery in later proceedings. Even as an unpublished decision, its reasoning is likely to be influential in resolving similar disputes about the scope and operation of protective orders across jurisdictions.