Memorandum in Opposition regarding 70 Motion for Protective Order — Beringer Commerce, Inc. v. FIN Cap, Inc. (Dkt. 74, E.D.N.C. No. 5:21-cv-00251)

Record facts

U.S. District Court for the Eastern District of North Carolina · No. 5:21-cv-00251-BO · Doc. 74 · 2022-02-07 · Docket on CourtListener

Full text

IN THE UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF NORTH CAROLINA 
WESTERN DIVISION 
BERINGER COMMERCE, INC., d/b/a 
BLUE ACORN, iCi, 
Plaintiff, 
vs. 
FIN CAP, INC., d/b/a “BLUEACORN.CO,” 
BLUE ACORN PPP, LLC, BLUE OAK 
FOREST, LLC, MICHAEL S. COTA, 
JAMES FLORES, STEPHANIE 
HOCKRIDGE REIS, and NATHAN REIS, 
Defendants. 
Civil Action No. 5:21-cv-251-BO 
MEMORANDUM IN OPPOSITION TO PLAINTIFF’S  
MOTION FOR PROTECTIVE ORDER WITH 
“HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” DESIGNATION 
Defendants Fin Cap, Inc., Blueacorn PPP, LLC and Blue Oak Forest, LLC (collectively, 
“Blueacorn PPP”), pursuant to Local Rule 7.2, hereby file their Memorandum in Opposition to 
Plaintiff’s Motion for Protective Order with “Highly Confidential – Attorneys’ Eyes Only” 
Designation.  (Dkt. #70). 
INTRODUCTION 
Blueacorn PPP does not oppose the entry of a protective order in this case to protect the 
proprietary and confidential business information of Plaintiff Beringer Commerce, Inc. d/b/a Blue 
Acorn iCi (“Plaintiff”).  The single issue Blueacorn PPP is contesting is whether it is necessary for 
the protective order to include a “Highly Confidential – Attorneys’ Eyes Only” designation.  
Blueacorn PPP opposes the inclusion of such a designation in the protective order: (a) because such 
a designation is typically permitted to prevent disclosure of confidential information to a competitor, 
Case 5:21-cv-00251-BO     Document 74     Filed 02/07/22     Page 1 of 7

2
and Plaintiff has made no showing that Plaintiff and Blueacorn PPP are in competition with each 
other; and (b) so that Blueacorn PPP and its counsel will have an adequate and sufficient opportunity 
to discuss and evaluate the merits of Plaintiffs’ claims, assess potential settlement, and be fully 
prepared for trial. 
ARGUMENT 
The issue of whether to include an “attorneys’ eyes only” provision in a protective order 
came before this court in Progress Solar Solutions, LLC v. Fire Protection, Inc., No. 5:17-CV-
00152-D, 2018 WL 11281543 (E.D.N.C. Sep. 24, 2018).  That case involved allegations that the 
defendants unfairly competed with the plaintiff by misappropriating and taking advantage of 
plaintiff’s proprietary information and trade secrets.   In considering the appropriateness of an 
“attorneys’ eyes only” provision, Magistrate Judge Gates noted that the inclusion of such a provision 
is not uncommon in cases involving the “exchange of highly sensitive proprietary information.” Id. 
at *2.  Referring to a test outlined by the Federal Circuit in U.S. Steel Corp. v. United States, 730 
F.2d 1465 (Fed. Cir. 1984), Magistrate Judge Gates also noted that the court should conduct an 
individualized factual assessment with the “crucial factor” being “whether the information would be 
disclosed to someone involved in competitive decision-making.” Id., quoting Parker Compound 
Bows, Inc. v. Hunter’s Mfg. Co., Inc., No. 5:15-mc-00064, 2014 WL 12462305 at *2 (W.D. Va. Dec. 
8, 2014).  Importantly, this Court recognized that the burden is on the moving party to support the 
particularized need for the higher level of protection.  Progress Solar, 2018 WL 11281543, at *2.  
Blueacorn PPP cannot meet that burden in this case. 
This case does not involve allegations of misappropriation of any trade secrets or proprietary 
information between competitors as was the case in Progress Solar Solutions.  As Plaintiff’s filings 
in this case have made clear, Plaintiff is a “digital technology consulting company that assists 
Case 5:21-cv-00251-BO     Document 74     Filed 02/07/22     Page 2 of 7

3
businesses with planning and developing online digital consumer experiences for its clients.” (Dkt. 
#73, p. 3)  Plaintiff also avers that it “offers payment processing services to its clients,” and offers its 
services through various internet channels of commerce, including its website. Id.
Blueacorn PPP does not compete with Plaintiff.  Instead, Blueacorn is a lender service 
provider that helped small business customers prepare and submit loan application paperwork for 
Paycheck Protection Program (“PPP”) loans.  As set forth in the Declaration of Noah Spirakus 
previously filed with the Court (Dkt. #32): (1)  Blueacorn PPP is not a lender; it is a service provider 
utilizing technology to work with community lenders as their online processing and support 
platform,  (Id., ¶ 2); (2) as of June 2021, Blueacorn PPP had processed over $15 billion in loans for 
966,000 small businesses (such as barbers, hair stylists, and Uber drivers) which had an average 
annual gross income of $41,000, an average PPP loan amount of approximately $16,000, and 
approximately 86% of them are non-caucasian owned businesses or contractors, who historically 
have had limited access to traditional banking (Id., ¶¶ 2 – 3); and (3) as of July 2021, Blueacorn PPP 
transitioned into the into the loan forgiveness stage, during which Blueacorn PPP began working 
exclusively with current customers in assisting them in applying for loan forgiveness, and will not be 
seeking any new PPP loan customers. (Id. ¶ 16).  The business conducted by Blueacorn PPP, and the 
customers served by Blueacorn PPP, bear no relation whatsoever Plaintiff’s business and customers, 
and the parties are simply not in competition with each other.   
The gravamen of Plaintiff’s Complaint is that Blueacorn PPP has infringed on Plaintiff’s 
intellectual property, including alleged trademarks and a copyright to a tilted blue acorn logo. (Dkt. 
#71, p. 3).  As to Plaintiff’s alleged claim of ownership of a copyright to the titled blue acorn logo, 
(see Dkt. # 71, p. 3), Blueacorn PPP notes that the US Copyright Office denied reconsideration of 
Plaintiff’s request for a copyright to the tilted blue acorn logo stating that the Copyright Office was: 
Case 5:21-cv-00251-BO     Document 74     Filed 02/07/22     Page 3 of 7

4
“unable to register a copyright claim in this work, however, as it does not contain a sufficient amount 
of original and creative artistic or graphic authorship to support a copyright registration.” See letter 
dated October 7, 2021attached as Ex. A.   
On the issue of whether the parties are in competition, the Court previously noted in denying 
Plaintiff’s Motion for Preliminary Injunction that, “significantly, plaintiff has not demonstrated 
through its filings that it has lost any existing or potential customers to defendants’ business because 
of defendants’ alleged infringement.” (Dkt. #39 at 4).  Plaintiff’s Motion for Protective Order and 
supporting materials make no different showing that Plaintiff and Blueacorn PPP are in actual 
competition with each other.  Instead, in recognition that some showing of competition is required to 
support their request to include an “attorneys’ eyes only” provision, Plaintiff instead engages in rank 
speculation of some perceived threat of future competition between the parties.  In a declaration filed 
in support of Plaintiff’s Motion, Plaintiff’s Chief Financial Officer Judy Geaslen states: (a) 
“Defendants have indicated they intend to continue using Blue Acorn iCi’s intellectual property after 
the PPP loan program ends;” and (b) that if Plaintiff was “required to publicly disclose its financial 
information, customer list, marketing strategies and business plans to Defendants, then Blue Acorn 
iCi would be harmed in future competition with Defendants as Defendants expand their use of Blue 
Acorn iCi’s intellectual property, as well as with other customers.” (Dec. of Judy Geaslen, Dkt. #72, 
¶ 8)(emphasis added).  Plaintiff’s memorandum in support of its Motion further speculates, without 
supporting evidence, that without an “attorneys’ eyes only” provision “there is an inherent risk that 
the highly sensitive commercial information Plaintiff provides may be disseminated in the event 
Defendants’ officers and employees leave and join Plaintiff’s competitors. These risks are 
amplified given the serious fraud allegations being lodged against Defendants. (See Ex. F).” (Dkt. 
#71, p. 8)(emphasis added).  This level of speculation particularly falls short of warranting a higher 
Case 5:21-cv-00251-BO     Document 74     Filed 02/07/22     Page 4 of 7

5
level of confidentiality because it could exist in any dispute involving two potential employers, 
anywhere, and would overshadow any discernable test. 
With regard to Ms. Geaslen’s conclusory assertion that BlueacornPPP has indicated an intent 
to use Plaintiff’s intellectual property after the PPP loan program ends, Blueacorn PPP has not made 
such an assertion, nor could it have since Blueacorn PPP has made no decisions on the conduct of its 
business beyond the conclusion of the PPP loan program.  For this reason, Ms. Geaslen’s assertion 
that Plaintiff may be harmed by future competition is pure speculation.  The assertions in Plaintiff’s 
supporting memorandum are even further removed from any evidentiary basis.  As an initial matter, 
Plaintiff’s attachment of a newspaper article concerning a Congressional investigation into the PPP 
loan program is not relevant in any way to Plaintiff’s claims of alleged infringement of their 
intellectual property.  The speculative notion that the newspaper article provides support for some 
motivation for by Blueacorn’s officers and employees to leave their employment and join Plaintiff’s 
competitors simply defies logic.  
Blueacorn PPP would also stress that even without an “attorneys’ eyes only” designation, 
none of the information Plaintiff designates as “confidential” will ever be publicly disclosed.  
Blueacorn’s proposed protective order makes clear that documents and information that Plaintiff 
designates as “confidential”: (a) shall only be used for purposes of this litigation and not for any 
other purpose; and (b) shall not be disclosed or discussed with anyone who has not agreed to be 
bound by the protective order and subject to the enforcement powers of the Court for violations of 
the protective order. (Dkt. # 71-3).  Blueacorn PPP’s proposed protective order without an 
“attorneys’ eyes only” designation will provide adequate protection for Plaintiff’s confidential 
business information in this case. 
Finally, Blueacorn PPP submits that the inclusion of an “attorneys’ eyes only” designation 
Case 5:21-cv-00251-BO     Document 74     Filed 02/07/22     Page 5 of 7

6
will unnecessarily burden Blueacorn PPP, and possibly the Court.  A two-tier protective order as 
proposed by Plaintiff will unnecessarily burden Blueacorn PPP’s ability to discuss this case fully 
with its counsel, to evaluate the case and settlement possibilities, and to be fully prepared for trial.  
Moreover, while Blueacorn PPP does not doubt that Plaintiff and its counsel would only use an 
“attorneys’ eyes only” designation in good faith, such designations are subject to being challenged 
by Blueacorn PPP, and only increase the chances of future disputes that will require the involvement 
of the Court to resolve.         
CONCLUSION 
For the foregoing reasons, Defendants Fin Cap, Inc., Blueacorn PPP, LLC and Blue Oak 
Forest, LLC respectfully request that the Court enter the proposed Protective Order at Docket # 71-3 
that does not include an “attorneys’ eyes only” provision.  
Respectfully submitted, this the 7th day of February 2022. 
NELSON MULLINS RILEY & SCARBOROUGH LLP 
/s/ Christopher J. Blake
Christopher J. Blake 
N.C. State Bar No.  16933 
chris.blake@nelsonmullins.com
D. Martin Warf 
N.C. State Bar No. 32982 
martin.warf@nelsonmullins.com
4140 Parklake Avenue, Suite 200 
Raleigh, North Carolina 27612 
Phone:  (919) 329-3800 
Fax:  (919) 329-3799 
Counsel for Defendants Fin Cap, Inc., Blueacorn PPP, 
LLC and Blue Oak Forest, LLC 
Case 5:21-cv-00251-BO     Document 74     Filed 02/07/22     Page 6 of 7

7
CERTIFICATE OF SERVICE
I hereby certify that on February 7, 2022, I electronically filed the foregoing with the Clerk 
of the Court using the CM/ECF system which will send notification of such filing to all counsel of 
record. 
             NELSON MULLINS RILEY & SCARBOROUGH LLP 
/s/ Christopher J. Blake
Christopher J. Blake 
N.C. State Bar No.  16933 
chris.blake@nelsonmullins.com 
4140 Parklake Avenue, Suite 200 
Raleigh, North Carolina 27612 
Case 5:21-cv-00251-BO     Document 74     Filed 02/07/22     Page 7 of 7

File and source

File

gov.uscourts.nced.187990.74.0.pdf

Size

43,416 bytes

SHA-256

64b422766de26dbd96d214dd5589a5733c2ec89b2801fe5e8e7367ae7c822e93

Our copy

gov.uscourts.nced.187990.74.0.pdf

Original

PACER (login required)