The opinion of the court was delivered by: Marilyn D. GO United States Magistrate Judge
Memorandum and Order regarding Modification of Protective Order
Plaintiffs bring these two related actions under section 2333(a) of the Anti-Terrorism Act of 1992, 18 U.S.C. § 2333(a), against Credit Lyonnais (the "Bank") for providing material support to the Islamic Resistance Movement, commonly known as HAMAS. In prior proceedings, the Court approved stipulated protective orders limiting the disclosure and dissemination of certain information produced in discovery. See Protective Order in Strauss filed on March 10, 2006 (ct. doc. 7) and Amended Protective Order in Wolf filed on July 18, 2007 (ct. doc. 26), which shall be collectively called the "Prior Orders."
For the reasons discussed below, this Court finds good cause for modification of the Prior Orders in order to narrow the scope of information protected in future filings so as to minimize the volume of documents to be sealed and made inaccessible to the public.
After issuance of the Prior Orders, the defendant has apparently designated most of the materials it produced in discovery as highly confidential. Both sides have also sought leave to file under seal a number of submissions concerning various discovery disputes. This Court granted the sealing applications since the matters in dispute, for the most part, concerned financial information involving non-parties entitled to protection under the Prior Orders. However, when the parties sought leave to file pre-motion letters under seal, the Honorable Dora L. Irizarry denied the applications, noting that a showing of good cause is required for sealing. See Electronic Orders filed on 5/17/11 and 5/24/11 in both cases.
As a result, this Court encouraged the parties to agree on modifications to the Prior Orders which would address the concerns about public access raised by Judge Irizzary. This Court requested the parties to draft more specific definitions of confidential information to be protected and to propose procedures for minimizing the volume of materials filed under seal. After the parties could not agree on a revised protective order, the Bank submitted its own proposed changes. In its new definition of confidential information, the Bank proposed eliminating the first category of information protected in the Prior Orders concerning trade secrets and "sensitive commercial or financial information," and replacing the second category for "financial information of persons who are not parties to this litigation" with more specific descriptions of the types of confidential information covered. See letters of Lawrence Friedman dated June 17, 2011, July 8, 2011 and October 4, 2011, ct. docs. 256, 265, 282 (Strauss); 151, 169 (Wolf) discussing Prior Orders, ¶¶ 1(a)(i) and 1(a)(ii). The Bank also proposed that the parties file all documents containing information within the new definition under seal but also publicly file the same documents with the confidential information redacted. Id.
Most of the documents the defendant bank previously designated as "confidential" or "highly confidential" pursuant to the Prior Orders pertain to a former customer, Comite de Bienfaisance et de Secours aux Palestinians a/k/a Comite de Bienfaisance pour la Solidarite avec la Palestiene ("CBSP"). Plaintiffs initially argued that CBSP has no privacy interests worthy of protection because it was designated as a Specially Designated Global Terrorist ("SDGT") organization within the meaning of 18 U.S.C. § 2339B. They later expressed a preference that all documents which contain information designated as confidential be sealed, in light of their perceived practical difficulties in having to make redactions of confidential information contained in their summary judgment submissions.
In order to understand the nature and extent of the redactions that would be required under the Bank's proposal, this Court has made an in camera review of documents submitted at the Court's request by the parties, which they believe constitute a representative sampling of documents they would be submitting in connection with the summary judgment motions to be filed.
The legal principles governing the modification of prior protective orders are well settled. As the Supreme Court recognized in Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1983), protective orders issued upon a showing of good cause as to materials produced in civil discovery are consistent with the First Amendment since "restraints placed on discovered, but not yet admitted information are not a restriction on a traditionally public source of information." Id. at 33, 37. Once a protective order is issued, it is "presumptively unfair for courts to modify protective orders which assure confidentiality and upon which the parties have reasonably relied." AT&T Corp. v. Sprint Corp., 407 F.3d 560, 562 (2d Cir. 2005) (citing S.E.C. v. TheStreet.com, 273 F.3d 222, 230 (2d Cir. 2001)). Where there has been reasonable reliance on a previously issued protective order, the order should not be modified without a showing of "improvidence in the grant of a Rule 26(c) protective order or some extraordinary circumstance or compelling need." Martindell v. Int'l Tel. & Tel. Corp., 594 F.2d 291, 296 (2d Cir. 1979).
However, when protected discovery materials are used in court filings, the common law right of the public "to inspect and copy ... judicial records and documents" is implicated and gives rise to a presumption of access to judicial documents. Nixon v. Warner Communic'ns, Inc., 435 U.S. 589, 597 (1978). "The presumption of access is based on the need for federal courts, although independent --indeed, particularly because they are independent-- to have a measure of accountability and for the public to have confidence in the administration of justice." United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995) ("Amodeo II").
In determining whether the presumption of access under common law applies, the court must first determine whether a filed document is a "judicial document." Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119-20 (2d Cir. 2006). If the presumption applies, the court must then determine the weight to be given that presumption and weigh the presumption of access against countervailing factors. These factors include, but are not limited to, "'the danger of impairing law enforcement or judicial efficiency' and 'the privacy interests of those resisting disclosure.'" Id. at 120 (quoting Amodeo II, 72 F.3d at 1050). Since the right of access is a qualified right, courts must identify all the factors to be weighed, examining them "in light of the relevant facts and circumstances of the particular case" and "weighing the interests advanced by the parties in light of the public interest and the duty of the courts." United States v. Amodeo, 44 F.3d 141, 146 (2d Cir. 1995) (quoting Nixon, 435 U.S. at 599, 602).
The presumption of access unquestionably applies at this juncture since documents submitted in connection with a "motion for summary judgment are -- as a matter of law -- judicial documents to which a strong presumption of access attaches, under both the common law and the First Amendment." Lugosch, 435 F.3d at 121 (emphases added). Where the presumption of public access arises under the First Amendment, the Second Circuit has utilized two different approaches in determining whether access to judicial documents is required. Id., 435 F.3d at 120. Under a so-called "experience and logic" approach, courts "consider both whether the documents 'have historically been open to the press and general public' and whether 'public access plays a significant positive role in the particular process in question.'" Id. (citing Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 92 (2d Cir. 2004) (quoting Press-Enterprise Co. v. Superior Court, 478 U.S. 1, 8 (1986)). The second approach requires consideration of "the extent to which judicial documents are 'derived from or [are] a necessary corollary of the capacity to attend the relevant proceedings.'" Id. (quoting Hartford Courant, 380 F.3d at 93).
Whether the presumption of access arises under the common law or the First Amendment, "documents may be kept under seal if 'countervailing factors' in the common law framework or 'higher values' in the First Amendment framework so demand." Lugosch, 435 F.3d at 124. Nonetheless, when "the more stringent First Amendment framework applies, continued sealing of the documents may be justified only with specific, on-the-record findings that sealing is necessary to preserve higher values and only if the sealing order is narrowly tailored to achieve that aim." Id. As the Second Circuit has cautioned, "district courts [should] avoid sealing judicial documents in their entirety unless necessary [since t]ransparency is pivotal to public perception of the judiciary's legitimacy and independence." United States v. Aref, 533 F.3d 72, 81-83 (2d Cir. 2008).
Since liability discovery is now completed and the parties are now engaged in briefing summary judgment motions, reassessment of the scope of the Prior Orders, especially the procedures set forth therein with respect to sealing documents, is not only appropriate at this time, but, indeed, necessary. After review, this Court finds that most provisions in the Prior Orders need not be changed since they primarily concern the flow of materials and information in pretrial discovery. As the Supreme Court explained, materials obtained in discovery "are not public components of a civil trial [and] were not open to the public at common law." Seattle Times, 467 U.S. at 33. Because "[m]uch of the information that surfaces during pretrial discovery may be unrelated, or only tangentially related, to the underlying cause of action," the Court held that "restraints placed on discovered, but not yet admitted, information are not a restriction on a traditionally public source of information."
Id. Clearly the provisions in the Prior Order have served to assist in the discovery process and moving this case toward trial. See In re September 11 Litigation, 262 F.R.D. 274, 278 (S.D.N.Y. 2009) (denying motion of plaintiffs to set aside confidentiality designations made pursuant to stipulated protective orders). Thus, this Court sees no reason either to disturb the confidentiality designations made by the parties in accordance with the terms of the Prior Orders or to modify the restrictions on the disclosure of the materials by the parties both during and after termination of these actions. The parties had agreed to the terms of the Prior Orders before approval by the Court and have relied on them during discovery without objection to designations of confidentiality made. Likewise, the ...