Opinion
Index No. 654375/2019 Motion Seq. No. 004
06-14-2022
MICHAEL EDWARDS, OLD POST COMPANY, INC., Plaintiff, v. ARROWGRASS CAPITAL PARTNERS LLP, ARROWGRASS CAPITAL PARTNERS (US) LP, ARROWGRASS CAPITAL SERVICES (US) INC., ARROWGRASS CAPITAL SERVICES UK LTD., and ARROWGRASS INVESTMENT MANAGEMENT LTD. Defendants.
Unpublished Opinion
DECISION + ORDER ON MOTION
HON. ANDREA MASLEY, J.S.C.:
The following e-filed documents, listed by NYSCEF document number (Motion 004) 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 160, 161, 162, 164 were read on this motion to/for SEAL.
Upon the foregoing documents, it is
In motion sequence 004, defendants Arrowgrass Capital Partners LLP, Arrowgrass Capital Partners (US) LP, Arrowgrass Capital Services (US) Inc., Arrowgrass Capital Services UK Ltd., and Arrowgrass Investment Management Ltd. (Arrowgrass) move pursuant to Section 216.1(a) of the Uniform Rules for Trial Courts to seal and redact NYSCEF Docs. Nos. (NYSCEF) 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, and 81 on the grounds that these documents contain the confidential financial information of third parties, as well as commercially sensitive identifying information of third parties. Arrowgrass argues there is no legitimate public concern that compels public disclosure of the third-party confidential information. This motion is unopposed. There is no indication that the press or public have an interest in this action.
NYSCEF 62 are excerpts from the January 15, 2021 deposition of Michael Edwards. The deposition contains X Corp.'s identity, a privately held third-party company.
NYSCEF 63 are excerpts of the April 21, 2021 deposition of Brett Carron. The deposition contains X Corp.'s identity, a privately held third-party company.
NYSCEF 64 are excerpts of the May 12, 2021 deposition of Nicholas Hammerschlag, a third-party deponent, revealing personal information and confidential business contacts. Deponent also discusses the value and sale of X Corp, a privately held third-party company.
NYSCEF 65 are excerpts of the January 26, 2021 deposition of Jason Pecora. Pecora discusses the value and sale of X Corp, a privately held third-party company.
NYSCEF 66 is the Amended and Restated Separation Agreement between Arrowgrass and Michael Edwards. This document contains X Corp.'s identity, a privately held third-party company.
NYSCEF 67 is the Amended and Restated Consultancy Agreement. This document contains X Corp.'s identity, a privately held third-party company.
NYSCEF 68 is an email attaching a March 13, 2019 presentation that contains the identity and confidential information regarding finances, strategic partners, valuation, and sale of X Corp., a privately held third-party company.
NYSCEF 69 is an email attaching a non-binding term sheet from MNA Capital. The email and the term sheet contain the identity and confidential information regarding the valuation, and sale of X Corp., a privately held third-party company.
NYSCEF 70 is an email attaching a non-binding term sheet from MNA Capital. The email and the term sheet contain the identity and confidential information regarding the valuation, and sale of X Corp., a privately held third-party company.
NYSCEF 71 is an email attaching a non-binding term sheet from MNA Capital. The email and the term sheet contain the identity and confidential information regarding the valuation, and sale of X Corp., a privately held third-party company.
NYSCEF 72 is an email attaching an April 16, 2019, presentation that contains the identity and confidential information regarding finances, strategic partners, valuation, and sale of X Corp., a privately held third-party company.
NYSCEF 73 is an email from Dominic O'Brien to Michael Edwards that contains X Corp.'s identity, a privately held third-party company.
NYSCEF 74 is an email attaching notes of conference call with X Corp.'s CFO on April 30, 2019. It contains the identity and confidential discussion regarding finances, strategic partners, valuation, and potential sale of X Corp., a privately held third-party company.
NYSCEF 75 is an email attaching notes of conference call with X Corp.'s CEO on May 8, 2019. It contains the identity and confidential discussion regarding finances, strategic partners, valuation, and potential sale of X Corp., a privately held third-party company.
NYSCEF 76 is an email from Brett Kasner that contains the identity and confidential discussion regarding finances, strategic partners, valuation, and potential sale of X Corp., a privately held third-party company. The email also includes the identity of a confidential business contacts of a subpoenaed third party.
NYSCEF 77 is an email from Brett Carron to Michael Edwards that contains the confidential identity of X Corp., a privately held third-party company.
NYSCEF 78 is an email from Michael Edwards to Brett Carron that contains the confidential identity of X Corp., a privately held third-party company.
NYSCEF 79 is an email from Michael Edwards to Dominic O'Brien that contains the confidential identity of X Corp., a privately held third-party company.
NYSCEF 80 is an email from Brett Kasner and an attached investment presentation. The email contains the confidential identity of X Corp., a privately held third-party company. The email also contains confidential business contacts of subpoenaed third parties, as well as reference to unrelated business transactions by the subpoenaed third parties. The attached presentation contains detailed financial and identifying information for X Corp. and has been included as an exhibit to Defendants' Expert Report only incidentally. As the attachment will not be cited in Defendants' motion, defendants seek to redact the attachment in full.
NYSCEF 81 is the Expert Report of Bruce Mumford, dated September 10, 2021. The expert report contains the identity of a subpoenaed third party's confidential business contact.
Section 216.1(a) of the Uniform Rules for Trial Courts empowers courts to seal documents upon a written finding of good cause. It provides:
"(a) [e]xcept where otherwise provided by statute or rule, a court shall not enter an order in any action or proceeding sealing the court records, whether in whole or in part, except upon a written finding of good cause, which shall specify the grounds thereof. In determining whether good cause has been shown, the court shall consider the interests of the public as well as the parties. Where it appears necessary or desirable, the court may prescribe appropriate notice and an opportunity to be heard."
Judiciary Law § 4 provides those judicial proceedings shall be public. "The public needs to know that all who seek the court's protection will be treated evenhandedly," and "[t]here is an important societal interest in conducting any court proceeding in an open forum." (Baidzar Arkun v Farman-Farma, 2006 NY Slip Op 30724[U],*2 [Sup Ct, NY County 2006] [citation omitted].) The public right of access, however, is not absolute. (See Danco Lab, Ltd. v Chemical Works of Gedeon Richter, Ltd., 274 A.D.2d 1, 8 [1st Dept 2000].) The "party seeking to seal court records bears the burden of demonstrating compelling circumstances to justify restricting public access" to the documents. (Mosallem v Berenson, 76 A.D.3d 345, 348-349 [1st Dept 2010] [citations omitted].) Good cause must "rest on a sound basis or legitimate need to take judicial action." (Danco Labs., 274 A.D.2d at 9.)
In the business context, courts have sealed records where trade secrets are involved or where the disclosure of documents "could threaten a business's competitive advantage." (Mosallem, 76 A.D.3d at 350-351 [citations omitted].) Additionally, the First Department has affirmed the sealing of records concerning financial information where there has not been a showing of relevant public interest in disclosure of the financing. (See Dawson v White & Case, 184 A.D.2d 246, 247 [1st Dept 1992].) For instance, in Dawson v White & Case, the First Department stated that the plaintiff-appellant failed to show "any legitimate public concern, as opposed to mere curiosity, to counter-balance the interest of defendant's partners and clients in keeping their financial arrangement private." (Id. [internal quotation marks and citation omitted].)
Records concerning financial information may be sealed where there has not been a showing of relevant public interest in the disclosure of that information. (Id.) A party "ought not to be required to make their private financial information public ... where no substantial public interest would be furthered by public access to that information" and that "sealing a court file may be appropriate to preserve the confidentiality of materials which involve the internal finances of a party and are of minimal public interest." (D'Amour v Ohrenstein & Brown, 17 Misc.3d 1130[A], 2007 NY Slip Op 52207[U], *20 [Sup Ct, NY County 2007] [citations omitted].)
Here, the documents at issue specifically relate to the identity, strategic partners, business contacts, valuation, and potential sale of a confidential privately held third-party. Movants have shown good cause to redact these documents. These documents contain a third-party's private business and financial terms, and disclosure would harm its competitive advantage and reveal commercially sensitive information of nonparties. (Mosallem, 76 A.D.3d at 350-351.)
Arrowgrass has already filed redacted versions of NYSCEF 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, and 81, and does not need to refile additional copies.
Accordingly, it is
ORDERED that motion sequence 004 is granted; and it is further
ORDERED that the County Clerk, upon service to him of this order by movant, shall seal NYSCEF 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, and 81; and it is further
ORDERED the New York County Clerk shall restrict access to the sealed documents with access to be granted only to authorized court personnel and designees, the parties and counsel of record in the above-captioned action, and any representative of a party or of counsel of record upon presentation to the County Clerk of written authorization from counsel; and it is further
ORDERED that this order does not authorize sealing or redacting for purposes of trial.