Haley v. Teachers Investment and Annuity Association

Opinion

[4 coopwin

July 1, 2020 USDC SDNY VIA ECF DOCUMENT The Honorable Robert W. Lehrburger ELECTRONICALLY FILED United States Magistrate Judge DOC #: United States District Court for the Southern District of New York |] DaTE FILED: 7/2/2020 500 Pearl Street, Room 1960 ee □□□□ New York, NY 10007 Re: Haley v. Teachers Insurance and Annuity Association of America, No. 1:17-cv-00855-JPO- RWL Dear Judge Lehrburger: Pursuant to Section B of the Appendix to Your Honor’s Individual Practices, Defendant Teachers Insurance and Annuity Association of America (“TIAA”) submits this letter to request that one number reflected on Dkt. 110, the transcript of the parties’ June 12, 2020 appearance before Your Honor, be filed under seal. Specifically, TIAA requests that before making the transcript publicly available, the Court Reporter be directed to redact the specific dollar amount that Plaintiffs counsel stated that TIAA received in “spread compensation” for its collateral loan service. The proposed redaction appears on page 9, lines 2-3, of the transcript and is set forth in Exhibit 1 attached hereto. Plaintiff has consented to the relief sought in this letter motion. The information TIAA seeks to have redacted concerns TIAA’s confidential business information about the spread compensation it receives in offering certain services—specifically, the actual dollar figure that Plaintiff's counsel calculated, using confidential information that TIAA produced in discovery, of the difference between the amount of interest that borrowing participants paid and the amount borrowing participants were credited on loan collateral. Disclosure of this sensitive information to the public and competitors would provide insight into TIAA’s confidential business operations and could cause competitive harm to TIAA. Under Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 124 (2d. Cir. 2006), the presumption of public access to judicial documents can be overcome if countervailing factors warrant confidentiality. The sealing of documents may be justified to preserve “higher values,” including the need to protect an entity from “competitive injury.” Id. at 124; Tropical Sails Corp. v. Yext, Inc., 2016 WL 1451548, at *4 (S.D.N.Y. Apr. 12, 2016) (sealing sensitive business information). Consistent with the balancing test set forth in Lugosch, courts routinely permit parties to seal or redact business materials that, if disclosed, may result in competitive harm. See, e.g., Louis Vuitton Malletier S.A. v. Sunny Merch. Corp., 97 F. Supp. 3d 485, 511 (S.D.N.Y. 2015) (granting motion to redact sensitive business data, strategies and policies). Here, the factors weigh in favor of maintaining the confidentiality of the figure TIAA seeks to redact. The specific dollar figure that TIAA seeks to file under seal is the type of information reflecting a company’s revenues that is treated as confidential for competitive harm reasons. See, e.g., Encyclopedia Brown Prods., Ltd. v. Home Box Office, Inc., 26 F. Supp. 2d 606, 608, 614 (S.D.N.Y. 1998) (holding confidential business information should be sealed, including: “breakdowns of defendants’ revenues and

Honorable Robert W. Lehrburger July 1, 2020 Page 2 expenses ... and the amounts actually remitted by cable operators to HBO”); see also Playtex Prod., LLC v. Munchkin, Inc., 2016 WL 1276450, at *11 (S.D.N.Y. Mar. 29, 2016) (“[T]he Court agrees with Plaintiffs that all of these statements” “related to [Plaintiffs’] sales and revenue” “should be redacted because Plaintiffs would be competitively harmed if they were revealed.”). Further, this situation is distinct from Bernstein v. Bernstein Litowitz Berger & Grossmann LLP, 814 F.3d 132, 143 (2d Cir. 2016), as Bernstein involved allegations of impropriety by a public entity, not a private organization’s propriety business information. Moreover, the specific dollar figure was not directly relevant to the specific discovery disputes that the Court addressed during the June 12 hearing. The requested relief is necessary and narrowly tailored to protect TIAA’s confidentiality, and maintaining that confidentiality does not deprive the public of critical information. Thus, TIAA respectfully requests that the Court permit the narrowly targeted, limited redaction in the publicly- available version of the June 12, 2020 transcript (Dkt. 110). Respectfully, /s/ James O. Fleckner James O. Fleckner, admitted pro hac vice Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 (617) 570-1000 cc: Counsel of record via ECF jfleckner @ goodwinlaw.com

Defendant's request to redact is granted. 50 ORDERED: 7/2/2020 =

HON. ROBERT W. LEHRBURGER UNITED STATES MAGISTRATE JUDGE

Exhibit 1 SOUTHERN DISTRICT OF NEW YORK In re: : Docket #17cv855 HALEY, : 1:17-cv-00855-JPO-RWL Plaintiff, : - against - : TEACHERS INVESTMENT AND ANNUITY : New York, New York ASSOCIATION, June 12, 2020 Defendant. : ------------------------------------ : TELEPHONE CONFERENCE PROCEEDINGS BEFORE THE HONORABLE ROBERT W. LEHRBURGER, UNITED STATES DISTRICT COURT MAGISTRATE JUDGE APPEARANCES: For the Plaintiff: BERGER MONTAGUE PC BY: TODD COLLINS, ESQ. 1818 Market Street, Suite 3600 Philadelphia, Pennsylvania 19103 SCHNEIDER WALLACE COTTRELL KONECKY LLP BY: JOHN NESTICO, ESQ. 6000 Fairview Road, Suite 1200 Charlotte, North Carolina 28210 For the Defendants: GOODWIN, PROCTER, L.L.P. BY: JAMES O. FLECKNER, ESQ. MICHAEL ISENMAN, ESQ. MOLLY LOUISE LEIWANT, ESQ. Exchange Place Boston, Massachusetts 02109 Transcription Service: Carole Ludwig, Transcription Services 155 East Fourth Street #3C New York, New York 10009 Phone: (212) 420-0771 Email: Transcription420@aol.com Proceedings recorded by electronic sound recording; Transcript produced by transcription service. 2 relevant to this case for like 980,000 loans, is $ 3 . And what this case is about is various prohibited 4 transactions under ERISA because they were taking too much, 5 they were charging amounts that were way beyond reasonable, 6 way beyond adequate, and what they were doing was profiting 7 not just from this loan interest but also from the 8 collateral and what they were taking on the collateral. If 9 this were a situation in which the collateral earns 3 10 percent and TIAA turns that 3 percent earned on the 11 borrowing participants collateral over to the borrowing 12 participants, then it would be entirely different, but what

13 we’re dealing with is a situation where TIAA makes a lot of 14 money on the loan interest and a lot of money on the 15 collateral that is invested that, of course, is the 16 collateral of the borrowing participants. So it’s absolutely 17 critical to us that we find out what that spread was on the 18 collateral earnings and we understand the position of TIAA 19 to be they’ll tell us what the crediting rate is, that is 20 what percent you earn as a borrowing participant on the 21 collateral, but we can’t find out what TIAA earned on that 22 collateral. If we knew what TIAA earned then we could get a 23 better sense of the total amount that TIAA profits from the

24 collateralized loan program. And that’s key to our case. 25 THE COURT: Thank you for explaining that. I think