Lavin v. Virgin Galactic Holdings, Inc.

District Court, E.D. New York·Decided April 2, 2025·No. 1:21-cv-03070·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

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SHANE LAVIN, individually and on behalf of all others similarly situated,

Plaintiffs,

MEMORANDUM AND -against- ORDER ON SEALING

21-CV-3070 (ARR) (TAM) VIRGIN GALACTIC HOLDINGS, INC.,

MICHAEL A. COLGLAZIER, GEORGE WHITESIDES, DOUG AHRENS, and JON CAMPAGNA,

Defendants.

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TARYN A. MERKL, United States Magistrate Judge:

Plaintiffs, individually and on behalf of all others similarly situated, brought this lawsuit under the Private Securities Litigation Reform Act (PSLRA) on behalf of those who purchased Virgin Galactic Holdings, Inc., stock between July 10, 2019, and August 4, 2022. (See Third Am. Compl., ECF No. 128, ¶ 1.) Two sealing motions are presently before the Court in connection with briefing concerning Plaintiffs’ pending motion for class certification. (See Defs.’ Mot. for Leave to File Under Seal, ECF No. 139; Pls.’ Mot. for Leave to File Under Seal, ECF No. 145.) For the reasons set forth herein, the sealing motions are denied in part and granted in part. By way of background,1 on October 12, 2024, Plaintiffs filed a motion for class certification, together with various exhibits. (See Mot. to Certify Class, ECF No. 131; Mem. in Supp., ECF No. 132; Aff. in Supp., ECF No. 133; Pls.’ Request for Judicial

1 Familiarity with the underlying facts and procedural history is assumed. Only the procedural history relevant to the pending motions is included herein. Notice in Supp., ECF No. 134.) On December 20 and 21, 2024, Defendants filed a memorandum in response to Plaintiffs’ motion, along with voluminous exhibits, together with a motion for leave to file under seal and a supporting memorandum, seeking to file portions of their opposition memorandum and exhibits under seal. (See Defs.’ Mot. for Leave to File Under Seal, ECF No. 139 (including Defs.’ Mem. of Law in Supp. of Mot. to File Under Seal, ECF No. 139-1, Defs.’ Mem. in Opp’n to Class Certification, ECF No. 139-2 (with proposed redactions), and exhibits, ECF Nos. 139-3– 139-14); Defs.’ Mem. in Opp’n, ECF No. 140 (redacted, public version); Defs.’ Aff. in Opp’n, ECF No. 141 (with certain exhibits filed under seal as part of ECF No. 139).)

On January 24, 2025, Plaintiffs filed a reply brief in support of the motion for class certification, together with a declaration in support and a motion for leave to file portions of their reply memorandum and certain supporting exhibits under seal. (See Reply, ECF No. 143; Decl. of Ex Kano S. Sams in Supp. of Reply (“Sams Decl.”), ECF No. 144 (including “placeholders” as to certain exhibits, which were filed under seal as part of ECF No. 145); Mot. for Leave to File Under Seal, ECF No. 145 (including Mem. of Law in Supp. of Mot. to File Under Seal, ECF No. 145-1; Pls.’ Reply Mem., ECF No. 145- 3 and exhibits, ECF Nos. 145-4–8).)2

2 The Court notes that both parties here filed their briefs with redactions prior to obtaining leave of Court to file material under seal. (See Response, ECF No. 140 (redacted); Reply, ECF No. 143 (redacted).) Moreover, Plaintiffs failed to indicate in their motion for leave to file under seal what material they sought to redact from the publicly filed version of their Reply, necessitating a line-by-line comparison by the Court. (Compare Reply, ECF No. 143 (redacted) with Reply, ECF No. 145-3 (unredacted, filed with the motion for leave to file under seal).) Going forward, the parties are reminded that prior to filing any documents under seal, including redacted or partially sealed documents, they must obtain leave of Court. See Steps for E-filing Sealed Documents — Civil Cases, available at https://img.nyed.uscourts.gov/files/ forms/EfilingSealedCV.pdf. To do so, the parties are directed to file a motion for leave to file under seal, with the accompanying documents or exhibits, identifying any proposed sealing requests by highlighting proposed redactions in a color other than yellow. Any requests to seal or sealed filings that do not comport with these procedures will be summarily denied and/or stricken from the docket. Having reviewed the motions, exhibits, and sealing requests in light of the well- established right of public access to judicial documents and the public’s interest in monitoring the administration of justice, see Mirlis v. Greer, 952 F.3d 51, 58–59 (2d Cir. 2020); Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119–20 (2d Cir. 2006); United States v. Aref, 533 F.3d 72, 81–83 (2d Cir. 2008); King Pharms., Inc. v. Eon Labs, Inc., No. 04- CV-5540 (DGT) (RLM), 2010 WL 3924689, at *4 (E.D.N.Y. Sept. 28, 2010) (collecting cases), the parties’ motions to seal are granted in part and denied in part as detailed below. I. Legal Standards

When reviewing a motion to seal, courts consider three factors: (1) whether the document is a “judicial document”; (2) “the weight of the presumption of access to that document”; and (3) whether “all of the factors that legitimately counsel against disclosure of the judicial document” outweigh “the weight properly accorded the presumption of access.” Mirlis, 952 F.3d at 59 (quotation marks omitted). The Second Circuit has recognized “that the weight to be given” to the presumption of access to judicial documents falls along a continuum, and “must be governed by the role of the material at issue in the exercise of Article III judicial power and the resultant value of such information to those monitoring the federal courts.” United States v. Amodeo, 71 F.3d 1044, 1049 (2d Cir. 1995) (“Amodeo II”); see also Mirlis, 952 F.3d at 60 (“The general and deeply rooted rule is that the presumptive right of access is afforded ‘strong weight’ when applied to documents that play a central role in ‘determining litigants’ substantive rights — conduct at the heart of Article III.’” (quoting Amodeo II, 71 F.3d at 1049)); Bernstein v. Bernstein Litowitz Berger & Grossmann LLP, 814 F.3d 132, 139 (2d Cir. 2016) (finding that a “judicial document” is “relevant to the performance of the judicial function and useful in the judicial process” and that such documents are presumptively public (quotation marks omitted)). It is well established that considerations of privacy or a “business’s proprietary information, such as trade secrets or confidential research” can override the public right of access to judicial documents. Crossman v. Astrue, 714 F. Supp. 2d 284, 287 (D. Conn. 2009); see also Zou v. Han, No. 23-CV-2370 (JMA) (JMW), 2024 WL 1704704, at *4–6 (E.D.N.Y. Apr. 19, 2024) (discussing privacy interests as to financial documents). However, the Second Circuit has cautioned that “[i]n most cases, a judge must carefully and skeptically review sealing requests to insure that there really is an extraordinary

circumstance or compelling need.” In re Orion Pictures Corp., 21 F.3d 24, 27 (2d Cir. 1994). II. Analysis Here, the parties are seeking to seal portions of briefs and exhibits submitted in connection with Plaintiffs’ class certification motion. Accordingly, in weighing the second factor, the Court affords significant weight to the presumption of access because the documents were submitted in connection with the adjudication of an important question impacting the scope of relief in this case.

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