Martin J. Walsh v. Alight Solutions, LLC

44 F.4th 716
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 12, 2022
Docket21-3290
StatusPublished
Cited by3 cases

This text of 44 F.4th 716 (Martin J. Walsh v. Alight Solutions, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Martin J. Walsh v. Alight Solutions, LLC, 44 F.4th 716 (7th Cir. 2022).

Opinion

In the

United States Court of Appeals For the Seventh Circuit ____________________ No. 21-3290 MARTIN J. WALSH, Secretary of Labor,

Petitioner-Appellee,

v.

ALIGHT SOLUTIONS LLC, Respondent-Appellant. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:20-cv-2138 — John F. Kness, Judge. ____________________

ARGUED APRIL 21, 2022 — DECIDED AUGUST 12, 2022 ____________________

Before EASTERBROOK, ROVNER, and BRENNAN, Circuit Judges. BRENNAN, Circuit Judge. The U.S. Department of Labor is investigating alleged cybersecurity breaches at Alight Solu- tions LLC, a company that provides administrative services for employers who sponsor healthcare and retirement plans. As part of its investigation the Department issued an admin- istrative subpoena. Alight produced some documents but 2 No. 21-3290

objected to many of the subpoena’s requests. The district court granted the Department’s petition to enforce the sub- poena with some modifications. On appeal, Alight argues the subpoena is unenforceable because the Department lacks authority to investigate the company, or cybersecurity incidents generally. The company also contends the subpoena’s demands are too indefinite and unduly burdensome, and that the district court abused its dis- cretion by denying Alight’s request for a protective order to limit production of certain sensitive information. Alight’s ar- guments are not persuasive, so we affirm. I Alight provides recordkeeping services for employers who sponsor healthcare and retirement benefit plans for their employees, some of which are governed by the Employee Re- tirement Income Security Act, 29 U.S.C. §§ 1001–1461 (“ERISA”). As of November 2020, Alight served over 750 cli- ents supporting more than 20.3 million plan participants. These clients entrust Alight with highly sensitive information about their companies, employee benefits plans, and plan par- ticipants. Alight provides cybersecurity services to protect this confidential information. The Department opened an investigation of Alight in July 2019 prompted by a discovery that Alight processed unau- thorized distributions of plan benefits due to cybersecurity breaches in its ERISA plan clients’ accounts. The Department says Alight failed to report, disclose, and restore those unau- thorized distributions. Alight denies any knowledge of breaches resulting in unauthorized distributions. No. 21-3290 3

As part of the investigation the Department sent Alight an administrative subpoena duces tecum. The subpoena calls for documents in response to 32 inquiries and covers the period from January 1, 2015 through the date of production. The in- formation requested ranges from specific inquiries, like Alight’s articles of incorporation and bylaws, to broad de- mands, including “[a]ll documents and communications re- lating to services offered to ERISA plan clients.” Alight produced a limited number of documents in re- sponse to about half of the subpoena’s requests, but the com- pany also objected to many of the inquiries. Specifically, the company challenged the Department’s investigatory author- ity and purposes, criticized the subpoena’s scope and burden, and emphasized its duty to keep certain information confi- dential. After unsuccessful attempts by the parties to resolve Alight’s objections, the Department petitioned the district court to enforce the subpoena. Meanwhile, the company con- tinued to interact with the Department and produced addi- tional materials. But Alight redacted most of the documents it produced to remove client identifying information, which prevented the Department from discerning potential ERISA violations. In response to the petition, Alight filed a memorandum opposing enforcement of the subpoena. The company argued that the Department lacked the authority to investigate the company because Alight is not a fiduciary under ERISA, the subpoena was too indefinite to enforce and sought documents unrelated to ERISA plans, and enforcement would jeopardize confidential information Alight was contractually obligated to protect. The company also noted that although the 4 No. 21-3290

subpoena requested documents back to January 1, 2015, Alight was not formed until May 2017. Alight asked the dis- trict court to quash the subpoena, or at a minimum to limit the subpoena and enter a protective order permitting redac- tions. Alight’s response also highlighted a production sample its legal consultant prepared, which covered two months of re- sponsive documents. The consultant spent over 40 hours pre- paring the sample, and she estimated that the employees who assisted her collectively spent the same amount of time on the project. Based on this sample, Alight’s legal consultant pro- jected full compliance with the subpoena would require “thousands of hours of work.” The Department filed a reply memorandum defending the subpoena. It stated that additional documentation was not required for 9 of the original 32 production requests. For the remaining 23 inquiries, the Department clarified or narrowed each request. Ultimately, the district court granted the Department’s pe- tition to enforce the subpoena as modified by the Depart- ment’s reply memorandum. The court found that the Depart- ment’s investigatory authority was not limited to fiduciaries, and that the requested information was reasonably relevant to the ERISA investigation. It also ruled that the subpoena was not too indefinite, and that Alight’s challenge to the indefi- niteness of the subpoena related more to the burden of pro- duction than the clarity of the production requests. As to Alight’s burden of compliance, the court applied the pre- sumption that subpoenas should be enforced and decided that the balance between the relevance of the requested infor- mation and the cost of production favored enforcement. No. 21-3290 5

The district court also declined to enter a protective order. Not only had Alight failed to formally move for such an order under Federal Rule of Civil Procedure 26(c), but the court found that the Freedom of Information Act and 18 U.S.C. § 1905 prohibited the Department from publicizing Alight’s confidential information. So, the court concluded that Alight had not shown good cause for redacting the requested docu- ments. Last, the court addressed the date range covered by the subpoena. Reasoning that Alight “cannot produce what it does not have,” the court directed Alight to produce those documents in its possession. And “if [Alight] does not have anything within its possession, custody, or control to produce from the period before it had its current legal existence, it should respond to the Subpoena accordingly.” II “We review the district court’s decision to enforce an agency subpoena for abuse of discretion, and we review any factual determinations on which the ruling is based for clear error. Questions of law are reviewed de novo.” EEOC v. Aero- tek, Inc., 815 F.3d 328, 333 (7th Cir. 2016) (citations omitted); see McLane Co., Inc. v. EEOC, 137 S. Ct. 1159, 1170 (2017). “A decision is an abuse of discretion only if no reasonable person would agree with the decision made by the trial court.” Lange v. City of Oconto, 28 F.4th 825, 842 (7th Cir. 2022) (quoting Smith v. Hunt, 707 F.3d 803, 808 (7th Cir. 2013)). Under clear- error review, we will overturn a decision “only if the entire record leaves us ‘with the definite and firm conviction that a mistake has been committed.’” Wilborn v. Ealey, 881 F.3d 998, 6 No.

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