The City of Philadelphia v. Bank of America Corporation

District Court, S.D. New York·Decided December 5, 2022·No. 1:19-cv-01608·Unknown

Opinion

ihe motion to seal 1s granted temporarily. Court will assess whether to keep the materials at issue sealed or redacted when deciding the underlying motion. The Clerk of Court 1s directed December 1, 2022 to terminate ECF No. 367. Via ECF SO_ORDERED, Honorable Jesse Furman United States District Judge Southern District of New York 40 Centre Street, Room 2202 cember 5, 2022 New York, New York 10007 Re: City of Philadelphia, et al. v. Bank of Am. Corp., et al., 19-cv-1608 (JMF) Dear Judge Furman: Pursuant to Rule 7 of the Court’s Individual Rules and Practices in Civil Cases, and the Stipulation and Order Regarding Redaction and Sealing Process for Class Certification Briefing (Dkt. 358), Plaintiffs The City of Philadelphia, Mayor and City Council of Baltimore, and the Board of Directors of the San Diego Association of Governments, Acting as the San Diego County Regional Transportation Commission (collectively, “Plaintiffs”), on behalf of all parties, hereby seek leave to file by ECF Plaintiffs’ Motion for Class Certification and Appointment of Class Counsel (“Motion”) (Dkt. Nos. 362-366) with certain confidential documents and information sealed or redacted.! An index listing all material that the parties seek to file in redacted form or under seal is attached as Exhibit 1. The parties have met and conferred regarding each’s proposed redactions and documents to be filed under seal, and no party opposes the requests of any other party.” The parties’ respective justifications for sealing or redacting those materials under Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119-20 (2d Cir. 2006), and its progeny, are set forth below. While the parties acknowledge that the materials to be redacted or sealed are judicial documents to which the presumption of public access attaches, they believe that in balancing the competing considerations against the presumption of access, the Court should grant the parties’ motion.

' Plaintiffs’ opening memorandum of law in support of the Motion was filed on October 27, 2022 with restricted access. Dkt. No. 363. Plaintiffs’ opening expert reports were filed on October 27, 2022, annexed to the Declaration of Elizabeth Aronson, dated October 27, 2022 (“Aronson Decl.”’) (Dkt. No. 364), as Exhibit 1 (Expert Report of Prof. William Schwert (Dkt. No. 364-1)) and Exhibit 2 (Expert Report of Dr. Rosa Abrantes-Metz report (Dkt. No. 364-2)), also with restricted access. Corrected versions of certain other exhibits annexed to the Aronson Declaration were filed on October 28, 2022 (Dkt. Nos. 366-1 through 366-7), also with restricted access. ? Plaintiffs do not seek to seal or redact any portion of their own documents or deposition testimony quoted or discussed in the Motion, and otherwise reserve all rights with respect to confidentiality.

Defendants’ information. Defendants have substantially narrowed the scope of their confidentiality designations with respect to Defendants’ discovery material previously designated as Confidential or Highly Confidential and filed, quoted from, or referenced in Plaintiffs’ Class Certification papers. The materials that Defendants wish to keep confidential and have filed in redacted form or under seal are documents and testimony that discuss specific and sensitive information related to Defendants’ rate-setting processes, handling of VRDO inventory and inventory limits, and internal strategy and compliance discussions, among other items.

Filing these materials in redacted or sealed form is consistent with the standards for sealing in the Second Circuit. Courts in the Second Circuit and the Southern District of New York have held that it is appropriate to seal commercially sensitive “business information that might harm a litigant’s competitive standing.” New York v. Actavis, PLC, No. 14-CV-7473 (RWS), 2014 WL 5353774, at *3 (S.D.N.Y. Oct. 21, 2014); see also City of Providence v. BATS Glob. Markets, Inc., No. 14-CV-2811 (JMF), 2022 WL 539438, at *2 (S.D.N.Y. Feb. 23, 2022) (allowing for sealing of documents based on potential harm to competitive standing). In order to avoid creating a competitive disadvantage for a litigant, courts regularly allow the sealing of commercially sensitive information, including “trade secrets, confidential research and development information, marketing plans, revenue information, pricing information, and the like.” Tyson Foods, Inc. v. Keystone Foods Holdings, Ltd., No. 1:19-CV-010125 (ALC), 2020 WL 5819864, at *2 (S.D.N.Y. Sept. 30, 2020).

The documents and testimony Defendants wish to keep confidential fall within the scope of confidential and sensitive commercial information that should be sealed. These documents include:

• Documents and testimony (and descriptions of the same) related to Defendants’ pricing methodologies that provide specific information about analysis conducted and inputs used to determine Defendants’ rates, and other specific processes related to rate-setting. See Dkt. No. 363 at p. 5 n.7, p. 6 n.8; Dkt. No. 364-1 at p. 16; Dkt. No. 364-2 at p. 8 nn.314-16, p. 25 n.68, p. 71 n.244, pp. 78-87 & nn.258, 266, 287, 297, p. 98 & n.339; Dkt. No. 364-9 at pp. 148-49; Dkt. No. 364-12 at pp. 116-18; Dkt. No. 364-13 at pp. 116- 17; Dkt. No. 364-14 at pp. 122-23; Dkt. No. 364-15 at p. 276; Dkt. No. 364-16; Dkt. No. 364-37; Dkt. No. 366-1 at pp. 78-80; Dkt. No. 366-2 at pp. 256-57; Dkt. No. 366-6. Disclosure of this information would allow competitors to essentially re-create portions of Defendants’ proprietary pricing methodologies and rate-setting processes. While some of these materials may be from before 2010, similar or identical processes are still in place today.

• Documents and testimony (and descriptions of the same) related to information relied on by Defendants in setting rates. See Dkt. No. 364-2 at pp. 56 n.199, p. 74 n.249. Similar to above, disclosure of this information would allow competitors to develop similar practices in setting rates, harming Defendants.

• Descriptions of and quotes from documents and testimony related to Defendants’ tracking of VRDO inventory, handling of inventory, and inventory limits. See Dkt. No. 363 at p. 13; Dkt. No. 364-2 at pp. 52-54, 66 n.227. Disclosure of this information would allow competitors to evaluate Defendants’ specific risk limits and inventory systems, and to adjust their processes to compete against Defendants accordingly.

• Descriptions of and quotes from documents and testimony related to costs associated with carrying VRDOs on Defendants’ books, yields on VRDOs, and other cost and pricing information. See Dkt. No. 364-2 at p. 15 n.21, pp. 48-54 & nn. 158, 169, 172, 181, 188- 92; Dkt. No. 364-54 at p. 44. Similar to the materials discussed above, disclosure of these materials could allow competitors to position themselves favorably against Defendants in the market.

• Summaries of swap agreements entered into by Defendants See Dkt. No. 364-1 at pp. 71- 72. The existence and terms of these agreements are confidential, and disclosure of information related to these swaps, including summaries of the numbers and types of swaps that Defendants have entered into will provide competitors insight into this confidential market that could be used to Defendants’ disadvantage.

• Documents and testimony (and descriptions of the same) related to internal strategy and compliance decisions and procedures by Defendants. See Dkt. No. 363 at pp. 6-8 & n.18, p. 11 n.33; Dkt. No. 364-2 at pp. 34, 63-64 & n.222; Dkt. No. 364-14 at p. 227; Dkt. No. 366-4 at pp. 200-03; Dkt. No. 364-19; Dkt. No. 364-20; Dkt. No. 364-44 at pp. 122-23; Dkt. No. 366-3 at p. 219. Disclosure of this sensitive strategy and compliance material would allow great access into Defendants’ internal decision-making processes, that could be used to Defendant’s disadvantage.

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The City of Philadelphia v. Bank of America Corporation, (S.D.N.Y. 2022).

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