The City of Philadelphia v. Bank of America Corporation

District Court, S.D. New York·Decided May 19, 2023·No. 1:19-cv-01608·Unknown

Opinion

Ne MOUOT lO seal Is Pranled leMpordimy., WOurl wilh assess whether to keep the materials at issue sealed or redacted when deciding the underlying motions. The Clerk of May 19, 2023 Court is directed to terminate ECF No. 426. Via ECF SO ORDERED. Honorable Jesse Furman United States District Judge Southern District of New York AO Centre Street, Room 2202 ay 19, 2023 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. No. 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’ Reply Memorandum of Law in Support of Their Motion for Class Certification and Appointment of Class Counsel, Plaintiffs’ Memorandum of Law in Opposition to Defendants’ Motion to Exclude Expert Testimony, and supporting documents (the “Reply Papers”) (Dkt. Nos. 411-414; 423) 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’ Reply Memorandum of Law in Support of Their Motion for Class Certification was filed on April 14, 2023 with restricted access. Dkt. No. 411. Plaintiffs’ Memorandum of Law in Opposition to Defendants’ Motion to Exclude Expert Testimony was filed on April 14, 2023 with restricted access. Dkt. No. 413. Exhibits to Plaintiffs’ Reply Memorandum of Law in Support of Their Motion for Class Certification were filed on April 14, 2023, annexed to the Declaration of Elizabeth Aronson, dated April 14, 2023 (“Aronson Decl.”) (Dkt. No. 412), including corrected Exhibit 77 (Reply Expert Report of Prof. William Schwert (Dkt. No. 423-1)) and Exhibit 78 (Reply Expert Report of Dr. Rosa Abrantes-Metz report (Dkt. No. 412-2)), also with restricted access. Exhibits to Plaintiffs’ Memorandum of Law in Opposition to Defendants’ Motion to Exclude Expert Testimony were filed on April 14, 2023, annexed to the Declaration of Randall Rainer, dated April 14, 2023 (“Rainer Decl.”) (Dkt. No. 414) with restricted access.

Plaintiffs’ Information. The materials Plaintiffs wish to keep confidential and have filed in redacted form or under seal are documents and testimony that discuss internal financial matters of the Named Plaintiffs. Consistent with the legal authority cited above, Plaintiffs request the sealing of only certain confidential information in three specific categories:

• Documents and testimony related to the Named Plaintiffs’ entry into interest rate swaps, including the confidentially negotiated economic terms thereof. See Dkt. No. 412-4 at pp. 54, 84 and 104-105.

• Documents related to Plaintiff City of Philadelphia’s internal Debt Management Policy including internal strategy about the ways to structure debt issuances, uses for different types of debt financing and guidelines for bond sales. Disclosure of this sensitive strategy and compliance material would allow great access into Plaintiff City of Philadelphia’s internal decision-making processes, that could be used to its disadvantage. See Dkt. No. 412-11.

• Sensitive material in the reply expert report of Plaintiffs’ expert Professor William Schwert, which quantifies the impact of Defendants’ alleged artificial inflation of VRDO rates and calculates his initial estimate of class damages therefrom. Such financial figures also are proper subjects of redaction. See Dkt. No. 411 at pp. 7 and 15; Dkt. No. 413 at p. 9 & n.12, pp. 20-21; pp. 23-24; Dkt Nos. 412-1 and 423-1 at p. 16, p. 19, p. 20 n.43, p. 22, p. 28, p. 30 & n.67, p. 33, p. 42, pp. 45-48 & nn.101 and 103, pp. 54-56 & n.117, p. 64, p. 66, p. 69, p. 73 and p. 91.

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 the Reply Papers. The materials that Defendants wish to keep confidential and have filed in redacted form are documents and testimony that discuss specific and sensitive information related to Defendants’ rate-setting processes, handling of VRDO inventory and inventory limits, and government investigations into VRDOs, 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. 411 at p. 14; Dkt. No. 412-1 at p. 9, p. 26; Dkt. No. 412-2 at pp. 16-25 & nn.16, 22, 24, 31, 36-37, 42, 52, 54, pp. 41-43 & nn.79, 82, p. 44-45 & nn.87, 89, pp. 102-103 n.230; Dkt. No. 412-6 at 139:2-140:4; Dkt. No. 413 at p. 18 n.21, p. 19 n.22; Dkt. No. 414-2 at 131:1-14, 131:20-21; Dkt. No. 414-3 at 28:11-29:11; Dkt. No. 414-5 at 138:2-13, 138:19-140:4, 141:3-25; Dkt. No. 423-1 at p 9, p. 26. 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.

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The City of Philadelphia v. Bank of America Corporation, (S.D.N.Y. 2023).

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