United States District Court, D. Arizona
ORDER
Dominic W. Lanza United Slates District Judge
This is
an ERISA case in which Plaintiff contends his claim for
long-term disability benefits was wrongfully denied. (Doc. 30
at 2-3.) Plaintiff further contends that Aetna and
Prudential, the companies that Defendant hired to administer
its benefits program, were afflicted by a conflict of
interest. (Id. at 3-5.)
On
January 18, 2019, Plaintiff filed a “Motion to Conduct
Discovery.” (Doc. 40.) In it, Plaintiff argues he is
entitled to conduct discovery on the issue whether Aetna and
Prudential had a conflict of interest and asks the Court to
authorize him to propound a series of discovery requests on
this topic. (Id.) Plaintiff included two exhibits to
his motion. The first, Exhibit A, is his proposed set of
discovery requests. (Doc. 40-1.) The second, Exhibit B, is an
“administrative services agreement” between
Prudential and Defendant. (Doc. 40-2.) This is the contract
that Defendant used to hire Prudential to administer its
benefits program.
On
February 5, 2019-before Defendant filed its response to the
motion-the parties filed a “Stipulated Motion to Seal
Exhibit B to Plaintiff's Motion to Conduct
Discovery.” (Doc. 46.) In it, the parties argue that
“good cause” exists to seal the 21-page contract
between Prudential and Defendant because “[a] contract
stating terms and conditions under which parties exchange
services, including pricing, is business sensitive, and
disclosure can create competitive disadvantage for both the
insurance carrier and the policy owner. Defendant asserts the
Administrative Services Agreement is business sensitive and
confidential . . . [and] Plaintiff does not contest or
oppose” this assertion. (Id. at 2.) No.
affidavits or declarations were submitted in support of the
sealing request.
The
Court agrees that the “good cause” standard
governs this sealing request, and further agrees that certain
portions of the contract may be sealed under this standard,
but disagrees that the contract may be sealed in its
entirety. As an initial matter, any sealing request must be
considered in light of the “strong presumption in favor
of access to court records, ” which is “based on
the need for federal courts, although independent-indeed,
particularly because they are independent-to have a measure
of accountability and for the public to have confidence in
the administration of justice.” Ctr. for Auto
Safety v. Chrysler Group, LLC, 809 F.3d 1092, 1096 (9th
Cir. 2016) (citations and internal quotation marks omitted).
Accordingly, a party seeking to seal a judicial record must
establish either a “compelling reason” or
“good cause” for its request, with the standard
dependent on the type of judicial record at issue.
Id. at 1096-97. When, as here, the record that is
the subject of the sealing request is an “attach[ment]
to a discovery motion unrelated to the merits of a case,
” the “good cause” standard applies.
Id.
Courts
have often found that, when a document contains confidential
financial information whose disclosure might result in
competitive harm, good cause exists for sealing. See,
e.g., 3B Med., Inc. v. Resmed Corp., 2016 WL 6818953, *3
(S.D. Cal. 2016) (“Having reviewed the documents the
parties request be sealed, the Court finds 3B Medical has
satisfied the good cause standard because the documents
contain ResMed's confidential financial
information.”); Nat'l Prods., Inc. v. Aqua Box
Prods., LLC, 2013 WL 13106901 (W.D. Wash. 2013)
(“[T]he Court is mindful of the proprietary nature of
confidential financial information, and that past information
may be used to predict future business plans. . . . The Court
agrees that the extent of past financial information
contained in the documents may harm NPI's competitive
position with respect to future business. NPI's motion to
seal . . . is GRANTED.”).
Here,
the Court has reviewed the 21-page document that is the
subject of the sealing request, and it appears that only the
final page contains anything in the ballpark of sensitive
financial information (i.e., the rates and fees
Prudential charges for administering the benefit program).
(Doc. 40-2 at 22.) It's unclear why the parties consider
the other 20 pages to be sensitive. Accordingly, and in the
absence of any affidavits or declarations establishing those
pages' sensitivity, the Court cannot find “good
cause” to seal the entire document. Cf. 3B
Medical 2016 WL 6818953 at *3 (“[T]he Court finds
that 3B Medical has not made a sufficiently particularized
showing to warrant sealing all of the exhibits in their
entirety. Specifically, 3B Medical has not shown good cause
to seal pages 1 and 3 . . . of Exhibit 8 because these pages
consist of emails concerning general business discussions
between ResMed executives, and therefore do not include
information concerning ResMed's pricing strategy,
contract negotiations, or revenue forecasts. In short, 3B
Medical fails to show what specific harm would come from
disclosure of these discussions.”).
Accordingly,
IT IS ORDERED that the parties'
“Stipulated Motion to Seal Exhibit B to Plaintiffs
Motion to Conduct Discovery” (Doc. 46) is granted in
part and denied in part. Only the final page of Exhibit B may
be sealed.
Because
Exhibit B is already in the public record, IT IS
FURTHER ORDERED that the Clerk of Court
strike Doc. 40-2 and then seal the stricken
document.
To the
extent Plaintiff wishes to have Exhibit B in the record,
Plaintiff may refile the final page under seal and file ...