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Sims v. BB&T Corp.

United States District Court, M.D. North Carolina

July 18, 2018

ROBERT SIMS, et al., Plaintiffs,
BB&T CORPORATION, et al., Defendants.


          Catherine C. Eagles, District Judge.

         In this ERISA action, the plaintiffs have sued the defendants alleging that they breached their fiduciary duties and committed prohibited transactions in administering the BB&T Corporation 401(k) Savings Plan. The parties have filed a consolidated motion to seal in which the defendants seek to fully or partially seal eleven documents and the plaintiffs seek to fully seal one document, all of which were filed in connection with the defendants' summary judgment motion. The Court will grant the motion to the extent it seeks to seal documents for which a party has established a compelling interest that outweighs the public's right to access; otherwise the motion is denied.


         “The courts of this country recognize a general right to inspect and copy . . . judicial records and documents.” Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978).[1] This right of public access to judicial records derives from the First Amendment and the common law. Va. Dep't of State Police v. Wash. Post, 386 F.3d 567, 575 (4th Cir. 2004). When a party asks to seal judicial records, the court “must determine the source of the right of access with respect to each document, ” and then “weigh the competing interests at stake.” Id. at 576. The Court must also (1) give the public notice and a reasonable opportunity to challenge the request to seal; (2) “consider less drastic alternatives to sealing;” and (3) if it decides to seal, make specific findings and state the reasons for its decision to seal over the alternatives. Id.; Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253-54 (4th Cir. 1988).

         The First Amendment guarantee of access extends only to particular judicial records. Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 180 (4th Cir. 1988). Judicial records are “documents filed with the court . . . [that] play a role in the adjudicative process, or adjudicate substantive rights.” In re Application of U.S. for an Order Pursuant to 18 U.S.C. Section 2703(D), 707 F.3d 283, 290 (4th Cir. 2013) (collecting cases). Because the public has a right to attend trials and oversee the courts, the First Amendment protects the public's right to access “the evidence and records filed in connection with summary judgment proceedings.” E.g., Doe v. Pub. Citizen, 749 F.3d 246, 267 (4th Cir. 2014).

         Whether derived from the common law or the First Amendment, the public's right of access “may be abrogated only in unusual circumstances.” Stone, 855 F.2d at 182. The First Amendment right of access to judicial records “yields only in the existence of a compelling governmental interest . . . that is narrowly tailored to serve that interest.” In re Application, 707 F.3d at 290; see also Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299, 305 (6th Cir. 2016) (“In class actions-where by definition some members of the public are also parties to the case-the standards for denying public access to the record should be applied with particular strictness.”) (citing In re Cendant Corp., 260 F.3d 183, 194 (3d Cir. 2001)). The party seeking to limit public access bears the burden to show that sealing is appropriate. Rushford, 846 F.2d at 253; see Pub. Citizen, 749 F.3d at 272.

         The party seeking to seal must provide specific reasons to support its position. Va. Dep't of State Police, 386 F.3d at 575; Press-Enter. Co. v. Superior Court of Cal., 478 U.S. 1, 15 (1986) (holding that “the First Amendment right of access cannot be overcome by a conclusory assertion”). Claims of confidentiality for court filings cannot be made indiscriminately and without evidentiary support. Bayer CropSci. Inc. v. Syngenta Crop Prot., LLC, No. 13CV316, 2013 WL 12137000, at *1 (M.D. N.C. Dec. 12, 2013); accord, LLC v. RPost Commc'ns Ltd, No. CV1400126, 2016 WL 1158851, at *2 (D. Ariz. Mar. 24, 2016) (“Broad allegations of harm, unsubstantiated by specific examples of articulated reasoning [are] not enough to overcome the strong presumption in favor of public access.”).

         II. ANALYSIS

         The Court has complied with the notice requirements set forth in Stone and Rushford. The parties filed this motion to seal in April 2018. Doc. 336. The plaintiff objects in whole or part to the sealing of nine documents that the defendants seek to seal. See, e.g., Doc. 368 (chart listing objections to Docs. 324, 325, 331-1, 331-2, 331-3, 331-5, 331-6, 334, and 335). No other person or entity has objected to the motion. See Mears v. Atl. Se. Airlines, Inc., No. 5:12CV613F, 2014 WL 5018907, at *2 (E.D. N.C. Oct. 7, 2014) (“The filing of a litigant's motion to seal . . . is sufficient to provide public notice and opportunity to challenge the request to seal.”).

         The Court finds that the First Amendment right of access applies to the documents because they were filed in connection with the summary judgment motion. See Pub. Citizen, 749 F.3d at 267 (explaining that the First Amendment protects public access to “the evidence and records filed in connection with summary judgment proceedings”).

         A. Documents with Confidential Business Information

         The defendants seek to seal documents on the basis that they contain confidential business information. “Business information that might harm a litigant's competitive standing” may be a sufficient interest to overcome the First Amendment right of access. Nixon, 435 U.S. at 598 (holding that “the common-law right of inspection has bowed before the power of a court to insure that its records” do not serve “as sources of business information that might harm a litigant's competitive standing”); see also Pub. Citizen, 749 F.3d at 269 (indicating in dicta that a company's “strong interest in preserving the confidentiality of its proprietary and trade-secret information . . . may justify partial sealing of court records.”).

         In order to determine whether the motions to seal should be granted based on claims of confidential business information, the Court evaluates: whether the party has shown that the information sought to be sealed is confidential; whether disclosure would harm the party's competitive standing or otherwise harm its business interests; whether the motion is narrowly tailored; and whether the interests in non-disclosure are compelling and heavily outweigh the public's interest in access to the information. In weighing the competing interests, the Court considers, among other things, whether access to the evidence is needed to understand the Court's decision on summary judgment and the degree of harm that disclosure would be likely to cause.

         1. RIS Customer Spreadsheet (Doc. 374)[2]

         The defendants move to seal a spreadsheet that lists institutional customers of BB&T's Retirement and Institutional Services (e.g., 401k plans) as well as information on the mutual funds available through those plans and on whether fees that those mutual funds provide to RIS are rebated to the institutional customer. Doc. 346 at 10-11. The plaintiffs have objected to the full sealing of this document and have proposed limiting the sealing to the specific customer names. Doc. 346 at 11.

         The defendants support their motion with the affidavit of Steven Reeder, a Senior Vice President and Benefits Manager at BB&T Corporation, which states that the spreadsheet contains “highly sensitive customer information that BB&T does not routinely disclose” and that “disclosure of this information could hamper BB&T's competitive standing in the marketplace.” Doc. 336-1 at ¶¶ 2, 5. While Mr. Reeder's affidavit does not explain why the information is sensitive or discuss how disclosure could hamper BB&T's competitive standing, counsel asserts in the briefing that BB&T's competitors could use this information to target customers and undercut BB&T. Doc. 346 at 10. To some extent the face of the document itself supports the inferences counsel draws in the brief. This is sufficient to establish a compelling interest in sealing the customer names. However, BB&T has not pointed to any non-conclusory evidence tending to support its assertion that disclosure of the other information on the spreadsheet would cause it harm, especially if the customer names are sealed.

         The plaintiffs relied on this spreadsheet to support their assertion that the BB&T 401k plan is treated differently than other 401k plans because the BB&T Plan does not receive rebates from RIS and as a result pays more in fees than similarly situated plans. See Doc. 346 at 11. This evidence was integral to the Court's decision to deny summary judgment on Counts I, VI, and VII. See Doc. 369 at 13-15, 25. Because this information was a primary consideration in the Court's decision on summary judgment the public has a strong interest in access to the spreadsheet.

         After weighing the interests of the defendants and the public, the Court will limit the sealing of the spreadsheet to the customer information provided in the first three columns on the left (i.e., PLANKEY, PlanNam, and Omni Plan ID). The customer names provided in the spreadsheet are not necessary for the public's understanding of the issues decided on summary judgment and may not even be relevant. Sealing this information will protect BB&T's compelling business interests by limiting a competitor's ability to target BB&T's customers. As BB&T has not submitted evidence to support its contention that it would be harmed by disclosure of other information on the form so long as the customer names are not disclosed, and as that information is necessary to facilitate public understanding, the Court will not seal the entire document.

         2. The Deposition of ...

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