Fidelity Brokerage Services LLC v. Savell

Filing 11

ORDER signed by Judge Lawrence K. Karlton on 6/18/2012 ORDERING that plaintiff's application to file documents under seal is DENIED without prejudice to an application to file under seal a document containing the customer-identifying information contained in Paragraph 7 of the Dunzweiler Declaration; parties are advised that at the TRO hearing the court does not plan to consider any of the declarations or evidence plaintiff submitted under seal on 6/15/2012; if plaintiff chooses to file a n ew application to seal, it shall do so no later than 6/18/2012 by 4:30 p.m.; if plaintiff chooses to file declarations in support of the TRO publicly, it shall do so no later than today (6/18/2012) at 4:30 p.m.; declarations shall contain ONLY inform ation already contained in the original declarations filed on 6/15/2012 and plaintiff shall effect electronic service on defendant's counsel no later than 4:30 p.m. today; plaintiff shall forthwith serve this order by electronic means on defendant's counsel, or on defendant, if counsel is unknown.(Waggoner, D)

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UNITED STATES DISTRICT COURT
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FOR THE EASTERN DISTRICT OF CALIFORNIA
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10 FIDELITY BROKERAGE
SERVICES LLC, a limited
11 liability company,
NO. CIV. S-12-01608 MCE/CKD
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13

Plaintiff,
v.

14 ERIC SAVELL, an
individual,
15
Defendant.
16
17

/

Plaintiff Fidelity Brokerage Services LLC, has submitted an ex

18 parte application to seal the declarations of Bo Lowenberg, Leslie
19 Blickenstaff and Krista J. Dunzweiler in their entireties, along
20 with all of their attached exhibits, on the ground that they
21 contain

“customer

information.”

Plaintiff

asserts

that

the

22 information is a trade secret under the Uniform Trade Secrets Act,
23 and its public disclosure is prohibited by the Gramm-Leach-Bliley
24 Act, 15 U.S.C. § 6801(a), and its implementing regulations, 17
25 C.F.R. §§ 248.10, 248.3(t)(1) and 248.3(u)(2)(i)(D).
26 ////
1

1

Plaintiff

submitted

the

application

under

seal.1

While

2 plaintiff notified defendant Eric Savell that it was filing this
3 secret application, it expressly declined to provide him with the
4 motion papers, asserting that he has no “legitimate business need
5 for

the

information

contained

in

the

sealed

documents.”

6 Declaration of Krista J. Dunzweiler ¶ 2 (June 14, 2012).

The

7 documents that plaintiff is withholding from defendant – and from
8 the public – are the only documents that contain any evidence in
9 support of plaintiff’s allegation that defendant has taken and is
10 improperly using confidential customer information.

This is the

11 very basis of plaintiff’s complaint and of its motion for a
12 Temporary Restraining Order (the Complaint and TRO application were
13 publicly filed).
14 would

allow

15 evidence.

Plaintiff has not suggested any procedure that

defendant

to

defend

himself

against

this

secret

Unsurprisingly, defendant has not filed a response to

16 this invisible documentation.
17 I.

STANDARD

18

The Ninth Circuit has spoken out strongly in support of the

19 “‘general right to inspect and copy public records and documents,
20 including judicial records and documents.’”

Kamakana v. City and

21 County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006), quoting
22 Nixon v. Warner Communications, Inc., 435 U.S. 589, 597 & n.7
23 (1978).

Since the documents plaintiff wishes to have sealed here

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The application and its accompanying documents have not been
entered on the Docket.

26
2

1 are

not

the

2 transcripts

stuff
or

of

traditional

warrant

court

materials),

3 presumption in favor of access.’”

secrecy

they

(grand

enjoy

a

jury

“‘strong

Id., 447 F.3d at 1178, quoting

4 Foltz v. State Farm Mutual Automobile Ins. Co., 331 F.3d 1122, 1135
5 (9th Cir. 2003).
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A party seeking to seal a judicial record then bears the
burden of overcoming this strong presumption by meeting
the “compelling reasons” standard. That is, the party
must “articulate[] compelling reasons supported by
specific factual findings,” that outweigh the general
history of access and the public policies favoring
disclosure .... In turn, the court must “conscientiously
balance[] the competing interests” of the public and the
party who seeks to keep certain judicial records secret.
After considering these interests, if the court decides
to seal certain judicial records, it must “base its
decision on a compelling reason and articulate the
factual basis for its ruling, without relying on
hypothesis or conjecture.”

13
14 Id., 447 F.3d at 1178-79 (citations omitted).
15 II.

ANALYSIS

16

The

Court

17 declarations

in

has

reviewed

camera.

plaintiff’s

For

the

reasons

three
that

submitted

follow,

the

18 application to seal will be denied as to all three declarations.
19 As noted, the declarations sought to be filed under seal provide
20 the only factual basis for plaintiff’s assertion that defendant is
21 in possession of, or is in the process of taking and using, its
22 customer lists and confidential customer information.

Permitting

23 the declarations to be filed under seal in their entireties would
24 deprive the public of the information it is entitled to, namely,
25 the basis for this court’s decision on the TRO application.

This

26 is not a secret court, and it will not decide this TRO application
3

1 based upon secret evidence.
2

Equally unacceptable, plaintiff has expressly declined to

3 provide defendant with these declarations, asserting that he has no
4 “business need” for them.

Dunzweiler Declaration ¶ 2.

The court

5 cannot understand how defendant can defend against plaintiff’s
6 request for a TRO without access to the evidence that supposedly
7 justifies its issuance.
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A.

The Declaration of Bo Lowenberg (June 13, 2012).

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The

Lowenberg

10 paragraphs.

Declaration

consists

of

twenty-eight

(28)

However, fifteen (15) of them – paragraphs 1-13, 15 &

11 28 – contain no customer information of any kind, nor any financial
12 information,

nor

any

other

information

13 confidential or in need of being sealed.

that

appears

to

be

This court will not seal

14 information that is essential to deciding the TRO application, but
15 which contains no confidential information.
16

Paragraphs 14 & 16-27 identify customers by their full names,

17 thus indirectly identifying them as “high-net-worth” individuals,
18 most of whom allegedly have at least $1 million invested at
19 Fidelity.

In addition, Paragraph 27 identifies specific amounts

20 belonging to customers whose full names are given.

At first

21 glance, then, there would appear to be a basis for sealing these
22 paragraphs (assuming plaintiff’s legal basis for sealing customer
23 records is sound).
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Upon closer inspection, however, it is clear that plaintiff

25 identified these same customers in the Complaint, by using their
26 initials only.

Plaintiff there stated that it was doing so “to
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1 protect the identify of Fidelity’s customers as required by the
2 Gramm-Leach-Bliley

Act

and

its

3 Complaint ¶ 37 n.1 (Dkt. No. 1).

implementing

regulations.”

The Complaint goes on to explain

4 that the “initials are defined in the Declaration of Krista J.
5 Dunzweiler, which Fidelity has sought to file under seal for
6 Fidelity’s customers’ protection.”

Id.

Dunzweiler’s Declaration

7 gives the same explanation for how plaintiff is protecting customer
8 information.

Dunzweiler Declaration ¶ 6.

Plaintiff does not

9 explain why it did not use the same technique to protect customer
10 identities in the Lowenberg Declaration.

Doing so would obviate

11 the need to seal any of the 28 paragraphs of that declaration.
12

The Lowenberg Declaration also attaches 14 Exhibits. Exhibits

13 1-3 contain no customer information of any kind, nor any financial
14 information,

nor

any

other

information

that

appears

to

be

15 confidential or in need of being sealed. The remaining eleven (11)
16 exhibits contain occasional references to specific customer names.
17 However,

defendants

have

already

redacted

other

confidential

18 customer information from these documents, namely social security
19 and account numbers.

Plaintiff has not explained why it cannot

20 also redact customer names so that the exhibits can be filed
21 publicly.
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On the record before the court, plaintiff has not made a

23 compelling showing that the Lowenberg Declaration should be filed
24 under seal.

As a result, it has failed to overcome the strong

25 presumption that judicial records are public documents, and the
26 application will therefore be denied.
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1

B.

Declaration of Leslie Blickenstaff (June 13, 2012).

2

The Blickenstaff Declaration consists of twenty-five (25)

3 paragraphs, and attaches ten (10) exhibits.

Only four (4) of the

4 paragraphs

–

–

5 information.

numbered

11,

12,

18

&

19

contain

customer

The remaining twenty-one (21) paragraphs contain no

6 customer information of any kind, nor any financial information,
7 nor any other information that appears to be confidential or in
8 need of being sealed.
9

The first three (3) attached exhibits contain no customer

10 information of any kind, nor any financial information, nor any
11 other information that appears to be confidential or in need of
12 being sealed.
13 occasional

Some of the remaining seven (7) exhibits contain

references

to

specific

customer

names.

However,

14 plaintiff has not explained why it has not simply redacted the
15 customer names so that the document can be filed publicly.
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On the record before the court, plaintiff has not made a

17 compelling showing that the Blickenstaff Declaration should be
18 filed under seal.

As a result, it has failed to overcome the

19 strong presumption that judicial records are public documents, and
20 the application will therefore be denied.
21

C.

Declaration of Krista Dunzweiler (June 14, 2012).

22

The Dunzweiler Declaration consists of seven (7) paragraphs,

23 and attaches one (1) exhibit.
24 customer

information

or

any

Only the last paragraph contains
other

confidential

information.

25 Paragraph 7 ties the customer initials used in the Complaint to
26 specific

customers.

Plaintiff
6

explained

that

it

used

this

1 technique in order to protect customer identities in the Complaint,
2 although as discussed above, plaintiff does not explain why it did
3 not use the same technique to protect customer identities in the
4 Lowenberg or Blickenstaff Declarations.
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Paragraph

7

of

the

Dunzweiler

Declaration

thus

contains

6 customer information that apparently cannot be presented in any
7 other way.

The first six (6) paragraphs of the declaration,

8 however, as well as the exhibit, contain no customer information of
9 any kind, nor any financial information, nor any other information
10 that appears to be confidential or in need of being sealed.
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If plaintiff wishes to file paragraph 7 under seal, it may

12 apply to do so in a separate document.2
13 not

seal

the

exhibit,

nor

the

However, the court will

non-confidential

information

14 contained in the first six (6) paragraphs of that declaration.
15 III. CONCLUSION
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For the reasons stated above:

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1.

Plaintiff’s application to file documents under seal is

18 DENIED.
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However, this denial is without prejudice to an application to

20 file under seal a document containing the customer-identifying
21 information contained in Paragraph 7 of the Dunzweiler Declaration;
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2.

The

parties

are

advised

that

at

the

TRO

hearing,

23 currently scheduled for June 19, 2012 at 3:00 p.m., the court does
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The court is not, of course, ruling on plaintiff’s future
application. If plaintiff submits a proper application, the court
will at that time consider whether or not it should be filed under
seal.
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1 not plan to consider any of the declarations or evidence plaintiff
2 submitted under seal on Friday, June 15, 2012;
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3.

If plaintiff chooses to file a new application to seal,

4 it shall do so no later than 4:30 p.m. today (Monday, June 18,
5 2012), if it wishes to have the court – at tomorrow’s TRO hearing
6 – consider any evidence filed or submitted under seal;
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4.

If plaintiff chooses to file declarations in support of

8 the TRO publicly, it shall do so no later than 4:30 p.m. today
9 (Monday, June 18, 2012), the declarations shall contain only
10 information already contained in the original declarations filed on
11 Friday,3

and

plaintiff

shall

effect

electronic

service

on

12 defendant’s counsel (or defendant if counsel is unknown), of such
13 documents, no later than 4:30 p.m. today; and
14

5.

Plaintiff shall forthwith serve this order by electronic

15 means on defendant’s counsel, or on defendant, if counsel is
16 unknown.4
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IT IS SO ORDERED.

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DATED:

June 18, 2012.

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That is, plaintiff may not submit additional factual
information at this time if it wishes the TRO hearing to go forward
as scheduled.
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Plaintiff is further advised that any delay in getting its
documents or this order served on the defendant’s counsel (or
defendant, if counsel is known), may lead to a re-scheduling of the
TRO hearing to a later date.
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