MAO-MSO RECOVERY II LLC et al v. USAA Casualty Insurance Company

Filing 45

ORDER denying #42 Defendant's Motion Challenging Plaintiffs' Confidentiality Designations. Signed by Magistrate Judge Edwin G. Torres on 10/31/2017. (js02)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 17-21289-Civ-WILLIAMS/TORRES
MAO-MSO RECOVERY II, LLC, a
Delaware entity; MSP RECOVERY
LLC, a Florida entity; MSPA
CLAIMS 1, LLC, a Florida entity,
Plaintiffs,
v.
USAA CASUALTY INSURANCE
COMPANY, a Texas company,
Defendant.
______________________________________/
ORDER ON DEFENDANT’S MOTION CHALLENGING PLAINTIFFS’
CONFIDENTIALITY DESIGNATIONS
This matter is before the Court on USAA Casualty Insurance Company’s
(“Defendant”) motion challenging confidentiality designations made by MAO-MSO
Recovery II, LLC, MSP Recovery LLC, and MSPA Claims 1, LLC (collectively,
“Plaintiffs”). [D.E. 42]. Plaintiffs responded to Defendant’s motion on October 20,
2017 [D.E. 43] to which Defendant replied on October 27, 2017.
Therefore, Defendant’s motion is now ripe for disposition.

[D.E. 44].

After careful

consideration of the motion, response, reply, relevant authority, and for the reasons
discussed below, Defendant’s motion is DENIED.

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I.

BACKGROUND

This is a putative class action in which Plaintiffs allege that Defendant failed
to fulfill its statutorily-mandated duty to reimburse Medicare Advantage
Organizations (“MAOs”) for medical expenses related to automobile accidents
involving Medicare enrollees. More specifically, Plaintiffs allege that (1) MAOs paid
unspecified medical expenses related to treatment of Medicare enrollees arising out
of unspecified automobile accidents, (2) Defendant was responsible for those
expenses, and (3) Defendant failed to fulfill its duty to reimburse MAOs for medical
expenses.1 As such, this lawsuit seeks reimbursement for those medical expenses
paid by the Plaintiff and the putative class members, including damages pursuant
to the Medicare Secondary Payer private cause of action under

42 U.S.C. §

1395y(b)(3)(A).
II.

ANALYSIS

The gist of Defendant’s motion is that Plaintiffs’ confidentiality designations
are improper and that Plaintiff should be required to produce an un-redacted
complaint on the record for public access.2 Defendant suggests that the identities of
the MAOs that assigned their claims to Plaintiffs do not constitute business
information or trade secrets and that the information should not be kept solely

MAOs are private organizations that contract with the federal government to
provide Medicare benefits to Medicare enrollees in exchange for a flat fee. The
MAOs deliver the Medicare benefits and assume the risks associated with insuring
the enrollees.
1

Plaintiff’s original complaint included redaction boxes over the Medicare
beneficiaries.
2
2

between the parties. Defendant argues that Plaintiffs have failed to present any
compelling basis to overrule the presumption of public access to court records –
including the names of the MAOs whose recovery rights are at the heart of this
action – and that Plaintiffs must be compelled to disclose this information in their
pleadings.
More specifically, Defendant takes issue with the complaints filed in this case
because they fail to identify a single MAO that assigned anything to Plaintiffs. On
July 26, 2017, Plaintiffs filed their first amended complaint [D.E. 29] and – unlike
the prior complaint – removed a redaction box and replaced it with the first and last
initials of Medicare beneficiaries. Plaintiffs allegedly represented that they would
continue to redact the names of MAO assignors until the execution of a qualified
protective order that the Court approved on July 31, 2017. Once a protective order
was agreed upon, Plaintiffs provided Defendant with an un-redacted copy of the
first amended complaint, yet still designated the complaint as confidential and
subject to the agreed upon protective order.3
On September 28, 2017, Defendant requested that Plaintiffs justify their
reasons for the confidentiality designations in the complaints. Plaintiffs allegedly
explained that the identity of the MAOs – who assigned their claims to Plaintiffs –
constitutes confidential and proprietary business information. Defendant disputes

The un-redacted copy of the first amended complaint includes the names of
two MAOs and two individuals in connection with representative claims in this
action.
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Plaintiff’s characterization and advances three arguments to require Plaintiffs to
file an un-redacted complaint on the docket for public access.
First, Defendant argues that Plaintiffs must produce the requested
information for public disclosure because Plaintiffs cannot meet their burden that
the information requested outweighs the public interest. Defendant also contends
that a list of MAO assignors is far removed from the types of material that courts
have generally agreed should be treated as confidential and proprietary business
information. See, e.g., Pinnacle Towers LLC v. Airpowered, LLC, 2015 WL 5897524,
at *2 (M.D. Fla. Oct. 7, 2015) (protecting licensing agreements that included pricing
terms); Abdulla v. Chaudhary, 2014 WL 12617454, at *2 (S.D. Ga. Oct. 15, 2014)
(protecting documents that included “private financial information including
income, assets, and liabilities”); Graphic Packaging Int’l, Inc. v. C.W. Zumbiel Co.,
2010 WL 6790538, at *2 (M.D. Fla. Oct. 28, 2010) (sealing documents where “the
disclosure of financial information . . . could negatively impact [the party’s] pricing
with other customers” and holding that a party’s “interest in maintaining the
confidentiality of its financial information and the terms of its contractual
relationship with its customer outweigh the public’s interest in accessing the
documents”).
Second, Plaintiffs should allegedly comply with Defendant’s request because
Plaintiffs must eventually prove the validity of their assignments in order to
demonstrate that Plaintiffs have standing to sue. Stated differently, Plaintiffs must
purportedly present some form of assignment that vest recovery rights in order for
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this action to advance.

And third, Defendant suggests that it would be

unreasonably confusing and burdensome if Plaintiffs continue to redact or seal
documents for the sole purpose of protecting the names of their assignors. There is
allegedly no justification for this layer of secrecy and therefore Plaintiffs’
confidential designations must be overruled.
In response, Plaintiffs argue that, after the Court approved the stipulated
protective order in this case, they provided Defendant with an un-redacted copy of
the first amended complaint.4 This disclosure occurred after the parties submitted
their protective order because Plaintiffs view the identities of the MAOs that
assigned their rights as a small subset of a larger customer list and therefore an
economic harm may result if the information is available to the public. Plaintiffs
4

Under the stipulated protective order, once a party challenges the

confidentiality of a designated document, the party seeking continued protection
must explain why that information warrants further protection:
A Party that objects to the designation of any information as
Confidential shall be required to begin the process by conferring
directly with counsel for the Producing Party. In conferring, the
challenging Party must explain the basis for its belief that the
confidentiality designation was not proper and must give the
Producing Party an opportunity to review the designated material, to
reconsider the designation, and, if no change in designation is offered,
to justify the basis for the designation. The Producing Party must
respond to a challenge within (5) business days of the conference If the
Parties are unable to resolve the issue, then the challenging Party may
move the Court for exception to this Stipulation and Agreed Protective
Order as to each such document or any such testimony prior to the
public use of such information. In such circumstances, the Producing
Party has the burden of proof.
[D.E. 27].
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also explain that if Defendant seeks the remainder of MAOs that assigned their
rights to Plaintiffs, then Defendants need only request that information in
discovery.

As such, Plaintiffs do not oppose the production of the information

sought; the only issue is whether the names of the MAOs that have assigned their
rights should be disclosed to the public.
“The operations of the courts and the judicial conduct of judges are matters of
utmost public concern,” Landmark Commc’ns, Inc. v. Virginia, 435 U.S. 829, 839
(1978), and “[t]he common-law right of access to judicial proceedings, an essential
component of our system of justice, is instrumental in securing the integrity of the
process.” Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304, 1311
(11th Cir. 2001). This right “includes the right to inspect and copy public records
and documents.” Id. (citation omitted). However, this right of access is not absolute
because it ordinarily “does not apply to discovery and, where it does apply, may be
overcome by a showing of good cause.” Romero v. Drummond Co., 480 F.3d 1234,
1245 (11th Cir. 2007).
A finding of good cause requires “balanc[ing] the asserted right of access
against the other party’s interest in keeping the information confidential.” Chicago
Tribune, 263 F.3d at 1309. “[W]hether good cause exists . . . is . . . decided by the
nature and character of the information in question.” Id. at 1315. “In balancing the
public interest in accessing court documents against a party’s interest in keeping
the information confidential, courts consider, among other factors, whether allowing
access would impair court functions or harm legitimate privacy interests, the degree
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of and likelihood of injury if made public, the reliability of the information, whether
there will be an opportunity to respond to the information, whether the information
concerns public officials or public concerns, and the availability of a less onerous
alternative to sealing the documents.” Romero, 480 F.3d at 1246.
After full consideration of the arguments presented and the relevant
authority, we agree with Plaintiffs that the public disclosure of the MAO assignors
may result in unnecessary harm and prejudice to Plaintiffs’ business. As Plaintiffs
point out, these assignors are part of a larger customer list that has taken many
years of hard work to assemble and Plaintiffs’ clients are all competing MAOs. If
the assignors became public, there is a possibility that it would impact Plaintiffs’
relationship with each client and undermine Plaintiffs’ efforts to develop new
business relationships with other MAOs. This conclusion is reinforced even more so
by the fact that Defendant already has access to an un-redacted version of the
complaint and will have access to the complete customer list through the normal
course of discovery.
As for Defendant’s contention that customer lists are not ordinarily
unprotected from public disclosure, we disagree. Under Florida law, for example,
“customer lists constitute trade secrets where they are a product of great expense
and effort, rather than a compilation of information available to the public.” Int’l
Hair & Beauty Sys., LLC v. Simply Organic, Inc., 2011 WL 5359264, at *4 (M.D.
Fla. Sept. 26, 2011), Report and Recommendation adopted as modified, 2011 WL

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5360098 (M.D. Fla. Nov. 3, 2011) (quoting MDT Personenel, LLC v. Camoco, LLC,
2010 WL 5535066, at *3 (M.D. Fla. Dec. 8, 2010)).
Therefore, we see no reason why Plaintiffs should be forced to release the
assignors of the MAOs to the public domain especially when the parties already
agreed to a stipulated protective order whose purpose was to safeguard confidential
information. And although we recognize that it is ultimately Plaintiffs’ burden to
demonstrate good cause for the confidentiality of MAO assignors, Defendant
noticeably omits any litigation purpose for wanting the identities to be made public.
Defendant merely argues that the public should have access to these items and that
Defendant is entitled to know the scope of who assigned Plaintiffs certain rights.
But, these arguments are unpersuasive because the information Defendant seeks is
already available – by Plaintiffs’ own admission – through several discovery devices
pursuant to the stipulated protective order. And Defendant also has access to the
un-redacted complaint and the assignors that Plaintiff omitted – meaning this
dispute is trivial at best. To conclude, Plaintiffs have adequately demonstrated the
potential harm to their privacy interests and business operations, and therefore
Defendant’s motion must be DENIED.5

We add that the result may have been different if a party litigant was
seeking to proceed anonymously. See Doe v. Frank, 951 F.2d 320, 322 (11th Cir.
1992) (“Generally, parties to a lawsuit must identify themselves in their respective
pleadings.”) (citing Southern Methodist Univ. Ass’n of Women Law Students v.
Wynne & Jaffe, 599 F.2d 707, 712 (5th Cir. 1979)). The issue here is far different
and implicates lesser public interest concerns.
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III.

CONCLUSION

For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that
Defendant’s motion is DENIED. [D.E. 42].
DONE AND ORDERED in Chambers at Miami, Florida, this 31st day of
October, 2017.
/s/ Edwin G. Torres
EDWIN G. TORRES
United States Magistrate Judge

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