United States of America et al v. Dish Network LLC

Filing 288

OPINION entered by Judge Sue E. Myerscough on 5/3/2013. Defendant Dish Network LLC's Motion to Maintain Seal on Certain Documents Previously Filed Under Seal in this Action, d/e 273 is GRANTED IN PART and DENIED IN PART. (SEE WRITTEN OPINION) (MAS, ilcd)

E-FILED

Monday, 06 May, 2013 01:05:32 PM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
UNITED STATES OF AMERICA,
and the STATES OF CALIFORNIA,
ILLINOIS, NORTH CAROLINA,
and OHIO,
Plaintiffs,
v.
DISH NETWORK, L.L.C.,
Defendant.

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No. 09-3073

OPINION
SUE E. MYERSCOUGH, U.S. District Judge:
This cause is before the Court on Defendant Dish Network L.L.C.’s
Motion to Maintain Seal on Certain Documents Previously Filed Under
Seal in this Action (d/e 273). The Motion is GRANTED IN PART and
DENIED IN PART. The parties have reached an agreement regarding
40 of the disputed documents. The Court accepts the parties’
agreements regarding those documents. The remaining six documents
will be unsealed.
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I. BACKGROUND
In its March 12, 2013 Opinion, this Court noted that numerous
pleadings were sealed in the Court file and advised the parties that the
Court intended to unseal those documents. See Opinion, p. 21-22 (d/e
258). However, the Court gave the parties leave to file a motion
identifying specific documents that should remain sealed and gave the
non-moving party leave to respond to any such motion.
On April 11, 2013, Defendant filed a Motion to Maintain the Seal
on Certain Documents Previously Filed Under Seal in this Action (d/e
273) and a memorandum in support thereof. Defendant identifies 46
documents that Defendant believes should remain sealed. These
documents include: (1) 40 documents containing “personally identifying
information”; (2) five sets of documents reflecting settlement
communications between Defendant and the Federal Trade Commission
(Settlement Documents) (see d/e 135-22; 143-25; 143-26; 143-30; and
203-8); and (3) one document that Defendant describes as a
“confidential and sensitive business document” that contains the terms of
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payments made by Defendant to several retailers (Retailer Payment
Document) (d/e 50-5).
Plaintiffs object to Defendant’s Motion. First, Plaintiffs assert that
many of the documents containing personally identifying information
can be redacted and has provided redacted versions of those filings. See
d/e 282 (corrected version). Plaintiffs also claim that several of those
documents have already been made public and therefore should be
unsealed. Second, Plaintiffs assert that the Settlement Documents
should be unsealed because there is no generally recognized privilege over
such documents. Finally, Plaintiffs argue that the Retailer Payment
Document does not contain trade secrets and contains information
Plaintiffs will use to prove their claims.
The Court granted Defendant leave to file a Reply. In that Reply,
Defendant agrees with Plaintiffs’ suggested handling of the documents
containing personally identifying information. Defendant asserts,
however, that good cause exists to maintain the seal on the Settlement
Documents and the Retailer Payment Document. Defendant also
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submits redacted versions of some of those documents. See d/e 284,
Exhibits A and B.
The Court granted Plaintiffs leave to file a surreply. In their
surreply, Plaintiffs object to Defendant’s proposed redactions to the
Settlement Documents and Retailer Payment Document.
II. LEGAL STANDARD
A presumption exists that the court record will be open absent
compelling reasons. Charvat v. Echostar Satellite, LLC, 269 F.R.D. 654,
656 (S.D. Ohio 2010). The Seventh Circuit has “insisted that litigation
be conducted in public to the maximum extent consistent with respecting
trade secrets, the identities of undercover agents, and other facts that
should be held in confidence.” Hicklin Eng’g L.C. v. R.J. Bartell, 439
F.3d 346, 348 (7th Cir. 2006).
Documents may be sealed only upon a showing of good cause.
Citizens First National Bank of Princeton v. Cincinnati Ins. Co., 178
F.3d 943, 946 (7th Cir. 1999). “[O]nly genuine trade secrets or
information within the scope of a requirement such as Fed.R.Crim.P.
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6(c)(2) (“matters occurring before the grand jury”), may be held in longterm confidence.” Union Oil Co of Cal. v. Leavell, 220 F.3d 562, 568
(7th Cir. 2000); see also Fed.R.Civ.P. 26(c)(1)(G) (providing that a
court, for good cause shown, may issue a protective order “requiring that
a trade secret or other confidential research, development, or commercial
information not be revealed or be revealed only in a specific way”).
III. ANALYSIS
A.

Some of the Documents Containing Personally Identifying
Information Shall Be Unsealed while Others Shall Remain Sealed
With Redacted Versions Included in the Record
In its Motion, Defendant seeks to keep 40 documents sealed on the

basis that the documents contain consumer personally identifying
information. Defendant asserts that these documents contained
personally identifying information, including names of non-party
consumers, telephone numbers, mailing addresses, and email addresses.
Plaintiffs respond that: (1) 31 of the documents should remain
sealed but that copies redacting the personally identifying information
should be made available in the public record; Plaintiffs provided those
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redacted copies at d/e 281 and d/e 282 (corrected version); (2) the
documents contained at docket entries 50-24, 206-23 (Exhibit 23), 2451 (Exhibit A), 252-1 (Exhibit A), and 226-11 (Exhibit K), should be
unsealed because either the document or the information contained
therein is already in the public docket; (3) the letter at d/e 95-41 (Exhibit
40) should be unsealed because the only personally identifying
information in the document was also provided in a public complaint
filed in New York state court; and (4) the three consumer declarations in
d/e 50-34, 50-35, and 50-36 should remain sealed because redacted
versions are already contained in the public record at d/e 52-34, 52-35,
and 52-36.
Defendant agrees with Plaintiffs’ resolution of the documents
containing the personally identifying information. See Def.‘s Reply, p. 1
n. 1. The Court finds this resolution appropriate. See, e.g. Lands’ End,
Inc. v. Connecticut Shotgun Mfg. Co., 2009 WL 1444403, at *1 (W.D.
Wis. 2009) (wherein redacted versions of the documents were filed in the
public record and unredacted versions were filed under seal); see also,
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e.g., CDIL-LR 5.11(providing for the filing of a sealed unredacted
document under certain circumstances when a redacted version is filed in
the public record). Moreover, good cause exists for redacting the
personally identifying information in 31 of the documents as reflected in
d/e 282.
B.

The Settlement Documents Shall be Unsealed
Defendant next asserts that certain documents reflecting settlement

negotiations between Defendant and the Federal Trade Commission
should remain sealed. Defendant supports the Motion with the
Declaration of Joseph A. Boyle, one of Defendant’s attorneys. According
to Boyle, the Settlement Documents contain sensitive and confidential
information regarding Defendant’s business. Boyle Decl. ¶ 10. Boyle
also asserts that unsealing these documents would have a chilling effect
on others attempting settlements, will compromise ongoing settlement
efforts, and discourages out of court dispute resolution. Boyle Decl. ¶ 11.
Plaintiffs argue there is no generally recognized privilege over
settlement communications. Plaintiffs further note that Federal Rule of
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Evidence 408 addresses the introduction of settlement communications
into evidence but not the discoverability or privilege. See Fed.R.Evid.
408 (evidence of settlement negotiations is not admissible).
In Reply, Defendant argues the documents contain information
regarding total telephone numbers called, error rates associated with
those calls, information regarding Defendant’s retailers, and categories of
those retailers. Defendant submits redacted versions of some of those
documents (d/e 143-26 and 203-8; 143-25) at d/e 284, page 9-25
(Exhibit A).
Plaintiffs are correct that no generally recognized settlementnegotiation privilege exists. See Pactiv Corp. v. Multisorb Techs., Inc.,
2012 WL 1831517, at *5 (N.D. Ill. 2012) (finding no discovery privilege
exists regarding settlement negotiations). Defendant is also correct that
there is a policy interest in facilitating and encouraging settlements,
which may be well-served by preserving the confidentiality of
communications made during settlement negotiations. See, e.g., Franklin

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United Methodist Home, Inc. v. Lancaster Pollard & Co., --- F. Supp. 2d
---, 2012 WL 5472089, at *8 (S.D. Ind. 2012).
In this case, however, a review of the documents does not show that
they contain information that should be kept from the public view. Two
of the letters (the February 3, 2012 letter and the August 11, 2011 letter,
speak only in the broadest terms about the analysis of the call records.
These letters do not contain any trade secrets or the type of business
information that would warrant sealing them.
The information Defendant seeks to redact in the August 14, 2008
and May 21, 2008 letter (see d/e 284, pp. 9-25 (Exhibit A) showing
proposed redactions) includes the number of calls made by Defendant or
its retailers, the number of active Order Entry (O/E) retailers, the number
of activations per month, and the percentage of activations by retailer or
groups of retailers. Defendant has not adequately explained how this
information—which is now nearly five years old—is confidential business
information, the disclosure of which would put Defendant at a

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competitive disadvantage. Therefore, Defendant has not met its burden
of showing the Settlement Document should remain under seal.
C.

The Retailer Payment Document Shall be Unsealed
Defendant also seeks to keep the Retailer Payment Document

under seal. This five page document lists the “activations” and “dollars”
for five different retailers for the years 2005 through 2010. Defendant
has submitted a redacted version of the Retailer Payment Document
which redacts the “activation” and “dollars” information.
Defendant supports the Motion with the Declaration of Blake Van
Emst, Vice President of Retail Services. Van Emst describes the Retailer
Payment Document as a spreadsheet that details Defendant’s payment
schedule and activation rates for five third-party retailers who sold
Defendant products and services from 2005 to 2010. Van Emst Decl. ¶
5. According to Van Emst, the sales and marketing information,
activation rates, and payment schedules to retailers contained in the
Retailer Payment Document is information known only to Defendant
and is treated as confidential by Defendant. Van Emst Decl. ¶ 7. Van
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Emst asserts that the information contained in the Retailer Payment
Document would provide valuable, competitive information to
Defendant’s customers. Van Emst. Decl. ¶ 8. Competitors could use the
information to determine the “market value [Defendant] places on its
various retailers based on factors such as demographics, geographic
location and activation rates that [Defendant] considers when
determining whether to retain or how to compensate a particular
independent third party retailer.” Van Emst Decl. ¶ 8. Van Emst claims
that disclosure of the business relationship and financial aspects of those
relationships between Defendant and its third-party retailers would have
a detrimental impact on Defendant and affect Defendant’s competitive
advantage. Van Emst Decl. ¶ 9. Defendant also asserts that Defendant’s
financial arrangements with its retailers are not at issue in this action.
Def. Mem. p. 3.
Plaintiffs disagree, noting that the Retailer Payment Document
appears to be only a general accounting of retailer payments and does not
break down the payments to reveal the actual payment rates. Pls.’ Resp.
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p. 8. Plaintiffs further assert that even assuming that the document
contains the information Defendant claims, the information is not
subject to trade-secret protection. Finally, Plaintiffs assert that
Defendant’s financial arrangements with its retailers are at issue in this
lawsuit because Plaintiffs will argue that Defendants’ continued
payments to retailers, coupled with Defendant’s knowledge of the
retailers’ illegal telemarketing conduct, constituted substantial assistance
and facilitation of illegal marketing.
The Court agrees with Plaintiffs. The Retailer Payment Document
appears to be only a general accounting of retailer payments and does not
appear to contain the “sales and marketing information,” or “payment
schedules” as stated by Van Emst. Moreover, the information it does
contain appears to be the same type of information already contained in
the public record in another case. See United States v. Masek, 588 F.3d
1283, 1286 (10th Cir. 2009) (in criminal prosecution of the owner of a
retailer for Echostar (now Dish), the Court noted that “[t]he average
amount paid to a retailer per account is approximately $400”).
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Defendant has failed to meet its heavy burden of showing good cause for
maintaining the documents under seal. Finally, Defendant’s broad
assertion that release of the information would result in competitive
injury is insufficient. See Chicago Mercantile Exchange, Inc. v.
Technology Research Group, LLC, 276 F.R.D. 237, 241 (N.D. Ill. 2011)
(finding the plaintiff failed to meet the heavy burden of showing good
cause for maintaining the documents under seal because a broad
assertion of competitive injury was insufficient).
While Defendant may not want the public to know how many
activations a particular retailer achieves or how much they are paid, this
is not information that warrants being sealed from the public. As stated
by the Seventh Circuit in Union Oil, 220 F.3d at 567-68 (internal
citations omitted):
Many a litigant would prefer that the subject of the case—
how much it agreed to pay for a construction pipeline, how
many tons of coal its plant uses per day, and so on—be kept
from the curious (including business rivals and customers),
but the tradition that litigation is open to the public is of very
long standing. People who want secrecy should opt for
arbitration. When they call on the courts, they must accept
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the openness that goes with subsidized dispute resolution by
public (and publicly accountable) officials.
IV. CONCLUSION
For all these reasons, Defendant Dish Network L.L.C.’s Motion to
Maintain Seal on Certain Documents Previously Filed Under Seal in this
Action (d/e 273) is GRANTED IN PART and DENIED IN PART.
THE CLERK OF THE COURT IS DIRECTED AS FOLLOWS:
(1) The following documents containing personally identifying
information shall remain sealed: 95-20 (Exhibit 19); 95-21 (Exhibit 20);
95-23 (Exhibit 22); 95-26 (Exhibit 25); 95-27 (Exhibit 26); 95-29
(Exhibit 28); 95-31 (Exhibit 30); 95-32 (Exhibit 31); 95-35 (Exhibit 34);
95-36 (Exhibit 35); 95-37 (Exhibit 36); 95-38 (Exhibit 37); 95-40
(Exhibit 39); 95-42 (Exhibit 41); 143-12 (Exhibit 12); 143-18 (Exhibit
18); 143-27 (Exhibit 27); 143-28 (Exhibit 28); 143-33 (Exhibit 33); 149;
149-7 (Exhibit 7); 149-8 (Exhibit 8); 149-9 (Exhibit 9); 149-10 (Exhibit
10); 152-2, pp. 44-63 (Exhibit E); 167-14 (Exhibit 14); 196-9 (Exhibit
I); 200-11 (Exhibit 11); 201-26 (Exhibit 25); 201-33 (Exhibit 32); 24510 (Exhibit J). However, redacted versions of those documents shall be
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available at d/e 282, which shall be unsealed. Because d/e 282 is a
corrected version of d/e 281, d/e 281 is STRUCK.
(2) The three consumer declarations filed under seal (d/e 50-34,
50-35, and 50-36) shall remain under seal because redacted versions are
already contained in the record (d/e 52-34, 52-35 and 52-36).
(3) The United States’ Responses to Dish’s First Set of
Interrogatories Directed to the United States filed at d/e 50-24, 206-23
(Exhibit 23), 245-1 (Exhibit A), and 252-1 (Exhibit A) shall be unsealed
because the document was previously filed without redactions and in the
public record at d/e 48-2 (Exhibit C) and d/e 52-24. Moreover, the State
of Illinois’ Responses to Dish’s First Set of Interrogatories Directed to
the State of Illinois, d/e 226-11 (Exhibit K), shall also be unsealed as it
contains the same language as contained in the United States’ response.
(4) The document filed at d/e 95-41 (Exhibit 40) (Letter regarding
Montel Noble v. EchoStar Communications Corp.) shall be unsealed
because the personally identifying information contained in that

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document was provided in a public complaint filed in New York state
court.
(5) The Settlement Documents filed at d/e 135-22 (Exhibit 22),
143-25 (Exhibit 25), 143-26 (Exhibit 26), 143-30 (Exhibit 30), and 2038 (Exhibit 8), shall be unsealed.
(6) The Retailer Payment Document filed at d/e 50-5 shall be
unsealed.
(7) The remaining sealed documents not otherwise addressed
herein shall be unsealed.
ENTER: May 3, 2013
FOR THE COURT:
s/Sue E Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE

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