U.S. Home Corporation v. Settlers Crossing, L.L.C. et al

Filing 493

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 11/30/12. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
U.S. HOME CORPORATION
:
v.

:

Civil Action No. DKC 08-1863

:
SETTLERS CROSSING, LLC, et al.
:
MEMORANDUM OPINION
Presently pending and ready for review in this suit for
breach of contract, fraud, and declaratory judgment are (1) the
renewed

motion

Corporation

and

of

Plaintiff/Counter
Counter

Defendant

Defendant

Lennar

U.S.

Home

Corporation’s

(“Plaintiffs”) to seal, (ECF No. 454), and (2) the joint motion
to seal filed by Defendants/Counter Claimants iStar Financial;
Settlers Crossing, LLC; Washington Park Estates, LLC; Brevard
Development

Company;

and

“Defendants”), (ECF No. 462).1

Stephen

B.

Sandler

(together,

The issues have been briefed, and

the court now rules, no hearing being deemed necessary.
Rule

105.6.

For

the

following

reasons,

Plaintiffs’

Local
renewed

motion to seal will be denied and Defendants’ motion to seal
will be granted.

1

Mr. Sandler did not join the other Defendants in asserting
the counterclaim.

I.

Background2
As necessary to resolve these motions, the background facts

are as follows.
commercial

real

At the heart of this matter is a complex
estate

transaction

pursuant

to

which

Plaintiff/Counter Defendant U.S. Home Corporation (“U.S. Home”)
was to acquire all ownership interests held by Defendant/Counter
Claimant

Washington

Defendant/Counter
Crossing”).

Park

Claimant

Estates,
Settlers

LLC

(“WPE”),

Crossing,

LLC

from

(“Settlers

Settlers Crossing, of which Defendant Sandler is a

principal, owns 100% of the membership interests in WPE, and WPE
owns or controls approximately 1,250 acres of undeveloped land
in Prince George's County, Maryland (“the Property”).
this

transaction,

Property.

U.S.

Home

would,

in

effect,

Thus, via

purchase

the

Defendant iStar became involved to provide a one-year

bridge loan for WPE to facilitate the transaction.
After discovery began, the parties sought leave to file
amended

pleadings.

With

respect

to

these

papers,

Plaintiff

Lennar Corporation attached, quoted, and characterized documents
related

to

the

transaction

assert

are

commercially valuable and contain sensitive trade secrets.

(ECF

Nos. 315-7, 315-8, 374-4).

that

Defendants

In support of their motion to seal

2

A complete recitation of the underlying facts in this case
is available at U.S. Home Corp. v. Settlers Crossing, LLC, No.
DKC 2008-1863, 2010 WL 958034 (D.Md. Mar. 11, 2010).
2

these

documents,

Defendants

attach

the

declaration

Melaugh, Vice President of Investments at iStar.
2).

Mr.

Melaugh

attests

to

the

of

Daniel

(ECF No. 462-

commercial

value

and

confidential nature of the documents Defendants seek to seal.
Defendants also submit redacted versions of the papers they wish
to seal in part.

(ECF Nos. 464-465).

Plaintiffs do not oppose

Defendants’ motion to seal or the redactions they propose.
Furthermore,

during

discovery

a

dispute

arose

over

the

disclosure of documents that Plaintiffs claimed were protected
by

the

doctrine.

attorney

client

privilege

and/or

the

work

product

Plaintiffs’ renewed motion to seal concerns documents

and exhibits involved in that dispute.
II.

Standard of Review
A motion to seal must comply with Local Rule 105.11, which

provides:
Any motion seeking the sealing of pleadings,
motions, exhibits or other papers to be
filed in the Court record shall include (a)
proposed
reasons
supported
by
specific
factual
representations
to
justify
the
sealing
and
(b)
an
explanation
why
alternatives to sealing would not provide
sufficient protections.
The Court will not
rule upon the motion until at least 14 days
after it is entered on the public docket to
permit
the
filing
of
objections
by
interested parties.
Materials that are the
subject
of
the
motion
shall
remain
temporarily sealed pending a ruling by the
Court.
If the motion is denied, the party
making
the
filing
will
be
given
an
opportunity to withdraw the materials.
3

This rule endeavors to protect the common law right to inspect
and

copy

judicial

records

and

documents,

Nixon

v.

Warner

Commc’ns, Inc., 435 U.S. 589, 597 (1978), while recognizing that
competing

interests

sometimes

outweigh

the

public’s

right

of

access, In re Knight Publ’g Co., 743 F.2d 231, 235 (4th Cir.
1984).
Before sealing any documents, the court must provide the
non-moving

party

with

notice

opportunity to object.
satisfied

by

either

of

Id.

the

request

to

seal

and

an

This notice requirement may be

notifying

the

persons

present

in

the

courtroom or by docketing the motion “reasonably in advance of
deciding the issue.”

Id. at 234.

Finally, the court should

consider less drastic alternatives to sealing, such as filing
redacted versions of the documents.
sealing

is

appropriate,

it

should

If the court decides that
also

provide

reasons,

supported by specific factual findings, for its decision to seal
and for rejecting alternatives.

Id. at 235.

III. Analysis
A.

Plaintiffs’ Renewed Motion

The parties agree that Plaintiffs’ motion to seal is moot,
and the documents at issue in that motion do not need to be
sealed.

Accordingly, the clerk will be directed to unseal ECF

No. 295.

4

B.

Defendants’ Motion

Defendants seek to seal certain exhibits in connection with
Plaintiffs’ opposition to Defendants’ motion for leave to file a
first amended counterclaim (ECF No. 315) and Plaintiffs’ reply
memorandum in support of their motion to amend the pleadings
(ECF

No.

374).

Defendants

also

seek

to

redact

portions

of

Plaintiffs’ papers that quote or otherwise characterize these
exhibits.

Produced pursuant to a court-approved confidentiality

order, these exhibits include a “Confidential Memorandum” (ECF
No. 315-8), that Defendants aver contains proprietary financial
research

and

analysis,

financial

information

Summary”

(ECF

No.

as
of

well

as

Defendant

315-7)

sensitive
Sandler;

containing

much

personal
a

and

“Transaction

of

the

same

information; and a “Confidential Settlement and Covenant Not to
Sue or Execute” (ECF No. 374-4), which contains information that
Defendants

allege

could

be

used

to

Defendants’

commercial

disadvantage if not kept confidential, in accordance with the
expectations of all parties to the agreement.
Because

Defendants

lay

out

the

reasons

that

documents

should be sealed or redacted, their motion will be granted.
Defendants emphasize, and an iStar executive affirms, that these
exhibits contain proprietary business information, and sensitive
financial

information

of

Defendant

Sandler.

Furthermore,

Defendants represent that it was the expectation of the parties
5

that

the

documents

would

remain

confidential.

Finally,

Defendants aver that this sensitive information pervades these
documents and that there is no less restrictive alternative to
sealing.
containing
suggest.
(4th

Cir.

Thus, these exhibits will be sealed, and the papers
excerpts

thereof

will

be

redacted

as

Defendants

See Pittston Co. v. United States, 368 F.3d 385, 406
2004)

(affirming

decision

to

seal

certain

“confidential, proprietary, commercial, or financial data” that
was produced under a protective order).
IV.

Conclusion
A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

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