State Farm Mutual Automobile Insurance Company v. Elite Health Centers Inc. et al
Filing
268
ORDER granting in part and denying in part Plaintiff's 190 Motion to Maintain Documents Under Seal ; and granting Defendant's 227 Motion for Protective Order--Signed by Magistrate Judge Anthony P. Patti. (MWil)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
STATE FARM MUTUAL
AUTOMOBILE INSURANCE
COMPANY,
Plaintiff,
Case No. 2:16-cv-13040
District Judge Sean F. Cox
Magistrate Judge Anthony P. Patti
v.
ELITE HEALTH CENTERS, INC.,
ELITE CHIROPRACTIC, P.C.,
ELITE REHABILITATION, INC.,
MIDWEST MEDICAL
ASSOCIATES, INC., PURE
REHABILITATION, INC., DEREK
L. BITTNER, D.C., P.C., MARK A.
RADOM, DEREK LAWRENCE
BITTNER, D.C., RYAN MATTHEW
LUKOWSKI, D.C., MICHAEL P.
DRAPLIN, D.C., NOEL H. UPFALL,
D.O., MARK J. JUSKA, M.D.,
SUPERIOR DIAGNOSTICS, INC.,
CHINTAN DESAI, M.D., MICHAEL
J. PALEY, M.D., DEARBORN
CENTER FOR PHYSICAL
THERAPY, L.L.C., MICHIGAN
CENTER FOR PHYSICAL
THERAPY, INC., and JAYSON
ROSETT
Defendants.
_________________________/
ORDER GRANTING IN PART AND DENYING IN PART STATE FARM
MUTUAL’S MOTION TO MAINTAIN DOCUMENTS UNDER SEAL
(DE 190) AND GRANTING DEFENDANT MARK RADOM’S MOTION
FOR PROTECTIVE ORDER TO MAINTAIN DIVORCE DOCUMENTS
UNDER SEAL (DE 227)
This matter is before the Court for consideration of Plaintiff State Farm
Mutual Automobile Insurance Company’s (“State Farm Mutual”) motion to
maintain documents under seal (DE 190), Defendant Mark Radom’s motion for
protective order to maintain divorce documents under seal (DE 227), and State
Farm Mutual’s response (DE 240). Judge Cox referred these motions to me for
hearing and determination. (DEs 200, 258.)
A.
Background
On or about May 15, 2018, Plaintiff State Farm Mutual filed several motions
and exhibits under seal. (See, e.g., DEs 144, 146, 151, 153, 155, 158.) On June 1,
2018, the Court entered an Order addressing, in part, motions and exhibits filed
under seal and directing the parties to review the submissions under seal to ensure
compliance with Local Rule 5.3 and the parties’ Stipulated Protective Order, and to
withdraw and/or re-file any motion(s) or exhibit(s) as necessary. (DE 169.)
On June 8, 2018, Plaintiff State Farm Mutual filed its motion to maintain
documents under seal, seeking to maintain under seal: (1) unredacted versions of
its previously filed motions to compel (DEs 144, 146 and 153) (the “Sealed
Motions”); and (2) the following exhibits attached to the Sealed Motions and/or to
State Farm Mutual’s motion filed as DE 157 (the “Sealed Exhibits”):
Mark Radom’s interrogatory answers for his divorce proceedings
(Exhibit L to DE 146; and also referred to in State Farm Mutual’s
motion to compel against Harriet Morse (DEs 143, 144));
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Noel Upfall’s 2016 tax returns (Exhibit R to DE 146);
Elite Entities’ Profit and Loss Statements (Exhibit 15 to DE 153);
Elite Entities’ 2015 Tax Returns (Exhibit 16 to DE 153);
Elite Health’s responses to State Farm Mutual’s second set of
interrogatories (Exhibit 17 to DE 153);
Mark Juska’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 7 to DE 157);
Noel Upfall’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 8 to DE 157); and
Ryan Lukowski’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 9 to DE 157).
State Farm Mutual explained that it filed the Sealed Motions and Sealed Exhibits
under seal because each reflected or contained information that the producing
parties had designated as “Confidential” pursuant to the Stipulated Protective
Order agreed to in this matter.
Pursuant to paragraph 10 the Stipulated Protective Order (DE 82), which
addresses “declassification” of documents designated as “Confidential,” State
Farm Mutual challenged the Confidentiality designation of Mark Radom’s
interrogatory responses (Exhibit L to DE 146) on June 5, 2018. (DE 190 at 14.)
Defendant Mark Radom filed a motion for protective order to maintain divorce
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documents under seal on June 27, 2018 (DE 227), and State Farm Mutual filed a
response in opposition on July 11, 2018 (DE 240).
On June 6, 2018, counsel for State Farm Mutual contacted counsel for
Defendants requesting them to advise whether they would de-designate the
following documents as Confidential under the Protective Order:
Elite Health’s responses to State Farm Mutual’s second set of
interrogatories (Exhibit 17 to DE 153);
Mark Juska’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 7 to DE 157);
Noel Upfall’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 8 to DE 157); and
Ryan Lukowski’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 9 to DE 157).
(DE 190 at 13.) According to State Farm Mutual, after it did not receive a
response, it sent a written objection to Defendants prior to filing the instant June 8,
2018 motion challenging the Confidentiality designation of the above documents.
(Id. at 15.)
B.
Legal Standard
Parties desiring to file court papers under seal face a formidable task in
overcoming the presumption that court filings are open to public inspection. In re
Knoxville News-Sentinel Co., 723 F.2d 470, 476 (6th Cir. 1983). The parties’
designation of certain documents as “confidential” under a protective order does
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not satisfy that burden. “[T]here is a stark difference between so-called ‘protective
orders’ entered pursuant to the discovery provisions of Federal Rule of Civil
Procedure 26, on the one hand, and orders to seal court records, on the other.”
Shane Group, Inc. v. Blue Cross Blue Shield of Michigan, 825 F.3d 299, 305 (6th
Cir. 2016). “Secrecy is fine at the discovery stage, before the material enters the
judicial record.” Id. (citation and internal quotation marks omitted). “Thus, a
district court may enter a protective order limiting the use or disclosure of
discovery materials upon a mere showing of ‘good cause[.]’ … ‘At the
adjudication stage, however, very different considerations apply.’” Id. (citation
omitted). “The line between these two stages, discovery and adjudicative, is
crossed when the parties place material in the court record.” Id. (citation omitted).
“Unlike information merely exchanged between the parties, ‘[t]he public has a
strong interest in obtaining the information contained in the court record.’” Id.
(quoting Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d 1165, 1180 (6th
Cir. 1983)). “[T]he public is entitled to assess for itself the merits of judicial
decisions,” and, thus, “‘[t]he public has an interest in ascertaining what evidence
and records the District Court [has] relied upon in reaching [its] decisions.’” Id.
(quoting Brown, 710 F.2d at 1181).
“The courts have long recognized, therefore, a ‘strong presumption in favor
of openness’ as to court records,” and the “burden of overcoming that presumption
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is borne by the party that seeks to seal them.” Shane Group, 825 F.3d at 305
(citations omitted). “The burden is a heavy one: ‘Only the most compelling
reasons can justify non-disclosure of judicial records.’” Id. (quoting Knoxville
News, 723 F.2d at 476). And, “even when a party can show a compelling reason
why certain documents or portions thereof should be sealed, the seal itself must be
narrowly tailored to serve that reason.” Id. (citing Press-Enterprise Co. v. Super.
Ct. of Cal., 464 U.S. 501, 509-11 (1984)). “The proponent of sealing therefore
must ‘analyze in detail, document by document, the propriety of secrecy, providing
reasons and legal citations.’” Id. at 305-06 (citation omitted). The “district court
that chooses to seal court records must set forth specific findings and conclusions
‘which justify nondisclosure to the public’ … even if neither party objects to the
motion to seal.” Id. at 306 (citation omitted). This latter obligation begins,
however, with the parties, who must furnish those good reasons to the Court when
making their sealing request. See id.
C.
Analysis
The Court finds, after reviewing Plaintiff State Farm Mutual’s motion to seal
(DE 190) and Defendant Radom’s motion and Plaintiff’s response (DEs 227, 240),
that Plaintiff’s motion to seal should be granted in part and denied in part, and that
Defendant Radom’s motion should be granted, for the reasons set forth below:
1.
Defendants’ discovery responses
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The Elite Defendants previously designated the following documents as
“Confidential” pursuant to the Stipulated Protective Order:
Elite Health’s responses to State Farm Mutual’s second set of
interrogatories (Exhibit 17 to DE 153 (DE 153-2));
Mark Juska’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 7 to DE 157 (DE 158));
Noel Upfall’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 8 to DE 157 (DE 158-1)); and
Ryan Lukowski’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 9 to DE 157 (DE 158-2)).
Pursuant to paragraph 10 of that Protective Order, State Farm Mutual served a
written objection challenging the Confidentiality designation of these four
documents on June 8, 2018. Under the Protective Order, once a party has
challenged the Confidentiality designation of a document, a party who seeks to
maintain the designation “must file an appropriate motion with the court” within
fourteen days of receiving the Objection. (DE 82 at ¶ 10.) To date, Defendants
have not filed a motion addressing the continued confidentiality of the above
documents, and the time for bringing such a motion under the Stipulated Protective
Order has passed. Nor have Defendants filed a response to State Farm Mutual’s
motion to maintain documents under seal. As a result, the Elite Defendants have
waived “Confidential” protection of these documents.
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Accordingly, the Elite Defendants have failed to carry the substantial burden
of presenting compelling reasons for sealing the documents above, and the Court
will deny the motion to seal these records (DEs 153-2, 158, 158-1, & 158-2).
2.
Mark Radom’s interrogatory answers in his divorce case
Defendant Radom previously designated the following document as
“Confidential” pursuant to the Stipulated Protective Order:
Mark Radom’s interrogatory answers for his divorce proceedings
(Exhibit L to DE 146 (DE 146-1)); and also referred to in State Farm
Mutual’s motion to compel against Harriet Morse (DEs 143, 144).
State Farm Mutual served a written objection challenging the Confidentiality
designation of this document on June 5, 2018. Defendant Radom responded by
filing a timely motion for protective order to maintain divorce documents under
seal (DE 227), to which Plaintiff State Farm Mutual filed a response (DE 240). 1
Defendant Radom argues that this single document, generated in a separate
and completely unrelated case (his divorce case against Amy Radom), should be
sealed to “prevent Radom from being unfairly prejudiced, humiliated, and
harassed, and prevent a protected and irrelevant document from being made part of
1
Pursuant to the procedure set forth in the Court’s June 14, 2018 Order regarding
motions, which requires parties to seek leave of Court via a letter request prior to
filing any additional motions (DE 202), Defendant Radom first filed a letter
requesting leave to file his motion for protective order to maintain divorce
documents under seal on June 14, 2018. (DE 205.) That request was granted on
June 27, 2018, and Defendant Radom promptly filed his motion. (DE 227.) Thus,
under the Court’s own procedure, the motion is considered timely.
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the pubic record for no discernable reason.” (DE 227 at 7-8.) Radom explained
that his discovery responses at issue “contain[] routine questions regarding
individual and marital assets, expenses, retirement accounts, the parties’ health,
minor children and other facts at issue in the divorce case,” that the parties to the
divorce case stipulated to the entry of a protective order which survived the
conclusion of the divorce, and that Radom’s discovery responses were never filed
with the Court or made part of the public record in that case. (Id. at 5-6.) Thus,
Radom concludes, his discovery responses from his divorce case “are not
necessary to an adjudicatory process at this time, and should remain under seal
until it becomes necessary to unseal it, if ever.” (Id. at 9.)
State Farm Mutual responds that Radom has failed to sustain his burden to
establish that the discovery responses should be sealed. (DE 240 at 5-7.) It asserts
that Radom’s reliance on the fact that the discovery responses were subject to a
protective order in his divorce case is “misplaced,” and that the discovery
responses are “highly relevant” to State Farm Mutual’s claims because they
contain information showing Michael Morse’s “substantial connections with and
involvement in virtually every component of the alleged scheme.” (Id at 7-9.)
The Court finds that Defendant Radom’s (and potentially non-party Amy
Radom’s) interest in the privacy of the information in the Radom discovery
responses outweighs the public’s interest in access to that information, at least at
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this time. See Knoxville News, 723 F.2d at 474 (“[T]rial courts have always been
afforded the power to seal their records when interests of privacy outweigh the
public’s right to know.”); Knopp v. Cent. Mich. Cmty. Hosp., No. 09-10790-BC,
2010 U.S. Dist. LEXIS 32714, at*4 (E.D. Mich. Apr. 2, 2010) (allowing employee
evaluation of non-party to be filed under seal because “the [extraneous personal]
information is not material to the resolution of the motion” and the non-party’s
“interest in the privacy of that information outweighs the public’s interest in
access”). As Radom explains, these discovery responses contain information
regarding marital assets, expenses, retirement accounts, income information, and
other facts at issue in the divorce case, and his interest in keeping this information
private outweighs the public’s interest in access to this information, at this time.
Accordingly, Radom’s motion for protective order to maintain divorce
documents under seal is GRANTED.
3.
Tax returns and profit and loss statements
The Elite Defendants and Dr. Upfall previously designated the following
documents as “Confidential” pursuant to the Stipulated Protective Order:
Noel Upfall’s 2016 tax returns (Exhibit R to DE 146);
Elite Entities’ Profit and Loss Statements (Exhibit 15 to DE 153);
Elite Entities’ 2015 Tax Returns (Exhibit 16 to DE 153).
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Plaintiff State Farm Mutual argues that tax returns and profit and loss statements
contain the type of financial information that courts have recognized is entitled to
confidential treatment, and, moreover, that Congress has designated tax returns as
confidential under the tax code, 26 U.S.C. § 6103(a). (DE 190 at 17-18.) State
Farm Mutual asserts that the public’s interest in these documents is minimal, and
that it is requesting leave to file information under seal in order to resolve a
discovery motion, not a dispositive or evidentiary motion, citing Bradford &
Bigelow, Inc. v. Richardson, 109 F.Supp.3d 445, 448 (D. Mass. 2015) (noting that
the “pendulum swings the other way [in favor of the public interest] for materials
filed in connection with non-discovery motions, like motions for summary
judgment”).
The Courts finds that disclosure of the tax returns and profit and loss
statements could reveal sensitive, private, personally-identifiable information that
should not be disclosed to third persons. See Goodman v. J.P. Morgan Inv. Mgmt.,
Inc., 301 F.Supp.3d 759, 784 (S.D. Ohio 2018) (“Courts have recognized the
strong interest in keeping personal financial records from public view.”) (collecting
cases). Accordingly, the Court GRANTS IN PART State Farm Mutual’s motion
to seal and orders that (1) Noel Upfall’s 2016 tax returns (Exhibit R to DE 146);
(2) Elite Entities’ Profit and Loss Statements (Exhibit 15 to DE 153); and (3) Elite
Entities’ 2015 Tax Returns (Exhibit 16 to DE 153) be kept under seal and may not
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be made public except by court order. See Furth v. Zanic, No. 1:06CV411, 2008
WL 1130207, at *3 (N.D. Ohio Oct. 15, 2008) (ordering tax returns be kept under
seal); Guzman v. Consumer Law Group, P.A., No. CV 111-187, 2015 WL
3827102, at *2 (S.D. Ga. June 19, 2015) (finding that “the public policy concern
expressed by Congress in 26 U.S.C. § 6103 outweighs the public’s interest in
access to” tax return information); Re: Kare Distrib., Inc. v. Jam Labels & Cards
LLC, No. 09-969 (SDW), 2011 WL 13238500, at *2 (D.N.J. Dec. 19, 2011)
(finding that defendants possess a legitimate privacy interest in the highly
confidential information in their tax returns that warrants protection from
disclosure); SMD Software, Inc. v. EMove, Inc., No. 5:08-CV-403-FL, 2011 WL
3652754, at *3 (E.D.N.C. Aug. 18, 2011) (sealing profit and loss statements
because they “contain business information potentially harmful to their competitive
standing”).
4.
Sealed motions
Finally, State Farm Mutual seeks to maintain under seal the “Sealed
Motions,” DEs 144, 146, and 153. State Farm Mutual filed these three motions
under seal and also filed redacted versions of these motions at DEs 143, 145 and
152. State Farm Mutual asserts that it only seeks to redact and maintain under seal
the specific information in the motions designated Confidential by the Elite
Defendants. DEs 144 and 146 contain references to Defendant Radom’s divorce
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responses, which the Court has agreed shall be sealed. DE 146 also contains
information from Noel Upfall’s 2016 tax returns, which shall remain under seal.
And DE 153 contains information from The Elite Entities’ 2015 tax returns and
profit and loss statements, which shall remain under seal. Because State Farm
Mutual’s redactions are narrowly tailored to redact the specific information
maintained under seal, Plaintiff’s motion to file these motions under seal is
GRANTED.
D.
Order
Accordingly, for the reasons set forth above, Plaintiff State Farm Mutual’s
motion to maintain documents under seal (DE 190) is GRANTED IN PART and
DENIED IN PART, and Defendant Radom’s motion for protective order to
maintain divorce documents under seal (DE 227) is GRANTED. The following
documents shall be maintained as sealed:
The “Sealed Motions” (DEs 144, 146 and 153);
Mark Radom’s interrogatory answers for his divorce proceedings
(Exhibit L to DE 146; and also referred to in State Farm Mutual’s
motion to compel against Harriet Morse (DEs 143, 144));
Noel Upfall’s 2016 tax returns (Exhibit R to DE 146);
Elite Entities’ Profit and Loss Statements (Exhibit 15 to DE 153);
Elite Entities’ 2015 Tax Returns (Exhibit 16 to DE 153).
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The following documents shall not be maintained as sealed, and must be re-filed:
Elite Health’s responses to State Farm Mutual’s second set of
interrogatories (Exhibit 17 to DE 153);
Mark Juska’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 7 to DE 157);
Noel Upfall’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 8 to DE 157); and
Ryan Lukowski’s responses to State Farm Mutual’s first set of
interrogatories (Exhibit 9 to DE 157).
IT IS SO ORDERED.
Dated: August 1, 2018
s/Anthony P. Patti
Anthony P. Patti
UNITED STATES MAGISTRATE JUDGE
Certificate of Service
I hereby certify that a copy of the foregoing document was sent to parties of record
on August 1, 2018, electronically and/or by U.S. Mail.
s/Michael Williams
Case Manager for the
Honorable Anthony P. Patti
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