ONEX CREDIT PARTNERS, LLC v. CERTAIN UNDERWRITERS AT LLOYD'S

Filing 136

OPINION. Signed by Magistrate Judge Mark Falk on 9/27/2017. (JB, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ONEX CREDIT PARTNERS, LLC, a
Delaware Company,

Civil Action No. 13-5629 (JMV)

Plaintiff,

OPINION

v.
ATRIUM 5 LTD., an Underwriter at
Lloyd’s, London individually, and in
its capacity as representative
Underwriter at Lloyd’s, London for
certain subscribing Underwriters at
Lloyd’s London who subscribed to
Policy RC967307/127,

FALK, U.S.M.J.
This matter comes before the Court upon Plaintiff’s motion [CM/ECF No. 119] to
seal or restrict public access to portions of certain exhibits and briefing filed in support of
and in opposition to Defendant’s motion for summary judgment. The motion is opposed.
The Court decides it on the papers. Fed.R.Civ.P. 78. For the reasons discussed below,
Plaintiff’s motion to seal is granted.

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BACKGROUND
This is a breach of contract action filed by Plaintiff Onex Credit Partners, LLC
(“Onex”) against its insurer, Defendant Atrium 5 LTD. (“Atrium”), based on a denial of
an insurance claim under a “key-man” disability policy. Onex is an investment adviser
and provides investment management services primarily to pooled investment vehicles
with a focus on investments in loans. (Pl.’s Br. at 2.) On or about October 31, 2007,
Onex purchased from Atrium a “key man” insurance policy (“Policy”) insuring against
the total disability of Onex’s former Co-CEO, Stuart Kovensky (“Mr. Kovensky”). (Id. at
2-3.) The Policy provided a $5,000,000 lump sum benefit to Onex in the event of the
permanent and total disability of Mr. Kovensky as defined by the Policy. (Compl. § 2.)
On March 3, 2010, while traveling on business for Onex, Mr. Kovensky suffered an acute
aortic dissection requiring life-saving emergency surgery. (Compl. §§ 21-22.) As a result
of the medical event, Onex claims that Mr. Kovensky became unable to and ceased
performing the substantial and material duties of his position with Onex. On February 24,
2011, Plaintiff submitted a notice of claim under the Policy for payment of the benefit
based on the permanent total disability of Mr. Kovensky. On April 4, 2013, Atrium
denied coverage on the grounds that Mr. Kovensky is not permanently disabled. (Compl.
§ 28.)
On September 20, 2013, Onex filed a two-count complaint against Atrium
asserting breach of contract and breach of the covenant of good faith and fair dealing.

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Plaintiff filed an Amended Complaint on December 16, 2013. Following dispositive
motion practice, Atrium filed an Answer on October 10, 2014. The parties engaged in
discovery during the course of which Onex produced millions of pages of business
records. (Declaration of David R. King dated March 24, 2017 (“King Decl.”) ¶ 10.)
Onex, Mr. Kovensky, Mr. Kovensky’s personal insurer, and Mr. Kovensky’s health care
providers also produced thousands of pages of documents including, medical records
relating to Mr. Kovensky’s past health and present health. (Id.) According to Onex, the
documents were produced pursuant to a Stipulated Discovery Confidentiality and
Clawback Order (“DCO”) filed January 23, 2015, and have been maintained as
confidential. (CM/ECF no. 42.)
Following the close of discovery, Atrium filed a motion for summary judgment on
March 6, 2017.1 On March 24, 2017, Onex filed this motion to seal.

DISCUSSION
A. Current motion
Onex moves to seal, in whole or in part, documents attached to Atrium’s motion

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Atium filed a Statement of Undisputed Facts, Declaration of Grant Ingram and Brief in support
of its motion. It did not file the exhibits referred to in the Declaration of Grant Igram recognizing
that Onex might claim that they were protected by the DCO. (Def.’s Br. at 5.) On March 10,
2017, Plaintiff requested, and the Court granted, an Order temporarily sealing all documents
filed by Atrium because the documents cite information in the then unfiled exhibits which Onex
maintains is confidential and should be sealed. (CM/ECF No. 110, 111.) On March 24, 2017,
Atrium filed the exhibits under seal. (CM/ECF No. 114-116.)
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for summary judgment and attached to Onex’s opposition, as well to redact the parties’
briefs and other moving papers which repeat, refer to, or disclose the information
contained in the exhibits which Onex regards as confidential.2 According to Onex, the
information that it seeks to seal and/or redact falls into four categories: (1) personal
medical information relating to Mr. Kovensky, including but not limited to actual
treatment records, and testimony and reports citing same; (2) personal financial
information relating to Mr. Kovensky; (3) private Kovensky family photos; and (4)
proprietary and trade business information belonging to Onex.3
B. Legal Standard
Local Civil Rule 5.3(c) governs motions to seal or otherwise restrict public access
in this District. The Rule provides that a party seeking to seal materials shall file a
motion describing “(a) the nature of the materials or proceedings at issue; (b) the
2

Onex filed the instant motion seeking to seal in their entirety, or in part by way of redaction,
exhibits attached to the Declaration of Grant Ingram filed in support of Atrium’s motion for
summary judgment, Atrium’s moving brief and supporting documents that reference the exhibits,
and Onex’s opposition papers which attach and reference them. Subsequent to the filing of the
notice of motion, Onex clarified that it seeks to redact Atrium’s reply papers also, including
exhibits attached to the Declaration of George G. Weickhardt, Esq. Onex has filed redacted
versions, where appropriate, on the docket.

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In support of its motion, Onex submitted an Index of the exhibits in dispute, redacted copies of
the exhibits, and redacted copies of the parties’ memoranda of law and statements of undisputed
facts for which Onex seeks a sealing Order. (King Decl. Ex. A, B, C and D; Declaration of
Heather Robinson (“Robinson Decl.”) Ex. 2; CM/ECF No. 121.) The Index also identifies two
documents that Onex deems privileged and for which it has demanded a “clawback” from
Atrium pursuant to terms of the DCO. (King Decl. ¶ 13.) The parties dispute each other’s
compliance with the DCO and Local Civil Rule 5.3(c). The Court makes no finding as to the
parties’ compliance at this time and rules on the merits of the sealing motion based on the
content of the documents at issue.
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legitimate private or public interest which warrant the relief sought; (c) the clearly
defined and serious injury that would result if the relief sought is not granted; [and] why a
less restrictive alternative to the relief sought is not available. . . .” L.Civ.R. 5.3(c)(3).
There is a presumption that materials presented to the Court and judicial proceedings are
matters of public record and subject to public access. See In re Cendant Corp., 260 F.3d
183, 192 (3d Cir. 2001). In order to overcome the presumption, the party moving to seal
must show “good cause” to warrant the relief. See Pansy v. Borough of Stroudsburg, 23
F.3d 772, 786 (3d Cir. 1994); see also Zavala v. Wal-Mart Corp., 2007 WL 2688934, at
*6 (D.N.J. Sept. 12, 2007) (the party seeking confidentiality must “show good cause
exists to warrant confidentiality, and thus, the sealing of the disputed documents.”).
“[D]iscretion should be left to the court to evaluate the competing considerations in light
of the facts of individual cases.” Pansy, 23 F.3d at 789.
C. Analysis
The Court has reviewed the four categories of documents at issue against the
standards set forth in the Local Rules and supporting case law and, for the reasons stated
below, concludes that sealing or redaction is warranted.
(i) Mr. Kovensky’s personal medical information
The Court notes at the outset that this litigation is a suit by Onex to recover
benefits under a policy issued to Onex by Atrium. Mr. Kovensky is not a party to this
lawsuit, does not have a financial stake in the litigation, and did not put his medical

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history in issue. (King Decl. at ¶ 37.) The exhibits at issue contain, among other things,
detailed medical records from the files of Mr. Kovensky’s medical providers, as well as
testimony from Mr. Kovensky’s medical providers that recount the substance of his
records, treatment, testing, history, diagnosis and prognosis. (King Decl. at ¶ 41.)
Medical records have long been recognized as confidential. See Doe v. Delie, 257
F.3d 309, 315 (3d Cir. 2001) (“We have long recognized the right to privacy in one’s
medical information. . . .”); see also Skinner v. Ashan, 2007 WL 708972, at *2 (D.N.J.
March 2, 2007); Delanoy v. Twp. of Ocean, 2015 WL 2235103 (D.N.J. 2015) (sealing
plaintiff’s private obstetric and gynecological treatment information utilized in
defendants’ motion to dismiss); Briglia v. Ameritas Life Ins. Corp., 2015 WL 4314062
(D.N.J. July 14, 2015) (sealing and redacting information in case for disability benefits);
Rosario v. Doe, 2013 WL 3283903, at *3 (D.N.J. June 25, 2013) (sealing records
containing private medical information). Moreover, medical records are protected under
the Health Insurance Portability and Accountability Act (“HIPPA”) and should be sealed.
See Bertolotti v. AutoZone, Inc., 132 F. Supp. 3d 590, 609-10 (D.N.J. 2015).
There is no public interest in Mr. Kovensky’s detailed medical records. The
information is purely private in nature, the disclosure of which could cause irreparable
harm to Mr. Kovensky. The Court finds that no less restrictive alternative is available.
Accordingly, the Court grants Onex’s motion to seal and/or redact these records.

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(ii) Mr. Kovensky’s personal financial information
Mr. Kovensky is not a party to this litigation and consequently has not put his
financial information at issue. While it is conceivable that his personal finances may be
relevant to the merits or defenses to this litigation, there is no public interest in this
information. See Adami v. Cardo Windows, 299 F.R.D. 68, 85-86 (D.N.J. 2014) (sealing
documents containing salaries of individuals); Watson v. City of Salem, 934 F.Supp. 666
(D.N.J. Jan. 16, 1996) ( permitting the filing of documentation of financial status under
seal).
There is a legitimate privacy interest in the materials sought to be sealed. It is
clear that due to the privacy expectations of Mr. Kovensky, injury could result if this
information were to be made public. See Platt v.Freedom Mortgage Corp., 2013 WL
6499252 (D.N.J. Dec. 11, 2013) (sealing exhibits containing personal information such as
wage, salary and tax information of parties and non-parties). There is no public interest
in Mr. Kovensky’s financial information. No less restrictive alternative is available. The
attempt to make this public is not legitimate. Accordingly, the Court grants Onex’s
motion to seal and/or restrict public access to these records.
(iii) Private Kovensky family photos
Onex seeks to seal personal family photos of Mr. Kovensky’s children and wife in
swimsuits and work-out clothing. Neither Mr. Kovensky’s wife nor his children are
parties to this lawsuit. There simply is no public interest in these photographs. The

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Kovenskys, who are not parties to this suit, have a privacy interest in the photographs
deserving protection. This is particularly true as several of the pictures are of minor
children and are personal in nature. See In re Paulsboro Derailment Cases, 2014 WL
4162790 (D.N.J. Aug. 20, 2014). Mr. Kovensky’s wife and children have an inarguable
interest in not having these private, intimate photographs publicly disclosed.
Accordingly, the presumption of public access is overcome, and the Court finds that these
materials should be sealed.
(iv) Proprietary and trade business information belonging to Onex
Onex seeks to seal and/or redact documents it maintains the disclosure of which
would reveal its investment decisions and strategies, finances, existing and potential
investors and business plans. Onex describes itself as an investment advisor, which
through its investment decisions, business practices and trading strategy over time, has
built a successful business in a highly competitive sector. (Pl.’s Br. at 12.) Out of the
150 documents filed in connection with the pending dispositive motion, Onex has
requested the sealing or redaction of less than 30, having determined them to be
competitively sensitive. (Robinson Decl. ¶ 37.) Onex claims that it would lose
competitive advantage if this information which reveals its investment decisions were
made public.
After careful review of the documents, the Court finds that Onex’s interest in
maintaining the confidentiality of these documents outweighs any presumption of public

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access to the records and that the public-at-large will suffer no adverse effect from nondisclosure. This Court has protected from disclosure materials containing “trade secret[s]
or other confidential research, development, or commercial information” to prevent harm
to a party’s place in the marketplace. Fed.R.Civ.P. 26(c)(7). See Goldenberg v. Indel,
Inc., 2012 WL 15909, at *3-4 (D.N.J. Jan. 3, 2012) (sealing exhibits that contained
sensitive and confidential business information); AstraZeneca AB v. Ranbaxy Pharm.,
Inc., 2010 WL 11475492 (D.N.J. June 4, 2010) (sealing confidential business materials);
Mars, Inc. v. JCM American Corp., 2007 WL 496816, *2 (D.N.J. Feb. 13, 2007); Bracco
Diagnostics, Inc. v. Amersham Health, Inc., 2007 WL 2085350, at *8 (D.N.J. July 18,
2007).
Onex has a legitimate privacy interest in protecting this business and proprietary
information and has established a clearly defined and serious injury that would result if
materials at issue were not sealed. See Glenmede Trust Co. v. Thompson, 56 F.3d 476,
487 (3d Cir. 1995). Indeed, if such information were made public, competitors could
become privy to Onex’s investment and business strategies and conceivably could use the
information to gain an advantage in the marketplace over Onex. For these reasons, the
Court concludes these documents should be sealed or redacted to restrict public access.
CONCLUSION
The Court has reviewed the four categories of documents which are the subject of
this sealing motion and finds that Onex’s interests in maintaining their confidentiality

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outweighs the presumption of public access to these materials. According, Onex’s
motion to seal is granted.4 A separate Order accompanies this Opinion.

s/Mark Falk
MARK FALK
United States Magistrate Judge

Dated: September 27, 2017

4

As part of its motion, Plaintiff also seeks the sealing of two documents attached to the
Declaration of Grant Ingram as Exhibits nos. 44 and 83 [CM/ECF No. 115, 116] on grounds that
they are protected by the attorney-client privilege and demands their return pursuant to the
parties’ DCO. [CM/ECF No. 42] The privilege issue is not presently before the Court. The
Court is unable to make a determination on the privilege question on this record. In an
abundance of caution, the Court will grant, without prejudice, the sealing of the documents. To
the extent the parties dispute whether the documents are privileged and should be returned,
counsel should meet and confer in an attempt to resolve the issue. If the matter cannot be
resolved without Court intervention, counsel can advise the Court in a letter of any ongoing
dispute and request how best to present the matter to the Court for resolution.
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