7-ELEVEN, INC. v. SODHI

Filing 109

MEMORANDUM OPINION AND ORDER Denying 104 Motion to Seal. Signed by Magistrate Judge Joel Schneider on 5/15/14. (js)

[Doc. No. 104, C.A. 13-3715]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
SAM YOUNES, et al.,
Plaintiffs,
Civil No. 13-3500 (RMB/JS)
v.
7-ELEVEN, INC.,
Defendant.

7-ELEVEN,
Plaintiff,
Civil No. 13-3715 (MAS/JS)
v.
KARAMJEET SODHI, et al.,
Defendants.

NEIL NAIK, et al.,
Plaintiffs,
Civil No. 13-4578 (RMB/JS)
v.
7-ELEVEN, INC.,
Defendant.

MEMORANDUM OPINION AND ORDER
This matter is before the Court on 7-Eleven’s Motion to
Seal [Doc. No. 104] the April 29, 2014 Certification executed by

1

its former Corporate Investigations Supervisor, Kurt McCord. The
Certification [Doc. No. 98-2] was attached to defendants’ May 6,
2014 discovery application. 1

Defendants oppose the motion.

The

Court is being asked to decide if McCord’s Certification should
be sealed in the absence of competent evidence that an injury
would result from its disclosure and in light of the fact that
the Certification has already been published on the internet. 2 In
other words, “the horse has left the barn.”

The Court exercises

its discretion to dispense with oral argument. Fed. R. Civ. P.
78; L. Civ. R. 78.1.

The Court also exercises its discretion to

decide 7-Eleven’s motion before the scheduled return date and
before
motion.

defendants

file

their

formal

opposition

to

7-Eleven’s

Given the Court’s ruling it would be a needless waste

of time to wait for defendants’ formal opposition papers.

For

the reasons to be discussed, 7-Eleven’s motion is DENIED.
Background
7-Eleven filed its Sodhi complaint on June 14, 2013, and
generally alleged that Sodhi materially breached his franchise
agreements for six 7-Eleven stores. More particularly, 7-Eleven
alleged that Sodhi did not accurately report his sales of money
1

For good cause shown, and over defendants’ objection, the Court temporarily
sealed McCord’s Certification on May 8, 2014 [Doc. No. 102]. Although 7Eleven’s motion was only filed in Sodhi, C.A. 13-3715 (MAS/JS), the case is
consolidated for discovery and case management purposes with Younes, C.A. No.
13-3500 (RMB/JS) and Naik, C.A. 13-4578 (RMB/JS).
2
See Defendants’ May 7, 2014 Letter Brief (“LB”) at 1 n.1, Doc. No. 101. Also,
a quick Google search reveals other websites discussing and linking to
McCord’s Certification.
2

orders.

As a result, 7-Eleven removed the money orders and

associated

equipment

from

Sodhi’s

stores.

7-Eleven’s

original

complaint sought a declaratory judgment that its actions were
legal and it was entitled to $150,000 in damages. Sodhi denied
the allegations and asserted a counterclaim alleging 7-Eleven’s
actions were made in retaliation for his active involvement with
the Franchise Owners Association.

Sodhi also alleged that 7-

Eleven is attempting to constructively terminate his franchises.
Sodhi alleged that 7-Eleven breached the New Jersey Franchise
Practices

Act,

alia,

award

an

termination

of

N.J.S.A.
of

56:10-1,

damages

his

and

et

an

franchises.

seq.,

and

injunction

7-Eleven

sought,
to

inter

prevent

filed

an

the

amended

complaint on June 26, 2013 [Doc. No. 7] naming Sodhi and his
alleged

co-conspirators,

Manjinder

Singh

and

Karamjit

Singh.

Amended Complaint &1. The amended complaint alleged that for at
least the past four years Sodhi intentionally failed to report
multiple

hundreds

of

thousands

of

dollars

of

sales

by

manipulation of the cash registers. Id. &2. 7-Eleven averred
that it “amassed irrefutable evidence … which establishes the
intentional diversion of cash from the operation of the Stores,
and

egregious,

further

alleged

illicit,
that

it

labor

practices.”

terminated

Id.

Sodhi’s

&4.
six

7-Eleven
Franchise

Agreements without an opportunity to cure because of Sodhi’s
“egregious

breaches.”

Id.

&6.

The
3

amended

complaint

alleges,

inter alia, Sodhi committed fraud and that he violated RICO (18
U.S.C. '1961, et. seq.) and NJ RICO (N.J.S.A. 2C:41-1 et. seq.).
7-Eleven seeks at least $1 million in damages, a declaration
that Sodhi’s Franchise Agreements are terminated, and possession
of Sodhi’s stores.

On July 3, 2013 [Doc. No. 16], the Honorable

Michael A. Shipp entered an Order temporarily restraining the
termination of Sodhi’s franchises. On January 7, 2014, 7-Eleven
withdrew

its

Motion

[Doc. No. 85].

for

a

Mandatory

Preliminary

Injunction.

Thereafter, at 7-Eleven’s request, these three

lawsuits involving 7-Eleven were consolidated for discovery and
case management.
On

May

5,

2014

[Doc.

No.

98]

Sodhi

filed

a

discovery

application pursuant to L. Civ. R. 37.1(b)(2) asking the Court
to Order 7-Eleven to produce relevant discovery.

In support of

the application Sodhi attached McCord’s Certification which has
been described on the internet as a “bombshell.” McCord worked
as a Corporate Investigations Supervisor for 7-Eleven for seven
months in 2013. Cert. &2. McCord alleges, inter alia, that 7Eleven “implemented a predatory program to increase corporate
profits by unethically stealing the equity and good will of its
franchisees.”
schemed

to

Id.
seize

&5.

McCord

further

profitable

stores

alleges
without

that

7-Eleven

paying

fair

compensation, and that it would then resell the stores at an
enormous profit. Id. &6. In addition, he alleges that 7-Eleven
4

developed

a

practice

of

“churning”

its

franchises

which

generated increased profits. Id. &&12-14. McCord alleges that 7Eleven maliciously targeted influential, outspoken franchisees
such as Sodhi, and he was encouraged to “dig up dirt” on Sodhi.
Id. &&45-47, 153-160.

McCord alleges he left 7-Eleven because

he “could not be a weapon of vengeance for 7–Eleven executives”
whose agenda was to “silenc[e] well respected franchisees who
were rebelling against injustices they were enduring.” Id. &162.
McCord “feel[s] it is [his] duty to expose the injustices that
[he] witnessed.” Id. &165.
Not unexpectedly, 7-Eleven denies McCord’s allegations and
seeks to seal his Certification.

7-Eleven originally took the

position that McCord’s Certification should be sealed to protect
“competitively sensitive business information.”

May 7, 2014 LB

at 1, Doc. No. 99. It alleged that on May 6, 2013, McCord signed
a “Confidentiality Statement” which required that he “safeguard
[and]

maintain

the

confidential

nature

of,

and

protect

7-

Eleven’s proprietary business information.” Id. 7-Eleven alleged
that

plaintiff’s

counsel

was

obligated

to

request

to

seal

McCord’s Certification pursuant to the terms of the August 14,
2013 Discovery Confidentiality Order (“DCO”) [Doc. No. 39]. 3

3

7-

The DCO provides that parties may designate as “Confidential” discovery
involving, inter alia, trade secrets and confidential business information.
DCO &1. The parties may designate as “Attorney’s Eyes Only” highly sensitive
business information “likely to cause significant harm to an individual or to
the business or competitive position of the designating party.” Id. &2.
5

Eleven now argues that McCord’s Certification should be sealed
because it contains privileged attorney-client and work-product
information.
Discussion
It is well established that there is “a common law public
right

of

access

to

judicial

proceedings

and

records.”

In

re

Cendant Corp., 260 F.3d 183, 192 (3d Cir. 2001). Thus, when a
party files a motion to seal it must demonstrate that “good
cause” exists for protection of the material at issue. Pansy v.
Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994). Good
cause exists when a party makes “a particularized showing that
disclosure will cause a ‘clearly defined and serious injury to
the party seeking closure.’” Id. The Third Circuit has explained
that

“broad

allegations

of

harm,

unsubstantiated

by

specific

examples or articulated reasoning, do not support a good cause
showing.” Id. (quoting Cipollone v. Liggett Grp., Inc., 785 F.2d
1108, 1121 (3d Cir. 1986)) (internal quotation marks omitted).
The applicable requirements to seal documents are set forth in
L.

Civ.

R.

describe:
issue;

5.3(c)(2),

(a)

(b)

the

the

which

nature

legitimate

of

requires
the

that

materials

private

or

a
or

public

motion

to

seal

proceedings
interest

at

which

Confidential information may only be used for purposes of the prosecution or
defense of the action (id. &3), and may only be seen by designated
individuals. Id. &&4, 7. All requests to seal documents must comply with
L. Civ. R. 5.3. Id. &9. Importantly, “[n]o information that is in the public
domain” shall be deemed or considered to be confidential material under the
DCO.” Id. &13.
6

warrants the relief sought; (c) the clearly defined and serious
injury that would result if the relief sought is not granted;
and (d) why a less restrictive alternative to the relief sought
is not available.
7-Eleven has now changed its argument in support of its
request

to

seal.

7-Eleven

originally

argued

that

McCord’s

Certification should be sealed because it contained “sensitive
business

information.”

Certification

should

be

Now,

however,

sealed

because

7-Eleven
it

argues

allegedly

contains

attorney-client privileged and work-product information. 4
at

3.

(“The

McCord

Certification

must

be

placed

the

Brief

under

seal

because it reflects attorney-client communications and attorney
work product coming from 7-Eleven’s counsel.”). Even assuming
for the moment that the disclosure of privileged information in
and of itself satisfies the criteria to seal a document pursuant
to L. Civ. R. 5.3, which the Court is not finding, 7-Eleven has
not

even

demonstrated

that

McCord’s

privileged or work-product information.
unsubstantiated

claims

do

not

satisfy

Certification

contains

7-Eleven’s broad and
its

burden

of

proof.

Accordingly, 7-Eleven’s motion to seal is denied.
It is axiomatic that a party who asserts a privilege or the
work-product doctrine has the burden of proving its existence
4

Although it is not certain, the
because it realized that the DCO
case. Defendants did not produce
instead used it to support their

Court assumes 7-Eleven changed its argument
only applies to discovery exchanged in the
McCord’s Certification in discovery but
discovery application.
7

and applicability. Zimmerman v. Norfolk Southern Corp., 706 F.3d
170, 181 (3d Cir. 2013); In re Grand Jury Subpoena, 745 F.3d
681, 693 (3d Cir. 2014). 7-Eleven has submitted no competent
evidence to support its burden. Instead, it merely relies on the
conclusory seven paragraph Declaration (“Decl.”) of its outside
counsel,

Stephen

Sussman,

Esquire

(“Sussman”).

Sussman’s

Declaration provides no facts to support 7-Eleven’s arguments
but instead it merely sets forth broad boilerplate assertions.
For

example,

contains

Sussman

assertions

privileged

avers

reflecting

attorney-client

product.” Decl. &3.
“contains

that

“[t]he
and

McCord

Certification

revealing

communications

and

7-Eleven’s

attorney

work

He also avers that McCord’s Certification

privileged

information,

attorney-client

communications, litigation strategy and work product that was
developed

by

counsel.”

Id.

&4.

As

is

evident

from

these

examples, Sussman does not set forth a single fact to support
his conclusions. Broad boilerplate assertions are insufficient
to establish that a privilege exists. Torres v. Kuzniasz, 936 F.
Supp. 1201, 1215 (D.N.J. 1996). As noted by the Third Circuit,
“[t]he

indiscriminate

claim

of

privilege

may

in

itself

be

sufficient reason to deny it.” Further, when a court is “faced
with

such

a

claim

[it]

cannot

determination of its validity.”

make

a

just

or

reasonable

United States v. O’Neill, 619

F.2d 222, 227 (3d Cir. 1980).
8

The same thing is true regarding 7-Eleven’s burden to show
that a

“clearly

defined

and

serious

injury”

McCord’s Certification is not sealed.

would

result

if

Sussman merely concludes

that if the information in the Certification is disclosed “it
Decl. &5.

could have significant impact on the [sic] 7-Eleven.”

This sort of general and conclusory statement is anathema to the
strict requirements in L. Civ. R. 5.3(c)(2)(c). “The claimed
injury must be specifically stated because broad allegations of
harm,

unsubstantiated

by

specific

examples

or

articulated

reasoning, do not support a good cause standard.”

Locascio v.

Balicki, C.A. No. 07-4834 (RBK), 2011 WL 2490832, at *6 (D.N.J.
June

22,

2011)(citation

and

quotation

omitted);

Opperman

v.

Allstate New Jersey Ins. Co., C.A. 07-1887 (RMB/JS), 2009 WL
3818063, at *10 (D.N.J. Nov. 13, 2009)(denying motion to seal
and

stating

interest

“Allstate

in

generalized
materials
BioBancUSA,

has

transparent
assertions

are
C.A.

overcome

judicial

(even

confidential
09-2289

not

if
and

the

strong

proceedings

made

by

by

(RBK/KMW),

2010

its

affidavit)

proprietary”);
WL

public
mere

that

the

O’Brien

v.

2923283,

at

*4

(D.N.J. July 19, 2010)(despite the fact that the document at
issue was covered by a confidentiality agreement, request to
seal denied where plaintiff merely provided a general cursory
summary of the harms that would result from disclosure). The
Court understands that just like the allegations 7-Eleven makes
9

against defendants in the complaint, the allegations in McCord’s
Certification

may

embarrassing.

However,

embarrassment

without

clearly
1121;

defined

Shine

or

and

v.

may

not

it
any

is

Bank

accurate

well

evidence

serious

TD

be

established
of

injury.

Financial

and

other

Group,

that

harm

Cipollone,

could

C.A.

public

is

785

be

not
F.2d

No.

a
at

09-4377

(RBK/KMW), 2011 WL 3328490, at *8-9 (D.N.J. Aug. 2, 2011).
Sussman’s Declaration is also deficient because it does not
comply with L. Civ. R. 7.2(a) which requires that affidavits,
declarations
statements

and
of

certifications

fact

within

“shall

the

be

personal

restricted

knowledge

of

to
the

signatory.” Sussman’s Declaration does not attest to the fact
that

he

has

privilege

personal

or

the

knowledge

alleged

of

the

“significant

facts

establishing

impact”

would result if McCord’s Certification is disclosed.
the

Declaration

Fowler

v.

is

Borough

deficient
of

(D.N.J.)(submissions

and

will

Westville,

in

97

affidavits

be

&5)

(id.

Supp.

not

based

that

Therefore,

disregarded.

F.

a

2d
on

602,

See
607

personal

knowledge will not be considered); Brennan v. Elizabeth Bd. of
Ed.,

Civ.

No.

07-329,

2008

U.S.

Dist.

LEXIS

21609,

at

*8-9

(D.N.J. March 19, 2008)(affidavit containing information beyond
the attorney’s personal knowledge stricken). The provisions of
L. Civ. R. 7.2 are not merely applicable to affidavits but also
apply

to

declarations

and

certifications.
10

Penn

v.

Wal-Mart

Stores,

Inc.,

116

F.

Supp.

2d

557,

560-61

n.3

(D.N.J.

2000)(“This [r]ule applies to certifications as well”); Cannon
v.

Cherry

Hill

Toyota,

190

F.R.D.

147,

154

(D.N.J.

1999);

Assisted Living Assoc. V. Moorestown Twp., 996 F. Supp. 409, 442
(D.N.J. 1998). 5
Moreover,
privileged

even

if

information

that

McCord’s
would

Certification
cause

a

contained

serious

injury

if

disclosed, which the Court is not finding, 7-Eleven’s motion
would

still

be

denied.

Rightly

or

wrongly,

McCord’s

Certification has already been published and is available on the
internet. Thus, even if the Court granted 7-Eleven’s motion,
which it is not, McCord’s Certification would still be available
to anyone who wanted to see it. The Court will not undergo the
pointless

exercise

of

sealing

a

continue to be publicly available.
once

confidential

longer

information

confidential.”

Janssen

has

document

that

is

and

will

“It is well established that
been

Products,

published,
L.P.

v.

it

Lupin

is

no

Ltd.,

C.A. No. 2:10-05954 (WHW), 2014 WL 956086, at *3 (D.N.J. March
12, 2014)(collecting cases). Like the Court in Janssen Products,
the Court does “not have the power to put the genie back in the

5

Sealing McCord’s entire Certification is also not the least restrictive
alternative. See L. Civ. R. 5.3(c)(2)(d). It is undoubtedly true that not
every averment in McCord’s Certification is privileged. For example, his
personal background and other publicly available information. Nevertheless,
7-Eleven seeks to seal the entire Certification. “Where a less restrictive
alternative exists, a motion to seal will fail.” Lite, N.J. Federal Practice
Rules, Comment 2.b. to L. Civ. R. 5.3 at 35 (Gann 2014 ed.).
11

bottle.”

Id.

McCord’s Certification is now irretrievably part

of the public record even if the Court grants 7-Eleven’s motion.
A sealing Order at this time would be pointless. 6
Conclusion
Accordingly, for all the foregoing reasons, it is hereby
ORDERED this 15th day of May, 2014, that 7-Eleven’s Motion to
Seal Kurt McCord’s Certification [Doc. No. 98-2] is DENIED. The
Clerk of the Court is directed to immediately unseal Doc. No.
98-2 that was temporarily sealed. 7

s/Joel Schneider
JOEL SCHNEIDER
United States Magistrate Judge

6

The Court makes it clear that it is not weighing in on the truth or accuracy
of the accusations in McCord’s Certification. It merely concludes that the
Certification will not be sealed.
7
Ordinarily the Court would stay enforcement of its Order to give 7-Eleven
time to appeal pursuant to L. Civ. R. 72.1(c). However, given that McCord’s
Certification is available on the internet, the Court finds that an appeal
would be fruitless. The reason the temporary seal was entered was to give
the Court a fair opportunity to decide if McCord’s Certification genuinely
deserved to be sealed. Now that the decision has been made, the temporary
seal should be removed.
12