Capitol Records, LLC v. Redigi Inc.

Filing 307

LETTER addressed to Judge Richard J. Sullivan from Richard S. Mandel dated December 29, 2016 re: More Detailed Response to Objection to Document 279. Document filed by Capitol Christian Music Group, Inc., Capitol Records, LLC, Virgin Records IR Holdings, Inc..(Mandel, Richard)

COWAN
LIEBOWITZ
LATMAN

Cowan, Liebowitz & Latman, P.C.
1 West 47th Street
14
New York, NY 10036
[phone] Tel
[phone] Fax
www.c11.corn
Richard S. Mandel
[phone]
rsmAcll.com

December 29, 2016
VIA ECF and EMAIL
Hon. Richard J. Sullivan
United States Courthouse
40 Foley Square, Room 2104
New York, NY 10007
Re:

Capitol Records, LLC et al. v. ReDigi Inc. et al., 12 cv. 0095 (RJS)

Dear Judge Sullivan:
We represent Plaintiffs in the above-referenced action. We write pursuant to the Court's
order of December 20, 2016 (Docket No. 283) in order to provide a more detailed response
objecting to the unsealing of the following documents that were previously sealed pursuant to the
Court's orders of July 31, 2012 (Docket No. 71) and September 5, 2012 (Docket No. 102):
Docket Nos. 57 (Exhibit 6), 74 (Exhibit 3), 76, 78, 90 and 91 (Exhibit 1). We note that per the
Court's order, we have provided ReDigi's appellate counsel with unredacted copies of each of
the foregoing documents so the sole issue is whether Plaintiffs' privacy interest in such
documents continues to outweigh the presumption of public access to judicial documents. For
the reasons set forth below, Plaintiffs respectfully submit that it does.
While there is a presumption of public access to judicial documents under the common
law and First Amendment, "the court must balance competing considerations" against such
presumption. Lugosch v. Pyramid Co. of Onondaga, 435 F.2d 110, 120 (2d Cir. 2006) (quoting
United States v. Amodeo, 71 F.3d 1044, 1050 (2d Cir. 1995)). Among the "countervailing
factors" that may outweigh the public interest in disclosure are "the privacy interests of those
resisting disclosure," id., including interests based on the need to protect sensitive commercial
information. See Fed. R. Civ. P. 26(c)(1)(G) ("The court may, for good cause, issue an order to
protect a party or person from annoyance, embarrassment, oppression, or undue burden or
expense, including . . . requiring that a trade secret or other confidential research, development,
or commercial information not be revealed or be revealed only in a specified way . . . .");
Crossman v. Astrue, 714 F. Supp. 2d 284, 287 (D. Conn. 2009) ("there can be (and often are)
considerations of personal privacy, public safety, or a business's proprietary information . . . that
can trump the right of the public to access court records.") (emphasis added); Encyclopedia
Brown Productions, Ltd. v. Deutsch, 26 F. Supp. 606 (S.D.N.Y. 1998) (withholding from
disclosure confidential business information that would harm defendants' competitive position).

29503/003/2184982.1

Cowan, Liebowitz & Latman, P.C.
Hon. Richard J. Sullivan, U.S.D.J.
December 29, 2016
Page 2
The above-referenced documents contain excerpts from Plaintiffs' 2003 "Digital Music
Download Agreement" with Apple and various later amendments to such agreement
(collectively, the "Apple Agreements"), as well as further references to and discussion of such
agreement and Capitol's contractual arrangement with Apple. Although this particular
agreement is no longer in effect, its terms remain of a highly competitively sensitive nature, are
not publicly available and are subject to a strict confidentiality provision which treats the terms
of the agreement as confidential and prohibits public disclosure of such terms without the other
side's consent or unless required by law. Permitting competitors, who have their own separately
negotiated and confidential relationships with Apple, to have access to historically negotiated
terms pursuant to which Plaintiffs have structured their key commercial arrangement with Apple
would provide useful insights to Plaintiffs' competitors in connection with their own future
negotiations and dealings with Apple. The recording industry members do not generally share
information concerning the terms of their past or present commercial arrangements, and making
such information available to Plaintiffs' competitors would afford them an unwarranted and
unfair business advantage.
The harm that Plaintiffs would suffer to their competitive position from the release of
such confidential business information outweighs the public's interest in access to such
documents. See, e.g., GoSMiLE, Inc. v. Dr. Jonathan Levine, D.M.D., P.C., 769 F. Supp. 2d
630, 649-50 (S.D.N.Y. 2011) (granting defendants' motion to seal when documents contained
"highly proprietary material concerning the defendants' marketing strategies, product
development, costs and budgeting"); Scott D. Boras Inc. v. Sheffield, 2009 WL 3444937, at *1
(S.D.N.Y. Oct. 26, 2009) (granting motion to seal certain documents where "the proprietary
business matters discussed" justified confidential treatment); Encyclopedia Brown Productions,
Ltd. v. Deutsch, 26 F. Supp. 606, 612-14 (S.D.N.Y. 1998) (granting motion to seal confidential
business information where harm to defendant's competitive position caused by giving
competitors a bargaining advantage in negotiating outweighed interest in public access).
I
ndeed, the information in question had no bearing on the outcome of the case, and
shielding those limited portions not revealed in the redacted documents from public disclosure
would still permit public access to all the relevant information on which the Court's resolution of
the parties' summary judgment motions turned. The Court gave short shrift to ReDigi's
argument on summary judgment that Capitol's arrangement with Apple permitting downloading
on iTunes had any relevance to ReDigi's fair use defense, and thus never needed to address any
aspect of the Apple Agreements:
ReDigi incredibly argues that Capitol is preempted from making a marketbased argument because Capitol itself condones downloading of its works
on iTunes. (ReDigi Mem. 18.) Of course, Capitol, as copyright owner, does
not forfeit its right to claim copyright infringement merely because it permits
certain uses of its works. This argument, too, is therefore unavailing.
Docket No. 109 at 11. Given the complete irrelevance of the terms of the Apple Agreements to
any issue in the case, and the sensitive nature of the competitive business information contained
29503/003/2184982.1

Cowan, Liebowitz & Latman, P.C.
Hon. Richard J. Sullivan, U.S.D.J.
December 29, 2016
Page 3
i the Apple Agreements, the balance clearly continues to weigh strongly against disclosure of
n
these documents. Moreover, inasmuch as Defendants' appellate counsel has been given access
to the documents at issue pursuant to an appropriate protective order, Defendants suffer no
prejudice from the continuing confidential treatment of the information.
Accordingly, for all these reasons, Plaintiffs respectfully request that the Court continue
to permit the sealing of the documents described above in accordance with its prior rulings
recognizing Plaintiffs' legitimate privacy interest in the business information contained in such
documents.
Respectfully,

Richard S. Mandel
cc:

All Parties Receiving Notice via ECF

29503/003/2184982.1