Refco Inc. v. Cantor Fitzgerald, L.P. et al

Filing 102

OPINION AND ORDER. Accordingly, RGL is permitted to file the SAC and attached exhibits under seal and to file redacted copies of those documents on the Court's ECF system, in accordance with this Order. Within 10 days of this Order, RGL is d irected to file its motion for leave to amend and all briefing on the motion with supporting documents, including a redacted version of Exhibit A to the Jarvis Declaration, in accordance with this Order. Within 10 days of this Order, Defendants are directed to file their opposition brief and supporting documents. Because this Order is being granted without any argument from the press or the public, it is without prejudice to any possible future application to unseal made by the press or the public. (Signed by Magistrate Judge Henry B. Pitman on 7/15/2015) Copies Sent By Chambers. (lmb)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-----------------------------------X
REFCO GROUP LTD., LLC,

:

Plaintiff,

CANTOR FITZGERALD, L.P., et al.,
Defendants.

13 Civ. 1654 (RA)(HBP)

:

-against-

:

OPINION
AND ORDER

:
:

-----------------------------------X

PITMAN, United States Magistrate Judge:

I.

Introduction

By notice of motion, dated December 10, 2014, plaintiff
Refco Group Ltd., LLC ("RGL") sought leave to file its Second
Amended Complaint ("SAC").

I granted that motion in part by

Order dated July 6, 2015 (Docket Item 101).

By several letters,

plaintiff seeks permission to file, under seal, certain documents
that were submitted in support of the motion to amend and the SAC
itself and to file redacted versions of those documents on the

Court's ECF system.1

For the reasons set forth below, the appli-

cation is granted.

II.

Background

RGL, one of the reorganized debtors in a Chapter 11
bankruptcy case,2 commenced an adversary proceeding by filing a
complaint, under seal, in the Bankruptcy Court on December 6,
2012.
On March 22, 2013, the Honorable Ronnie Abrams, United
States District Judge, approved the parties' stipulation withdrawing the reference of the adversary proceeding and allowing

1

As described below, RGL submitted letters on December 10,
2014 (Letter of Geoffrey C. Jarvis, Esq., counsel for RGL, to the
Honorable Ronnie Abrams, United States District Judge, dated
December 10, 2014 ("Dec. 10, 2014 Letter")) and February 13, 2015
(Letter of Geoffrey C. Jarvis, Esq., counsel for RGL, to the
undersigned, dated February 13, 2015 ("February 13, 2015
Letter")). In response to an Order to show cause, counsel for
plaintiff and defendants submitted a joint letter, dated May 29,
2015, along with copies of the proposed redactions, for in camera
review (Joint Letter of Geoffrey C. Jarvis, Esq. and Ryan L.
DiClemente, Esq., counsel for RGL and defendants, respectively,
to the undersigned, dated May 29, 2015 ("May 29, 2015 Letter")).
Their letter incorporated arguments from a letter of the
defendants, dated June 13, 2013 (Letter of Francis X. Riley III,
Esq., counsel for defendants, to Judge Abrams, dated June 13,
2013, ("June 13, 2013 Letter")). These letters will be filed on
the Court's ECF system along with this Order; however, any
attached exhibits containing unredacted material will not be
filed.
2

In re Refco Inc., et al., Ch. 11 Case No. 05-60006 (RDD)
(Bankr. SDNY).
2

the case to proceed in the Court (Docket Item 3).

On April 15,

2013, Judge Abrams approved the parties' stipulated schedule for
filing the Amended Complaint and directed RGL to "submit to the
Court a letter setting forth the legal basis for its application
to file the Amended Complaint under seal" (Docket Item 9).3
Subsequently, RGL submitted a letter in further support of its
request to file the Amended Complaint under seal; Judge Abrams
granted RGL's request to maintain the Amended Complaint under
seal temporarily until the parties' dispute as to the appropriate
extent of the redactions was resolved (Letter of Geoffrey C.
Jarvis, Esq. to Judge Abrams, dated April 16, 2013 (Docket Item
10)).
By notice of motion, dated May 1, 2013, RGL filed a
motion to unseal, in part, the Amended Complaint (Docket Item
13).

However, because the parties subsequently reached an

agreement as to the appropriate scope of what material should be
sealed and redacted from the publicly available version of the
Amended Complaint, Judge Abrams denied RGL's motion as moot by
Order dated May 23, 2013 (Docket Item 18).

3

In a letter to Judge

RGL's initial letter requesting to file its Amended
Complaint under seal is docketed on the Court's ECF system as
pages three and four of the approved stipulation (see Letter of
Geoffrey C. Jarvis, Esq. to Judge Abrams, dated April 15, 2013
(Docket Item 9)).
3

Abrams, dated June 13, 2013, defendants submitted the proposed
redactions, along with legal support for the application to file
the Amended Complaint under seal (June 13, 2013 Letter, passim).
RGL later filed a redacted copy of the Amended Complaint on the
Court's ECF system (Docket Item 25).4
By notice of motion, dated December 10, 2014, plaintiff
sought leave to file the SAC.

In its December 10, 2014 Letter,

plaintiff requested permission to file its motion and accompanying documents, as well as the SAC itself, under seal and to file
redacted versions of those documents on the Court's publicly
accessible ECF system (Dec. 10, 2014 Letter, passim).

By Order

dated December 18, 2014, Judge Abrams determined that plaintiff's
application is within the scope of the reference to me for
general pre-trial matters (Docket Items 43 & 86).

By its Febru-

ary 13, 2015 Letter, plaintiff renewed its application for an
Order allowing it "to file under seal the Motion, the Second
Amended Complaint, and all briefing on the Motion" (February 13,
2015 Letter, passim).
I issued an Order to show cause on April 28, 2015,
directing plaintiff to explain "by May 29, 2015 why it should be
permitted (1) to file, under seal, the moving papers and its

4

Judge Abrams did not publish an Order granting the
application.
4

second amended complaint and (2) to file publicly redacted
versions of those documents on the Court's ECF System" (Order to
Show Cause, dated April 28, 2015, (Docket Item 100) at 4-5).

In

a joint May 29, 2015 Letter, the parties, relying on the legal
arguments originally set forth in the June 13, 2013 Letter, made
a joint application to seal part of the briefing on the motion to
amend and portions of the SAC (May 29, 2015 Letter, at 1-2 &
n.2).

III.

Discussion

A.

Applicable Law

As a general principle, judicial proceedings are
presumptively open to public scrutiny.

The presumption of access

to judicial documents, grounded in both the common law and the
First Amendment, "is based on the need for federal courts,
although independent -- indeed, particularly because they are
independent -- to have a measure of accountability and for the
public to have confidence in the administration of justice."
United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995)
("Amodeo II").

As the late Honorable Peter K. Leisure, United

States District Judge, explained:
Accessibility of judicial documents and proceedings to the public is a centuries-old component of our
5

legal system. United States v. Amodeo, 44 F.3d 141, 145
(2d Cir. 1995) . . . . Openness of judicial workings
is, among other things, crucial to the citizenry's
ability to "keep a watchful eye on the workings of
public agencies", Nixon v. Warner Communications, Inc.,
435 U.S. 589, 598, 98 S. Ct. 1306, 55 L.Ed.2d 570
(1978), especially with respect to the judges of the
Article III courts, who are not elected. Thus, while
public access to court records and proceedings is not
absolute, there has been a long-standing presumption in
its favor and against sealing. See id.
The Court of Appeals for the Second Circuit has
held that the decision whether to seal court records
requires weighing the importance of the presumption of
public access, depending upon the type of judicial
function at issue, against the interests sought to be
protected by sealing. United States v. Amodeo, 71 F.3d
1044, 1047–1051 (2d Cir. 1995) . . . . The motives of
the party invoking the presumption of public access,
and those of the party opposing such access, may be
considered insofar as they bear on the veracity of the
parties' asserted positions. Cf. id. at 1050. In all
events, "a judge must carefully and skeptically review
sealing requests to insure that there really is an
extraordinary circumstance or compelling need." In re
Orion Pictures Corp., 21 F.3d 24, 27 (2d Cir. 1994).
Encyclopedia Brown Prods., Inc. v. Home Box Office, Inc., 26 F.
Supp. 2d 606, 610-11 (S.D.N.Y. 1998) (footnote omitted).
The common law right of access attaches to judicial
documents, i.e., documents "'relevant to the performance of the
judicial function and useful in the judicial process.'"

Lugosch

v. Pyramid Co. of Onondaga, 435 F.3d 110, 120 (2d Cir. 2006),

6

quoting United States v. Amodeo, 44 F.3d 141, 145 (2d Cir. 1995)
("Amodeo I").

Under the common law, if the court finds

that a document is a judicial document and therefore
that at least a common law presumption of access applies, [the court] must "determine the weight" of the
presumption of access. [Lugosch v. Pyramid Co. of
Onondaga, supra, 435 F.3d at 119]. The weight to be
given to the presumption of access is "governed by the
role of the material at issue in the exercise of Article III judicial power and the resultant value of such
information to those monitoring the federal courts."
[Amodeo II, supra], 71 F.3d [at] 1049 . . . . "Finally, after determining the weight of the presumption
of access, the court must balance competing considerations against [disclosure]." Lugosch, 435 F.3d at 120
(internal quotation marks omitted). Only when competing interests outweigh the presumption may access be
denied. Id. at 119-20.
United States v. Erie County, New York, 763 F.3d 235, 239 (2d
Cir. 2014).
"[T]he public and the press [also] have a 'qualified
First Amendment right'" of access to "'certain judicial documents,'" including those documents (1) that "'have historically
been open to the press and general public' and [where] 'public
access plays a significant positive role in the functioning of
the particular process in question'" or (2) that "are 'derived
from or [are] a necessary corollary of the capacity to attend the
relevant proceedings.'"

Lugosch v. Pyramid Co. of Onondaga,

supra, 435 F.3d at 120, quoting Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 91-93 (2d Cir. 2004).

7

The First Amendment

presumption of access may be overcome "'if specific, on the
record findings are made demonstrating that closure is essential
to preserve higher values and is narrowly tailored to serve that
interest.'"

Lugosch v. Pyramid Co. of Onondaga, supra, 435 F.3d

at 120, quoting In re New York Times Co., 828 F.2d 110, 116 (2d
Cir. 1987); see also EEOC v. Kelley Drye & Warren LLP, No. 10
Civ. 655 (LTS)(MHD), 2012 WL 691545 at *2, *3 (S.D.N.Y. Mar. 2,
2012) (Swain, D.J.) (examples of "higher values" which may
justify sealing include third party privacy interests, confidentiality of trade secrets and the risk of creation of a competitive disadvantage by disclosure).

B.

The Redactions Sought
by RGL and Defendants

RGL, joined by defendants, initially proposed to file
publicly a redacted version of its motion to file the SAC and to
file the unredacted version under seal.

The proposed redactions

include the removal of information identical to that redacted in
the Amended Complaint and approved by Judge Abrams ("Original
Redactions"), as well as the removal of new, additional information obtained through discovery ("New Redactions").
RGL's request to seal and redact the documents is based
"solely" on defendants' designation of the material as "confiden-

8

tial" and the parties' approved stipulated confidentiality
agreement, which requires that any documents filed on the Court's
ECF system that disclose information designated as confidential
"be filed under seal with the Clerk of the Court and kept under
seal until further order of the Court" (May 29, 2015 Letter, at
2-3; Stipulation and Order for the Production and Exchange of
Confidential Information, dated December 8, 2014 (Docket Item 79)
¶ 9).

Defendants have agreed to waive their claims of confiden-

tiality as to some of RGL's proposed New Redactions, and RGL does
not object to defendants' remaining claims of confidentiality
(May 29, 2015 Letter, at 2-3).

Defendants' reasons for seeking

to prevent disclosure of the information underlying the currently
proposed Original and New Redactions are addressed below (see May
29, 2015 Letter, at 3-4).

1.

Original Redactions

With regard to the SAC and the exhibits annexed thereto, the parties propose to maintain the Original Redactions to
(1) paragraphs 34, 132, 139, 178 and 179, (2) Exhibit B at
CantorSubpoena0056515, (3) Exhibit C at G&W011721, G&W011723,

5

In referencing the exhibits annexed to the SAC, I cite to
the pagination included by RGL in the lower-right corner of each
page.
9

G&W11741-54 and G&W011794-98, (4) Exhibit D at
CantorSubpoena005431 and (5) Exhibit F in its entirety (May 29,
2015 Letter, at 2-3).6

Although not identified by the parties,

they also appear to seek to maintain the Original Redactions to
Exhibit C at G&W0011756-57, G&W011770 and G&W011773.
The parties contend that the Original Redactions
approved by Judge Abrams should continue for the same reasons set
forth in defendants' June 13, 2013 Letter, in which defendants
argued that (1) while the Amended Complaint was arguably a
judicial document, the attached exhibits and material in the
Amended Complaint that was drawn from those exhibits were not
judicial documents because they were "inconsequential to RGL's
ability to sufficiently plead the legal causes of action in the
Amended Complaint" and (2) "the presumption of access [was]
extremely low" because the information had little to do with the
claims and defenses

(June 13, 2013 Letter, at 4).

In addition,

defendants argued that disclosure would cause "significant and
irreparable competitive injury to both Defendants and [a] Non-

6

RGL seeks to make identical redactions to the SAC and its
exhibits (A through F) that are annexed as Exhibit A to the
Declaration of Geoffrey C. Jarvis in Support of the Memorandum of
Law in Support of Plaintiff's Motion for Leave to File a Second
Amended Complaint, dated December 10, 2014 ("Jarvis Decl."). As
the proposed redactions are identical for both, I address them
together.
10

Party Entity" because the information was "commercially sensitive," the exhibits contained specific information concerning the
entities' intellectual property and licensing practices, disclosure could harm confidence in the defendants' future agreements
including non-disclosure agreements and disclosure would negatively impact the entities' negotiating capabilities (June 13,
2013 Letter, at 4, 7-8).
The proposed Original Redactions are identical to those
approved by Judge Abrams in the Amended Complaint.7

Accordingly,

with regard to the Original Redactions, the application is
granted.

2.

New Redactions

With regard to the SAC and the exhibits annexed thereto, the parties propose New Redactions to (1) paragraph 176 of
the SAC and (2) Exhibit E (May 29, 2015 Letter, at 2-3).

In the

May 29, 2015 Letter, the parties also withdrew the request to
make the other New Redactions (Supplemental Declaration of
Geoffrey C. Jarvis in Support of Plaintiff's Reply Memorandum in

7

The corresponding redactions in the Amended Complaint are
found in paragraphs 34, 83, 90, 131 and 132 and its annexed
Exhibits B, C-2, C-3, C-4, C-5, C-7, D and E.
11

Further Support of Its Motion for Leave to File a Second Amended
Complaint, dated February 13, 2015).
Exhibit E to the SAC is a term sheet (the "Term Sheet")
that preceded a 2011 License Agreement (Exhibit F to the SAC),
which was redacted in its entirety as part of the Original
Redactions, and paragraph 176 refers to information from the Term
Sheet.

Defendants contend that, like the 2011 License Agreement,

the New Redactions include commercially sensitive information
regarding "a confidential reciprocal license agreement between
Cantor Nevada and a third party who is not named or involved in
this litigation" (May 29, 2015 Letter, at 3).

Defendants claim

that disclosure of the information will competitively disadvantage both parties to the agreement because it includes descriptions of "the specific patents[8] at issue and the material terms
of the agreement, including the proposed compensation to each
party" (May 29, 2015 Letter, at 3).

Defendants argue that this

is the type of material protected by Fed.R.Civ.P. 26(c)(1)(G) and
that has been routinely protected from public disclosure (May 29,
2015 Letter, at 3).

8

Given that patents are public documents, it is not entirely
clear what harm would result from their disclosure.
12

a.

Common Law
Right of Access

Assuming the New Redactions are being made from judicial documents,9 the presumption of access to these documents is
low, because the redacted information is minimally relevant to
the parties' claims and does not appear necessary to or helpful
in resolving the motion for leave to amend.

See Amodeo II,

supra, 71 F.3d at 1050 ("Where testimony or documents play only a
negligible role in the performance of Article III duties, the
weight of the presumption is low and amounts to little more than
a prediction of public access absent a countervailing reason.").
My Opinion and Order dated July 6, 2015 granting in part the
motion to file the SAC demonstrates that the specifics of the
license described in the redacted information was not material to
the resolution of that motion.
In addition, the defendants' interest in maintaining
the confidentiality of the information appears to outweigh any
public interest in disclosure.

Defendants have demonstrated that

the New Redactions contain confidential information concerning an

9

In the May 29, 2015 Letter, the parties do not address
whether the documents constitute "judicial documents"; however,
the proposed SAC is clearly a judicial document as it is the type
of document that courts must rely upon in deciding whether to
grant leave to amend. See Ello v. Singh, 531 F. Supp. 2d 552,
584 & n.32 (S.D.N.Y. 2007) (Karas, D.J.).
13

agreement with a non-party entity10 and that the interests of
defendants and the non-party entity in maintaining the confidentiality of the information appear to outweigh the public interest
in access to the judicial documents.

See Alexander Interactive,

Inc. v. Adorama, Inc., 12 Civ. 6608 (PKC)(JCF), 2014 WL 4346174
at *2 (S.D.N.Y. Sept. 2, 2014) (Francis, M.J.) (allowing documents containing confidential information concerning the business
relationship between defendant and a non-party entity to be filed
under seal); GoSMiLE, Inc. v. Dr. Jonathan Levine, D.M.D. P.C.,
769 F. Supp. 2d 630, 649-50 (S.D.N.Y. 2011) (Castel, D.J.)
(granting motion to seal documents containing "highly proprietary
material concerning the defendants' marketing strategies, product
development, costs and budgeting"); Gelb v. Am. Tel. & Tel. Co.,
813 F. Supp. 1022, 1035 (S.D.N.Y. 1993) (McKenna, D.J.) (noting
that "defendants' assertion that its competitors . . . could use
[the information] to do competitive injury to the defendants is,
on the facts of this case, a sufficient basis" for sealing); see
also Fed.R.Civ.P. 26(c)(1)(G) (permitting issuance of a protective order, for good cause, to prevent disclosure of "a trade

10

The New Redactions include information regarding the
material terms of defendants' agreement with the non-party
entity, which was memorialized in the originally redacted 2011
Licensing Agreement, as well as information concerning the nature
of their relationship, licensing, specific patents, expenses and
compensation.
14

secret or other confidential research, development, or commercial
information").

b.

Qualified First
Amendment Right of Access

Assuming the qualified First Amendment right of access
is applicable, the New Redactions are designed to protect the
"higher value[]" of protecting confidential business information,
as discussed above, while also being "narrowly tailored to serve
that interest."

Lugosch v. Pyramid Co. of Onondaga, supra, 435

F.3d at 120 (internal quotation marks and citation omitted); see
PDV Sweeny, Inc. v. ConocoPhillips Co., 14 Civ. 5183 (AJN), 2014
WL 4979316 at *3 (S.D.N.Y. Oct. 6, 2014) (Nathan, N.J.) (determining "that sealing is appropriate with respect to [certain]
documents on the basis of their containing sensitive commercial
information"); Standard Inv. Chartered, Inc. v. Nat'l Ass'n of
Sec. Dealers, Inc., 07 Civ. 2014 (SWK), 2008 WL 199537 at *8
(S.D.N.Y. Jan. 22, 2008) (Kram, D.J.) (concluding that defendant's "interest in protecting confidential business information
outweigh[ed] the qualified First Amendment presumption of public
access").

The New Redactions are strictly limited to the infor-

mation contained within paragraph 176, which cites information
from the Term Sheet, and the Term Sheet itself, which was the

15

precursor to the 2011 License Agreement that was subject to the
Original Redactions.
Accordingly, the parties have made a sufficient showing
to overcome the presumption in favor of access to the New Redactions.

IV.

Conclusion

Accordingly, RGL is permitted to file the SAC and
attached exhibits under seal and to file redacted copies of those
documents on the Court's ECF system, in accordance with this
Order.
Within 10 days of this Order, RGL is directed to file
its motion for leave to amend and all briefing on the motion with
supporting documents, including a redacted version of Exhibit A
to the Jarvis Declaration, in accordance with this Order.
Within 10 days of this Order, Defendants are directed
to file their opposition brief and supporting documents.
Because this Order is being granted without any argument from the press or the public, it is without prejudice to any

16

possible future application to unseal made by the press or the
public.
Dated:

New York, New York
July 15, 2015
SO ORDERED

HENRY PI
United States Magistrate Judge
Copies transmitted to:
Geoffrey C. Jarvis, Esq.
Grant & Eisenhofer P.A.
29th Floor
485 Lexington Avenue
New York, New York 10017
Diane T. Zilka, Esq.
Grant & Eisenhofer, PA
Chase Manhattan Centre
1201 North Market Street
Wilmington, Delaware 19801
Nathan A. Cook, Esq.
Grant & Eisenhofer, PA
123 Justison Street
Wilmington, Delaware 19801
Francis X. Riley, III, Esq.
Ruth Rauls, Esq.
Ryan L. Diclemente, Esq.
Saul Ewing LLP
650 College Road East
Princeton, New Jersey 08540

17

Frencis X. Riley, Ill
Plxlne: (609) 4S2·31SO

Saul E ._ll'g

Fax: (609) 514·3744

[e-mail]
www.saul.com

June 13, 2013
VIA E-MAIL AND OVERNIGHT DELIVERY
The Honorable Ronnie Abrams
United States District Court for the Southern District of New York
Thurgood Marshall United States Courthouse
40 FoJey Square
New York, NY 10007
RE:

Refco Group, Ltd., LLC v. Cantor Fitzgerald, LP. et aL
No,,ta~cy-01654 <RAl

Dear Judge Abrams,
This firm represents defendants Cantor Fitzgerald, L.P., Cantor Fitzgerald Securities, Lee
Amaitis, Stephen M. Merkel, Howard W. Lutnick, CIHLP, LLC, Cantor G&W (Nevada) L.P.
("Cantor Nevada''), Cantor Gaming & Wagering Limited (''Cantor G&W''), Cantor Fitzgerald
Europe, and nominal defendants Cantor Index Limited (''CIL"), Cantor Index LLC ("Cantor
Index"), Cantor Gaming Limited, Cantor Fitzgerald Game Holdings, LLC and Cantor Index
Holdings, L.P. (collectively "Defendants"). I respectfully write on Defendants behalf pursuant to
Rule S.A of Your Honor's Individual Rules & Practices in Civil Cases to request that the Court
permit the highlighted portionS of the enclosed Exhibits 2 through 6 to be redacted and filed
under seal. As per Your Honor's rules, one partial, loose-leaf set of solely those pages on which
Defendants seek to redact material are attached as Exhibit 7.
By way of background, on April 16, 20 I 3, plaintiff Refco Group, Ltd., LLC ("Piaintitr'
or "RGL") filed under seal an Amended Complaint and accompanying exhibits in accordance
with certain confidentiality agreements entered into by and between the various parties for the
production of documents pursuant to certain Rule 2004 Subpoenas that were issued in the
bankruptcy proceeding.,' On or about May 1, 2013, RGL filed a motion to unseal,, in part the
All of the exhibits attached to the Amended Complaint, with the exception of the Partnership Agreement itself,
were produced pursuant to confidentiality agreements. On April 9, 2010, the United States Bankruptcy Court for the
Southern District of New York entered an order pennilting Debtors to serve a Rule 2004 subpoena on defendant
Cantor Fitzgerald Securities (''CES") for certain limited categories of documents ("April Subj>oena"). (05-60006,
Docket Entry 6978). In connection with the April Subpoena, ROL entered into a confidentiality agreement dated
June 9, 2010 with respect to the documents. RGL later sought and obtained leave, by order dated January 26, 2012
'I

750 College Road East, Suite 100 • Princeton, NJ 08540-6617 • Phoue: (609) 452·3100 • Fu: (609) 452·3122

Marc A. Citron • Princeton Manasins Partner
DELAWARE

MARYLAND

MASSACHUSETTS

NEW 1ERSEY

NEW YORK

PENNSYLVANIA

WASHINGTON, DC

June 13, 2013
Page2

Amended Complaint and exhibits. After the filing of the motion and at Your Honor's directio~
the parties engaged in discussions in an attempt to reach agreement with regard to the
information and documents for which sealing would be requested. The parties were able to reach
an agreement and advised Your Honor. Accordingly, the Motion to Unseal was denied as moot
on May 23,2013 (Docket Entry No. 18).
The below sets forth the documents and information which Defendants request be
redacted and filed under seal and to which RGL has advised it has no objection.
I.

The Parties' Agreement Regarding The Sealing Of AUegations In And
Exhibits Attached To The Amended Complaint

The Amended Complaint attaches five (5) exhibits: Exhibit A - the Limited Partnership
Agreement; Exhibit B - 2006 License Agreemenr; Exhibit C - UK Gambling A~Jication ;
Exhibit D -Asset Purchase Agreement4; and Exhibit E- the 2011 License Agreement. The only
exhibits which Defendants seek to have sealed are Exhibits B, C, D and E ("Exhibits"). The
parties have reached an agreement regarding the redaction and sealing of specific allegations in
the Amended Complaint which contain descriptions of the Exhibits, as well as portions of the
relevant exhibits. The Defendants request and RGL does not object to the sealing of the
information set forth below:
(1) all references to the intellectual property contained in the license agreements which
consists of:
• portions of paragraphs 83, 90, 131 and 132 in the Amended Complaint (A
highlighted version with proposed redactions of the Amended Complaint
is attached hereto as Exhibit 2 for the court's in camera review)
and amended February 2, 2012, to serve discovery by way of interrogatories and document requests. (05-60006,
Docket Entry 7160). RGL also served a subpoena to Cantor G&W (Nevada), L.P. ("Cantor Nevada") through the
United States Bankruptcy Court for the Southern District of Nevada. In connection with this discovery, separate
confidentiality agreements were entered: one with Cantor Fitzgerald L.P. ("~")and its affiliates, including CFS
and Cantor Index Holdings L.P. ("CIH") and its subsidiaries; and one with Cantor Nevada and its subsidiaries.
(Attached as Exhibit 1 are copies of the three confidentiality agreements).
2

Exhibit B to the Amended Complaint is a license agreement entered into on February 7, 2006 among CFPH LLC,
Cantor Index and Cantor Nevada (''2006 License Agreement").

i

I

3

Attached as Exhibit C to the Amended Complaint is a copy of the gambling application that was filed with the
Gambling Commission in the United Kingdom ("UK Gambling Awlicatjon") on behalf of Cantor G& W.
4

Exhibit D to the Amended Complaint is a copy of the asset purchase agreement dated April30, 2010 between
Cantor Index Limited and Cantor G& W (''Asset Purchase Agreement").

Attached as Exhibit E to the Amended Comp~aint is a licen~e agreement entered into on June 29, 2011 by and
between Cantor Nevada, Cantor Index and a third-party who m not named nor involved in this litigation (''N.Qn:
&rtv Entity'') ("20 I J License Agreement").
5

f

----------------------------------

June 13, 2013
Page3

•

the entirety of Schedule A attached to Exhibit B (2006 License

Agreement) (CantorSubpoena005651) (A highlighted version with
•

proposed redactions of the 2006 License Agreement is attached hereto as
Exhibit 3 for the court's in camera review); and
the entirety of Exhibit E (2011 License Agreement) (A highlighted version
with proposed redactions of the 2011 License Agreement is attached
hereto as Exhibit 4 for the court's in camera review).

(2) Schedule I to Exhibit D (Asset Purchase Agreement) of the Amended Complaint
(CantorSubpoena005431) (A highlighted version with proposed redactions of the Asset
Purchase Agreement is attached hereto as Exhibit 5 for the court's in camera review);
and
(3) all portions of Exhibit C (UK Gambling Application) to the Amended Complaint
which describe technological processes (Sections 5 - G&W011794- G&W011798), as
well as the Cantor entity's articles of incorporation (G&W011741-011754) {A
highlighted version with proposed redactions of the UK Gambling Applications Is
attached hereto as Exhibit 6 for the court's in camera review).

II.

Selected Portions Of The Amended Complaint And The Exhibits Should Be
Redacted And That Information Submitted Under Seal

The presumption of public access to judicial documents is subject to multiple, wellrecognized exceptions that are designed to protect precisely the type of information Defendants
seek to have maintained under seal in this matter. See Lugosh v. Pyramid Co. ofOnondag~ 435
F.3d 110, 119-120 (2d Cir. 2006). As the Second Circuit detemiined in Lugosh, even a qualified
First Amendment right of access "does not end the inquiry." ld. at 120. A Court may seal or
restrict the public's access to any judicial filing or proceeding where there is a legitimate private
or public interest which warrant doing so, a clearly defined and serious injury would result if
access is provided, and a less restrictive method that can be followed. ld. Accordingly,
documents will be sealed when it is demonstrated ''that closure is essential to preserve higher
values and is narrowly tailored to serve that interest." Id. (citations omitted). The Second
Circuit has articulated a three-step analytical process for determining whether documents should
be placed \mder seal.
First, a court must determine whether the presumption of access attaches by determining
whether the particular item to be sealed is a judicial document. Lugosch. 435 F.3d at 119. A
document or information is a "judicial document" if it is an "item ... relevant to the performance
of the judicial function and useful in the judicial process." Lugosch, 435 F.3d at 119 (citations
omitted).
Second, if the item sought to be sealed is a judicial document, the court must nevertheless
then dete~e the weight of the presumption of access. Id. "[T]he weight to be given the
presumptiOn of access must be governed by the role of the material at issue in the exercise of

June 13, 2013
Page4

Article III judicial power and the resultant value of such infonnation to those monitoring the
federal courts." ld. (quotation omitted). Generally, the information will fall somewhere on a
continuum from matters that directly affect an adjudication to those matters that come within a
court's purview solely to insure their irrelevance. ld. at 121 (quotation omitted). When the
information sought to be protected "sheds almost no light on either the substance of the
underlying proceeding or the basis for the Court's decision," and plays "only a negligible role in
the performance of Article III duties, the weight of the presumption is low," and sealing should
be afforded Standard Inv. Chartered. Inc. v. Fin. Indus. Regulatory Auth., 2009 WL 2778447, at
*2 (2d Cir., Sept. 3, 2009) (referring to and quoting the District Court's decision, Standard Inv.
Chartere<!, Inc. v. Fin. Indus. Regulatory Auth., 2008 WL 199537, *8 (S.D.N.Y., Jan. 22, 2008)).
Finally, after determining the weight of the presumption of access, the court must
"balance competing considerations against it." Lugosch, 435 F.3d 120. (quotation omitted). It is
well established that in this balancing analysis, competitively sensitive information like that at
issue here, should be protected against public disclosure if disclosure would cause significant and
irreparable competitive iQjury. See Standard Inv. Chartere<!, Inc., 2009 WL 2778447, at *2
(regulatory organization's "'interest in protecting confidential business information outweighs
the qualified First Amendment presumption of public access."'); GoSMiLE. Inc. v. Dr. Jonathan
Levine. D.M.D. P.C .. 769 F. Supp. 2d 630, 649-50 (S.D.N.Y. 2011) (granting motion to seal
"highly proprietary material concerning ... marketing strategies, product development, costs and
budgeting."); Gelb v. Am. Tel. & Tel. Co., 813 F. Supp. 1022, 1035 (S.D.N.Y. 1993) (granting
motion to seal documents based upon the "assertion that its competitors who do not now have
this information could use it to do [the party] competitive injury ....'').
Here, although the Amended Complaint is arguably a judicial document, the exhibits
themselves and the quotations from those exhibits in the Amended Complaint are
inconsequential to RGL's ability to sufficiently plead the legal causes of action in the Amended
Complaint. In fact, with regard to the continuum of matters that directly affect an adjudication,
the narrowly tailored portions of the Exhibits and corresponding allegations in the Amended
Complaint that Defendants submit are in need of continued redaction and should be maintained
under seal have little to do with RGL's asserted causes of action or a defense to the motion to
dismiss. Accordingly, because the information Defendants seek to be protected "sheds almost no
light on either the substance of the underlying proceeding or the basis for the Court's [future]
decision," the presumption of access is extremely low. That low presumption, coupled with the
significant and irreparable competitive injury to both Defendants and the Non-Party Entity that
will result if the subject information is publicly disclosed weigh in favor of sealing.

A.

Attaching the Exhibits in Their Entirety to the Amended Complaint is
Unnecessary

The portions of the Exhibits and allegations in the Amended Complaint which
Defendants seek to have redacted and sealed should not ~ considered judicial documents
because they are unnecessary to the claims asserted by RGL.

I
I

I

June 13, 2013
PageS

Neither the portions of the license agreements, nor the allegations that quote portions of
the license agreements are necessary to support RGL's claims. Although RGL has asserted
claims arising from the existence of both the 2006 and 2011 License Agreements, there is little
need or for their attachment to the Amended. Complaint when only a portion of the document is
even potentially relevant. See Gelb. 813 F. Supp. at 1034 (recognizing there was no evidentiary
reason or procedural requirement for plaintiff's decision to attach certain confidential documents
to the complaint). RGL's ability to maintain its causes of action is sufficiently met by
generalized descriptions in the body of the Amended Complaint concerning the existence of the
patent license agreements, as opposed to the wholesale attachment of either the 2006 or the 20 I I
License Agreements. Thus, Schedule A of the 2006 License Agreement and the entirety of the
2011 License Agreement, along with verbatim quotations to language from the agreements are
not necessary for RGL to assert the causes of action set forth in the Amended Complaint.
The Amended Complaint does not include any allegation pertaining to the Articles of
Association or Section 5 contained in the UK Gambling Application, or the employees listed in
Schedule 16 to the Asset Purchase Agreement. Nor do any of the claims set forth in the Amended
Complaint in any way rely on these portions of the UK Gambling Application or the Asset
Purchase Agreement. (Amended Complaint at~~ 105-114).
Thus, none of the information above has any relevance to the performance of the judicial
function nor is it useful in the judicial process.. Accordingly, they should not be considered
·
judicial documents.

B.

Because the Exhibits and the Allegations in the Amended Complaint Setting
Forth the Specific Contents of these Exhibits Do Not Directly Affect the
Adjudication Before the Court At This Time, the Presumption of Access is
Low

To the extent the court deems the 2011 License Agreement to be a judicial document, the
document, in its entirety, sheds almost no light on the substance of the Amended Complaint, thus
the presumption of access is extremely low. See Standard Inv. Chartered. Inc., 2009 WL
2778447, at *2. When particular exhibits are not central to the case or the issues before the
court, sealing is appropriate. Gelb, 813 F. Supp. at 1034; see Triguint Semiconductor, Inc. v.
Avago Technologies Ltd., 2011 WL 4947343, *2, *5 (D. Arizona, October 18, 2011) (where
"the documents are only tangentially related to the underlying cause of action, the public need is
lessened" and sealing is appropriate). While the allegation that Cantor Index licensed its
intellectual property in the 20 II License Agreement and that Cantor Nevada received the royalty
payments is arguably relevant to RGL's claims (Amended Complaint at ~'129), the specific tenns
and conditions of the agreement and detailed descriptions of the technology is not, at this point, a
primary focus in the litigation. Similarly, Schedule A to the 2006 License Agreement, which
listS the intellectual property, is not relevant at this point in the litigation. Specifically, the scope
6

~ith the exception of one.individual on this schedule, none of the other persons identified are related to RGL's

clalDls. (Amended Complamt at ~120).

June 13,2013
Page6

of the license for Cantor Index's patents has nothing to due with RGL's assertion that the
agreement was influenced by the personal interests of CIH's general partner, affiliates or the
Individual Defendants. Nor do the trade-secrets which should be redacted have any bearing on
whether RGL has sufficiently pled that demand by it of CIH' s general partner was futile, thus
permitting it to bring the Amended Complaint's derivative claims. Accordingly, the presumption
of access for the entirety of the 2011 License Agreement document is low, as is the presumption
of Schedule A ofthe 2006 License Agreement.
To the extent the court deems the Articles of Association and/or Section 5 of the UK
Gambling Application or Schedule I to the Asset Purchase Agreement to be judicial documents,
this information sheds no light on the substance of the Amended Complaint, thus the
presumption of access is virtually nonexistent. Standard Inv. Chartered, Inc., 2009 WL 2778447,
at *2. As set forth above, when particular exhibits are not central to the case or the issues before
the court, sealing is appropriate. Here, Section 5 of the UK Gambling Application has nothing
whatsoever to do with the claims asserted by RGL as demonstrated by the fact that nowhere in
~e body of the Amended Complaint does RGL even discuss the section. Similarly, there is no
mention whatsoever of the Articles of Association in the Amended Complaint. Neither portion
of the UK Gambling Application or Schedule I play any role, let alone a negligible role, in this
Court's performance of its Article III duties, accordingly there is little if no presumption of
access to it.

C.

Because the Exhibits and the Allegations in the Amended Complaint Contain
Competitively Sensitive Information, Including Trade Secrets, and Their
Public Disclosure Would Cause Significant and Irreparable Competitive
Injury, Portions Should Remain Under Seal

The court has recognized that "higher values" which can defeat the presumption of access
include a company's interest in protecting "business information that inight harm a litigants
competitive standing" and protecting a trade secret. Standard Inv. Chartered, Inc., 2008 WL
199537, *7-9 (citations omitted); see GoSMiLE, Inc., 769 F. Supp. 2d at 649 (sealing documents
that were trade secrets); Triquint Semiconductor, Inc., 2011 WL 4947343, • 2 (holding that ''the
release of trade secrets is a compelling reason 'sufficient to outweigh the public's interest in
disclosure and justify sealing court records.'") (citations omitted). A trade secret is defined as
"any formula, pattern, device or compilation of information which is used in one's business,
which gives him an opportunity to obtain an advantage over competitors who do not know or use
it .... " Gelb, 813 F. Supp. at 1034 (referencing § 757 of the Restatement (First) of Torts.).
Documents that contain costs, development, marketing and distribution information are
considered trade secrets that are appropriately sealed. GoSMiLE, Inc., 769 F. Supp. 2d at 649.
Specifically, the kind of information that is contained "in a licensing agreement constitutes a
trade secret that could harm a litigant's competitive standing." Triguint Semiconductor, Inc.,
2011 WL 4947343, * 2. Further, documents that implicate the confidentiality of parties not
inv~lved in the litigation at hand or information relating to non-parties is sufficient to justify
seal!n~ of th~.documents. See Triguint Semiconductor, Inc., 2011 WL 4847343, *5 (sealing
exhibits that mvo1vefd] previous business dealing that were collateral to the issues in the case

June 13, 2013
Page7

and implicate[d] the confidentiality of parties not involved in the current case."); Caxton
International Ltd. v. Reserve International Liquidity Fund, Ltd., 2009 WL 2365246 * 6
(S.D.N.Y., July 20, 2009) (permitting the redaction of documents containing identifying
information of non-parties).
With regard to information that might harm a ·litigant's competitive standing, it is
sufficient for the party to identify "particular transactions that it is likely to pursue in the future;
it does not have to prove that such transactions are guaranteed to occur." Standard Inv.
Chartered. Inc., 2008 WL 199537, at *7, fn 5.1 In Standard Inv. Chartered, Inc., the district held
and the Second Circuit affirmed that certain documents were appropriately sealed where the
party had defmed the injury it stood to suffer by "identifying future transactions with respect to
which broad disclosure would cause it to suffer a competitive disadvantage," which if publicly
disclosed would permit an outsider to ascertain the party's negotiation tactics. Id. (citing Gelb,
813 F. Supp. at 1035 (holding that "defendants' assertion that its competitors who do not now
have [information on marketing tactics] could use it to do competitive injury to the defendants is
; :. a sufficient basis to grant defendants' motion to seal ... ")).

1.

The 2006 and 2011 License Agreements

The 2011 License Agreement was individually negotiated by Cantor Index, Cantor
Nevada and the Non-Party Entity, contains the material terms of their relationship and is still in
effect today. If the 2011 License Agreement is publicly filed, competitors will be able to look at
the agreement in its entirety and discern the technology Cantor Index is willing to license, the
price at which it is willing to license its technology and the price and terms by which Cantor is
willing to obtain a license from a third party. This will put Cantor Index at an unfair competitive
disadvantage. Cantor Index is actively engaged in the process of trying to license one or more of
the patents listed in the 2011 License Agreement, as well as other Cantor Index patents, to other
entities and anticipates engaging in negotiations with specific parties in the near future. If those
entities were able to obtain the terms of the 2011 License Agreement, Cantor Index would be at a
significant competitive disadvantage in negotiating these agreements. By way of example, the
royalty payment· structure in the 2011 License Agreement is unique and Cantor Index may not
structure a similar deal in the future. Releasing the terms of the 2011 License Agreement will
prejudice Cantor Index competitively because it will create expectations for future agreements.
Further, given the commercial relationship and the subject matter of the 2011 License Agreement
are with a significant player in the gaming industry, the terms of the agreement are commercially
sensitive.
Moreover, the 2011 License Agreement is subject to a non-disclosure agreement with the
Non-Party Entity. (§ 1.17 and 12.7). Making the terms and conditions of the 2011 License
Agreement public will deprive Cantor Nevada, Cantor Index and the Non-Party Entity of
bargained for confidentiality that they deem valuable. That has a direct affect on the ability to
7

The analysis applied by the district court to the non-judicial documents was also adopted and applied by the court
to the judicial documents. Id. at *8.

June 13,2013
Page8

enter into future agreements with third parties, since potential third parties wiiJ have less
confidence that the terms and conditions they wish to have kept confidential will actually remain
confidential. Maintaining the confidentiality of license agreements negotiated by Cantor Iridex is
essential to it business, both as a means of protecting valuable business strategy information and
knowledge from competitors, and as a means of protecting its ability to implement a key
component of its business strategy by allowing it to negotiate commercially reasonable terms in
its agreements.
Cantor Index's ability to leverage the intellectual property it owns through license
agreements or other related ventures will be compromised if ~mpetitors are able to see the
specific terms of its existing agreements, it will inhibit its ability to negotiate optimum terms
with respect to future license agreements and will directly affect its ability to engage in the
process of licensing additional Cantor Index patents. Similarly, the intellectual property detailed
in Schedule A to the 2006 License Agreement will provide competitors with information
r~g~ding which patents Cantor Index is willing to license.
·
Accordingly, in light of the low presumption of access and the significant harm that
would result from public disclosure, redaction of the 2011 License Agreement in its entirety and
Schedule A of the 2006 License Agreement is appropriate.

2.

The UK Gambling Application

The UK Gambling Application was not publicly filed and it contains personal identifying
information for certain individuals associated with the application, the complete Articles of
8
Association for Cantor G& W, and the technical specifications for the FFO.
Section 5 of the business plan in the UK Gambling Application is the quintessential trade
secret, namely it is the "formula, pattern, device or compilation of information which is used in
[Cantor G&W's] business, which gives [it] an opportunity to obtain an advantage over
competitors who do not know or use it .... " Gelb, 813 F. Supp. at 1034 (citing§ 757 of the
Restatement (First) of Torts.). Section 5 is the technological backbone of the FFO, setting forth
the system design for the FFO, including the schematics for the technology and a narrative of the
manner in which it functions. It contains essentially the two key pieces of the FFO teclmology: a
description of pricing algoritbms and how the technology is integrated into a partners internal
software system. Thus, Section 5 provides a step-by-step breakdown of exactly how the FFO
works and public disclosure would provide competitors with a road map of the FFO teclmology,
enable those competitors to directly copy the proprietary teclmology and build an identical
system and thus, unfairly compete with Cantor G& W.
Accordingly, in light of the low presumption of access and the significant harm that
would result from public disclosure, redaction of Section 5 is appropriate. Further, because the
8

The Fixed Financial Odds business ("FFO") is a betting operation which provides for computerized wagering.

I

f

I

June 13, 2013
Page9

Articles of Association for Cantor G&W have no relevance to RGL's claims, there is no basis to
make them publicly available.
CONCLUSION
Due to the low presumption of public access and the competitive injury that will result
from public disclosure, Defendants respectfully request: that portions of the Amended Complaint
be redacted and filed under seal in the form attached as Exhibit 2; Exhibit E (2011 License
Agreement) be sealed in its entirety; Schedule A of Exhibit B (2006 License Agreement) be
redacted and sealed in its entirety; Schedule I of Exhibit D (Asset Purchase Agreement) be
redacted and sealed in its entirety; and the following portions of Exhibit C (UK Gambling
Application) be redacted and sealed - personal identifying information, Section 5 and Cantor
G& W' s Articles of Incorporation.
Respectfully submitted,

cc:

Geoffrey Jarvis

I
j,
'

<£.

485 Lexington Avenue
New York, NY 10017
Tel: [phone]
Fax: [phone]

Grant&Eisenhofer P.A

1747 Pennsylvania Avenue, N.W" Sulte 875
Washington, DC 20006

123 Justison Street Wilmington, DE 19801 Tel: [phone]

Fax: [phone]

Tet 202-386-9500
Fax: [phone]
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Chicago, IL 60602

WRITER'S DIRECf DIAL NUM!3ER

Direct Dial: [phone]
gj arvls@gela w .com

Tel: 3!2-214-oOOo
Fax: [phone]

December 10, 2014

VIA E-MAIL AND HAND DELIVERY
The Honorable Ronnie Abrams
United States District Court for the Southern District of New York
Thurgood Marshall United States Courthouse
40 Foley Square
New York, NY 10007
RE:

Refco Group Ltd., LLC v. Cantor Fitzgerald, LP., No. 13-cv-01654 (RA)

Dear Judge Abrams:
I write on behalf of Refco Group Ltd., LLC ("Plaintiff'), the plaintiff in the abovereferenced action (the "Action"), pursuant to Rule 5.A of Your Honor's Individual Rules &
Practices in Civil Cases ("Rule 5.A"), to request permission to file under seal certain court filings
accompanying Plaintiffs Motion For Leave To File A Second Amended Complaint (the
"Motion"), and to publicly file a redacted version of those documents. Plaintiff has served the
Motion today, and intends to docket it through the ECF system, but respectfully submits that
certain material should not be publicly filed.
Prior to commencing the Action, Plaintiff sought and obtained leave from the U.S.
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") to examine a
1
number of entities under Bankruptcy Rule 2004 (each, an "Examination Party"). Certain of the
Examination Parties required that Plaintiff execute a confidentiality agreement (the "Bankruptcy
Confidentiality Agreement") that, among other things, governs the manner in which information
produced and designated by an Examination Party as confidential may be submitted to the Court.
A copy of the Bankruptcy Confidentiality Agreement is attached as Exhibit A hereto.

1

Plaintiff commenced the Action in the Bankruptcy Court on December 6, 2012. By stipulation,
dated March 21, 2013, the parties agreed that the reference of the Action should be withdrawn
and that the Action should proceed in this Court. Your Honor approved the stipulation on March
22, 2013.

The Honorable Ronnie Abrams
United States District Court for the Southern District of New York
December 10, 2014
Page 2

Subsequently, in this Action, Defendants produced certain documents in response to
Plaintiffs written discovery demands. Those documents bear confidentiality designations. The
Court entered the Stipulation and Order For the Production and Exchange of Confidential
Information on December 8, 2014 (the "Order") (Dkt. # 79). Paragraph 5 of the Order prohibits
the public filing of documents designated by the parties as confidential.
Plaintiffs proposed Second Amended Complaint ("SAC"), the exhibits thereto, and its
submissions in support of its accompanying Motion, incorporate and rely on information
designated as confidential by Defendants. To avoid any potential claim that Plaintiff has
violated any provisions of the Bankruptcy Confidentiality Agreement or the Order, Plaintiff
hereby requests permission to: (a} file under seal Plaintiffs Memorandum of Law in support of
the Motion (the "MOL"); (b) file under seal the Declaration of Geoffrey C. Jarvis, dated
December 10, 2014, and all exhibits thereto, which include the proposed SAC (the
"Declaration"); and (c) publicly file a redacted version of the MOL and the Declaration with
exhibits?
As required by Rule 5.A, I have enclosed: (1) the MOL and the Declaration, including its
exhibits, with the material in each document that Plaintiff proposes be redacted highlighted; and
(2) a looseleaf set of the unredacted version of just the pages that contain the material that
Plaintiff proposes to redact.
V.f e are available at the Court's convenience should Your Honor have any questions
concerning the above.

Resp~f~~~-~~~~~1/;bmJ!/itted,

r···;; /.///; /
'

·: J/

//

Geoffrey C.

/]

Ja'

i

I

.· .·
/

Enclosures
cc: All Counsel

2

Plaintiff does not waive objections to the confidential designation of.material cited in the SAC
and m support of the Motion, and reserves all rights thereto.

~

485 LeXington Avenue

123 Justtson Street
Wilmington, DE 19801
Tel: [phone]
Fax: 302-622·7100

Grnnt & Eisenhofer PA
New York, NY 10017

Tel: 646-722·8500

1747 Pennsylvania Avenue, N.W., Suite 875
washington, DC 20006
Fax: 646·722-8501 Tel: 202·386·9500
Fax: 202·386·9505
30 N. LaSalle Street, Suite 1200
Chicago, IL 60602
Tel: 312-214·0000

WRITER'S DIRECT DIAL NL;MBEH

[phone]

Fax: 312-214·0001

February 13, 2015

VIA HAND DELIVERY
Honorable Henry B. Pitman
United States District Court, Southern District ofNew York
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007
Re:

fP1 r~ ~ ~ 2~5~~ IDJ
CHAMBERS OF
HENRY PITMAN
U.S.M.J.

Refco Group Ltd., LLC v. Cantor Fitzgerald, L.P., et aL,
C.A. No. 1:13-cv-01654-RA-HBP

Dear Judge Pitman:
On December 10, 2014, pursuant to Rule 5.A of the Honorable Ronnie Abrams'
Individual Rules & Practices in Civil Case, PlaintiffRefco Group Ltd. LLC ("RGL") submitted a
letter request to tile under seal certain documents. Specifically, RGL sought to file under seal its
Motion for Leave to File a Second Amended Complaint ("Motion") along with a proposed
Second Amended Complaint. RGL submitted the Motion to Judge Abrams' chambers along
with the unopposed request to file the documents under seal.
On December 16, 2014, the parties submitted to Judge Abrams a stipulation pursuant to
which Defendants' Opposition to RGL's would be due on January 23, 2015, and RGL's Reply
would be due on February 13, 2015. Judge Abrams approved the Stipulation on December 23,
2014. Dkt. #87.
Because the Motion falls within the reference of pre-trial matters to Your Honor, Dkt.
#42, Judge Abrams ruled that it was not properly before her. Therefore, she directed RGL to
bring the Motion to Your Honor's attention. Dkt. # 86. Judge Abrams then decided to hold in
abeyance her ruling on RGL's Objections to the November 24, 2014 Order, Dkt. # 80, until such
time as the Motion is decided. Dkt. # 99.
On January 23, 2015, Defendants served RGL with their Opposition to the Motion.
Enclosed herewith are courtesy copies of (i) the letter request to file under seal, which was
submitted to Judge Abrams; (ii) redacted and unredacted copies of the Motion; (iii) clean and
redline copies of the proposed Second Amended Complaint; (iv) Defendants' Opposition to the
Motion; and (v) RGL's Reply in further support of the Motion. These documents have not been
filed on ECF, as the parties are awaiting a ruling on RGL's request to file under seal. To the

The Honorable Henry Pitman
February 13,2014
Page 2
extent it is necessary, RGL hereby renews its request to file under seal the Motion, the Second
Amended Complaint, and all briefing on the Motion.
In addition, pursuant to Your Honor's Individual Practice No. 2.E, RGL hereby requests
oral argument on the Motion.
We are available at the Court's convenience should Your Honor have any questions
concerning the above.
Respectfully submitted,

£t~
Enclosures
cc: All Counsel

C£

12:1 Justison ~trect

4-HS Lexington AventJe
NCv\r YorK. NY l(J017
Tel: 64(]-722·8500

Fax: 646 722·HS01

Grdllt & Eisenhofer I!A.
Wilmington, llE WC>Ol

1747 Pennsy!vanld Avenue. N.W., Suite 875

Tel: :JO~ t;~~ 7000

Fax: 302-b~2-7100

washingtun, uc 2ooon
T<•.!: 2()2·386·9500
Fax: 202·381j·HSOS
:;o N. !..JSallc Street. Suite> 1200
Chie<Jt1,0, lL 60602
Tel: :[phone]
Fax: ~12-214-000l

'v'.'RJTl:H'S DlHECT DIAL NUMBER

(302) n22-7040

May29,2015

VIA HAND DELIVERY
Honorable Henry B. Pitman
United States District Court, Southem District of New York
Daniel Pat1ick iv1oynihan United States Courthouse
500 Pearl Street
New York, NY 10007

Rc:

Refco Group Ltd., LLC v. Cantor Fitzgerald, L.P., et al.,
C.A. No.1 :13-cv-01654-RA-HBP

Dear Judge Pitman:
The undersigned counsel for Plaintiff Refco Group Ltd., LLC ("RGL") and counsel for
Defendants ("Cantor") in the above-captioned action hereby respond to the Coun's April 2R, 2015
Orckr to Show Cause ("Show Cause Order").

On December 10, 2014, pursuant to Rule 5.A of the Honorable Ronnie Abrams' Individual
Rules & Practices in Civil Case, RGL submitted a letter request to file under seal certain documents.
SpcciiicHlly, RGL sought to illc under seal its Motion for Leave to File a Second Amended Complaint
("~,fotion") along with a proposed Second Amended Complaint ("SAC") and accompanying exhibits.
On February 13, 2015, pursuant to an order issued by Judge Abrams, RGL submitted to Your Honor a
letter bringing the Motion to Your Honor's attention.
On April 28, 2015, Your Honor issuct! the Show Cause Order, requiring RGL to "show cause
by May 29, 2015 why it should be pen11itted (1) to file, under seal, the movmg papers and its second
amended complaint und (2) to file publically redacted versions of those documents on the Court's ECF
systerr:." Dkt f.!- 100. This letter serves as the parties' re~ponsc.
A. !U!.dge Abrams' Previou_slv ,\p!2_rond Cm·tain Redactions.

RGL commenced an adversary proceeding against Cantor arising from an underlying
bankruptcy proceeding, In re R(fco Inc, Case No. 05-60006 (Rankr S.D.N.Y.). On December 7,
2012, the Honorable Robert Drain of the U.S. Bankruptcy Court for the Southern District ofl\kw York
authorized RGL to file its complaint under seal. Case No. 05-60006, Dkt. fl 7204. RGL iJkd ItS
complaint on December 6, 2012. Adversary Proc. No. 12-02054 (S.D.N.Y.). ThcrcaCt.ec tl:e

The Honorable Henry Pitman
May 29,2015
Page 2
bankruptcy reference was withdrawn and this matter was transferred to the U.S. District Court, and
assigned to the Honorable Ronnie Abrams. Judge Abrams t,'Tanted the patiies leave to maintain the
complaint under seal until such time as Defendants presented their arguments for maintaining the seal
protection. Case No. 13-01654, Dkt. itlO. On May 1, 2013, RGL filed a motion to unseal, in part, the
Amended Complaint and exhibits. !d. at Dkt. #13. At the direction of Judge Abrams, the parties
subsequently attempted to reach an agreement regarding the infcmnation and documents for which
sealing would be requested. The parties reached an agreement and the motion to unseal was denied as
moot. !d. at Dkt. #18. On June 13, 2013, Cantor submitted certain redactions to the Court for in
camera review, along with an in-depth analysis supporting its contention that cetiain documents and
1
information, including the 2011 License Agreement , should be withheld from public disclosure. A
true and correct copy of Cantor's June 13, 2013 Letter to the Honorable Ronnie Abrams is attached
hereto as Exhibit A. Thereafter, the Court pem1itted RGL to lile a redacted version of the Amended
Complaint on the public docket. !d. at Dkt. #25.
The redactions originally presented in the Amended Complaint have been carried forward to
the SAC and the Motion ("Original Redactions"). In addition, the SAC and the Motion also contain
new, additional redacted infcn111ation obtained from documents produced in discovery ("New
Redactions"). Attached hereto as Exhibit B is a copy of the Second Amended Complaint with tlte
Original Redactions highlighted in yellow and the New Redactions, which were revised as described
bdow, highlighted i11 gTeen
B. RGL

With~lr:nv!>

Its Rcqu(·st to File lill(f<:r Seal As To Certain Portions Of Tht·

Motion And SAC.
Following the issuance of the Court's Shmv Cause Order, the parties conferred to determine
whether RGL could withdraw its request to file any of the New Redactions under seal. As RGL
explained in its request to file under seal, it sought leave to file the New Redactions under seal hecause
those potiions of the SAC and the Motion concerned facts discovered from documents rhat Cantor had
designated as "confidential." Pursuant to the Stipulation and Order for the Production and Exchange
of Confidential Information, which the Court entered on December 8, 2014, inforrnation designated as
con±J.dential must "be tiled under seal with tbe Clerk of the Court and kept under seal until further
order of the Court." Dkt. #79, ~ 9.
Cantor has agreed to waive its claim of confidentiality as to nearly all of the materio.l
underlying the New Redactions. Accordingly, RGL withdraws its request to fik under seal the redacted
material in the SAC at pages 6, ll, 40, 44, 51, and it withdraws its request to file under seal the redacted
material in the Motion at pages 11, 15, 16, 21 and 22. In addition, RGL withdraws its request to f]le
under seal the redacted material in para§,'Iaph 170 on page 41 of the SAC. liowever, RGL maintains its
recjucst to file under seal the remaining redactions on pages 41-42 of t:~;c SAC, Exhibit E and the
remaining proposed reductcd matelial in lhe SAC, including all materi<tl underlying rhe Origit:c1l
Redactions. It makes this request solely on the hasis that Cantor has clcsigmned rhr: information <ts

: l'hc 2011 License Agreement refers to a license agree,nent entered into on Jt:nc 29, 201 !, by ~wd bt::ween Cantor Nevada
.
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Canto2· Index, and a third pnrty who is not muned nor inv"lvcJ in this litigation.

The Honorable Henry Pitman
May 29, 2015
Page 3
confidential, the reasoning for which is set forth below by Cantor.
request to seal the specified portions of the SAC, and Exhibit E.

RGL does not object to Cantor's

C. Cantor Maintains Its Claim Of Confidcntialitv As To The Term Sheet Relating To
Tht• 20 It Lit'l'nsc Ag!'ccment.
The only new allegations and/or inforlilation Cantor seeks to seal relates to a confidential term
sheet (the "Term Sheet") which preceded the 2011 Liceme Agreement. See SAC, para. 176, and Ex.
E. As descdbcd in detail above, the Court previously permitted the parties to redact the entire 2011
License Agreement, along with any allegations relating to the same. See SAC, Ex. F. Accordingly,
the Tcnn Sheet, which predates and simply "summarizes the pri~eipal business terms" of the
reciprocal license agreement should likewise be redacted and sealed.~ Similar to the 2011 License
Agreement, the Tenn Sheet identifies and describes the specific patents at issue and the matcdal terms
of the a~:,rrccment, including the proposed compensation to each party.
As described in its June 13, 2013 letter to the Court, this is precisely the type of "commercial
information" Fed. R. Civ. P. 26(c)(l)(G) was created to protect from public disclosure. There can be
little doubt that disclosing the terms of a confidential reciprocal license agreement between Cantor
Nevada and a third-party who is not named nor involved in this litigation \Vould place both parties at a
competitive disadvantage if this information was made public. Courts have routinely protected such
infom1ation from public disclosure. See y~,~sJn CQrscti:_<_l,_\', (mm~.:n F<:!trllb., Inc., 97 Civ. 5139, 1999
WL 13257, at *2 (S.D.N.Y. Jan. 13, 1999) (noting protocol to treat parties' cost information as
confidential and holding, ''Pricing and marketing inf01mation are widely held to be 'confidential
business information' that may he subject to a protective order"); see also Y:i::;l<t lnd::t, ln..: ... v_,j\aaga,
LLC, 2008 WL 8343':19, at *3 (D.N.J. Mar. 27, 2008) (order sealing confid,~ntiallicense and settlement
agreements and pmiions of the transcript discussing the same and finding the pat1y "has a legitimate
private intcre8t in maintaining the confidentiality of the terms of its agreements and ... that it will suffer
a competitive disadvantage if its license and settlement agreements are disclosed."); [.!g_t:,JIJ~(:_l\j
;\.DL_GQ111., 2007 U.S. Dist. LEXIS 9819, at *2, 2007 WL 496816 (D.N.J. Fch. 13, 2007) (finding a
kgitimate privacy interest in maintaining the confidentiality of terms to a business agreement that are
not available to the public because otherwise the parties to the agreement could lose their future
competitive negotiating positions and strategies, causing them to suffer serious injury).
As such, Cantor respectfully requests that the referenced allegations and (.;Xhibits relating to
contl.dcntial Term Sheet be sealed and prohibited from public disclosure. As to all other ::~ew
Redactions, RGL respectfully withdraws its request to file under seal. For the Court's convenience,
attached hereto a:; Exhibit B is a copy of the SAC and the Motion reflecting the revised redactions.
The Original Redactions arc highligllted i11 yellow and the New Redactions are highlighted in green.
The attached document will not be filed on the pLtblic ECF system.

2

Cantor hereby incorporates by reference the authorities cited and referenced in its June 13, 20 J:l Lctler to the Court. See
Exhibit A.

The Honorable Henry Pitman
May 29, 2015
Page 4

We are available at the Court's convenience should Your Honor haw any questions concerning
the above.
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