PDV Sweeny, Inc. et al v. ConocoPhillips Company et al

Filing 22

ORDER: For the foregoing reasons, Respondents' request is granted with respect to Exhibits 3, 4, and 5 of the Pizzurro Declaration, and with respect to the above-described portions of Exhibit 1 to the Pizzurro Declaration. The request is denie d with respect to the remaining documents. The Court reiterates that it may revisit this decision following resolution of the petitions or upon request. The Clerk is directed to strike Exhibits 1, 3, and 4, and 5 attached to the Pizzurro Declarati on, ECF No. 4. Petitioners are directed to ECF file a redacted version of Exhibit 1 to the Pizzurro Declaration, in accordance with this order. The Court will seal unredacted versions of these documents. Respondents are directed to ECF file their opposition brief and supporting documents, including Exhibits A through G to the Prevatt Declaration. (Signed by Judge Alison J. Nathan on 10/6/2014) (lmb)

USDC SDNY
DOCU\'iENT

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

PDV Sweeny, Inc., et al.,
Plaintiffs,
14-cv-5183 (AJN)

-vORDER
ConocoPhillips Company, et al.,
Defendant.

ALISON J. NATHAN, District Judge:
Before the Court is the request ("Redaction Request") submitted by Respondents
ConocoPhillips Company ("ConocoPhillips") and Sweeny Coker Investor Sub, LLC, to seal
Exhibits 1-5 attached to the Pizzurro Declaration, which was submitted with the Petitioner PDV
Sweeney and PDV Texas' Petition to Vacate the Partial Award, and Exhibits A-G to the Prevatt
Declaration, which was submitted with Respondent's Cross-Petition to Confirm, Recognize, and
Enforce the Arbitration Award. For the reasons that follow, the request is provisionally granted
with respect to Exhibits 3, 4, and 5 to the Pizzurro Declaration and portions of Exhibit 1 to the
Pizzurro Declaration, and it is denied with respect to the remaining documents.

I.

Background

This action arises from a 1999 joint venture related to the operation of an oil refinery,
undertaken by ConocoPhillips, on the one hand, and Petroleos de Venezuela, S.A. ("PDVSA")
and certain of its subsidiaries, including Petitioners PDV Sweeny and PDV Texas, on the other.

See Dkt. No. 2 if 15. Among the many interlocking contracts comprising the joint venture was a
Transfer Agreement, which contained a provision the parties refer to as the "Call Option." Id.

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if

21. The underlying dispute centers upon ConocoPhillips' exercise of that Call Option to acquire
PDVSA's entire interest in the joint venture. See id.

iii! 21-22.

Petitioners initiated an arbitration of their dispute under the ICC rules, seeking, among
other things, a declaration that Respondents' exercise of the Call Option was invalid and
ineffective. See id.

if 35.

Following briefing and a hearing, the arbitrators issued an April 23,

2014, Partial Award dismissing this claim in its entirety. Id.

if 43.

The arbitrators reserved the

issues of costs and interest for the Final Award, which was ultimately issued on August 25, 2014.
See Prevatt Deel. Ex. G (Final Award).

On July 11, 2014, Petitioners filed a petition to vacate the portion of the Partial Award
dismissing their claim that the exercise of the Call Option was invalid and ineffective. See Dkt.
No. 2 if 43. On August 29, 2014, the Respondents opposed the Petition and filed a Cross-Petition
to Confirm, Recognize, and Enforce the Partial and Final Awards. Along with their CrossPetition, Respondents submitted the instant Redaction Request.

II.

Legal Standard

In the Second Circuit, courts apply a three-step framework to determine whether to deny
the public access to court-filed documents. First, the Court must "decide whether a document is
a judicial document protected by the common law right of access," i.e., "whether it is 'relevant to
the performance of the judicial function and useful in the judicial process."' United States v. Erie
Cnty., -- F.3d --, No. 13-3653-cv, 2014 WL 4056326, at *3 (2d Cir. Aug. 18, 2014) (quoting
Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006)). If a document is a

judicial document, the presumption of access applies, and the Court proceeds to the second step
of the analysis and "determine[ s] the weight of the presumption of access," which "is governed
by the role of the material at issue in the exercise of Article III judicial power and the resultant

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value of such information to those monitoring the federal courts." Id. (quotation marks omitted).
Third, "after determining the weight of the presumption of access, the court must balance
competing considerations against it," which "include but are not limited to the danger of
impairing law enforcement or judicial efficiency and the privacy interests of those resisting
disclosure." Lugosch, 435 F.3d at 120 (internal quotation marks omitted). "Only when
competing interests outweigh the presumption may access be denied." Erie Cnty., 2014 WL
4056326, at *3.
"In addition to the common law right of access, it is well established that the public and
the press have 'a qualified First Amendment right to attend judicial proceedings and to access
certain judicial documents."' Lugosch, 435 F.3d at 120 (quoting Hartford Courant Co. v.

Pellegrino, 380 F.3d 83, 91 (2d Cir. 2004)). Where this First Amendment right of access
applies, sealing is appropriate only if "on the record findings are made demonstrating that
closure is essential to preserve higher values and is narrowly tailored to serve that interest." Id.
(quoting In re New York Times Co., 828 F.2d 110, 116 (2d Cir. 1987)).

III.

Discussion

Respondents request that the following documents be sealed: Exhibits 1-5 to the Pizzuro
Declaration, comprising the Partial Award and various documents submitted to the arbitrators,
including the Transfer Agreement; and Exhibits A-G to the Prevatt Declaration, comprising
excerpts from the pleadings to the arbitration and the Final Award.
With respect to the first step of the inquiry, the Court finds that these documents, which
were submitted in connected with petitions to confirm or vacate an arbitration award, constitute
'"judicial documents that directly affect the Court's adjudication' and are therefore subject to a
presumption of public access." First State Ins. Co. v. Nat'! Cas. Co., No. 13-cv-704 (AJN), 2013

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WL 8675930, at *l (S.D.N.Y. Feb. 19, 2013) (quoting Aioi Nissay Dowa Ins. Co. v. Prosight
Specialty Mgmt. Co., Inc., No. 12-cv-3274 (JPO), 2012 WL 3583176, at *5 (S.D.N.Y. Aug. 21,

2012)).
Proceeding to the second step of the inquiry, the Court determines that the weight of this
presumption appears to be particularly significant with respect to the Paiiial Award, Final
Award, the arbitration pleadings, and the Transfer Agreement containing the disputed Call
Option provision, i.e. Exhibits 1 and 2 to the Pizzurro Declaration, and Exhibits A through G to
the Prevatt Declaration. See Dkt. No. 2 ~ 55 (arguing that the Court should "conduct its own
legal analysis of the Call Option provision"). Those documents lie at the heaii of this litigation,
and, as a result, are likely to be valuable "to those monitoring the federal courts." Lugosch, 435
F.3d at 119 ("[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 Article III judicial power and the resultant value of such
information to those monitoring the federal courts.") (alteration in original). At this early stage,
however, it appears that the remaining documents sought to be redacted, i.e. Exhibits 3, 4, and 5
to the Pizzurro Declaration, play a more tangential role in the dispute, and the Court therefore
accords them a weaker presumption of access. See id.
Against the presumption of access, Respondents point to their ongoing commercial
relationship for the supply and purchase of crude oil, which is governed by Exhibits 3 and 4 to
the Pizzurro Declaration and may be directly affected by sensitive commercial information
contained in Exhibit 5 of the Pizzurro Declaration. See Redaction Request 3-4. Respondents
present no specific arguments against public access to the remaining documents sought to be
sealed-i. e., the Partial Award, the Final Award, and the pleadings submitted in the arbitrationbut rather point to the confidentiality provision of their agreement to arbitration, which provided

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that the parties should treat "the entire Arbitration proceedings including all information and
documentation connected therewith ... as confidential." See Redaction Request 3, 1.
On balance, the Court provisionally finds that sealing is appropriate with respect to
Exhibits 3, 4, and 5 attached to the Pizzuro Declaration. In particular, the Court concludes that
sealing is appropriate with respect to those documents on the basis of their containing sensitive
commercial information affecting the parties' ongoing relationship. The documents are,
furthermore, of limited relevance to the dispute before the Court. For the same reasons, the
Court finds that some redaction is appropriate with respect to portions of the Partial Award,
Pizzuro Deel. Ex. 1, that are not at issue in this proceeding, i.e., paragraphs 139-56, 337-411, and
433-94. The Court notes that it may revisit this decision following resolution of the petitions or
upon request.
However, the Court denies Respondents' request with respect to the remaining portions
of the Partial Award, the Transfer Agreement, the Final Award, and the pleadings submitted in
relation to arbitration. See Pizzurro Deel. Exs. 1, 2; Prevatt Deel. Exs. A-G. Respondents make
no specific arguments in support of sealing those documents and instead rely upon the
confidentiality provision of their arbitration agreement. See Redaction Request 3. But "[t]he
mere existence of a confidentiality agreement ... does not demonstrate that sealing is
necessary." Church Ins. Co. v. Ace Property & Cas. Ins. Co., No. 10-cv-698 (RJS), 2010 WL
3958791, at *3 (S.D.N.Y. Sept. 23, 2010) (quoting Mut. Marine Office, Inc. v. Transfercom Ltd.,
No. 08-cv-10367 (PGG), 2009 WL 1025965, at *5 (S.D.N.Y. Apr. 15, 2009)); see also Lugosch,
435 F.3d at 125-26 ("[T]he mere existence of a confidentiality order says nothing about whether
complete reliance on the order to avoid disclosure [is] reasonable."). Respondents having thus

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made no showing sufficient to overcome the strong presumption in favor of access that attaches
to these documents, their request is denied.

IV.

Conclusion

For the foregoing reasons, Respondents' request is granted with respect to Exhibits 3, 4,
and 5 of the Pizzurro Declaration, and with respect to the above-described portions of Exhibit 1
to the Pizzurro Declaration. The request is denied with respect to the remaining documents. The
Court reiterates that it may revisit this decision following resolution of the petitions or upon
request.
The Clerk is directed to strike Exhibits 1, 3, and 4, and 5 attached to the Pizzurro
Declaration, ECF No. 4. Petitioners are directed to ECF file a redacted version of Exhibit 1 to
the Pizzurro Declaration, in accordance with this order. The Court will seal unredacted versions
of these documents.
Respondents are directed to ECF file their opposition brief and supporting documents,
including Exhibits A through G to the Prevatt Declaration.
SO ORDERED.
Dated:

October~

, 2014
New York, New York

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