Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated
Filing
285
ORDER granting 278 Letter Motion to Seal. The Court will reserve judgment on Defendant's motion pending decision on summary judgment. The filings at docket entries 268, 270, 272, 279, 281, and 283 will remain under seal until that time. SO ORDERED. (Signed by Judge Valerie E. Caproni on 1/28/2025) (tg)
Lara Samet Buchwald
+1 212 450 4351
lara.buchwald@davispolk.com
davispolk.com
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
MEMO ENDORSED
USDC SDNY DRAFT
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 1/28/25
January 27, 2025
Honorable Valerie E. Caproni
United States District Judge
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007
Re:
Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Case No. 1:19-cv-07998 (VEC)
Dear Judge Caproni:
Pursuant to Rule 5.B of the Court’s Individual Practices in Civil Cases and the November 26, 2024 Order
approving the parties’ proposed sealing procedures (ECF No. 265), Defendant Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“Merrill” or “Defendant”) moves for leave to file under seal or in redacted
form various materials submitted by Plaintiff in opposition to Defendant’s motion for summary judgment.1
This letter motion follows a meet and confer process, where defense counsel advised Plaintiff that it
wishes to redact or seal certain documents and information in Plaintiff’s opposition papers that Merrill and
its affiliate, non-party Bank of America, N.A. (“BANA”), have designated as confidential or highly
confidential under the governing protective order (referred to herein as “the Relevant Material”).
The positions of the parties and non-party BANA are set forth below.
Position of Merrill and Non-Party BANA
Merrill and non-party BANA seek to seal or redact certain confidential and sensitive business information
referenced in Plaintiff’s opposition papers. The information that Merrill and BANA seek to seal or redact
here falls into three categories. Two categories are consistent with the parties’ prior motions regarding
redaction and sealing in this case, all of which the Court granted in full (ECF Nos. 96, 120, 135, 167, 170,
186, 210, 233, 247, 256, 274). The third category, which includes one document, is a new category of
immaterial, but nevertheless, commercially sensitive training material. A significant majority of the
information that Merrill and BANA seek to seal or redact here is the same as the information—namely,
core pricing issues and competitive information—that the Court permitted the parties to seal or redact in
the parties’ prior motions for summary judgment (ECF No. 210).
The first category of information to be sealed and redacted reflects the methodology for setting interest
rates, including the specific factors considered when determining rates and references to proposed rate
changes. It also includes key inputs into BANA’s proprietary and confidential forecasting methodology,
which is used for financial modeling and forecasting for the broader enterprise. Non-party BANA views
this information as highly sensitive and the same methodologies remain in use today. BANA does not
share this information with the public, it does not share this information with competitors, and if
competitors were to acquire this information, they could make pricing decisions that could cause
competitive harm to BANA. Current and former BANA employees are subject to robust policies and
agreements that do not permit them to disclose these types of proprietary and sensitive business
information. The Court has regularly permitted narrowly tailored sealing of or redactions to this
information. See supra at 1.
1 Pursuant to the Court’s Order, Plaintiff served her opposition papers on Defendant’s counsel on January 10, 2025, by
email. Plaintiff is e-filing those papers herewith.
DRAFT
Honorable Valerie E. Caproni
The second category of information to be sealed and redacted reflects financial information relating to the
total amount of cash or accounts in Merrill investment accounts, including account balances, the total
amount of cash swept, the number of specific accounts maintained, and the number of statement-linked
accounts. Merrill views this category of information as highly sensitive; while aggregate-level information
may be publicly reported from time to time, disaggregated information (for example, by product type or by
month) is sensitive and used by the Merrill Edge channel and/or product teams in running the business,
evaluating growth rates, and analyzing product types. Merrill does not share this information with the
public, it does not share this information with competitors, and if competitors were to acquire this
information, they could cause competitive harm to Merrill. Current and former Merrill employees are
subject to robust policies and agreements that do not permit them to disclose these types of proprietary
and sensitive business information. The Court also has regularly permitted narrowly tailored sealing of or
redactions to this information. See supra at 1.
The final category of information to be sealed and redacted—contained in only one exhibit—reflects
Merrill’s commercially sensitive internal training materials. Merrill’s training processes are not pertinent to
the present litigation, or any decision on the pending motion. Likewise, Merrill does not share this
information with the public or with competitors. Current and former BANA employees are subject to
robust policies and agreements that do not permit them to disclose these types of proprietary and
sensitive business materials.
This approach is consistent not only with this Court’s earlier sealing orders, see supra at 1, it is also
consistent with the Second Circuit’s analysis in Lugosch v. Pyramid Co. of Onondaga, which recognized
that the right of public access to judicial documents is not absolute and “the court must balance
competing considerations against it.” 435 F.3d 110, 119–20 (2d Cir. 2006). “Courts in this
District . . . routinely seal documents to prevent the disclosure of confidential business information,” such
as precisely the competitively sensitive communications in the three narrowly tailored categories
contemplated here. News Corp. v. CB Neptune Holdings, LLC, No. 21-cv-04610 (VSB), 2021 WL
3409663, at *2 (S.D.N.Y. Aug. 4, 2021) (identifying various categories for which courts have sealed or
redacted sensitive business information, including “sales and revenue” information, “analytical testing,”
“qualitative market research,” “confidential proprietary information, pricing, rates . . . [,] other non-public
commercial, financial, research or technical information” as well as “rates or planning information” and the
“research and development for new products” (alterations in original)); see also Kidd v. Thomas Reuters
Corp., 299 F. Supp. 3d 400, 408 (S.D.N.Y. 2017) (identifying documents which comprise “proprietary,
confidential and commercially sensitive internal training materials . . . may remain under seal”). For
instance, documents may be sealed where “closure is essential to preserve higher values and is narrowly
tailored to serve that interest.” Id.; see also Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 599 (1978)
(“[T]he decision as to access is one best left to the sound discretion of the trial court, a discretion to be
exercised in light of the relevant facts and circumstances of the particular case.”). Several well
“[e]stablished factors” and interests—including “privacy interests” and “business secrecy”— can “outweigh
the presumption of public access” and justify sealing, especially with respect to the types of information at
hand. Hanks v. Voya Ret. Ins. & Annuity Co., No. 16-cv-6399 (PKC), 2020 WL 5813448, at *1 (S.D.N.Y.
Sept. 30, 2020).
Non-party BANA’s and Merrill’s respective competitive interests in protecting these categories of highly
sensitive, proprietary business information represent “countervailing factors outweighing the presumption
of public access.” Valassis Commc’ns, Inc. v. News Corp., No. 17-CV-7378 (PKC), 2020 WL 2190708, at
*4 (S.D.N.Y. May 5, 2020) (granting a motion to “redact information related to the financial metrics” of a
company’s active businesses on the basis that need to protect the business sensitivity of such information
outweighed the public’s right to access). Strategic discussions about when and how much to adjust
interest rates on active products are the types of communications which, if revealed, “may provide
valuable insights into a company’s current business practices that a competitor would seek to exploit.”
Vuitton Malletier S.A. v. Sunny Merch. Corp., 97 F. Supp. 3d 485, 511 (S.D.N.Y. 2015); see also In re
Am. Realty Cap. Props., Inc. Litig., Nos. 15 Misc. 40 (AKH), 15-CV-307 (AKH), 15-CV-6043 (AKH), 2019
WL 11863704, at *1 (S.D.N.Y. Mar. 25, 2019) (granting a motion to seal proprietary methodologies on the
basis that disclosure “would allow . . . competitors to copy those methodologies, thereby putting [the
January 27, 2025
2
DRAFT
Honorable Valerie E. Caproni
company] at a competitive disadvantage”). Here, non-party BANA seeks to shield competitively sensitive,
nonpublic, and proprietary information concerning its rate setting methodology and proprietary and
confidential forecasting methodology, including from third-party industry participants with which BANA
might compete. Current and former BANA and Merrill employees are also subject to strict policies and
agreements that do not permit the disclosure of proprietary and sensitive business information.
Plaintiff takes no position on Merrill’s and BANA’s request to seal confidential information but observes
she is “skeptical of the confidentiality interests of some of Merrill’s proposals”; Plaintiff’s skepticism is not
compelling. As highlighted above, a significant majority of the information that Merrill and BANA seek to
seal or redact here is the same as the information the Court already permitted the parties to seal or redact
on October 3, 2023, in connection with Merrill’s prior motion for summary judgment. Consistent with what
the Court has previously permitted, the sensitive business information and internal strategizing that Merrill
and BANA seek to redact or seal here—which are narrowly tailored and limited in nature—reflects
important privacy interests that overcome the presumption of public access. See supra at 2; see also,
e.g., Red Hawk, LLC v. Colorforms Brand LLC, No. 20-cv-09032 (JHR) (SLC), 2024 WL 551543, at *2
(S.D.N.Y. Feb. 9, 2024) (permitting “limited redactions that would seal specific pricing and sales figures,”
where redactions were “sufficiently narrowly tailored to protect competitively sensitive information without
depriving the public of meaningful access”); Vuitton Malletier S.A., 97 F. Supp. 3d at 511 (permitting
redactions that were “generally limited to specific business information and strategies, which, if revealed,
‘may provide valuable insights into a company’s current business practices that a competitor would seek
to exploit.’” (quoting Encyclopedia Brown Prods., Ltd. v. Home Box Office, Inc., 26 F. Supp. 2d 606, 614
(S.D.N.Y. 1998))). Merrill’s and BANA’s confidential information was competitively sensitive in 2018, and
it remains competitively sensitive now. In fact, given the heightened level of attention around cash sweep
litigation across the industry now, it is important to ensure that the internal processes and competitively
sensitive information of Merrill and BANA is protected from disclosure to competitors. Neither does the
age of some of Merrill’s and BANA’s confidential information warrant denial of the present request, see
Encyclopedia Brown Prods., Ltd., 26 F. Supp. 2d at 614 (“Confidential business information dating back
even a decade or more may provide valuable insights into a company's current business practices that a
competitor would seek to exploit.”).
Plaintiff’s Position
As Plaintiff noted in connection with Merrill's last redaction request, the presumption in favor of public
access is particularly strong in the summary judgment context. See ECF 274 at 3 (citing cases). Plaintiff
is skeptical of the confidentiality interests of some of Merrill's proposals. For example, in paragraph 24(c)
and 40(j) of the Rule 56.1 statement, Merrill seeks to redact a discussion from December 2018
of a potential rationale behind its decision from over six years ago to limit certain sweep options. The
rationale would likely be obvious to any competitor.
As with the prior joint letter, Plaintiff respectfully asks the Court to reserve judgment on Merrill’s
application until determination of the underlying summary judgment motion. Doing so will ensure that the
Court’s rulings on any acceptable redactions in the summary judgment decision are consistent with
redactions in the underlying briefing. To the extent the Court seeks to rule now, Plaintiff takes no position
on Merrill's request.
*
Relevant Material
Plaintiff’s Memorandum in
Opposition to Merrill’s Motion for
Summary Judgment
January 27, 2025
*
*
Merrill’s Proposal and its Basis
Portions of this memorandum of law should be redacted
because it contains references to specific factors,
competitive analysis, methodologies, and models in
connection with rate-setting or financial analysis; and the
total number of online-linked and statement-linked
accounts.
3
DRAFT
Honorable Valerie E. Caproni
Relevant Material
Plaintiff’s Response to Merrill’s
Local Rule 56.1 Statement
Plaintiff Ex. 2 – Deposition
transcript (excerpts) of Marshall Hill
Plaintiff Ex. 5 – BANA_00032471
and BANA_00032472
Plaintiff Ex. 6 – BANA_00042898
Plaintiff Ex. 7 – Deposition
transcript (excerpts) of Aileen
Gleason
Plaintiff Ex. 13 – Deposition
transcript (excerpts) of Sheldon Luo
Plaintiff Ex. 14 – Deposition
transcript of Professor Andrea
Eisfeldt, Ph.D., dated June 16,
2022
Plaintiff Ex. 15 – MLPFS_00033900
and MLPFS_00033902
Plaintiff Ex. 17 – MLPFS_00011774
Plaintiff Ex. 19 – BANA_00002748
Plaintiff Ex. 20 – BANA_00024318
and BANA_00024319
January 27, 2025
Merrill’s Proposal and its Basis
Portions of this statement should be redacted because it
contains references to specific factors, competitive
analysis, methodologies, and models in connection with
rate-setting or financial analysis; and contains financial
information related to the total amount of cash swept,
account balances, or accounts maintained.
Portions of this excerpted transcript should be redacted
because it contains references to methodology used in new
account asset tier assignment.
This document should be sealed because it reflects
disaggregated financial information relating to total
amounts of cash swept and competitive analysis.
Portions of this document should be redacted because it
contains references to methodology considered in
connection with financial analysis.
Portions of this excerpted transcript should be redacted
because it contains references to specific factors,
competitive analysis, methodologies, and models in
connection with rate-setting or financial analysis; and
specific references to proposed rate changes, including to
specific factors considered when determining such
changes.
Portions of this excerpted transcript should be redacted
because it contains references to specific factors,
competitive analysis, methodologies, and models in
connection with rate-setting or financial analysis; and
specific references to proposed rate changes, including to
specific factors considered when determining such
changes.
Portions of this excerpted transcript should be redacted
because it contains references to specific factors and
competitive analysis in connection with rate-setting or
financial analysis.
This document should be sealed because it contains
financial information related to the total amount of cash
swept or account balances and contains references to
competitive analysis in connection with rate setting or
financial analysis.
This document should be sealed because it contains
references to specific factors and competitive analysis in
connection with rate-setting or financial analysis.
This document should be sealed because it contains
references to specific factors, competitive analysis,
methodologies, and models in connection with rate-setting
or financial analysis; and specific references to proposed
rate changes, including to specific factors considered when
determining such changes.
Portions of this document should be redacted because it
contains references to specific factors, competitive
analysis, and methodologies used in part for internal
financial forecasting and specific factors including
competitor benchmarks considered in connection with ratesetting.
4
DRAFT
Honorable Valerie E. Caproni
Relevant Material
Plaintiff Ex. 21 – BANA_00012987
and BANA_00012988
Plaintiff Ex. 22 – BANA_00008850
Plaintiff Ex. 23 – BANA_00008818
Plaintiff Ex. 24 – Deposition
transcript (excerpts) of Debra
Greenberg
Plaintiff Ex. 25 – MLPFS_00011759
and MLPFS_00011762
Plaintiff Ex. 28 – BANA _00043908
Plaintiff Ex. 29 – BANA_00005505
and BANA_00005508
Plaintiff Ex. 30 – BANA_00010614
and BANA_00010615
Plaintiff Ex. 31 – BANA_00041581
and BANA_00041583
Plaintiff Ex. 32 – BANA_00024318
and BANA_00024319
January 27, 2025
Merrill’s Proposal and its Basis
Portions of this document should be redacted because it
contains references to specific factors, competitive
analysis, and methodologies used in part for internal
financial forecasting and specific factors including
competitor benchmarks considered when determining
whether to change rates.
This document should be sealed because it contains
financial information related to the total amount of cash
swept or account balances and competitive analysis in
connection with rate-setting or financial analysis.
This document should be sealed because it contains
references to specific factors, competitive analysis,
methodologies, and models in connection with rate-setting
or financial analysis; and specific references to proposed
rate changes, including to specific factors considered when
determining such changes.
Portions of this excerpted transcript should be redacted
because it contains references to specific factors and
competitive analysis in connection with rate-setting or
financial analysis; and number of statement-linked
accounts.
This document should be sealed because it contains
references to specific factors and competitive analysis in
connection with rate-setting or financial analysis.
This document should be sealed because it contains
financial information related to the total amount of cash
swept or account balances and competitive analysis in
connection with rate-setting or financial analysis.
This document should be sealed because it contains
references to specific factors, competitive analysis,
methodologies, and models in connection with rate-setting
or financial analysis; specific references to proposed rate
changes, including to specific factors considered when
determining such changes; and reflects financial
information relating to the total amount of cash in Merrill
accounts.
This document should be sealed because it contains
financial information related to the total amount of cash
swept or account balances; forecasted rate changes; and
specific factors including competitor benchmarks
considered when determining whether to change rates.
This document should be sealed because it contains
references to methodology used in part for internal financial
forecasting and specific factors including competitor
benchmarks considered when determining whether to
change rates.
This document should be sealed because it contains
references to methodology used in part for internal financial
forecasting and specific factors including competitor
benchmarks considered when determining whether to
change rates.
5
DRAFT
Honorable Valerie E. Caproni
Relevant Material
Plaintiff Ex. 34 – BANA_00004965
and BANA_00004966
Plaintiff Ex. 36 – Merrill’s
Responses and Objections to
Plaintiff’s First Set of Interrogatories
Plaintiff Ex. 38 – MLPFS_00017728
Plaintiff Ex. 41 – BANA_00003830
and BANA_00003833
Merrill’s Proposal and its Basis
This document should be sealed because it contains
references to specific factors and competitive analysis in
connection with rate-setting or financial analysis; and
reflects financial information relating to the total amount of
cash in Merrill accounts, including account balances
Portions of this response should be redacted because it
contains financial information related to the total amount of
cash swept or account balances.
This document should be sealed because it contains
commercially sensitive and proprietary internal training
materials.
This document should be sealed because it contains
financial information related to the total amount of cash
swept or account balances; specific factors considered
when determining whether to change rates; references to
proposed rate changes; references to methodology used in
part for internal financial forecasting; and the financial
implications of specific rate decisions.
The parties thank the Court for its attention to this matter.
Respectfully submitted,
cc:
WOLF POPPER LLP
DAVIS POLK & WARDWELL LLP
/s/ Adam J. Blander
Robert C. Finkel
Adam J. Blander
Antoinette Adesanya
845 Third Avenue
New York, New York 10022
Tel.: 212.759.4600
/s/ Lara Samet Buchwald
Lara Samet Buchwald
Cristina M. Rincon
Chui-Lai Cheung
450 Lexington Avenue
New York, New York 10017
Tel.: 212.450.4000
Attorneys for Plaintiff and the
Putative Class
Attorneys for Defendant Merrill Lynch,
Pierce, Fenner & Smith Incorporated and
Non-party Bank of America, N.A.
All counsel of record (via ECF)
The Court will reserve judgment on Defendant's motion pending
decision on summary judgment. The filings at docket entries 268,
270, 272, 279, 281, and 283 will remain under seal until that time.
SO ORDERED.
1/28/25
HON. VALERIE CAPRONI
UNITED STATES DISTRICT JUDGE
January 27, 2025
6
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