Federal Trade Commission et al v. Vantage Point Services, LLC et al
Filing
142
ORDER granting 125 Motion to Unseal Deposition Transcripts. Signed by Hon. H. Kenneth Schroeder, Jr on 8/10/2016. (KER)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
FEDERAL TRADE COMMISSION, et al.,
Plaintiffs,
v.
15-CV-6S(Sr)
VANTAGE POINT SERVICES, LLC., et al.,
Defendants.
DECISION AND ORDER
This case was referred to the undersigned by the Hon. William M.
Skretny, in accordance with 28 U.S.C. § 636(b)(1)(A), for all pretrial matters, and for
hearing and disposition of all non-dispositive motions or applications. Dkt. #64.
Plaintiffs commenced this action pursuant to Section 13(b) of the Federal
Trade Commission Act, 15 U.S.C. § 53(b) (“FTCA”); Section 814 of the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692l (“FDCPA”); New York Executive Law
§ 63(12); and New York General Business Law §§ 349 and 602, alleging abusive and
deceptive debt collection practices by defendants. Dkt. #1.
On January 5, 2015, Judge Skretny issued an Ex Parte Temporary
Restraining Order With Asset Freeze (“TRO”). Dkt. #11.
On March 30, 2015, Judge Skretny granted defendants’ motion for a
protective order sealing the deposition testimony of individual defendants Gregory
MacKinnon, Megan Van DeViver, Angela Burdorf, and Joseph Ciffa taken pursuant to
the expedited discovery provision of the temporary restraining order. Dkt. #42. In
reaching this conclusion, Judge Skretny relied upon the fact that the civil litigation was
commenced by both federal and state government, each of which could pursue criminal
charges arising out of the conduct at issue in this civil litigation. Dkt. #42. The protective
order was granted without prejudice to plaintiffs’ moving to unseal all or part of the
depositions testimony. Dkt. #42.
On May 15, 2015, Judge Skretny entered a Preliminary Injunction With
Asset Freeze. Dkt. #62.
On October 15, 2015, this Court granted defendants’ motion for a
protective order sealing the deposition testimony of the individual defendants taken
during the course of discovery. Dkt. #83. The Court explicitly afforded plaintiffs’ the
right to seek modification of the protective order. Dkt. #83.
On January 29, 2016, the Court So Ordered a Stipulated Protective Order
which allows, inter alia, designation of deposition transcripts as Confidential Material by
identifying the specific page(s) and line number(s) that are confidential and creates a
process where, upon objection to the designation, the designating party may move the
Court to uphold the confidential designation. Dkt. ##99 & 101.
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Currently before the Court is plaintiffs’ motion to unseal the deposition
testimony of the individual defendants so as to allow plaintiffs to publicly file excerpts of
the depositions, as well as deposition exhibits, in support of plaintiffs’ forthcoming
motion for summary judgment. Dkt. #125. Plaintiffs argue that, as supporting
documents to plaintiffs’ summary judgment motion, the documents are entitled to public
access. Dkt. #125. Absent relief from the protective order, plaintiffs will be required to
file the motion for summary judgment under seal, thereby inhibiting public scrutiny of
the evidence in this case. Dkt. #125. Plaintiffs note that, pursuant to the terms of a
stipulated protective order (Dkt. #99), defendants could mark specific passages of
deposition testimony as confidential and ask the Court to uphold that designation. Dkt.
#125-1, p.6.
Defendants argue that plaintiffs’ admission that a parallel civil
investigation involving the individual and corporate defendants was being conducted by
the New York State Attorney General and the Consumer Financial Protection Bureau
(“CFPB”), combined with plaintiffs’ refusal to rule out referral of this matter for criminal
prosecution, warrants continued sealing of the deposition testimony of the individual
defendants. Dkt. #136, ¶¶ 4-5. Defendants also argue that they relied upon the
continuation of the sealing order in deciding to provide testimony in this action. Dkt.
#136, ¶¶ 32-35. Finally, defendants argue that redaction pursuant to the stipulated
confidentiality order is inadequate to protect them from the potential consequences of
disclosure to the CFPB. Dkt. #136, ¶¶ 37-38.
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Plaintiffs reply that defendants could not have reasonably relied upon
protective orders entered without prejudice to plaintiffs’ moving to unseal the deposition
transcripts. Dkt. #141, p.2. Plaintiffs reiterate that they are only seeking to unseal
those portions of the deposition transcripts which are relevant to their upcoming motion
for summary judgment. Dkt. #141, p.9.
“Where there has been reasonable reliance by a party or deponent, a
District Court should not modify a protective order granted under Rule 26(c) ‘absent a
showing of improvidence in the grant of [the] order or some extraordinary circumstance
or compelling need.” S.E.C. v. THESTREET.COM, 273 F.3d 222, 229 (2d Cir. 2001),
quoting Martindell v. Int’l Tel. & Tel. Corp., 594 F.2d 291, 296 (2d Cir. 1979). Any other
rule would “unfairly disturb the legitimate expectations of litigants,” and discourage
parties from providing deposition testimony or negotiating settlements in civil actions.
Id. at 229-30; See Martindell, 594 F.2d at 295 (“Unless a valid Rule 26(c) protective
order is to be fully and fairly enforceable, witnesses relying upon such orders will be
inhibited from giving essential testimony in civil litigation, thus undermining a procedural
system that has been successfully developed over the years for disposition of civil
differences.”).
In contrast to the “general and strong presumption against access to
documents sealed under protective order when there was reasonable reliance upon
such an order,” the Court of Appeals has recognized “that a subspecies of sealed
documents in civil cases – so called ‘judicial documents’ – deserve a presumption in
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favor of access.” Id. at 231, citing United States v. Amodeo, 44 F.3d 141, 145 (2d Cir.
1995) (“Amodeo I”). Thus, although recognizing the value of protective orders “to
prevent discovery from being used as a club by threatening disclosure of matters which
will never be used at trial,” the Court of Appeals has also emphasized that “different
considerations apply” at the adjudication stage. Joy v. North, 692 F.2d 880, 893 (2d
Cir. 1982). Those considerations include “the need for federal courts . . . to have a
measure of accountability and for the public to have confidence in the administration of
justice.” Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006). As a
result, the Court of Appeals has declared that “documents submitted to a court for its
consideration in a summary judgment motion are – as a matter of law – judicial
documents to which a strong presumption of access attaches, under both the common
law and the First Amendment.” Id. at 121. Such documents “should not remain under
seal absent the most compelling reasons,” Id., quoting Joy, 692 F.2d at 893.
In the instant case, the individual defendants cannot claim reliance upon
the protective order because it was entered without prejudice to plaintiffs’ moving to
unseal all or part of the depositions testimony (Dkt. #42), and with an explicit
acknowledgment of plaintiffs’ right to seek modification of the protective order. Dkt.
#83. See In re Ethylene Propylene Diene Monomer (EPDM) Antitrust Litigation, 255
F.R.D. 308, 320 (D. Ct. 2009) (“Where the court explicitly instructed the parties that
they could revisit the issue of confidentiality at any point during the proceedings, there
was no reasonable reliance on the protective order remaining permanent.”), citing Allen
v. City of New York, 420 F. Supp.2d 295, 301 (S.D.N.Y. 2006).
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At the summary judgment stage of these proceedings, the public is
entitled to assess plaintiffs’ evidence of abusive and deceptive debt collection practices
by defendants; defendants’ evidence in defense of these allegations; and the Court’s
analysis of the legal issues raised in light of the evidence presented. Transparency is
particularly important in this case because the plaintiffs are government agencies
entrusted to protect the public. The Court trusts that plaintiffs will limit the evidence
presented in support and/or defense of upcoming dispositive motions to that which is
germane to the legal issues presented in those motions. See Lugosch, 435 F.3d at 119
(“In order to be designated a judicial document, ‘the item filed must be relevant to the
performance of the judicial function and useful in the judicial process.”), quoting United
States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995) (“Amodeo II”). To the extent that
defendants disagree with the relevance of deposition testimony to be proffered by
plaintiffs, they may avail themselves of the designation of confidential material
provisions set forth in the stipulated protective order.
SO ORDERED.
DATED:
Buffalo, New York
August 10, 2016
s/ H. Kenneth Schroeder, Jr.
H. KENNETH SCHROEDER, JR.
United States Magistrate Judge
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