COMMONWEALTH OF PENNSYLVANIA v. THINK FINANCE, INC. et al

Filing 170

MEMORANDUM SIGNED BY HONORABLE J. CURTIS JOYNER ON 7/26/17. 7/28/17 ENTERED AND COPIES E-MAILED. (va, ) Modified on 7/28/2017 (va, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
COMMONWEALTH OF PENNSYLVANIA, by
Attorney General JOSH SHAPIRO,

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Plaintiff,
v.
THINK FINANCE, INC., et al.,
Defendants.

CIVIL ACTION
NO. 14-cv-7139

MEMORANDUM
Joyner, J.

July 26, 2017

Before the Court are Plaintiff’s Motion to Unseal the Second
Amended Complaint (Doc. No. 162) and Defendants’ Letter
Application for Protective Order (Doc. No. 168), together with
the Parties’ respective oppositions (Doc. No. 166, 169).

For the

following reasons, the Plaintiff’s Motion is granted and the
Defendants’ Motion is denied.
I.

Factual and Procedural Background
This action concerns high-interest rate, short-term loans

made to Pennsylvania citizens over the Internet.1

The plaintiff,

the Office of the Attorney General (“OAG”), alleges that
Defendants violated Pennsylvania and federal laws prohibiting

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The allegations in this case are set out in further detail in
this Court’s earlier opinion denying in part and granting in part the
Defendants’ Motions to Dismiss. See Pennsylvania v. Think Finance,
Inc., No. 14-CV-7139, 2016 WL 183289, at *1-2 (E.D. Pa. Jan. 14,
2016). We repeat here only what is relevant to the present Motions.

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usurious and otherwise illegal lending practices.
In June 2016, this Court entered a Confidentiality and
Protective Order (“Protective Order,” Doc. No. 136) allowing
persons producing discovery materials to designate certain
materials as “Confidential.”

Almost exactly a year later and

with leave of Court, the OAG filed a Second Amended Complaint
(“SAC,” Doc. No. 162).

Because portions of the SAC drew on

material produced in discovery and designated “Confidential,” the
OAG filed the SAC under seal.

Believing that none of the

documents relied upon are genuinely entitled to confidentiality
under the Protective Order, however, the OAG then quickly moved
to unseal the SAC.

(Doc. No. 162).

Defendants Think Finance,

Inc., TC Loan Service, LLC, Tailwind Marketing, LLC, TC Decision
Sciences, LLC, and Financial U, LLC (collectively, “Think
Finance”) timely filed a response opposing that Motion.
No. 166).

(Doc.

In addition, Think Finance has separately applied to

the Court for a second Protective Order that would declare that
23 specific documents relied on by the OAG in the SAC be treated
as “Confidential” for all purposes of this litigation.
168).

(Doc. No.

Because the relief sought by the parties raise identical

issues of fact and law, we will analyze both requests together.
II.

Applicable Law
“It is well-settled that there exists, in both criminal and

civil cases, a common law public right of access to judicial

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proceedings and records.”
(3d Cir. 2001).

In re Cendant Corp., 260 F.3d 183, 192

It is also well-settled that “a party wishing to

obtain an order of protection over discovery material must
demonstrate that ‘good cause’ exists for the order of
protection.”

Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786

(3d Cir. 1994).

“Good cause is established on a showing that

disclosure will work a clearly defined and serious injury to the
party seeking closure.
specificity.”

The injury must be shown with

Id. (citation omitted).

“Broad allegations of

harm, unsubstantiated by specific examples or articulated
reasoning, do not support a good cause showing.”
and internal quotation marks omitted).

Id. (citation

“The burden of justifying

the confidentiality of each and every document sought to be
covered by a protective order remains on the party seeking the
order.”

Id. at 786-87.

The Third Circuit has instructed that courts should consider
seven non-exhaustive factors in determining whether to grant a
protective order, including (1) whether disclosure will violate
any privacy interests, (2) whether the information is being
sought for a legitimate purpose or for an improper purpose, (3)
whether disclosure of the information will cause a party
embarrassment, (4) whether confidentiality is being sought over
information important to public health and safety, (5) whether
the sharing of information among litigants will promote fairness

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and efficiency, (6) whether a party benefitting from the order of
confidentiality is a public entity or official, and (7) whether
the case involves issues important to the public.
Skiles, 420 F.3d 301, 306 (3d Cir. 2005).

Shingara v.

Although not

dispositive, the public’s interest in disclosure is “particularly
legitimate and important where, as in this case, at least one of
the parties to the action is a public entity or official.”

See

Pansy, 23 F.3d at 786.
III.

Analysis
The OAG and Think Finance agree that, for purposes of

analysis, the 23 disputed documents divide neatly into two
categories.

Nineteen of the disputed documents are business

agreements among Think Finance and third parties that Think
Finance argues contain detailed operations information that could
impact its competitiveness.

As for the other four documents

(three of which are PowerPoint presentations), Think Finance
maintains that they are appropriately designated as
“Confidential” because they contain non-public financial data and
business development information.

In support of their argument

for confidential treatment of these documents, Think Finance has
submitted a sworn declaration from its former chief risk officer,
Ranganath Kothamasu, stating that public dissemination of the
information contained in these documents onto the open market
would prejudice Think Finance.

(Doc. No. 168).

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Upon careful

review of the disputed documents, however, the Court finds that
Think Finance has failed to carry its burden of showing that good
cause exists for the issuance of a protective order and that all
of these documents, as well as the SAC, are subject to public
inspection.
We consider first the 19 business agreements.

As Think

Finance notes, these agreements contain detailed information on
the structure, economics, and specific costs of Think Finance’s
business relationships, along with particular prices for services
performed.

Should their contents become public, the argument

goes, current or prospective competitors in the consumer lending
sector would gain valuable insight into Think Finance’s
competitive strategies, financial obligations, and economics.
Those substantial privacy interests are said to outweigh any
public interest in inspecting these documents, which Think
Finance dismisses as “minimal.”

(Doc. No. 168).

Even putting aside the public interest in disclosure—which,
in this civil enforcement action brought in the public’s name, is
of course substantial—Think Finance has lodged only “[b]road
allegations of harm, unsubstantiated by specific examples or
articulated reasoning.”

Cipollone v. Liggett Grp., Inc., 785

F.2d 1108, 1121 (3d Cir. 1986).

The business agreements in

question are all dated between 2007 and 2011, and Think Finance
has offered no specific reasoning as to how or why the disclosure

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of (to pick one example) a price term in a seven-year old
agreement, see TF-PA-003901 (Doc. No. 168), would harm its
competitive position today.

See Leucadia, Inc. v. Applied

Extrusion Techs., Inc., 998 F.2d 157, 167 (3d Cir. 1993)
(“continued sealing must be based on current evidence to show how
public dissemination of the pertinent materials now would cause
the competitive harm they claim”) (emphasis in original)
(alterations and internal quotation marks omitted).

Think

Finance has also failed to identify at any level of specificity
any competitors or potential market entrants that could or would
use the information in these agreements to Think Finance’s
detriment.
Turning to the seven relevant factors identified by the
Third Circuit in Pansy, 23 F.3d at 787-91, and its progeny, see
Shingara, 420 F.3d at 306; Glenmede Trust Co. v. Thompson, 56
F.3d 476 (3d Cir. 1995), the Court finds that none of the factors
weigh in favor of granting a protective order.

For the reasons

discussed above, Think Finance has not shown that disclosure of
these documents will violate any privacy interests, the first
Pansy factor.

As to the second and third factors, the OAG’s

interest in transparency regarding its enforcement action is
clearly a legitimate purpose, and there is no suggestion that
disclosure of these documents will cause any party embarrassment.
The fourth and fifth factors (whether confidentiality is being

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sought over information important to public health and safety and
whether the sharing of information among litigants will promote
fairness and efficiency) are “either neutral or weigh against the
protective order.”

Shingara, 420 F.3d at 308.

The sixth and

seventh factors also tilt against confidentiality because this is
not a case between private litigants.

See Pansy, 23 F.3d at 788.

Instead, this civil enforcement action brought by a state
attorney general axiomatically “involves issues important to the
public,” the seventh Pansy factor.
We turn finally to the remaining four documents, which are
said to include non-public financial data and business
development information the disclosure of which would be harmful
to Think Finance.

The first of these documents (TF-PA-013270) is

a copy of a PowerPoint presentation titled “Great Plains
Lending,” dated December 2010.

The second (TF-PA-013418) is a

one-page undated document titled “Great Plains Lending: Flow of
Funds for Ongoing Loan Originations and Sales,” which appears to
be either talking points or a handout associated with the
aforementioned PowerPoint presentation.

The third and fourth

documents are also copies of PowerPoint presentations (TF-PA098567; TF-PA-228133), one titled “Emergency Cash Lending - A New
Source of Tribal Revenue,” and dated February 2011, and the other
titled “Rise Debt Deal” and dated January 2014.

(Doc. No. 168).

Think Finance has again failed to demonstrate how any of

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these documents, three of which appear to be at least six years
old and the newest of which is still more than three years old,
remain competitively sensitive today.

Instead it suggests that

unspecified competitors could replicate Think Finance’s flowchart
of potential operations or use their market analysis and
potential strategies as a “roadmap” to compete more effectively.
(Doc. No. 168).

As with the business agreements, however, Think

Finance’s conclusory arguments as to competitive harm are not
enough to justify confidential treatment in light of the
considerable countervailing public interest in access to court
filings in this proceeding.
IV.

Conclusion
For the foregoing reasons, Plaintiff’s Motion to Unseal the

SAC is granted and Defendants’ Motion for a Protective Order is
denied.

An appropriate Order follows.

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