Megatel Homes LLC et al v. Moayedi et al
Filing
356
MEMORANDUM OPINION AND ORDER: The court denies as moot FC-IV Financial LLC's 222 Motion to Proceed Without Designating Local Counsel and Brief in Support, denies without prejudice the 210 , 231 , 274 Motions to Seal, and denies without pr ejudice the 228 , 230 , 233 , 235 , 237 Motions to Strike. If the parties wish to refile a motion to seal confidential information, they must identify with specificity all information they wish to have sealed. This means that the parties must i dentify by page and line number any information they want placed under seal. Further, as it relates to the Motions to Strike, the parties may refile these motions in tandem with their summary judgment motions if they wish to do so. (Ordered by Judge Sam A. Lindsay on 1/28/2025) (agc)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MEGATEL HOMES, LLC; MEGATEL
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HOMES II, LLC; and MEGATEL HOMES §
III, LLC,
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Plaintiffs,
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v.
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MEHRDAD MOAYEDI; UNITED
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DEVELOPMENT FUNDING, L.P.;
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UNITED DEVELOPMENT FUNDING II, §
L.P.; UNITED DEVELOPMENT
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FUNDING III, L.P.; UNITED
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DEVELOPMENT FUNDING IV;
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UNITED DEVELOPMENT FUNDING
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INCOME FUND V; UMT SERVICES
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INC.; UMT HOLDINGS, L.P.; HOLLIS
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GREENLAW; THEODORE F. ETTER,
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BENJAMIN WISSINK; and BRANDON
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JESTER,
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Defendants.
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Civil Action No. 3:20-CV-0688-L-BT
MEMORANDUM OPINION AND ORDER
Before the court are Defendants’ Motion for Leave to File Documents Under Seal and
Brief in Support (“First Motion to Seal”) (Doc. 210), filed on March 8, 2024; Nonparties First
Continental Investment Co., Ltd and FC-IV Financial LLC’s Motion to Proceed Without
Designating Local Counsel and Brief in Support (Doc. 222), filed on March 12, 2024; Plaintiffs’
Motion to Limit the Testimony of Michelle Tran (“First Motion to Strike”) (Doc. 228), filed on
March 15, 2024; Plaintiffs’ Motion To Limit The Expert Opinions Of Scott Hakala (“Second
Motion to Strike”) (Doc. 230), filed on March 15, 2024; Plaintiffs’ Motion for Leave to File
Documents Under Seal and Brief in Support (“Second Motion to Seal”) (Doc. 231), filed on
March 15, 2024; Motion to Exclude Opinions, Testimony, and Expert Reports of Jim Goodrich
Memorandum Opinion and Order – Page 1
(“Third Motion to Strike”) (Doc. 233), filed on March 15, 2024; UDF Defendants’ Motion to
Strike Certain Opinions of Robert Manz (“Fourth Motion to Strike”) (Doc. 235), filed on March
15, 2024; Motion to Exclude Opinions, Testimony, and Expert Reports of Robert Manz (“Fifth
Motion to Strike”) (Doc. 237), filed on March 15, 2024; and Defendant Mehrdad Moayedi’s
Motion for Leave to File Documents Under Seal in Support of His Response to Plaintiff’s
Motion to Limit the Expert Opinions of Scott Hakala (“Third Motion to Seal”) (Doc. 274), filed
on April 5, 2024.
For the reasons herein stated, the court denies as moot? FC-IV Financial LLC’s Motion
to Proceed Without Designating Local Counsel and Brief in Support, denies without prejudice
the Motions to Seal, and denies without prejudice the Motions to Strike.
I.
Analysis
A. Motions to Strike
On March 14, 2024, the court continued “the dispositive motion deadline until thirty days
after it disposes of all relevant pending motions” and vacated the trial setting. See Order 6-7
(Doc. No. 227). The court informed the parties that “it takes this position because it wants all
discovery to be completed so that no party is put in a position in which a request is made
pursuant to Federal Rule of Civil Procedure 56(d), and its ruling on a motion for summary
judgment is further delayed.” Id. at 7.
In the interim, the numerous discovery motions referred to the United States Magistrate
Judge have been resolved. See Omnibus Discovery Order (Doc. 327). As such, the court will
issue a scheduling order setting briefing deadlines for all dispositive motions and setting pretrial
deadlines. The dispositive motions deadline will control with respect to summary judgment
? This motion relates to the Motion to Quash, which has already been decided by Magistrate Judge Rutherford.
Memorandum Opinion and Order – Page 2
motions and motions challenging the opinions, testimony, and reports of experts, as in this case,
the two are inextricably intertwined.
To allow the court to consider the summary judgment motions and challenges to experts
concomitantly, minimize unnecessary work, and promote judicial efficiency, the court denies
without prejudice the Motions to Strike. The parties may refile these motions in conjunction
with their summary judgment motions.
B. Motions to Seal
In the First Motion, Defendants United Development Funding, L.P., United
Development Funding II, L.P., United Development Funding III, L.P., United Development
Funding IV, United Development Funding Income Fund V, UMT Services, Inc., and UMT
Holdings, L.P., Hollis Greenlaw, Theodore F. Etter, Benjamin Wissink, and Brandon Jester,
(collectively, “UDF” or “UDF Defendants”) and Mehrdad Moayedi, (“Mr. Moayedi”) request
that the court grant them leave to file under seal Confidential Exhibits A-5 and A-7. They state
that Exhibits A-5 and A-7 are “Plaintiffs’ expert report and supplement expert report that rely
upon and necessarily discloses Plaintiffs’ financial information.” Doc. 210 at 3. UDF contends
that the information it seeks to seal “discloses financial data and other business information that
Plaintiffs have designated as confidential” and may give Plaintiffs’ competitors “an unfair
competitive advantage by having access to such information.” Id.
In the Second Motion, Plaintiffs Megatel Homes, LLC, Megatel Homes II, LLC, and
Megatel Homes III, LLC (collectively, “Megatel Plaintiffs” or “Megatel”) request that the court
grant them leave to file under seal Appendix in Support of Plaintiffs’ Motion and Brief to Limit
the Testimony of Scott Hakala. Plaintiffs contend that the information it seeks to seal “includes
confidential methodology/analysis and confidential financial and business information, including
Memorandum Opinion and Order – Page 3
confidential expert information” and that the information is not public information. Doc. 231 at
3. Further, they contend that “the parties and expert’s competitors would gain an unfair
competitive advantage by having access to such information.” Id.
In the Third Motion, Mr. Moayedi requests that the court grant him leave to file under
seal Confidential Exhibit 1-A. He contends that Exhibit 1-A “discloses financial data and other
business information that Megatel designated as confidential,” which is non-public information.
Doc. 274 at 3. Further, he contends that “Megatel’s competitors may gain an unfair competitive
advantage by having access to such information.” Id.
In making the determination of which records to seal, the court must apply a balancing
test. Binh Hoa Le v. Exeter Fin. Corp., 990 F.3d 410, 419 (5th Cir. 2021) (citations omitted).
Under this strict balancing test, the court must undertake a case-by-case, document-by-document,
line-by-line analysis. Id. (quotation marks and citations omitted). When the court seals a
document, the sealing must be explained at “a level of detail that will allow” the appellate court
to review the court’s decision. Id. (internal quotation marks and citations omitted). The court is
unable to conduct this type of analysis because of the broad requests made by the parties in each
of the Motions to Seal. While all three of the Motions to Seal are filed by different parties, the
language contained within them are mirror images of each other. The parties do not state with
specificity the content that they request be sealed.
Merely requesting that a document be sealed is not specific enough for the court to make
a determination. Further, the documents the parties request be sealed are so voluminous that it
would be laborious for the court to perform its duty of applying the balancing test. In the First
Motion, UDF requests that the court seal two six-page documents; in the Second Motion,
Megatel requests that the court seal a 452-page document; and in the Third Motion, Mr. Moayedi
Memorandum Opinion and Order – Page 4
requests that the court to seal a 321-page document. The requests do not comply with the
authority cited herein and in its scheduling order. As a result, the court cannot perform its duty
and, therefore, is not able to grant the Motions to Seal.
II.
Conclusion
Accordingly, for the reasons stated, the court denies as moot FC-IV Financial LLC’s
Motion to Proceed Without Designating Local Counsel and Brief in Support (Doc. 222), denies
without prejudice the Motions to Seal (Docs. 210, 231, and 274), and denies without prejudice
the Motions to Strike (Docs. 228, 230, 233, 235, and 237). If the parties wish to refile a motion
to seal confidential information, they must identify with specificity all information they wish to
have sealed. This means that the parties must identify by page and line number any information
they want placed under seal. Further, as it relates to the Motions to Strike, the parties may refile
these motions in tandem with their summary judgment motions if they wish to do so.
The court puts the parties on notice that any motion requesting that a document or
a portion of a document be filed under seal must comply with the authority herein cited as
well as any other applicable authority. Further, the attorneys are directed to explain
specifically how and why their motion complies with the authority set forth in this
Memorandum Opinion and Order. Failure to follow this directive will result in the denial
of the motion. This is the last chance that the parties will be given to comply with the
relevant law regarding the filing of sealed documents.
It is so ordered this 28th day of January, 2025.
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Sam A. Lindsay
United States District Judge
Memorandum Opinion and Order – Page 5
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