By: Lauren Schantz
ALCOF III NUBT, L.P. v. Chirico, 2024 NCBC 52 (N.C. Super. Ct. Aug. 21, 2024) (Conrad, J.)
Key Terms: failure to state a claim; fraudulent omission; duty to disclose; officer; affirmative acts; silence
Plaintiffs, investors in Avaya, Inc., brought suit against three of Avaya’s officers, alleging that the officers induced them to invest in Avaya by making misleading representations about the current and future financial condition of the company. Plaintiffs asserted a claim for fraudulent omission against Defendant Stephen D. Spears, Avaya’s former chief revenue officer, and Spears moved to dismiss for failure to state a claim.
Spears argued that he had no duty to speak and the Court agreed. The Court rejected each of Plaintiffs’ arguments, determining that (i) Spears was not liable for the acts of the company or other officers simply because he was an officer; (ii) Plaintiffs failed to allege that Spears had engaged in any specific affirmative acts to conceal information; and (iii) Spears’s alleged silence was insufficient to create a duty to disclose.
For these reasons, the Court granted Spears’s motion and dismissed Plaintiffs’ claim against him with prejudice.
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ALCOF IIII NUBT, L.P. v. Chirico; Brigade Cavalry Fund Ltd. v. Chirico, 2024 NCBC 53 (N.C. Super. Ct. Aug. 21, 2024) (Conrad, J.)
Key Terms: venue; forum-selection clause; exclusive forum; agency relationship; equitable enforcement
Plaintiffs, investors in Avaya, Inc., brought suit against Avaya’s officers, alleging that the officers induced them to invest in Avaya by making misleading representations about the current and future financial condition of the company. The Brigade Plaintiffs asserted claims against Defendant James M. Chirico, Avaya’s former president and chief executive officer, and Kieran J. McGrath, Avaya’s former executive vice president and chief financial officer, for negligent misrepresentation, fraudulent inducement, and related securities violations. The Canyon Plaintiffs intervened in Brigade and asserted similar claims against Chirico and McGrath. The ALCOF Plaintiffs initiated a separate lawsuit and asserted claims for negligent misrepresentation, fraudulent inducement, and fraudulent omission against Chirico and McGrath. Chirico and McGrath moved to dismiss for failure to state a claim and improper venue in both lawsuits.
Chirico and McGrath argued that, although they were not parties to Plaintiffs’ contracts with Avaya, they could nevertheless enforce the exclusive New York forum-selection clauses in the contracts as agents of Avaya. Plaintiffs, however, argued that the language of the contracts foreclosed Chirico and McGrath’s equitable rights to enforce the forum-selection clauses. The Court rejected Plaintiffs’ argument, concluding that, as non-signatory agents rather than third-party beneficiaries, Chirico and McGrath may enforce the forum-selection clauses in their principal’s (Avaya) agreement, especially because all of their alleged conduct occurred in their capacities as Avaya’s officers and agents. A contrary rule would upset the expectations of agents and signatories, undermine the purpose of forum selection clauses, and make it too easy for a plaintiff to evade forum-selection clauses by suing the agents rather than the corporation.
As a result, the Court granted Chirico and McGrath’s motions and dismissed Plaintiffs’ claims against them without prejudice to their right to refile in an appropriate venue.
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Vernon v. Trs. of Gaston Coll.; Archie v. Trs. of Gaston Coll.; Eppes v. Trs. of Gaston Coll., 2024 NCBC 54 (N.C. Super. Ct. Aug. 21, 2024) (Robinson, J.)
Key Terms: sovereign immunity; data breach; personal jurisdiction; waiver; unjust enrichment; unfair and deceptive trade practices; negligence; declaratory judgment; tort; State Tort Claims Act; breach of contract
Plaintiffs are former students of Gaston College, a public community college. Plaintiffs each initiated separate purported class actions in the wake of a 2023 data breach of Gaston College’s computer systems that allegedly compromised their private information. Plaintiffs each asserted claims for breach of contract, breach of implied contract, and unjust enrichment; Archie and Vernon each asserted claims for negligence and negligence per se; and Eppes asserted additional claims for declaratory judgment and unfair and deceptive trade practices. Gaston College moved to dismiss all three actions in their entirety on grounds of sovereign immunity.
The Court first determined that, as a public education institution, Gaston College was entitled to sovereign immunity from suit unless it waived such immunity. The Court then considered whether Gaston College had waived its sovereign immunity or otherwise consented to suit.
Unjust Enrichment. The Court dismissed Plaintiffs’ claims for unjust enrichment with prejudice, concluding that the State can only waive its sovereign immunity when it expressly enters into a contract.
Unfair and Deceptive Trade Practices. The Court dismissed Eppes’s UDTP claim with prejudice because the UDTPA only applies to claims against a “person, firm, or corporation” and state institutions are neither a person, firm, or corporation.
Negligence, Negligence per se, and Declaratory Judgment. The Court concluded that, although the State Tort Claims Act partially waives the State’s sovereign immunity for negligent conduct, jurisdiction over all tort claims against the State are subject to the exclusive jurisdiction of the North Carolina Industrial Commission. The Court therefore dismissed these claims without prejudice to the Plaintiffs’ right to bring those claims in the Industrial Commission.
Breach of Contract. The Court concluded that Plaintiffs sufficiently alleged claims for breach of express contract but failed to allege one or more of the elements to establish a claim for breach of implied in fact contract, and dismissed the latter claims with prejudice.
Thus, the Court granted Gaston College’s motion to dismiss as to all but Plaintiffs’ breach of express contract claims.
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Airtron, Inc. v. Heinrich, 2024 NCBC 55 (N.C. Super. Ct. Aug. 22, 2024) (Conrad, J.)
Key Terms: final judgment; pro se litigants; misappropriation of trade secrets; unfair and deceptive trade practices; actual damages; nominal damages; punitive damages; treble damages; attorneys’ fees; injunction
As summarized here, the Court previously sanctioned pro se Defendant Bradley Heinrich for disobeying court orders and failing to comply with discovery requests by striking his answer and entering default judgment against him as to liability on Plaintiff’s claims for misappropriation of trade secrets and unfair or deceptive trade practices.
After an evidentiary hearing, the Court entered final judgment against Heinrich. The Court concluded that Airtron was not entitled to actual damages on its trade secret claim because Airtron failed to show by a preponderance of the evidence that it lost profits as a result of Heinrich’s misappropriation; the Court did, however, award Airtron one dollar in nominal damages. The Court further concluded that Airtron was not entitled to punitive damages because it had not shown that willful and malicious misappropriation occurred, but granted Airtron’s request for treble damages under N.C.G.S. § 75-16 (for a total of three dollars). The Court denied Airtron’s request for attorneys’ fees, concluding that Heinrich’s conduct was not willful nor did he make an “unwarranted refusal” to resolve the matter since he had, in fact, previously agreed to a settlement but was just unable to obtain the necessary funds. The Court enjoined Heinrich from any further use of Airtron’s trade secrets.
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BIOMILQ, Inc. v. Guiliano, 2024 NCBC Order 54 (N.C. Super. Ct. Aug. 15, 2024) (Robinson, J.)
Key Terms: gatekeeper order; pro se litigants; false representations; abusive language; show cause; Rule 11 sanctions; voluminous filings; inherent authority; rule violations; violation of court orders; unauthorized practice of law
The Court’s indulgence of pro se litigants has its limits. Defendant and Counterclaim Plaintiff Shayne Guiliano finally exceeded them. Shortly after this action was initiated in March 2022, Guiliano’s counsel of record withdrew and he proceeded pro se. Guiliano retained new counsel in November 2022, but that counsel moved to withdraw a year later. Plaintiffs’ counsel opposed the motion, citing several email communications sent by Guiliano to Plaintiffs’ counsel while Guiliano was represented by counsel that contained abusive language and false accusations. The Court granted the motion to withdraw but set forth clear expectations for Guiliano’s future communications with counsel and the Court.
Guiliano’s disrespectful behavior persisted, however, even after the entry of a show cause order. Guiliano continued to use abusive and combative rhetoric in communications with counsel and the Court, impugning the integrity of the Court. He violated several Business Court Rules, filing unpermitted “responses” to Court orders and other filings, engaging in voluminous and duplicative filing, and using various tactics to circumvent word limits. Guiliano also persisted in attempting to represent the interests of Defendant and Counterclaim Plaintiff 108Labs, LLC, even when the company was represented by counsel.
The Court, through its inherent authority, determined that sanctions in the form of a gatekeeper order were warranted. Prior to filing any document in this or a related action, Guiliano must obtain the certification of an attorney licensed to practice in this State. Violations will result in the striking of the filings and may result in the dismissal of Guiliano’s claims and striking his defenses. Pursuant to Rule 11, the Court permitted the other parties to seek attorneys’ fees and costs associated with Guiliano’s misconduct.
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The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.
Posted 08/27/24
By: Ashley Oldfield
United Therapeutics Corp. v. Liquidia Techs., Inc., 2024 NCBC 47 (N.C. Super. Ct. July 31, 2024) (Earp, J.)
Key Terms: summary judgment; trade secret misappropriation; reasonable measures; three-year restriction
Plaintiff, a biotech company, brought suit against Roscigno (a former executive) and Liquidia (a competing biotech company) for misappropriation of trade secrets and unfair and deceptive trade practices arising from Roscigno’s alleged taking of trade secrets and confidential information relating to the development of certain medical treatments. Roscigno moved for summary judgment on the claim against him for trade secret misappropriation.
Roscigno first argued that since the confidentiality provisions of his employment agreement expired three years post-employment (which had long since passed), Plaintiff had failed to take reasonable measures to protect the secrecy of its information, an essential requirement for the existence of a trade secret. The Court rejected this argument noting a number of other measures Plaintiff had taken to maintain the secrecy of its information, including restrictions in Plaintiff’s employee handbook and technology policy. Roscigno next argued that no misappropriation occurred because, in his employment agreement, Plaintiff impliedly consented to his use of trade secret information by only restricting his use of Confidential Information for three years. The Court found the employment agreement ambiguous on this point and the intent of the parties unclear; thus, it was up to the jury to determine. The Court also concluded that even if the employment agreement permitted Roscigno to disclose Plaintiff’s trade secrets three years after termination of his employment, Plaintiff had presented sufficient evidence that Roscigno’s taking of the information in the first place was misappropriation.
For these reasons, the Court denied Roscigno’s motion for summary judgment.
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B&D Software Holdings, LLC v. InfoBelt, Inc., 2024 NCBC 48 (N.C. Super. Ct. Aug. 1, 2024) (Davis, J.)
Key Terms: summary judgment; fraud; Rule 9(b); North Carolina Securities Act; negligent misrepresentation; breach of fiduciary duty; constructive fraud; conversion
In 2019, Plaintiff invested $3.6 million in InfoBelt, a company which develops and licenses software and provides associated consulting services relating to data management and retention at financial institutions. After InfoBelt’s sole customer ceased using its consulting services in 2021, InfoBelt’s revenue suffered a major decline. Plaintiff subsequently sued InfoBelt and its founder, Mannava, asserting various claims relating to Defendants’ alleged failure to disclose key information to Plaintiff prior to its investment in InfoBelt. Both sides moved for summary judgment on all claims.
Fraud and Fraudulent Inducement. In its summary judgment briefing, Plaintiff asserted two theories in support of its fraud-based claims. The Court concluded, however, that since the first theory had not been alleged in the complaint or disclosed during discovery, Plaintiff was barred from asserting it now in its fraud-based claims or in connection with any other claim. With regard to the second theory—that InfoBelt had provided it with inflated revenue figures and projections based on fraudulent billings practices—the Court found that the evidence did not support this theory, and, further, that Plaintiff did not show a causal link between InfoBelt’s billing practices and any injury to Plaintiff. Accordingly, the Court granted summary judgment in favor of Defendants and dismissed these claims.
North Carolina Securities Act. The Court concluded that, for the same reasons stated above, the fraudulent billing theory could not support a claim under either N.C.G.S. § 78A-56 (a)(1) or (a)(2).
Negligent Misrepresentation. In support of this claim, Plaintiff contended that, despite Mannava knowing about InfoBelt’s fraudulent billing practices, he told Plaintiff that there were “no issues with [InfoBelt’s] revenue and we’re very optimistic about the revenue continuing to grow.” The Court concluded that this claim failed because 1) the Court had already determined that the fraudulent billing theory failed; 2) the “no issues with revenue” statement was too vague to be actionable; and 3) the “optimistic about future revenue” statement was a mere expression of opinion regarding future conditions and was therefore not actionable either.
Breach of Fiduciary Duty and Constructive Fraud. The Court granted summary judgment on these claims as the only arguments advanced by Plaintiff in its briefing were based on the two theories the Court had already rejected. The Court concluded that Plaintiff abandoned any other bases for the claims by failing to argue them at the summary judgment stage.
Conversion. Plaintiff argued that Defendants converted its investment by using the money to pay Mannava’s salary after InfoBelt was no longer profitable. The Court rejected this argument and granted summary judgment in favor of InfoBelt. There was no caselaw allowing a conversion claim to go forward on similar facts and, in any event, the Court had determined that no fraud occurred in connection with Plaintiff’s investment in InfoBelt.
Thus, the Court granted Defendants’ motion for summary judgment in its entirety and dismissed all of Plaintiff’s claims with prejudice.
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BluSky Restoration Contractors, LLC v. Brown, 2024 NCBC 49 (N.C. Super. Ct. Aug. 7, 2024) (Robinson, J.)
Key Terms: unjust enrichment; Wage and Hour Act; breach of contract, restrictive covenants; nominal damages; Delaware law; misappropriation of trade secrets
Plaintiff BluSky Restoration performs restoration services in response to natural disasters and other catastrophes. BluSky sued its former employee, Steven Brown, contending that Brown left the company for a competitor in violation of various restrictive covenants, took trade secret information, and solicited BluSky employees. Brown asserted counterclaims for unjust enrichment and violation of the N.C. Wage and Hour Act. Both sides moved for partial summary judgment.
Brown’s Unjust Enrichment Claim. Brown alleged that BluSky was unjustly enriched by its continued operations using Brown as their licensed “qualifying agent” in Florida and Louisiana after his resignation. However, the Court concluded that no benefit was conferred by Brown upon BluSky because the evidence showed that Florida and Louisiana had been informed that Brown and his licenses were no longer affiliated with BluSky. Thus, the Court granted summary judgment in BluSky’s favor and dismissed the unjust enrichment claim.
BluSky’s Breach of Contract Claims. Pursuant to the various agreements allegedly breached, these claims were governed by Delaware law. BluSky’s first breach of contract claim was based on a restrictive covenant in Brown’s Employment Agreement. Brown argued that the claim failed because BluSky was not actually damaged from any alleged breach, as required by Delaware law. The Court rejected this argument, concluding that BluSky had provided at least a minimally reasonable estimate of damages, and, in any event, may be entitled to nominal damages. Summary judgment was therefore denied as to this claim. BluSky’s other breach of contract claims were based on confidentiality, non-competition, and non-solicitation provisions in the LP Agreement and the LLC Agreement. The Court concluded that these provisions were overbroad and unenforceable under Delaware law because 1) they were not reasonable in geographic scope and temporal duration and 2) they did not advance BluSky’s legitimate economic interests. These claims were dismissed.
BluSky’s Misappropriation of Trade Secrets Claim. This claim was based, in part, on BluSky’s “CAT Vendor List,” which contained detailed information regarding the best vendors for various services used in the restoration business. The Court concluded that this collection had potential commercial value from not being generally known and therefore, a genuine issue of material fact existed for jury determination. Similarly, BluSky’s efforts to protect its trade secrets through, among other things, an employee handbook, password protection, and confidentiality agreements for high-ranking employees, were sufficient to create a jury question regarding reasonableness. Thus, the Court denied summary judgment on this claim.
Brown’s Wage and Hour Act Claim. Brown asserted this claim based on BluSky’s failure to pay him his annual bonus. However, because the Employment Agreement notified Brown of the conditions of forfeiture of his bonus and Brown did not provide evidence of any other basis for a bonus, the Court concluded that Brown was not entitled to a bonus because he was not employed by BluSky on the day bonuses were paid as required by the Employment Agreement. Accordingly, the Court granted summary judgment in BluSky’s favor and dismissed the WHA claim.
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BluSky Restoration Contractors, LLC v. Sasser Cos., 2024 NCBC 50 (N.C. Super. Ct. Aug. 9, 2024) (Robinson, J.)
Key Terms: tortious interference; civil conspiracy; injunctive relief; judgment on the pleadings
In this action, the BluSky plaintiffs asserted claims against Sasser Companies, a local competitor in the restoration industry, for tortious interference with contract and civil conspiracy arising from Sasser’s hiring of Steven Brown, a BluSky employee. Sasser moved for judgment on the pleadings.
Tortious Interference with Contract Claim. BluSky alleged that Sasser induced Brown to breach various restrictive covenants and his contractually imposed fiduciary duties. The Court denied judgment on the pleadings, finding that the pleadings created at least a question as to whether Sasser’s alleged actions, including offering Brown an artificially inflated compensation package, making an effort to conceal Brown’s plan to work for Sasser, and asking Brown to gather information regarding BluSky employees, were related to its legitimate interest in competition or were done to harm Plaintiffs.
Tortious Interference with Prospective Economic Advantage Claim. BluSky alleged that Sasser interfered with a proposed part-time employment agreement between Brown and BluSky which would have provided BluSky time to find license holders to replace Brown. The Court found that BluSky had sufficiently identified the contract at issue and alleged that Sasser’s conduct was the but-for cause of Brown declining to enter into the agreement. Accordingly, the Court denied judgment on the pleadings.
Civil Conspiracy Claims. BluSky asserted claims for conspiracy to breach fiduciary duty, conspiracy to commit fraudulent concealment, and conspiracy to commit fraud. However, because BluSky did not plead standalone claims for the underlying torts, the Court granted the motion and dismissed the conspiracy claims without prejudice.
Injunctive Relief. BluSky requested a permanent injunction enjoining Sasser from any future misappropriation of BluSky’s trade secrets and from encouraging Brown to violate the restrictive covenants at issue. The Court dismissed this claim because injunctive relief is not an independent cause of action.
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Wheeler v. Geist, 2024 NCBC 51 (N.C. Super. Ct. Aug. 12, 2024) (Conrad, J.)
Key Terms: Rule 12(b)(6); constructive fraud; fiduciary duty; standing; pizza franchise
Plaintiff Wheeler and Defendant Geist previously co-owned several pizza franchises. After selling his interests, Wheeler sued Geist, his four companies (which provided management services to the restaurants and owned the underlying real property), and a related trust, asserting a single claim for constructive fraud based on allegations that Geist had cheated Wheeler by siphoning money from the restaurants to Geist’s other companies by charging excessive management fees and rent. Defendants moved to dismiss the complaint.
The Court first determined that Wheeler failed to allege the existence of either a de jure or de facto fiduciary relationship. Although the complaint referred to Wheeler and Geist as “partners,” the complaint did not allege that a legal partnership existed. Further, there were no allegations of a shareholder relationship; Wheeler alleged only that he had an “ownership interest.” Finally, Wheeler’s allegations that he was unfamiliar with restaurant management and relied on Geist to handle day-to-day operations did not rise to the level of “control and domination” necessary for a de facto fiduciary relationship.
Second, the Court concluded that Wheeler also lacked standing because the basis for his claim was that Defendants’ actions harmed the restaurants and, in turn, harmed him by decreasing his distributions. Because the complaint did not allege either a special duty or a separate injury, Wheeler lacked standing. Accordingly, the Court granted the motion but dismissed the case without prejudice for lack of standing.
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Green v. EmergeOrtho, P.A., 2024 NCBC Order 51 (N.C. Super. Ct. Aug. 2, 2024) (Bledsoe, C.J.)
Key Terms: class action settlement; attorneys’ fees; common fund; percentage-of-the-fund; lodestar method; Rule 1.5 of the Rules of Professional Conduct; reasonable rate
This order addressed Plaintiff’s motion for an award of attorneys’ fees and expenses following the settlement of a class action suit, as well as a service award for the Plaintiff/class representative. Plaintiff’s counsel sought fees of $183,315.00 (one-third of the settlement fund) under the percentage-of-the-fund method. The Court elected to consider the fees according to the percentage-of-the-fund method and the lodestar method, in combination with the relevant factors in Rule 1.5 of the Rules of Professional Conduct.
The Court first concluded that the time expended was reasonable and that the suit involved complex and novel questions involving data security and privacy that required high legal skill to satisfactorily resolve.
Next, the Court considered whether the rates charged were comparable to those charged in North Carolina for similar services. Although the rates charged here were higher than those approved by the Court in other cases, the Court recognized that hourly rates have risen substantially since many of those cases were decided. Accordingly, the Court approved rates of $575 to $725 for the partners and $325 to $500 for the associates. Applying these rates, the total fee award for professional services under the lodestar method was $206,094.40.
The Court also noted that the settlement achieved was very favorable to the purported class and that the experience, reputation, and ability of the attorneys weighed in favor of the requested fee. The remaining Rule 1.5 factors weighed neither for nor against the award.
Since the amount requested was substantially lower than the fees under the lodestar method, the Court concluded, in its discretion, that the requested award of one-third of the common fund was reasonable and should be approved. The Court also approved the request for payment of expenses and a $5,000 service award to the class representative.
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Williams v. Monarch, 2024 NCBC Order 50 (N.C. Super. Ct. Aug. 2, 2024) (Bledsoe, C.J.)
Key Terms: class action settlement; attorneys’ fees; common fund; percentage-of-the-fund; lodestar method; Rule 1.5 of the Rules of Professional Conduct; reasonable rate
Like in the above-summarized Green v. EmergeOrtho case, this order addressed Plaintiff’s motion for an award of attorneys’ fees and expenses following the settlement of a class action suit, as well as a service award for the Plaintiff/class representative. Plaintiff’s counsel sought fees of $366,630.00 (one-third of the settlement fund) under the percentage-of-the-fund method.
The Court’s analysis was substantially similar to that in Green, except that since the amount requested here was substantially higher than the fees calculated under the lodestar method, the Court concluded, in its discretion, that an award of one-fourth of the common fund, i.e., $275,000.00, was reasonable and should be approved.
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Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLC, 2024 NCBC Order 52 (N.C. Super. Ct. July 31, 2024) (Davis, J.)
Key Terms: BCR 10.9; motion to allocate discovery costs; electronically stored information; digital imaging; Rule 26(b)(1b)
In this action, Plaintiff sued a group of its Former Employees and their new employer, contending that Defendants unlawfully used Plaintiff’s confidential information and trade secrets to solicit Plaintiff’s employees and clients. Certain discovery procedures were agreed to or ordered early in the case, including the digital imaging of certain electronic devices of the Former Employees. A number of disputes regarding discovery arose, which ultimately resulted in Plaintiffs’ incurring additional expenses relating to discovery of Defendants’ electronically-stored information. Plaintiffs subsequently moved to allocate ESI-related discovery costs between the parties.
The Court began by noting that Rule 26(b)(1b) provides the Court with both authority and discretion to allocate costs incurred in connection with ESI discovery and that it was further guided by notions of fairness and equity based on the facts and circumstances of the case. Plaintiffs proposed two ways in which the Court could allocate costs, both of which included fees incurred by counsel in connection with the discovery. The Court concluded that there was no clear statutory basis for awarding attorneys’ fees and so it eliminated those amounts from consideration. The Court also excluded the fees of Plaintiff’s’ digital forensics expert to the extent those fees related to the initial imaging of the Former Employees’ devices because Plaintiffs had previously agreed to bear those costs. However, the Court concluded that considering the circumstances of the case, including the Court’s previous conclusion that Former Employees had engaged in spoliation of evidence, the remaining ESI-related costs should be allocated on a 50/50 basis between Plaintiffs and Defendants.
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Cadwalader, Wickersham & Taft LLP v. Certain Underwriters at Lloyd’s of London, Beazley Syndicates 623 and 263, 2024 NCBC Order 53 (N.C. Super. Ct. Aug. 12, 2024) (Davis, J.)
Key Terms: motion to seal; ex parte order; Rule 27(b)(3); BCR 7.3; BCR 5.2; motion to reconsider
On July 1, 2024, Plaintiff initiated this action by filing a complaint in Mecklenburg County Superior Court. The complaint and its accompanying exhibit was filed provisionally under seal and accompanied by a motion to seal. The motion to seal was granted ex parte on July 8 and the case was designated to the Business Court on July 25. Defendants then moved for reconsideration of the ex parte sealing order and argued that the sealing order was improper because 1) they did not have time to respond as provided by Rule 27(b)(3) before the order was entered; 2) the order did not have the required findings of fact; and 3) the order was overbroad and unjustifiable because the motion failed to provide a sufficient basis for sealing. Plaintiff responded that the motion should be denied because 1) Defendants did not comply with BCR 7.3’s consultation requirement; 2) the information filed under seal met the test for sealing and there was no clear error warranting reconsideration; and 3) Defendants’ procedural arguments were without merit.
The Court began by acknowledging (and admonishing counsel for) the violation of BCR 7.3, but declined to summarily deny the motion on that basis. Noting that both Rule 27(b)(3) and BCR 5.2 allow for a twenty-day response period for motions to seal and that sealing entire documents is generally disfavored, the Court concluded that the parties should have the opportunity to submit memoranda before the Court rules on the motion for reconsideration. Specifically, Plaintiff was directed to submit proposed redacted versions of the complaint and exhibit with a brief explaining why the proposed redactions were necessary and limited to the fullest extent possible. Defendants could then file a responsive brief.
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The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.
Posted 08/14/24
