Coventry Capital US LLC v. EEA Life Settlements, Inc.
1:17-cv-07417
S.D.N.Y.Nov 2, 2017Background
- Coventry sued EEA and others in diversity court after negotiations for the sale of a portfolio of life insurance policies failed, asserting fraud and breach of contract claims.
- Prior to negotiations the parties signed an April 27, 2017 agreement that protected "Confidential Information," including non-public commercial/financial details and personally identifying information for insureds.
- Coventry filed a heavily redacted public complaint to avoid breaching the confidentiality agreement.
- Defendants opposed un-redacting and cross-moved to seal the entire complaint or require further redactions, claiming disclosure would reveal confidential negotiation strategy, pricing and valuation methods, and harm competitive standing.
- The magistrate judge reviewed the redacted material and found it disclosed only common negotiation facts and prices but not valuation methodologies or other competitively sensitive processes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint must remain sealed or redacted despite the public right of access | Public filing of an unredacted complaint is appropriate; redactions unnecessary. | Confidentiality agreement and business secrecy justify sealing/redaction. | Complaint is a judicial document with a presumptive public right of access; sealing/redaction denied. |
| Whether the April 27 confidentiality agreement requires continued secrecy of the complaint contents | Agreement does not override public access because disclosed material is not competitively sensitive. | Agreement covers non-public negotiation details, so disclosure would breach contract and cause harm. | Agreement did not justify keeping the redacted allegations sealed; defendants failed to show specific likely harm. |
| Whether disclosed prices/terms reveal proprietary valuation methods or give competitors an unfair advantage | Listed prices do not reveal valuation methodology or proprietary processes. | Disclosure of prices and negotiation details would enable competitors to gain advantage. | Prices alone do not disclose valuation methods; defendants offered only conclusory assertions of harm—insufficient to overcome access presumption. |
Key Cases Cited
- Bernstein v. Bernstein Litowitz Berger & Grossman LLP, 814 F.3d 132 (2d Cir. 2016) (recognizing presumptive public access to judicial documents)
- United States v. Amodeo, 71 F.3d 1044 (2d Cir. 1995) (defining "judicial documents" relevant to access analysis)
- SEC v. TheStreet.com, 273 F.3d 222 (2d Cir. 2001) (public access standard for filings)
- Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110 (2d Cir. 2006) (First Amendment standard for sealing and narrow tailoring)
- In re Terrorist Attacks on September 11, 2001, 454 F. Supp. 2d 220 (S.D.N.Y. 2006) (discussing demands of sealing under common law and First Amendment)
- Nixon v. Warner Commc'ns, Inc., 435 U.S. 589 (1978) (recognizing protection for confidential business information in limited circumstances)
- Gelb v. American Telephone & Telegraph Co., 813 F. Supp. 1022 (S.D.N.Y. 1993) (business secrecy alone insufficient without particularized harm)
- In re Parmalat Securities Litigation, 258 F.R.D. 236 (S.D.N.Y. 2009) (requiring particularized showing of harm to justify sealing)