U.S. Commodity Futures Trading Commission v. Banc de Binary, Ltd.
2:13-cv-00992
D. Nev.Mar 23, 2015Background
- CFTC filed documents (deposition testimony from the SEC) on the docket that Banc de Binary and the SEC consider confidential under a stipulated Protective Order entered in a parallel SEC case. The CFTC says the filings were a mistake.
- The Protective Order (stipulated) permits designation of discovery materials as confidential but requires a party to move and show "good cause" under the appropriate standard before filing them under seal.
- The court ordered the CFTC to show cause why the documents should remain sealed after the filing error was discovered.
- Banc de Binary moved to keep the deposition excerpts sealed, arguing the materials are confidential business information and that a previously entered protective order establishes good cause to prevent public access.
- The court analyzed the distinction among three kinds of protective orders (protecting production, sealing court records, and stipulated discovery confidentiality) and concluded a stipulated protective agreement does not by itself satisfy the separate, document-specific showing required to seal judicial records.
- The court denied sealing for the CFTC’s Opposition to the Motion for a Protective Order (#84), finding Banc de Binary’s submissions were conclusory and failed to make the particularized showing of specific prejudice required by Rule 26(c) and Ninth Circuit precedent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a stipulated protective agreement alone permits sealing of judicial filings | Stipulated protective order already established "good cause" for sealing discovery materials | Stipulated agreement cannot unilaterally extinguish the public's right to access; party must make a document-specific showing | Stipulated agreement insufficient; party must move and make a particularized showing for each document before sealing judicial records |
| Whether Banc de Binary made the required showing to seal the CFTC filing | The deposition contains confidential business/proprietary information that could harm defendants' businesses | The CFTC erred in filing; but public access presumption requires specific facts to seal | Banc de Binary’s assertions were conclusory legal statements and failed to show particularized harm; sealing denied |
| Standard applicable to sealing discovery filed with court | Protective order during discovery equates to good cause for sealing judicial records | Sealing judicial records requires application of the public-access balancing test and a document-by-document showing | Court applied Kamakana/Phillips standard: party must justify sealing with particularized facts; generalized claims insufficient |
| Whether the court should defer to the parallel case’s sealing status | The same documents remained sealed in parallel SEC case, so they should remain sealed here | A parallel court’s treatment does not substitute for the required showing here; each court requires its own justification | Parallel-case sealing did not satisfy the local rule/particularized showing requirement; documents unsealed here |
Key Cases Cited
- Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172 (9th Cir. 2006) (prescribes the standard for sealing judicial records)
- Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307 F.3d 1206 (9th Cir. 2002) (addresses access to materials filed under seal pursuant to protective orders)
- Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003) (stated parties bear the burden to make a particularized showing to obtain protective orders)
- Public Citizen v. Liggett Group, Inc., 858 F.2d 775 (1st Cir. 1988) (private agreements cannot unilaterally override the public’s right to access judicial records)
- Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984) (courts have broad discretion to regulate discovery and enter protective orders)
- Serrano v. Cintas Corp., 699 F.3d 884 (6th Cir. 2012) (protective orders require particularized factual demonstration, not conclusory statements)
- Abbott Labs. v. Gardner, 387 U.S. 136 (1967) (ripeness principles require an actual controversy and concrete record for adjudication)