-VCF Federal Trade Commission v. AMG Services, Inc. et al, No. 2:2012cv00536 - Document 146 (D. Nev. 2012)
Court Description: ORDER Granting in part and Denying in part 71 Defendants' Motion to Seal. Defendants shall file a redacted copy of the Muir Declaration in accordance with this Order and an unsealed copy of Exhibit A. Exhibit C will remain filed under SEAL. Signed by Judge Gloria M. Navarro on 08/15/2012. (Copies have been distributed pursuant to the NEF - AC)
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-VCF Federal Trade Commission v. AMG Services, Inc. et al Doc. 146 1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 4 FEDERAL TRADE COMMISSION, 5 6 7 8 9 ) ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff, vs. AMG SERVICES, INC., et al, Defendants, and PARK 269 LLC, et al., 10 Relief Defendants. 11 ORDER INTRODUCTION 12 13 Case No.: 2:12-cv-536-GMN-VCF Before the Court is Defendants The Muir Law Firm LLC and Timothy J. Muir, Esq.’s 14 Motion to Seal the Declaration of Timothy J. Muir, and Exhibit A and C attached to the 15 Opposition to Plaintiff’s Motion for Preliminary Injunction (ECF No. 71). Plaintiff Federal 16 Trade Commission (hereinafter “FTC” or “Commission”) filed a Response (ECF No. 96) and the 17 Defendants filed a Reply (ECF No. 117). 18 BACKGROUND 19 The FTC brings the instant action to halt a web of Internet-based payday lenders that 20 allegedly deceive consumers about the costs of their loans and allegedly engage in unlawful debt 21 collection practices. The FTC is currently seeking a preliminary injunction to enjoin Defendants’ 22 alleged violation of the Federal Trade Commission Act, the Truth in Lending Act and the 23 Electronic Fund Transfer Act. 24 25 The instant motion seeks to seal the Declaration of Timothy J. Muir (Ex. 1 attached to Opposition to Plaintiff’s Motion for Preliminary Injunction, ECF No. 70) and Exhibits A and C Page 1 of 7 Dockets.Justia.com 1 (ECF Nos. 70–1 and 70–2.) DISCUSSION 2 3 4 A. Legal Standard Federal courts have historically recognized a “strong presumption in favor of access” to 5 judicial records. Kamakana v. City and County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006). 6 Accordingly, “[a] party seeking to seal a judicial record then bears the burden of overcoming this 7 strong presumption by meeting the ‘compelling reasons’ standard . . . . That is, the party must 8 articulate compelling reasons supported by specific factual findings that outweigh the general 9 history of access and the public policies favoring disclosure, such as the public interest in 10 understanding the judicial process.” Id. at 1178–79 (citations and internal punctuation omitted). 11 There are exceptions whereby judicial records may be sealed without meeting the 12 “compelling reasons” standard, such as: (1) documents that have “traditionally been kept secret 13 for important policy reasons,” including grand jury transcripts and certain warrant materials, and 14 (2) documents attached to non-dispositive motions. See e.g. id. at 1178 –79; Foltz v. State Farm 15 Mut. Auto. Ins. Co., 331 F.3d 1122, 1134–35(9th Cir. 2003). The second exception is intended to 16 exclude documents attached to discovery motions. See Kamakana, 447 F.3d at 1179 (“We have, 17 however, carved out an exception to the presumption of access to judicial records for a sealed 18 discovery document attached to a non-dispositive motion . . . .”) (internal quotations and citations 19 omitted). The discovery exception exists because “the public has less of a need for access to 20 court records attached only to non-dispositive motions because those documents are often 21 unrelated, or only tangentially related, to the underlying cause of action.” Id. (internal quotations 22 omitted). 23 Motions for a preliminary injunction, while not a dispositive motion, go to the merits of 24 the case and are not merely “tangentially related” to the cause of action. Therefore, when 25 considering a motion to seal, some courts treat a motion for preliminary relief as a dispositive Page 2 of 7 1 motion. See, e.g., Selling Source, LLC v. Red River Ventures, LLC, No. 2:09-cv-01491-JCM- 2 GWF, 2011 WL 1630338 at *5 (D. Nev. April 29, 2011) (“The Court finds that requests for 3 preliminary injunctive relief should be treated as dispositive motions for purposes of sealing 4 court records.”); B2B CFO Partners, LLC v. Kaufman, No. CV 09-2158-PHX-JAT, 2010 WL 5 2104257 (D. Ariz. May 25, 2010) (using the standard for a dispositive motion and holding that 6 the party “must show compelling reasons to file under seal” in determining whether to lodge a 7 preliminary injunction under seal); Dish Network LLC v. Sonicview USA, Inc., No. 09-CV-1553, 8 2009 U.S. Dist. LEXIS 63429, at * 16-17 (S.D. Cal. Jul. 23, 2009) (holding that a motion for a 9 temporary restraining order and seizure was a dispositive motion for purposes of sealing court 10 records); Yountville Investors, LLC v. Bank of America, N.A., No. C08-425RSM, 2009 WL 11 411089 at *2 (W.D. Wash. Feb. 17, 2009) (“A motion for a preliminary injunction is treated as a 12 dispositive motion under these rules.”); but see In re Nat’l Sec. Agency Telecomm. Records 13 Litig., No. 06-1791, 2007 WL 549854 at *3 (N.D. Cal. Feb. 20, 2007) (finding that a preliminary 14 injunction is a non-dispositive motion but noting that the seal was appropriate in part because 15 only some information had been redacted, while other information had been released); Reilly v. 16 MediaNews Group Inc., No. C 06-04332, 2007 WL 196682, at *12 (N.D. Cal. Jan. 24, 2007) 17 (applying the “good cause” standard in connection with documents attached to a temporary 18 restraining order). 19 If the preliminary injunction motion is not treated as a dispositive motion, then the party 20 seeking to seal the documents must make a “‘particularized showing’ under the ‘good cause’ 21 standard of Rule 26(c)” of the Federal Rules of Civil Procedure. Kamakana, 447 F.3d at 1180 22 (internal citations omitted). Rule 26(c) protects trade secrets and other confidential research, 23 development, or commercial information. Fed. R. Civ. P. 26(c)(G). A party moving for a 24 document to be sealed must demonstrate “for each particular document it seeks to protect . . . that 25 specific prejudice or harm will result if no protective order is granted.” Foltz, 331 F.3d at 1130. Page 3 of 7 1 “‘Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, do 2 not satisfy the Rule 26(c) test.’” Beckman Indus., Inc. v. Int’l Ins. Co., 966 F.2d 470, 476 (9th 3 Cir. 1992) (quoting Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3rd Cir. 1986)). 4 This Court is persuaded by the reasoning of another District of Nevada case, Selling 5 Source, 2011 WL 1630338, and finds that it is proper to treat the preliminary injunction motion 6 as a dispositive motion and will therefore apply the compelling reasons standard to seal the 7 documents. 8 B. 9 10 Analysis 1. Declaration of Timothy J. Muir Defendants’ motion claims that Mr. Muir’s declaration “contains confidential and 11 proprietary information, trade secrets, and confidential commercial and business information 12 relating to Mr. Muir, the Muir Law Firm and his clients. Several of those clients are named in 13 this action. The Declaration details identity of clients, services performed for clients, corporate 14 and ownership structures of entities, the business methods and practices of one such client, Black 15 Creek Capital Corporation (“Black Creek”), and the purposes of payments to and from clients.” 16 (Motion to Seal 4:12–17, ECF No. 71.) 17 The FTC argues that Defendants have not put forth a good cause to seal the Declaration, 18 let alone a compelling reason to seal. The FTC argues that Defendants broad description that the 19 declaration contains confidential and proprietary information, trade secrets and confidential 20 commercial and business information does change the fact that what is identified is actually quite 21 ordinary. The only statement in the declaration regarding the “ownership structure” of his clients 22 is that a particular person owns a particular company. (Muir Decl. ¶ 15, ECF No. 69.) The only 23 discussion of a client’s “business methods and practices” was a general description of the types 24 of business that the client engages in. (Id. at ¶15.) FTC argues that none of these things are 25 “confidential,” “proprietary,” or “trade secrets.” FTC asserts that the declaration describes Page 4 of 7 1 services performed for clients, and the payments received, in a general way and that much of the 2 information is already documented in public documents that Mr. Muir signed. Even the owner of 3 the company that Mr. Muir is attempting to conceal has admitted his sole ownership of that 4 company in his own public filing. (See ECF No. 58.) 5 Defendants reply that the declaration does disclose confidential information, such as his 6 monthly rental obligations, detailed discussions of the nature of legal services provided for 7 clients, and the types and amount of expenses advanced on behalf of clients. (See Muir Decl.). 8 The declaration also contains a detailed discussion of the complaint to the FTC, which is attached 9 at Exhibit C. 10 Having reviewed the declaration, the Court finds that it should not be sealed. The 11 information contained in the declaration is quite general, including generalized statements about 12 the type of legal work Mr. Muir does for his clients. Even though Defendants argue that the 13 types and amounts of expenses advanced on behalf of his clients is disclosed, this information is 14 very general and there is only one specific dollar amount listed with regard to those services. 15 This dollar amount however is still stated in very general terms. Defendants argue in their Reply 16 that sealing is justified in this case when it will help avoid public scandal, the circulation of 17 libelous statements or otherwise infringe a defendant’s fair trial rights. See Kamakana, 447 F.3d 18 at 1179. However, Defendants fail to demonstrate how the information contained in the 19 declaration will contribute to this problem. Instead, Defendants make the point that this case is 20 already publicized by the FTC’s press release. The declaration, if anything, would correct or 21 defend against any of the “misrepresentations” that Defendants claim were in the press release. 22 Accordingly, the Court will not grant the motion to seal the declaration. However, the 23 Court will allow the current declaration to remain under seal and allow Defendants to file a 24 redacted copy of the declaration, removing the information regarding Exhibit C for the reasons 25 explained below in section 3 of this Order. Page 5 of 7 1 2. Written Consent of the Shareholders of Black Creek Capital Corporation 2 Defendants assert that the Written Consent of the Shareholders of Black Creek which is 3 attached as Exhibit A to the Muir Declaration, should be sealed for the same reasons as the 4 declaration. 5 The FTC asserts that the reasons given by Defendants to seal the Written Consent filed as 6 Exhibit A are deficient in the same manner as the reasons given to seal the Muir Declaration are 7 deficient. The FTC argues that the document contains no particular business plans or trade 8 secrets but that it merely states certain tasks that a corporate officer is permitted to do. The FTC 9 also points out that the Defendants do not state any harm that would result from this ordinary 10 shareholder consent entering the public record. Finally, the FTC claims that the substance of 11 Exhibit A is already disclosed in Defendants’ publically available Opposition to the FTC’s 12 Motion for a Preliminary Injunction. (See Muir Opp. to PI pg. 22-23, ECF No. 69.) 13 14 The Court does not find compelling reasons to seal Exhibit A. Therefore, the Court will Order the exhibit to be unsealed. 15 3. Letter Dated August 18, 2011 to the Office of Inspector General for the FTC 16 Defendants also argue that the Letter of the Inspector General of the FTC attached as 17 Exhibit C to the Muir Declaration should be sealed because it contains confidential information 18 relating to a complaint to the FTC regarding a violation of federal law. Defendants argue that the 19 complaint arises from sensitive and confidential banking records and financial documents of 20 certain defendants in this action that the FTC obtained pursuant to a civil investigative demand 21 (“CID”). Defendants argue that before such information can be used or disclosed in a court 22 proceeding, federal law requires that parties’ interest in the confidential information be advised 23 and provided the opportunity to obtain a protective order. See 16 C.F.R. § 4.10(g). 24 25 Defendants sent the letter to the Office of the Inspector General of the FTC as they believed that federal law was violated when some sensitive documents turned up in other Page 6 of 7 1 litigation. The letter itself provides significant factual details regarding the defendants and the 2 confidentiality of the documents. The heading of the letter states, the content and exhibits of the 3 letter are “Confidential – Not Subject to Freedom of Information Act.” 4 5 6 7 8 9 10 11 12 13 The FTC does not oppose the sealing of Exhibit C because it claims the documents do not pertain to any factual or legal issues in this case and are entirely irrelevant. The Court finds that Exhibit C should remain sealed. The parties took careful steps to protect this document my marking it “Confidential.” CONCLUSION IT IS HEREBY ORDERED that Defendants The Muir Law Firm LLC and Timothy J. Muir, Esq.’s Motion to Seal (ECF No. 71) is GRANTED in part and DENIED in part. Defendants shall file a redacted copy of the Muir Declaration in accordance with this Order and an unsealed copy of Exhibit A. Exhibit C will remain filed under SEAL. ust, DATED this 15th day of August, 2012. 14 15 16 17 ________________________________ _____________________ _ Gloria M. Navarro Gloria o Navarro United n e Jud United States District Judge 18 19 20 21 22 23 24 25 Page 7 of 7
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