B2 Payment Solutions, Inc. v UL LLC

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B2 Payment Solutions, Inc. v UL LLC 2018 NY Slip Op 32043(U) August 17, 2018 Supreme Court, New York County Docket Number: 653394/2018 Judge: Andrea Masley Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 653394/2018 [*FILED: 1] NEW YORK COUNTY CLERK 08/21/2018 12:08 PM NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 08/21/2018 SUPREME COURT OF THE STATE OF NEW YORK PRESENT: NEW YORK COUNTY PART~ Andrea Masley Justice INDEX NO. 653394/2018 MOTION DATE MOTION SEQ. NO. 002 MOTION CAL. NO. 82 PAYMENT SOLUTIONS, INC, Plaintiff, -vUL LLC and UL TS BV, Defendants. Iii z 0 wl/J ~ i5 I- 0:: (/J Notice of Motion/ Order to Show Cause -Affidavits - o;: 0 filo::O::l 0:: u.. Exhibits ... Answering Affidavits - E x h i b i t s - - - - - - - - - - - - - - Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __. _ _ _ _ __ Cl :;~ I- The following papers, numbered 1 to _ _ were read on this motion to seal certain filings. I PAPERS NUMBERED Cross-Motion: D Yes D No Upon the foregoing papers, it is ordered that the motion to seal is GRANTED to the extent that the parties may file redacted documents and file the same documents unredacted under seal. WW u.. J: w lo:: 0:: >- 0 ::l u.. ::> u.. l- ow 0.. (/J w 0:: ~ w (/J < u z 0 j:: 0 ::!: Plaintiff 82 Payment Solutions, Inc. (82) commenced this action on July 5, 2018 against Defendants UL LLC (UL) and UL TS 8V (UL8V) for (1) unlawful termination of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) breach of contract; and (4) tortious interference with contract. UL is the parent company of UL8V. Defendants are engaged in the business of payment testing tools used to process credit, debit, and prepaid card transactions. According to the complaint, 82 served as UL8V's distributor in North America. Plaintiff alleges that after UL8V reorganized its management team, the new team attempted to phase out 82. For example, 82 alleges that defendants improperly terminated the parties' distribution agreement. In motion sequence 002, 82 and defendants move jointly, pursuant to 22 NYCRR § 216, for an order authorizing the redaction of certain documents related to 82's motion for a preliminary injunction, currently filed under temporary seal, and Page 1 of 1 of 4 4 INDEX NO. 653394/2018 [*FILED: 2] NEW YORK COUNTY CLERK 08/21/2018 12:08 PM NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 08/21/2018 sealing the unredacted versions of the same documents.' In particular, the parties seek to redact and seal B2's Memorandum of Law In Support of its Order to Show Cause (Doc. No. 46) and the Affirmation of ltai Sela, including its exhibits, submitted in support of B2's motion for injunctive relief (Doc. No. 47). In addition, defendants seek an order directing B2 to redact certain documents and file the unredacted versions under seal. B2 did not join in this branch of the motion, but does not object to the relief. Specifically, defendants request an order directing B2 to redact: (1) the Affirmation of Berend Van Geffen (Van Geffen Affirmation) (Doc. No. 36), submitted in support of B2's motion for preliminary injunction; (2) defendants' Memorandum of Law In Opposition To Order To Show· Cause For A Preliminary Injunction (Doc. No. 34); and (3) the Affidavit of Gregory Swanson In Opposition To B2's Motion For A Preliminary Injunction (Doc. No. 35). Section 216.1 (a) of the Uniform Rules for Trial Courts empowers courts to seal documents upon a written finding of good cause. It provides: "(a) Except where otherwise provided by statute or rule, a court shall not enter an order in any action or proceeding sealing the court records, whether in whole or in part, except upon a written finding of good cause, which shall specify the grounds thereof. In determining whether good cause has been shown, the court shall consider the interests of the public as well as the parties. Where it appears necessary or desirable, the court may prescribe appropriate notice and an opportunity to be heard. (b) For purposes of this rule, 'court records' shall include all documents and records of any nature filed with the clerk in connection with the action. Documents obtained through disclosure and not filed with the clerk shall remain subject to protective orders as set forth in CPLR 3103 (a)." Judiciary Law§ 4 provides that judicial proceedings shall be public. "The public needs to know that all who seek the court's protection will be treated evenhandedly," and "[!]here is an important societal interest in conducting any court proceeding in an open forum" (Baidzar Arkun v Farman-Farma, 2006 NY Slip Op 30724[U), *2 [Sup Ct, NY County 2006) [citation omitted)). The public right of access, however, is not absolute (see Danco Lab, Ltd. v Chemical Works of Gedeon Richter, Ltd., 274 AD2d 1, 8 [1st Dept 2000)). The "party seeking to seal court records bears the burden of demonstrating compelling circumstances to just_ify restricting public access" to the documents (Masai/em v Berenson, 76 AD3d 345, 348-349 [1st Dept 201 OJ [citations omitted)). The movant must demonstrate good cause to seal records under Rule§ 216.1 by submitting "an affidavit from a person with knowledge explaining why the file or certain documents should be sealed" (Grande Prairie Energy LLC v Alstom Power, Inc., 2004 NY Slip Op 51156 [U), *2 [Sup Ct, NY County 2004)). Good cause must "rest on a sound basis or a I The parties filed joint memorandum of law in support of their motion for redactions and in support of defendants' requests for additional relief (Doc. No. 48). Page 2 of 4 2 of 4 INDEX NO. 653394/2018 [*FILED: 3] NEW YORK COUNTY CLERK 08/21/2018 12:08 PM NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 08/21/2018 legitimate need to take judicial action" (Danco Labs., 274 AD2d at 9). Consent to seal does not constitute "good cause" (MBIA Ins. Corp. v Countrywide Home Loans, Inc., 2012 NY Slip Op 33147[U] 9 [Sup Ct, NY County 2012]). In support of their sealing motion, the parties submitted the affirmations of attorneys William Wargo and Robin L. Alperstein who explain that the filings, for which sealing is requested, contain sensitive information such as customer names, business strategies, and marketing plans. They opine that the disclosure of such confidential information would harm both parties' competitive standing in the industry. Mr. Wargo contends that the Van Gefffen Affirmation contains numerous assertions about ULBV's internal business projections and explanations for particular contract provisions with 62. The parties have demonstrated good cause to the extent the parties may redact from the respective filings all references to sensitive information about 82 and defendants' finances and business strategies. In the business context, courts have sealed records where trade secrets are involved or where the disclosure of documents "could threaten a business's competitive advantage" (Mosallem, 76 AD3d at 350-351 [internal citations omitted]). (See also Feffer v Goodkind, Wechsler, Labaton & Rudoff, 152 Misc 2d 812, 815-816 [Sup Ct, NY County 1991] ["[T]he internal finances" of a party are not a matter of public interest], affd 183 AD2d 678 [1st Dept 1992]). Here, the information - customer lists, sales figures, and product development strategies - could arm competitors with propriety information to the detriment of 82 and defendants. The court also notes that the motions to seal were listed on the court's public calendar and were argued in the courtroom, but neither the press nor the public attended. The parties are directed to redact confidential information relating to each company's internal finances, strategies, and proprietary information. Pursuant to, and in accordance with, Rule 216, having determined that good cause exists for the redacting of the complaint in this action and the grounds having been specified, it is now accordingly, ORDERED that the motion to seal is granted to the extent the parties shall redact confidential information from: (1) 82's Memorandum of Law In Support of its Order to Show Cause (Doc. No. 46); and (2) the Affirmation of ltai Sela, including attachments (Doc. No. 47); and it is further ORDERED that the motion is granted to the extent defendants shall redact confidential information from: (3) the Affirmation of 8erend Van Geffen (Doc. No. 36); (4) Defendants' Memorandum of Law In Opposition To Order To Show Cause For A Preliminary Injunction (Doc. No. 34); and (5) Affidavit of Gregory Swanson In Opposition To 82's Motion For A Preliminary Injunction (Doc. No. 35); and it is further ORDERED that the motion is granted to the extent the parties shall redact confidential information from the filings as directed by this decision and file them in redacted form within 10 days of the.date of this decision. Future submissions containing or referencing confidential information, as outlined in this decision, shall be likewise redacted prior to being filed publically in NYSCEF; and it is further Page 3 of 3 of 4 4 INDEX NO. 653394/2018 [*FILED: 4] NEW YORK COUNTY CLERK 08/21/2018 12:08 PM NYSCEF DOC. NO. 56 RECEIVED NYSCEF: 08/21/2018 ORDERED that the County Clerk, upon service on him of a copy of this order, is directed to accept NYSCEF Doc. Nos. 34, 35, 36, 46, and 47 in redacted form; and it is further ORDERED that NYSCEF Doc. Nos. 34, 35, 36, 46, and 47 shall be filed in unredacted form and until further order of the court, the County Clerk shall deny access to the unredacted documents to anyone (other than the staff of the County Clerk or the court) except for counsel of record for any party to this case, a party, and any representative of counsel of record for a party upon presentation to the County Clerk of written authorization from the counsel; and it is further ORDERED that this order cannot be used to seal or redact any documents or evidence used at trial. DATED~\ ~11 ~ 1 Dated: _ _ _ _ _ _ _ __ Check one: 0 FINAL DISPOSITION Check if appropriate: D 0 J.S.C. NON-FINAL DISPOSITION DO NOT POST Page 4 of 4 4 of 4

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