The opinion
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10 UNITED STATES DISTRICT COURT
11 SOUTHERN DISTRICT OF CALIFORNIA
12
CHARLES MATTHEW ERHART, Case No. 15-cv-02287-BAS-NLS
13 consolidated with
Plaintiff, 15-cv-02353-BAS-NLS
14
ORDER GRANTING IN PART
15 v. AND DENYING IN PART THE
16 BOFI FEDERAL BANK, PARTIES’ MOTIONS
REGARDING FILING
17 Defendant. DOCUMENTS UNDER SEAL
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And Consolidated Case
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22
23 Presently before the Court are twelve motions concerning filing documents
24 under seal.1 The parties filed the motions in connection with their cross-motions for
25 summary judgment and a motion to exclude expert testimony. For the following
26 reasons, the Court grants in part and denies in part the motions.
27
1 BACKGROUND2
2 Defendant BofI Federal Bank is a federally chartered savings and loan
3 association. Defendant’s holding company, BofI Holding, Inc., is publicly traded
4 under the Securities Exchange Act of 1934.3 BofI hired Charles Matthew Erhart as
5 a Staff Internal Auditor in its headquarters in San Diego, California.
6 These consolidated actions revolve around competing narratives of Erhart’s
7 tenure as an internal auditor for BofI. In his pleading, Erhart recounts how he
8 repeatedly battled against pressure from senior management as he discovered
9 conduct he believed to be wrongful. For example, Erhart claims he unearthed
10 evidence that BofI failed to turn over information that was responsive to a subpoena
11 from the Securities and Exchange Commission. Erhart also allegedly discovered that
12 BofI’s Chief Executive Officer was “depositing third-party checks for structured
13 settlement annuity payments into a personal account, including nearly $100,000 in
14 checks made payable to third parties.” In addition, Erhart claims the Bank engaged
15 in wrongdoing during an examination by BofI’s principal regulator, the Department
16 of the Treasury’s Office of the Comptroller of the Currency (“OCC”).
17 When BofI learned Erhart was potentially reporting these allegations to the
18 OCC, Erhart claims BofI engaged in a pattern of retaliatory conduct against him,
19 including making false statements about his medical leave and ultimately terminating
20 him. Based on these allegations, Erhart brings seven claims against BofI, including
21
22
23 2 The Court largely adopts this background from its order granting in part and denying in
part the parties’ motions for judgment on the pleadings. (See ECF No. 123; see also ECF No. 40.)
24 3 BofI Holding’s common stock originally traded on The NASDAQ Global Select Market
under Section 12(b) of the Exchange Act. See Axos Financial, Inc., Registration of Securities
25 (Form 8-A) (Sept. 13, 2018). Since this lawsuit was filed, BofI Holding and BofI Federal Bank
have rebranded as Axos Financial, Inc. and Axos Bank. (Tolla Decl. ¶ 2, ECF No. 127-2.) The
26
holding company’s shares now trade on The New York Stock Exchange. Axos Financial, Inc.,
27 Registration of Securities (Form 8-A) (Sept. 13, 2018).
To be consistent with the record, the Court refers to these entities by their prior names. And
1 whistleblower retaliation in violation of the Sarbanes–Oxley Act and the Dodd–
2 Frank Wall Street Reform and Consumer Protection Act.
3 In contrast, BofI’s countersuit portrays Erhart as an entry-level internal auditor
4 who conducted improper “rogue investigations.” BofI claims Erhart “abused his
5 power” as an auditor by “initiating and conducting his own unplanned and
6 unapproved investigations into matters that were outside the scope of the” Bank’s
7 internal audit plans. In doing so, Erhart allegedly “misrepresented to other BofI
8 employees that he was conducting authorized investigations as part of his job.” The
9 Bank also contends that Erhart accessed confidential information for personal gain,
10 disseminated confidential information to “a website that allows comments on the
11 stocks of publicly traded companies,” and abandoned his job. In light of these
12 allegations, BofI brings its own catalog of eight claims against Erhart, including
13 breach of contract, breach of the duty of loyalty, and violation of the Computer Fraud
14 and Abuse Act.
15 BofI is moving for partial summary judgment on several of Erhart’s claims.
16 (ECF No. 127.) Erhart is also moving for summary judgment on almost all of BofI’s
17 claims. (ECF No. 137.) Erhart is further seeking to exclude the testimony of two
18 expert witnesses at trial. (ECF No. 128.) In connection with these three motions, the
19 parties have filed twelve motions related to sealing documents. Due to the volume
20 of the parties’ requests, the Court will refer to each motion by its Electronic Case
21 Filing Number (“ECF No.”).
22
23 LEGAL STANDARD
24 “[T]he courts of this country recognize a general right to inspect and copy
25 public records and documents, including judicial records and documents.” Nixon v.
26 Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978). “Unless a particular court record
27 is one ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the
1 2006) (citing Foltz v. State Farm Mut. Auto Ins. Co., 331 F.3d 1122, 1135 (9th Cir.
2 2003)). “The presumption of access is ‘based on the need for federal courts, although
3 independent—indeed, particularly because they are independent—to have a measure
4 of accountability and for the public to have confidence in the administration of
5 justice.” Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir.
6 2016) (quoting United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995)).
7 A party seeking to seal a judicial record bears the burden of overcoming the
8 strong presumption of access. Foltz, 331 F.3d at 1135. The showing required to
9 meet this burden depends upon whether the documents to be sealed relate to a motion
10 that is “more than tangentially related to the merits of the case.” Ctr. for Auto Safety,
11 809 F.3d at 1102. When the underlying motion is more than tangentially related to
12 the merits, the “compelling reasons” standard applies. Id. at 1096–98. When the
13 underlying motion does not surpass the tangential relevance threshold, the “good
14 cause” standard applies. Id.
15 “In general, ‘compelling reasons’ sufficient to outweigh the public’s interest
16 in disclosure and justify sealing court records exists when such ‘court files might
17 have become a vehicle for improper purposes,’ such as the use of records to gratify
18 private spite, promote public scandal, circulate libelous statements, or release trade
19 secrets.” Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598). However,
20 “[t]he mere fact that the production of records may lead to a litigant’s embarrassment,
21 incrimination, or exposure to further litigation will not, without more, compel the
22 court to seal its records.” Id. (citing Foltz, 331 F.3d at 1136). The decision to seal
23 documents is “one best left to the sound discretion of the trial court” upon
24 consideration of “the relevant facts and circumstances of the particular case.” Nixon,
25 435 U.S. at 599.
26 //
27 //
1 STANDING ORDER FOR CIVIL CASES
2 Consistent with the presumptive right of public access to court records, this
3 Court’s Standing Order for Civil Cases provides:
4 The Court may seal documents to protect sensitive information, however,
the documents to be filed under seal will be limited by the Court to only
5
those documents, or portions thereof, necessary to protect such sensitive
6 information.
7
Parties seeking a sealing order must provide the Court with: (1) a specific
8 description of particular documents or categories of documents they need
to protect; and (2) declarations showing a compelling reason or good
9
cause to protect those documents from disclosure. The standard for filing
10 documents under seal will be strictly applied.
11 (Standing Order ¶ 5.)
12 ANALYSIS
13 The parties’ summary judgment motions and Erhart’s request to exclude
14 experts at trial are all more than tangentially related to the merits of this consolidated
15 dispute. Hence, these motions and the documents attached to them are subject to the
16 compelling reasons standard. Before turning to the parties’ specific sealing requests,
17 the Court addresses a frequent basis asserted in the parties’ motions for sealing
18 information: the bank examination privilege.
19 “Stated broadly, the bank examination privilege is a qualified privilege that
20 protects communications between banks and their examiners in order to preserve
21 absolute candor essential to the effective supervision of banks.” Wultz v. Bank of
22 China Ltd., 61 F. Supp. 3d 272, 281 (S.D.N.Y. 2013) (quoting Linde v. Arab Bank,
23 PLC, No. 04 Civ. 2799, 2009 WL 3055282, at *1 (E.D.N.Y. Sept. 21, 2009)). The
24 Ninth Circuit has “not addressed” this privilege, which is also known as “the bank
25 examiner’s privilege.” Campidoglio LLC v. Wells Fargo & Co., 870 F.3d 963, 977
26 n.5 (9th Cir. 2017). But in recognizing the privilege, other courts have explained that
27 it “arises out of the practical need for openness and honesty between bank examiners
1 process by privileging such communications.” Wultz, 61 F. Supp. 3d at 281–82
2 (quoting Merchants Bank v. Vescio, 205 B.R. 37, 42 (D. Vt. 1997)); see also In re
3 Subpoena Served upon Comptroller of Currency, 967 F.2d 630, 633–34 (D.C. Cir.
4 1992). Indeed, for successful bank supervision, the bank’s “management must be
5 open and forthcoming in response to the inquiries of bank examiners, and the
6 examiners must in turn be frank in expressing their concerns about the bank.” In re
7 Subpoena, 967 F.2d at 634. “These conditions simply could not be met as well if
8 communications between the bank and its regulators were not privileged.” Id. The
9 bank examination privilege belongs solely to banking regulatory entities. See, e.g.,
10 In re Bankers Tr. Co., 61 F.3d 465, 472 (6th Cir. 1995).
11 The magistrate judge previously recognized that there are documents relevant
12 to this litigation containing information covered by the bank examination privilege.
13 (ECF No. 100.) Hence, the magistrate judge directed the parties to seek permission
14 from the OCC—the holder of the bank examination privilege—to use documents that
15 disclose “agency opinions and recommendations and banks’ responses.” (Id.) The
16 OCC subsequently asserted the bank examination privilege over certain records, but
17 “determined that the particular circumstances of the [case] warrant making the
18 Records available to the parties in this action, provided that appropriate protection of
19 their confidentiality can be secured.” (See ECF No. 114.) Thus, the magistrate judge
20 entered a protective order that required, among other things, that the parties file under
21 seal those records for which the OCC provided permission to be used in this case.
22 (Id.)
23 In light of the foregoing, the Court finds it appropriate to seal information
24 subject to the bank examination privilege; namely, the OCC’s examination requests
25 to BofI and the Bank’s responses to these requests. The Court also finds it
26 appropriate to seal briefing, deposition testimony, and other information that reveals
27 the content of the OCC’s requests and the Bank’s responses. However, the Court
1 will require that the parties’ redactions be narrowly tailored to this content, making
2 the filings otherwise publicly available.
3 Beyond material involving bank examination, the parties also seek to redact
4 bank and loan account information and certain non-public information of third
5 parties, including bank customers and employees. The Court generally concludes it
6 is appropriate to grant narrowly tailored requests to seal this information—
7 particularly where the content of this information is unnecessary to understand the
8 Court’s orders and the parties’ dispute. However, where this is not the case—or
9 where it is unclear why the information is confidential or sensitive—the Court finds
10 the parties have not satisfied the compelling reasons standard. The Court will thus
11 consider each sealing motion in turn.
12
13 I. ECF No. 125
14 The Bank moves to seal portions of its motion for summary judgment and
15 approximately ten attachments. (ECF No. 125.) Erhart does not oppose. The Court
16 rules on the proposed redactions in Table 125 attached to this order. Accordingly,
17 the Court grants in part and denies in part ECF No. 125. The Clerk shall accept and
18 file under seal the following documents:
19 • BofI’s Mot. (ECF No. 126-1);
20 • Tolla Decl. (ECF No. 126-2);
21 • Ex. C: Erhart Dep. (ECF No. 126-5);
22 • Ex. E: Erhart Dep. (ECF No. 126-7);
23 • Ex. F: Ball Dep. (ECF No. 126-8);
24 • Ex. G: Ball Dep. (ECF No. 126-9);
25 • Ex. I: Grenet Dep. (ECF No. 126-10);
26 • Ex. J: Garrabrants Dep. (ECF No. 126-11);
27 • Ex. M: Tolla Rule 30(b)(6) Dep. (ECF No. 126-13);
1 • Ex. U: BofI Letter to SEC (ECF No. 126-17);
2 • Ex. X: Erhart E-mail to Ball RE: Subpoena (ECF No. 126-18);
3 • Ex. AA: Internal Audit Memo RE: Employee Account Review (ECF No.
4 126-19);
5 • Ex. UU: BofI’s Responses to OCC’s Requests (ECF No. 126-20);
6 • Ex. VV: Erhart E-mails to Shkabara RE: SEC Subpoena (ECF No. 126-21);
7 and
8 • Ex. XX: Tolla E-mail RE: OCC’s Requests (ECF No. 126-22).
9 The Clerk shall further:
10 • Reject the lodged, unredacted McWilliams Decl. (ECF No. 126-3) and
11 replace the redacted version on the docket (ECF No. 127-5) with the
12 unredacted copy (ECF No. 126-3);
13 • Reject the lodged, unredacted Towill Decl. (ECF No. 126-4) and replace
14 the redacted version on the docket (ECF No. 127-6) with the unredacted
15 copy (ECF No. 126-4);
16 • Reject the lodged, unredacted Ex. D: Erhart Dep. (ECF No. 126-6) and
17 replace the redacted version on the docket (ECF No. 127-10) with the
18 unredacted copy (ECF No. 126-6);
19 • Reject the lodged, unredacted Ex. K: Garrabrants Dep. Errata Sheet (ECF
20 No. 126-12) and replace the redacted version on the docket (ECF No. 127-
21 17) with the unredacted copy (ECF No. 126-12);
22 • Reject the lodged, unredacted Ex. Q: Transfer and Assignment Agreement
23 (ECF No. 126-14) and replace the redacted version on the docket (ECF No.
24 127-23) with the unredacted copy (ECF No. 126-14); and
25 • Reject the lodged, unredacted Ex. R: Transfer and Assignment Agreement
26 (ECF No. 126-15) and replace the redacted version on the docket (ECF No.
27 127-24) with the unredacted copy (ECF No. 126-15).
1 of the Bank’s proposed redactions, the Court ORDERS the Bank to publicly file
2 revised versions of these documents with only those redactions that the Court has
3 approved. The Bank shall file these items on CM/ECF as a “Notice Regarding
4 Exhibit Attachment” and link the items to the Bank’s motion for summary judgment.
5
6 II. ECF No. 130
7 Erhart moves to seal certain documents filed in connection with his motion to
8 exclude expert testimony. (ECF No. 130.) Erhart explains that some of the
9 documents lodged under seal were designated confidential, but Erhart does not
10 believe all of the lodged material should be sealed. (Id.) BofI responds to the motion
11 and submits proposed redacted versions of several documents. (ECF No. 144.) The
12 Court rules on the parties’ proposed redactions in Table 130 attached to this order.
13 Accordingly, the Court grants in part and denies in part ECF No. 130. The Clerk
14 shall accept and file under seal the following documents:
15 • Ex. 3: van Drunen Rule 26 Report (ECF No. 131-3);
16 • Ex. 6: Micheletti Dep. (ECF No. 131-4); and
17 • Ex. 297: Customer Deposit History and Related E-mails (ECF No. 131-5).
18 The Clerk shall further:
19 • Reject the lodged, unredacted Ex. 1: van Drunen Am. Rule 26 Report (ECF
20 No. 131-1) and replace the redacted version on the docket (ECF No. 128-
21 4) with the unredacted copy (ECF No. 131-1); and
22 • Reject the lodged, unredacted Ex. 2: Policy Statement (ECF No. 131-2) and
23 file it as an additional attachment to Erhart’s motion to exclude testimony
24 (ECF No. 128).
25 Finally, for Ex. 3: van Drunen Rule 26 Report (ECF No. 131-3), Erhart shall publicly
26 file a revised version of this document with only those redactions that the Court has
27 approved. Erhart shall file this item as a “Notice Regarding Exhibit Attachment” and
1 III. ECF No. 132
2 Erhart moves to seal part of the Deposition of Andrew J. Micheletti, which
3 Erhart references in his motion for summary judgment. (ECF No. 132.) Erhart relies
4 on the same deposition transcript in his motion to exclude expert testimony. BofI
5 responds to the motion to support the request. (ECF No. 143.) Upon review, the
6 proposed redactions for this deposition are the same ones considered by the Court in
7 connection with ECF No. 130. Thus, the Court grants ECF No. 132. The Clerk shall
8 accept and file under seal the unredacted copy of the Micheletti Deposition (ECF No.
9 133-1). The redacted version that was publicly filed by BofI (ECF No. 143-2) will
10 serve as the public exhibit for Erhart’s motion to exclude.
11
12 IV. ECF Nos. 140, 141, 145
13 BofI moves to amend its prior motion to seal, which was considered above
14 (ECF No. 130), explaining that it inadvertently filed an unredacted version of Ex. T
15 in support of BofI’s motion for summary judgment—instead of lodging it with the
16 Court. (ECF No. 140.) Hence, BofI moves to seal Ex. T in its entirety. (Id.)
17 Relatedly, BofI files a supplemental motion to seal Ex. T, “which is a relevant
18 excerpt of a confidential letter from the SEC to BofI containing a confidential SEC
19 subpoena” that “contains highly sensitive customer names.” (ECF No. 141.)
20 However, in making this request, BofI again inadvertently attached an unredacted
21 copy of Ex. T to its motion to seal. Accordingly, BofI also moves to strike the
22 unredacted version of Ex. T that it filed for the second time in its supplemental motion
23 to seal Ex. T. (ECF No. 145.)
24 There are not compelling reasons to seal the customer name at issue. The name
25 is already disclosed in various other filings, including other documents at issue in this
26 order, and it is public information that the SEC investigated and sought enforcement
27 action against this customer. Hence, the Court denies BofI’s motion to amend its
1 motion to seal Ex. T (ECF No. 141). Finally, the Court similarly denies as moot
2 BofI’s motion to strike (ECF No. 145). Accordingly, the Clerk shall reject the
3 document lodged under seal in ECF No. 142. No further action is needed for these
4 motions.
5
6 V. ECF No. 150
7 BofI moves to seal documents used to support the Bank’s opposition to
8 Erhart’s motion to exclude expert testimony. (ECF No. 150.) First, the Bank seeks
9 to seal limited excerpts of Ex. G (ECF No. 15-8), which is a summary of personnel
10 costs incurred by the Bank. The proposed redactions mask salary, benefits, and bonus
11 information of specific Bank employees and the name of a third-party bank customer.
12 The Court finds sealing this information is appropriate. The Court will seal the non-
13 public information about a bank customer for the same reasons expressed for prior
14 motions to seal. And the Court finds knowledge of the specific salary and bonus
15 rates of select employees is unnecessary to understand the Court’s orders and the
16 parties’ dispute.
17 Second, the Bank seeks to seal excerpts of Guido van Drunen’s Amended Rule
18 26 Report. The Court has already considered these proposed redactions and
19 incorporates its analysis from other motions to seal. Thus, the Court denies the
20 request to seal this document. Accordingly, the Court grants in part and denies in
21 part ECF No. 150. The Clerk shall accept and file under seal Ex. G: Summary of
22 Personnel Costs (ECF No. 151-2), but publicly file Ex. H: van Drunen Am. Rule 26
23 Report (ECF No. 151-2) in place of the redacted version attached to BofI’s opposition
24 (ECF No. 152-9).
25
26 VI. ECF No. 153
27 BofI moves to seal parts of eight documents used to support its opposition to
1 The Court rules on the proposed redactions in Table 153 attached to this order.
2 Hence, the Court grants in part and denies in part ECF No. 153. The Clerk shall
3 accept and file under seal the following documents:
4 • Ex. K: Micheletti Dep. (ECF No. 154-3);
5 • Ex. R: Lopez E-mail RE: FMLA Leave (ECF No. 154-4);
6 • Ex. V: Lopez E-mail RE: FMLA Leave (ECF No. 154-5);
7 • Ex. Z: Summary of Personnel Costs (ECF No. 154-6);
8 • Ex. AA: Gillam E-mail RE: SEC Subpoena (ECF No. 154-7); and
9 • Ex. BB: Gillam E–mail RE: NYT Article (ECF No. 154-8).
10 The Clerk shall further:
11 • Reject the lodged, unredacted Ex. B: Erhart Dep. (ECF No. 154-1) and
12 replace the redacted version on the docket (ECF No. 155-3) with the
13 unredacted copy (ECF No. 154-1); and
14 • Reject the lodged, unredacted Ex. E: Ball Dep. (ECF No. 154-2) and
15 replace the redacted version on the docket (ECF No. 155-6) with the
16 unredacted copy (ECF No. 154-2).
17 Finally, for those documents that the Court has accepted under seal but denied
18 some of the Bank’s proposed redactions, the Court ORDERS the Bank to publicly
19 file revised versions of these documents with only those redactions that the Court has
20 approved. The Bank shall file these items on CM/ECF as a “Notice Regarding
21 Exhibit Attachment” and link the items to the Bank’s opposition to Erhart’s motion
22 for summary judgment.
23
24 VII. ECF Nos. 156, 172
25 Erhart moves to file portions of his opposition to BofI’s summary judgment
26 motion and approximately twenty attachments under seal. (ECF No. 156.) BofI
27 produced many of these documents and marked them as confidential; therefore,
1 Bank does so for some of the documents. (ECF No. 174.) The Court rules on the
2 proposed redactions in Table 156 attached to this order.
3 Beyond those determinations, the Court denies the request to seal any
4 documents that were protectively lodged under seal but that BofI did not also seek to
5 seal. The Clerk is directed to reject these items, which are:
6 • Ex. 83: Internal Audit Memo (ECF No. 157-10);
7 • Ex. 90: Memo RE: Employee Account Review (ECF No. 157-11);
8 • Ex. 93: Lopez E-mail RE: Strategic Plan Approval (ECF No. 157-12);
9 • Ex. 98: Williams E-mail RE: Deposit Concentration Risk (ECF No. 157-
10 13);
11 • Ex. 160: Due Diligence Policy Excerpt (ECF No. 157-14);
12 • Ex. 228: Lopez E-mail RE: Board Meeting Minutes (ECF No. 157-15);
13 • Ex. 262: Draft Lottery Audit (ECF No. 157-17);
14 • Ex. 268: Draft Business Plan Audit (ECF No. 157-18);
15 • Ex. 280: BSA Policy (ECF No. 157-19);
16 • Ex. 282: Due Diligence Policy Excerpt (ECF No. 157-20);
17 • Ex. 295: Erhart E-mail RE: Strategic Plan (ECF No. 157-21); and
18 • Ex. 296: “Work Paper 6” RE: Business Plan (ECF No. 157-22).
19 The Court ORDERS Erhart to publicly file all of these documents on CM/ECF as a
20 “Notice Regarding Exhibit Attachment” and link the items to his opposition to BofI’s
21 motion for summary judgment.
22 The Clerk shall accept and file under seal the following documents:
23 • Erhart’s Opp’n (ECF No. 157-1);
24 • Ex. E: Erhart Dep. (ECF No. 157-3);
25 • Ex. F: Ball Dep. (ECF No. 157-4);
26 • Ex. M: Brickey Dep. (ECF No. 157-5);
27 • Ex. N: Sisk Dep. (ECF No. 157-6);
1 • Ex. 47: Whistleblower Discussion Notes (ECF No. 157-9); and
2 • Ex. 229: Erhart E-mail RE: Strategic Plan (ECF No. 157-15).
3 The Clerk shall further:
4 • Reject the lodged, unredacted Ex. C: Erhart Dep. (ECF No. 157-2) and
5 replace the redacted version on the docket (ECF No. 158-6) with the
6 unredacted copy (ECF No. 157-2).
7 Finally, for the documents that the Court approved only some of the parties’
8 proposed redactions, the Court ORDERS Erhart to publicly file revised versions of
9 these documents with those redactions that the Court has approved. Erhart shall file
10 these items on CM/ECF as a “Notice Regarding Exhibit Attachment” and link the
11 items to his opposition to the Bank’s motion for summary judgment.
12 The Bank also seeks to seal part of its response to Erhart’s motion to seal.
13 (ECF No. 172.) This part of the Bank’s response argues that the identity of two
14 witnesses and their testimony may be subject to sealing because a protective order
15 guarded this information in a related securities case. Having reviewed the material
16 at issue, including the protective order, the Court denies the request to seal. Although
17 there may be—or have been—good cause to protect the identities of these former
18 employees in the related case, the Court discerns no compelling reasons to seal their
19 identities or factual testimony in this case. Hence, beyond denying BofI’s request to
20 seal this information in Table 156, the Court also denies BofI’s motion to seal its
21 argument on this issue (ECF No. 172). The Clerk shall reject the lodged version of
22 BofI’s response to Erhart’s motion (ECF No. 173) and file this unredacted copy (ECF
23 No. 173) in place of the Bank’s redacted version (ECF No. 174).
24
25 VIII. ECF Nos. 161 & 165
26 The Bank moves to seal portions of its reply in support of its motion for
27 summary judgment and several attached exhibits. (ECF No. 161.) Relatedly, the
1 same day. (ECF No. 164.) The Court rules on the proposed redactions in Table 161
2 & 165 attached to this order. Accordingly, the Court grants in part and denies in part
3 these two motions to seal.
4 The Clerk shall accept and file under seal the following documents:
5 • Reply (ECF No. 163-1);
6 • Ex. A: Erhart Dep. (ECF No. 162-1);
7 • Ex. C: Erhart Dep. (ECF No. 162-2); and
8 • JSUF (ECF No. 166-1).
9 The Clerk shall further:
10 • Reject the lodged, unredacted Ex. D: Garrabrants Dep. (ECF No. 162-3)
11 and replace the redacted version on the docket (ECF No. 164-5) with the
12 unredacted copy (ECF No. 162-3).
13 Finally, for those documents that the Court has accepted under seal but denied some
14 of the Bank’s proposed redactions, the Court ORDERS the Bank to publicly file
15 revised versions of these documents with only those redactions that the Court has
16 approved. The Bank shall file these items on CM/ECF as a “Notice Regarding
17 Exhibit Attachment” and link the items to the Bank’s reply in support of its motion
18 for summary judgment.
19
20 CONCLUSION
21 In light of the foregoing, the Court:
22 1. GRANTS IN PART and DENIES IN PART the Bank’s motion to seal
23 (ECF No. 125);
24 2. GRANTS IN PART and DENIES IN PART Erhart’s motion to seal
25 (ECF No. 130);
26 3. GRANTS Erhart’s motion to seal (ECF No. 132);
27 4. DENIES BofI’s motion to amend its prior motion to seal (ECF No.
1 ||} DENIES AS MOOT Bofl’s motion to strike (ECF No. 145);
2 5. GRANTS IN PART and DENIES IN PART the Bank’s motion to seal
3 || (ECF No. 150);
4 5. GRANTS IN PART and DENIES IN PART Bofl’s motion to seal
5 || (ECF No. 153);
6 6. GRANTS IN PART and DENIES IN PART Erhart’s motion to seal
7 ||(ECF No. 156);
8 7. DENIES Bofl’s motion to seal (ECF No. 172);
9 7. GRANTS IN PART and DENIES IN PART Bofl’s remaining two
10 ||motions to seal (ECF Nos. 161 & 165); and
11 8. Directs the Clerk of the Court to complete the various sealing
12 ||requests that are underlined throughout this order above.
13 IT IS SO ORDERED.
14 /
15 || DATED: September 19, 2019 LY wl (Bashan. 6
16 United States District Judge
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TABLE 125
Item ECF No. Description Determination Basis/Explanation
Motion 127-1 Bank/loan account Granted Sensitive financial information
• 12:20–21, 24 information
• 13:2
Motion 127-1 Argument involving Granted in part The Court seals most of this information in
• 15:6–18, 20 bank examination light of the bank examination privilege, but
• 15:23–16:13, 15–16 denies the request to seal the fact that
Erhart was not responsible for preparing
BofI’s response to the OCC’s relevant
inquiry (Mot. 15:23).
Motion 127-1 Argument involving Granted in part The Court seals most of this information in
• 17:11–18:4 bank examination light of the bank examination privilege, but
• 18:6–8 denies the request to seal the fact that
• 18:11–13 Erhart was not responsible for preparing
BofI’s response to the OCC’s relevant
inquiry (Mot. 18:3).
Motion 127-1 Argument involving Granted Bank examination privilege
• 19:17–22 bank examination
• 20:9–12 & n.12
Motion 127-1 Argument involving Granted in part The Court seals most of this information in
• 20:14–22 & n.13 bank examination light of the bank examination privilege, but
denies the request to seal the sentence
concerning Erhart’s belief that BofI was
defrauding its regulator (Mot. 20:17–21).
Motion 127-1 Argument involving Granted Bank examination privilege
• 23:5–12 bank examination
Table 125
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Item ECF No. Description Determination Basis/Explanation
Motion 127-1 Identities of third Denied The identities of the two third parties who
• 27:20 parties and trust sold their structured settlement payments to
• 28:2, 4–5, 7–8 involved in Seneca One is public information. (See
• 31:21–22 structured settlement BofI’s Request for Judicial Notice, Exs. 1–
• 32:16–17 transactions 2, ECF Nos. 127-63 to 64.)
Further, there are not compelling reasons to
seal the fact that Seneca One then sold
these payments streams to the Bank’s CEO.
BofI also has not demonstrated compelling
reasons to seal the name of the family trust
involved in the transactions. Indeed, the
CEO testified that he and the trust are one
and the same.
Motion 127-1 Argument involving Granted Bank examination privilege
• 43:16–17 bank examination
Tolla Decl. 127-2 Statements regarding Granted Bank examination privilege
• ¶¶ 4–11 bank examination
McWilliams Decl. 127-5 Identities of third Denied The Court incorporates its explanation from
• ¶¶ 4, 8–9 parties and trust above.
involved in
structured settlement
transactions
Towill Decl. 127-6 Identities of third Denied The Court incorporates its explanation from
• ¶¶ 19–20, p. 13 parties and trust above.
involved in
structured settlement
transactions
Table 125
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Item ECF No. Description Determination Basis/Explanation
Ex. C: Erhart Dep. 127-9 Identities of third Denied The Court incorporates its explanation from
• 614:4, 13, 15, 23 parties and trust above.
• 619:14 involved in
• 627:5, 7, 9, 19 structured settlement
• 632:6 transactions
• 635:16–17, 20, 22
• 647:23–24
Ex. C: Erhart Dep. 127-9 Bank/loan account Granted Sensitive financial information
• 723:16 information
• 729:17
Ex. D: Erhart Dep. 127-10 Testimony regarding Denied This information is not adequately covered
• 766:20–21 coworker’s concern by the bank examination privilege.
Ex. E: Erhart Dep. 127-11 Testimony regarding Granted The Court seals this information in light of
• 1144:9–14, 17–18 bank examination the bank examination privilege. However,
• 1145:8–12, 23–24 the Court also highlights that the Bank’s
• 1146:4–5, 14, 21–22 proposed redactions for certain pages are
• 1149:22–1150:7, 10– inconsistent with those later proposed for
11, 25 the same document. (Compare ECF No.
• 1151:1–3, 21–25 127-11, with ECF No. 164-4.)
• 1158:8–9, 16–19, 22–
23
Ex. E: Erhart Dep. 127-11 Testimony regarding Granted in part The Court seals most of this information in
• 1246:14–1247:6 bank examination light of the bank examination privilege, but
• 1247:12–14 denies the request to seal Erhart’s
• 1250:4–7, 14–16, 22– testimony that he believed the bank would
25 be misrepresenting itself to shareholders
Table 125
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Item ECF No. Description Determination Basis/Explanation
• 1251:1–2 (Erhart Dep. 1247:1–4 (starting at “the
bank”)).
Ex. F: Ball Dep. 127-12 Testimony regarding Granted Bank Examination Privilege
• 75:10–15 bank examination
• 86:4–7
• 146:12–14
Ex. F: Ball Dep. 127-12 Testimony Denied This information is not adequately covered
• 146:24–25 explaining why by the bank examination privilege.
BofI’s CEO raised
his voice
Ex. G: Ball Dep. 127-13 Testimony regarding Granted Bank Examination Privilege
• 299:15–18 bank examination
Ex. I: Grenet Dep. 127-15 Identity of third- Granted The redactions are narrowly tailored to
• 63:21–22 party bank customer information about a third-party bank
customer, and this information is
unnecessary to understand the Court’s
rulings and the parties’ dispute.
Ex. J: Garrabrants Dep. 127-16 Testimony Denied The Court incorporates its explanation from
• 264:2–3, 8, 13 concerning trust above.
• 268:6–9 involved in
structured settlement
transactions
Ex. J: Garrabrants Dep. 127-16 Testimony regarding Granted Bank examination privilege
• 146:6–7, 11–12, 14–25 bank examination
Ex. J: Garrabrants Dep. 127-16 Name of trust Denied The Court incorporates its explanation from
• 169:9 above.
Table 125
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Item ECF No. Description Determination Basis/Explanation
Ex. K: Garrabrants Dep. 127-17 Name of trust Denied The Court incorporates its explanation from
Errata Sheet above.
Ex. M: Tolla Rule 30(b)(6) 127-19 Testimony involving Granted Bank examination privilege
Dep. bank examination
• 24:21–25:5
• 119:16–24
• 120:2–121:25
Ex. Q: Transfer and 127-23 Identity of third Denied The Court incorporates its explanation from
Assignment Agreement party involved in above.
structured settlement
transaction
Ex. R: Transfer and 127-24 Identity of third Denied The Court incorporates its explanation from
Assignment Agreement party involved in above.
structured settlement
transaction
Ex. T: SEC Letter to BofI & 127-26 Bank/loan account Granted Sensitive financial information
Subpoena information
Ex. U: BofI Letter to SEC 127-27 Bank/loan account Granted Sensitive financial information
information
Ex. X: Erhart E-mail to Ball 127-30 Bank/loan account Granted Sensitive financial information
RE: Subpoena information
Ex. AA: Internal Audit 127-33 Bank/loan account Granted in part The Court seals the bank account number
Memo RE: Employee information and and related information. The Court,
Account Review identities of third however, denies the request to seal the
parties and trust other information about the third parties
involved in involved in structured settlement
structured settlement transactions based on the Court’s
transactions explanation from above.
Table 125
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15cv2287
Item ECF No. Description Determination Basis/Explanation
Ex. UU: BofI’s Responses 127-53 BofI’s responses to Granted Bank examination privilege
to the OCC’s Requests the OCC’s requests
Ex. VV: Erhart E-mails to 127-54 Bank/loan account Granted Sensitive financial information
Shkabara RE: SEC information
Subpoena
Ex. XX: Tolla E-mail RE: 127-56 OCC’s requests to Granted Bank Examination Privilege
t he OCC’s Requests B ofI
Table 125
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15cv2287
TABLE 130
Item ECF No. Description Determination Basis/Explanation
Ex. 1: van Drunen Am. 128-4 Discussion of Denied Although Erhart’s allegations concerning
Rule 26 Report Erhart’s allegations coworkers may be embarrassing, the Court
• 11 concerning other finds this reason is not a compelling
• 20 & n.119 bank employees justification for sealing the information.
Cf. Kamakana v. City & Cty. of Honolulu,
447 F.3d 1172, 1179 (9th Cir. 2006).
Ex. 1: van Drunen Am. 128-4 Name of customer Denied The name of this customer is already
Rule 26 Report targeted by SEC publicly disclosed in several other
• 12 n.54 subpoena documents, including multiple documents
• 15 nn.74–75 submitted with the parties’ motions.
Further, that the SEC investigated this
customer is public knowledge.
Ex. 3: van Drunen Rule 26 128-5, Discussion of Denied The Court incorporates its explanation from
Report 144-2 Erhart’s allegations above.
• 10 concerning other
• 11 bank employees
• 19
• 20 & n.116
Ex. 3: van Drunen Rule 26 128-5, Name of customer Denied The Court incorporates its explanation from
Report 144-2 targeted by SEC above.
• 12 n.52 subpoena
• 15 nn.71–72
Ex. 3: van Drunen Rule 26 128-5, Bank/loan account Granted Sensitive financial information
Report 144-2 information
• 15 n.73
Table 130
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15cv2287
Item ECF No. Description Determination Basis/Explanation
Ex. 6: Micheletti Dep 144-4 Identities of third- Granted The redactions are narrowly tailored to
• 73:18, 24 party bank customers information about third-party bank
• 74:23–24 and associated customers, and this information is
• 75:7 representatives unnecessary to understand the Court’s
• 77:2–3, 23, 25 rulings and the parties’ dispute.
• 79:6, 12, 24–25
• 80:5
• 81:11, 14, 21
Ex. 297: Customer Deposit 144-5 Bank/loan account Granted The redactions are narrowly tailored to
History and Related E-mails information and information about a third-party bank
identity of third- customer, and this information is
party bank customer unnecessary to understand the Court’s
r ulings and the parties’ dispute.
Table 130
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TABLE 153
Item ECF No. Description Determination Basis/Explanation
Ex. B: Erhart Dep. 155-3 Identities of third Denied The Court incorporates its explanation from
• 639:4–5 parties involved in above.
structured settlement
transactions
Ex. E: Ball Dep. 155-6 Identity of employee Denied There are not compelling reasons to seal
• 329:9, 16 who Erhart this information.
investigated
Ex. K: Micheletti Dep. 155-12 Identities of third- Granted The Court previously approved these
• 73:18, 24 party bank customers redactions above.
• 74:23–24 and associated
representatives
Ex. R: Lopez E-mail RE: 155-19 Home address of Granted The redaction is narrowly tailored to
FMLA Leave employee personal information, and this information
is unnecessary to understand the Court’s
rulings and the parties’ dispute.
Ex. V: Lopez E-mail RE: 155-23 Same as Ex. R Granted Same as Ex. R
FMLA Leave
Ex. Z: Summary of 155-27 Same as Ex. G Granted Same as Ex. G considered in ECF No. 150
Personnel Costs considered in ECF
No. 150
Ex. AA: Gillam E-mail RE: 155-28 Identity of bank Granted in part The Court incorporates its explanation from
SEC Subpoena client being above for the name of the client being
investigated by the investigated. As to the other information,
SEC and contact the redaction is narrowly tailored to
information of third personal information of a third party, and
party. this information is unnecessary to
understand the Court’s rulings and the
parties’ dispute.
Table 153
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15cv2287
Item ECF No. Description Determination Basis/Explanation
Ex. BB: Gillam E-mail RE: 155-29 Same contact Granted Same as part of Ex. AA.
NYT Article information of third
party as Ex. AA
Table 153
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15cv2287
TABLE 156
Item ECF No. Description Determination Basis/Explanation
Opp’n 158, Argument involving Granted Bank examination privilege
• 10:21–24 174-2 bank examination
• 11:3–7
• 13:15–16, 25–26
Opp’n 158, Information Denied Unlike other potentially non-public bank
• 15:26–28 174-2 regarding CEO’s information, the Court finds this
• 16:3–5, 11 brother’s bank information is necessary to understand the
account nature of Erhart’s allegations concerning
CEO Garrabrants’s brother’s account and
BofI’s defense to these claims. Hence,
there are not compelling reasons to seal this
information in these circumstances.
Opp’n 158, Argument involving Granted in part The Court seals part of this information in
• 19:14–15, 17–18, 19– 174-2 bank examination light of the bank examination privilege
20 (Opp’n 19:14–15), but denies the request to
seal Erhart’s claim that the Bank was
defrauding its regulator (Opp’n 17:18).
Opp’n 158, Argument involving Denied There are not compelling reasons to seal
• 22:7 174-2 former employee this information.
Opp’n 158, Argument involving Granted Bank examination privilege
• 22:9–14, 19–23, 25 174-2 bank examination
Opp’n 158, Argument involving Denied Neither party demonstrates compelling
• 21:3–22:3 (varying 174-2 former bank reasons for sealing this information.
redactions) employees’
• 22:5–23:3 (varying observations
redactions)
Table 156
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15cv2287
Item ECF No. Description Determination Basis/Explanation
Opp’n 158, Argument involving Granted Bank examination privilege
• 35:14–17 174-2 bank examination
Ex. C: Erhart Dep. 158-6, Identities of third Denied The Court incorporates its explanation from
• 608:19–21, 23 174-3 parties involved in above.
• 613:15, 18–19 structured settlement
• 614:4, 13, 15, 23 transactions
• 619:14
• 625:19
• 626:15
Ex. C: Erhart Dep. 158-6, Name of trust Denied The Court incorporates its explanation from
• 625:2 174-3 above.
• 626:21
Ex. C: Erhart Dep. 158-6, Information Denied The Court incorporates its explanation from
• 654:22 174-3 regarding CEO’s above.
brother’s bank
account
Ex. C: Erhart Dep. Errata 158-6, Information Denied The Court incorporates its prior
Sheet 174-3 regarding third explanations for the same material.
• 276:10–12 parties involved in
• 627:13 structured settlement
• 627:18–20 transactions
Ex. E: Erhart Dep. 158-6, Testimony regarding Granted in part BofI relies on the same deposition pages in
• 1144:9–18 174-3 bank examination its motion for summary judgment.
• 1145:6–12, 22–24 However, BofI proposes different
• 1150:1–12 redactions for this copy of the deposition
• 1151:1–7, 17–25 than those redactions proposed above.
• 1246:14–1247:14 (Compare ECF No. 174-3, with ECF No.
158-6.) Thus, the Court seals the same
material as the Court did above, but denies
Table 156
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15cv2287
Item ECF No. Description Determination Basis/Explanation
the request to seal additional material on
these pages.
Ex. F: Ball Dep. 158-6, Same as above Granted in part The Court has already ruled on these
• 146:12–15, 24–25 174-3 redactions. The Court incorporates its
explanation from above. The Court denies
Erhart’s request to seal more of page 146
than the Court previously considered.
(Compare ECF No. 158-9 at 146, with ECF
No. 127-12 at 146.)
Ex. M: Brickey Dep. 174-6 Testimony regarding Denied Neither party demonstrates compelling
• 6:14–15 former employee’s reasons for sealing this information.
• 127:1–128:25 observations
• 133:1–25
Ex. M: Brickey Dep. 147-6 Testimony regarding Granted Bank examination privilege
• 23:9–24:8 bank examination
• 24:23–25
• 48:1–25
• 57:1–60:20
• 92:8–10
• 92:17–19
• 93:7–20
Ex. M: Brickey Dep. 147-6 Testimony regarding Granted in part The Court denies the request to seal the fact
• 24:9–22 third party’s medical that the employee went out on stress leave
treatment and later resigned, but grants the request to
seal information concerning medical
treatment, which is sensitive information of
Table 156
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15cv2287
Item ECF No. Description Determination Basis/Explanation
a third party that is also irrelevant to the
parties’ dispute.
Ex. N: Sisk Dep. 174-7 Testimony Granted in part The Court grants the request to seal the
• 24:10–14 concerning bank sentence on page 24, lines 10 to 12, in light
reserves of the bank examination privilege.
Ex. N: Sisk Dep. 174-7 Testimony regarding Denied Neither party demonstrates compelling
• 41:3–42:25 former employee’s reasons for sealing this information.
• 49:1–25 observations
• 55:1–16
• 59:1–5
• 76:3–25
Ex. O: List of Electronic 174-8 Bank/loan account Granted Sensitive financial information
Format Documents information
• 2
Ex. O: List of Electronic 174-8 Information Granted Bank examination privilege
Format Documents regarding bank
• 2–3 examination
Ex. O: List of Electronic 174-8 Bank/loan account Granted The redactions are narrowly tailored to
Format Documents information and sensitive financial information and the
• 5–8 information identities of third-party bank customers, the
regarding third-party disclosure of which is unnecessary to
bank customers understand the Court’s rulings and the
parties’ dispute.
Ex. O: List of Electronic 174-8 Bank/loan account Granted in part The Court denies the request to seal the
Format Documents information and identities of the third parties involved in
• 11–18 identities of third structured settlement transactions for the
• 20 reasons explained above. The Court
Table 156
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Item ECF No. Description Determination Basis/Explanation
parties and related otherwise grants the request because the
information redactions are narrowly tailored to sensitive
financial information and the identities of
third-party bank customers, the disclosure
of which is unnecessary to understand the
Court’s rulings and the parties’ dispute.
Ex. O: List of Electronic 174-8 Bank examination Granted Bank examination privilege
Format Documents information
• 18
Ex. 47: Whistleblower 174-10 Bank examination Granted Bank examination privilege
Discussion Notes information
• BofI 5900
Ex. 47: Whistleblower 174-10 Bank/loan account Granted The redactions are narrowly tailored to
Discussion Notes and customer sensitive financial information and the
• BofI 5902–05 information identities of third-party bank customers, the
• BofI 5912 disclosure of which is unnecessary to
understand the Court’s rulings and the
parties’ dispute.
Ex. 47: Whistleblower 174-10 Information Denied The Court incorporates its explanation from
Discussion Notes concerning CEO’s above.
• BofI 5905–06 and brother’s bank
accounts
Ex. 47: Whistleblower 174-10 Erhart’s allegations Denied The Court incorporates its explanation from
Discussion Notes concerning other above.
• BofI 5911 bank employees
Ex. 229: Erhart E-mail to 174-11 Fiscal Strategic Plan Granted The Court seals the Fiscal Strategic Plan
Ball RE: Strategic Plan because it contains sensitive business
information, and the disclosure of this
Table 156
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Item ECF No. Description Determination Basis/Explanation
information is unnecessary to understand
t he parties’ dispute and the Court’s rulings.
Table 156
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15cv2287
TABLE 161 & 165
Item ECF No. Description Determination Basis/Explanation
Reply 164 Argument involving Granted Bank examination privilege
• 5:18–6:1, 14 bank examination
• 7:14–15, 17–18
• 8:16–18, 20–22
• 9:17
Reply 164 Argument involving Denied The Court incorporates its explanation from
• 14 n.10 CEO’s bank account above.
Reply 164 Argument involving Denied The Court incorporates its explanation from
• 18:8–17 observations of above.
former employees
Ex. A: Erhart Dep. 164-2 Testimony involving Granted The redactions are narrowly tailored to
• 570:13 third-party bank information regarding a third-party bank
• 574:11 customer customer, the disclosure of which is
• 579:1–2, 6, 9, 21, 23 unnecessary to understand the Court’s
rulings and the parties’ dispute.
Ex. A: Erhart Dep. 164-2 Identity of third Denied The Court incorporates its explanation from
• 621:4–6 party involved in above.
• 624:7–8, 25 structured settlement
• 625:2, 19 transaction and name
• 632:6 of trust
Ex. C: Erhart Dep. 164-4 Testimony involving Granted The Court has already determined this
• 1144:9–11 bank examination information may be sealed above.
• 1145:8–10, 23–25 However, the Court notes that the proposed
• 1146:3–4, 6–7, 10–11 redactions do not match up with those
• 1151:5–6, 11–12 previously suggested by the Bank.
Table 161 & 165
- 1 -
15cv2287
Item ECF No. Description Determination Basis/Explanation
(Compare ECF No. 164-4, with ECF No.
127-11.)
Ex. D: Garrabrants Dep. 164-5 Name of trust Denied The Court incorporates its explanation from
• 177:19, 21, 25 above.
• 178:15–16, 22, 24
Joint Statement of 167 Bank/loan account Granted Sensitive financial information
Undisputed Facts (“JSUF”) information
• ¶ 23
• ¶¶ 25–26
JSUF 167 Bank examination Granted Bank examination privilege
• ¶ 29 information
• ¶ 31
JSUF 167 Information Denied The Court incorporates its explanation from
• ¶ 42 concerning above.
• ¶ 43 structured settlement
transactions
Table 161 & 165
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15cv2287