Shargian v. Shargian

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

MOSHE SHARGIAN CIVIL ACTION

VERSUS NO. 21-2282

YOEL SHARGIAN SECTION “O”

ORDER AND REASONS

Before the Court is the opposed motion1 of Defendant Yoel Shargian for leave

to file a sealed exhibit to his motion2 in limine to exclude testimony, evidence, or

argument about certain “Private Placement Memoranda” issued by non-party SKK

Opportunity Zone Fund I, LLC. That motion asks the Court to seal the unredacted

deposition transcript of Plaintiff Moshe Shargian’s expert forensic accountant Harold

Asher because, according to Defendant, Asher’s testimony is irrelevant and would put

the multi-million-dollar Charity Hospital redevelopment project at risk. But

Defendant has failed to carry his burden to satisfy “the exacting standard for sealing”

by presenting “compelling countervailing interests” sufficient to rebut “the working

presumption” that Asher’s unredacted deposition transcript should be accessible to

the public. Bin Hoa Le v. Exeter Fin. Corp., 990 F.3d 410, 419, 421 (5th Cir. 2021).

For that reason and for those that follow, the motion to seal is DENIED.

1 ECF No. 64.

2 ECF No. 59.

I. BACKGROUND

This case arises from a dispute between cousins Moshe and Yoel Shargian over

an alleged oral contract to split the proceeds of a project to redevelop Charity Hospital

in New Orleans, Louisiana. The facts are recounted in detail in Judge Vance’s opinion

on Defendant’s motion for summary judgment.3 The Court recounts here only those

facts strictly necessary to resolve the narrow motion to seal that is before it.

Plaintiff retained Harold Asher as an expert forensic accountant to opine on

Plaintiff’s alleged damages and other topics.4 Asher formed his opinion after

reviewing a set of financial documents that included the so-called “Private Placement

Memoranda”—prospectuses that SKK Opportunity Zone Fund, an investor in the

Charity Hospital redevelopment project and a partner of Defendant, issued to other

investors.5 The Private Placement Memoranda are subject to a stipulated

confidentiality agreement and protective order;6 they contain “confidential financial

projections and financing structures” of the Charity Hospital redevelopment project.7

Asher gave deposition testimony that criticized representations SKK

Opportunity Zone Fund made to investors in the Private Placement Memoranda.8

Defendant now moves for leave to file an unredacted transcript of that deposition

3 ECF No. 80.

4 ECF No. 59-3 at 8.

5 Id. at 2.

6 ECF No. 44.

7 ECF No. 64-1 at 1–2.

8 ECF Nos. 64-2 (redacted, unsealed) & 64-4 (unredacted, sealed).

testimony as a sealed exhibit to his motion in limine to exclude evidence, testimony,

and argument regarding the Private Placement Memoranda. Plaintiff opposes.9

II. LEGAL STANDARD

“The public’s right of access to judicial proceedings is fundamental.” Binh Hoa

Le, 990 F.3d at 418. After all, “[j]udicial records belong to the American people; they

are public, not private, documents.” Id. at 417. “‘The public has an interest in

transparent court proceedings that is independent of the parties’ interests.’” June

Med. Servs., L.L.C. v. Phillips, 22 F.4th 512, 519 (5th Cir. 2022) (quoting In re Gee,

No. 19-30953, 2019 WL 13067384, at *4 (5th Cir. Nov. 27, 2019) (Elrod, J.,

concurring)). Courts are therefore “duty-bound to protect public access to judicial

proceedings and records.” Binh Hoa Le, 990 F.3d at 417. And Courts should “be

ungenerous with their discretion to seal judicial records.” Id. at 418.

Accordingly, “the working presumption is that judicial records should not be

sealed.” Binh Hoa Le, 990 F.3d at 419; accord, e.g., June Med. Servs., L.L.C, 22 F.4th

at 519–20 (“[W]e heavily disfavor sealing information placed in the judicial record.”).

That working presumption against sealing “can be rebutted only by compelling

countervailing interests favoring nondisclosure.” Bin Hoa Le, 990 F.3d at 421. “And,

to the extent that any sealing is necessary, it must be ‘congruent to the need.’” June

Med. Servs., L.L.C., 22 F.4th at 521 (quoting Binh Hoa Le, 990 F.3d at 420).

9 ECF No. 78.

Before sealing judicial records, the Court “must undertake a case-by-case,

‘document-by-document,’ ‘line-by-line’ balancing of ‘the public’s common law right of

access against the interests favoring nondisclosure.’” Binh Hoa Le, 990 F.3d at 419

(quoting United States v. Sealed Search Warrants, 868 F.3d 385, 390 (5th Cir. 2017)).

“Sealings must be explained at ‘a level of detail that will allow for [Fifth Circuit]

review.’” Id. (quoting Sealed Search Warrants, 868 F.3d at 397). “And a court abuses

its discretion if it ‘mak[es] no mention of the presumption in favor of the public’s

access to judicial records’ and fails to ‘articulate any reasons that would support

sealing.’” Id. (quoting S.E.C. v. Van Waeyenberghe, 990 F.2d 845, 849 (5th Cir. 1993)).

III. ANALYSIS

Defendant moves for leave to file Asher’s unredacted deposition transcript as

a sealed exhibit to Defendant’s motion in limine. Defendant submits that the

unredacted deposition transcript should be sealed for three principal reasons: first,

because Asher based his deposition testimony on a review of confidential business

information that is subject to a protective order; second, because public disclosure of

Asher’s testimony could harm the Charity Hospital redevelopment project; and third,

because Asher’s testimony is irrelevant. The Court considers each argument in turn.

First, Defendant has not carried his burden to justify sealing Asher’s

unredacted deposition transcript simply because Asher based his testimony on a

review of confidential business information subject to a protective order. “That a

document qualifies for a protective order under Rule 26(c) for discovery says nothing

about whether it should be sealed once placed in the judicial record.” June Med.

Servs., 22 F.4th at 521 (quoting Binh Hoa Le, 990 F.3d at 521); accord LOCAL CIVIL

RULE 5.6 (“[R]eference to a stipulation or protective order is not sufficient to establish

the necessity of sealing any document or other tangible item.”). True, “sealing may be

appropriate where [a document] incorporate[s] confidential business information.” N.

Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 204 (5th Cir.

2015). But Defendant has not “identif[ied] any particular confidential information”

within the four corners of Asher’s unredacted deposition transcript “that may cause

[Defendant] harm.” Id.; accord Cox Operating, LLC v. Atina M/V, No. 20-CV-2845,

2023 WL 3092797, at *1–2 (E.D. La. Apr. 26, 2023) (Milazzo, J.) (denying motion to

seal “sensitive commercial information” because the movants failed to “identify any

particular confidential information” that would harm them (quotation omitted)). It is

insufficient for Defendant to claim merely that Asher reviewed confidential business

records before his deposition, while saying nothing of what confidential information

Asher may or may not have revealed in the transcript Defendant seeks to seal.

Second, and similarly, Defendant has not carried his burden to support sealing

based on the supposed harm that Asher’s unredacted transcript could cause the

Charity Hospital redevelopment project if that transcript were publicly accessible.

“[A] showing that disclosure of the information sought to be sealed would harm a

party’s reputation or its business is not sufficient to overcome the strong common law

presumption in favor of public access.” Payne v. Payne, No. 3:22-CV-2709, 2023 WL

3136417, at *1 n. 5 (N.D. Tex. Apr. 27, 2023) (citing Brown & Williamson Tobacco

Corp. v. F.T.C., 710 F.2d 1165, 1179 (6th Cir. 1983)). The bare assertion that Asher’s

unredacted deposition transcript would harm the project is inadequate to support

sealing. See Vantage Health Plan, Inc. v. Willis-Knighton Med. Ctr., 913 F.3d 443,

451 (5th Cir. 2019) (explaining that “the bald assertion of competitive harm is

insufficient” to support sealing); see also Omega Hosp., LLC v. Cmty. Ins. Co., 14-CV-

2264, 2015 WL 13534251, at *4 (E.D. La. Aug. 12, 2015) (Barbier, J.) (denying motion

to seal “confidential and proprietary business information” because the movant

offered only “broad, unsupported allegations” to support its sealing request).

Third, the asserted irrelevance of Asher’s deposition testimony to Plaintiff’s

breach-of-contract claim is not an independent ground for sealing. Whatever the

relevance of Asher’s deposition testimony to that claim, Defendant has made Asher’s

testimony relevant to the public’s understanding of this litigation by submitting

Asher’s deposition transcript in support of Defendant’s pending motion in limine.

That motion in limine asks the Court to award Defendant affirmative, meaningful

relief—an order excluding evidence about the Private Placement Memoranda—based

in part on the very deposition testimony that Defendant asks the Court to seal.

Obliging Defendant’s request would lead to an “important judicial decision[]” being

“made behind closed doors and then announced in conclusive terms to the public, with

the record supporting the court’s decision sealed from public view.” United States v.

Holy Land Found. for Relief & Dev., 624 F.3d 685, 690 (5th Cir. 2010) (quoting In re

Sulfur Content Gasoline Prods. Liab. Litig., 517 F.3d 220, 230 (5th Cir. 2008)).

Finally, the two cases Defendant cites do not support sealing Asher’s

unredacted deposition transcript. The first case considered an unopposed motion to

seal exhibits that “primarily contain[ed] trade secrets and confidential information.”

Acad. of Allergy & Asthma in Primary Care v. La. Health Serv. & Indem. Co., 18-CV-

399, 2023 WL 3862033, at *1–3 (E.D. La. June 7, 2023) (Currault, M.J.). The court

granted the motion in part, “adjust[ing]” the movant’s proposed redactions “to shield

from the public view only the confidential business information and detailed financial

records contained within each exhibit.” Id. The sealing analysis there does not inform

the sealing analysis here for a fundamental reason: Unlike the movant there,

Defendant here has not specifically identified any confidential business information

within the four corners of Asher’s deposition transcript that would harm Defendant.

Defendant’s second cited case also does not meaningfully advance Defendant’s

argument. See Mendoza v. Doyle Int’l La., LLC, No. 17-CV-437, 2019 WL 5391389, at

*3 (M.D. La. Oct. 22, 2019). Mendoza granted a party’s unopposed motion to seal a

document filed by another party but later withdrawn from the record. Id. The court

reasoned that the strong presumption of public access did not attach because the

motion sought to seal “a proposed pleading that was withdrawn.” Id. That rationale

does not apply here. Unlike the proposed pleading in Mendoza, Asher’s deposition

transcript has not been withdrawn; it remains in the record because Defendant put

it there—as an attachment to Defendant’s own motion in limine.

In sum, Defendant has failed to carry his burden to satisfy “the exacting

standard for sealing” by presenting “compelling countervailing interests” sufficient to

rebut “the working presumption” that Asher’s unredacted deposition transcript

should be accessible to the public. Bin Hoa Le, 990 F.3d at 419 & 421.

IV. CONCLUSION

Accordingly,

IT IS ORDERED that Defendant’s opposed motion for leave to file the

unredacted deposition transcript of Plaintiffs expert forensic accountant Harold

Asher as a sealed exhibit to Defendant’s motion in limine to exclude testimony,

evidence, and argument regarding the Private Placement Memoranda is DENIED.

IT IS FURTHER ORDERED that if Defendant wishes to withdraw the

motion in limine, Asher’s unredacted deposition transcript, or both, Defendant must

file a motion to withdraw by February 15, 2024. If Defendant does not timely move

to withdraw, the Clerk of Court is respectfully directed to unseal and file into the

public record Asher’s unredacted deposition transcript!° on February 16, 2024.

New Orleans, Louisiana, this 8th day of February, 2024.

BRANDON 8. LONG

UNITED STATES DISTRICT JUDGE

10 ECF No. 64-4.