P & L Development, LLC v. Gerber Products Company

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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P&L DEVELOPMENT, LLC,

Plaintiff, MEMORANDUM

-against- AND OPINION

CV 21-5382 (MKB) (AYS)

GERBER PRODUCTS COMPANY,

NESTLE S.A., PERRIGO COMPANY PLC, L.

PERRIGO COMPANY and PBM

NUTRITIONALS, LLC,

Defendants.

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SHIELDS, Magistrate Judge:

Before the Court is the renewed motion to seal filed by Defendants Perrigo Company,

PLC, L. Perrigo Company, and PBM Nutritionals, LLC (collectively, the “Perrigo Defendants”),

seeking to seal certain portions of the Gerber-Perrigo Supply Agreement (the “Supply

Agreement”) that was submitted to the District Court as an exhibit in support of their motion to

dismiss Plaintiff, P & L Development, LLC’s (“Plaintiff”) Complaint. The original motion to

seal was filed with the District Court on March 2, 2022, in conjunction with the Perrigo

Defendants’ motion to dismiss. (Docket Entry (“DE”) [52].) The issue of sealing being a non-

dispositive matter automatically referred to this Court, a telephone conference with respect to the

sealing motion was held before this Court on March 14, 2022. During that conference, this Court

directed the Perrigo Defendants to renew their motion to seal on or before April 4, 2022,

specifying every item sought to be sealed and providing an explanation for why the material

should be sealed.

The Perrigo Defendants renewed their motion on April 4, 2022. (DE [87].) Plaintiff filed

opposition to the motion on April 15, 2022, and a reply was submitted by the Perrigo Defendants

on April 20, 2022. Having reviewed the parties’ motion papers, and their arguments in support of

and in opposition to sealing, the Court holds that the Perrigo Defendants’ motion to seal is

granted in part and denied in part.

BACKGROUND

Familiarity with the facts of this action is presumed and, as such, the facts will not be

repeated herein. On January 10, 2022, this Court granted in part and denied in part Defendant

Gerber Products Company’s (“Gerber”) motion to seal portions of the Complaint and the

memorandum of understanding between Plaintiff and Gerber (“MOU”), attached to the

Complaint as an exhibit. In determining the motion, the Court ordered only small portions of the

Complaint and the MOU to be sealed, limiting such sealing to those statements in the documents

that pertain to pricing information and specific manufacturing information that, if disclosed to

competitors, could injure Gerber’s competitive position. (DE [37].)

The Perrigo Defendants now seek to seal significant portions of the Supply Agreement,

which was submitted to the District Court as an exhibit in support of their motion to dismiss

Plaintiff’s Complaint.1 In support of their motion, the Perrigo Defendants offer the declarations

of their counsel, J. Clayton Everett, Jr., and Gerber’s Vice President and General Counsel,

Kenneth L. Goldberg, who both argue that the information sought to be sealed contains “non-

public information that could cause competitive harm if made public” and that such information

“is not necessary for the public to understand the arguments in support of or in opposition to the

Perrigo Defendants’ Motion to Dismiss.” (Everett, Jr. Decl., DE [87-1], ¶ 3.) The Perrigo

Defendants also rely on the fact that the Supply Agreement contains a confidentiality provision

in Section 11.11, entitled “No Public Disclosure.” (Goldberg Decl., DE [88], ¶ 4.)

1 The Perrigo Defendants’ renewed motion states that they are no longer seeking to seal any

information contained in their memoranda of law submitted in support of their motion to dismiss,

as previously requested in their original motion to seal.

While Plaintiff agrees that some of the information sought to be sealed by the Perrigo

Defendants is highly confidential and should be shielded from public disclosure, it argues that

many of the sealing requests made by the Perrigo Defendants are overbroad and do not qualify

for sealing under the test adopted by the Second Circuit. For the reasons discussed below, the

Court largely agrees with Plaintiff.

DISCUSSION

I. Legal Standard for Sealing

“The public and the press have a ‘qualified First Amendment right to . . . access certain

judicial documents.’” Toolasprashad v. Toolasprashad, 21-CV-4672, 2021 WL 4949121, at *2

(E.D.N.Y. Oct. 25, 2021) (quoting Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 120 (2d

Cir. 2006)) (additional citations omitted). Such judicial documents include complaints, see In re

Google Digital Advertising Antitrust Litig., Nos. 21-md-3010, 21-cv-6841, 2021 WL 4848758,

at * 1 (S.D.N.Y. Oct. 15, 2021), as well as other filings that are “relevant to the performance of

the judicial function and useful in the judicial process.” Lugosch, 435 F.3d at 119.

While there is a presumptive right of public access to judicial documents, that right is

“not absolute.” Mirlis v. Greer, 952 F.3d 51, 59 (2d Cir. 2020) (quoting Nixon v. Warner

Commc’ns, Inc., 435 U.S. 589, 599 (1978)). Thus, even judicial documents may be kept under

seal if “higher values . . . so demand.” Lugosch, 435 F.3d at 124. Such values may, in

appropriate cases, include business interests. See, e.g., GoSMiLE, Inc. v. Dr. Jonathan Levine,

D.M.D. P.C., 769 F. Supp. 2d 630, 649-50 (S.D.N.Y. 2011) (allowing sealing of documents

“contain[ing] highly proprietary material concerning the defendants’ marketing strategies,

product development, costs and budgeting”); In re Zyprexa Injunction, 474 F. Supp. 2d 385, 424-

25 (E.D.N.Y. 2007) (allowing for sealing of “confidential proprietary material and trade secrets”

that pose “a significant risk of harm to . . . a pharmaceutical company operating in a competitive

marketplace.”); Playtex Prods., LLC v. Munchkin, Inc., No. 14-cv-1308, 2016 WL 1276450, at

*11-12 (S.D.N.Y. Mar. 29, 2016) (granting request to redact portions of summary judgment brief

which referenced “confidential and sensitive business information, including sales and costs

information, presentations, merger discussions, and competitive analyses and product testing”);

Encyclopedia Brown Prods., Ltd. v. Home Box Office, Inc., 26 F. Supp. 2d 606, 614 (S.D.N.Y.

1998) (allowing for sealing of information that “may provide valuable insights into a company's

current business practices that a competitor would seek to exploit.”); see also Fed. R. Civ. P.

26(c)(1)(G) (permitting issuance of a protective order, for good cause, to prevent disclosure of “a

trade secret or other confidential research, development, or commercial information”). In such

cases, while there might be no basis to keep judicial documents under seal in their entirety, there

may be a basis to redact limited information. See In re General Motors LLC Ignition Switch

Litig., Nos. 14-MD-2543, 20-CV-3732, 2021 WL 5331709, * 3 (S.D.N.Y. Nov. 16, 2021).

An order restricting public access to judicial documents must be based upon specific, on-

the-record findings that sealing is necessary to preserve the asserted interest. Additionally, any

order to seal must be “narrowly tailored to achieve that aim.” Brown v. Maxwell, 929 F.3d 41,

47 (2d Cir. 2019) (quoting Lugosch, 435 F.3d at 124). Findings as to sealing are determined by

engaging in a three-step analysis. “First, the court determines whether the filing is a ‘judicial

document;’ second, it determines the weight of the presumption of access afforded to the

document; and third, the court must identify and weigh factors ‘that legitimately counsel’ against

public access.” Google, 2021 WL 4848758 at *1 (quoting Mirlis, 952 F.3d at 59); see also

Allegra v. Luxottica Retail N. Am., No. 17-CV-05216, 2021 WL 4799032, *2 (E.D.N.Y. Oct.

14, 2021). Ultimately, sealing or redaction is warranted only if the privacy interests of the party

resisting disclosure outweigh the presumption of access.

II. Disposition of the Motion

There is no question – nor do the parties dispute – that the information the Perrigo

Defendants seek to seal is contained within a “judicial document” in that the Supply Agreement

was filed as an exhibit in support of their motion to dismiss. See Bredehorn v. Young, No. CV

19-1010, 2020 WL 2042391, at *2 (E.D.N.Y. Apr. 28, 2020) (“Documents filed as exhibits to

motions or as attachments to letters filed with the Court seeking some type of judicial action are,

in fact, ‘judicial documents.’”) (citing Bernstein v. Bernstein Litowitz Berger & Grossman LLP,

No. 14-CV-6867, 2016 WL 1071107, at *5 (S.D.N.Y. Mar. 18, 2016), aff’d, 814 F.3d 132 (2d

Cir. 2016)). Accordingly, it is entitled to a strong presumption of access. See Lugosch, 435 F.3d

at 121 (“Our precedents indicate that documents submitted to a court for its consideration in a

. . . motion are – as a matter of law – judicial documents to which a strong presumption of access

attaches, under both the common law and the First Amendement.”). Moreover, the necessity of

public understanding is present “even in private business disputes.” Alcon Vision, LLC v. Lens.

com, No. 18-CV-0407, 2020 WL 3791865, at *4 (E.D.N.Y. July 7, 2020).

Accordingly, the Court finds that the first two prongs of the Lugosh balancing test weigh

heavily in favor of public access. With respect to the third prong of the analysis, there is no

question but that the Court has the power to seal portions of judicial documents that constitute

highly competitive business information. Before shielding a document from the public docket

however, the Court must find, particularly, that the claimed interest in sealing is outweighed by

the public’s right to access. The party seeking sealing bears the burden of showing that the

confidential business interests of its client outweigh the public’s right to understand the

allegations in this lawsuit, as well as the reason why the Court takes any action herein. See

Sylvania v. Ledvance, 20-CV-9858, 2021 WL 412241, at *2 (S.D.N.Y. Feb. 5, 2021); Alcon,

2020 WL 3791865, at *6.

A. The Parties’ Agreed Redaction: Schedule 2 to the Supply Agreement

The parties agree to sealing Schedule 2 to the Supply Agreement, which contains

a table entitled “Take-or-Pay Amount,” on page 24 of the Supply Agreement. Nonetheless, this

Court must decide whether sealing this information outweighs the right of public access. The

Perrigo Defendants request to seal the information contained in Schedule 2 on the grounds that it

contains pricing information, which, if disclosed, could cause competitive harm to the Perrigo

Defendants.

“Pricing information” has been held to “fall within the scope of protected trade secrets.”

Uni-Systems, LLC v. U.S. Tennis Ass’n, Inc., No. 17 CV 147, 2019 WL 3753780, at *5

(E.D.N.Y. Aug. 8, 2019). The information contained in Schedule 2 is of a highly sensitive

competitive nature, which, if disclosed, could certainly harm the Perrigo Defendants’ business

interests, both currently and in the future, by revealing to competitors minimum purchase

commitments and specific pricing terms negotiated between the Perrigo Defendants and Gerber.

Moreover, public disclosure of this information would do little to enlighten the public about the

nature of this case. Nor is it necessary to understand the motion to dismiss pending before the

District Court, or any rulings rendered in connection therewith. Accordingly, this Court finds

good cause to seal Schedule 2 to the Supply Agreement in its entirety.

B. The Perrigo Defendants’ Requested Redactions

As stated above, the Perrigo Defendants base their request for sealing, in part, on

the ground that the Supply Agreement contains a confidentiality provision at Section 11.11,

entitled “No Public Disclosure,” which states that “[n]either Party may make any public

statement, announcement or disclosure to Third Parties concerning the existence of this

Agreement or its terms, the business relationship between the Parties or the transactions

contemplated hereby, without the prior written approval of the other Party except as required by

applicable law (including, but not limited to, securities laws).” (Goldberg Decl. ¶ 4.) As this

Court previously held in connection with Gerber’s prior motion to seal, the mere fact that the

Supply Agreement includes a confidentiality provision does not, by itself, require sealing of this

document. See, e.g., Under Seal v. Under Seal, 273 F. Supp. 3d 460, 471 (S.D.N.Y. 2017); Aioi

Nissay Dowa Ins. Co. Ltd. v. ProSight Specialty Mgmt. Co., Inc., No. 12 Civ. 3274, 2012 WL

3583176, at *6 (S.D.N.Y. Aug. 12, 2012); Wells Fargo Bank, N.A. v. Wales LLC, 993 F. Supp.

2d 409, 414 (S.D.N.Y. 2014).

The Court now turns to the specific sections of the Supply Agreement sought to be

sealed, which can be broken down into three categories: (1) Pricing information; (2) Design

manufacturing, and supply process information; and, (3) Information concerning the scope of the

Supply Agreement.

1. Pricing Information: Section 4.1 and Schedule 1

The Perrigo Defendants argue that Section 4.1 of the Supply Agreement,

as well as Schedule 1 thereto, contain confidential pricing information, including the pricing

terms offered to the Perrigo Defendants by Gerber, the specific proprietary formulations covered

by the Supply Agreement, and the Perrigo Defendants’ minimum annual product volume

commitments. (Everett, Jr. Decl. ¶ 4.) Plaintiff agrees that the specific pricing term found in

Section 4.1 should be sealed, as well as Table A in Schedule 1.

The Court agrees with Plaintiff. Section 4.1 consists of two sentences, with only the

second sentence containing arguably sensitive commercial information. The first sentence does

nothing more than set out the general obligations agreed to by the Perrigo Defendants and

Gerber. (Supply Agreement, annexed to Everett, Jr. Decl. at Ex. A, at 10.) Accordingly, the

Court finds that, on balance, the need to maintain confidentiality outweighs the right to public

disclosure with respect to only the second sentence of Section 4.1. As such, the Perrigo

Defendants’ motion to seal is granted with respect to the second sentence of Section 4.1 and

denied with respect to the first sentence.

With respect to Schedule 1, the Schedule consists of two tables – Table A, entitled

“Products and Formulations,” and Table B, entitled “Minimum Annual Product Volumes and

Product Prices.” (Supply Agreement at 22-23.) There is no question that Table B should be

sealed. It contains specific contractual pricing information and the minimum amounts the Perrigo

Defendants have contracted to purchase from Gerber. As stated above, such information is

considered a trade secret and deserving of confidential treatment. Accordingly, the Perrigo

Defendants’ motion to seal Table B in Schedule 1 is granted.

Table A, however, contains no real information. In fact, aside from three entries

consisting of combined letters and numbers, the rest of the entries in the table are listed as

“TBD,” as in “to be determined.” The Court finds nothing confidential about information that

has yet to even be determined. Moreover, the few letters and numbers listed in Table A are not

defined in any way and appear to be meaningless to anyone other than the Perrigo Defendants

and Gerber. Accordingly, the motion to seal Table A in Schedule 1 is denied.

2. Manufacturing, Design and Supply Process Information: Sections 2.3, 2.4,

2.5, 2.7, 2.8, Certain information on Page 16 of the Quality Agreement

Annexed to the Supply Agreement, and Schedule 7

The information sought to be sealed as manufacturing, design and supply

process information consists of information pertaining to: (1) the timing and manner in which the

Perrigo Defendants purchase products from Gerber; (2) specific details concerning Gerber’s

delivery of products to the Perrigo Defendants; (3) the Perrigo Defendants’ purchase

commitments to Gerber; (4) the processes Gerber must use to manufacture the Perrigo

Defendants’ proprietary infant formulas; (5) the allocation of manufacturing costs between

Gerber and the Perrigo Defendants; (6) the Perrigo Defendants’ specific proprietary formulations

covered by the Supply Agreement; and, (7) the specific quality metrics governing Gerber’s

supply of infant formula to the Perrigo Defendants. (Everett Decl. ¶ 5.) Plaintiff does not oppose

sealing certain limited portions of the information the Perrigo Defendants seek to redact, as noted

below.

Sections 2.3, 2.7, and 2.8 set forth nothing more than general contractual terms with

respect to how often the Perrigo Defendants will purchase products from Gerber, a general

statement as to the materials Gerber will use to manufacture the infant formula, and how costs

are allocated between the Perrigo Defendants and Gerber. (Supply Agreement at 6-8.) The Court

finds no sensitive business information contained therein. Moreover, such information may be

important to the District Court in determining the pending motions to dismiss and likewise

important to the public’s ability to understand any decisions reached in this matter. Accordingly,

the motion to seal Sections 2.3, 2.7 and 2.8 of the Supply Agreement is denied.

With respect to Sections 2.4 and 2.5, the Court finds that those provisions contain certain

discrete terms deserving of sealing. For the most part, Section 2.4, entitled “Product Delivery

Instructions,” contains general contractual obligations with respect to how and when Gerber will

deliver its product to the Perrigo Defendants. (Supply Agreement at 6.) However, within the

section there is a discrete amount set forth at line 21 with respect to how much Gerber is

permitted to vary the quantity of the product delivered to the Perrigo Defendants. The Court

finds that this discrete amount constitutes sensitive business information that should be shielded

from disclosure. The rest of the section, however, does not qualify for such protection and the

interests of public disclosure outweigh any private business interest identified. As such, the

motion to seal is granted with respect to only the discrete percentage amount contained in line 21

of Section 2.4 and denied with respect to the remainder of the section.

Similarly, Section 2.5 sets forth the parameters concerning the minimum amount of

product that the Perrigo Defendants shall purchase from Gerber each contract year, without

identifying the actual amount. The section goes on to state that if the Perrigo Defendants fail to

purchase the annual minimum volume of product, then they shall pay amounts set forth in

Schedule 2, without identifying the exact amounts. Accordingly, there is nothing more than

general contractual obligations set forth in Section 2.5, with the exception of a specific amount

identified in the last sentence of the section, which the Court finds to be commercially sensitive

and, if disclosed, could harm the parties to the Supply Agreement. Accordingly, the motion to

seal Section 2.5 is denied except with respect to the fifteen words following the word “Year” in

lines 22 and 23 of Section 2.5.

The Perrigo Defendants also seek to seal the table on page 16 of the Quality Agreement

that is annexed to the Supply Agreement. While Plaintiff opposes the motion on the grounds that

the Perrigo Defendants did not seek to seal this information in the original motion to seal made

to the District Court, by permitting the Perrigo Defendants to renew their motion, this Court

implicitly permitted them to modify or add items sought to be sealed. Moreover, upon review of

the table listed on page 16, the Court finds that it contains commercially sensitive information in

that it lists the specific proprietary formulations belonging to the Perrigo Defendants, by both

formula number and description, thereby linking the specific products to their formula numbers.

On balance, the Perrigo Defendants’ business interests outweigh any public interest in the

disclosure of this information. Nor is the information necessary to a determination of the pending

motions to dismiss or the public’s ability to understand such a determination. Accordingly, the

motion to seal the table contained on page 16 of the Quality Agreement annexed to the Supply

Agreement is granted.

The final item sought to be sealed as manufacturing, design and supply process

information is Schedule 7 to the Supply Agreement, which, again, sets forth general contractual

obligations on Gerber’s part with respect to the quality metrics governing its supply of product to

the Perrigo Defendants. (Supply Agreement at 36.) While it is doubtful the District Court will

need to interpret this information in rendering its decision on the motions to dismiss, or that the

public will need this information to understand any such decision, there is also simply nothing

confidential or commercially sensitive about the general information contained in Schedule 7.

Accordingly, the motion to seal Schedule 7 to the Supply Agreement is denied.

3. Information Concerning the Scope of the Supply Agreement:

Sections 2.2. and 10.1

The Perrigo Defendants seek to seal the information contained in

Sections 2.2 and 10.1 on the ground that they relate to the scope of the relationship between

Gerber and the Perrigo Defendants, including their respective rights under the Supply Agreement

to purchase or sell infant formula products. (Everett Decl. ¶ 6.) Section 2.2 is an exclusivity

provision and Section 10.1 concerns the term of the Supply Agreement. (Supply Agreement at 5,

17.) These sections are at the very heart of this litigation wherein Plaintiff is alleging that Gerber

engaged in anti-competitive conduct to Plaintiff’s detriment and that all defendants monopolized

and conspired to monopolize the infant formula market. Accordingly, Sections 2.2 and 10.1

appear to be crucial to the District Court’s determination of the pending motions to dismiss, and

likewise integral to the public’s understanding of that determination. For these reasons, the Court

finds that the public interest in disclosure outweighs the private business interests identified by

the Perrigo Defendants. The motion to seal is denied with respect to Sections 2.2 and 10.1 of the

Supply Agreement.

CONCLUSION

For the foregoing reasons, the Perrigo Defendants’ motion to seal is granted in part and

denied in part. Specifically, the following sections of the Supply Agreement are permitted to be

sealed: (1) the discrete percentage amount found at line 21 of Section 2.4; (2) the fifteen words

following the word “Year” at lines 22 and 23 of Section 2.5; (3) the second sentence of Section

4.1; (4) Table B in Schedule 1; (5) Schedule 2 in its entirety; and (6) the table contained on page

16 of the Quality Agreement annexed to the Supply Agreement. In all other respects, the motion

to seal is denied.

Counsel’s compliance with this Order is stayed pending either a decision on any appeal to

the District Court, or expiration of the time in which to appeal.

SO ORDERED.

Dated: Central Islip, New York

May 6, 2022

/s/ Anne Y. Shields

ANNE Y. SHIELDS

United States Magistrate Judge