The City of Philadelphia v. Bank of America Corporation

ihe motion to seal 1s granted temporarily. Court will assess

whether to keep the materials at issue sealed or redacted when

deciding the underlying motion. The Clerk of Court 1s directed

December 1, 2022 to terminate ECF No. 367.

Via ECF SO_ORDERED,

Honorable Jesse Furman

United States District Judge

Southern District of New York

40 Centre Street, Room 2202 cember 5, 2022

New York, New York 10007

Re: City of Philadelphia, et al. v. Bank of Am. Corp., et al., 19-cv-1608 (JMF)

Dear Judge Furman:

Pursuant to Rule 7 of the Court’s Individual Rules and Practices in Civil Cases, and the

Stipulation and Order Regarding Redaction and Sealing Process for Class Certification Briefing

(Dkt. 358), Plaintiffs The City of Philadelphia, Mayor and City Council of Baltimore, and the

Board of Directors of the San Diego Association of Governments, Acting as the San Diego

County Regional Transportation Commission (collectively, “Plaintiffs”), on behalf of all parties,

hereby seek leave to file by ECF Plaintiffs’ Motion for Class Certification and Appointment of

Class Counsel (“Motion”) (Dkt. Nos. 362-366) with certain confidential documents and

information sealed or redacted.! An index listing all material that the parties seek to file in

redacted form or under seal is attached as Exhibit 1. The parties have met and conferred

regarding each’s proposed redactions and documents to be filed under seal, and no party opposes

the requests of any other party.”

The parties’ respective justifications for sealing or redacting those materials under

Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119-20 (2d Cir. 2006), and its progeny, are

set forth below. While the parties acknowledge that the materials to be redacted or sealed are

judicial documents to which the presumption of public access attaches, they believe that in

balancing the competing considerations against the presumption of access, the Court should

grant the parties’ motion.

' Plaintiffs’ opening memorandum of law in support of the Motion was filed on October 27, 2022 with

restricted access. Dkt. No. 363. Plaintiffs’ opening expert reports were filed on October 27, 2022,

annexed to the Declaration of Elizabeth Aronson, dated October 27, 2022 (“Aronson Decl.”’) (Dkt. No.

364), as Exhibit 1 (Expert Report of Prof. William Schwert (Dkt. No. 364-1)) and Exhibit 2 (Expert

Report of Dr. Rosa Abrantes-Metz report (Dkt. No. 364-2)), also with restricted access. Corrected

versions of certain other exhibits annexed to the Aronson Declaration were filed on October 28, 2022

(Dkt. Nos. 366-1 through 366-7), also with restricted access.

? Plaintiffs do not seek to seal or redact any portion of their own documents or deposition testimony

quoted or discussed in the Motion, and otherwise reserve all rights with respect to confidentiality.

Defendants’ information. Defendants have substantially narrowed the scope of their

confidentiality designations with respect to Defendants’ discovery material previously

designated as Confidential or Highly Confidential and filed, quoted from, or referenced in

Plaintiffs’ Class Certification papers. The materials that Defendants wish to keep confidential

and have filed in redacted form or under seal are documents and testimony that discuss specific

and sensitive information related to Defendants’ rate-setting processes, handling of VRDO

inventory and inventory limits, and internal strategy and compliance discussions, among other

items.

Filing these materials in redacted or sealed form is consistent with the standards for

sealing in the Second Circuit. Courts in the Second Circuit and the Southern District of New

York have held that it is appropriate to seal commercially sensitive “business information that

might harm a litigant’s competitive standing.” New York v. Actavis, PLC, No. 14-CV-7473

(RWS), 2014 WL 5353774, at *3 (S.D.N.Y. Oct. 21, 2014); see also City of Providence v. BATS

Glob. Markets, Inc., No. 14-CV-2811 (JMF), 2022 WL 539438, at *2 (S.D.N.Y. Feb. 23, 2022)

(allowing for sealing of documents based on potential harm to competitive standing). In order to

avoid creating a competitive disadvantage for a litigant, courts regularly allow the sealing of

commercially sensitive information, including “trade secrets, confidential research and

development information, marketing plans, revenue information, pricing information, and the

like.” Tyson Foods, Inc. v. Keystone Foods Holdings, Ltd., No. 1:19-CV-010125 (ALC), 2020

WL 5819864, at *2 (S.D.N.Y. Sept. 30, 2020).

The documents and testimony Defendants wish to keep confidential fall within the scope

of confidential and sensitive commercial information that should be sealed. These documents

include:

• Documents and testimony (and descriptions of the same) related to Defendants’ pricing

methodologies that provide specific information about analysis conducted and inputs

used to determine Defendants’ rates, and other specific processes related to rate-setting.

See Dkt. No. 363 at p. 5 n.7, p. 6 n.8; Dkt. No. 364-1 at p. 16; Dkt. No. 364-2 at p. 8

nn.314-16, p. 25 n.68, p. 71 n.244, pp. 78-87 & nn.258, 266, 287, 297, p. 98 & n.339;

Dkt. No. 364-9 at pp. 148-49; Dkt. No. 364-12 at pp. 116-18; Dkt. No. 364-13 at pp. 116-

17; Dkt. No. 364-14 at pp. 122-23; Dkt. No. 364-15 at p. 276; Dkt. No. 364-16; Dkt. No.

364-37; Dkt. No. 366-1 at pp. 78-80; Dkt. No. 366-2 at pp. 256-57; Dkt. No. 366-6.

Disclosure of this information would allow competitors to essentially re-create portions

of Defendants’ proprietary pricing methodologies and rate-setting processes. While some

of these materials may be from before 2010, similar or identical processes are still in

place today.

• Documents and testimony (and descriptions of the same) related to information relied on

by Defendants in setting rates. See Dkt. No. 364-2 at pp. 56 n.199, p. 74 n.249. Similar

to above, disclosure of this information would allow competitors to develop similar

practices in setting rates, harming Defendants.

• Descriptions of and quotes from documents and testimony related to Defendants’

tracking of VRDO inventory, handling of inventory, and inventory limits. See Dkt. No.

363 at p. 13; Dkt. No. 364-2 at pp. 52-54, 66 n.227. Disclosure of this information would

allow competitors to evaluate Defendants’ specific risk limits and inventory systems, and

to adjust their processes to compete against Defendants accordingly.

• Descriptions of and quotes from documents and testimony related to costs associated with

carrying VRDOs on Defendants’ books, yields on VRDOs, and other cost and pricing

information. See Dkt. No. 364-2 at p. 15 n.21, pp. 48-54 & nn. 158, 169, 172, 181, 188-

92; Dkt. No. 364-54 at p. 44. Similar to the materials discussed above, disclosure of

these materials could allow competitors to position themselves favorably against

Defendants in the market.

• Summaries of swap agreements entered into by Defendants See Dkt. No. 364-1 at pp. 71-

72. The existence and terms of these agreements are confidential, and disclosure of

information related to these swaps, including summaries of the numbers and types of

swaps that Defendants have entered into will provide competitors insight into this

confidential market that could be used to Defendants’ disadvantage.

• Documents and testimony (and descriptions of the same) related to internal strategy and

compliance decisions and procedures by Defendants. See Dkt. No. 363 at pp. 6-8 & n.18,

p. 11 n.33; Dkt. No. 364-2 at pp. 34, 63-64 & n.222; Dkt. No. 364-14 at p. 227; Dkt. No.

366-4 at pp. 200-03; Dkt. No. 364-19; Dkt. No. 364-20; Dkt. No. 364-44 at pp. 122-23;

Dkt. No. 366-3 at p. 219. Disclosure of this sensitive strategy and compliance material

would allow great access into Defendants’ internal decision-making processes, that could

be used to Defendant’s disadvantage.

• Documents and testimony (and descriptions of the same) discussing Defendants’ client

development strategies and positioning in the market compared to competitors. See Dkt.

No. 364-1 at p. 92; Dkt. No. 364-2 at p. 15 n.23, p. 56; Dkt. No. 364-3; Dkt. No. 364-54

at pp. 68-69. Again, disclosure of these materials could allow competitors to strategically

position themselves against Defendants, to the competitive detriment of Defendants.

Third party information. Plaintiffs, on behalf of third parties, request permission to seal

or redact, as applicable, certain confidential business and personal information of third parties

that is quoted and discussed in the Motion, including in the opening reports of Plaintiffs’ experts,

Professor Schwert and Dr. Abrantes-Metz. The relevant third parties provided such information

during discovery pursuant to document and deposition subpoenas, and subject to the Stipulated

Protective Order. Because it could be commercially harmful to the third parties to publicly

disclose such information, courts in this District have held that third-party confidential

information warrants sealing over public access. See, e.g., Dodona I, LLC v. Goldman, Sachs &

Co., 119 F. Supp. 3d 152, 156-57 (S.D.N.Y. 2015) (finding that sensitive personal information of

employees and third parties, as well as customer information regarding trading strategies,

objectives, and transactions, constitute the “type of information [that] overcomes the

presumption of public disclosure”); see also United States v. Amodeo, 71 F.3d 1044, 1050 (2d

Cir. 1995) (“We have previously held that ‘[t]he privacy interests of innocent third parties . . .

should weigh heavily in a court’s balancing equation.’”) (citations omitted). Accordingly,

sensitive third-party information has been authorized to be redacted from a motion for class

certification. Valelly v. Merrill Lynch, Pierce, Fenner & Smith Inc., 2022 U.S. Dist. LEXIS

140126, at *2-4 (S.D.N.Y. Aug. 4, 2022). Furthermore, the present request to seal or redact third

party information is narrowly tailored and still affords broad public access to the contents of the

Motion as a whole. See Playtex Prods., LLC v. Munchkin, Inc., 2016 U.S. Dist. LEXIS 42261, at

*41 (S.D.N.Y. Mar. 29, 2016) (authorizing sealing where request was “narrowly tailored”). For

example, of the seventy-six (76) exhibits to the Aronson Declaration, this letter-motion seeks

leave to seal only eight (8) of them as produced by third parties. See Aronson Decl., Exs. 33

(Dkt. 366-5), 43 (Dkt. 366-7), 44 (Dkt. 364-47), 46 (Dkt. 364-49), 53 (Dkt. 364-56), 54 (Dkt.

364-57), 55 (Dkt. 364-58) and 56 (Dkt. 364-59).

Other sensitive information in Prof. Schwert’s opening expert report. In addition to

containing commercially sensitive information of third parties, addressed above, Prof. Schwert’s

opening expert report also quantifies the impact of Defendants’ alleged artificial inflation of

VRDO rates and calculates his initial estimate of class damages, see Dkt. 364-1, pp. 65-68, as

also discussed in the opening memorandum of law. Such financial figures also are proper

subjects of redaction. See Valelly, 2022 U.S. Dist. LEXIS 140126, at *3-4 (granting application

to seal expert report that contained, inter alia, the “financial implications of [the defendant

bank’s] rate decisions”). Plaintiffs seek leave to redact such information.

* * *

Accordingly, on behalf of the parties, Plaintiffs respectfully request that the portions of

Plaintiffs’ opening memorandum of law, opening expert reports, and Exhibits 6, 8, 9, 10, 11, 12,

14, 24, 26, 41 and 51 to the Aronson Declaration, highlighted in green (as indexed in Exhibit 1

hereto) be permitted to be filed in redacted form. All such materials are being filed with this

letter-motion in both redacted and highlighted form, in accordance with Rule 7.C.iii of the

Court’s Individual Rules and Practices in Civil Cases.3

On behalf of the parties, Plaintiffs respectfully further request that Exhibits 3, 13, 16, 17,

33, 34, 42, 43, 44, 46, 53, 54, 55 and 56 to the Aronson Declaration (as also indexed in Exhibit

1), which were filed under seal on October 27, 2022 or in corrected form under seal on October

28, 2022, as applicable, be permitted to remain under seal.

Respectfully submitted,

/s/ Daniel L. Brockett /s/ David H. Wollmuth /s/ William Christopher Carmody

Daniel L. Brockett David H. Wollmuth William Christopher Carmody

Quinn Emanuel Wollmuth Maher & Deutsch Susman Godfrey LLP

Urquhart & Sullivan, LLP

LLP

cc: All counsel of record (via ECF)

3 Plaintiffs’ filings made on October 27 and 28, 2022 highlighted in yellow the relevant portions of certain

deposition transcripts cited in Plaintiffs’ opening memorandum of law and expert reports.

Exhibit 1

Document Request for Location of Requested Redactions or

Redactions or to Redactions Sealing

Seal in Full? Requested By

Plaintiffs’ Redactions Footnote 7 Defendants

Memorandum of Law Page 6, last sentence of Plaintiffs o/b/o

in Support of Their first full paragraph third party

Motion for Class Pages 6-7 & footnote 8 Defendants

Certification and Footnote 18 Defendants

Appointment of Class Pages 9-12 & footnotes 20, Plaintiffs o/b/o

Counsel (Dkt. No. 22, 24, 26-28, 30, 34-36, third party

363) and 38

Footnote 33 Defendants

Page 13 Defendants

Pages 17-18 Plaintiffs o/b/o

third party

Page 21 Plaintiffs

Page 23 Plaintiffs

Pages 30-34 & footnotes Plaintiffs (pp. 30-

49-51, and 53 31)

Plaintiffs o/b/o

third parties (pp.

32-24 & nn. 49-51,

53)

Page 37 and footnote 63 Plaintiffs o/b/o

third party

Expert Report of Redactions Footnote 7 Plaintiffs o/b/o

William Schwert third party

(Dkt. No. 364-1) Footnote 37 Plaintiffs o/b/o

third party

Page 15 Plaintiffs o/b/o

third party

Page 16 Defendants

Pages 17-18 & footnotes Plaintiffs o/b/o

52-54, and 56-57 third party

Pages 20-21 & footnotes Plaintiffs o/b/o

62-67 third party

Pages 34-35 & footnotes Plaintiffs

83-84

Pages 44-70 & footnotes Plaintiffs (pp. 44-

90-91, 104-106, 108, 110- 67, 68 (¶¶ 99-

12, and 114-18 100)) & nn. 104-

106)

Plaintiffs o/b/o

third parties (pp.

68 (¶ 101), 69-70

& nn. 108, 110-12,

114-18)

Pages 71-72 Defendants

Pages B-2, B-4 Plaintiffs o/b/o

third parties

Expert Report of Redactions Page 10 Plaintiffs o/b/o

Rosa M. Abrantez- third party

Metz, PhD (Dkt. No. Footnote 21 Defendants

364-2) Pages 20-29 & footnotes Plaintiffs o/b/o

47-67, 71-77, and 81 third party

Footnote 68 Defendants

Page 34, paragraph 54, Defendants

excluding final sentence of

paragraph

Pages 34-36 & footnotes Plaintiffs o/b/o

105 and 107-122 (final third parties

sentence of paragraph 54

and paragraph 55 on page

34)

Pages 48-53 & footnotes Defendants

158, 169, 172, 183, 188,

and 189-92

Page 56 & footnote 199 Defendants

Page 59 Plaintiffs o/b/o

third party

Page 61 & footnote 214 Plaintiffs o/b/o

third party

Pages 63-64 & footnote Defendants

222

Footnote 227 Defendants

Pages 68-69 & footnotes Plaintiffs o/b/o

233 and 238 third party

Footnote 244 Defendants

Pages 71-75 & footnotes Plaintiffs o/b/o

249-50 (redaction on page third party

73 of footnote 249)

Footnote 249, redactions Defendants

on page 74

Pages 78-87 & footnotes Defendants

258, 266, 287, and 297

Page 84, paragraph 145 Plaintiffs o/b/o

third party

Page 98 & footnote 339 Defendants

Pages B-3, B-4 Plaintiffs o/b/o

third parties

Aronson Decl. (Dkt. Redactions Paragraphs 35, 45, 49, and Plaintiffs o/b/o

No. 364) 55–58 third parties

Aronson Decl., Seal Defendants

Exhibit 3 (Dkt. No.

364-3)

Aronson Decl., Redactions Pages 148-49 Defendants

Exhibit 6 (Dkt. No.

364-9)

Aronson Decl., Redactions Pages 78-80 Defendants

Corrected Exhibit 8

(Dkt. No. 366-1)

Aronson Decl., Redactions Pages 116-18 Defendants

Exhibit 9 (Dkt. No.

364-12)

Aronson Decl., Redactions Pages 116-17 Defendants

Exhibit 10 (Dkt. No.

364-13)

Aronson Decl., Redactions Pages 122-23, 227 Defendants

Exhibit 11 (Dkt. No.

264-14)

Aronson Decl., Redactions Page 276 Defendants

Exhibit 12 (Dkt. No.

364-15)

Aronson Decl., Seal Defendants

Exhibit 13 (Dkt. No.

364-16)

Aronson Decl., Redactions Pages 256-57 Defendants

Corrected Exhibit 14

(Dkt. No. 366-2)

Aronson Decl., Seal Defendants

Exhibit 16 (Dkt. No.

364-19)

Aronson Decl., Seal Defendants

Exhibit 17 (Dkt. No.

364-20)

Aronson Decl., Redactions Page 219 Defendants

Corrected Exhibit 24

(Dkt. No. 366-3)

Aronson Decl., Redactions Pages 200-03 Defendants

Corrected Exhibit 26

(Dkt. No. 366-4)

Aronson Decl., Seal Plaintiffs o/b/o

Corrected Exhibit 33 third party

(Dkt. No. 366-5)

Aronson Decl., Seal Defendants

Exhibit 34 (Dkt. No.

364-37)

Aronson Decl., Redactions Pages 122-23 Defendants

Exhibit 41 (Dkt. No.

364-44)

Aronson Decl., Seal Defendants

Corrected Exhibit 42

(Dkt. No. 366-6)

Aronson Decl., Seal Plaintiffs o/b/o

Corrected Exhibit 43 third party

(Dkt. No. 366-7)

Aronson Decl., Seal Plaintiffs o/b/o

Exhibit 44 (Dkt. No. third party

364-47)

Aronson Decl., Seal Plaintiffs o/b/o

Exhibit 46 (Dkt. No. third party

364-49)

Aronson Decl., Redactions Pages 44, 68-69 Defendants

Exhibit 51 (Dkt. No.

364-54)

Aronson Decl., Seal Plaintiffs o/b/o

Exhibit 53 (Dkt. No. third party

364-56)

Aronson Decl., Seal Plaintiffs o/b/o

Exhibit 54 (Dkt. No. third party

364-57)

Aronson Decl., Seal Plaintiffs o/b/o

Exhibit 55 (Dkt. No. third party

364-58)

Aronson Decl., Seal Plaintiffs o/b/o

Exhibit 56 (Dkt. No. third party

364-59)