The City of Philadelphia v. Bank of America Corporation

Ne MOUOT lO seal Is Pranled leMpordimy., WOurl wilh

assess whether to keep the materials at issue sealed or

redacted when deciding the underlying motions. The Clerk of

May 19, 2023 Court is directed to terminate ECF No. 426.

Via ECF SO ORDERED.

Honorable Jesse Furman

United States District Judge

Southern District of New York

AO Centre Street, Room 2202 ay 19, 2023

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. No. 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’ Reply Memorandum of Law in Support of Their

Motion for Class Certification and Appointment of Class Counsel, Plaintiffs’ Memorandum of

Law in Opposition to Defendants’ Motion to Exclude Expert Testimony, and supporting

documents (the “Reply Papers”) (Dkt. Nos. 411-414; 423) 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’ Reply Memorandum of Law in Support of Their Motion for Class Certification was filed on

April 14, 2023 with restricted access. Dkt. No. 411. Plaintiffs’ Memorandum of Law in Opposition to

Defendants’ Motion to Exclude Expert Testimony was filed on April 14, 2023 with restricted access.

Dkt. No. 413. Exhibits to Plaintiffs’ Reply Memorandum of Law in Support of Their Motion for Class

Certification were filed on April 14, 2023, annexed to the Declaration of Elizabeth Aronson, dated April

14, 2023 (“Aronson Decl.”) (Dkt. No. 412), including corrected Exhibit 77 (Reply Expert Report of Prof.

William Schwert (Dkt. No. 423-1)) and Exhibit 78 (Reply Expert Report of Dr. Rosa Abrantes-Metz

report (Dkt. No. 412-2)), also with restricted access. Exhibits to Plaintiffs’ Memorandum of Law in

Opposition to Defendants’ Motion to Exclude Expert Testimony were filed on April 14, 2023, annexed to

the Declaration of Randall Rainer, dated April 14, 2023 (“Rainer Decl.”) (Dkt. No. 414) with restricted

access.

Plaintiffs’ Information. The materials Plaintiffs wish to keep confidential and have filed

in redacted form or under seal are documents and testimony that discuss internal financial

matters of the Named Plaintiffs. Consistent with the legal authority cited above, Plaintiffs request

the sealing of only certain confidential information in three specific categories:

• Documents and testimony related to the Named Plaintiffs’ entry into interest rate swaps,

including the confidentially negotiated economic terms thereof. See Dkt. No. 412-4 at pp.

54, 84 and 104-105.

• Documents related to Plaintiff City of Philadelphia’s internal Debt Management Policy

including internal strategy about the ways to structure debt issuances, uses for different

types of debt financing and guidelines for bond sales. Disclosure of this sensitive strategy

and compliance material would allow great access into Plaintiff City of Philadelphia’s

internal decision-making processes, that could be used to its disadvantage. See Dkt. No.

412-11.

• Sensitive material in the reply expert report of Plaintiffs’ expert Professor William

Schwert, which quantifies the impact of Defendants’ alleged artificial inflation of VRDO

rates and calculates his initial estimate of class damages therefrom. Such financial figures

also are proper subjects of redaction. See Dkt. No. 411 at pp. 7 and 15; Dkt. No. 413 at p.

9 & n.12, pp. 20-21; pp. 23-24; Dkt Nos. 412-1 and 423-1 at p. 16, p. 19, p. 20 n.43, p. 22,

p. 28, p. 30 & n.67, p. 33, p. 42, pp. 45-48 & nn.101 and 103, pp. 54-56 & n.117, p. 64, p.

66, p. 69, p. 73 and p. 91.

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 the

Reply Papers. The materials that Defendants wish to keep confidential and have filed in redacted

form are documents and testimony that discuss specific and sensitive information related to

Defendants’ rate-setting processes, handling of VRDO inventory and inventory limits, and

government investigations into VRDOs, 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. 411 at p. 14; Dkt. No. 412-1 at p. 9, p. 26; Dkt. No. 412-2 at pp. 16-25 &

nn.16, 22, 24, 31, 36-37, 42, 52, 54, pp. 41-43 & nn.79, 82, p. 44-45 & nn.87, 89, pp.

102-103 n.230; Dkt. No. 412-6 at 139:2-140:4; Dkt. No. 413 at p. 18 n.21, p. 19 n.22;

Dkt. No. 414-2 at 131:1-14, 131:20-21; Dkt. No. 414-3 at 28:11-29:11; Dkt. No. 414-5 at

138:2-13, 138:19-140:4, 141:3-25; Dkt. No. 423-1 at p 9, p. 26. 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 same) related to Defendants’ tracking of

VRDO inventory, inventory levels on specific CUSIPs, handling of inventory, and

inventory limits. See Dkt. No. 412-2 at p. 64 n.122, p. 81. 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.

• Documents and testimony (and descriptions of same) related to comparisons of

Defendants’ rates to competitors, client development strategies, and positioning in the

market. See Dkt. No. 412-2 at p. 64-65 n.122. Disclosure of these materials could allow

competitors to strategically position themselves against Defendants, to the competitive

detriment of Defendants.

• Documents related to remarketing fees charged by Defendants. See Dkt. No. 412-14 at p.

1. Disclosure of this sensitive information would be commercially harmful to

Defendants.

• Documents and testimony (and descriptions of the same) related to costs associated with

carrying VRDOs on Defendants’ books. See Dkt. No. 412-2 at p. 79 n.160, p. 81 &

nn.169, 170. Similar to the materials discussed above, disclosure of these materials could

allow competitors to position themselves favorably against Defendants in the market.

• Documents and testimony (and descriptions of same) related to government

investigations into VRDOs. See Dkt. No. 412-1 at A-4; Dkt. No. 412-3 at 256:14-17,

256:19-20, 256:22-25; Dkt. No. 423-1 at A-4. Government regulators have kept these

investigations confidential and they have not been publicly disclosed.

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

or redact certain confidential business and personal information of third parties quoted and

discussed in the Reply Papers, including in the reply 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). The present request to seal or redact third

party information is narrowly tailored and still affords broad public access. 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 twenty (20)

exhibits to the Aronson Declaration, and the five (5) exhibits to the Rainer Declaration, this

letter-motion seeks leave to seal only 2 of them as produced by third parties. See Aronson Decl.,

Exs. 85 (Dkt. No. 412-9) and 88 (Dkt. No. 412-12).

* * *

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

Plaintiffs’ Reply Papers and Exhibits 77 (original and corrected copy), 78, 79, 80, 82, and 90 to

the Aronson Declaration, and Exhibits 2, 3, and 5 to the Rainer 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.2

On behalf of the parties, Plaintiffs respectfully further request that Exhibits 85, 87, 88 to

the Aronson Declaration (as also indexed in Exhibit 1), which were filed under seal on April 14,

2023, 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)

2 Plaintiffs’ filings made on April 14, 2023 highlighted in yellow the relevant portions of certain

deposition transcripts cited in Plaintiffs’ Reply Papers and reply expert reports.

Exhibit 1

Document Request for Location of Requested Redactions or

Redactions or to Redactions Sealing

Seal in Full? Requested By

Plaintiffs’ Reply Redactions Page 7 Plaintiffs

Memorandum of Law

in Support of Their

Page 8 Plaintiffs o/b/o

Motion for Class

third-party

Certification and

Page 14 Defendants

Appointment of Class

Page 15 Plaintiffs

Counsel (Dkt. 411)

Page 17 & n.8 Plaintiffs o/b/o

third-party

Page 19 Plaintiffs and

Plaintiffs o/b/o

third-party

Declaration of Redactions Page 2 Plaintiffs o/b/o

Elizabeth Aronson in third-party

Further Support of

Plaintiffs’ Motion for

Class Certification

(Dkt. 412)

Exhibit 77 to the Redactions Page 9 Defendants

Declaration of Page 16 Plaintiffs

Elizabeth Aronson – Page 19 Plaintiffs

Expert Reply Report Page 20 n. 43 Plaintiffs

of William Schwert Page 22 Plaintiffs

(Dkt. 412-1) Page 26 Defendants

Page 28 Plaintiffs

Page 30 & n.67 Plaintiffs

Page 33 Plaintiffs

Page 42 Plaintiffs

Page 43 & n.91 Plaintiffs o/b/o

third-party

Pages 45-48 & nn.101 and Plaintiffs

103

Page 54-56 and n.117 Plaintiffs

Page 64 Plaintiffs

Page 66 Plaintiffs

Page 69 Plaintiffs

Page 73 Plaintiffs

Page 89 n.177 Plaintiffs o/b/o

third-party

Page 91 Plaintiffs

Appendix A: pp. A-2, A-4, Plaintiffs o/b/o

A-5 third-party

Appendix A: Page A-4 Defendants

Exhibit 77 to the Redactions Page 9 Defendants

Declaration of Page 16 Plaintiffs

Elizabeth Aronson – Page 19 Plaintiffs

Expert Reply Report Page 20 n. 43 Plaintiffs

of William Schwert Page 22 Plaintiffs

(Dkt. 423-1) Page 26 Defendants

Page 28 Plaintiffs

Page 30 & n.67 Plaintiffs

Page 33 Plaintiffs

Page 42 Plaintiffs

Page 43 & n.91 Plaintiffs o/b/o

third-party

Pages 45-48 & nn.101 and Plaintiffs

103

Page 54-56 and n.117 Plaintiffs

Page 64 Plaintiffs

Page 66 Plaintiffs

Page 69 Plaintiffs

Page 73 Plaintiffs

Page 89 n.177 Plaintiffs o/b/o

third-party

Page 91 Plaintiffs

Appendix A: pp. A-2, A-4, Plaintiffs o/b/o

A-5 third-party

Appendix A: Page A-4 Defendants

Exhibit 78 to the Redactions Page ii Plaintiffs o/b/o

Declaration of third-party

Elizabeth Aronson – Page 8 Plaintiffs o/b/o

Expert Reply Report third-party

of Rosa Abrantes- Pages 16-25 & nn.16, 22, Defendants

Metz (Dkt. 412-2) 24, 31, 36-37, 42, 52, 54

Page 23 Plaintiffs o/b/o

third-party

Pages 41-43 & nn.79, 82 Defendants

Pages 44-45 & nn.87, 89 Defendants

Page 64-65 n.122 Defendants

Page 79 n.160 Defendants

Page 81 & nn.169, 170 Defendants

Page 83 Plaintiffs o/b/o

third-party

Page 96 Plaintiffs o/b/o

third-party

Page 98 Plaintiffs o/b/o

third-party

Pages 100-104 and nn. Plaintiffs o/b/o

224-225, 227, 230, and third-party

232-35

Pages 102-103 n.230 Defendants

Page 109 Plaintiffs o/b/o

third-party

Appendix B: B-3 Plaintiffs o/b/o

third-party

Exhibit 79 to the Redactions Page 256 Defendants

Declaration of

Elizabeth Aronson –

Excerpt of March 24,

2023 Deposition

Robert Glenn

Hubbard (Dkt. 412-3)

Exhibit 80 to the Redactions Pages 54, 84, 104-105 Plaintiffs

Declaration of

Elizabeth Aronson –

Excerpt of March 13,

2023 Deposition of

Dr. John Chalmers

(Dkt. 412-4)

Exhibit 82 to the Redactions Pages 139-140 Defendants

Declaration of

Elizabeth Aronson –

Excerpt of July 21,

2022 Deposition of

Benjamin Langmead

(Dkt. 412-6)

Exhibit 85 to the Seal N/A Plaintiffs o/b/o

Declaration of third-party

Elizabeth Aronson –

Excerpt of September

14, 2022 30(b)(6)

Deposition of Swap

Financial Group, LLC

(Dkt. 412-9)

Exhibit 87 to the Seal N/A Plaintiffs

Declaration of

Elizabeth Aronson –

City of Philadelphia

Debt Management

Policy August 2015

(Dkt. 412-11)

Exhibit 88 to the Seal N/A Plaintiffs o/b/o

Declaration of third-party

Elizabeth Aronson –

Excerpt of August 1,

2022 30(b)(6)

Deposition of Acacia

Financial (Dkt. 412-

12)

Exhibit 90 to the Redactions Page 1 Defendants

Declaration of

Elizabeth Aronson –

Barclays Bank

Invoice (Dkt. 412-14)

Plaintiffs’ Redactions Page 9 & n.12 Plaintiffs

Memorandum of Law Page 18 n.21 Defendants

in Opposition to Page 19 n.22 Defendants

Defendants’ Motion Pages 20-21 Plaintiffs

to Exclude Expert Pages 23-24 Plaintiffs

Testimony (Dkt. 413)

Exhibit 2 to the Redactions Page 131 Defendants

Declaration of

Randall Rainer –

Excerpt of January

13, 2023 Deposition

of Rosa Abrantes-

Metz (Dkt. 414-2)

Exhibit 3 to the Redactions Pages 28-29 Defendants

Declaration of

Randall Rainer –

Excerpt of May 26,

2022 Deposition of

Peter McCarthy (Dkt.

414-3)

Exhibit 5 to the Redactions Pages 138-141 Defendants

Declaration of

Randall Rainer –

Excerpt of July 21,

2022 Deposition of

Benjamin Langmead

(Dkt. 414-5)