# Diamond Resorts U.S. Collection Development, LLC v. Wesley Financial Group, LLC

> District Court, E.D. Tennessee · March 18, 2025

URL: https://www.frixlaw.com/law-library/cases/10825911

## Case

- **Court:** District Court, E.D. Tennessee
- **Decided:** March 18, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE

DIAMOND RESORTS U.S. COLLECTION )
DEVELOPMENT, LLC, et al., )
)
Plaintiffs, )
)
v. ) No. 3:20-CV-251-DCLC-DCP
)
WESLEY FINANCIAL GROUP, LLC, et al., )
)
Defendants. )

MEMORANDUM AND ORDER
This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,
and Standing Order 13-02.
Now before the Court is Plaintiffs’ Motion to Seal [Doc. 343], which seeks leave to file
under seal their Opposition to Defendants’ Motion to Preclude Plaintiffs from Using ‘AEO’
Customers in Their Disgorgement Calculation (“Opposition”) [Doc. 342 SEALED] and all the
exhibits thereto [Docs. 342-1 to 342-7]. Defendants have responded to the motion [Doc. 350].
On November 18, 2024, the parties requested that the Court hold this motion in abeyance
pending their efforts to resolve this case [Doc. 353]. The Court granted the parties’ request and
held the motion in abeyance until January 31, 2025 [Doc. 354]. The parties filed a status report
on January 31, 2025, requesting additional time to complete their discussions about an early
resolution [Doc. 355]. The Court also granted this request [Doc. 356]. On March 3, 2025, the
parties filed a joint status report stating that they were unable to resolve this matter and that holding
the motion in abeyance is no longer necessary [Doc. 357].
The motion is therefore ripe for adjudication. See E.D. Tenn. L.R. 7.1(a). For the reasons
stated below, the Court DENIES WITHOUT PREJUDICE the motion [Doc. 343].
I. ANALYSIS
On June 9, 2020, the Court entered the Memorandum and Order Regarding Sealing
Confidential Information (“Sealing Order”) [Doc. 8] that sets forth the standard and procedure for
filing material under seal. With respect to the standard, the Sealing Order states that a party

requesting leave to seal documents has a “very high barrier . . . to overcome the presumption of
openness as to a court’s record” [Id. at 1 (citation omitted)]. A party requesting that documents be
sealed must “analyze in detail, document by document, the propriety of secrecy, providing reasons
and legal citations” [Id. at 2 (citation omitted)]. The Sealing Order explains, “It is highly unlikely
that the Court will place entire motions and their supporting documents under seal. To do so would
eliminate from the public record all bases for any ruling upon the motion by the Court thereby
eviscerating the public’s First Amendment right of access.” [Id. at 3]. The Local Rules permit the
Court to seal documents upon a finding of good cause. E.D. Tenn. L.R. 26.2.
Plaintiffs filed the motion because Defendants designated the information as confidential,
[Doc. 343 p. 1]. “[W]ith the limited exception of AEO customers’ names,” Plaintiffs do not believe

the documents require sealing [Id.].
Defendants respond to the motion, stating that it should be granted [Doc. 350]. First,
Defendants accuse Plaintiffs of not following the procedure outlined in the parties’ Confidentiality
Order [Id. at 1 (citing Doc. 72 ¶ 13(b))]. Defendants assert that because Plaintiffs did not follow
that procedure, “Plaintiffs’ self-contradictory request to remove confidentiality and AEO
protections is procedurally improper” [Id. at 2]. Second, Defendants submit that Plaintiffs violated
Local Rule 5.2 by filing “complete versions of multiple expert reports and an expert deposition”
[Id.]. Third, Defendants state, “Plaintiffs concede that ‘AEO customers’ names’ should continue
to be protected” [Id.]. Defendants contend that the exhibits include more than just customer names,
“such as addresses, unique customer identification numbers, and payment amounts” [Id. (citations
omitted)]. Fourth, Defendants argue that Plaintiffs agreed, and the Court found, that certain
information is entitled to be designated as confidential [Id. at 3 (citing Doc. 72 ¶ 1)]. Defendants
provide, “The documents at issue contain non-public business and financial information” and that

the “expert reports and declaration discuss non-public financial figures” [Id. (citations omitted)].
The Court has reviewed the Opposition [Doc. 342 SEALED] and the exhibits thereto
[Docs. 342-1 to 342-7 SEALED] and finds that Defendants have not met their very high burden to
seal these documents in whole. Defendants argue, “In the Confidentiality Order, . . . Plaintiffs
already ‘stipulated and agreed,’ and the Court found, that non-public ‘commercial, financial,
transactional’ and other ‘non-public’ information is entitled to be designated Confidential’ [Doc.
350 p. 3 (citing Doc. 72 ¶ 1)]. But this pertains to materials exchanged during discovery [Doc. 72
¶ 1]. As the Sealing Order explains, “This Court regularly signs agreed protective orders, pursuant
to Federal Rule of Civil Procedure 26(c), which permit the parties to designate the discovery they
wish to keep confidential among themselves” [Doc. 8 p. 1]. “There is a stark difference between

so-called ‘protective orders’ entered pursuant to the discovery provisions of [Rule 26], on the one
hand, and orders to seal court records, on the other” [Id. (quoting Shane Grp., Inc. v. Blue Cross
Blue Shield of Mich., 825 F.3d 299, 305 (6th Cir. 2016))].
Defendants state that Plaintiffs’ motion seeks to unseal the documents, and therefore, they
were required to follow the procedure for challenging designations outlined in the Protective Order
[Doc. 350 p. 1 (citing Doc. 72 ¶ 13(b))]. But this dispute came before the Court on a motion to
seal, which the Protective Order also addresses [See Doc. 72 ¶ 8]. Regardless, even if Defendants
are correct, they ask that the Court deny Plaintiffs’ request to unseal documents and grant the
motion [Doc. 350 p. 2]. This request conflicts with the Sixth Circuit’s requirement that district
courts “set forth specific findings and conclusions ‘which justify nondisclosure to the public.’”
Shane Grp., Inc., 825 F.3d 299, 306 (6th Cir. 2016) (quoting Brown & Williamson Tobacco Corp.
v. F.T.C., 710 F.2d 1165, 1176 (6th Cir. 1983)). Based on the instant filings, the Court cannot
conduct that analysis.

Defendants, however, have identified some information that may justify nondisclosure to
the public [Doc. 350 pp. 2–3].1 But they have not explained why redactions to at least some of the
documents are not more appropriate. The Court will give them an opportunity to do so.
The Court therefore DENIES WITHOUT PREJUDICE Plaintiffs’ Motion to Seal
[Doc. 343]. In accordance with Rule 12.2 of the ECF Rules and Procedures, the Court DIRECTS
the Clerk’s Office to DELETE the Opposition [Doc. 342] and the exhibits thereto [Docs. 342-1
to 342-7]. The parties SHALL meet and confer on or before March 25, 2025, about appropriate
redactions or sealing. To the extent redactions or sealing are requested, the parties SHALL file a
joint motion to seal on or before March 28, 2025, setting forth their respective positions on the
redactions or sealing. In filing this motion, the Court DIRECTS the parties to the procedures

outlined in the Sealing Order [Doc. 8 p. 2].
To the extent both parties believe sealing or redactions are no longer necessary, Plaintiffs
SHALL refile their Opposition and the exhibits thereto in the public record on or before March
28, 2025.

1 Defendants also state that Plaintiffs violated Local Rule 5.3, which states, “When filing
such materials, only excerpts of the documents which are directly germane to the matter under
consideration by the Court may be filed.” E.D. Tenn. L.R. 5.3. Defendants state, “Plaintiffs’
request could be addressed by striking the exhibits for failure to comply with [Local Rule] 5.3”
[Doc. 350 p. 2]. It is not clear to the Court that this dispute would be addressed by striking all the
exhibits because Plaintiffs’ Opposition is currently sealed [See Doc. 342 SEALED]. The Court
directs the parties to discuss this issue during the meet and confer.
Il. CONCLUSION
For the reasons stated above, the Court DENIES WITHOUT PREJUDICE Plaintiffs’
Motion to Seal [Doc. 343].
IT IS SO ORDERED.
ENTER:
CfortAria C. Teolirn_
Debra C. Poplin YO
United States Magistrate Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10825911. Public record. Not legal advice.