IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

NORTHEAST SERIES OF LOCKTON )

COMPANIES, LLC., ) No. 12 CV 1695

 )

 Plaintiff/Counterdefendant, )

 ) Judge Guzman

vs. )

 ) Magistrate Judge Arlander Keys

DAVID BACHRACH )

 ) 

 Defendant/Counterplaintiff,)

 )

 

MEMORANDUM OPINION AND ORDER

Currently before the Court is Defendant’s, David

Bachrach’s, motion for a ruling on the confidentiality of two

documents and on whether the motion for summary judgment should

or should not be filed under seal. Pursuant to the Agreed

Confidentiality Order and Local Rule 26.2, Mr. Bachrach urges the

Court to find that Plaintiff’s Operating Agreement and First

Amended and Restated Operating Agreement are not confidential and

that he be permitted to file his motion for summary judgment

publicly and not under seal. For the reasons set forth below,

the Court grants Defendant’s motion. 

BACKGROUND

Plaintiff, Northeast Series of Lockton Companies, LLC,

offers a variety of commercial insurance services through its

Producer Members who have professional experience and expertise
in the insurance industry. Defendant, David A. Bachrach, is a

former Producer Member of Plaintiff. The Plaintiff's Members are

compensated by commission payments based on the revenue they

generate and the plaintiff's profitability. (Compl., Dkt # 1, ¶

11.) Because Members may generate income on an irregular basis,

the Plaintiff allows them to take regular draw payments and

recover certain expenses incurred in the course of their sales

efforts. (Id. ¶ 12.) However, every Member is contractually

bound to repay any of these draw payments and advanced business

expenses that exceed the actual commissions earned by the Member.

(Id. ¶¶ 12, 20.) Plaintiff alleges that, despite this obligation

pursuant to the Member Agreement, the Operating Agreement and the

Amended Operating Agreement, Mr. Bachrach failed to repay his

negative capital account balance of $336,726.75 when his

membership was terminated on December 15, 2011. (Id. ¶¶ 20–21,

26.) 

Plaintiff has sued Mr. Bachrach to recoup draws it paid him,

and argues that its Operating Agreement is the “express

agreement” permitting it to recoup said draws. (Id. ¶ 20.) 

Plaintiff has designated its Operating Agreement and its First

Amended and Restated Operating Agreement (collectively as the

“Operating Agreements”) as “ATTORNEYS’ EYES ONLY – PLUS

BACHRACH/SERIES” under the Agreed Confidentiality Order (Doc.

#34-1.) Mr. Bachrach has filed a counterclaim, disputes the

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confidentiality designation by Plaintiff, and now requests the

Court to declare the Operating Agreements are not confidential

and asks that he be permitted to file his motion for summary

judgment publicly and not under seal. 

LEGAL STANDARD

The burden of establishing confidentiality is to establish

“good cause” for it, and the burden lies on the party who

designated the documents as “confidential”. See. e.g., EEOC v.

Univ. of Notre Dame Du Lac, 715 F.2d 331 at 340 (7th Cir. 1983).

The Seventh Circuit has held that good cause to file a document,

or portion thereof, under seal requires the party seeking

protection to “analyze in detail, document by document, the

propriety of secrecy, providing reasons and legal citations.” 

Baxter Int’l v. Abbott Labs, 297 F.3d 544 at 548 (7th Cir. 2002). 

Moreover, the burden is a continual one, as a party must

“continue to show good cause for confidentiality when

challenged.” In re Bank One Sec. Litig., 222 F.R.D. 582 at 586

(N.D. Ill. 2004)(citing Union Oil Co. of Cal. v. Leavell, 220

F.3d 562 at 568 (7th Cir. 2000)). If a party claims that injury

will result from public disclosure of certain information, it

must provide support for such a statement. Baxter Int’l, 297 F.3d

at 548. 

Lastly, “[t]here is a strong presumption toward public

disclosure of court files and documents.” In re Bank One Sec.

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Litig., 222 F.R.D. 582 at 585 (N.D. Ill. 2004) (Denlow, MJ),

citing Globe Newspaper Co. v. Superior Court, 457 U.S. 596 at 603

(1982). See also, United States v. Ladd, 218 F.3d 701 at 704 (7th

Cir. 2000) (the public presumptively has a right of access to the

records of judicial proceedings). “Those documents, usually a

small subset of all discovery, that influence or underpin the

judicial decision are open to public inspection unless they meet

the definition of trade secrets or other

categories of bona fide long-term confidentiality.” Baxter Int'l

Inc. v. Abbott Labs., 297 F.3d 544 at 545 (7th Cir. 2002), citing

Grove Fresh Distributors, Inc. v. Everfresh Juice Co., 24 F.3d

893 (7th Cir. 1994), and In re Continental Illinois

Securities Litigation, 732 F.2d 1302 (7th Cir. 1984). 

DISCUSSION

Mr. Bachrach argues that Plaintiff has failed to meet its

burden of establishing “good cause” for the secrecy of both the

Operating Agreements and the filing of his impending motion for

summary judgment. Plaintiff contends that the Operating

Agreements are legally confidential and proprietary documents,

which should be filed under seal, and that Mr. Bachrach conceded,

waived, and/or is estopped from making the arguments he now

asserts because he signed the Member Agreement to maintain

confidentiality. The Court finds Plaintiff’s arguments

unavailing and agrees with Defendant that Plaintiff has failed to

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meet its burden of establishing “good cause” and has not overcome

the strong presumption towards public disclosure. 

Mr. Bachrach intends to file a motion for summary judgment

and seeks to include the Operating Agreements as exhibits to his

motion. After a complete review of all documents submitted, the

Court finds no reason to deem the Operating Agreements

confidential, as it does not contain anything that the law

considers worthy of confidential protection, such as “a trade

secret or other confidential research, development, or commercial

information.” Federal Rule of Civil Procedure 26(c)(1)(G). See

also, Citizens First Nat'l Bank v. Cincinnati Ins. Co., 178 F.3d

943 (7th Cir. 1999). The Court does not find the Operating

Agreement to contain nor disclose the cost of any of the products

Plaintiff sells; information about Plaintiff’s profits made on

sales; information regarding Plaintiff’s profit margin;

Plaintiff’s marketing plan; Plaintiff’s customers; nor any

employee’s hours worked, gross pay, rate of pay, tax deductions,

etc. – nothing is revealed that is a trade secret or harmful

commercial information. 

The Operating Agreements do contain and disclose information

concerning the way in which Plaintiff and its parent were

organized and various categories of pay, albeit without any

specific breakdown. Defendant argues that some of this

information is already publicly available, and can be found on

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Plaintiff’s website, including information such as the purpose of

the company, the names of various offices and titles, financial

package information such as savings/retirement, time off,

learning development, work-life, performance management, and

health and welfare. Either way, the Court does not find that

this information constitutes “good cause” that should outweigh

the strong presumption of public disclosure. 

Plaintiff additionally argues that confidentiality is

warranted due to the pay-structures that are explained within the

Operating Agreement. However, Plaintiff fails to point to any

hard numbers on which a competitor could base any sort of

calculation and gain a competitive advantage. Moreover,

employees have the right to discuss and disclose their pay. 

Therefore, the vaguely worded pay-structures do not warrant

confidentiality. Lastly, Plaintiff’s argument that Mr. Bachrach

conceded, waived, and/or is estopped from making the arguments he

now asserts simply due to his signing of the Member Agreement

also does not outweigh the presumption towards disclosure of

court files and documents in the suit that Plaintiff brought.

 Mr. Bachrach maintains that the publicly-available filing

will not cite to specific provisions of the Operating Agreement,

so as not to violate the parties’ Protective Order. Instead, he

will provide the Operating Agreement, among other things, for in

camera inspection. This precaution, coupled with Plaintiff’s

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failure to meet its burden of proving “good cause” otherwise,

compels the Court to grant Defendant’s motion. 

Accordingly, the Court grants Defendant’s motion [#51] and

finds that the Operating Agreements are not confidential and

directs Defendant to file his motion for summary judgment

publicly. All matters relating to the referral of this action

having been resolved, the case is returned to the assigned judge. 

Dated: August 2, 2013

 E N T E R E D:

_____________________________

 MAGISTRATE JUDGE ARLANDER KEYS

 UNITED STATES DISTRICT COURT

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