Court Opinion

ID: 9960255
Source: CourtListenerOpinion
Date Created: 2024-04-15 20:07:45.191325+00
Date Added: 2024-06-11T08:19:19.503989
License: Public Domain

Securities Indus. & Fin. Mkts. Assn., Inc. v Certain
          Underwriters at Lloyd's of London
               2024 NY Slip Op 31249(U)
                      April 9, 2024
           Supreme Court, New York County
        Docket Number: Index No. 656239/2020
                  Judge: Andrea Masley
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                        INDEX NO. 656239/2020
  NYSCEF DOC. NO. 259                                                                                             RECEIVED NYSCEF: 04/09/2024

            SUPREME COURT OF THE STATE OF NEW YORK
            COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 48
            ----------------------------------------------------------------------------------- X

             SECURITIES INDUSTRY AND FINANCIAL MARKETS                                              INDEX NO.         656239/2020
             ASSOCIATION, INC.,

                                                          Plaintiff,                                MOTION DATE

                                                - V -                                               MOTION SEQ. NO.        009
             CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON,
                                                                                                     DECISION+ ORDER ON
                                                          Defendants.                                      MOTION

            ----------------------------------------------------------------------------------- X

            HON. ANDREA MASLEY:

            The following e-filed documents, listed by NYSCEF document number (Motion 009) 241, 242, 243, 244,
            245,246,247,248,249,250
            were read on this motion to/for                                SEAL

            Upon the foregoing documents, it is

                      In motion sequence number 009, defendants, Certain Underwriters at Lloyd's of

            London (Underwriters) move, by order to show cause, pursuant to Section 216.1 of the

            Uniform Rules for the New York State Trial Courts, to seal NYSCEF Doc No. [NYSCEF]

            236 and 237 on the ground that these documents were originally filed by the plaintiff

            Securities Industry and Financial Markets Association, Inc. (SIFMA) under seal as

            NYSCEF 181 and 182 respectively. The motion is unopposed.

                      There is no indication that the press or public have an interest in this action.

                      NYSCEF 236 is a copy of SIFMA's Memorandum of Law in opposition to

            Underwriters' Motion for Summary Judgment (Memorandum of Law in opposition),

            originally filed by SIFMA as NYSCEF 181.

             656239/2020 SECURITIES INDUSTRY AND vs. CERTAIN UNDERWRITERS AT                                            Page 1 of 6
             Motion No. 009

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                                                                                            INDEX NO. 656239/2020
  NYSCEF DOC. NO. 259                                                               RECEIVED NYSCEF: 04/09/2024

                   NYSCEF 237 is a copy of SIFMA's Counterstatement to Underwriters' Statement

            of Material Facts in Support of Motion for Summary Judgment (Counterstatement),

            originally filed by SIFMA as NYSCEF 182.

                   Both NYSCEF 181 and 182 were filed by SIFMA under restricted access

            pursuant to a request to seal on November 4, 2021. (NYSCEF 243, Rayburn aff          ,m 4-5.)
            Background

                   SIFMA filed this action against Underwriters seeking money damages and

            declaratory relief arising out of Underwriters' breach of their contractual obligations

            under an event cancellation insurance policy (Policy) purchased by SIFMA. (NYSCEF 2,

            Complaint ,i 1.) SIFMA alleged that Underwriters breached the Policy when they denied

            coverage of losses incurred by SIFMA when it had to cancel three of its scheduled

            conferences. (Id. ,i,i 3-4.) The Underwriters moved pursuant to CPLR 3212 for

            summary judgment seeking the dismissal of the complaint with prejudice. (NYSCEF 54,

            Notice of Motion [mot. seq. no. 004].) While their motion for summary judgment was

            pending, Underwriters moved by order to show cause to permit filing of certain

            documents under seal and to redact portions of court filings which disclosed

            Underwriters' sensitive and proprietary business information. (NYSCEF 123, Proposed

            Order to Show Cause [mot. seq. no. 007].) This court signed the order to show cause

            to seal on November 1, 2021, which included a TRO directing the clerk of the court to

            restrict public access to NYSCEF 118, 119 and 127-151 pending the hearing of the

            order to show cause. (NYSCEF 154, Order to Show Cause [mot. seq. no. 007].)

                   In the meantime, SIFMA filed its papers in opposition to Underwriters' motion for

            summary judgment. SIFMA filed its affirmation in opposition to the motion for summary

             656239/2020 SECURITIES INDUSTRY AND vs. CERTAIN UNDERWRITERS AT                Page 2 of 6
             Motion No. 009

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                                                                                              INDEX NO. 656239/2020
  NYSCEF DOC. NO. 259                                                                 RECEIVED NYSCEF: 04/09/2024

            Judgment (NYSCEF 156), Memorandum of Law in opposition to Underwriters' Motion

            for Summary Judgment (NYSCEF 181 ), Counterstatement to Underwriters' Statement

            of Material Facts in Support of Motion for Summary Judgment (NYSCEF 182) and

            supporting exhibits. Six 1 of the total 24 exhibits were copies of documents which had

            been designated confidential by Underwriters and were subject to the Order to Show

            Cause to Seal issued on November 1, 2021. (NYSCEF 247, Defendants' Memo of Law

            at pgs. 2, 4.) These six exhibits were filed under seal. As SIFMA's Memorandum of

            Law and Counterstatement (NYSCEF 181 and 182) referred to these six exhibits, the

            Memorandum of Law and Counterstatement were also filed under seal. (NYSCEF 247,

            Defendants' Memo of Law at pg. 2.)

                      This court issued a decision 2 on April 4, 2022, granting in part and denying in

            part Underwriters' mot. seq. no. 007. (NYSCEF 194, Decision and Order [mot. seq. no.

            007].) The court found good cause to redact portions of NYSCEF 130, 132, 143, 145,

            147, 159, 160, 162, 173, and 174 which pertained to Underwriters' proprietary business

            strategy, financial information and/or nonparty identifying information and directed

            Underwriters to file publicly redacted versions of these documents. (NYSCEF 214,

            Amended Decision and Order [mot. seq. no. 007] at pgs. 3-5.) The court did not find

            good cause to seal the binding authority agreement (filed as NYSCEF 119, 129, and

            157) in its entirety and directed Underwriters to file a proposed redacted copy of the

            binding authority agreement along with explanations for the proposed redactions.

            1   NYSCEF 157, 159, 160, 162, 173 and 174.
            2 The court issued an amended decision on mot. seq. no. 007 on April 12, 2022

            (NYSCEF 214, Amended Decision and Order [mot. seq. no. 007]). The April 4, 2022
            decision had inadvertently referred to the Underwriters' sensitive and proprietary
            business information as the plaintiff's.
                656239/2020 SECURITIES INDUSTRY AND vs. CERTAIN UNDERWRITERS AT               Page 3 of 6
                Motion No. 009

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                                                                                       INDEX NO. 656239/2020
  NYSCEF DOC. NO. 259                                                           RECEIVED NYSCEF: 04/09/2024

            (NYSCEF 214, Amended Decision and Order [mot. seq. no. 007] at pgs. 4-5.) The

            court also held that good cause did not yet exist to redact portions of NYSCEF 150

            which simply referenced NYSCEF 119, 129, and 157, and directed Underwriters to also

            file proposed redacted copy of NYSCEF 150. (Id.) On April 11, 2022, Underwriters filed

            redacted versions of the referenced documents as ordered by the Court and further filed

            proposed redactions to NYSCEF 157, among others, with the explanations ordered by

            the Court. (NYSCEF 247, Defendants' Memo of Law at pg. 6.)

                   This court granted SIFMA's motion for summary judgment and denied

            Underwriters' motion for summary judgment. (NYSCEF 223, Decision and Order [mot.

            seq. no. 004].) Underwriters has sought leave to reargue the motion for summary

            judgment pursuant to CPLR 2221 (d) (NYSCEF 226, Notice of Motion [mot. seq. no.

            008]) and seeks to refile SIFMA's Memorandum of Law in opposition and

            Counterstatement as NYSCEF 236 and 237 in support of their motion to reargue. As

            SIFMA's Memorandum of Law in opposition and Counterstatement were not the subject

            of the Order to Show Cause to Seal (NYSCEF 154, Order to Show Cause [mot. seq. no.

            007]) or the court's decision on the Underwriters' motion seq. no. 007 (NYSCEF 214,

            Amended Decision and Order [mot. seq. no. 007]), no order has been issued directing

            these documents to be filed under seal, to be unsealed or redacted. (NYSCEF 247,

            Defendants' Memo of Law at pg. 6.) These documents continue to remain under

            restricted access and Underwriters' have sought to refile these documents under seal

            out of an abundance of caution. (Id.)

             656239/2020 SECURITIES INDUSTRY AND vs. CERTAIN UNDERWRITERS AT           Page 4 of 6
             Motion No. 009

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                                                                                          INDEX NO. 656239/2020
  NYSCEF DOC. NO. 259                                                              RECEIVED NYSCEF: 04/09/2024

            Discussion

                   Section 216.1 (a) of the Uniform Rules for Trial Courts empowers courts to seal

            documents upon a written finding of good cause. It provides:

                   "(a) [e]xcept where otherwise provided by statute or rule, a court shall not enter
                   an order in any action or proceeding sealing the court records, whether in whole
                   or in part, except upon a written finding of good cause, which shall specify the
                   grounds thereof. In determining whether good cause has been shown, the court
                   shall consider the interests of the public as well as the parties. Where it appears
                   necessary or desirable, the court may prescribe appropriate notice and an
                   opportunity to be heard."

                   Judiciary Law§ 4 provides that judicial proceedings shall be public. "The public

            needs to know that all who seek the court's protection will be treated evenhandedly,"

            and "[t]here is an important societal interest in conducting any court proceeding in an

            open forum." (Baidzar Arkun v Farman-Farma, 2006 NY Slip Op 30724[U], *2 [Sup Ct,

            NY County 2006] [citation omitted].) The "party seeking to seal court records has the

            burden to demonstrate compelling circumstances to justify restricting public access" to

            the documents. (Id. at 349 [citations omitted].) Good cause must "rest on a sound

            basis or legitimate need to take judicial action." (Danco Lab, Ltd. v Chemical Works of

            Gedeon Richter, Ltd., 274 AD2d 1, 8 [1st Dept 2000] [internal quotations omitted].)

                   The defendants have failed to show good cause for the wholesale sealing of

            NYSCEF 236 and 237. Admittedly, NYSCEF 236 and 237 refer to and reproduce

            information from documents that were designated as confidential by the Underwriters

            and were the subject of this court's decision on mot. seq. no. 007. (NYSCEF 157, 159,

            160, 162, 173 and 174. (NYSCEF 247, Defendants' Memo of Law at pgs. 4-5.)

            However, that is not sufficient to seal an entire document.

             656239/2020 SECURITIES INDUSTRY AND vs. CERTAIN UNDERWRITERS AT              Page 5 of 6
             Motion No. 009

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                                                                                                  INDEX NO. 656239/2020
  NYSCEF DOC. NO. 259                                                                       RECEIVED NYSCEF: 04/09/2024

                     This court has already determined in its decision on motion seq. no. 007 that

            good cause exists to redact information pertaining to Underwriters' proprietary business

            strategy, financial information and non-party identifying information particularly

            references to event dates, locations, limits on insured, market share, non-party

            identifying information and details of meetings with clients and non-parties. (NYSCEF

            214, Amended Decision and Order [mot. seq. no. 007] at pgs. 3-5.) Therefore, good

            cause might exist to redact portions of NYSCEF 236 and 237 that refer to information

            pertaining to Underwriters' proprietary business strategy, financial information and non-

            party identifying information, such information already having been permitted to be

            redacted in NYSCEF 157, 159, 160, 162, 173 and 174.

                     Accordingly, it is

                     ORDERED that motion 009 is denied and the parties are directed to file copies of

            NYSCEF 236 and 237 under temporary seal with proposed redactions in accordance

            with this court's decision on mot. seq. no. 007. The proposed redactions should be

            highlighted in yellow. The parties should also file publicly redacted versions of NYSCEF

            236 and 237 containing the proposed redactions.

                     ORDERED that this order does not authorize sealing or redacting for purposes of

            trial.

                     4/9/2024
                       DATE                                                    ANDREA MASLEY, J.S.C.

                                     ~
             CHECK ONE:                   CASE DISPOSED                 NON-FINAL DISPOSITION

                                          GRANTED         0    DENIED   GRANTED IN PART          □ OTHER
             APPLICATION:                 SETTLE ORDER                  SUBMIT ORDER

             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN    FIDUCIARY APPOINTMENT    □ REFERENCE

             656239/2020 SECURITIES INDUSTRY AND vs. CERTAIN UNDERWRITERS AT                      Page 6 of 6
             Motion No. 009

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