Caremark LLC. v. New York Cancer & Blood Specialists

Background

New York Cancer & Blood Specialists, identified in the opinion as NYCBS, began arbitration against Caremark in 2019 to recover fees it claimed Caremark had improperly imposed. On June 28, 2023, the arbitration panel ruled for NYCBS on several claims and awarded approximately $17 million in damages, along with attorneys’ fees and interest.

Caremark filed a federal petition seeking to vacate, or cancel, the arbitration award. Before filing the petition, Caremark asked to keep the entire case under seal. Alternatively, it sought to seal its legal memorandum and the large evidentiary record and briefing from the arbitration, or to redact proprietary information. A judge sitting in the court’s initial assignment part temporarily sealed the case before NYCBS could respond. After the case was assigned to Judge Buchwald, NYCBS opposed the sealing request.

Legal standard

The court applied the Second Circuit’s three-step test for restricting public access to court records. First, it determined whether the records were judicial documents—documents relevant to the court’s work and useful in deciding the case. Second, it assessed the strength of the presumption that those documents should be public. Third, it balanced that presumption against competing interests, including privacy and possible competitive harm.

Court’s analysis

The court held that the documents supporting Caremark’s petition were judicial documents because they directly affected the court’s decision on the petition to vacate. The records therefore received a strong presumption of public access.

Caremark argued that the confidentiality clause in the arbitration agreement supported sealing. The court rejected that argument, explaining that a private agreement to keep information confidential does not by itself overcome the public-access presumption for judicial documents.

Caremark also argued that some materials contained trade secrets. The court found that Caremark had not shown that the records contained trade secrets or explained specifically how disclosure would cause a clearly defined and very serious competitive injury. The court characterized Caremark’s assertions about competitors using the information as vague and conclusory. It also noted that much of the information was already public, similar information had not been sealed in another case involving Caremark, and some requested redactions concerned information up to seven years old. Caremark did not show that disclosure of this older information would cause competitive harm.

Finally, the court found a strong public interest in the records because the dispute involved the use of Medicare Part D money. It also noted that the type of fees involved had been examined in government hearings and investigations.

Disposition

Judge Buchwald denied Caremark’s motion to seal in full. The clerk was directed to unseal the case in its entirety. This order addressed access to the court records; it did not decide whether the arbitration award should be vacated.