KSFB Management, LLC v. Galway Holdings, LP

Background

Galway Holdings, LP asked the Court for permission to file under seal Exhibit D to the declaration supporting Galway’s motion to dismiss KSFB Management, LLC’s complaint. The exhibit was a PowerPoint presentation that Galway said KSFB or its affiliates provided in late 2022 while the parties were considering a potential transaction. Galway stated that the presentation contained high-level financial and other information concerning KSFB’s affiliate, NKSFB.

Galway represented that KSFB alleged the presentation contained confidential business information and trade-secret information protected by the parties’ nondisclosure agreement. Galway sought to seal only the presentation, not any other portion of its motion to dismiss or its accompanying documents.

Legal standard

The Court applied the Second Circuit’s three-step test for sealing court records. First, it asks whether the material is a “judicial document,” meaning that it is relevant to the judicial function and useful in the judicial process. If it is, a presumption of public access applies. The Court then weighs that presumption against competing interests, including the protection of confidential business information.

The opinion notes that a nondisclosure agreement alone does not overcome the presumption of public access. Galway argued, however, that if KSFB’s allegations about the presentation were true, the confidential or trade-secret nature of the information would weigh substantially against making it public.

Ruling

Judge Valerie Caproni granted the application. She held that the need to protect sensitive proprietary information outweighed the presumption of public access to judicial documents and justified sealing Exhibit D to the Deutsch Declaration.

The Court stated that Galway had filed the exhibit under seal by email and ordered Galway to file a copy under seal on the docket by no later than June 28, 2024. Access to that filing was to be restricted to the parties and the Court.