Monterey Bay Military Housing, LLC v. Ambac Assurance Corporation

Background

The plaintiffs are 18 project entities that operate 16 privatized military housing projects. They renewed a request to seal or redact about 1,100 documents submitted in connection with the parties’ pending motions for summary judgment. The plaintiffs grouped the requested protections into personal identification information, banking information, military-base parcel descriptions, and commercially sensitive information.

In an earlier decision, Judge Paul G. Gardephe allowed sealing or redaction of personal identification information and military-base parcel descriptions, but denied other requests without prejudice because the plaintiffs had not provided document-specific explanations. He permitted the plaintiffs to submit a new request supported by a spreadsheet identifying each document, the requested redactions, and the justification for restricting access. The plaintiffs later filed that spreadsheet and supporting declarations. The defendants took no position on the requests.

Legal standard

The court applied the three-part test from Lugosch v. Pyramid Co. of Onondaga. The documents were judicial documents, meaning materials relevant to the court’s decision, and therefore were subject to a strong presumption of public access. The plaintiffs had to provide specific facts showing that sealing was necessary to protect a more important interest and that the requested restriction was narrowly tailored.

Ruling

The court granted the requests involving personal identification information. The plaintiffs identified 14 documents on that ground, and the court found that only 13 actually contained such information. The court also granted the requests involving banking information in 75 documents, finding that the information could reveal sensitive personal financial information or create safety or embarrassment concerns.

The court granted the requests involving military-base parcel descriptions in 51 documents. It relied on the earlier finding that the privacy and security interests of the military and service members living on base outweighed the public interest in access to that information.

The court also granted the requests involving commercially sensitive information. It found that the plaintiffs had provided document-level support and specific evidence that disclosure could harm the developers’ competitive positions. The protected materials included:

- limited partnership and limited liability company agreements; - requests for proposals, responses, and evaluations; - loan agreements and related documents; - commitment letters; - closing documents; - financial plans and analyses; - other agreements; - transaction documents; - discovery materials; - correspondence and meeting materials; - expert reports; and - project plans, status reports, and site-visit materials.

The court concluded that the information included business models, financing structures, interest rates, fees, budgets, management methods, negotiation strategies, and other information that competitors or financing partners could use in future military housing projects. Although much of the information was more than ten years old, the supporting declarations stated that the developers continued to compete for institutional housing opportunities and continued to protect the information. The court found that the information therefore remained competitively sensitive.

Disposition

The court granted the Sealing Motion. It directed the plaintiffs to file a letter by May 13, 2025, identifying the sealing requests they had withdrawn and the docket entries containing the corresponding unredacted documents. Judge Sarah L. Cave issued the opinion and order under an existing referral for pretrial supervision from Judge Gardephe.