Hedgeye Risk Management, LLC v. Dale

Background

The parties submitted extensive materials related to summary-judgment motions and motions concerning expert reports and declarations. The submissions included more than 50 briefs and declarations, multiple statements of asserted facts, and several hundred exhibits. Hedgeye Risk Management, LLC, the Dale Defendants, and the Terman Defendants each asked to seal many of those materials, either partly or entirely. The parties disagreed about the proper scope of sealing.

To manage the requests, the court required the parties to narrow their disputes and prepare spreadsheets identifying each document or portion of a document that a party wanted to keep under seal. The parties submitted spreadsheets and copies of the materials with proposed redactions. The spreadsheets contained thousands of separate requests involving documents, pages, sentences, phrases, words, charts, and numbers.

Legal standard and analysis

The court applied the Second Circuit's three-step test for sealing judicial documents. First, it determined whether the material was a judicial document to which a presumption of public access applied. Second, it assessed the strength of that presumption. Third, it identified legitimate reasons against disclosure and balanced those reasons against public access.

The court held that all of the materials filed for consideration in connection with the summary-judgment motions and related expert motions were judicial documents. It assessed the relevance of each item but did not decide whether the court would ultimately rely on that item in resolving the pending matters.

The court treated possible disclosure of alleged trade secrets as an important factor. It clarified, however, that allowing information to remain sealed did not mean the information was actually a trade secret. Whether any information qualified for trade-secret protection remained disputed and would be decided later on summary judgment or at trial. The court also considered competitively sensitive business information, such as sensitive financial data, business strategies, and client or customer identities. Older financial and business information was less likely to justify sealing.

The court required redactions to be narrowly tailored, meaning limited to the information necessary to protect a legitimate interest. It therefore reduced the scope of some proposed redactions. The court also cautioned that the large number of individual rulings might produce apparent inconsistencies and that some rulings could later be revisited.

Order

The court ordered that a copy of the order and the three spreadsheets containing the court's rulings be filed under seal. Because the spreadsheets were themselves judicial documents, the parties were ordered to file public versions by September 4, 2025.

The public spreadsheets could redact only information for which the court had granted permission to seal, and only when the spreadsheet's description necessarily revealed that sealed information. The court gave client names, personal email addresses, and total subscriber numbers as examples. The parties could not redact information connected to an item for which the court had denied sealing, and generally could not redact descriptions that did not themselves reveal seal-worthy information.