Parolise v. Portfolio Recovery Associates, LLC

Background

Marilena C. Parolise and Portfolio Recovery Associates, LLC jointly moved to seal pages 11–52 of Docket Number 35-17. Parolise had filed the exhibit in support of an emergency motion to stay, or pause, arbitration. The pages contain a “Forward Flow Accounts Purchase Agreement” between Portfolio Recovery Associates and a third party. The agreement includes the purchase price and other nonpublic negotiated terms, representations, and warranties.

The exhibit had already been sealed in its entirety while the sealing request was pending. The parties asked the court to keep pages 11–52 under seal because the information was confidential and could affect Portfolio Recovery Associates’ competitive position and ability to negotiate similar contracts.

Court’s analysis

The court applied the Second Circuit’s three-step test for sealing judicial documents. First, it determined that the agreement was a judicial document because it had been filed in support of a motion. Second, it found that the presumption of public access was relatively low because the agreement played no apparent role in the court’s decision to deny Parolise’s emergency motion to stay arbitration and was not expressly relied on in that motion. The court also noted that Parolise had not intended to file the agreement on the public docket in that form.

Third, the court balanced the limited public-access interest against the interests favoring confidentiality. It found that disclosure of the purchase price and other negotiated terms could reveal valuable business information and potentially harm Portfolio Recovery Associates’ competitive position and future negotiations. Those interests outweighed the public’s interest in disclosure at that time.

Disposition

The court granted the motion to seal pages 11–52 of Docket Number 35-17. The exhibit will remain under seal, and Portfolio Recovery Associates was directed to publicly refile the exhibit with pages 11–52 redacted.