Saadeh v. Kagan

Background

Rafic Saadeh sued Michael Kagan and the Estate of Irving Kagan, alleging breach of contract, promissory estoppel, and fraudulent conveyance. Saadeh sought repayment and additional damages relating to a loan made to Irving Kagan, who had died in 2020. Saadeh later added fraudulent-conveyance claims against Joshua Kagan.

The parties entered a confidentiality agreement that the court approved. Michael Kagan, proceeding without a lawyer, later asked the court to require that Saadeh’s forthcoming second amended complaint be filed under seal. After the complaint was filed, Kagan moved to redact paragraphs 27 through 29 and 34 through 61. He asserted that those portions contained confidential financial information about him and his business, included misleading or false statements, and cast damaging aspersions on him, Irving Kagan, Joshua Kagan, and Marni Kagan, who was identified as a non-party. He also asserted attorney-client privilege over portions of the complaint.

Joshua Kagan separately moved for leave to file under seal an exhibit containing the second amended complaint, while Michael Kagan’s sealing request remained pending.

Legal Standard

The court explained that judicial documents are generally presumed to be open to the public. A party seeking to seal such documents bears the burden of showing an extraordinary circumstance, compelling need, or other substantial interest that outweighs public access. The court first determines whether the material is a judicial document, then weighs the common-law and First Amendment access interests against countervailing concerns.

Analysis

The court found that Saadeh’s second amended complaint was unquestionably a judicial document and that complaints receive a strong presumption of public access because they play an important role in the judicial process.

Paragraphs 27 through 29 described Saadeh’s allegations concerning fraudulent conveyance. Paragraphs 34 through 61 further discussed the fraudulent-conveyance claim, Irving Kagan’s alleged business, his income while the loan was outstanding, and the alleged payment of Michael and Joshua Kagan’s expenses by Irving Kagan.

The court held that Michael Kagan’s broad assertions that the paragraphs contained financial data and misleading or false statements were insufficient to overcome the presumption of access. His concerns about negative effects on business or social status were also insufficient. The court further held that his attorney-client-privilege argument failed because he had not shown that the complaint identified Irving Kagan’s clients or disclosed other information protected by that privilege.

Michael Kagan also asked that bank records, related analysis, and documents concerning a discovery demand be filed under seal. The court denied that request without prejudice because the application did not show whether those documents would be filed with the complaint, and copies had not been submitted with the motion. The court stated that Kagan could renew the request if Saadeh intended to file those documents.

Disposition

The court denied Michael Kagan’s request to have the second amended complaint filed under seal and ordered Saadeh to file it on the public docket by March 19, 2021. Because that ruling resolved the sealing issue, the court denied without prejudice Joshua Kagan’s motion to file the exhibit containing the complaint under seal and ordered him to file the exhibit publicly by the same date. The Clerk of Court was directed to deny the motion at ECF No. 90. This order addressed access to court filings; it did not decide the underlying contract, promissory-estoppel, or fraudulent-conveyance claims.