Automated Management Systems, Inc. v. Rappaport Hertz Cherson Rosenthal, P.C.

Background

Automated Management Systems, Inc. (AMSI) filed a renewed motion to keep certain documents under seal and to maintain redactions in publicly filed versions. The documents concerned declarations by Branko Rakamaric and James Traina and AMSI’s memorandum opposing the defendants’ motion for summary judgment. The defendants—Rappaport Hertz Cherson Rosenthal, P.C., William Rappaport, Steven M. Hertz, Eliot Cherson, Michael C. Rosenthal, Branko Rakamaric, and Ben Wachter—did not oppose the motion.

The court had previously denied sealing motions without prejudice because the parties had not specifically explained why sealing was necessary. In the renewed motion, AMSI described the information as including source code for disputed portions of its software, a database dictionary and database structure, software subsystems, the user interface, email alerts, and descriptions of the software’s architecture and operation. AMSI represented that the information was not publicly known, was protected through employee and licensee confidentiality agreements, had required substantial development resources, and could provide competitors with a roadmap or turnkey product if disclosed.

Legal standard

The court explained that judicial documents generally carry a strong presumption of public access. Documents supporting a summary-judgment motion are judicial documents because they directly affect adjudication or substantive rights. A party seeking sealing must show that higher values—such as protecting sensitive, competitive, or proprietary business information—overcome that presumption. Any sealing or redaction must also be narrowly tailored.

The court noted that trade-secret principles can help determine whether business information is sensitive enough to justify sealing. The factors discussed included how widely the information is known, the measures used to protect it, its value to the business and competitors, the resources used to develop it, and how easily others could acquire or duplicate it.

Ruling

The court held that AMSI met its burden for the Rakamaric declaration, the Traina declaration, and AMSI’s summary-judgment opposition. It found that the information was not publicly known, had been developed at significant expense, had been kept secret through considerable effort, and could cause a significant competitive disadvantage if disclosed. The court also found the proposed redactions reasonable and narrowly tailored.

The court granted AMSI’s motion to seal and directed the clerk to maintain the current sealed viewing levels for docket entries 216, 235, 238, 240, 244, 254, and 256. However, AMSI had not provided specific support for continued sealing of docket entries 244, 254, and 256. The court gave AMSI 21 days to file a motion supporting continued sealing and redaction of those documents. If no timely motion was filed, those documents were to be unsealed after the 21-day period. The order resolved docket entry 305, while pretrial management remained referred to Magistrate Judge Jennifer E. Willis.