IN RE: IBM ARBITRATION AGREEMENT LITIGATION

Background

On July 14, 2022, the court had granted IBM’s motion to dismiss and denied as moot Plaintiffs’ motion for summary judgment. The court then directed any party seeking to keep materials sealed or redacted to explain, document by document, why continued secrecy was consistent with the presumption that court records should be public.

IBM moved to keep sealed or redacted the materials filed in support of Plaintiffs’ summary-judgment motion, including the motion itself. IBM also sought redactions from Plaintiffs’ opposition to IBM’s motion to dismiss: the names and titles of IBM executives, managers, and other employees; the names and titles of people listed as authors or recipients of documents; and the month and day, but not the year, of those documents. Plaintiffs asked that the motion papers and exhibits be unsealed with limited exceptions.

Court’s analysis

The court applied the Second Circuit’s three-part test for sealing judicial documents. First, it asked whether the materials were “judicial documents”—documents relevant to the court’s work and useful in deciding a matter. Second, it considered the strength of the presumption of public access. Third, it balanced that presumption against competing interests, including privacy and confidentiality. Any redactions had to be narrowly tailored, and IBM had the burden of showing that secrecy interests outweighed public access.

The court held that Plaintiffs’ summary-judgment motion, supporting memoranda addressing that motion, and accompanying exhibits were not judicial documents. The court had dismissed the claims on IBM’s motion to dismiss and had not considered Plaintiffs’ outside evidence. Because those materials could not have influenced the ruling on IBM’s motion, they were not relevant to the court’s judicial function or useful in the judicial process.

The court added that the result would be the same even if the materials qualified as judicial documents. Their connection to the court’s decision was weak because the court had not considered them. In contrast, the court found strong competing interests favoring continued confidentiality. The Federal Arbitration Act requires courts to enforce arbitration agreements, including confidentiality provisions, according to their terms. The court also reasoned that unsealing the materials would give Plaintiffs the public disclosure they sought even though their claims had been dismissed before the court considered the summary-judgment evidence.

The court declined to follow a different Southern District of New York decision that treated summary-judgment materials as judicial documents even when a motion to dismiss might resolve the case before the summary-judgment motion was reached. It explained that the cited decision involved claims that had already survived dismissal, requiring the court to consider summary judgment. Here, by contrast, the court never had to consider Plaintiffs’ summary-judgment materials.

The court treated the filings connected to IBM’s motion to dismiss differently. Those materials were plainly judicial documents. Nevertheless, the court approved redactions of the names and titles of third parties and the month and day of documents because those individuals’ privacy interests outweighed the presumption of public access to those portions.

Ruling and orders

Judge Furman granted IBM’s motion to seal and denied Plaintiffs’ requests to the extent they conflicted with IBM’s motion. The court approved IBM’s proposed redactions to Plaintiffs’ opposition to the motion to dismiss and directed IBM to publicly file the redacted version by August 4, 2022. The parties were also ordered to file a joint letter by that date identifying the docket numbers of any filings to be unsealed. The clerk was directed to terminate IBM’s sealing-motion docket entry, ECF No. 94.