loanDepot.com, LLC v. CrossCountry Mortgage, LLC

Background

loanDepot filed a letter motion asking for permission to file certain exhibits and portions of exhibits under seal or with redactions. The materials supported loanDepot’s motion for a preliminary injunction and included portions of its memorandum of law, the Pizzutelli Declaration and exhibits, and the Vaughn Supplemental Declaration and exhibits.

Some documents had been marked “CONFIDENTIAL” or “HIGHLY CONFIDENTIAL—ATTORNEYS’ EYES ONLY” by CrossCountry Mortgage, LLC or the individual defendants. For those materials, loanDepot relied on the defendants’ confidentiality designations and stated that the defendants bore the burden of supporting continued confidential treatment. Other materials contained loanDepot customer identities, financial information, contact information, loan information, internal business data, employee performance rankings, and contact lists that loanDepot described as trade secrets.

Legal standard

The court applied the Second Circuit’s three-step public-access analysis. First, it considered whether the materials were “judicial documents,” meaning documents relevant to the court’s judicial function and useful in the court’s process. Second, it considered the weight of the presumption that judicial documents should be publicly accessible. Third, it balanced that presumption against competing interests, including the privacy interests of people who were not parties to the case and the need to protect confidential business information.

Ruling

The court granted in part and denied in part the motion to seal, without prejudice to renewal. The court concluded that the materials described in Section II of loanDepot’s letter contained business and client information, and that redactions were necessary to prevent disclosure of non-party customers’ identities and details about their prospective loans. Those individuals’ identities were not material to an issue then before the court, so their privacy interests outweighed the public’s right of access at that stage.

The court also found that redaction was necessary to protect loanDepot’s proprietary and business information because disclosure could place loanDepot at a competitive disadvantage. It directed loanDepot to file the memorandum of law, specified exhibits, and the Vaughn Declaration in redacted form by June 9, 2023. The court directed the clerk to keep all currently sealed documents under seal while defendants had the opportunity to file a renewed request to maintain the documents under seal by that date, supported by an explanation sufficient under Second Circuit law. The court also directed the clerk to close the motion at docket number 240.

This order addressed public access to court filings and confidentiality; it did not decide the parties’ underlying trade-secret, contract, or preliminary-injunction claims.