Broidy v. Global Risk Advisors LLC

Background

The case includes Plaintiffs’ allegations under the Racketeer Influenced and Corrupt Organizations Act. The disputes addressed in this order concerned Gibson, Dunn & Crutcher LLP, which had formerly represented Defendants. Plaintiffs had filed a motion for sanctions based on Gibson Dunn’s alleged conflict of interest involving its partner, Zainab Ahmad, and her prior work at the Office of Special Counsel.

Gibson Dunn submitted an unredacted Exhibit B containing emails between the firm and Defendants. Gibson Dunn sought to seal the exhibit, arguing that it contained confidential commercial information relevant to Defendants’ decision to change counsel and that it implicated privacy interests and attorney-client privilege. Defendants separately sought to seal a redacted version, Exhibit A, and asked the Court to strike Exhibit B and replace it with Exhibit A. Plaintiffs opposed sealing, requested private judicial review of communications between Gibson Dunn and Defendants, and sought to reopen discovery concerning Ahmad, Gibson Dunn, Defendants, and Matthew Grimes’s grand jury testimony.

Sealing Requests

The Court applied the presumption of public access to judicial documents. It found that Exhibits A and B were judicial documents because they were submitted to support Gibson Dunn’s defense against the sanctions motion. The Court determined that the public-access presumption was near the modest end of the spectrum because the sanctions motion was not likely to affect the outcome of the case.

The Court reviewed Exhibit B and found that most of it contained nonpublic, long-term business strategies and other confidential commercial information. It also found that the communications in both exhibits were protected by attorney-client privilege because they included Defendants’ business reason for asking Gibson Dunn to withdraw, Gibson Dunn’s legal advice about remaining as counsel, and Defendants’ eventual decision to have the firm withdraw. The Court concluded that Defendants’ privacy interests outweighed the presumption of public access and that sealing Exhibit B in full was sufficiently narrow. It also granted Defendants’ request to seal Exhibit A.

The Court denied Plaintiffs’ request for private judicial review of all communications. Plaintiffs had not provided evidence that such a review would support their position or reveal information not protected by privilege.

Requests to Strike

Defendants asked the Court to strike Exhibit B and replace it with Exhibit A. The Court agreed that Gibson Dunn’s more prudent course would have been to disclose narrower excerpts under court supervision and subject to a protective order. But it found that filing Exhibit B under seal qualified as an arrangement limiting access to the Court and those who needed the information. The Court also noted that prospective protections, including a protective order treating the information as highly sensitive, could address Defendants’ concerns without retroactively striking an exhibit that Plaintiffs had already seen.

The Court denied Defendants’ request to strike Exhibit B. It found that the disclosure could not be characterized as unreasonable because Gibson Dunn believed the emails were necessary to explain Defendants’ business reason for changing counsel. The Court also was not convinced that the redacted information was immaterial or irrelevant to the sanctions motion, and it stated that Rule 12(f)’s authority to strike material generally concerns pleadings rather than an exhibit attached to an affidavit.

The Court separately denied Gibson Dunn’s request to strike portions of Plaintiffs’ reply submissions. It stated that the judge deciding the sanctions motion should determine whether to rely on information in Plaintiffs’ reply papers. Gibson Dunn had also responded to some of the arguments and could have requested permission to file another reply addressing any remaining issues.

Discovery

Plaintiffs sought to reopen discovery to question Ahmad, Gibson Dunn, and Defendants about information Ahmad learned during her prior employment and to subpoena portions of Grimes’s grand jury testimony. The Court applied the good-cause standard for reopening discovery, considering factors including whether trial was imminent, opposition and prejudice, Plaintiffs’ diligence, the foreseeability of the additional discovery, and the likelihood that it would produce relevant evidence. The Court identified diligence as the primary consideration.

The Court found no good cause to reopen discovery. It noted that Defendants opposed the request, further discovery could prejudice the parties because the sanctions motion was fully briefed, and Plaintiffs had not shown that additional depositions were likely to produce relevant evidence that outweighed the burdens. As to Grimes’s testimony, Plaintiffs had months after learning of the declaration to obtain the information but provided no evidence of diligence. The Court therefore denied Plaintiffs’ discovery request without prejudice.

Disposition

The Court granted Defendants’ request to seal Exhibit A and Gibson Dunn’s request to seal Exhibit B. It denied Defendants’ request to strike Exhibit B, denied Gibson Dunn’s request to strike portions of Plaintiffs’ submissions, denied Plaintiffs’ request for private judicial review, and denied Plaintiffs’ request to reopen discovery without prejudice. It denied as moot Defendants’ request to be heard further in support of Gibson Dunn’s sealing request. The Clerk was asked to close the motions at Dkt. Nos. 173, 178, and 187. This order did not decide the underlying sanctions motion.