UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE
CBV, INC., )
)
Plaintiff, )
)
v. ) C.A. No. 1:21-cv-01456-MN
)
CHANBOND, LLC, )
)
Defendant. )
REPLY BRIEF OF MOVANTS GREGORY COLLINS AND KAMAL MIAN
IN SUPPORT OF THEIR MOTION TO INTERVENE AND UNSEAL JUDICIAL RECORDS
David L. Finger (DE Bar ID #2556)
Finger & Slanina, LLC
One Commerce Center
1201 N. Orange St., 7th floor
Wilmington, DE 19801-1186
(302) 573-2525
dfinger@delawgroup.com
Attorney for Movants Gregory
Collins and Kamal Mian
Dated: June 9, 2022
ARGUMENT
On June 6, 2022, the Leane Defendants filed a redacted version of their sealed
letter brief (the “Letter”) dated June 1, 2022 (D.I. 114), which appears to disclose the
settlement amount thatChanBond opposes disclosing.D.I. 119. Specifically, on page
2, the Letter states that the Leane Defendants were awarded $27,500,000 in the
arbitration. Paragraph 29 of the arbitration award, attached as Exhibit 1 to the Letter,
states “Claimant is entitled to damages [REDACTED] constituting the 22% fee due
and owing from the settlement.…” (D.I. 119-1 at 11). Simple math ($27,500,000 ÷
22%) suggests a settlement amount of $125,000,000, exclusive of interest, fees and
costs (which have also been improperly redacted).
If that is the case, then the horse is out of the barn
1, and there is no excuse for
any part of the arbitration award being sealed, and the Court should have the Clerk
remove the seal from documents in this case immediately.
To the extent that they have got it wrong on the amount, Movants now address
ChanBond’s arguments on opposition to the Motion to Unseal.
In their opening brief, Movants established that (i) the public has a right of
access to judicial records, under both the common law and the First Amendment; (ii)
1
For a review of synonyms for that idiom, see TexasLDPC Inc. v. Broadcom
Inc., 2019 WL 8105993 at *1 (D. Del. Jan. 29, 2010).
1
Case 1:21-cv-01456-MN Document 120 Filed 06/09/22 Page 5 of 13 PageID #: 6303
the documents filed in this action, including the arbitration award, are judicial
records;(iii) the parties never presented any evidence showing that the material isthe
kind of information that courts will protect, disclosure will work a clearly defined and
serious injury to the party seeking closure, and the interest in secrecy outweighs the
presumption, as is required; and (iii) the Court never made any specific findings on
the record to that effect.
ChanBond, in its Answering Brief 2
, did not dispute either the law or the facts
presented by Movants (as, indeed, it could not credibly do).3
Instead, it has conceded
that documents that the documents Movants seek to unseal are already available in
the public domain. ChanBond also submitted a redacted version of an Arbitration
Award dated May 18, 2022
4
, redacting (i) the amount of the settlement in the patent
litigation, (ii) the “typical range of fees for the types of services” provided by a third party patent monetization firm, (iii) the extent of the arbitration plaintiff’s interest in
2
Plaintiff CBV, Inc. did not file a response, thereby implicitly conceding the
correctness of Movants’ position.
3
ChanBond also did not dispute Movants’ right to intervene for the limited
purpose of seeking to unseal judicial records.
4
The Arbitration Award that ChanBond claims “resulted in the violation of the
Court's orders concerning confidentiality” (Response at 1), was filed under seal on
March 31, 2022.
2
the patent litigation, (iv) the amount of attorneys’ fees awarded, (v) the rate of postjudgment interest on the award, and (vi) the amount of administrative fees and
expenses assessed against the arbitration defendants.
It is notable that ChanBond, having been given the opportunity, made
absolutely no effort at all in its Response to establish how it would suffer any serious
cognizable commercial injury from the disclosure of any of this redacted
information.
5 The presumption of public access to judicial records is strong, and
conclusory statements seeking to seal documents “miss the mark.” In re Avandia
Marketing, Sales Practices and Products Liability Litigation , 924 F.3d 662, 673 (3d
Cir. 2019).
ChanBond attempts to deflect from its failures by asking the Court to consider
Movants’ alleged “misconduct” in this action. Of course, Movants deny and reject
this conclusory characterization. But in any event, Movants are not claiming a right
personal to them. The right belongs to the public and the Court “is the primary
5
It is especially difficult to understand how disclosure of the award of attorneys’
fees, costs and expenses, the rates of a third-party business and the rate of postjudgment interest can constitute commercially sensitive information which could
cause business injury. To the extent ChanBond is embarrassed by the award, “[m]ere
embarrassment is insufficient to overcome the strong presumption of public access
inherent in the common law right.” In re Avandia Marketing, Sales Practices and
Products Liability Litigation, 924 F.3d at 679.
3
representative of the public interest in the judicial process and is duty-bound therefore
to review any request to seal the record (or part of it).” Citizens First Nat. Bank of
Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 945 (7th Cir. 1999).6
ChanBond invokes the interests of justice to justify continued sealing, but in
a conclusory manner without explaining why unsealing would be unjust. Certainly,
fulfilling the goal of open proceedings, lauded at both common law and under the
First Amendment, is a just result, certainly when measured again a naked claim of
“justice.”
ChanBond points to the existence of a confidentiality provision in the
settlement agreement and claims that the provision was “bargained for.” However,
there is no evidence that the provision was specifically bargained for, as opposed to
included by counsel as boilerplate language, or relied upon. In any event, “[t]he right
of access to court documents belongs to the public, and the [parties] were in no
position to bargain that right away.” San Jose Mercury News, Inc. v. U.S. Dist.
Court--Northern Dist. (San Jose), 187 F.3d 1096, 1101 (9th Cir. 1999). As such,
“[t]he presence of a confidentiality provision is not itself a sufficient reason to seal
6
ChanBond complains that Movants did not meet and confer to resolve the
issue. The last time Movants met with counsel for the parties the meeting devolved
into something less than civil. In any event, as Movants were unwilling to meet
ChanBond’s condition, any conference would not have been productive.
4
a settlement agreement.” Fonseka v.AlfredHouse ElderCare, Inc., 2015WL 3457224
at *2 (D. Md. May 28, 2015). Accord Wolinsky v. Scholastic Inc., 900 F.Supp.2d
332, 338 (S.D.N.Y. 2012) (“the presumption of public access would become virtually
meaningless if it could be overcome by the mutual interest of the parties in keeping
their settlement private”) ; Select Portfolio Servicing v. Valentino, 2013 WL 1800039
at *3 (N.D. Cal. Apr. 29, 2013). See also Fair Laboratory Practices Associates v.
Riedel, 666 Fed.Appx. 209 (3d Cir. 2016) (reversing decision to seal settlement
agreement and remanding for the District Court to determine whether public
disclosure will work a clearly defined and serious injury).7
Here, the Arbitration Award was submitted to this Court as part of an
enforcement action. The action seeks governmental backing to compel payment of
the award.
7
ChanBond misquotes Enprotech Corp. v. Renda, 983 F.2d 17 (3d Cir. 1993),
claiming that the ThirdCircuit said: “settlement documents can become...public under
either of two circumstances: (1) when a settlement is filed with a district court; and
(2) when the parties seek interpretative assistance from the court or otherwise move
to enforce a settlement provision.” (Response at 2). What the Third Circuit actually
wrote was: “when a settlement is filed with a district court and becomes a judicial
record, or when the parties seek interpretative assistance from the court or otherwise
move to enforce a settlement provision, then the settlement documents can become
part of the public component of a trial.” Id. at 20 (italics added).
5
Defendants next cites a trio of cases to show that this Court “frequently
protects settlement agreements from public disclosure.” (Response at 3). It is equally
true, however, that courts in this Circuit also frequently deny requests to seal and
grant motions to unseal settlement agreements. E.g., Bank of America Nat. Trust and
Sav. Ass’n v. Hotel Rittenhouse Associates, 800 F.2d 339 (3d Cir. 1986)8
; Brumley
v. Camin Cargo Control, Inc., 2012 WL 300583 (D. N.J. Feb. 01, 2012).
The trio of cases, however, is useful in demonstrating why sealing is improper
in this case. Those casesshow that for information to be sealed as being commercially
sensitive, there must be a showing that the information will be used in ongoing or
future operations of the business. In Amgen Inc. v. Amneal Pharms. LLC, 2021 WL
4133516 (D. Del. Sept. 10, 2021), opinion vacated in part on reconsideration, 2021
WL 4843959 (D. Del. Oct. 18, 2021), the information related to current operations,
prices, sales revenue, customer payment terms, and licensing terms, disclosure of
which could place a party at a competitive disadvantage. In Volkswagen Grp. of Am.,
Inc. v. N. Am. Auto. Serv., Inc., 2020 WL 9211151 (D.N.J. Nov. 30, 2020), the
information related to current business and litigation strategies. And in Genentech,
Inc. v. Amgen, Inc., 2020 WL 9432700 (D. Del. Sept. 2, 2020), the Special Master
8
ChanBond makes no effort to address Bank of America Nat. Trust and Sav.
Ass’n ,controlling Third Circuit authority.
6
found that there was comprehensive evidence and factual explanation as to why the
material met the criteria for sealing.
By contrast, the present action addresses a damage award for past conduct
which breached a contract, and ChanBond offered no evidence, much less
comprehensive evidence, justifying continued sealing. This does not qualify as
commercially sensitive information. As one court has stated:
Obviously, the Settlement Amount is not the name of a minor child,
personally identifying information, or a scandalous or defamatory
matter. Nor can there be any plausible assertion that it is a trade secret,
confidential research, or development. That leaves “commercial
information” as the only remaining possibility, but “nformation is not
considered ‘commercial’ merely because it relates to business affairs.”
To the contrary, the “commercial information” exception only protects
“information which would cause ‘an unfair advantage to competitors by
providing them information as to the commercial operations’” of the
movant. It simply does not “offer a safe harbor for those who crave
privacy or secrecy for its own sake.” For this reason, there appears to be
unanimous agreement among courts that the terms of a settlement
agreement, including the amount of any settlement payments, are not
“commercial information” and, therefore, should not be restricted from
public view.
In re Wells Fargo Bank, N.A., 2019 WL 642850 at *2 (Bankr. W.D. Pa. Feb. 14,
2019) (footnotes omitted).
Next, ChanBond argues, based only on it own “understanding” (without
identifying the source of this “understanding,” so the Court could determine the
credibility of the statement), and without the benefit of any evidence, that the
7
“confidentiality of the settlement amount was a material inducement for their
agreement to enter into the settlement in the first instance, without which there would
be no proceeds for the parties here (and double derivatively the Non-Parties) to
dispute.” From this, ChanBond claims it would be at risk for claims that it breached
the settlement agreement.
Further, as for what ChanBond “understands,” “statements made in briefs are
not evidence of the facts asserted….” Bell v. United Princeton Properties, Inc., 884
F.2d 713, 720 (3d Cir. 1989). Accord Tunnell v. Wiley, 514 F.2d 971, 975 n.5 (3rd
Cir. 1975). Further, as unsealing would be pursuant to a court order, ChanBond
would be immune from liability. Worrall v. Irvin, 890 F.Supp. 696, 708 (S.D. Ohio
1994); In re Martin Paint Stores, 199B.R. 258, 265-266 (Bankr.S.D.N.Y.1996). See
also W.R. Grace and Co. v. Local Union 759, Intern. Union of United Rubber, Cork,
Linoleum and Plastic Workers of America, 461 U.S. 757, 767 n.10 (1983)
(“Although Barrett could have considered the District Court order to cause
impossibility of performance and thus to be a defense to the Company’s breach, he
did not do so”).
Finally, ChanBond asks that the Court allow it to re-file its opposition to
CBV’s Motion for Preliminary Injunction without referencing or attaching the
Arbitration Award. (Response at 3 fn.2). The Arbitration Award is already on the
8
docket, and the only way to remove it would be to strike it from the docket. Once a
motion to unseal has been filed, however, the Court may not strike a document from
the record to avoid public disclosure. In re Peregrine Systems, Inc., 311 B.R. 679,
691 (D. Del. 2004).
CONCLUSION
WHEREFORE, for the foregoing reasons, as well as the reasons stated in its
Opening Brief, Movants respectfully request that this Court grant their motion to
unseal all records filed in this case, including a fully unredacted version of the
Settlement Agreement.
Respectfully submitted,
/s/ David L. Finger
David L. Finger (DE Bar ID #2556)
Finger & Slanina, LLC
One Commerce Center
1201 N. Orange St., 7th floor
Wilmington, DE 19801-1186
(302) 573-2525
dfinger@delawgroup.com
Attorney for Movants Gregory
Collins and Kamal Mian
Dated: June 9, 2022
AI
