Court Orders Selective Redaction Rather Than Sealing

On August 8, 2018, Justice Masley of the New York County Commercial Division issued a decision in Barrison v. D'Amato & Lynch LLP, 2018 NY Slip Op. 31922(U), ordering selective redaction rather than sealing of document to be filed, explaining:

Section 216.1 (a) of the Uniform Rules for Trial Courts empowers courts to seal documents upon a written finding of good cause. It provides:

(a) Except where otherwise provided by statute or rule, a court shall not enter an order in any action or proceeding sealing the court records, whether in whole or in part, except upon a written finding of good cause, which shall specify the grounds thereof. In determining whether good cause has been shown, the court shall consider the interests of the public as well as the parties. Where it appears necessary or desirable, the court may prescribe appropriate notice and an opportunity to be heard.
(b) For purposes of this rule, 'court records' shall include all documents and records of any nature filed with the clerk in connection with the action. Documents obtained through disclosure and not filed with the clerk shall remain subject to protective orders as set forth in CPLR 3103(a).

Rule 202.5 (e), entitled "Omission or Redaction of Confidential Personal Information", provides that confidential personal information such as taxpayer identification numbers, social security numbers, and bank account numbers shall be omitted or redacted.

Judiciary Law § 4 provides that judicial proceedings shall be public. The public needs to know that all who seek the court's protection will be treated evenhandedly, and there is an important societal interest in conducting any court proceeding in an open forum. The public right of access, however, is not absolute.

The party seeking to seal court records bears the burden of demonstrating compelling circumstances to justify restricting public access to the documents. The movant must demonstrate good cause to seal records under Rule§ 216.1 by submitting an affidavit from a person with knowledge explaining why the file or certain documents should be sealed.

Good cause must rest on a sound basis or legitimate need to take judicial action. Courts have sealed tax returns because such records contain private information about personal finances.

The parties must redact all confidential information as defined by Uniform Rule § 202.5(e). Parties are directed to redact all confidential information belonging to parties and non-parties including home addresses and social security numbers. In addition, the court finds good cause based on private finance information for which the public has no interest. The parties are directed to redact all financial information from the tax returns and K-1 Forms that is unrelated to this action. Moreover, while this motion to seal was listed on the court's public docket, neither the press nor public appeared do demonstrate interest in this case.

(Internal quotations and citations omitted).

This decision relates to a common issue in complex commercial litigation: the balancing of the New York courts' need to make their proceedings public and litigants' need to protect sensitive commercial information. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding protecting sensitive commercial information during litigation.