Commercial Division Blog

Posted: December 3, 2013 / Categories Commercial, Court Rules/Procedures

Motion to Seal Sensitive Commercial Document Granted

On November 6, 2013, Justice Ramos of the New York County Commercial Division issued a decision in Greystone Funding Corp. v. Kutner, 2013 NY Slip Op. 32980(U), sealing portions of the record in that action.

Unlike federal courts, New York state courts rarely seal court records. Because of the importance of this issue to commercial litigators, we have repeated below Justice Ramos's analysis in granting a motion to seal:

Under New York law, there is a broad presumption that the public is entitled to access to judicial proceedings and court records. However, the right of access is not absolute.

To that extent, 22 NYCRR § 216.1 provides that:

[e]xcept 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 of the parties.

Although the term good cause is not defined, a sealing order should clearly be predicated upon a sound basis or legitimate need to take judicial action. A finding of good cause presupposes that public access to the documents at issue will likely result in harm to a compelling interest of the movant.

Exhibit F conclusively contains impressions and contemporaneous notes that could harm Greystone's competitive advantage by having access to a large compilation of their business leads and their internal and contemporaneous impressions.

In the business context, we have allowed for sealing where trade secrets are involved, or where the release of documents could threaten a business's competitive advantage. Proprietary information, in the nature of current or future business strategies which are closely guarded by a private corporation, is akin to a trade secret, which, if disclosed, would give a competitor an unearned advantage.

(Internal quotations and citations omitted).