"Confidential" Documents in Article 75 Proceeding Permitted to Be Sealed

On December 6, 2022, Justice Joel M. Cohen of the New York County Commercial Division issued a decision in Metropolitan Transportation Authority v. Westfield Fulton Center, 2022 N.Y. Slip Op. 34112(U), holding that confidential documents submitted in connection with an arbitration could be filed under seal in an Article 75 proceeding, explaining:

As an initial matter, the fact that the parties have stipulated to sealing documents, or that they have designated the documents during discovery as "Confidential" or "Highly Confidential," does not, by itself, require granting of the motion (see, e.g., Maxim, 145 AD3d at 518; Gryphon, 28 AD3d at 324). Agreements to seal do not, without more, establish "good cause" (MBIA Ins. Corp. v Countrywide Home Loans, Inc., 2012 NY Slip Op 33147[U], * 9 [Sup Ct, NY County 2012]).

Here, however, Respondent [*3] has met its burden of showing good cause. New York has a "long and strong public policy favoring arbitration" (Am. Intl. Specialty Lines Ins. Co. v Allied Capital Corp., 35 NY3d 64, 70, 125 N.Y.S.3d 340, 149 N.E.3d 33 [2020]), and New York courts have authorized sealing the records of Article 75 proceedings where the matter properly belonged in arbitration, and thus "the material filed with the court belongs not in the court, but in the files of the arbitrating body"' (Matter of Cohen v S.A.C. Capita/Advisors, LLC, 11 Misc 3d 1054[A], 815 N.Y.S.2d 493, 2006 NY Slip Op 50205[U] [Sup Ct, NY County [**3] 2006], quoting Feffer v Goodkind, Wechsler, Labaton & Rudolf, 152 Misc. 2d 812, 815, 578 N.Y.S.2d 802 [Sup Ct, NY County 1991], affd sub nom., 183 A.D.2d 678, 584 N.Y.S.2d 56 [1st Dept 1992]). While there is not "a per se sealing rule for records submitted to the court in connection with arbitration proceedings" where, "as is common among parties to arbitration, the parties had a strong expectation of confidentiality even in court proceedings to confirm the award," sealing and/or redaction may be appropriate (Allstate Life Ins. Co. v Lincoln Ben. Life Co., 2020 WL 3819037 [Sup Ct, NY County 2020]). Here, the parties had designated certain documents as confidential in the underlying arbitration and have worked together to reduce the documents Westfield seek to be sealed or redacted in this action from seventy-seven to eighteen.

Court filings are presumptively public, but arbitration proceedings are not. And while courts in the Commercial Division generally scrutinize sealing motions, this case shows that the court may be more protective of "confidential" documents submitted in an Article 75 proceeding following a confidential mediation. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning a sealing motion.