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HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 057 - Open Resp Mot Restrict W Exhibit IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 2021-cv-02063-DDD-NYW CITY OF FORT COLLINS, Plaintiff and Counter-Defendant, vs. OPEN INTERNATIONAL, LLC, OPEN INVESTMENTS, LLC. Defendants and Counterclaimant. OPEN’S RESPONSE IN OPPOSITION TO THE CITY’S MOTIONS TO RESTRICT Defendants and Counterclaimant Open International, LLC and Open Investments, LLC (together, “Open”) respectfully oppose the Plaintiff and Counter-Defendant City of Fort Collins’s (the “City”) Motions to Restrict Access (Dkts. 50 & 53). With these Motions, the City continues its systematic effort to suppress highly relevant documents that are deeply damaging to its case. See also Dkts. 44, 45. But the City articulates no justification for sealing the documents, identifies no harm from their disclosure, and offers no basis to claw them back when Open obtained them outside this litigation. The City has not borne the heavy burden that a party must bear if it seeks to rebut the strong presumption in favor of public access to court records. The City’s request to seal and to suppress critical evidence should be denied. LEGAL STANDARD “Courts have long recognized a common-law right of access to judicial records.” Mann v. Boatright, 477 F.3d 1140, 1149 (10th Cir. 2007). While that right is not absolute, it entails a “strong presumption in favor of public access” that may not be rebutted unless “countervailing Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 1 of 8 -2- interests heavily outweigh the public interests in access.” Id. This right is premised upon the recognition that public monitoring of the courts fosters important values such as respect for the legal system.” Johnstown Feed & Seed, Inc. v. Cont’l W. Ins. Co., 2009 U.S. Dist. LEXIS 23507, at *3 (D. Colo. Mar. 26, 2009) (quotations and citations omitted) (elaborating on judicial duty to “avoid secrecy,” which is “anathema to a free society”). To overcome the presumption, a party seeking to seal court records must do two things. First, it must “articulate a real and substantial interest that justifies depriving the public of access to the records that inform [judicial] decision-making.” Sacchi v. IHC Health Servs., Inc., 918 F.3d 1155, 1160 (10th Cir. 2019) (quotations and citations omitted); accord D.C.COLO.LCivR 7.2(c)(2). Second, the party must demonstrate that “disclosure will work a clearly defined and serious injury.” United States v. Walker, 761 F. App’x 822, 834 (10th Cir. 2019) (quotations and citations omitted); accord D.C.COLO.LCivR 7.2(c)(3). ARGUMENT The City seeks to hide five documents from public view: two 2020 memoranda from its third-party consultant Vanir, a 2020 project plan from Vanir, a 2021 engagement agreement between the City and TMG Consulting, and a 2021 project assessment from TMG. But the City has not identified the requisite protectable interest and potential harm from disclosure that are necessary to overcome the presumption of open court records. I. CONFIDENTIALITY DESIGNATIONS UNDER THE PROTECTIVE ORDER ARE IRRELEVANT. The City leads off by citing the Protective Order (Dkt. 32), invoking the “Confidential” designation for the five documents at issue, and noting that Open has not challenged those designations. See Dkt. 50 ¶¶ 1, 5; Dkt. 53 ¶¶ 1, 4. But these facts are beside the point when it Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 2 of 8 -3- comes to sealing. “[A] party cannot overcome the presumption against sealing judicial records simply by pointing out that the records are subject to a protective order.” MusclePharm Corp. v. Liberty Ins. Underwriters, Inc., 712 F. App’x 745, 749 (10th Cir. 2017). “A showing of compelling cause over and above that sufficient to support entry of a private protective order is necessary” to justify sealing. Johnstown, 2009 U.S. Dist. LEXIS 23507, at *5. Indeed, the City agreed the “Protective Order does not entitle [it] to file confidential information under seal.” Dkt. 32 §§ 1.1, 13.3. The parties’ confidentiality designations under the Protective Order are “irrelevant” to the City’s Motions. Johnstown, 2009 U.S. Dist. LEXIS 23507, at *4. II. THE CITY HAS NOT ARTICULATED A PROTECTABLE INTEREST AND A SPECIFIC HARM THAT WARRANT SEALING. A. The City Offers Only Generalized and Ill-Fitting Assertions to Justify Protection. Aside from the Protective Order, the City mentions three bases for restricting access to the documents at issue in its Motions. None of them warrants sealing. First, the City contends that the documents “refer to and consist of confidential strategic and business information.” Dkt. 50 ¶ 5; Dkt. 53 ¶ 5. But the City does not bother to identify particular provisions or sections in the documents that warrant protection. For example, the City cautions broadly that the report issued by TMG includes “summaries of interviews with personnel” (while omitting that those summaries are aggregated and unattributed), as well as “recommendations for the project,” “descriptions of failings within the project,” and other “subject[s] of this dispute.” Dkt. 53 ¶ 9; see also id. ¶ 6 (citing “discussions regarding risk mitigation and issues concerning the project, including detailed recommendations” as protectable); id. ¶ 7 (citing “information that was intended to remain confidential and internal” as Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 3 of 8 -4- protectable”); id. ¶ 8 (citing “description of the scope of work” as protectable). In these glosses of highly relevant documents, the City does “not cite any particular provision in any Exhibit that [it] believe[s] contain[s] [protectable] confidential or proprietary information.” Colorado Access v. Atl. Specialty Ins. Co., 2022 U.S. Dist. LEXIS 76794, at *7 (D. Colo. Apr. 22, 2022) (Wang. J.) Instead, it waves its hands at the whole set of documents and insists that even “[r]edaction . . . is not a reasonable or practical alternative because they contain confidential information.” Dkt. 50 ¶ 7; Dkt. 53 ¶ 11 (noting “extensive confidential information”). The presumption of open records will not yield to these “generalized assertions.” Colorado 2022 U.S. Dist. LEXIS 76794, at *9. Ultimately, the memoranda, plans, and reports from Vanir and TMG are little different than the police test results, interview appraisals, and other analytical information that the District of Colorado refused to seal, even over a municipality’s objections about personal privacy concerns of non-party officers. See Huddleson v. City of Pueblo, 270 F.RD. 635, 638 (D. Colo. 2010). Like the exhibits here, those documents analyzing public works by a public entity were not protectable. Second, the City vaguely cites “an NDA that limits” Vanir, Dkt. 50 ¶ 6, and an agreement by TMG to “sign all necessary confidentiality agreements and/or NDA’s [sic] with all parties as required,” Dkt. 53 ¶ 8, but the City identifies no agreed protections over the subject documents themselves. Even if there were some agreed protections over the documents, reliance on “confidentiality provision[s], alone, is insufficient to overcome the strong public interest in access to judicial records.” Colorado Access, 2022 U.S. Dist. LEXIS 76794, at *8; see also Sacchi v. IHC Health Servs., 918 F.3d 1155, 1160 (10th Cir. 2019) (rejecting confidentiality clause and involvement of non-party as basis to overcome presumption of open records). Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 4 of 8 -5- Third, the City contends that at least one, if not both, of the Vanir memoranda are subject to the deliberative process privilege and therefore should be sealed and clawed back. See Dkt. 53 ¶¶ 5-7. But this argument fails for several reasons. To start, the City’s authority addresses a special privilege under “Exemption 5” of the federal Freedom of Information Act, see DOI v. Klamath, 531 U.S. 1, 4, 8 (2001), and does not address whether deliberative process privilege covers third-party consultants (like Vanir) in the FOIA context, or whether it applies at all in litigation, id. at 12 & n.3. But even if a third-party consultant’s non-legal1 communications with a party could be privileged, the City waived that privilege by making the Vanir memoranda available to Open during the project through a collaborative shared drive. See Parrot Decl. ¶¶ 3- 6. “A voluntary disclosure to unnecessary third parties waives the deliberative process privilege as to the document or information specifically released.” Citizens for Responsibility & Ethics v. United States DOC, 2020 U.S. Dist LEXIS 146783, at *4-5 (D.D.C. Aug. 14, 2020) (applying waiver in FOIA context even if recipient did not view information); accord Carrol v. Scanlon, 2013 Colo. Dist. LEXIS 2631, at *22 (Dist. Ct. Eagle Cty. June 3, 2013) (in CORA context, “it is well established that the deliberative process privilege is waived if information is disclosed to third parties . . . .”). The City cannot claim privilege over memoranda it provided to Open during the project, and it surely cannot claw back documents that Open obtained outside the litigation. See Parrott Decl. ¶¶ 6, 8; see also Dkt. 32 (Protective Order) § 12.1 (providing claw-back of documents disclosed “in connection with the pending litigation”); accord F.R.E. 502 (protecting 1 The Vanir memo states that lawyers were not involved in its drafting. See Dkt 43-1 at 2. Notably, the memo also bears Open’s Bates stamp because Open obtained it outside the litigation and then produced it under Rule 26(a)(1)(A). See June 14, 2022 Declaration of Hernando Parrott, attached hereto (“Parrot Decl.”), ¶¶ 7-9. Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 5 of 8 -6- against inadvertent disclosure “in a federal proceeding”); Dkt. 21 (Scheduling Order) § 6(g) (addressing inadvertent “production”). B. The City Makes No Meaningful Effort to Demonstrate Harm from Disclosure. In addition to articulating a basis for sealing documents, the City must “identify a clearly defined and serious injury that would result if access is not restricted.” E.g., D.C.COLO.LCivR 7.2(c)(3) Where, as here, the request pertains to business information, injury generally means “harm [to] competitive standing.” Nixon v. Warner Commc’ns, 435 U.S. 589, 598 (1978). Other than its tautological claim that “disclosure risks harm” because the documents “contain information that was intended to remain confidential and internal,” Dkt. 53 ¶ 7, the City does not mention injury or harm in its briefs. Nor can harm be inferred without reference to specific sensitive information, which the City also omits. This deficit distinguishes this case from the cases the City cites where a motion to restrict was granted. See Dkt. 50 ¶ 6; Dkt. 53 ¶ 10. In each of those cases, one or both parties identified specific trade secrets or sensitive proprietary business information that, in the hands of a competitor, could harm one or both parties’ competitive standing. The City has not identified such information with any specificity, nor has it articulated any kind of harm to its competitive standing that would arise from disclosing: two-year-old memoranda criticizing a project that has since been abandoned, project plans and assessments from more than a year ago for the abandoned project, or a generic commercial contract. The City has not shown that it will be harmed by the disclosure of memoranda, plans, assessments, and contracts that do not pertain to any competitively sensitive, ongoing work. Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 6 of 8 -7- CONCLUSION The City is a public entity with public stakeholders, and it has not articulated the specific information that warrants sealing from the public or identified likely harm from disclosure to the public. The City’s Motions should be denied. Dated: June 14, 2022. Respectfully submitted, s/ Paul D. Swanson Paul D. Swanson, pdswanson@hollandhart.com Anna van de Stouwe, acvandestouwe@hollandhart.com Alexander D. White, adwhite@hollandhart.com Holland & Hart LLP 555 17th Street, Suite 3200 Denver, Colorado 80202 Telephone: 303-295-8000 Attorneys for Defendants Open International, LLC and Open Investments, LLC CERTIFICATE OF COMPLIANCE I hereby certify that the foregoing pleading complies with the type-volume limitations set forth in Judge Domenico’s Practice Standard III(A)(1). This brief contains 1,733 words. s/ Paul D. Swanson Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 7 of 8 -8- CERTIFICATE OF SERVICE I hereby certify that on the 14th day of June, 2022, the foregoing was electronically filed with the Clerk of Court using the Court’s electronic filing system and that a copy of the foregoing was sent to all counsel of record via same in compliance with the Federal Rules of Civil Procedure and the Local Rules of this Court. s/ Paul D. Swanson Case 1:21-cv-02063-DDD-NYW Document 57 Filed 06/14/22 USDC Colorado Page 8 of 8 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 2021-cv-02063-DDD-NYW CITY OF FORT COLLINS, Plaintiff and Counter-Defendant, vs. OPEN INTERNATIONAL, LLC, OPEN INVESTMENTS, LLC. Defendants and Counterclaimant. DECLARATION OF HERNANDO PARROTT I, Hernando Parrott, am over the age of eighteen and I make this Declaration pursuant to 28 U.S.C. § 1746, based upon my personal knowledge of the facts and circumstances stated herein: 1. I am the President of Defendant and Counterclaimant Open International, LLC (“Open”), and I am familiar with the utilities-software implementation project (the “Project”) undertaken by the City of Fort Collins (the “City”) and Open between August 2018 and July 2021. 2. Throughout its duration, the Project required detailed, ongoing, and intensive collaboration between the City and Open. 3. To further this collaboration the City set up a shared Sharepoint repository, at the beginning of the project, granting read/write access to named users of the OASIS project team members including personnel from the City and Open. The City managed this repository, adding and removing named users through the life cycle of the project. Case 1:21-cv-02063-DDD-NYW Document 57-1 Filed 06/14/22 USDC Colorado Page 1 of 3 -2- 4. Both parties accessed and contributed to the documents stored on the shared repository . 5. Among thousands of documents stored on the drive, the City kept more than a dozen memos prepared by Vanir Construction Management, Inc. (“Vanir”) in late 2019 and early 2020, including the two memos labeled Open_Intl_00034498 and -00034556, which were filed in this action as Dkts. 43-1 and 43-2, respectively. 6. Open had access to these memoranda and the rest of the shared repository long before this litigation began. 7. When Open learned that the City had filed a lawsuit, Open took steps to ensure that it preserved all documents related to the project, stored in the shared repository. 8. Open preserved a copy of the documents on the shared drive on July 7, 2021, and the City effectuated service of the initial state court summons and complaint on Open on July 9, 2021. 9. Open thereafter produced copies of the Vanir memos and other shared-drive documents to the City in September and November 2021. I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge. Executed on the 14th day of June, 2022 at Miami, Florida Hernando Parrott Case 1:21-cv-02063-DDD-NYW Document 57-1 Filed 06/14/22 USDC Colorado Page 2 of 3 -3- Case 1:21-cv-02063-DDD-NYW Document 57-1 Filed 06/14/22 USDC Colorado Page 3 of 3