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
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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
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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
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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).
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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.
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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.
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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
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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
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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.
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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
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