Collaborative Imaging Technology, LLC v. CMI Management, LLC, et al

Case Number

24CV05224

Case Type

Hearing Date / Time

Mon, 12/09/2024 - 10:00

Nature of Proceedings

Plaintiff’s Motion To File Under Seal Complaint

Tentative Ruling

Collaborative Imaging Technology, LLC v. CMI Management, LLC, et al.

Case No. 24CV05224         

Hearing Date: December 9, 2024                                                       

HEARING:              Plaintiff’s Motion To File Under Seal Complaint

                                   

ATTORNEYS:        For Plaintiff Collaborative Imaging Technology, LLC: J. Christian Nemeth, Julian L. Andre, McDermott Will & Emery LLP

                        For Defendants CMI Management, LLC, Pueblo Radiology Medical Group, Inc., and Pueblo Radiology Associates, Inc: Christopher B. Queally, Matthew Whitten, Christian S. Vandenberghe, Gordon Rees Scully Mansukhani, LLP

TENTATIVE RULING:

The motion of plaintiff to file the complaint under seal is denied. To the extent plaintiff does not, on or before December 19, 2024, notify the Court that the complaint lodged conditionally under seal by plaintiff on September 19, 2024, is to be filed unsealed, the clerk is directed to permanently delete the complaint lodged by plaintiff conditionally under seal on September 19, 2024.

Background:

On September 19, 2024, plaintiff Collaborative Imaging Technology, LLC (CIT) filed a complaint against defendants CMI Management, LLC (CMI), Pueblo Radiology Medical Group, Inc. (Pueblo MG), and Pueblo Radiology Associates, Inc. (Pueblo RA) (collectively, defendants), alleging three causes of action: (1) breach of contract; (2) declaratory relief; and (3) promissory fraud. The publicly filed complaint of CIT includes extensive redactions. On the same date, CIT concurrently lodged a copy of the complaint conditionally under seal, without redaction.

The unredacted allegations of the publicly filed complaint indicate that CIT is a billing services vendor for various physician practice groups which include Pueblo MG and Pueblo RA, and that CIT is a party to a contract with these physician practice groups which was scheduled to expire on August 1, 2026. (Public Compl., ¶¶ 1 & 10-11.) These allegations also indicate that the claims alleged by CIT in this action arise from what CIT contends is an unlawful scheme by defendants to exit the parties’ contractual billing relationship by, among other things, breaching one or more agreements between the parties and engaging in purported bad faith conduct which harmed CIT’s relationships with nonparties to this litigation. (See, e.g., Public Compl., ¶¶ 1-3, 13-14, 25, 36, 39, 59 [unredacted allegations].)

On September 19, 2024, CIT filed a motion for an order directing that the complaint of CIT be filed under seal. In support of the motion, CIT submits the declaration of its counsel, J. Christian Nemeth (Nemeth), who states that on July 24, 2024, the parties to this action executed an agreement which purportedly includes a provision designating all information related to the agreement as confidential and not subject to public disclosure. (Nemeth Decl., ¶ 2.) Nemeth contends that the complaint must be sealed to protect information that the parties have deemed to be confidential pursuant to their agreement, including information relating to third parties not named in this action. (Id. at ¶ 5.)

Defendants oppose the motion.

Analysis:

Subject to exceptions which do not appear to be present here, the public has a constitutional right of access to documents filed with the court in civil litigation matters, which is “grounded in the First Amendment.” (Overstock.com, Inc. v. Goldman Sachs Group, Inc. (2014) 231 Cal.App.4th 471, 484, 495; Savaglio v. Wal-Mart Stores, Inc. (2007) 149 Cal.App.4th 588, 596.) “Unless confidentiality is required by law, court records are presumed to be open.” (Cal. Rules of Court, rule 2.550(c).) (Note: Undesignated rule references herein shall be to the California Rules of Court unless otherwise specified.) A court may order that a record be filed under seal only upon an express factual finding establishing an “overriding interest that overcomes the right of public access to the record”, that “the overriding interest supports sealing the records”, that “a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed”, that “the proposed sealing is narrowly tailored”, and that “no less restrictive means exist to achieve the overriding interest.” (Cal. Rules of Court, rule 2.550(d)(1)-(5); Sander v. State Bar of California (2013) 58 Cal.4th 300, 319, fn. 7.)

“[A] reasoned decision about sealing or unsealing records cannot be made without identifying and weighing the competing interests and concerns. Such a process is impossible without (1) identifying the specific information claimed to be entitled to such treatment; (2) identifying the nature of the harm threatened by disclosure; and (3) identifying and accounting for countervailing considerations. The burden of presenting information sufficient to accomplish the first two steps is logically placed upon the party seeking the sealing of the documents, who is presumptively in the best position to know what disclosures will harm him and how. This means at a minimum that the party seeking to seal documents, or maintain them under seal, must come forward with a specific enumeration of the facts sought to be withheld and specific reasons for withholding them.” (H.B. Fuller Co. v. Doe (2007) 151 Cal.App.4th 879, 894 (H.B. Fuller).)

The present motion is brought on the sole ground that there exists a provision in an unspecified agreement between the parties, a copy of which is not provided with or described in the motion, purportedly designating all information relating to the agreement as confidential. “The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.” (Cal. Rules of Court, rule 2.551(a).) For this reason, even if the Court were to credit the assertions made by CIT’s counsel with respect to the purported agreement, the existence of an agreement by the parties, alone, is not a basis upon which the Court may order that the complaint of CIT be filed under seal.

In addition, the allegations which have been redacted from the publicly filed complaint do not, on their face and in each instance, appear to implicate any overriding interest that would overcome the public’s right to access the record. For example, though CIT fails to explain how the mere existence of a contract between the parties implicates an overriding interest, all allegations relating to the contract, without regard to the content or nature of these allegations, have been redacted in a wholesale fashion from the complaint. This example is intended to be illustrative, but not exhaustive as to why the allegations of the complaint do not on their face appear to implicate any overriding interests.

Moreover, wholly absent from the motion and the Nemeth declaration is any “concrete factual basis for a sealing order[]” as to each redacted allegation, or any reasoned legal or factual argument demonstrating, on a point by point basis with respect to each allegation, the existence of an overriding interest in each of the specific items or categories of information which CIT has redacted from the complaint. (H.B. Fuller, supra, 151 Cal.App.4th at p. 891.) For these same reasons, the sealing proposed by CIT is not narrowly tailored.

The broad, general, and overly conclusive information and arguments offered by CIT in the motion are also wholly insufficient to permit the Court to make the express factual findings required under rule 2.550(d), or to enter the order required under rule 2.550(e)(1), including the directive described under rule 2.550(e)(1)(B). It is not the court’s burden to determine which, if any, facts are sufficient to justify the sealing of each portion or allegation of the complaint which has been redacted by CIT. (Cal. Rules of Court, rule 2.551(b)(1); see also Artiglio v. General Electric Co. (1998) 61 Cal.App.4th 830, 842.)

For all reasons discussed above, CIT has failed to identify, with a sufficiently specific enumeration of each allegation it seeks to withhold, the specific information CIT claims is entitled to a sealing order, or to identify as to each allegation the specific nature of the harm threatened by its disclosure, the specific reasons for withholding the information appearing in each allegation, or any overriding interest in the information disclosed by each allegation. As CIT has wholly failed to meet its burden to show facts sufficient to justify the sealing of the complaint, the Court will deny the motion.

Unless CIT notifies the Court, on or before December 19, 2024, that the complaint lodged conditionally under seal on September 19, 2024, is to be filed unsealed, the Court will direct the clerk to permanently delete the complaint lodged by CIT in this action. (Cal. Rules of Court, rule 2.551(b)(6). Further, to the extent CIT fails to notify the Court that the lodged complaint is to be filed unsealed by the date specified in this ruling, the Court will deem the redacted complaint publicly filed by CIT to be the presently operative pleading with respect to any appropriate pleading challenge, if any, that may be filed in this action and directed to the complaint.