Bradshaw v. Maiden

Bradshaw v. Maiden, 2020 NCBC 26.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
MECKLENBURG COUNTY 14 CVS 14445

JAMES W. BRADSHAW; CARLA O.
BRADSHAW; RESORT RETAIL
ASSOCIATES, INC.; E.C.
BROADFOOT; CHRISTINA DUNN
CHANDRA; THOMAS F. EGAN;
CHARLES EGGERT; MARK P.
GARSIDE; DR. JAMES J. GREEN,
JR.; ROBERT K. GRUNEWALD;
RONALD HOLMES; DAVID
LAUCK; CURT W. LEMKAU, JR.;
EVAN MIDDLETON; JOSHUA M.
NELSON; CHRISTIAN C. NUGENT;
REGINA H. PAKRADOONI, as
Executrix of the Estate of PETER B.
PAKRADOONI, deceased; FORD
PERRY; MARCELLO G. PORCELLI;
ADAN RENDON; RICHARD H.
STEVENSON; PAUL STOKES;
LAWRENCE J. THEIL; R.
MITCHELL WICKHAM; WILLIAM INTERIM ORDER AND OPINION ON
H. WILLIAMSON, III; WILLIAM K.
WRIGHT, JR.; ALEX M. WOLF; MOTIONS TO SEAL
CHAFFIN FAMILY LIMITED
PARTNERSHIP; and SOLARIS
CAPITAL LLC,
Plaintiffs,

v.

STEPHEN E. MAIDEN; MAIDEN
CAPITAL, LLC; and SS&C
TECHNOLOGIES, INC., successor
by merger to SS&C FUND
ADMINISTRATION SERVICES,
LLC (a/k/a SS&C FUND
SERVICES),

Defendants.

SS&C TECHNOLOGIES, INC.,
successor by merger to SS&C FUND
ADMINISTRATION SERVICES,
LLC,

Third-Party Plaintiff,
v.

MAIDEN CAPITAL OPPORTUNITY
FUND, LP,

Third-Party Defendant.

1. THIS MATTER is before the Court upon (i) Defendant SS&C Technologies,

Inc.’s (“SS&C”) Motion for Leave to File Under Seal (the “First Motion to Seal”), (ECF

No. 260); (ii) Plaintiffs’ Motion to File Under Seal (the “Second Motion to Seal”), (ECF

No. 277); and (iii) SS&C’s Motion for Leave to File Under Seal (the “Third Motion to

Seal”), (ECF No. 283), (collectively, the “Motions to Seal”) in the above-captioned case.

2. The Court elects to enter this Interim Order and Opinion concerning the

Motions to Seal without a hearing pursuant to Rule 7.4 of the North Carolina

Business Court Rules (“BCRs”). After considering the Motions to Seal, the related

briefing, and the tendered exhibits, the Court, for the reasons below, GRANTS in

part, DENIES in part, and DEFERS in part the Motions to Seal.

Mauney PLLC, by Gary V. Mauney, and Lewis & Roberts, PLLC, by James A.
Roberts, III, for Plaintiffs James W. Bradshaw; Carla O. Bradshaw; Resort
Retail Associates, Inc.; E.C. Broadfoot; Christina Dunn Chandra; Thomas F.
Egan; Charles Eggert; Mark P. Garside; Dr. James J. Green, Jr.; Robert K.
Grunewald; Ronald Holmes; David Lauck; Curt W. Lemkau, Jr.; Evan
Middleton; Joshua M. Nelson; Christian C. Nugent; Regina H. Pakradooni, as
Executrix of the Estate of Peter B. Pakradooni, deceased; Ford Perry; Marcello
G. Porcelli; Adan Rendon; Richard H. Stevenson; Paul Stokes; Lawrence J.
Theil; R. Mitchell Wickham; William H. Williamson, III; William K. Wright,
Jr.; Alex M. Wolf; Chaffin Family Limited Partnership; and Solaris Capital
LLC.

Alston & Bird LLP, by Michael A. Kaeding and Ryan P. Ethridge, and Paul,
Weiss, Rifkind, Wharton & Garrison LLP, by Jeffrey Recher and John
Baughman, for Defendant SS&C Technologies, Inc.

Bledsoe, Chief Judge.
I.

FACTUAL BACKGROUND

3. This case arises out of the collapse of a private hedge fund, Maiden Capital

Opportunity Fund, LP (“Fund”), managed exclusively by Maiden Capital, LLC

(“Maiden Capital”). See Bradshaw v. Maiden, 2017 NCBC LEXIS 30, at *2 (N.C.

Super. Ct. Mar. 31, 2017). Defendant Stephen E. Maiden (“Maiden”), the managing

partner of Maiden Capital, used the Fund to orchestrate an alleged multi-million

dollar “Ponzi scheme,” resulting in financial losses to Plaintiffs, all of whom invested

in the Fund. See Bradshaw v. Maiden, 2018 NCBC LEXIS 98, at *2–3 (N.C. Super.

Ct. Sept. 20, 2018). SS&C administered the Fund’s accounts from approximately

2007 until the Fund’s demise in 2013. See Bradshaw v. Maiden, 2018 NCBC LEXIS

46, at *2 (N.C. Super. Ct. May 9, 2018).

4. SS&C and Plaintiffs are now seeking to seal numerous documents filed in

support of and/or in opposition to SS&C’s Motion for Summary Judgment. For the

reasons discussed below, the Motions to Seal do not provide sufficient information for

the Court to determine whether sealing is warranted under BCR 5 for a majority of

the materials the parties seek to have sealed. The Court issues this Interim Order

and Opinion to identify these procedural defects and to grant the parties an

opportunity to cure by filing a supplemental brief or briefs in support of the Motions

to Seal as well as public redacted versions of the Sealed Documents. 1

1 The Court shall refer to all briefs, exhibits, and other attachments that the parties have

provisionally filed under seal collectively as the “Sealed Documents.”
II.

PROCEDURAL HISTORY

5. On October 28, 2019, SS&C filed (i) a Motion for Summary Judgment, (Mot.

Summ. J., ECF No. 256); (ii) a memorandum in support thereof (“SS&C’s

Memorandum in Support”), (Mem. Law Supp. Mot. Summ. J., ECF No. 257), which

was provisionally filed under seal; and (iii) an index and several exhibits, (Exs.

SS&C’s Mot. Summ. J., Part 1, ECF No. 258). The next day, SS&C provisionally filed

under seal fourteen additional exhibits to its Motion for Summary Judgment, (Exs.

SS&C’s Mot. Summ. J., Part 2 [hereinafter “Sealed Exs. SS&C’s Mot. Sum. J.”], ECF

No. 259), along with the First Motion to Seal, (Mot. Leave File Under Seal

[hereinafter “1st Mot. Seal”], ECF No. 260). On November 7, 2019, SS&C filed (i) a

public version of SS&C’s Memorandum in Support, (PUBLIC/REDACTED

VERSION—Mem. Law Supp. SS&C’s Mot. Summ. J. [hereinafter “Public Mem. Law

Supp.”], ECF No. 262); (ii) public versions of Exhibits A, D–F, I, P, and R–U to its

Motion for Summary Judgment, (PUBLIC/REDACTED VERSION—Exs. SS&C’s

Mot. Summ. J., Part 2 [hereinafter “Public Exs. SS&C’s Mot. Summ. J.”], ECF No.

263); and (iii) a notice of filing Exhibits B, C, H, and Q to its Motion for Summary

Judgment entirely under seal, (Notice Filing Under Seal—Exs. B, C, H, & Q SS&C’s

Mot. Summ. J. [hereinafter “Notice Filing Under Seal—Exs. B, C, H, & Q”], ECF No.

264).

6. On December 31, 2019, Plaintiffs provisionally filed under seal a brief in

opposition to SS&C’s summary judgment motion (“Plaintiffs’ Brief in Opposition”),
(Pls.’ Br. Opp’n Def. SS&C’s Mot. Summ. J. [hereinafter “Sealed Pls.’ Br. Opp’n”],

ECF No. 268). An affidavit, (Aff. Counsel, ECF No. 276), an index of exhibits and

testimony excerpts, (Index Exs. & Dep. Test. Excerpts/Trial Test. [hereinafter “Sealed

Index”], ECF No. 269), a compilation of deposition testimony and trial testimony

excerpts, (Dep. Test. Excerpts & Trial Test. [hereinafter “Sealed Test. Excerpts”],

ECF No. 275), and forty-seven documentary exhibits, (Exs. 3–12, ECF No. 270; Exs.

13–21, ECF No. 271; Exs. 23–33, ECF No. 272; Exs. 36, 38–46, ECF No. 273; Exs. 1–

2, 22, 34–35, 37, & 47, ECF No. 274), accompanied Plaintiffs’ Brief in Opposition.

7. Plaintiffs sought to seal Plaintiffs’ Brief in Opposition, the index, the

compilation of deposition testimony and trial testimony excerpts, and Exhibits 3–21,

23–33, 36, and 38–46 in the Second Motion to Seal. (See Pls.’ Mot. File Under Seal

1–2 [hereinafter “2nd Mot. Seal”], ECF No. 277.) Two days later, Plaintiffs

provisionally filed under seal Exhibit 38, (Ex. 38, ECF No. 278), and Exhibit 39, (Ex.

39, ECF No. 279), because these exhibits failed to upload when the initial filing was

made. On January 13, 2020, SS&C filed a supplemental brief in support of the Second

Motion to Seal (“Supplemental Brief in Support of Second Motion to Seal”), (Suppl.

Br. Resp. Pls.’ Mot. Leave File Under Seal [hereinafter “Suppl. Br.”], ECF No. 280),

pursuant to BCR 5.3.

8. SS&C provisionally filed under seal two copies of its reply in support of its

summary judgment motion (collectively, “SS&C’s Reply Memorandum”), (Reply

Mem. Law Further Supp. Def. SS&C’s Mot. Summ. J., ECF Nos. 281–82), on January

30, 2020. That same day, SS&C provisionally filed under seal an index and seven
exhibits, (Exs. X–DD SS&C’s Reply Mem. Further Supp. Mot. Summ. J., ECF No.

282.1), together with the Third Motion to Seal, (Mot. Leave File Under Seal

[hereinafter “3rd Mot. Seal”], ECF No. 283). Six business days later, SS&C filed (i) a

public version of SS&C’s Reply Memorandum, (PUBLIC-REDACTED

VERSION_Reply Mem. Law Further Supp. Def. SS&C’s Mot. Summ. J. [hereinafter

“Public Reply”], ECF No. 284); (ii) public versions of the index and Exhibits X, Y, and

AA–DD, (PUBLIC-REDACTED VERSION_Exs. X–DD Reply Mem. Law Further

Supp. Def. SS&C’s Mot. Summ. J. [hereinafter “Public Exs. X, Y, & AA–DD”], ECF

No. 285); and (iii) a notice of filing Exhibit Z entirely under seal, (Notice Filing Under

Seal_Ex. Z Reply Mem. Law Further Supp. Def. SS&C’s Mot. Summ. J. [hereinafter

“Notice Filing Under Seal—Ex. Z”], ECF No. 286).

III.

LEGAL STANDARD

9. Documents filed in the courts of this State are “open to the inspection of the

public[,]” except as prohibited by law. N.C.G.S. § 7A-109(a); see Virmani v.

Presbyterian Health Servs. Corp., 350 N.C. 449, 463, 515 S.E.2d 675, 685 (1999).

Nevertheless, “ ‘a trial court may, in the proper circumstances, shield portions of court

proceedings and records from the public[.]’ ” France v. France, 209 N.C. App. 406,

413, 705 S.E.2d 399, 405 (2011) (emphasis omitted) (quoting Virmani, 350 N.C. at

463, 515 S.E.2d at 685). “The determination of whether [documents] should be filed

under seal is within the discretion of the trial court.” Taylor v. Fernandes, 2018

NCBC LEXIS 4, at *4 (N.C. Super. Ct. Jan. 18, 2018) (citing In re Investigation into
Death of Cooper, 200 N.C. App. 180, 186–87, 683 S.E.2d 418, 424 (2009)).

Nevertheless, courts should conceal records sparingly and only “in the interest of the

proper and fair administration of justice[.]” Virmani, 350 N.C. at 463, 515 S.E.2d at

685.

10. BCR 5 governs the process for filing documents under seal in this Court and

includes specific procedural instructions designed to ensure a proper balance between

the interests of the litigants and the public. For the Court to assess whether sealing

is warranted, a motion to seal documents must include “the circumstances that

warrant sealed filing” and “the reason(s) why no reasonable alternative to a sealed

filing exists.” BCR 5.2(b)(2)–(3). Until the Court can make this determination, BCR

5.2(d) provides the public with notice that documents have been provisionally sealed

and allows access to public redacted versions or non-confidential descriptions of those

documents. See BCR 5.2(d). SS&C, as the designating party of the Sealed

Documents, bears the burden of overcoming the presumption that court records

should be open to the public. See BCR 5.1(b), 5.3; Preiss v. Wine & Design Franchise,

LLC, 2018 NCBC LEXIS 55, at *7 (N.C. Super. Ct. June 4, 2018).

IV.

ANALYSIS

A. Circumstances that Warrant Sealed Filing

11. For analytical purposes, SS&C has aggregated the individual Motions to

Seal and grouped the Sealed Documents into the following four categories: (i) SS&C’s

Client Data (as defined below); (ii) SS&C’s processes and procedures; (iii) SS&C’s
pricing information; and (iv) Plaintiffs’ personal information. (See 1st Mot. Seal 2–5;

Suppl. Br. 3–8; 3rd Mot. Seal 2–4.) The Court will address the Motions to Seal

collectively and determine whether SS&C has met its burden regarding the need for

filing under seal for each category in turn.

1. SS&C’s Client Data

12. SS&C states that it entered into an Agreement to Provide Services (the

“ASA”) to the Fund, which prohibits SS&C from disclosing information related to “(i)

the Fund or its Management; (ii) current, former, and prospective investors in the

Fund (including their names, addresses, and other personal information); and (iii)

any of the affiliates or service providers to the Fund (collectively, ‘Client Data’).” (1st

Mot. Seal 2; Suppl. Br. 3; 3rd Mot. Seal 2–3.) SS&C contends that sealing is

warranted because disclosure of such information could violate the terms of the ASA.

(1st Mot. Seal 2; Suppl. Br. 3; 3rd Mot. Seal 3.) SS&C further contends that sealing

is proper because the Court has previously ruled that SS&C’s Client Data may be

filed under seal. (1st Mot. Seal 3; Suppl. Br. 4; 3rd Mot. Seal 3; see also Order Mot.

File Under Seal ¶ 4 [hereinafter “2014 Order”], ECF No. 22.)

13. Although this Court has previously sealed documents containing Client

Data where public disclosure “would require SS&C to choose between withdrawing

these filings or violating the terms of the ASA[,]” (2014 Order ¶ 2), our Court of

Appeals has recently emphasized that “freedom of contract must be balanced with

the presumptive right of public access to court proceedings[,]” Doe v. Doe, 823 S.E.2d

583, 600 (N.C. Ct. App. 2018). “A court . . . is not bound by the parties’ designation
of material as ‘confidential,’ even if the designation is made in accordance with a

confidentiality agreement executed by the parties.” Taylor, 2018 NCBC LEXIS 4, at

*5 (citing France, 209 N.C. App. at 415–16, 705 S.E.2d at 407 (“Evidence otherwise

appropriate for open court may not be sealed merely because an agreement is

involved that purports to render the contents of that agreement confidential.”)); see

also Beroz v. Nuvotronics, Inc., 2018 NCBC LEXIS 249, at *3 (N.C. Super. Ct. Apr. 3,

2018) (“Our appellate courts and this Court have frequently and soundly rejected the

notion that parties to litigation may shield information from the public by

agreement.”). “[T]he reason the court seals [documents] is not because the parties

have agreed to keep them confidential but instead because their disclosure would

cause serious harm to [the] parties . . . .” Lovell v. Chesson, 2019 NCBC LEXIS 76,

at *5 (N.C. Super. Ct. Oct. 28, 2019).

14. Thus, our appellate courts and this Court have now made clear that the

mere fact that disclosure of the Client Data may constitute a breach of the ASA,

standing alone, is not a sufficient basis to justify sealing. Without an explanation of

how public disclosure of the Client Data could result in harm to SS&C and/or the

Fund, the Court cannot determine whether the Client Data is of the type and quality

that should be sealed.

2. SS&C’s Processes and Procedures

15. SS&C contends that information related to the processes and procedures it

used in providing services to the Fund, including SS&C’s checklists, reports, and

proprietary software, should be sealed because (i) internal processes and procedures
are a type of confidential and proprietary business information that North Carolina

courts have determined may warrant sealing; and (ii) this Court has previously ruled

that this type of information may be filed under seal. (See 1st Mot. Seal 3–4; Suppl.

Br. 4–5; 3rd Mot. Seal 4; see also Order Pls.’ Mot. Leave File Under Seal ¶ 6

[hereinafter “2017 Order”], ECF No. 142.)

16. Our courts have determined that “ ‘[a] corporation may possess a strong

interest in preserving the confidentiality of its proprietary and trade-secret

information, which in turn may justify partial sealing of court records[,]’ ” Doe, 823

S.E.2d at 598 (emphasis added) (quoting Co. Doe v. Pub. Citizen, 749 F.3d 246, 269

(4th Cir. 2014)), and a corporation’s internal business processes and procedures are

included within the categories that North Carolina courts have treated as

confidential and proprietary trade secrets warranting protection, see, e.g., Sunbelt

Rentals, Inc., v. Head & Engquist Equip., LLC, 174 N.C. App. 49, 53–56, 620 S.E.2d

222, 226–28 (2005) (holding a compilation of “customer information, preferred

customer pricing, employees’ salaries, equipment rates, fleet mix information, budget

information and structure of the business” constituted trade secrets); State ex rel.

Utils. Comm’n v. MCI Telecomms. Corp., 132 N.C. App. 625, 634, 514 S.E.2d 276, 282

(1999) (holding a compilation of customer data and business operations was sufficient

to constitute trade secrets); S. Fastening Sys., Inc. v. Grabber Constr. Prods., Inc.,

2015 NCBC LEXIS 42, at *11 (N.C. Super. Ct. Apr. 28, 2015) (holding a compilation

of customer information, sales reports, prices and terms books, sales memos, sales
training manuals, and information concerning vendor relationships constituted trade

secrets).

17. But it is not enough that SS&C’s proprietary software and internal

processes and procedures for preparing reports and checklists are the types of

information that North Carolina courts have treated as confidential and proprietary

trade secrets. SS&C must still provide a sufficient justification for sealing these

specific documents under BCR 5.2(b)(2), and, here, SS&C has not explained how

public disclosure of its processes and procedures would result in harm to itself and/or

the Fund. SS&C contended that disclosure of this information “would disadvantage

SS&C in the market if it were available to SS&C’s competitors” in both its response

to an August 31, 2017 motion to seal filed by Plaintiffs, (Resp. Pls.’ Mot. Leave File

Under Seal 2, ECF No. 131), as well as a supplemental brief filed in support thereof,

(SS&C’s Suppl. Br. Supp. Resp. Pls.’ Mot. Leave File Under Seal 2, ECF No. 138), and

this Court later granted Plaintiffs’ motion to seal those documents, (2017 Order ¶ 6).

The Court suspects that public disclosure of information related to SS&C’s processes

and procedures contained in the Sealed Documents may similarly disadvantage

SS&C in the market. But this assertion does not appear in any of SS&C’s Motions to

Seal or supporting briefs. (See 1st Mot. Seal; Suppl. Br.; 3rd Mot. Seal.) Thus, SS&C

has not provided an adequate basis to justify sealing the Sealed Documents that

contain information related to SS&C’s processes and procedures under BCR 5.2(b)(2).
3. SS&C’s Pricing Information

18. SS&C contends that sealing (i) a September 30, 2011 Statement of Partner’s

Capital for Plaintiff Robert K. Grunewald, (Sealed Exs. SS&C’s Mot. Sum. J., Ex. A

[hereinafter “Grunewald Capital Statement”]); (ii) a report reflecting service fees paid

by the Fund to SS&C from March 15, 2007 to March 12, 2012, (Sealed Exs. SS&C’s

Mot. Sum. J., Ex. H); (iii) the ASA, (Exs. 3–12, Ex. 9 [hereinafter “ASA”]); (iv)

spreadsheets of monthly expenses and payments for 2009–2012, including fees paid

to SS&C, (Exs. 3–12, Ex. 12); and (v) an exhibit containing a report reflecting service

fees paid by the Fund to SS&C from March 15, 2007 to March 12, 2012, June 2010

and December 2010 bank statements for Maiden Capital, and a screenshot for a

payment made on December 20, 2010, (Exs. 13–21, Ex. 15), is necessary because

disclosure of such pricing and cost information could harm SS&C’s competitive

standing. (See 1st Mot. Seal 4–5; Suppl. Br. 7.) SS&C further contends that sealing

is proper because the Court has previously ruled that SS&C’s pricing and cost

information may be filed under seal. (1st Mot. Seal 5; Suppl. Br. 7; see also Order

Mot. File Under Seal ¶ 4 [hereinafter “2016 Order”], ECF No. 72.)

19. The Court first notes that the September 30, 2011 Statement of Partner’s

Capital for Plaintiff Grunewald, filed as Exhibit A to SS&C’s Memorandum in

Support, does not contain any of SS&C’s cost or pricing information; rather, it

illustrates the performance of Grunewald’s investments in the Fund as of September

30, 2011. (See Grunewald Capital Statement.) Thus, the Court cannot grant SS&C’s

Motions to Seal as to this exhibit on these grounds; however, SS&C has also included
this exhibit in its fourth category of documents, Plaintiffs’ personal information, (see

1st Mot. Seal 5), which the Court addresses in turn below.

20. The Court next turns its attention to the ASA, which Plaintiffs provisionally

filed under seal as Exhibit 9 to Plaintiffs’ Brief in Opposition. (ASA.) SS&C also

provisionally filed the ASA under seal as Exhibit D to SS&C’s Memorandum in

Support. (Sealed Exs. SS&C’s Mot. Sum. J., Ex. D.) As SS&C notes in both the First

Motion to Seal and the Supplemental Brief in Support of Second Motion to Seal, this

Court granted SS&C’s motion to seal the ASA in its entirety in an order dated March

28, 2016. (1st Mot. Seal 3; Suppl. Br. 7; see also 2016 Order ¶ 6.) However, a thorough

review of the docket shows that SS&C filed the ASA publicly as Exhibit 5 to its

Memorandum of Law in Support of Motion to Dismiss Complaint on November 10,

2014. (Exs. 3–5 Mem. Law Supp. Mot. Dismiss Compl. by Def. SS&C, Ex. 5, ECF No.

18.2.) The fact that any cost and pricing information (or Client Data, as SS&C

contends in the First Motion to Seal) contained in the ASA has been publicly available

for over five years strongly suggests that SS&C faces no serious risk of significant

harm from further public disclosure of this document such that sealing of either

exhibit is unnecessary.

21. The remaining three exhibits in this category all contain SS&C’s pricing and

cost information. A corporation’s pricing and cost information is included within the

categories that North Carolina courts have treated as confidential and proprietary

trade secrets that may justify sealing. See supra Paragraph 15; see also GE Betz, Inc.

v. Conrad, 231 N.C. App. 214, 234, 752 S.E.2d 634, 649 (2013) (holding “pricing
information, customer proposals, historical costs, and sales data” may constitute

trade secrets); Bldg. Ctr., Inc. v. Carter Lumber, Inc., 2016 NCBC LEXIS 79, at *10–

13 (N.C. Super. Ct. Oct. 21, 2016) (holding “pricing structures” and “margins and

profits” may be considered trade secrets). The Court is satisfied that disclosure of

SS&C’s pricing and cost information serves no useful purpose to the public and that

preserving the confidentiality of SS&C’s proprietary and trade secret information

warrants sealing of these documents. See Beroz, 2018 NCBC LEXIS 249, at *2

(“[P]arties must ‘limit the materials that they seek to file under seal,’ and ‘[t]he party

seeking to maintain materials under seal bears the burden of establishing the need

for filing under seal’ [pursuant to BCR 5.1(b)]’.”); see also Thomas Cook Printing Co.

v. Subtle Impressions, Inc., 2008 NCBC LEXIS 18, at *10 (N.C. Super. Ct. Oct. 24,

2008) (holding that where the “subject matter does not implicate substantial policy

concerns[,]” filing under seal is proper).

4. Plaintiffs’ Personal Information

22. SS&C contends that two documents related to individual Plaintiffs’

investments in the Fund should be sealed because (i) they contain personal financial

information; and (ii) the Court has previously granted SS&C’s motion to seal this type

of information. (1st Mot. Seal 5; Suppl. Br. 8; see also 2017 Order ¶ 6.)

23. The two documents are Exhibit A to SS&C’s Memorandum in Support,

which is a September 30, 2011 Statement of Partner’s Capital for Plaintiff

Grunewald, (Grunewald Capital Statement), and Exhibit 7 to Plaintiffs’ Brief in

Opposition, which is an e-mail from an SS&C employee to Plaintiff Elliot Broadfoot
as well as the referenced attachment, an April 30, 2008 Statement of Partner’s

Capital for Broadfoot, (Exs. 3–12, Ex. 7). While Plaintiffs Grunewald and Broadfoot

may find public disclosure of the amounts they lost through investment in the Fund

embarrassing, our appellate courts have recently emphasized that “ ‘[a]djudicating

claims that carry the potential for embarrassing or injurious revelations about’

parties . . . is ‘part of the day-to-day operations of’ the North Carolina courts[.]” Doe,

823 S.E.2d at 598 (quoting Co. Doe, 749 F.3d at 269) (holding that protection of

defendants or innocent third parties from embarrassment or economic loss does not

constitute a compelling state interest that justifies sealing). The Court also notes

that Plaintiffs only filed Exhibit 7 to Plaintiffs’ Brief in Opposition under seal because

SS&C designated the document as “Confidential,” (2nd Mot. Seal 2), and Plaintiffs

did not file a brief in support of sealing Exhibit A to SS&C’s Memorandum in Support

as permitted by BCR 5.3. Upon this showing, the Court does not find there to be a

sufficient basis to justify sealing these exhibits.

B. Filing Public Versions of Documents Provisionally Filed Under Seal

24. In addition to providing the parties with certain privacy protections, BCR 5

also serves a public notice function—in particular, that identified documents,

described non-confidentially, have been provisionally sealed pending the Court’s

ruling. BCR 5.2(d) provides as follows:

Within five business days of the filing or provisional filing of a document
under seal, the party that filed the document should file a public version
of the document. The public version may bear redactions or omit
material, but the redactions or omissions should be as limited as
practicable. In the rare circumstance that an entire document is filed
under seal, in lieu of filing a public version of the document, the filing
party must file a notice that the entire document has been filed under
seal. The notice must contain a non-confidential description of the
document that has been filed under seal.

BCR 5.2(d) (emphasis added).

25. Neither SS&C nor Plaintiffs have complied with the timing requirements of

BCR 5.2(d). While SS&C did file a redacted public version or a notice that an entire

document has been filed under seal for all Sealed Documents that are the subject of

its First and Third Motions to Seal, (see Public Mem. Law Supp.; Public Exs. SS&C’s

Mot. Summ. J.; Notice Filing Under Seal—Exs. B, C, H, & Q; Public Reply; Public

Exs. X, Y, & AA–DD; Notice Filing Under Seal—Ex. Z), all were filed late. Plaintiffs

did not file redacted versions or notices of filing entirely under seal for their Brief in

Opposition, index, compilation of deposition testimony and trial testimony excerpts,

or the forty supporting exhibits that were provisionally filed under seal. One or the

other is required, as BCR 5.2(d) contemplates that the trial court will have the benefit

of the filing party’s proposed redactions in deciding the motion to seal. See BCR

5.2(d).

C. Omnibus Electronic Filings

26. Finally, the Court notes that SS&C does not object to unsealing Exhibits 8,

11, 17, 29, 38, and 43 to Plaintiffs’ Brief in Opposition as well as the excerpts from

Eugene Grace’s and Maiden’s testimony from the compilation of deposition testimony

and trial testimony excerpts filed with the same, (Suppl. Br. 8), all of which were

provisionally filed under seal. Because no party objects to unsealing these

documents, the Court will direct that they be unsealed below.
27. However, the parties’ method of filing the Sealed Documents in the Court’s

e-filing system has impaired the Court’s ability to unseal individual documents. The

parties filed the Sealed Documents, and SS&C filed public redacted versions thereof,

as large, omnibus electronic files. The parties are to take notice that it is the Court’s

preferred practice for parties to divide the index and supporting materials into

separate documents, with each exhibit or other supporting document separately filed

as an attachment to the index by designating the index as a “lead document” in the

Court’s e-filing system.

V.

CONCLUSION

28. WHEREFORE, based on the above, the Court, in the exercise of its

discretion, hereby ORDERS as follows:

a. The Court GRANTS the Motions to Seal as to Exhibit H to SS&C’s

Memorandum of Law in Support of Motion for Summary Judgment,

(ECF No. 259), and as to Exhibits 12 and 15 to Plaintiffs’ Brief in

Opposition to SS&C’s Motion for Summary Judgment, (ECF Nos. 270–

71), and hereby ORDERS that the following documents shall remain

under seal pending further Order of the Court: (i) the report reflecting

service fees paid by the Fund to SS&C from March 15, 2007 to March

12, 2012, (ECF No. 259); (ii) the spreadsheets of monthly expenses and

payments for 2009–2012, including fees paid to SS&C, (ECF No. 270);

and (iii) the report reflecting service fees paid by the Fund to SS&C from
March 15, 2007 to March 12, 2012, the June 2010 and December 2010

bank statements for Maiden Capital, and the screenshot for a payment

made on December 20, 2010, (ECF No. 271).

b. The Court DENIES as moot the Motions to Seal as to Exhibits 8, 11,

17, 29, 38, and 43 to Plaintiffs’ Brief in Opposition to SS&C’s Motion for

Summary Judgment and the excerpts from Eugene Grace’s and Steve

Maiden’s testimony from the compilation of deposition testimony and

trial testimony excerpts filed therewith, (ECF Nos. 270–73, 275, 278),

and hereby ORDERS that Plaintiffs shall file public versions of each of

those documents, and the Mecklenburg County Clerk of Superior Court

shall unseal each of those documents, no later than May 15, 2020.

c. The Court DENIES the Motions to Seal as to Exhibit D to SS&C’s

Memorandum of Law in Support of Motion for Summary Judgment,

(ECF No. 259), and as to Exhibit 9 to Plaintiffs’ Brief in Opposition to

SS&C’s Motion for Summary Judgment, (ECF No. 270), and hereby

ORDERS that SS&C shall file a public version of Exhibit D, Plaintiffs

shall file a public version of Exhibit 9, and the Mecklenburg County

Clerk of Superior Court shall unseal Exhibits D and 9, no later than May

15, 2020.

d. The Court hereby ORDERS that, after consultation with SS&C,

Plaintiffs shall have through and including May 15, 2020 to file public,

redacted versions, with all such redactions as limited as practicable, of
(i) their Brief in Opposition to SS&C’s Motion for Summary Judgment,

(ECF No. 268); (ii) the index, (ECF No. 269); (iii) the compilation of

deposition testimony and trial testimony excerpts, (ECF No. 275); and

(iv) Exhibits 3–7, 9–10, 12–16, 18–21, 23–28, 30–33, 36, 39–42, and 44–

46, (ECF Nos. 270–73, 279). In the event that Plaintiffs or SS&C

contend an entire document must be sealed, Plaintiffs must file a

separate notice for each such document indicating that the document

has been sealed in its entirety and containing a non-confidential

description of the document.

e. All materials to be filed by this Order must be divided into separate

exhibits, with the index, each exhibit, and/or the notice of the filing of a

document entirely under seal separately filed as an attachment to either

the index or notice, as appropriate, by designating the underlying index

or notice as a “lead document” in the Court’s e-filing system.

f. SS&C shall have through and including May 15, 2020 to file a

supplemental brief or briefs in support of the Motions to Seal. Any such

supplemental brief or briefs shall comply with the procedural

requirements of BCRs 5 and 7. Should any Sealed Documents

provisionally filed under seal not be the subject of a timely filed

supplemental brief or briefs, such documents shall be unsealed and

made a part of the public record.
g. The Court DEFERS further ruling on the Motions to Seal. All Sealed

Documents provisionally filed under seal not specifically addressed

above shall remain under seal pending further order of the Court.

SO ORDERED, this the 7th day of April, 2020.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge