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John Doe Co.No.1 v. Consumer Financial Protection Bureau

United States District Court, District of Columbia

June 15, 2016

JOHN DOE COMPANY NO. 1, et al., Plaintiff


          RANDOLPH D. MOSS United States District Judge

         Plaintiffs initially brought this action seeking to enjoin the Consumer Financial Protection Bureau (“CFPB”) from interviewing an individual who, according to Plaintiffs, had previously served as their attorney. Although they did not categorically oppose the interview, Plaintiffs argued that their current counsel should be permitted to attend in order to protect their rights under the attorney-client privilege. That dispute was ultimately rendered moot, but it generated a second dispute that still occupies the parties and the Court. That dispute centers on whether Plaintiffs’ identities should remain under seal.

         At the time Plaintiffs filed suit, they sought to seal the entire case on the ground that revealing that they were subject to an ongoing CFPB investigation would cause them reputational and economic damage. Over the objection of the CFPB, Acting Chief Judge Sullivan temporarily granted that motion “without prejudice to further consideration by the United States District Judge to whom this case is randomly assigned.” Dkt. 2. After the case was assigned and the parties submitted further briefing, the Court granted the motion to seal in part and denied it in part. The Court concluded that there was no justification for maintaining the entire matter under seal but that it was appropriate to recaption the case as a “John Doe” suit and to redact names and other identifying information from material contained in the public docket. Two months later, the CFPB moved for reconsideration of the Court’s decision to permit the pseudonymous treatment of the case. That motion is currently before the Court.

         The thrust of the CFPB’s request for reconsideration is that Plaintiffs did not request pseudonymous treatment until they filed their reply brief and that, in considering whether to grant that alternative relief, the Court erred in applying the six-factor test for proceeding under seal that the D.C. Circuit set forth in United States v. Hubbard, 650 F.2d 293 (D.C. Cir. 1980). In lieu of the Hubbard test, the CFPB contends that the Court should have relied on the test applied in Doe v. Teti, Misc. No. 15-1380, 2015 WL 6689862, at *2 (D.D.C. Oct. 19, 2015), and other cases in deciding whether to permit pseudonymity. Dkt. 17-1 at 7-12. Finally, the CFPB also asks the Court to clarify whether its prior Order, if not set aside, bars the Bureau from responding to a request made under the Freedom of Information Act (“FOIA”) that does not seek the sealed pleadings, but does seek administrative petitions filed with the Bureau within a narrow timeframe. Because this Court’s earlier opinion disclosed that the CFPB denied Plaintiffs’ request for administrative relief on July 20, 2015, disclosing the CFPB submissions filed on that day would effectively identify Plaintiffs.

         As explained below, the Court rejects Plaintiffs’ contention that the CFPB’s motion for reconsideration is untimely. But the Court disagrees with the Bureau’s contention that the test applied in Teti is controlling or that it compels a different result. Transparency is, of course, the norm in federal judicial proceedings, and those who seek pseudonymous treatment bear the heavy burden of demonstrating that the cost of disclosure outweighs the public interest in transparency. But it is also true that the subjects of ongoing government investigations often have a legitimate interest in ensuring that the existence of otherwise confidential government investigations are not publicly disclosed while they are ongoing, and the record here shows that at least some of the Plaintiffs would likely suffer debilitating injury if their identities are disclosed before the Bureau’s investigation is completed. This is not the typical case where disclosure of allegations made in litigation may cause reputational harm, but one where the CFPB has yet to make any allegations of wrongdoing-and may never do so. Nor is this a case where the CFPB exercised its administrative discretion to disclose the identities of the subjects of its investigations. To the contrary, there is no basis to believe that the CFPB would have disclosed its ongoing investigation of Plaintiffs-or would have been able to identify any legitimate basis for doing so-had Plaintiffs not filed suit. And finally, this is not a case in which the Court has sealed the entire proceeding. Rather, the only matter subject to seal is Plaintiffs’ identities, leaving most information about the proceeding on the public record.

         Having considered this evidence, the parties’ further briefing, and the arguments made during the extended oral argument, the Court concludes that continued pseudonymous treatment is warranted, at least while the investigation remains ongoing. The Court further concludes that there is no basis on the current record for it to address the CFPB’s request for clarification regarding the effect of the Court’s Order on the Bureau’s obligations under FOIA. Plaintiffs disavow any claim that the Court’s prior Order affects whether and how the Bureau should respond to a FOIA request for records that are not part of the docket in this case. Nothing in the current record, moreover, suggests that a relevant FOIA request even remains pending before the Bureau. If a live dispute arises, the parties can seek appropriate relief at that time.

         The CFPB’s motion for reconsideration is, accordingly, DENIED.


         A. Timeliness

         Before turning to the merits of the CFPB’s motion for reconsideration, the Court must first consider whether that motion, which was filed almost three months after the Court granted Plaintiffs leave to proceed pseudonymously, was timely. The CFPB argues that it is merely asking the Court to rely on its inherent “‘supervisory power over its own records and files.’” Dkt. 17-1 at 4-5 (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 598 (1978)). It notes that “‘[s]o long as [the records and files] remain under the aegis of the court, they are superintended by the judges who domain over the court, ’” Dkt. 17-1 at 5 (quoting Gambale v. Deutsche Bank AG, 377 F.3d 133, 141 (2nd Cir. 2004)), and it asks the Court to exercise its discretion and allow the public full access to all case materials. Under this view, the CFPB is not required to comply with any particular timeliness requirements, and a motion seeking to unseal any aspect of a case may be brought at any time.

         Plaintiffs, in contrast, characterize the CFPB’s motion as arising under Federal Rule of Civil Procedure Rule 60(b)(6), which allows the Court to “relieve a party or its legal representative from a final judgment, order, or proceeding for . . . any . . . reason that justifies relief.” Fed.R.Civ.P. 60(b)(6). See Dkt. 19 at 3-6. In their view, this means that the Court may only grant the motion if it was brought within a “reasonable time, ” Fed.R.Civ.P. 60(c). See Dkt. 19 at 4. And according to Plaintiffs, the CFPB’s motion is “plainly untimely” because it came “a mere five days” short of the three-month cutoff that others courts in this Circuit have deemed “presumptive[ly] . . . untime[ly].” Dkt. 19 at 4 (citing Carvajal v. DEA, 286 F.R.D. 23, 26 (D.D.C. 2012)).

         Even assuming, however, that Rule 60(b) applies here, the Court concludes that the motion is timely. There is no set test for considering whether a Rule 60(b) motion filed less than three months after the original decision is timely, but the D.C. Circuit has looked to the length of the delay, the reason for it, and the prejudice to the nonmoving party. See, e.g., Salazar v. Dist. of Columbia, 633 F.3d 1110, 1118-22 & n.5 (D.C. Cir. 2011). Although the CFPB might have moved more promptly in seeking reconsideration, an 87-day delay is not disqualifying. As Plaintiffs recognize, courts in this Circuit have applied a presumption of untimeliness to motions for reconsideration that arise more than three months after the original decision. See Dkt. 19 at 4; Carvajal, 286 F.R.D. at 26. There is thus nothing presumptively untimely about the Bureau’s motion. Plaintiffs contend that the CFPB is simply trying to circumvent the expired deadline to appeal the Court’s earlier decision, see Dkt. 19 at 4, but the Court will not impute bad faith or an ulterior motive to the Bureau absent some stronger evidence. Plaintiffs, moreover, have (if anything) benefited from the CFPB’s delay in moving for reconsideration. During this interval, Plaintiffs’ identities have remained confidential, which is precisely the relief they seek. And finally, the D.C. Circuit has explained that the “‘reasonable time’ requirement[] does not carry the same significance in [a case involving] long-running equitable relief as it would in an action where the court’s role had ended and the litigants relied on the repose inherent in the end of litigation.” Salazar, 633 F.3d at 1116. Rather, “‘[t]he power of a court of equity to modify a decree of injunctive relief . . . is long-established, broad, and flexible.’” Id. (alterations in original) (quoting United States v. W. Elec. Co., 46 F.3d 1198, 1202 (D.C. Cir. 1995)); see also New York State Ass’n for Retarded Children, Inc. v. Carey, 706 F.2d 956, 967 (2d Cir. 1983) (Friendly, J.). Here, the Court’s sealing order is akin to an injunctive decree.

         The Court, accordingly, concludes that the Bureau’s motion is timely.

         B. Standard of Review

         The parties also dispute the standard of review the Court should apply to the CFPB’s motion. The CFPB posits that its motion merely asks the Court to exercise its “‘supervisory power over its own records and files.’” Dkt. 17-1 at 4-5 (quoting Nixon, 435 U.S. at 598). The Bureau does not identify any applicable standard of review for such a motion, leaving the impression that it believes the Court should reconsider its prior decision de novo. Plaintiffs, in contrast, argue that the Bureau’s motion is a motion to amend a final judgment or order, subject to Federal Rule of Civil Procedure 60(b), and thus requires a showing of “extraordinary circumstances, ” Ackermann v. United States, 340 U.S. 193, 199 (1950). See Dkt. 19 at 5.

         Neither approach is compelling. To the extent the Bureau maintains that it is entitled to de novo reconsideration, it fails to accord due weight to principles of judicial economy and finality. The Court undoubtedly maintains “supervisory power over its own records and files, ” but that does not mean that parties are entitled to “relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment.” Jung v. Assoc. of Am. Med. Colls., 226 F.R.D. 7, 9 (D.D.C. 2005) (internal quotation marks and citation omitted). A party seeking reconsideration must, at a minimum, show good cause-such as an “intervening change of controlling law, the availability of new evidence, . . . the need to correct a clear error or prevent manifest injustice, ” Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996), or- as the Bureau argues here-its inability to address a significant issue in prior briefing. But Plaintiffs’ approach is also unconvincing. To the extent they contend that the Court’s prior order constituted a final judgment in the matter, which can only be reopened upon a showing of “extraordinary circumstances, ” that argument fails to accord due weight to the fact that the Court’s Order is continuing in nature and that the relevant circumstances may change over time.Cf. United States v. Swift & Co., 286 U.S. 106, 114 (1932) (“We are not doubtful of the power of a court of equity to modify an injunction in adaptation to changed conditions . . . .”).

         Ultimately, however, the Court need not settle the parties’ dispute regarding the standard of review. As explained below, even assuming that de novo review applies, as the Bureau advocates, the Court would conclude that continued pseudonymous treatment is warranted at this time. That conclusion is only bolstered by the fact that much of the Bureau’s current argument could have been raised in its original opposition.


         A. Disclosure of ...

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