United States District Court, D. Massachusetts
MARVIN PEARLSTEIN, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
BLACKBERRY LIMITED, THORSTEN HEINS, BRIAN BIDULKA, and STEVE ZIPPERSTEIN, Defendants.
District of New York Action No: 13 Civ. 7060 (CM KHP)
MEMORANDUM & ORDER
Talwani United States District Judge.
Limited (“BlackBerry”) and the Federal Bureau of
Investigation (“FBI”) have filed a renewed
Joint Motion for an Order to Authorize Production of
Unredacted Documents [#10]. For the following reasons,
this motion is ALLOWED IN PART and DENIED IN PART.
is defending a securities fraud lawsuit in the Southern
District of New York (the “Pearlstein
action”) that alleges that BlackBerry made fraudulent
and misleading statements about the market success of its Z10
smartphone. BlackBerry made the statements at issue in a
press release responding to an equity research analyst report
published by Detwiler Fenton (the “Report”) that
alleged the Z10 was experiencing historically poor sales.
served a subpoena in the Pearlstein action on the
FBI to produce certain investigative materials, primarily
FD-302 memoranda, that BlackBerry contends are relevant to
BlackBerry's defense of the securities fraud claims. The
FBI informed BlackBerry that, absent court order, it would
not produce the documents related to its investigation
without redactions, citing the Privacy Act, 5 U.S.C. §
552a, the Department's “Touhy”
regulations, and Department of Justice policy. See
Unopposed Mot. to Compel 1 [#1].
has submitted several motions to compel the FBI to produce
the redacted documents, initially with the FBI's
non-opposition or assent, and then as a joint motion.
See Unopposed Mot. Compel [#1], Renewed Unopposed
Mot. Compel [#5], Joint Mot. Order Authorizing Produc.
Unredacted Docs. [#8]. See also 5 U.S.C. §
552a(b)(11) (permitting disclosure “pursuant to the
order of a court of competent jurisdiction). The court denied
each, without prejudice, due to concerns that disclosure of
the unredacted documents, without any notice of the
disclosure and the opportunity to oppose the disclosure,
would constitute an unwarranted invasion of the named
individuals' privacy. See Orders [#3], [#6],
[#9]. As stated in the most recent order, the Privacy Act
establishes a general rule that executive agency records
shall not be disclosed without the consent of “the
individual to whom the record pertains.” Order 3 [#9]
(citing 5 U.S.C. § 552a(b)). Although the Privacy Act
allows for disclosure of protected information without
consent of the named individual upon court order, the court
must still consider whether disclosure would
“threaten the interests protected by statutory
publication bans” such as the Privacy Act. Laxalt
v. McClatchy, 809 F.2d 885, 889 (D.C. Cir. 1987). The
court concluded that compelling disclosure without notice and
without consideration of the privacy interests of the named
individuals ran afoul of the recognized interests of these
individuals in the nondisclosure of the documents. The court
directed BlackBerry that any future motions to compel should
include either a cognizable rationale for not informing the
interested individuals of the disclosure, or a certification
that the interested individuals had been notified.
See Order 5 [#9].
The Pending Motion
and the FBI have now renewed their motion pursuant to Federal
Rule of Civil Procedure 26(c) and 37(a) and 5 U.S.C. §
552a. Joint Mot. Order Authorize Produc. Unredacted Docs.
[#10]. They seek an order authorizing the FBI to produce
documents in response to the subpoena, without redacting the
names of listed individuals, but designating the documents as
Confidential under the terms of the protective order that
governs discovery in the Pearlstein action. Cf.
Laxalt, 809 F.2d at 889 (“when the District Court
considers a request for a Privacy Act order in the discovery
context it must consider the use of protective
orders”). BlackBerry certifies that it has now provided
notice to the thirty individuals whose protected information
is at issue. Six lodged objections with the court. Four
objected directly to BlackBerry. Of the ten objectors, four
apparently served as attorneys for clients during the
FBI's investigation. Twenty individuals did not respond.
for court orders under § 552a(b)(11) should be evaluated
by balancing the need for the disclosure against the
potential harm to the subject of the disclosure.”
Perry v. State Farm Fire & Cas. Co., 734 F.2d
1441, 1447 (11th Cir. 1984); see also Laxalt, 809
F.2d at 890 (“Where the actual content of the record
has the potential to cause harm to the affected party, a
court supervising discovery should consider this factor in
determining how to exercise its traditional authority to
limit disclosure”). BlackBerry asserts that the
Pearlstein action alleges that the Detwiler Fenton
Report was accurate, that BlackBerry was aware that the
Report was accurate, and that BlackBerry's press release
rebutting the Report was false and misleading. The documents
at issue are from the FBI's criminal investigation of
conduct related to the Detwiler Fenton Report. As a result of
that investigation, an executive at a wireless retailer was
found to have engaged in a scheme to defraud his employer by
providing confidential business information concerning sales
data and other information about publicly traded companies,
including BlackBerry, to Detwiler Fenton. See United
States v. Dunham, No. 1:15-cr-10110-DPW (D. Mass.).
BlackBerry asserts that an affidavit filed by an FBI special
agent in the criminal case undermines the accuracy of the
Detwiler Fenton Report. See BlackBerry's Suppl.
Mem. 3-4 [#13]. Based on this information, BlackBerry
contends that the documents from this investigation are
relevant to its defense, and that the documents, in
unredacted form, are not useful in its defense.
twenty individuals who did not lodge objections to
disclosure, the court concludes that there is no potential
harm to the subject of the disclosure and disclosure is
warranted. Accordingly, the court will authorize the FBI to
produce documents in response to BlackBerry's subpoena
without redacting the names of these twenty individuals, and
to produce, without redactions, documents (including text
messages and emails) provided by any of those individuals to
leaves the ten individuals who did raise objections to the
production of their information, and as to whom the court
must weigh their privacy interest against BlackBerry's
need for the information.
has identified the role in this dispute of only one of the
six non-attorney objectors. BlackBerry asserts that Jeff
Johnston was the Detweiler Fenton analyst who received the
information from the wireless retailer executive that led to
the Detwiler Fenton Report. As such, the interview memoranda
and other materials concerning Mr. Johnston do appear to be
of substantial importance to BlackBerry's defense in the
argues that Mr. Johnston “does not have a privacy
interest in his involvement in the FBI investigation because
it is already a matter of public record, having been publicly
disclosed by prosecutors and reported in the national
media.” BlackBerry's Supp. Mem. 6 [#13] (citing
Gawker Media, LLC v. Fed. Bureau of Investigation,
145 F.Supp.3d 1100, 1108 (M.D. Fla. 2015)). Mr.
Johnston's claim to privacy is distinguishable from that
addressed in Gawker Media, however, as nothing in
the record here suggest that Mr. Johnston was the target of
the investigation, and BlackBerry has made no showing that
Mr. Johnston ...