Free Speech

More in the Saga of the Escaped Cat, Here Meowing About "a Russian/Israeli Oligarch"

|The Volokh Conspiracy |

In today's decision by Judge Ronnie Abrams (S.D.N.Y.) in Rollag v. Cowen Inc., plaintiff sued defendants on July 6, 2020 for violations of the Family and Medical Leave Act and related state and local laws; the case also involves (with some procedural twists too tedious to relate) a Sarbanes-Oxley Act retaliation claim and an OSHA claim:

The Complaint includes factual allegations that appear to relate to his anticipated Sarbanes-Oxley Act claim—namely, that Defendants retaliated against him after he repeatedly expressed concerns regarding Defendants' solicitation of investments from an entity tied to Vitaly Malkin, whom Plaintiff describes as "a Russian/Israeli oligarch banned from Canada for 19 years, and reputed to be engaged in money laundering and arms dealing (among other ventures)."

Here's the opening paragraph of the Complaint:

When Kevin Rollag, a former Director at Cowen, discovered that the new potential investor on a deal he was working on was Vitaly Malkin, a Russian/Israeli oligarch banned from Canada for 19 years, and reputed to be engaged in money laundering and arms dealing (among other ventures), he did not think the Bank could seriously consider allowing his participation.

This got a good deal of press attention:

On the day that Plaintiff filed his complaint, the legal news website Law360 ran an article entitled, "Banker Says Cowen Fired Him For Objecting To Oligarch," describing both the OSHA complaint and this lawsuit. On July 8 or 9, 2020, Plaintiff's counsel issued a press release entitled, "Lawsuit: Cowen Fired Top Investment Banker Who Raised Concerns About the Bank's Business Ties to Russian Oligarch." The press release also discussed the claims in both the OSHA complaint and this action and linked to both complaints. On July 9, 2020, the website Cash Crop Today published the full text of the press release.

But then, at the end of July, defendants tried to get the Complaint sealed:

On July 30, 2020, Defendants filed a motion to compel arbitration and stay this action. On July 31, 2020, Defendants filed a letter motion to seal the Complaint or, alternatively, to strike the Complaint and order Plaintiff to file a replacement thereof that substitutes pseudonyms for the names of Cowen's clients, employees, and potential investors. Defendants contend:

"In connection with his employment with Cowen, Plaintiff entered into … confidentiality and non-disparagement [agreements] that prohibit Plaintiff from disclosing non-public confidential or proprietary information about Cowen's employees, business, and clients, and from disparaging and defaming Cowen and its employees, both during and after the termination of Plaintiff's employment. In direct  contravention of those agreements, Plaintiff chose to file this court action, containing false and inflammatory allegations that disparage Cowen, its employees, and certain current and potential clients and investors, and then engaged in a publicity campaign to generate press attention."

Defendants maintain that Plaintiff's "blatant falsehoods and accusations have nothing to do with Plaintiff's actual asserted legal claims in his Complaint for discrimination and alleged wrongful termination related to his purported FMLA leave and parental status." … [They] maintain that if the Court declines to order sealing or direct Plaintiff to file a complaint that uses pseudonyms, "it will encourage Plaintiff's counsel and others to file complaints with salacious, irrelevant allegations in matters that can only proceed in arbitration, and to do so for the in terrorem value in extracting a settlement." Defendants' reply provides no explanation as to why Defendants waited until July 31, 2020 to file the motion to seal.

"The common law right of public access to judicial documents is firmly rooted in our nation's history." "In addition to the common law right of access, it is well established that the public and the press have a 'qualified First Amendment right to attend judicial proceedings and to access certain judicial documents.'" … "A sealed complaint leaves the public unaware that a claim has been leveled and that state power has been invoked—and public resources spent—in an effort to resolve the dispute. These considerations indicate that public access to the complaint and other pleadings has a 'significant positive role,' in the functioning of the judicial process."

"A proponent of sealing may overcome the presumption of access by demonstrating a substantial probability of harm to a compelling interest." "[A] judge must carefully and skeptically review sealing requests to [e]nsure that there really is an extraordinary circumstance or compelling need." "'Generalized concern[s] of adverse publicity' do not outweigh the presumption of access." …

"… [W]here … a party fails to take immediate steps to request that publicly filed materials be sealed, its request to redact or seal may be denied for that reason." … Defendants provide no justification for why they waited until July 31, 2020 to file their motion to seal—three and a half weeks after Plaintiff filed his Complaint, and over a month after Plaintiff alleges his attorney sent a draft thereof to Cowen. In fact, Defendants were put on notice of Plaintiff's factual allegations and legal claims as early as June 12, 2020, when Plaintiff contends he sent Defendants a "detailed letter." … Defendants' "failure to act promptly plainly belies any … claim of harm." The Court thus holds that Defendants have failed to overcome the presumption of public access.

This conclusion is reinforced by that fact that, "[b]y the time Defendants filed [this] motion[], news outlets had already reported on the allegations in the Complaint." {… "[T]he proverbial cat is out of the bag." … "[H]owever confidential [the information] may have been beforehand, subsequent to publication it was confidential no longer."} Courts in this Circuit have found that a defendant's "countervailing privacy interest … cannot defeat the strong presumption of public disclosure where the material it seeks to seal is already in the public domain" due to media coverage. As the Second Circuit has noted, once "the genie is out of the bottle," courts "have not the means to put the genie back." In light of the existing press coverage of the Complaint, the Court concludes that sealing would be futile at this stage.

Finally, the Court notes that to the extent that Defendants maintain that Plaintiff breached confidentiality and non-disparagement contracts or engaged in unlawful defamation, they are free to bring suit against Plaintiff on those grounds in the appropriate forum….