In Re: Manchester Square Partners, L.P.

In Re: Manchester Square Partners, L.P., No. 471-11-10 Bncv (Hayes, J., Jan. 19, 2012)
[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the
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VERMONT SUPERIOR COURT
SUPERIOR COURT CIVIL DIVISION
Bennington Unit Consolidated Docket No. 471-11-10 Bncv
In Re:
Manchester Square Partners, L.P.
F.H. Corporation
F.H. Corporation
H.N. Realty Partners, L.P.
H.B. Realty Partners, L.P.
H.B. Realty Partners, L.P.
HLJ, L.P.
Manchester Commons Associates, L.P.
Vanderbilt Properties, L.P.
Vanderbilt Properties, L.P.
Mancom, Inc.
Vanderbilt MPD Corporation
DECISION ON MOTION
This case comes before the court on a consolidated appeal of the decisions of the Manchester
Board of Civil Authority with respect to various properties in the town of Manchester, Vermont. Each
entity filed a separate appeal, but for the purposes of this consolidated appeal, the court will refer to
the entities collectively as “appellants.” On December 27, 2011, appellants moved to seal and/or redact
certain business information that will be presented during the course of this appeal. Specifically,
appellants request that the following information be shielded from public inspection:
[T]he following information for each tenant space in each Property: property address; date of
lease; initial term of lease; number of renewal term(s), if any; length of renewal term(s), if any;
effective date of modified rent terms, if any; base rent payable during initial term, if any; base
rent payable during renewal term(s), if any; base rent payable under modified rent terms, if any;
date the rental space became vacant; actual base rent paid; actual percentage rent paid, if any;
tenant’s payment to landlord on account of operating expenses; total operating expenses
incurred . . . the underlying financial documentation supporting the figures [above] . . .
summaries of the substantive provisions of each lease and the parts of the lease that identify its
date, initial term, number and length of renewal terms, effective date of modified rent terms,
and rent payable during the initial and renewal terms, and modifications thereof . . . Complete
Profit and Loss Statements for each Appellant . . . the following information for each tenant
space in each Property: base rent; percentage rent; rent paid; common-area maintenance
(“CAM”) income paid; total paid; adjusted operating expenses; and net income.
Appellants’ Mot. To Seal and/or Redact Confidential Documents and Information at 2-3.1 For the
reasons stated below, appellants’ motion is denied.
The proper framework for determining whether to restrict the public’s access to judicial records
is Vermont’s Rules for Public Access to Court Records (Rules). In re Sealed Documents, 172 Vt. 152, 156
n.3 (2003); see also Rules for Public Access to Court Records § 1 (“[The rules] provide a comprehensive
policy on public access to Judicial Branch records.”). The general policy in Vermont with respect to
public access to court records is that such records “shall be open to any member of the public for
inspection or to obtain copies.” Rules § 4. However, the Rules enumerate specific exceptions to public
access, Id. § 6(b), and also provide a catch-all exception under which a court may seal an otherwise
public record for “good cause specific to the case before the judge and exceptional circumstances.” Id. §
7(a).
There is no suggestion in this case that the information appellants seek to protect fits any of the
enumerated exceptions in Rule 6. Therefore, if the court is to seal or redact any information appellants
present in this case, its authority must come from Rule 7. Appellants argue that the information listed
above qualifies as “trade secrets,” and that preventing disclosure of such secrets to the public meets the
good cause and exceptional circumstances standard under Rule 7. Specifically, appellants argue that
disclosure of the above information would result in financial harm, because competitors could use the
information to undercut appellants’ rates, and to draw more business to themselves.2
1
The list of information appellants seek to protect from public disclosure is the same list that appeared in a
stipulated protective order issued by this court on March 24, 2011. The fact that a protective order was issued in
this case has little bearing on whether this motion should be granted under the Vermont Rules for Access to Court
Records. Protective orders are issued liberally to aid in the discovery process, and allow all parties to obtain full
and fair discovery. While protective orders are issued liberally to encourage full disclosure among parties, very
different standards apply to information presented in court proceedings.
2
The court is skeptical that information regarding rental rates of commercial property can truly qualify as a “trade
secret” under Vermont law. Although the language of 9 V.S.A. § 4601(3) is drafted fairly broadly, it seems inimical
to Vermont’s general policies of openness in business practices to allow such information to be protected from
disclosure to the public. See, e.g., 9 V.S.A. 2453 et seq (Vermont’s consumer fraud and antitrust statutes).
Vermont’s law on trade secrets, 9 V.S.A. § 4601 et seq., is designed to protect businesses from
involuntary disclosure of confidential business information that could do financial harm if made public.
This case involves no involuntary disclosure – appellants willingly seek to introduce the information for
which protection is sought. It is worth noting that Vermont’s public records statute, 1 V.S.A. § 315 et
seq., specifically exempts trade secrets from public disclosure, id. § 317(c)(9), but Vermont’s Rules for
Public Access to Court Records do not. The omission of a trade secrets exemption from the Rules
suggests that Vermont’s policy with respect to public disclosure of trade secrets in the context of judicial
records is generally one of openness, and should only be overcome in exceptional circumstances. Such
circumstances do not exist in this case.3
First, appellants have chosen to take an appeal to this court, and voluntarily seek to introduce
the evidence for which protection is sought. Appellants’ brief cites two related federal cases in which a
Vermont auto group sued the state over its greenhouse gas emissions policies: Green Mountain Chrysler
Dodge Jeep v. Crombie, 2:05-CV-302, 2007 WL 922255 (D. Vt. Mar. 23, 2007) (“Crombie I”) and Green
Mountain Chrysler Plymouth Dodge Jeep v. Crombie, 205-CV-302, 2007 WL 1074933 (D. Vt. Apr. 6. 2007)
(“Crombie II”). In the Crombie cases, the plaintiffs sought to seal or redact information involving “future
product plans, vehicle design information including fuel economy effects, cost and pricing estimates,
market data, financial projections and experts' proprietary data analysis software, and profit and loss
information.” Crombie I at *2. In Crombie I, the court reasoned that it would only seal the requested
information for the “most compelling reasons”, id. at *7, and set the case for a status conference.
In a subsequent decision during the same litigation, the court held that the plaintiffs could
“identify specific companies, product lines and the like by a generic description or code.” Crombie II at
*1 Additionally, the court ruled that “numerical data may be replaced by sample numbers or
3
Appellants’ brief cites Springfield Terminal v. Agency of Transportation et al., 174 Vt. 341 (2002), a case decided
under the public records act, not the Rules. Because Springfield Terminal is not a Rules case, it is not applicable
here.
summaries.” Id. Notably, however, the court also held that “[a]bsent exceptional circumstances, all
evidence deemed relevant to the adjudication of the validity of Vermont's greenhouse gas regulations
shall be presented in open court, with full and unrestricted public access.” Id. The information
appellants seek to protect is certainly relevant to deciding the tax appeal – indeed, it will likely be
essential to deciding the appeal. Under the logic of Crombie II, therefore, it must be “presented in open
court, with full and unrestricted public access.” Id.
Second, this court must issue a decision on the underlying tax appeal, and explain its reasons for
deciding the way it does. To issue a decision as appellants propose – that refers to “Confidential
Documents” or “Confidential Information” as the basis for the court’s reasoning – would be to ignore
the public’s clear strong interest in information relating to tax appeals and similar proceedings. Indeed,
the Crombie I court expressed many of the same concerns:
The Court is troubled by the implication that the Plaintiffs may introduce evidence on this point
that they do not want the public to see. Presumably they wish the Court to rely on this evidence
in its findings and conclusions; does the Court refer to sealed documents or secret testimony in
its opinion? Does it seal its opinion if based upon trade secrets submitted under seal?”
Crombie I at *7.
Finally, the information appellants seek to protect is dramatically different from proprietary
information that is typically shielded from public disclosure in a court proceeding. Information about
companies’ upcoming product lines is much more in keeping with the traditional definition of a trade
secret, and is much more vulnerable to exploitation by competitors than the information appellants
seek to seal here.
ORDER
For the foregoing reasons, Appellants’ Motion to Seal and/or Redact Confidential Documents
and Information (MPR #4), filed December 27, 2011, is denied, as to any and all such information
offered or admitted into evidence at the upcoming trial.
Dated at Bennington, this day of January, 2012.
______________________________
Katherine A. Hayes
Superior Court Judge