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Case number 16-5188.

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MetLife Inc.

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vs. Financial Stability Oversight Council.

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Better Markets Inc.

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Appellant.

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Mr. Hall for Appellant.

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Better Markets Inc.

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Mr. Tarone for Appellate.

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MetLife Inc.

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and Mr. Riley for Appellate Financial Stability Oversight Council.

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Mr. Hall.

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Good morning.

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May it please the Court, I'm Stephen Hall, representing Better Markets, the appellant intervener in this important case.

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This is a case – and by the way, if I may, with the Court's permission, I'd like to reserve five minutes of my allotted time for rebuttal purposes.

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This is a case about the strength and breadth of an extremely important right, the right of public access to judicial records.

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And the context is simply this.

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The district court's decision below on the merits was to rescind FSOC's designation of MetLife for enhanced supervision by the Fed.

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That has huge implications for the financial stability of the United States.

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And yet, over two-thirds of the entire record on which the court based its decision is under seal.

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Moreover, the parties, when they made their case to the court, relied very heavily on the sealed components of the record.

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And the district court itself even cited to a sealed element in the joint appendix.

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The district court's decision on our motion to intervene and for an application for an order to show cause struck a blow against transparency and against

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the public's right of access to judicial records.

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And we challenge four rulings that were embodied in the court's opinion.

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First, the court misread the plain language of Section 5322 of Title 12 to hold that it actually superseded entirely the Hubbard analysis that's required by this court.

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Second, it aired by suggesting that the joint appendix is not, in fact, a judicial record subject to the right of access.

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Third, it asserted that all of the redactions were, in fact, appropriate.

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It did so in a summary fashion, and it did so even though it had failed to gather any information necessary to actually make such a judgment.

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Fourth and finally, it adopted a novel, particularized interest test for those who seek to intervene under Rule 24B for the purpose, limited purpose, of seeking access to records.

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I'd like to start on the legal issues presented with the role of Section 5322D5A, which is the subject, a core basis for the District Court's decision, and something that both appellees

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devote considerable attention to.

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As a threshold point, in our view, no matter what 5322, what its scope is in one sense, it certainly only applies to a certain universe of documents.

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And those are the documents that are submitted to the FSOC.

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And in fact, some of the elements of the joint appendix, which is the record in the case, clearly don't even fall within 5322.

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A prime example would be the proposed designation.

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That's a document that was quite obviously prepared by ESSOC, not submitted by MetLife.

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And even if we accept the reasonable proposition

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that redaction might be appropriate for elements of that document that reflected data, information, reports submitted.

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The fact remains that there would still have to be a particularized analysis of that document, notwithstanding 5322.

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So you'd say that even if it's undisputed that the material that's being redacted is just a verbatim quotation of a report that was submitted to FSOC and therefore clearly would fall within the scope of the statute for purposes of the proceedings before FSOC.

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we would yes we we don't crawl with the idea that if there are particular

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and to reflect the statutory language, particular data, information, or report elements that otherwise fit the standard, and they're embodied in documents that were not submitted, that's a separate issue.

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But I would say that as a procedural matter, one of the reasons why Hubbard is so important is to make those judgments.

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There has to be a scrutiny by the district court to evaluate exactly what doesn't fall within the various possible categories of information.

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The core argument... When you say it's a separate issue, you mean that the answer would be clear in that situation, whereas the answer is not clear in that situation?

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What I'm trying to emphasize, Your Honor, is just that, yes, there may be instances where data and information possibly deserves protection, depending on how the Hubbard analysis pans out.

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But we concede it might be covered by 5322, even though it wasn't submitted in the sense of it came in a document from

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that didn't come from a document submitted to FSOC, if you follow me.

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Does that answer your question?

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Yeah.

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The core issue really is the plain language of Section 5322.

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And it's obvious on its face that it is very limited in scope.

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It only applies to, by its very terms, the Council, the Office of Financial Research,

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and the member agencies of FSOC.

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And on that basis alone, there's no basis, in fact, for the district court's decision that 5322 would bind a federal court and would for all time prohibit

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any revelation of information.

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What about the idea that, even if you're right about the statutory language, that the statute is a strong indication of Congress's recognition of the privacy, confidentiality, prejudice, business information,

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or competitive harm that would occur from disclosure of this kind of information.

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In other words, it's a strong indication on the fourth and fifth Hubbard factors of where the court should go, really their alternative argument, which is under any possible conception or application of the Hubbard factors, the same result would occur here.

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It's a fair question, and of course it goes to the need for a Hubbard analysis, quite frankly.

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But my answer to the question, Your Honor, is that it is one indication of the privacy interest and Congress's view of its importance, and that has to be weighed in the mix.

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But it's not a particularly strong

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indicator of congressional intent or desire to protect secrecy.

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And I say that for the following reasons.

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On the face of the statute, it clearly contemplates a kind of limited scope in the sense that it preserves symmetry.

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The related provisions in Section 5322, for example, contemplate that privileges will apply.

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There will be no waiver of privileges by virtue of submission of information.

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In other words, this information may be protected when it's in the hands of the executive agency, and it is subject to FOIA, which in itself is something intended to promote transparency.

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But in the judicial context, there's nothing in 5322 that suggests it would carry over.

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So it's limited in scope, and it reflects, therefore,

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On the FOIA thing, just to stop you on that, they did also add in though, including the FOIA exemptions that would cover this kind of information.

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That's specifically referenced also in the statute too.

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Well, there is a reference to FOIA and its applicability, again, an indication of congressional intent that there be transparency.

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The language says FOIA shall apply, including the exceptions.

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You're quite right, Your Honor.

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But there's nothing in the statute or in any case that suggests

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which I think is where your question might lead, to suggest that FOIA, or a reference to FOIA, would supersede or overcome the well-established and presumptive common law right of access to that information once it's in the context of a judicial case.

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Right, I take that point.

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I think it's more music as you're applying the Hubbard factors, which is

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It's common sense, frankly, which is proprietary, sensitive business information should not be dumped into the public domain without care.

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And courts don't do that, and the Hubbard factors reflect that.

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And I'm trying to figure out, again, I'm on their alternative argument here, how this kind of information could ever possibly be released by any district court applying Hubbard factors.

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Well, I think there are really two important answers to that.

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This echoes the argument of the parties that it would be unthinkable that by invoking the right of judicial review, Congress would have intended that the confidentiality protections to the kind of business information you're referring to would have to be waved off.

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But that is hardly the scenario.

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That's a false premise.

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The fact is it is hardly unthinkable that Congress intended to protect the information almost presumptively.

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It's very sweeping.

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It says all information submitted, regardless of whether it really is, in fact, business confidential.

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It's eminently thinkable that Congress said, OK, while it's in the hands of the agency, during its what you might call investigative process in this designation proceeding,

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Yes, it's going to receive the protections of FOIA, but it's an entirely different situation, as evidenced by Section 53D5B on privilege, when it goes to court.

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Now, to the kind of the court... Doesn't that put a penalty on the...

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company that's challenging the designation, which is if we go to court, this absolute protection that occurred that attached to our information before the council suddenly may not be so absolute when we go to court.

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And that is an arguable deterrent to challenging your designation.

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And I think the district court referred to that as

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I don't know if the word was unthinkable, but something to that, in that vein.

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I think you're quite correct, Your Honor.

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The answer I would give is no.

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And the reason is that there really isn't any price, because our whole point is that the protections under Hubbard are robust.

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They're there.

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We did not come into court, into the district court, and say,

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Because they have sued to challenge the designation, there should be a wholesale unsealing of information.

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What we said was, when the case goes to court, then a number of very important principles apply.

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There's a presumptive right of access.

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That's well established and incontrovertible.

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And moreover, this court has made it abundantly clear that the obligation to protect

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truly confidential information while vindicating the public's right of access has to be done with a three-step process.

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The district court has to gather the information it needs on a particularized basis about the documents in question, about the asserted confidentiality claims.

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It has to evaluate and balance those.

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And then it has to articulate its reasoning with specificity.

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None of that was done.

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Let me ask you this.

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Interrupt you there.

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On page 16 of the government's brief, they say every document in the record that does not contain any of MetLife's confidential business information or any confidential information submitted by state insurance regulators has now been unsealed in its entirety.

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Well, the first answer is we shouldn't have to take their word for it, Your Honor.

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The problem in this case fundamentally is that the district court did not have enough information to actually evaluate whether that claim, undoubtedly made, is really true.

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And quite frankly, we cited an instance in New York, the HSBC case, where the issue was whether a monitor's report

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pursuant to a consent decree or a plea agreement should remain confidential and sealed.

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And the court in its decision, part two of its decision, if you will, essentially said the report should in fact be unsealed, although it

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it held that decision in its pending appeal.

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But it cited an almost classic example of information that the bank, HSBC alleged, was confidential.

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But it was completely benign.

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It was not confidential at all.

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There are instances as well in this very case.

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And I can pull the- We can ask the government this, too.

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But do you read that life's confidential business information

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necessarily to mean information that fits within the scope of the statutory confidentiality provision or is it a legal conclusion about whether it's confidential?

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Frankly, Your Honor, 5322 doesn't even parse it that particularly.

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In other words, 5322 says the test there is submitted.

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It's an incredibly broad brush, all the more reason for Hubbard to be conducted in earnest.

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I'm not sure I understand the thrust of your question beyond that.

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It's not entirely apparent to me, immediately apparent to me, what it means to say it doesn't contain any of MetLife's confidential business information, because we don't know how the determination was made as to whether that's confidential business information.

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That's right.

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Now, I think it may go to the question of what happens if a court does undertake a meaningful Hubbard analysis.

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It would then have the opportunity to weigh that very question as to each category of document.

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What is the nature?

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Do you envision a document by document, line by line, district court proceeding?

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Absolutely, your honor.

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It's the only way to vindicate this, what has been referred to as precious right of access.

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It doesn't mean that it can't be done.

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It doesn't happen in most FOIA cases, to use the analogy of FOIA.

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With all due respect, Your Honor, I think that the FOIA officers at the various agencies take their job seriously.

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No, I'm talking about when the agencies then it comes to court, and the court's process is not usually to do what you just described.

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Well, candidly, I can't speak to those cases where FOIA denials have been subject to litigation and how the court proceeds.

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But I can say that the line of decisions in this court, from this court, make it very clear that exactly the kind of detailed thorough analysis is required.

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under Hubbard.

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And it may rise to the level of line by line.

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It may not, depending on the particular facts and circumstances of the case.

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On the Hubbard factors, the final five, so the first is the need for public access.

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That's obviously what you're arguing for.

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But the next five all seem to go against you pretty heavily, I guess.

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And I guess

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I guess my questions are two.

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One, on any of those five, do you think they actually cut in your favor?

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And then on the first, can you explain

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the precise purposes or need that you think you have in the documents at question here?

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Happy to do it.

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A three-part answer, Your Honor.

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First is, it's really impossible to do a Hubbard analysis here and now without the benefit of much more information about whether, indeed, it is a bona fide confidentiality piece of information or a bona fide trade secret.

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It's simply impossible.

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But to take the premise of your question

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going to see the documents when that's done.

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The district court said it was aware of everything, looked at everything, knew what was in the record.

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Right, but that – and one of our arguments, frankly, and an important one, is that what that seems to be is an attempt to say as an alternative holding, yes, I've reviewed everything, summary statement to that effect, I concur with the party's judgment – that's in that language as well – and that satisfies Hubbard as if there's a creation of a Hubbard light, if you will.

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And that's simply unacceptable.

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And it's not what the law requires.

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If you look at the progeny of starting with Hubbard and thereafter, it is imperative, for example, in one case this court said, that the court articulate with specificity its reasons.

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It has to ask the appellees to come forward with justifications.

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That simply wasn't done in this case.

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And nothing in the record of the decision.

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I thought your argument about that is that the court just didn't apply a Hubbard test at all.

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That is, that the court adopted the position of the parties, that this stuff was protected.

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and then concurred in the judgment that the stuff is protected, but that it didn't actually apply a Hubbard test.

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Is that?

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That's correct.

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And the court itself says it did not, quote, reach that framework.

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There's no dispute that the court did not conduct a Hubbard analysis.

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But what's troubling is, in the second of its core holdings on the merits of our attempt,

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to gain access to the record.

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The district court said, in effect, it's been said that I didn't conduct an independent analysis, and I just relied on the parties.

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That's not true.

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I have reviewed the record and the briefs.

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I concur in their judgment, period.

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That is not a Hubbard analysis by any stretch.

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It doesn't reflect, in fact,

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It doesn't seem to me the court was purporting to do a Hubbard analysis.

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The court was just saying, I looked at the documents and I agree with the parties not to release them.

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Our concern is that that could be read, Your Honor, to suggest that a district court would have the discretion to avoid a Hubbard analysis, where in our view it's clearly required, and yet go with something much more skeletal and summary that falls well short.

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We want to challenge that.

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Is it fair to say that would be appropriate if we adopted the party's view that the statute protects all this stuff?

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but not appropriate if we adopted your view that Hubbard applies.

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I'm sorry.

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Once more, Your Honor.

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I think you're resisting something here that you don't need to.

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It's a helpful question.

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You're resisting something.

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Say yes.

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I'm actually thinking back to trying to finish Judge Kavanaugh's question.

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And I apologize, Judge Garland.

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I'll get you back to that.

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I think Judge Kavanaugh has answered it.

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Very well.

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Now you can answer Judge Kavanaugh.

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But you did raise a fair question about Hubbard and where it actually points in this case.

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And I reiterate my first response, which is you can't do it.

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There isn't enough information.

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But let's take them in turn.

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I think you yourself posited that yes,

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The need for access here is compelling because of the historic nature of the case.

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That's one of the factors that weighs very heavily in this court's decisions applying Hubbard.

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With respect to prior access, it's impossible to know which way that goes.

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We have a huge swath of 2,000 pages of information.

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We have six volumes summarily withheld as voluntarily submitted information.

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Who knows what's in there that may or may not have been exposed to public view in the past?

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There's been no analysis of that.

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The third factor is the identity of the objector.

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Even that is a mixed question, frankly.

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Certainly, relative to the holding in Hubbard, there's no third party whose privacy interests need the particular solicitude of the court.

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In Hubbard, of course,

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There was a church where a search warrant had been executed.

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It wasn't under indictment.

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And the court was very keen on protecting the Fourth Amendment issues for that ancillary party.

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Here we don't have that.

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That cuts in our favor.

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Moreover,

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It isn't really true that MetLife and FSOC agree on the objections.

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It's frankly on this record impossible to tell.

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There's evidence in the record that FSOC basically said, we're going along with MetLife here.

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So you don't even have a situation from the standpoint of who's objecting, of two parties objecting, two against one.

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It isn't that case.

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It's much more murky than that.

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The fourth factor is the privacy interest.

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And here, I think, goes exactly to Judge Srinivasan's point.

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There's no way to evaluate the privacy interest, the magnitude of it, what it applies to, unless you know what precisely they're claiming.

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Is it the secret for Coca-Cola?

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Is it a real trade secret?

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Or is it a very general comment, as it was in one of the cases on January 27th,

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MetLife filed a revised set of briefs in light of the fact that they had decided to spin off a business unit.

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And if you look at the few bits and pieces that were unredacted, some of it goes to things like, well, we were concerned we might have to make structural changes or we might have to consider breaking up.

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Does that count as bona fide confidential trade secret information?

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Clearly not.

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The only way to sift through all of that and evaluate that fourth factor is to do the kind of analysis that wasn't done here.

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The potential for prejudice, I think, as you said, is linked to that, and it partakes of the same consideration.

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Isn't the overarching view of this, and this is where the statute kicks in, I suppose, is

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the companies being looked at and they have to provide all this information.

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All this information comes from state insurance regulators elsewhere.

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And then if they challenge that, well, that information then goes into the court.

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The idea that all of a sudden to challenge that

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all that business information has to be let loose on the public when it otherwise wouldn't be seems problematic in the grand scheme of how this statute was supposed to operate.

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I think that was what the district court was getting at.

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I still think

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And maybe I'm speaking out of term.

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I think almost any district judge applying the Hubbard factors in this kind of situation has come to a similar conclusion because it's all this sensitive business information.

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That's the whole point of this statute, right, is to look at the sensitive business information and make a conclusion about the company.

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And then it goes to court if the company is so designated.

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Well, again, Your Honor, we submit that the courts are eminently capable of balancing the public's right of access with whatever legitimate privacy concerns may exist.

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There's a different mechanism to be sure.

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It's not necessarily weaker or punitive in any sense.

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And frankly,

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in terms of the, well, I'll leave it there.

[00:25:50] Speaker 03:
Your basic response, which is not a bad one, is let the district court do Hubbard, don't do Hubbard yourself.

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That's absolutely true.

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And that's consistent with the vast majority of the holdings from this court applying the Hubbard case.

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And in fact, I think

[00:26:04] Speaker 02:
MetLife has submitted the Hardaway case for consideration, and we submit that's eminently distinguishable.

[00:26:12] Speaker 02:
First of all, it certainly confirmed the general principle that it's an abuse of discretion not to conduct a Hubbard analysis.

[00:26:20] Speaker 02:
Moreover, it actually did remand in that case.

[00:26:23] Speaker 02:
for potential future Hubbard analysis, with the exception of one document, a medical record, that he decided then and there should remain confidential.

[00:26:33] Speaker 02:
That's an easy case.

[00:26:35] Speaker 02:
That's nothing like the case that we're dealing with here before us, or Hubbard for that matter, where there were about 50,000 pages of documents seized from the church.

[00:26:44] Speaker 02:
The district court lamented that it's a significant task to review all that, but it's what justice requires.

[00:26:52] Speaker 02:
And that's, in fact, the law.

[00:26:53] Speaker 01:
Do you want to wrap up or have you wrapped up?

[00:26:58] Speaker 02:
Well, I'm not sure if I have any time left for rebuttal.

[00:27:01] Speaker 01:
Well, then that better sit down and save whatever.

[00:27:04] Speaker 02:
I think I shall.

[00:27:05] Speaker 01:
Thank you very much.

[00:27:06] Speaker 01:
We'll give you some time.

[00:27:12] Speaker 01:
I'm at life now.

[00:27:13] Speaker 07:
May it please the court, Amir Tayrani for MetLife, Inc.

[00:27:17] Speaker 07:
When Congress enacted Dodd-Frank, it expressly guaranteed the confidentiality of data, information, and reports submitted to FSOC during its designation proceedings in order to facilitate the free flow of information between companies under consideration for designation and their state regulators on the one hand and FSOC on the other.

[00:27:42] Speaker 07:
Beto Market's request to unseal the record would eviscerate the plain statutory language and upend Congress's carefully calibrated statutory framework.

[00:27:52] Speaker 01:
Can I ask you about this careful calibration?

[00:27:54] Speaker 01:
Because it's confusing me a little.

[00:27:56] Speaker 01:
Not your statements, but the statutory language itself.

[00:28:01] Speaker 01:
You have A, B, and C in front of you.

[00:28:03] Speaker 07:
I do, Your Honor.

[00:28:04] Speaker 01:
OK.

[00:28:04] Speaker 01:
So A says, as Beto Market says, that the council

[00:28:11] Speaker 01:
and the agencies.

[00:28:14] Speaker 01:
She'll maintain the confidentiality of any data submitted under this.

[00:28:21] Speaker 01:
Then B says, which is about retention of privilege, refers only to non-publicly available data, suggesting, at least to me, that there's some distinction between any data and non-publicly available data.

[00:28:35] Speaker 01:
So let me just start with that.

[00:28:36] Speaker 01:
Do you agree that Congress is referring to two different things in these two places?

[00:28:41] Speaker 07:
I think that would be a reasonable reading of the statute, Your Honor, and the availability of the guarantee of confidentiality in D-5A does not depend on whether the data information or report was previously publicly available.

[00:28:57] Speaker 07:
Congress recognized the need for a broadly applicable statute.

[00:29:01] Speaker 01:
But so I was thinking about the other way around, which suggests that the submission of non-publicly available data doesn't waive any privilege.

[00:29:11] Speaker 01:
which by negative pregnant suggests that the submission of publicly available data does.

[00:29:16] Speaker 01:
Otherwise, there would be no reason for Congress to have stuck in the non-publicly available language.

[00:29:23] Speaker 01:
Am I right about that?

[00:29:24] Speaker 07:
The non-publicly available modifier is a limitation on subsection B. But subsection B is not at issue here.

[00:29:33] Speaker 07:
Subsection B would come into play if this were a case where FSOC were not a party.

[00:29:38] Speaker 07:
and MetLife as a defendant, for example, were resisting a discovery request and the discovery was premised.

[00:29:47] Speaker 01:
How do we know that B doesn't apply to this case?

[00:29:50] Speaker 01:
There's nothing in here about, in fact it says,

[00:29:56] Speaker 01:
doesn't have any privilege arising under federal or state law, including the rules of any federal or state court to which the data or information is otherwise subject.

[00:30:07] Speaker 01:
So at least in the language it suggests that once you get to court, the submission of non-publicly available data, you don't waive whatever privileges you have, but there's no protection of publicly available data.

[00:30:22] Speaker 01:
Why is that reading wrong?

[00:30:24] Speaker 07:
Your Honor, MetLife is not depending on its privileges that may be available to it under federal law or under state law to resist the request to unseal the record.

[00:30:36] Speaker 07:
What MetLife is invoking is the guarantee of confidentiality in D5A.

[00:30:42] Speaker 01:
So that's what I'm confused between the relation between A and B, because B sounds like what it's saying is that there isn't some kind of absolute confidentiality privilege.

[00:30:54] Speaker 01:
But rather, the requirement that the agency keep the material confidential preserves whatever other privileges, including confidential business information that the company has.

[00:31:08] Speaker 01:
Otherwise, I don't really understand the point of the

[00:31:11] Speaker 07:
B would apply your honor if MetLife were resisting discovery and the proponents of discovery were arguing that MetLife had waived a privilege such as the attorney-client privilege by submitting information to FSOC during the designation proceedings.

[00:31:27] Speaker 07:
D5B makes clear that MetLife did not waive that privilege or any otherwise available state or federal privilege by submitting information to FSOC during these designation proceedings.

[00:31:41] Speaker 07:
But with respect to the availability of the documents to the public in this suit, where MetLife is exercising its statutory right to challenge its designation, Congress spoke clearly to the issue in subsection A. Where is the distinction between this third party discovery and a case like this where MetLife came to court itself?

[00:32:05] Speaker 01:
I don't read that in B. I'm not saying you're wrong, but I'm trying to figure out what the distinction between these two

[00:32:11] Speaker 07:
The distinction, Your Honor, is that in subsection A, Congress tracked a statute that this Court had already construed as providing a blanket guarantee of confidentiality in litigation.

[00:32:26] Speaker 07:
And that's the statute that was at issue in Ray Seald's case that uses a similar structure to establish confidentiality.

[00:32:36] Speaker 03:
Has the or any person that statute has

[00:32:41] Speaker 03:
More language.

[00:32:42] Speaker 03:
This statute's limited to the Council, the Office of Financial Research, and the other member agencies, right?

[00:32:49] Speaker 07:
That's true, Your Honor.

[00:32:50] Speaker 07:
And the statute at issue in sealed case, which was a provision of the Federal Election Campaign Act, provided that any notification or investigation made under this section shall not be made public by the commission or by any other person.

[00:33:07] Speaker 07:
The definitional provision of the Federal Election Campaign Act made clear that the federal government and federal authorities are not persons within the meaning of

[00:33:18] Speaker 07:
this statute.

[00:33:20] Speaker 07:
This court nevertheless concluded that in an in-ray sealed case, the district court was bound by the confidentiality provision of the Federal Election Campaign Act and had erred when it denied a motion to seal that was filed by a party that was the subject of an ongoing investigation for campaign finance violations by the Federal Election Group.

[00:33:45] Speaker 01:
Before we get to Seal Case, just help me through the last section of the statute, the Freedom of Information Act.

[00:33:54] Speaker 01:
So when it says that the Freedom of Information Act, including its exceptions, shall apply to any data or information submitted,

[00:34:01] Speaker 01:
Do you think that means that if somebody files a Freedom of Information request that nothing that was submitted can be produced or just nothing that was submitted that falls within the exceptions of the Freedom of Information Act?

[00:34:16] Speaker 07:
The Freedom of Information Act would apply under its standard procedures to the extent that Bethe Markets or another entity were to direct a Freedom of Information Act request to FSOC.

[00:34:29] Speaker 07:
So MetLife would be free to invoke the B4 exemption, for example.

[00:34:33] Speaker 01:
Yes, but it wouldn't be free to, I take it, invoke what I would describe now as the 5A protection.

[00:34:39] Speaker 01:
Is that right?

[00:34:40] Speaker 07:
That's correct, Your Honor.

[00:34:41] Speaker 01:
So the argument that

[00:34:44] Speaker 01:
allowing the court to disclose it will ruin everything.

[00:34:49] Speaker 01:
How does that fit with the fact that the Freedom of Information Act ruins everything other than confidential business information or trade secrets or anything else that the Freedom of Information Act would itself protect anyway and which, as Judge Yamano was pointing out, is already pretty much built in to the Hubbard test?

[00:35:09] Speaker 07:
Because, Your Honor, a district court has a measure of discretion in applying the Hubbard factors.

[00:35:14] Speaker 07:
It's a six-factor balancing test.

[00:35:17] Speaker 07:
FSOC, in entertaining a Freedom of Information Act request, would not have discretion in applying the B4 exemption for trade secrets and confidential business information, or the B8 exemption for supervisory financial information.

[00:35:34] Speaker 07:
MetLife is confident that if a Freedom of Information Act request were directed to EFSA that it would reject that request on the basis of the B4 and B8 exemptions.

[00:35:46] Speaker 07:
What Congress was concerned about in the setting of litigation is that application of the standard common law factors affords district courts a measure of discretion to weigh the competing interests.

[00:35:59] Speaker 07:
and a company in MetLife's position that's under consideration for designation would have to think long and hard before disclosing to EXOC its most highly sensitive financial information if the only guarantee in place were a six-factor balancing test.

[00:36:16] Speaker 01:
If that were right, if what Congress was really concerned about is the courts screwing up here, why didn't they just say this?

[00:36:22] Speaker 01:
This would make it a lot easier.

[00:36:24] Speaker 01:
Why don't they just say that the courts, not just the council, but also the courts,

[00:36:29] Speaker 01:
You can't have to treat this confident.

[00:36:32] Speaker 07:
Congress enacted this provision, Your Honor, against the backdrop of this Court's decision.

[00:36:37] Speaker 01:
And how do we know that?

[00:36:39] Speaker 01:
Is that something we just accept, or are you saying that that was in the legislative history?

[00:36:44] Speaker 07:
It's not in the legislative history, Your Honor, it can be.

[00:36:47] Speaker 07:
They probably had no idea about sealed case.

[00:36:50] Speaker 03:
You really think that's true, what you just said?

[00:36:52] Speaker 03:
I mean, I'm not questioning, I'd be making the argument if I were you too, but the idea that members of Congress really knew about our decision in sealed case, about the FEC statute?

[00:37:01] Speaker 07:
I think there is a presumption.

[00:37:03] Speaker 03:
And then use different language, even though they knew what the language in sealed case was?

[00:37:07] Speaker 07:
Your Honor, I don't think the language is very different between the two statutes.

[00:37:12] Speaker 07:
Clearly, Congress recognized the importance of the designation process, and FSOC's power to designate entities, non-bank, systemically important financial institutions is a centerpiece of Dodd-Frank.

[00:37:24] Speaker 03:
Isn't it more reasonable to assume Congress thought courts know what they're doing with sealed confidential material?

[00:37:29] Speaker 03:
We don't need to micromanage how they handle that.

[00:37:33] Speaker 07:
Courts do know what they're doing, Your Honor.

[00:37:35] Speaker 04:
In other words, we assume Congress knew about Hubbard.

[00:37:39] Speaker 04:
Well, they knew.

[00:37:40] Speaker 03:
I doubt Congress knew about Hubbard, but Congress knew courts aren't just wildly disseminating confidential trade secrets.

[00:37:49] Speaker 07:
Congress enacted these provisions against the backdrop of this court's authority.

[00:37:54] Speaker 07:
And if there were not a blanket guarantee of confidentiality in D5A, then companies in MetLife's position would have to rely on the Hubbard balancing framework.

[00:38:05] Speaker 07:
And we're talking here about the most sensitive information

[00:38:09] Speaker 07:
about a company, its balance sheet, its contingency planning in the event that it... That's all why you're going to win under Hubbard.

[00:38:16] Speaker 01:
It sounds like it would be an abuse of discretion to reveal that information.

[00:38:20] Speaker 07:
Your Honor, it would be an abuse of discretion.

[00:38:22] Speaker 04:
What is the cost to you?

[00:38:23] Speaker 04:
What is the principal concern to you if the rule to emerge were that Hubbard governs rather than a gloss on the statute that would extend the statutory provisions to judicial review?

[00:38:35] Speaker 07:
Your Honor, it's conceivable that in the future MetLife could be subject to redesignation proceedings.

[00:38:42] Speaker 07:
It's certain that other companies will be subject to designation proceedings.

[00:38:46] Speaker 07:
And those companies need to have assurance that if they're going to turn over their most confidential information, that that information will remain outside of the public domain.

[00:38:58] Speaker 03:
You're being appropriately diplomatic, but I think your concern is a wacky judicial decision.

[00:39:04] Speaker 04:
Hubbard will be disappointed.

[00:39:05] Speaker 03:
Black is a term of art here.

[00:39:06] Speaker 03:
Yes.

[00:39:08] Speaker 03:
We're familiar with it.

[00:39:09] Speaker 03:
We know when we see it.

[00:39:10] Speaker 07:
The other concern, Your Honor, is that FSOC would not be able to make a fully informed determination about whether to designate a company without access to the type of information that's under seal in this case.

[00:39:23] Speaker 01:
Well, that's required, right?

[00:39:25] Speaker 01:
The statute requires the companies to produce information, doesn't it?

[00:39:29] Speaker 07:
It does, Your Honor, but FSOC did not invoke that provision.

[00:39:33] Speaker 01:
No, I know.

[00:39:33] Speaker 01:
It's always better, obviously, to get things voluntarily.

[00:39:36] Speaker 01:
But FSOC has the right under the statute to get it without accommodation, without negotiation.

[00:39:45] Speaker 01:
I'm not saying that's a good thing, but they do have that power, don't they?

[00:39:49] Speaker 07:
That avenue may be available.

[00:39:50] Speaker 07:
It was not invoked here.

[00:39:52] Speaker 01:
No, not maybe.

[00:39:52] Speaker 01:
The statute says may require.

[00:39:54] Speaker 01:
Isn't that right?

[00:39:55] Speaker 07:
The statute does say that, but there are limitations on how far that power could go.

[00:40:01] Speaker 07:
For example, part of what was submitted here were analyses that MetLife voluntarily put together as to what it would do in the event that it were confronted with a run by its policyholders that were trying to redeem their policies for cash value.

[00:40:19] Speaker 07:
That's something that

[00:40:20] Speaker 07:
FSOC could not direct a company to put together, but MetLife here felt that that analysis was informative and should be available to FSOC when it made the designation determination.

[00:40:33] Speaker 07:
If this court disagrees with the district court's application of D5A, then this court is well positioned to apply the Hubbard factors itself without a remand, as it did last month in the Hardaway case, as it did in Hubbard itself, where the record

[00:40:50] Speaker 07:
of sealed materials encompassed 50,000 documents, and this court undertook the Hubbard analysis after developing those factors in the first instance and held that the district court had erred by unsealing the materials in the record.

[00:41:05] Speaker 01:
Can I ask you, just since we're running out of time, one thing

[00:41:08] Speaker 01:
I just want to narrow this hypothetical now.

[00:41:10] Speaker 01:
It's not the problem in this case, because I think the parties did a good job on it, and the district court did a good job on it.

[00:41:17] Speaker 01:
But imagine that the district court's decision turns on information that was provided.

[00:41:26] Speaker 01:
That no one from the outside could understand whether the district court correctly or incorrectly decided, without language in the court's opinion,

[00:41:36] Speaker 01:
that is, and maybe just a small amount of language, but some reference in the court's opinion to confidential business information.

[00:41:45] Speaker 01:
Would it still have to be redacted?

[00:41:47] Speaker 01:
Under your theory, it absolutely must be redacted from the court's opinion, is that right?

[00:41:53] Speaker 07:
unless MetLife or the entity that submitted that information to FSOC gave authorization for that information to be disclosed.

[00:42:04] Speaker 01:
By the court.

[00:42:05] Speaker 01:
By the court.

[00:42:06] Speaker 01:
So we really would have complete secret law in this area.

[00:42:10] Speaker 01:
That is, no one would be able to know why the court decided what it did without

[00:42:20] Speaker 01:
unless they are either met life or, I know this didn't happen here, but met life or feds.

[00:42:25] Speaker 01:
We face this question in the classification realm, and I don't think the courts ever reach the question of whether due process permits it to rest totally on something that's complete secret law, because in almost all cases we're able to persuade agencies to either declassify the relevant material or we're able to write around it.

[00:42:45] Speaker 01:
But this is not classified national security information we're talking about.

[00:42:50] Speaker 01:
And I guess I'm worried about the implication of what you're saying, not for this case, but for another, where it's essential to explaining the court's reasoning to rely on not even confidential commercial information, but just any data that was submitted under this subject.

[00:43:12] Speaker 07:
Your Honor.

[00:43:13] Speaker 07:
even endorsing the district court's reading of D5A, there would be extensive information that is not covered by the confidentiality protections of that provision.

[00:43:26] Speaker 07:
For example, the district court's analysis of FSOC's regulations and whether FSOC was required.

[00:43:33] Speaker 01:
Yes, to be able to explain the law, but not how it applies to the facts.

[00:43:37] Speaker 01:
But imagine that there was some data

[00:43:40] Speaker 01:
information or reports submitted under this subchapter that was otherwise publicly available and that was not a confidential commercial information, right, something that would be released under FOIA.

[00:43:54] Speaker 01:
And the court needs to explain that in its opinion.

[00:43:59] Speaker 01:
If I understand your position correctly, the court cannot cite that even though

[00:44:07] Speaker 01:
But if markets could get the same information, although they couldn't get the court's opinion, but they could get the same information in a freedom of information act case, is that your position?

[00:44:16] Speaker 07:
That's true, Your Honor.

[00:44:17] Speaker 07:
There is no exception in D5A for information that's already publicly available.

[00:44:23] Speaker 07:
Because Congress recognized in this setting that the interest in confidentiality and a fairly and efficiently run designation process outweigh the public right of access.

[00:44:35] Speaker 01:
But even- And then not just the public right of access, but the right of the court system to explain its cases and opinions.

[00:44:43] Speaker 01:
That's what

[00:44:45] Speaker 01:
If it weren't for that, you would have a pretty strong case here, it seems, I think.

[00:44:50] Speaker 01:
But when you think about what Congress didn't say, that is a very big step to say courts can't explain themselves by reference to the facts without saying that in the statute.

[00:45:03] Speaker 07:
Your Honor, the district court here rescinded MetLife's designation based on grounds that have little or nothing to do with the material in the record.

[00:45:13] Speaker 07:
The district court also gave the parties the opportunity to request redactions.

[00:45:18] Speaker 07:
Neither party did.

[00:45:19] Speaker 07:
And she made a point.

[00:45:21] Speaker 01:
That's why I say I think that everybody did a good job in this case.

[00:45:24] Speaker 01:
But as you know, what we decide here is going to cover the next case, not just this case, if we're deciding a law question on this point.

[00:45:32] Speaker 07:
That's true, Your Honor, and Congress made that determination itself when it enacted the broad, unequivocal language of D5A and determined that that type of across-the-board protection is necessary to ensure that FSOC can do its job.

[00:45:48] Speaker 01:
Okay, thank you.

[00:45:49] Speaker 01:
Thank you.

[00:45:50] Speaker 01:
I think we hear from DOJ now.

[00:46:03] Speaker 06:
May it please the court, Nicholas Reilly, for the Financial Stability Oversight Council.

[00:46:07] Speaker 06:
I'd like to just start with the question that you left off on, just because I think the government's answer might be slightly different.

[00:46:14] Speaker 06:
And I think it's helpful just to look at the text of the statute just to begin there.

[00:46:19] Speaker 06:
The government's reading of this provision, DA, is not that all data information and reports submitted to the Council in the course of one of these designation processes must remain confidential.

[00:46:34] Speaker 06:
permanently, our view is that the council's statutory duty under this provision is to maintain the confidentiality of the information that it receives.

[00:46:42] Speaker 06:
So the council's not expanding the universe of confidential information.

[00:46:47] Speaker 06:
So your honor was alluding to if there's information out there that's already public.

[00:46:51] Speaker 01:
No, I mean if the parties submit to the agency public information,

[00:47:01] Speaker 01:
Do you have an obligation to keep that confidential?

[00:47:04] Speaker 06:
Right.

[00:47:04] Speaker 06:
And I think our view is no, because the council's only duty is to, again, maintain the confidentiality.

[00:47:10] Speaker 06:
I see.

[00:47:10] Speaker 06:
Maintain.

[00:47:11] Speaker 04:
So that's why I'm saying... In other words, it otherwise has to be confidential.

[00:47:14] Speaker 04:
That's right.

[00:47:14] Speaker 04:
Maintain whatever confidentiality otherwise exists.

[00:47:16] Speaker 06:
That's right.

[00:47:17] Speaker 06:
And in fact, in this case, I think there's an example of this, which is, as we know, some of the information that remains under seal came from not just NetLife, but from state insurance regulators who provided it to the council on the condition that it remain confidential.

[00:47:32] Speaker 06:
the Council treated that information as confidential pursuant to a memorandum of understanding that it had with these regulators.

[00:47:38] Speaker 06:
In one instance, I believe one of these regulators subsequently made some of the information, some of the documents that it provided to the Council available on its own website.

[00:47:47] Speaker 06:
And at that point, the Council stopped treating that information as confidential.

[00:47:51] Speaker 06:
So again, I just want to be very clear that – No, that's very helpful.

[00:47:55] Speaker 01:
On the

[00:47:57] Speaker 01:
ultimate question of our own opinions in the case in which we decide either is too big to fail, isn't, whatever.

[00:48:06] Speaker 01:
Do you agree with MetLife, though, that we can't explain our opinion in a way that, or the district court can't, in a way that references information that is confidential, even if it's not, for example, great secrets or something like that?

[00:48:25] Speaker 06:
I think that's right.

[00:48:26] Speaker 06:
And I think that's what Congress specifically contemplated when it enacted this statute.

[00:48:30] Speaker 06:
Again, we're talking here, and I think Judge Kavanaugh alluded to this with one of his questions, we're talking here about a process where the counsel's statutory duty is to look at some of the very most sensitive business type of information that these companies possess.

[00:48:45] Speaker 06:
That's what's necessary in order for the counsel to perform its statutory.

[00:48:49] Speaker 04:
And how are you applying the statutory word confidentiality

[00:48:51] Speaker 04:
Because something that's already public is not confidential because everybody agrees with that.

[00:48:56] Speaker 04:
But if there's something that's released to you that's not a trade secret, are you saying that FSOC makes some kind of independent assessment of whether it's nonetheless confidential?

[00:49:05] Speaker 06:
I think in practical terms, again, the statute doesn't actually define confidentiality in this context.

[00:49:12] Speaker 06:
So I think Congress did leave that judgment to the council.

[00:49:16] Speaker 06:
In this context, though, because the parties worked together to actually make all of, with respect to the documents that are essential to this litigation, the final determination, the hearing transcript, all of these documents, because they did make so much of that public, all the non-confidential parts public,

[00:49:32] Speaker 06:
You know, as a practical matter, I don't know what independent analysis FSOC would have had to have done in this case because... So just to, again, follow up on this question.

[00:49:43] Speaker 01:
So you think confidentiality means more than just it's not publicly available?

[00:49:50] Speaker 01:
So some things are trade secrets and some things are not.

[00:49:54] Speaker 01:
Some things are business confidential.

[00:49:55] Speaker 01:
Business information, they fit under the two.

[00:49:58] Speaker 01:
FOIA exemptions.

[00:50:01] Speaker 01:
Is this some kind of shorthand for those FOIA exemptions?

[00:50:05] Speaker 06:
I don't know that I'm not reading it.

[00:50:08] Speaker 06:
I don't think the government reads it as being shorthand specifically for the FOIA exemptions.

[00:50:11] Speaker 06:
I don't think this is necessarily like a one-to-one relationship that confidential in section DA equals the FOIA exemptions.

[00:50:20] Speaker 06:
What I think it means to answer it sounds like your initial question is in terms of whether confidential means simply non-public.

[00:50:28] Speaker 06:
I think it could mean

[00:50:30] Speaker 06:
something else, but in this context, I'm just giving you an example of the type of information that I don't think the council would treat as confidential, for instance, information that was already public.

[00:50:41] Speaker 01:
So can the court disclose the publicly available information that was submitted to the council and put into the joint appendix?

[00:50:51] Speaker 06:
The publicly available information, I think, absolutely.

[00:50:53] Speaker 01:
Even though it was submitted?

[00:50:54] Speaker 06:
Yeah, again, I think that

[00:50:58] Speaker 01:
What's relevant in in this section section da as we've been calling it is that the council maintain the confidentiality if that confidence you know that whether the district court did that or not, so I guess I'm not sure exactly how to read the district court's opinion, but I thought they adopted met life's view about this in which case they didn't Separate in the way that you're separating the meaning of the word confidentiality

[00:51:23] Speaker 06:
No, I think, I mean, we very much agree with MetLife's reading of the statute.

[00:51:26] Speaker 06:
I think, regardless of how one reads DA, I think what the district court did was correct, which was saying that if Congress has provided a statute requiring the confidentiality of certain information, and again, we're saying that information is information that was

[00:51:41] Speaker 06:
that is, in fact, confidential and that was previously not made available to the public, others may read that differently.

[00:51:47] Speaker 06:
But either way, the district court's view that when Congress has provided that certain information must remain confidential, that obviates the need to engage in a hundred.

[00:51:56] Speaker 01:
I'm sorry, because I hadn't anticipated this argument.

[00:51:58] Speaker 01:
You're trying to process it.

[00:52:00] Speaker 01:
Sure.

[00:52:01] Speaker 01:
For information that wasn't confidential before, but was merely submitted, I don't know whether there is anything in this category.

[00:52:09] Speaker 01:
and then is put into the joint appendix.

[00:52:14] Speaker 01:
Can that be disclosed by the district court?

[00:52:16] Speaker 05:
I think it can.

[00:52:18] Speaker 01:
I think it can.

[00:52:19] Speaker 01:
I see.

[00:52:20] Speaker 03:
Because it wasn't confidential.

[00:52:21] Speaker 03:
That's right.

[00:52:22] Speaker 03:
Whatever confidential is, it's probably labeled as confidential when it's given to the

[00:52:28] Speaker 03:
to the council.

[00:52:29] Speaker 06:
I think that's right.

[00:52:30] Speaker 04:
Again, the statute is taking on these as you understand the fact of this case, there isn't any work that the district court would have to do in that regard because none of that stuff is redacted.

[00:52:40] Speaker 06:
With respect to the documents that are central to this litigation, again, those being the final determination, the transcript of MetLife's hearing before the council, certainly all the briefs that were filed below and here on appeal and in the earlier appeal and in this appeal, I think that's right because the parties have gone through in this line by line and in some instances word by word manner to identify what is confidential and redacted in this fairly tailored way.

[00:53:03] Speaker 04:
Now there are, sorry.

[00:53:06] Speaker 06:
I was going to say, there are some other documents, obviously, that are a part of the joint appendix here, such as the voluntary submission to the council.

[00:53:14] Speaker 06:
And this, I think, addresses both your question, Judge Trinivasan, and your question about our statement on page 16.

[00:53:20] Speaker 06:
All of those other documents

[00:53:21] Speaker 06:
contain confidential information.

[00:53:23] Speaker 06:
Now, the government did not go through those documents in the same line-by-line.

[00:53:27] Speaker 06:
The parties did not go through in the same line-by-line, word-by-word fashion that they did with respect to final determination and some of the other key documents in this case.

[00:53:34] Speaker 06:
But they did look at each of these documents and find that there was large volumes of confidential information.

[00:53:39] Speaker 03:
So they respond to that, that you, I think, A, how do we know?

[00:53:43] Speaker 03:
How does the district court know?

[00:53:45] Speaker 03:
And B, shouldn't it be gone through line by line?

[00:53:48] Speaker 03:
So do you want to respond to their arguments on that?

[00:53:50] Speaker 03:
I think that was their response.

[00:53:52] Speaker 06:
I think that's right.

[00:53:52] Speaker 06:
And with respect to the first point, how did the district court know?

[00:53:59] Speaker 06:
The district court knew and the district court told us that it knew because the district court, at the point where it resolved,

[00:54:05] Speaker 06:
better markets motion had at that point decided the summary judgment motions and had to go through the joint appendix at that point.

[00:54:12] Speaker 06:
And so I think we can take it on fairly good authority when the district court says at page, this is at JA 31, says that she conducted a quote, independent evaluation of these materials.

[00:54:24] Speaker 06:
With respect to the second point,

[00:54:26] Speaker 06:
should the parties have had to have gone through those other documents line by line?

[00:54:31] Speaker 06:
I think the answer is no, and I don't think that's what Hubbard requires.

[00:54:34] Speaker 06:
I think if what Better Markets really wants here is this line by line type of redaction log, like the kind that they outlined in their requested order to show cause, the mechanism for doing that is FOIA.

[00:54:47] Speaker 06:
What they're requesting is, I think, very similar to a bond index, and there are procedures for going about getting that if that's what it wants.

[00:54:53] Speaker 06:
But I think Hubbard does not require that.

[00:54:56] Speaker 03:
Can I interrupt you there?

[00:54:58] Speaker 03:
You said something earlier, and I just want to make sure I follow up on this.

[00:55:01] Speaker 03:
You said the parties made all the non-confidential items public.

[00:55:06] Speaker 03:
I think I have that right.

[00:55:07] Speaker 03:
What does non-confidential mean there?

[00:55:10] Speaker 06:
I will just to clarify the earlier statement.

[00:55:12] Speaker 06:
I was talking about, again, those documents that were central to litigation.

[00:55:15] Speaker 06:
So for instance, the final determination.

[00:55:18] Speaker 06:
And I think there what we're talking about is documents that don't fall into one of the two categories of confidential information that are issued here.

[00:55:26] Speaker 06:
One, and I think the largest, as the court has been discussing, are documents that are information that is MetLife proprietary sensitive business information.

[00:55:37] Speaker 03:
Let me pause there.

[00:55:38] Speaker 03:
Information from the company that they say is confidential information.

[00:55:41] Speaker 03:
They turn it over.

[00:55:42] Speaker 03:
The counsel has to maintain the confidentiality in the court, whether under Hubbard or under the statute, shouldn't release that stuff unless they agree.

[00:55:52] Speaker 03:
Is that right?

[00:55:52] Speaker 06:
I think that's right.

[00:55:53] Speaker 06:
Right.

[00:55:54] Speaker 06:
And again, the counsel is exercising some judgment here, as I mentioned earlier, in instances as with the state regulatory information.

[00:56:01] Speaker 06:
The counsel does exercise some judgment as to what's confidential and what's not here.

[00:56:04] Speaker 06:
But I think the way you framed it is exactly right.

[00:56:06] Speaker 06:
the other category of information.

[00:56:08] Speaker 06:
I see that my time state insurance regulator exactly the state insurance.

[00:56:11] Speaker 03:
Same thing there that if they label it as confidential information, counsel has a duty to maintain that court shouldn't

[00:56:21] Speaker 03:
go on its own frolic, should respect that as well, whether it's Hubbard or the statute.

[00:56:26] Speaker 06:
I think generally speaking, yes, assuming... Generally speaking always makes me scared.

[00:56:30] Speaker 03:
Sure.

[00:56:30] Speaker 06:
Well, I guess the reason I say that is because, as I mentioned earlier, in this case, there was information that was turned over and designated as confidential by a state insurance regulator that that regulator subsequently put on its website.

[00:56:41] Speaker 03:
Okay, but that's the regulator saying, yeah, we gave you something that was confidential, we no longer think it's confidential, so you can have at it.

[00:56:48] Speaker 06:
That's right.

[00:56:48] Speaker 06:
But I think the reason I bring that up is because in that case, it's not as though the regulator, you know, notified the council that it was doing this.

[00:56:54] Speaker 06:
The council saw that this information had been disclosed and then made the decision that it wasn't confidential.

[00:56:59] Speaker 06:
But yes, in terms of – to answer your primary question, I think that is what non-confidential means in this context.

[00:57:06] Speaker 03:
So their argument also is

[00:57:08] Speaker 03:
at a real formalist level, hey, the statute doesn't speak to the courts, so this should be done under Hubbard rather than the statute.

[00:57:16] Speaker 03:
And you may get to the same end result, but we should follow the right steps here under the statute.

[00:57:21] Speaker 03:
What's the harm?

[00:57:22] Speaker 03:
I know your legal argument responds to that.

[00:57:24] Speaker 03:
What's the harm from doing it that way in your view?

[00:57:28] Speaker 06:
I think the harm is twofold.

[00:57:32] Speaker 06:
For one, it impedes this kind of second-guessing that Better Markets is suggesting that courts engage in here would, I think, have the chilling effect that we describe in our brief of making both companies and third-party regulators less forthcoming in the information they provide to the counsel.

[00:57:48] Speaker 03:
Okay, so it would harm the counsel – this is important – harm the counsel and its performance of its statutory duties, you fear?

[00:57:56] Speaker 06:
Yes, that's right.

[00:57:57] Speaker 06:
Is that realistic fear?

[00:57:59] Speaker 06:
I think it is.

[00:58:00] Speaker 06:
I think this case actually to some extent illustrates that because we're talking here, again, as I think Judge Garland alluded to and Mr. Tarani made clear, the information we're talking about here, much of it was made available by MetLife voluntarily to aid the council in its process.

[00:58:17] Speaker 06:
Much of that information included information, much of the information that met life provided voluntarily included data and information that met life found sensitive and proprietary.

[00:58:27] Speaker 06:
If that wasn't protected, the council would have never received that.

[00:58:31] Speaker 03:
Okay.

[00:58:32] Speaker 03:
And you had, I think, another response.

[00:58:33] Speaker 06:
Right.

[00:58:34] Speaker 06:
It was just a broader point, which is that I know there's been a lot made about the public's interest in accessing these documents.

[00:58:38] Speaker 06:
The public also has an interest, I think, in judicial efficiency.

[00:58:41] Speaker 06:
And in this particular case, I think it's important to just situate ourselves in terms of how the litigation actually progressed.

[00:58:49] Speaker 06:
At the point where Better Markets is now asking for this information in these other documents to go through and to have the parties go through line by line and redact them,

[00:58:58] Speaker 06:
This is information that the district court has already told us it didn't rely on.

[00:59:02] Speaker 06:
And to force the district court to go through thousands of pages in doing this when it's not actually going to facilitate the public's understanding of her decision, I think there is a reasonable interest in judicial efficiency there.

[00:59:13] Speaker 04:
Can I ask a question about the mechanics of the confidentiality process just for a second?

[00:59:16] Speaker 04:
So it sounds like if an entity submits something and designates it as confidential,

[00:59:22] Speaker 04:
then it's it's not accepted at face value because at least you identified one situation in which there's pushback and that's a situation in which the agency would say well that's already public so how can it be confidential is that the is that

[00:59:38] Speaker 06:
Again, I'm talking about it.

[00:59:39] Speaker 06:
I think that's generally right.

[00:59:40] Speaker 06:
That's how it worked in this case.

[00:59:41] Speaker 06:
This is the first case that is proceeded to to litigation And so we're you know, this is all that I really have to go on in terms of what the council Yeah, yeah, and my question has been there may not be any answer because this is the first time because there aren't fixed rules But just based on your understanding of the practicalities of how this plays out

[00:59:59] Speaker 04:
Is there the possibility of pushback on the ground that what's not your designated as confidential is not that it's already been made public.

[01:00:07] Speaker 04:
It's just that we don't understand why this would have to be kept confidential.

[01:00:11] Speaker 06:
You know, I think if you're, if we were at the administrative stage and this hadn't yet proceeded to litigation, I don't think that, or are you talking about in a situation where this has proceeded to litigation?

[01:00:22] Speaker 06:
Because the reason I say, if we were at the administrative stage, I don't think there'd be a need at that point, given the council's general duty and, you know, just the way this is operating for the council to go and really push back.

[01:00:33] Speaker 06:
And I think there'd be a disincentive for the council to do so because it wants full and frank discussions with these companies.

[01:00:38] Speaker 06:
If we are,

[01:00:39] Speaker 06:
In litigation, again, this is the only case that we have to go on.

[01:00:43] Speaker 06:
And in this case, because the parties preemptively on their own made this information available, I'm not entirely sure what would happen.

[01:00:51] Speaker 01:
You drew a distinction at one point between information in the sealed appendix that was central to the court's decision and other.

[01:01:00] Speaker 01:
What's the other?

[01:01:02] Speaker 06:
Right.

[01:01:02] Speaker 06:
So the other, I think, is largely made up of these large submissions that MetLife made to the council voluntarily that contain information that MetLife wanted the council to have in the course of making its designation.

[01:01:15] Speaker 06:
Now, the council's final determination, I want to be very clear, discusses those submissions to the extent that it can and in places where it makes reference to specific numbers or data or information that is proprietary

[01:01:31] Speaker 01:
What's the difference in terms of the way that parties or the court treated that group of other material in the sealed appendix?

[01:01:40] Speaker 06:
Right.

[01:01:40] Speaker 06:
Well, I think, for one, the district court tells us in the ruling below that she did not rely on a lot of that other information.

[01:01:46] Speaker 01:
I assume it's the information she didn't rely on but nonetheless was in the record.

[01:01:50] Speaker 01:
What did she do with respect to looking at that to determine whether it was still confidential?

[01:01:57] Speaker 01:
was confidential or anything else.

[01:01:59] Speaker 06:
Right, well she tells us in her order here at JA-31 that she performed this independent evaluation of all of the materials.

[01:02:05] Speaker 06:
She doesn't tell us how she evaluated it.

[01:02:07] Speaker 01:
You were drawing a distinction.

[01:02:09] Speaker 01:
I'm just asking you what was your distinction.

[01:02:11] Speaker 01:
You seem to be saying that a much closer look was taken by the parties of the material on which the decision was based as compared to the material

[01:02:21] Speaker 01:
That it wasn't.

[01:02:22] Speaker 05:
Is that correct?

[01:02:22] Speaker 05:
Am I right about that?

[01:02:23] Speaker 05:
That's right.

[01:02:24] Speaker 05:
That's with respect to the parties.

[01:02:25] Speaker 05:
Again, I don't know... And you don't know what the court did?

[01:02:28] Speaker 05:
That's exactly right.

[01:02:28] Speaker 01:
Okay.

[01:02:29] Speaker 01:
Fair enough.

[01:02:29] Speaker 01:
Okay.

[01:02:31] Speaker 06:
All right.

[01:02:31] Speaker 06:
Thank you very much.

[01:02:32] Speaker 01:
I'd like to exercise my discretion here and here from MetLife.

[01:02:35] Speaker 01:
Just on that one question, I'd like to know whether you are... You do have a different position on what maintain confidentiality means, and if you do, if you want to give a sentence or two explaining why yours is the better position.

[01:02:49] Speaker 07:
We do have a different position, Your Honor, and we believe that D5A applies without regard to whether the material was previously in the public domain, because Congress wanted to ensure that companies would be confident in submitting their most sensitive information to FSOC, and if FSOC had the discretion to make that type of

[01:03:11] Speaker 07:
item by item determination as to whether the material was already publicly available, then companies would be chilled in their willingness to submit their highly sensitive proprietary information to the agency.

[01:03:23] Speaker 07:
Okay, thank you.

[01:03:25] Speaker 01:
I know there's no time left.

[01:03:26] Speaker 01:
We'll give you two minutes, okay?

[01:03:28] Speaker 02:
Thank you.

[01:03:29] Speaker 02:
I appreciate it.

[01:03:38] Speaker 02:
A number of quick points.

[01:03:41] Speaker 02:
On the issue of what is the state of this record in terms of its opacity and to what extent did the district court rely, a clarification and then an implication.

[01:03:53] Speaker 02:
Yes, the district court decided to define a judicial record essentially in terms of what the court relied on in its opinion and suggested that there was nothing that couldn't be understood based on that sort of definition and approach.

[01:04:09] Speaker 02:
And we submit, number one, that's not the case.

[01:04:11] Speaker 02:
In fact, there's still significant opacity, even under that sort of restrictive view of what is a judicial record, that the parties themselves in making their case to the court cited 90 times.

[01:04:22] Speaker 02:
This has met life in its two briefs on the merits, 90 times to sealed information.

[01:04:27] Speaker 02:
And as I mentioned earlier at the outset, the district court itself, although it said there's

[01:04:33] Speaker 02:
No basis for my decision cannot be seen.

[01:04:38] Speaker 02:
There is a citation in her opinion at JA 9495 and footnote 8 to a document that she found, quote, very interesting that is, in fact, still under seal.

[01:04:51] Speaker 02:
With respect to opacity, it's also true that even at the appellate stage, counsel for MetLife relied significantly on oral argument

[01:05:00] Speaker 02:
on the Oliver Wyman report, on its face, highly germane to this case, because it talks about the adverse consequences of financial instability.

[01:05:11] Speaker 02:
I don't want to interrupt you.

[01:05:13] Speaker 02:
Well, let me round out.

[01:05:14] Speaker 02:
The point I wanted to make was there's an extraordinary amount of opacity still.

[01:05:19] Speaker 02:
That's why we advocate for going back to the core definition of what's a judicial record here and subject the entire joint appendix to a Hobbit analysis.

[01:05:29] Speaker 02:
So we don't have to mind read.

[01:05:31] Speaker 02:
We don't have to play games about what the court did or didn't rely on.

[01:05:34] Speaker 02:
And finally, on that, the virtue of using a relevant standard is that

[01:05:40] Speaker 02:
The public is also entitled to know what components of the record the district court decided not to cite or rely on.

[01:05:48] Speaker 02:
That in itself is a very significant thing, especially in a case of this.

[01:05:52] Speaker 03:
So I am going to interrupt now.

[01:05:53] Speaker 03:
So the FEC case, they argue, compels a ruling against you here because any person does not refer to the courts in the FEC statute.

[01:06:07] Speaker 03:
Your response?

[01:06:09] Speaker 02:
We have always taken the position, Your Honor, that in-ray sealed case does nothing to undermine our position here.

[01:06:15] Speaker 02:
And the reason is the issue before the court in in-ray sealed was not whether or not

[01:06:23] Speaker 02:
sensitive information should or should not be unsealed, it was whether the FEC had the right to try and do that in a subpoena enforcement action.

[01:06:32] Speaker 02:
Those are two very different issues, and the Court's opinion is quite clear in saying

[01:06:38] Speaker 02:
Frankly, although we view the section of the FECA as evincing a congressional, a significant privacy interest in the minds of Congress, the Court said specifically it might actually be possible under Hubbard to conclude that notwithstanding the statute,

[01:06:55] Speaker 02:
that information should see the light of day.

[01:06:57] Speaker 02:
All it said was the agency itself could not in rogue-like fashion come in and splay out on the public record what is classically sensitive investigative information.

[01:07:09] Speaker 03:
Yeah, there's harsh language about the agency in that case.

[01:07:11] Speaker 03:
That is true in what they have done.

[01:07:13] Speaker 03:
Okay, next question.

[01:07:15] Speaker 03:
The government argues that this will harm the council's process and thereby thwart the overall statutory objectives here.

[01:07:24] Speaker 03:
Your response to that?

[01:07:25] Speaker 02:
One very concrete, one general.

[01:07:28] Speaker 02:
I would recommend that the court consult the motion to compel both the parties' briefs on that issue and the district court's order resolving it.

[01:07:38] Speaker 02:
What's apparent from the parties' briefs in the first instance is that neither ESSAC nor MetLife actually regard 5322 as an absolute bar.

[01:07:49] Speaker 02:
In fact, MetLife itself belittled the claim

[01:07:52] Speaker 02:
that FSOC should be entitled to retain the information on so slender a ground as chilling discussions with state regulators.

[01:08:02] Speaker 02:
And the court itself, when it rendered its decision, said, in fact, whatever confidentiality interest is embodied in 5322, it must yield to

[01:08:13] Speaker 02:
met life's right to have review of the designation on a full administrative record.

[01:08:18] Speaker 02:
We submit that the natural follow-on conclusion is it must also submit to the public's century-old right to know.

[01:08:26] Speaker 03:
The fact is that... I think, and maybe you've captured this, but I think the point the government's saying is they're not going to be able to get the information they need to make good, correct decisions

[01:08:39] Speaker 03:
absence some assurance of confidentiality and the ability to thereby encourage more information to be submitted to the council.

[01:08:51] Speaker 03:
And that's a weighty argument.

[01:08:54] Speaker 02:
There are three arguments.

[01:08:56] Speaker 02:
One is just, again, as a matter of statutory interpretation, in our view, 5322 just doesn't bind a court.

[01:09:02] Speaker 02:
It only applies to the agency itself, number one.

[01:09:06] Speaker 02:
Number two, we think in general, and there's evidence for it in this record and in HSBC, the notion that information is dangerously sensitive and cannot see the light of day is typically and often exaggerated.

[01:09:23] Speaker 02:
Not always.

[01:09:24] Speaker 02:
Not always.

[01:09:26] Speaker 03:
I don't think we can generalize on that.

[01:09:28] Speaker 02:
Well, I think we can say that it sometimes is, and that's precisely why a discriminating evaluation under Hubbard is necessary.

[01:09:37] Speaker 03:
Then my third question, I might have cut you off.

[01:09:40] Speaker 03:
No, I'm fine.

[01:09:45] Speaker ?:
Okay.

[01:09:46] Speaker 03:
I think the argument is, yeah, you could do it under Hubbard, but it'll always be an abuse of discretion for a district court to release anything that is otherwise confidential in the counsel process.

[01:09:58] Speaker 03:
So whether you go left or go right, you're ending up in the same place, which is this kind of material can't be disclosed.

[01:10:07] Speaker 03:
And they prefer the statutory process because there may be

[01:10:12] Speaker 03:
district courts that jump the rails on occasion, that causes problems.

[01:10:17] Speaker 03:
So what's your response to that general argument by the other side?

[01:10:25] Speaker 02:
I just don't think, again, we're sort of getting to the core issue, which is what Congress actually intended or said.

[01:10:34] Speaker 02:
It just doesn't follow that there's an absolute prohibition on information submitted to the Council in the

[01:10:44] Speaker 02:
judicial context.

[01:10:46] Speaker 02:
What we're ultimately talking about is the fundamental presumptive right of access to judicial records and the extraordinary interest that that serves measured against, in this case, a sweeping allegation that this is just too sensitive to be exposed to the light of day without any kind of discriminating analysis and determination.

[01:11:10] Speaker 02:
That's what we're asking for under Hubbard.

[01:11:13] Speaker 01:
Take a brief break while Council play musical chairs.