WEST PALM BEACH – A judge in the U.S. District Court for the Southern District of Florida recently denied the Consumer Financial Protection Bureau's challenge to confidential designations desired by the defendant, Ocwen Financial Corporation, in a case in which CFPB is suing Ocwen for alleged violations of several federal consumer financial protection laws.
The June 25 court order by U.S. District Judge William Matthewman characterizes the case as “a government enforcement action,” citing the CFPB as the agency alleging violations. The alleged violations include improperly calculated loan balances, borrower payments which were allegedly wrongly allocated, errors in escrow processes and negligence in addressing consumer complaints.
In the course of the legal challenge, CFPB and defendant entered into a “stipulated protective order” or SPO, that governs confidentiality of information.
The court document shows that after going through the process of interrogatories, the defendant argued that other information outside of SPO guidelines also deserves the confidentiality designation.
CFPB's motion challenged this assertion.
“Plaintiff argues that defendants have not established good cause to maintain their narrative answers under seal, and that any reason for their confidentiality is significantly outweighed by the substantial public interest in this government enforcement action,” the court wrote. “According to plaintiff, the narrative answers merely describe Ocwen's practices … (and) do not constitute or reveal trade secrets or innovative practices coveted by other businesses. Plaintiff adds that the practices described in the narrative answers are not secrets and are actually consistent with the practices described by plaintiff in its complaint.”
One of the defendant's arguments in the successive motions is that since defendants are still participating in discovery, the plaintiff's motion was premature.
Defendants claim that CFPB has not demonstrated any “real need for de-designation at this time.”
“Defendants argue that if plaintiff uses the information in support of a dispositive motion, they should raise any de-designation demands at that point in time,” the court wrote.
After citing case law over confidentiality and evaluating the information in question, the court was persuaded to the defendant's overall argument.
“The court finds that, at this stage in litigation, the defendant has appropriately designated the interrogatory answers as confidential under the Stipulated Protective Order,” the court wrote. “The answers, produced in response to plaintiff's Interrogatories, are considered discovery material and therefore are not subject to the common-law right of access.”
The court's conclusion notes that “defendants have demonstrated that there is good cause to designate the narrative answers at issue as confidential during the discovery phase of litigation.” Consequently, the court denied the plaintiff's motion to challenge the defendant's confidential designations but left open the plaintiff's option to challenge confidential designations later in the case.