Page 1 AFFIDAVIT OR AFFIRMATION IN SUPPORT OF PROPOSED OSC/EXPARTE APP: FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
INDEX NO. 654765/2019
RECEIVED NYSCEF: 08/20/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: COMMERCIAL DIVISION
WALMART INC. (f/k/a WAL-MART STORES,
INC.),
Plaintiff,
- against TESLA ENERGY OPERATIONS, INC. (f/k/a
SOLARCITY CORPORATION),
Defendant.
Index No.: ___________/2019
EMERGENCY AFFIRMATION OF
JAMES P. ROUHANDEH IN
SUPPORT OF PLAINTIFF’S
APPLICATION FOR A
TEMPORARY RESTRAINING
ORDER PERMITTING PLAINTIFF
TO FILE CONFIDENTIAL
DOCUMENTS UNDER SEAL OR
WITH REDACTIONS
JAMES P. ROUHANDEH affirms pursuant to CPLR 2106:.
I am an attorney admitted to practice in the State of New York and a member of
the firm of Davis Polk & Wardwell LLP, counsel for Plaintiff Walmart Inc. (f/k/a Wal-Mart
Stores, Inc.) (“Plaintiff” or “Walmart”). I submit this Emergency Affirmation in support of
Plaintiff’s Application for a Temporary Restraining Order permitting Plaintiff to file confidential
documents under seal or with redactions..
Walmart has sued Defendant Tesla Energy Operations, Inc. (f/k/a SolarCity
Corporation) (“Tesla”). The lawsuit involves 244 similar, but not identical, contracts between
Walmart and Tesla. The contracts all contain a provision requiring the parties to keep the
contracts’ terms confidential. Those contracts are described in the Complaint and are also
annexed to the Complaint. The purpose of this emergency application is to permit Walmart’s
Complaint to remain in redacted format, and with certain exhibits redacted and other exhibits
under seal, so that Walmart may pursue its claims without violating the confidentiality provisions
of the contracts.
of 4Page 2 FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
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INDEX NO. 654765/2019
RECEIVED NYSCEF: 08/20/2019
The specific relief Walmart requests is permission (a) to file under seal Exhibits 1
through 244 of its Complaint (those are the contracts whose terms are confidential) and (b) to file
redacted versions of its Complaint and its Exhibits 245, 248, 249, and 250 (the redacted passages
disclose the contracts’ confidential terms)..
Tesla’s attorney has been provided with notice that Plaintiff is seeking a
temporary restraining order to file the aforementioned documents under seal or with redactions.
Tesla may opt to join (or at least not oppose) this application. But, even if Tesla opposes this
application, we respectfully submit that there is no unfair prejudice from permitting Walmart to
file a redacted version of its Complaint and its Exhibits on the public docket and to seal its
unredacted Complaint and Exhibits while this application is pending.
BACKGROUND.
Walmart’s complaint has 244 counts for breach of contract and 244 counts for
declaratory relief. The lawsuit alleges that Tesla has breached a series of Solar Power &
Services Agreements, Solar Power Lease and License Agreements, and Solar Power and Energy
Storage Services Agreements between Walmart and Tesla (collectively, the “Agreements”)..
Each of the Agreements contains a provision titled “Confidentiality Obligation”
that states:
If either Party provides confidential information, including business plans,
strategies, financial information, proprietary, patented, licensed, copyrighted or
trademarked information, and/or technical information regarding the design,
operation and maintenance of the System or of Host’s business (“Confidential
Information”) to the other or, if in the course of performing under this Agreement
or negotiating this Agreement a party learns Confidential Information regarding
the other Party, the receiving Party shall (a) protect the Confidential Information
from disclosure to third parties with the same degree of care accorded its own
confidential and proprietary information, and (b) refrain from using such
Confidential Information, except in the negotiation and performance of this
Agreement. . . . The terms of this Agreement (but not its execution or existence)
of 4Page 3 FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
INDEX NO. 654765/2019
RECEIVED NYSCEF: 08/20/2019
shall be considered Confidential Information for purposes of this Article, [with
exceptions not applicable here]..
Based on this provision, Walmart wishes to file the Agreements under seal and to
redact portions of the Complaint and Exhibits 245 and 248 through 250 to the Complaint that
describe the terms of the Agreements (but not portions that relate to the Agreements’ execution
or existence)..
The existence of confidentiality provisions in an agreement provides good cause
for filing the agreement under seal. See In re East 51st Street Crane Collapse Litig., 31 Misc. 3d, 416 (Sup. Ct. N.Y. Cty. 2011) (listing “maintaining the confidentiality of the settlement
terms,” among other factors, in support of sealing confidential agreement); Tong v. S.A.C.
Capital Mgmt., LLC, 16 Misc. 3d 401, 413 (Sup. Ct. N.Y. Cty. 2007) (listing “the Agreement’s
confidentiality provisions,” among other factors, in support of entering a sealing order).
THE EXIGENT CIRCUMSTANCES.
Walmart and Tesla have tried to resolve their dispute and the time for Tesla to
cure its alleged breaches has been extended. The parties, however, have not been successful in
reaching a resolution..
The last cure period for Tesla’s contractual breaches expired at the close of
business on August 15, 2019. Walmart has now filed a lawsuit and, mindful of its confidentiality
obligations, has also filed this application. This application and a copy of the complaint have
been emailed to Tesla's counsel, Fred Norton. The cover email is attached as Exhibit A..
We respectfully request the Court’s prompt attention to this application because
the New York County Clerk’s Protocol On Courthouse And County Clerk Procedures For
Electronically Filed Cases (Revised January 23, 2019) requires us to seek a sealing order with an
expedited temporary restraining order restricting access.
of 4Page 4 INDEX NO. 654765/2019
FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
RECEIVED NYSCEF: 08/20/2019
No Prior Relief Requested.
There has been no prior application before this Court or any other judge for the
relief requested herein.
Dated: New York, New York
August 20, 2019
/s/ James P. Rouhandeh
James P. Rouhandeh
of 4
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AFFIDAVIT OR AFFIRMATION IN SUPPORT OF PROPOSED OSC/EXPARTE APP: FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
INDEX NO. 654765/2019
RECEIVED NYSCEF: 08/20/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: COMMERCIAL DIVISION
WALMART INC. (f/k/a WAL-MART STORES,
INC.),
Plaintiff,
- against TESLA ENERGY OPERATIONS, INC. (f/k/a
SOLARCITY CORPORATION),
Defendant.
Index No.: ___________/2019
EMERGENCY AFFIRMATION OF
JAMES P. ROUHANDEH IN
SUPPORT OF PLAINTIFF’S
APPLICATION FOR A
TEMPORARY RESTRAINING
ORDER PERMITTING PLAINTIFF
TO FILE CONFIDENTIAL
DOCUMENTS UNDER SEAL OR
WITH REDACTIONS
JAMES P. ROUHANDEH affirms pursuant to CPLR 2106:
1.
I am an attorney admitted to practice in the State of New York and a member of
the firm of Davis Polk & Wardwell LLP, counsel for Plaintiff Walmart Inc. (f/k/a Wal-Mart
Stores, Inc.) (“Plaintiff” or “Walmart”). I submit this Emergency Affirmation in support of
Plaintiff’s Application for a Temporary Restraining Order permitting Plaintiff to file confidential
documents under seal or with redactions.
2.
Walmart has sued Defendant Tesla Energy Operations, Inc. (f/k/a SolarCity
Corporation) (“Tesla”). The lawsuit involves 244 similar, but not identical, contracts between
Walmart and Tesla. The contracts all contain a provision requiring the parties to keep the
contracts’ terms confidential. Those contracts are described in the Complaint and are also
annexed to the Complaint. The purpose of this emergency application is to permit Walmart’s
Complaint to remain in redacted format, and with certain exhibits redacted and other exhibits
under seal, so that Walmart may pursue its claims without violating the confidentiality provisions
of the contracts.
1 of 4
PDF Page 3
FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
3.
INDEX NO. 654765/2019
RECEIVED NYSCEF: 08/20/2019
The specific relief Walmart requests is permission (a) to file under seal Exhibits 1
through 244 of its Complaint (those are the contracts whose terms are confidential) and (b) to file
redacted versions of its Complaint and its Exhibits 245, 248, 249, and 250 (the redacted passages
disclose the contracts’ confidential terms).
4.
Tesla’s attorney has been provided with notice that Plaintiff is seeking a
temporary restraining order to file the aforementioned documents under seal or with redactions.
Tesla may opt to join (or at least not oppose) this application. But, even if Tesla opposes this
application, we respectfully submit that there is no unfair prejudice from permitting Walmart to
file a redacted version of its Complaint and its Exhibits on the public docket and to seal its
unredacted Complaint and Exhibits while this application is pending.
BACKGROUND
5.
Walmart’s complaint has 244 counts for breach of contract and 244 counts for
declaratory relief. The lawsuit alleges that Tesla has breached a series of Solar Power &
Services Agreements, Solar Power Lease and License Agreements, and Solar Power and Energy
Storage Services Agreements between Walmart and Tesla (collectively, the “Agreements”).
6.
Each of the Agreements contains a provision titled “Confidentiality Obligation”
that states:
If either Party provides confidential information, including business plans,
strategies, financial information, proprietary, patented, licensed, copyrighted or
trademarked information, and/or technical information regarding the design,
operation and maintenance of the System or of Host’s business (“Confidential
Information”) to the other or, if in the course of performing under this Agreement
or negotiating this Agreement a party learns Confidential Information regarding
the other Party, the receiving Party shall (a) protect the Confidential Information
from disclosure to third parties with the same degree of care accorded its own
confidential and proprietary information, and (b) refrain from using such
Confidential Information, except in the negotiation and performance of this
Agreement. . . . The terms of this Agreement (but not its execution or existence)
2
2 of 4
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FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
INDEX NO. 654765/2019
RECEIVED NYSCEF: 08/20/2019
shall be considered Confidential Information for purposes of this Article, [with
exceptions not applicable here].
7.
Based on this provision, Walmart wishes to file the Agreements under seal and to
redact portions of the Complaint and Exhibits 245 and 248 through 250 to the Complaint that
describe the terms of the Agreements (but not portions that relate to the Agreements’ execution
or existence).
8.
The existence of confidentiality provisions in an agreement provides good cause
for filing the agreement under seal. See In re East 51st Street Crane Collapse Litig., 31 Misc. 3d
406, 416 (Sup. Ct. N.Y. Cty. 2011) (listing “maintaining the confidentiality of the settlement
terms,” among other factors, in support of sealing confidential agreement); Tong v. S.A.C.
Capital Mgmt., LLC, 16 Misc. 3d 401, 413 (Sup. Ct. N.Y. Cty. 2007) (listing “the Agreement’s
confidentiality provisions,” among other factors, in support of entering a sealing order).
THE EXIGENT CIRCUMSTANCES
9.
Walmart and Tesla have tried to resolve their dispute and the time for Tesla to
cure its alleged breaches has been extended. The parties, however, have not been successful in
reaching a resolution.
10.
The last cure period for Tesla’s contractual breaches expired at the close of
business on August 15, 2019. Walmart has now filed a lawsuit and, mindful of its confidentiality
obligations, has also filed this application. This application and a copy of the complaint have
been emailed to Tesla's counsel, Fred Norton. The cover email is attached as Exhibit A.
11.
We respectfully request the Court’s prompt attention to this application because
the New York County Clerk’s Protocol On Courthouse And County Clerk Procedures For
Electronically Filed Cases (Revised January 23, 2019) requires us to seek a sealing order with an
expedited temporary restraining order restricting access.
3
3 of 4
PDF Page 5
INDEX NO. 654765/2019
FILED: NEW YORK COUNTY CLERK 08/20/2019 07:08 PM
NYSCEF DOC. NO. 60
RECEIVED NYSCEF: 08/20/2019
No Prior Relief Requested
12.
There has been no prior application before this Court or any other judge for the
relief requested herein.
Dated: New York, New York
August 20, 2019
/s/ James P. Rouhandeh
James P. Rouhandeh
4
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