CWA is the exclusive collective negotiations agent for approximately 50,000 public employees throughout New Jersey, a majority of whom are members of the Public Employees' Retirement System (“PERS”). However, following the lead of other states investing with and benefiting from partnerships with private equity firms, New Jersey adopted an Alternative Investments Program (“AIP”). The side letter agreement also notes plaintiffs' pending appellate litigation challenging the legality of the regulations authorizing the AIP, Communications Workers of America v. According to Clark, these confidentiality terms allow the SIC, now a thirteen-member body that includes two union representatives, to obtain “a summary of the material terms of the State's investment in each fund, including the name and type of the fund, the size and geographic focus of the fund, a general description of the fund's investment strategy, the term of the fund and the investment period, the amount of the State's commitment, and the management fee paid to the fund.”On June 21, 2005, CWA submitted requests pursuant to OPRA and the common law right of access for all contracts and proposed contracts the DOI or the Department of Treasury had with the private equity funds. Defendants provided these documents on May 22, 2007. Furthermore, in his certification, Ezersky establishes the manner in which the agreements describe trade, investing and other commercial and financial matters:(1) The Investment Agreements describe the capital structure of the Fund, the investment parameters and limitations imposed on the general partner's investment decisions, the situations in which consent must be obtained from the limited partners and a variety of other private information about the internal operations and limitations of the Fund.
Historically, employees of the DOI invested these monies in variable return securities and public fixed-income, i.e., stocks and bonds. Specifically, the so-called “side letter agreement” gives the State a seat on the advisory board, acknowledges the State's status as a tax-exempt entity, sets out additional notice and reporting requirements, establishes limitations on indemnity and liability and incorporates provisions regarding the State Investment Council's (“SIC”) Policy Concerning Political Contributions and Prohibitions on Investment Management Business. In addition, the partnership agreements and the side letter agreements establish the confidentiality of a particular fund, allowing only three employees of the DOI and its Director to have access to the entirety of the agreements. The scheduling order was modified on a number of occasions due to the related matter before the Appellate Division, Communications Workers of America v. On May 11, 2007, the court entered an order for production, under seal, of the nine documents and for an in camera review. With regard to the partnership and side letter agreements between the State and defendant intervenor Quadrangle Group, Peter Ezersky, managing principal of Quadrangle Group LLC, asserts the proprietary nature of the partnership and letter agreements:(1) Quadrangle has spent countless hours developing and implementing the terms of our Investment Agreements․ This effort has consisted of years of diligent work by Quadrangle and its principals as well as numerous legal and tax advisors and consultants.(2) Quadrangle derives independent economic value, both actual and potential, from the fact that the confidential terms of [the] Investment Agreements are not known to the public, including competing private equity funds that could obtain economic value from the disclosure of such information.(3) Quadrangle consistently and rigorously polices the confidentiality of the terms governing the investment partnerships we sponsor, including the Fund.(4) The Investment Agreements are not publicly available, and are delivered in confidence to Common Pension Fund E as a limited partner.(5) The information contained in the Investment Agreements is provided to Quadrangle employees and agents only on a “need to know” basis and to those persons whose function within the organization requires the knowledge of that specific information in the course of their business.(6) The Investment Agreements contain express confidentiality provisions obligating each limited partner to maintain the confidentiality of the terms of the Agreements and non-public information regarding the general partner and the partnership, “except as otherwise required by law.”(7) While the partnerships' Certificates of Limited Partnership are publicly filed with the Secretary of State in Delaware, the investment agreements themselves are not publicly filed.(8) In circumstances where certain counter-parties of the funds have a legitimate business purpose to review the Investment Agreements (e.g.creditors), in each such instance the counter-party is first required to agree to keep the Investment Agreements confidential.
Under the AIP, the Common Pension Fund E was created. The agreements also set forth an accounting convention, how to allocate profits and losses of a fund, and how to address tax issues. The prayer for relief requests: (1) release of the records identified in the June 21, 2005, and June 23, 2005, record requests; (2) an award of attorney fees; and (3) any such other relief the court deems just and equitable. For were know that Oak Hill was of its term and only had a time to liquidate its knowledge would impact the the price potential buyers the portfolio company. OPRA deems confidential “information which, if disclosed, would give an advantage to competitors or bidders.” N. Second, having undertaken this laborious review, the court is satisfied when a document falls within one of the statutory exemptions, redaction is not required. Because the terms and conditions of the Side Letter for Blackstone Capital Partners V.
In response, plaintiffs requested a breakdown of the charges, challenged the special service fee as excessive, and objected to the time frame to produce some of the documents. The parties filed supplemental briefs on March 4, 2008. Moreover, public policy requires courts to construe narrowly OPRA's limitations on the right to access government records. Against this backdrop, the cumulative representations set forth above, coupled with the in camera review, establish that the partnership and side letter agreements in general are the proprietary commercial or financial information of each of the defendant intervenors. 47:1A-1.1Defendants argue the court should apply the trade secrets test set forth in Hammock v.
Specifically, the State estimated a time period of approximately 500 hours of staff time to produce the 36,000 pages of documents responsive to the OPRA requests. Subsequently, the court set oral argument for February 26, 2008. The partnership agreements also restrict the outside activities of the general partners.(6) The partnership agreements limit the liability of the general partners and provide them with indemnification by the partnership for certain actions taken on behalf of the funds.(7) The partnership agreements grant limited partners the right to remove the general partner, to reduce or extend the term of the partnership or the investment period, and to participate on advisory committees that are able to review certain decisions made by the general partner.(8) The partnership agreements also provide mechanisms for limited partners to transfer their interests in the funds under certain conditions, to withdraw from the funds, to be excused from certain investments due to regulatory or other issues, or to co-invest with the fund in certain investments.(9) The partnership agreements set forth a number of accounting and other financial matters, including how assets of the fund are to be valued, how profits and losses are to be allocated, how committed capital is to be called by the fund, how financial information is to be reported to the limited partners and how various tax issues are to be addressed.(10) The partnership agreements set forth the amount of management fees and how they are to be paid, and set forth in detail how and when the general partners and limited partners are to receive distributions of proceeds received form investments.(11) The partnership agreements contain default provisions for violations of the terms of the agreements and mechanisms for resolving disputes arising from the agreements.(12) The letter agreements include provisions with respect to the State's right to a seat on the advisory board of the fund, provisions acknowledging the State's status as a tax-exempt entity, and additional notice or reporting requirements.(13) The letter agreements deal with certain legal restrictions applicable to the State, including limitations on indemnification and limitations on the contractual liability of the State due to its status as a sovereign entity. As noted in Hammock, a trade secret consists of “any formula, pattern, device or compilation of information which is used in one's business and which gives him an opportunity to obtain an advantage over competitors who do not know or use it,” Restatement of Torts § 757, comment b (1971), or “any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford a potential economic advantage over others.” Restatement (Third), Unfair Competition § 39 (Tentative Draft No.
As part of these communications, the defendants requested additional time to respond to the requests and requested a special service fee of $15,803.78 for the production of the documents. After several requests to extend the time to complete the aforementioned tasks, defendants submitted the redacted documents and a new Vaughn index on December 27, 2007. Clark also identifies how the agreements describe trade, investing and other commercial and financial matters:(1) The partnership agreements contain detailed information concerning the operations of the general partners and the partnerships themselves.(2) The partnership agreements typically will contain representations concerning the investment strategies and processes followed by the general partners.(3) They ․ set forth certain guidelines and limitations on the general partners' investment activities on behalf of the fund.(4) They set limits on the types of investments that may be made, the amount of capital that may be invested in the aggregate or in a particular transaction, and the length of time during which capital may be invested.(5) The partnership agreements often include “key person” provisions, designating certain investment management professionals of the general partner as vital to the operation of the Funds and providing contingencies triggered by the departure of one or more of these professionals. While Hammock addressed the right of public access to judicial records and materials filed with the court in civil litigation, the Court delineated the test for determining trade secrets.
The PERS and TPAF, along with three other New Jersey State pension funds, hold approximately $79 billion in pension system assets that the DOI manages in various investment vehicles. Between June 23, 2005, and October 12, 2005, the parties engaged in a series of correspondence. On October 11, 2007, in writing, defendants acknowledged the request by the court to review each agreement, for possible redaction, and to provide a more detailed Vaughn index. This [summary] allows the SIC to review the material terms of the State's investment in the funds, without disclosing confidential information, including specific details of the fund's organizational structure and its investment strategies and parameters.
Annmarie Pinarski for the plaintiff Communications Workers of America (Weissman & Mintz, attorneys; Ms. Defendants denied the request for disclosure on the grounds that: (1) the documents contain trade secret and proprietary commercial or financial information exempt from disclosure under N.
Lichtblau, Assistant Attorney General, and Rubin D. The defendants are John Mc Cormac, Treasurer of the State of New Jersey, and Barbara O'Hare, manager of the Government Records Access Unit (“defendants”).
Warburg Pincus will not accept investment by persons who will not agree to stringent confidentiality rules. The fourth factor addresses the value of the information to the owner and to his competitors. It was held in those cases that the justifications for non-disclosure were vague and conclusory, and did not show “substantial harm.”The reasons offered for withholding documents must be specific. Each is a unique blend of variables: the amount of debt each fund may carry, what fees the general partner takes from a fund's profits, the limits on the general partner's powers, how a withdrawing partner redeems their investment, how the fund distributes gains, and various other matters. COMMON LAW RIGHT OF ACCESSThe common law right of access to public records requires the court to balance the public interest in non-disclosure against the private interest in securing access to the information. For example, in Texas and Michigan, the Legislatures amended the statutes regarding pension funds for the respective State Universities to classify as confidential, information regarding the funds' portfolio and performance, which had previously been ordered disclosed to the public. An in camera review by this court of all of the agreements establishes that the terms of the agreements are complex, and the practice in the industry is to maintain these as confidential and to not accept investments from entities that will not agree to do so or cannot honor such agreements.
Only Warburg Pincus limited partners, members of Warburg Pincus and Warburg Pincus' agents, employees and attorneys are provided the information on a need-to-know basis.(2) The Investment Agreements ․ are not subject to public disclosure under the federal security laws.(3) Warburg Pincus requires all investors in its limited partnership interests to agree in writing that they will not disclose the provisions of the Investment Agreements. Finally, DOI maintains these agreements in a locked filing cabinet. Mo.1998) where the party arguing for nondisclosure failed to satisfy part two of the National Parks test: that disclosure would “would cause substantial harm to the competitive position of the person from whom the information was obtained.” National Parks, supra, 498 F.2d at 770. The partnership agreements and the side letter agreements differ significantly from one another. Under the changes, the name, address and vintage year of each alternative investment fund; how many public dollars are committed to an alternative investment fund over its lifespan; the total public dollars committed to all alternative investment funds; the yearly amount of cash distributions that the public pension fund receives from any alternative investment fund; the year-to-year amount of assets that the public fund has committed in a given alternative investment fund; certain measures of a fund's performance; the amount that the public fund pays in fees to the managers of the alternate investment fund; and the amount of profit the public California Public Records Act (“CPRA”), 2005 Cal. Due diligence material; financial statements of the alternative investment fund; materials from meetings regarding the alternative investment fund; portfolio positions in which the alternative funds invest; capital call and distribution notices; and significantly, alternative investment agreements and all related documents, remain confidential. Moreover, experience in other states further bolsters defendants' position. In conclusion, a balancing of the competing interests shows the public interest in confidentiality weighing more heavily, especially in light of other states' experiences with court-ordered disclosure, and plaintiffs do not have a common law right of access to the partnership or side letter agreements.
47:1A-1.1; and (3) the public need for confidentiality outweighs the plaintiffs' interest in disclosure under the common law.
OPEN PUBLIC RECORDS ACT(“OPRA”)OPRA provides that “government records shall be readily accessible for inspection, copying, or examination by the citizens of this State, with certain exceptions ․“ N. However, for completeness, the court will address whether the government has shown that any information improperly denied as proprietary commercial and financial information was properly denied as trade secrets.
Specifically, Rule 506 only requires private equity funds to provide identifying information, the number of investors, the dollar amount of securities sold, the expenses of issuance, and a general statement of the intended use of the proceeds. Finally, if defendants fail to justify denying the record, the court shall order that plaintiff have access and award a reasonable attorney's fee. OPRA provides that:[a] government record shall not include the following information which is deemed to be confidential ․: trade secrets and proprietary commercial or financial information obtained from any source. Neither of these terms is defined in OPRA and there are no reported decisions, in New Jersey, interpreting the exemption. In his certification, Cutter also describes the trade, investing and other commercial and financial matters in the agreements:(1) [The] information includes (i) provisions of the Investment Agreements relating to certain tax matter affecting Warburg Pincus and its limited partners, (ii) information on Warburg Pincus' investment structure and specific investment authority and limitations, (iii) the detailed mechanism for allocating profits and losses between WP IX LLC, as the general partner, and the limited partners, including upon liquidation, (iv) provisions governing various obligations of the general partner, (v) the detailed mechanism for calculating distributions, and (vi) rules governing the treatment of fees and expenses ․, [ (vii) the] ability to create other funds or make other investments, [ (viii) ] provision relating to the implementation of alternative investment structures, [ (ix) ] governance rights and restrictions on personnel changes at the general partner, and [ (x) ] valuation procedures and reporting obligations.(2) Public disclosure of ․ the Investment Agreements would reveal to [competitors] proprietary and sensitive information, confidential methods, business practices and strategies.(3) Disclosure of [the Agreements] ․ would allow other funds a window into Warburg Pincus' strategy and the ability to anticipate or thwart that strategy. The fifth factor relates to the amount of effort or money expended by the owner in developing the information. Moreover, the agreements detail a fund's limitations on buying and selling investments. Significantly, the Legislature has recognized that the interest of plaintiffs and their interests are met without public disclosure of the agreements. CONCLUSIONFor the reasons set forth in this opinion, the complaint is dismissed as it relates to the nine documents.