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Firms Keep a Lid on Suit Against the Government

WASHINGTON (CN) - A federal judge used heavy redactions as a compromise in weighing corporate privacy rights against the public's right to access court proceedings.

The ruling published Thursday by U.S. District Judge Randolph Moss thus fails to identify the five companies and one individual that briefly sued the Consumer Financial Protection Bureau over the summer.

The dispute stemmed from the agency's purported decision to bar an attorney for John Doe and the unnamed companies from a voluntary hearing it held during a preliminary investigation of the companies.

In seeking to have the proceedings sealed, Doe and the unnamed companies noted that publicizing their claims would draw unwanted attention to a Consumer Financial Protection Bureau investigation that is otherwise private.

Before the case was assigned to Moss, U.S. District Judge Emmet Sullivan had the case temporarily sealed as the court's acting chief.

The companies withdrew their suit in August, about two weeks in, after an evidentiary hearing.

Though the matter is concluded, Judge Moss found that it cannot be fully unsealed.

The nine-page decision begins with Moss acknowledging that judicial proceedings are traditionally matters of public record, and therefore any "the public interest weighs strongly in favor of unsealing the case."

Moss also agreed, however, there is a "significant" possibility unsealing the records could hurt the plaintiffs' reputations, even if the companies overstated the potential damage unsealing the records could cause.

"The precise magnitude of the harm plaintiffs face is difficult to determine on this record, and it is of course possible that plaintiffs overstate the severity of the injury that disclosure of their identities would inflict," Moss wrote. "Nonetheless, it is not difficult to see how disclosure of the fact that an entity is subject to investigation by federal authorities would inflict non-trivial reputational, and possibly associated financial, harm on that entity. This unrebutted, commonsense showing favors keeping the case under seal."

After weighing these two competing interests, Moss determined there was no way to justify keeping the entire record of the case under seal, but that it would be appropriate to allow the companies to submit redacted versions of files in the case.

Venable attorney Allyson Baker represents the first three companies in the case. Richard Scheff, of Montgomery McCroacken, represents the fourth and the fifth companies, as well as the unnamed individual.

Neither attorney was available for comment on this story.

John Coleman, who represents the Consumer Financial Protection Bureau, did not respond to request for comment.

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