In re: Midland Nat'L Life Ins. Co.

Filing

FILED PER CURIAM OPINION (BETTY BINNS FLETCHER, KIM MCLANE WARDLAW and JAY S. BYBEE) REVERSED AND REMANDED. FILED AND ENTERED JUDGMENT. [8262161] [11-55369, 11-55372]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re MIDLAND NATIONAL LIFE
INSURANCE CO ANNUITY SALES
PRACTICES LITIGATION,
ESTATE OF JOHN G MIGLIACCIO;
CARMEN MIGLIACCIO; MARY P.
MUNOZ; ROBERT D. KAISER, On
Behalf of Themselves and All
Others Similarly Situated; NANCY
BENDZAK, as attorney-in-fact for
Mary Bendzak; MARY BENDZAK,
individually and on Behalf of All
Others Similarly Situated,
Plaintiffs-Appellees,
v.
ALLIANZ LIFE INSURANCE
COMPANY OF NORTH AMERICA,
Intervenor-Appellant,
AMERICAN EQUITY INVESTMENT LIFE
INSURANCE COMPANY,
Intervenor,
MIDLAND NATIONAL LIFE
INSURANCE, an Iowa corporation,
Defendant,
KATHLEEN MCWHORTER,
Objector.

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No. 11-55369
D.C. No.
2:07-ml-01825CAS-MAN

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IN RE MIDLAND NATIONAL LIFE INSURANCE CO

VIDA F. NEGRETE, as Conservator
for Everette E. Ow, an individual,
and on behalf of all others
similarly situated persons,
Plaintiff-Appellee,
v.
ALLIANZ LIFE INSURANCE
COMPANY OF NORTH AMERICA,
Intervenor-Appellant,
AMERICAN EQUITY INVESTMENT LIFE
INSURANCE COMPANY,
Intervenor,
FIDELITY AND GUARANTY LIFE
INSURANCE COMPANY,
Defendant,
MAJORIE MACK; GERALD MACK,
Movants.

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No. 11-55372
D.C. No.
2:05-cv-06837-CASMAN
OPINION

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Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted
June 4, 2012—Pasadena, California
Filed July 25, 2012
Before: Betty B. Fletcher, Kim McLane Wardlaw, and
Jay S. Bybee, Circuit Judges.
Per Curiam Opinion

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IN RE MIDLAND NATIONAL LIFE INSURANCE CO

COUNSEL
James F. Jorden, Denise A. Fee (argued), Sonia Escobio
O’Donnell, Jorden Burt LLP, Washington, D.C., for
intervenor-appellant Allianz Life Insurance Company of
North America.

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IN RE MIDLAND NATIONAL LIFE INSURANCE CO

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John J. Stoia, Jr., Theodore J. Pintar, Kevin K. Green
(argued), Rachel L. Jensen, Robbins Geller Rudman & Dowd
LLP, San Diego, California, for the plaintiffs-appellees.

OPINION
PER CURIAM:
Intervenor Allianz Life Insurance Company of North
America (“Allianz”) appeals the district court’s order denying
its motion to unseal judicial records.1 Because the records at
issue were filed in connection with pending summary judgment motions, we reverse and remand to the district court to
grant the motion.
I
We recount the procedural background of the underlying
cases to “provide[ ] context for the unsealing order.” Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1176 (9th
Cir. 2006). The district court presided over four class action
cases, each brought by the same plaintiffs’ counsel. Plaintiffs
asserted similar claims against each defendant for RICO violations and violations of state law based on the marketing and
sales of annuity products to senior citizens. Fidelity & Guaranty Life Insurance Company (“Fidelity”) and Midland
National Life Insurance Company (“Midland”) are the defendants in the two underlying cases. Allianz and American
Equity Investment Life Insurance Company (“American Equity”) are the defendants in the other two cases.
1

The underlying district court cases were treated as related and have
been consolidated in this appeal. The motions to unseal and the district
court’s orders were substantially identical. We therefore refer to the
motion and order in the singular.

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IN RE MIDLAND NATIONAL LIFE INSURANCE CO

In 2007, Fidelity and Midland filed motions for summary
judgment. Plaintiffs opposed, and attached a declaration by
Craig McCann, Ph.D., to support their theory of causation and
class-wide damages. Fidelity and Midland both filed motions
based on Daubert to exclude Dr. McCann’s opinion.2 The district court appointed an expert witness, Zvi Bodie, Ph.D.,
under Federal Rule of Evidence 706, to assist the court with
resolving “central issues bearing on” the motions for summary judgment.
Dr. Bodie submitted a report evaluating Dr. McCann’s
opinion to the court and the parties. The defendants shared the
report with Allianz and American Equity. Plaintiffs challenged the admissibility of the report, however, and the parties in the two underlying cases litigated expert testimony
issues for the next two years. The district court ordered Dr.
Bodie’s report and the related records sealed until it determined whether the report was admissible.
In its case, Allianz also filed a motion for summary judgment and a Daubert motion to exclude Dr. McCann. The district court deferred ruling on those motions while considering
Fidelity and Midland’s similar summary judgment and Daubert motions. The district court explained that Dr. McCann’s
opinions were “such a central part of the plaintiffs’ case” that
the litigation of his opinion in the other cases would inform
the district court’s decision in the Allianz case. Both Fidelity
and Midland settled with the plaintiffs before the district court
ruled on the Daubert or summary judgment motions.
In November 2010, Allianz filed a motion to intervene in
the underlying cases. Allianz requested the unsealing of Dr.
Bodie’s report and of any related records.3 The district court
2

See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993).
In the motion to unseal, Allianz requested access to: (1) Dr. Bodie’s
report; (2) status reports and conferences related to Dr. Bodie; (3) filings
3

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granted the motion for limited purpose intervention but denied
Allianz’s motion to unseal the judicial records. The district
court ruled that the strong presumption in favor of public
access to judicial records did not apply to the records at issue
because they were attached to a non-dispositive Daubert
motion. Applying the “good cause” standard, the district court
ruled that Allianz had not offered a sufficiently compelling
reason to unseal the records.4
Allianz timely appealed.5
II
Aside from an unrelated motion for settlement approval,
there were no other matters pending in either underlying case
when the district court denied the motion to unseal. The order
denying the motion to unseal is therefore “appealable either
as a final order under 28 U.S.C. § 1291 or as a collateral
order.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d
1122, 1129 (9th Cir. 2003).
related to plaintiffs’ objections to Dr. Bodie’s report; (4) filings related to
the protective order for Dr. Bodie’s deposition; (5) supplemental declarations by Dr. McCann; (6) filings related to motions in limine for the Daubert hearing; and (7) any other documents related to Dr. Bodie or Dr.
McCann.
4
In December 2010, Allianz also filed a motion to appoint Dr. Bodie as
a Rule 706 expert in its own case. The district court denied the motion.
The district court later denied Allianz’s Daubert motion and renewed
motion for partial summary judgment. Negrete v. Allianz Life Ins. Co. of
Am., Nos. CV 05-6838, CV 05-8908, 2011 WL 4852314 (C.D. Cal. Oct.
13, 2011) (summary judgment); id., 2011 WL 4852305 (C.D. Cal. Oct. 13,
2011) (motion to exclude). The parties are preparing for a 2012 trial.
5
The class action against American Equity had a similar procedural posture, and American Equity joined in Allianz’s motion to intervene and
unseal records. American Equity did not join Allianz in appealing the district court’s order.

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IN RE MIDLAND NATIONAL LIFE INSURANCE CO

III
Allianz contends that the district court committed reversible error because it applied the wrong standard when denying
the motion to unseal. Allianz also argues that there are no
compelling reasons for the judicial records to remain sealed.
We review de novo whether the district court used the correct
legal standard when ruling on a motion to grant, lift, or modify a protective order. Phillips ex rel. Estates of Byrd v. Gen.
Motors Corp., 307 F.3d 1206, 1210 (9th Cir. 2002). We
review the district court’s ruling for abuse of discretion. Id.
A
[1] The public has a “general right to inspect and copy
public records and documents, including judicial records and
documents.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589,
597 (1978) (footnote omitted). This right extends to pretrial
documents filed in civil cases. San Jose Mercury News, Inc.
v. U.S. Dist. Court, 187 F.3d 1096, 1102 (9th Cir. 1999). If,
however, the documents are among those which have “traditionally been kept secret for important policy reasons,” such
as grand jury transcripts and pre-indictment warrant materials,
they are not subject to the right of public access. Times Mirror
Co. v. United States, 873 F.2d 1210, 1219 (9th Cir. 1989).
[2] Although the common law right of access is not absolute, “we start with a strong presumption in favor of access to
court records.” Foltz, 331 F.3d at 1135. A party seeking to
seal judicial records can overcome the strong presumption of
access by providing “sufficiently compelling reasons” that
override the public policies favoring disclosure. Id. When ruling on a motion to seal court records, the district court must
balance the competing interests of the public and the party
seeking to seal judicial records. Kamakana, 447 F.3d at 1179.
To seal the records, the district court must articulate a factual
basis for each compelling reason to seal. Id. Compelling rea-

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sons must continue to exist to keep judicial records sealed.
Foltz, 331 F.3d at 1136.
[3] We have “carved out an exception to the presumption
of access” to judicial records. Id. at 1135. This exception is
“expressly limited to” judicial records “filed under seal when
attached to a non-dispositive motion.” Id. Under the exception, “the usual presumption of the public’s right of access is
rebutted.” Phillips, 307 F.3d at 1213. Thus, a particularized
showing of “good cause” under Federal Rule of Civil Procedure 26(c) is sufficient to preserve the secrecy of sealed discovery documents attached to non-dispositive motions. Foltz,
331 F.3d at 1135, 1138. And once the right of access is rebutted, “the party seeking disclosure must present sufficiently
compelling reasons why the sealed discovery document
should be released.” Phillips, 307 F.3d at 1213.
B
The district court ruled that the records here fall into the
exception for sealed discovery documents attached to a nondispositive motion. The district court reasoned that the Daubert motion was non-dispositive because it “would not have
been a determination on the merits of any claim or defense.”
Allianz argues that the strong presumption of access to judicial records applies here, despite the connection to the Daubert motion, because the judicial records were also filed in
connection with summary judgment proceedings.
[4] That the records are connected to a Daubert motion
does not, on its own, conclusively resolve the issue. In some
cases, such as this one, a Daubert motion connected to a
pending summary judgment motion may be effectively “dispositive of a motion for summary judgment.” Lust ex rel. Lust
v. Merrell Dow Pharm., Inc., 89 F.3d 594, 597 (9th Cir. 1996)
(holding that although a Daubert ruling was dispositive, the
abuse of discretion standard still applies); see Rink v.
Cheminova, Inc., 400 F.3d 1286, 1288 (11th Cir. 2005)

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(affirming a grant of summary judgment on grounds that
plaintiff failed to prove causation after the plaintiff ’s expert
was excluded under Daubert). Plaintiffs themselves described
these Daubert proceedings as “absolutely critical” and “potential[ly] case dispositive.” To turn the issue around, if a
magistrate judge had ruled on the Daubert motion and
excluded Dr. McCann’s opinion, plaintiffs surely would have
challenged the order as dispositive and subject to de novo
review by a district court judge.
[5] Looking at these circumstances, we agree with Allianz
that the judicial records at issue were filed “in connection”
with pending summary judgment motions. San Jose Mercury
News, 187 F.3d at 1102. The district court appointed Dr.
Bodie to assist the court in resolving whether Fidelity and
Midland were entitled to summary judgment on plaintiffs’
RICO claim. Further, as the district court stated in an order
granting in part and denying in part summary judgment, the
judicial records at issue pertain to “central issues bearing on
defendant’s summary judgment motion.”
[6] Plaintiffs have not demonstrated that the records fall
into the exception to the presumption of public access. The
district court erred by failing to apply the “compelling reasons” standard.
C
Alternatively, in a footnote, the district court asserted without elaboration that there were also “compelling reasons” to
keep the judicial records sealed. The district court’s finding is
plainly inadequate. See Kamakana, 447 F.3d at 1179 (holding
that to find compelling reasons the court must conscientiously
balance the competing interests and articulate the factual basis
for the compelling reasons).
[7] Further, none of the “good cause” findings for keeping
the judicial records sealed—whether articulated in the district

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court’s order or asserted by the plaintiffs on appeal—satisfy
the compelling reasons standard. See id. at 1180 (emphasizing
that a “good cause” showing will generally not satisfy the
“compelling reasons” standard because different interests are
at stake). Compelling reasons “sufficient to outweigh the public’s interest in disclosure and justify sealing court records
exist when such ‘court files might have become a vehicle for
improper purposes,’ such as the use of records to gratify private spite, promote public scandal, circulate libelous statements, or release trade secrets.” Id. at 1179 (quoting Nixon,
435 U.S. at 598). The record is devoid of any such compelling
reasons to keep the records sealed.
[8] Because there are no compelling reasons to keep the
judicial records sealed, we order the district court on remand
to grant the relief requested by Allianz in the motion to
unseal. The district court should identify all judicial records
requested by Allianz in the motion. Additionally, the district
court should permit the parties in the underlying cases to
redact sensitive personal and competitive information before
unsealing the records.6
IV
[9] We conclude that the judicial records at issue were submitted to the court in connection with pending motions for
summary judgment. Because neither the plaintiffs nor the district court have identified any compelling reasons to keep the
records sealed, we conclude that the records should be made
public once the parties are permitted to redact sensitive information.
REVERSED and REMANDED.
6

Defendants Fidelity and Midland did not object to Allianz’s motion to
unseal, subject to the redaction of personal and competitive information
from the records before unsealing and Allianz’s agreement to pay Fidelity’s costs.