Vaughn v. Teran

Filing 132

ORDER GRANTING In Part And DENYING In Part Plaintiff's 128 Motion to Seal, signed by Magistrate Judge Helena M. Barch-Kuchta on 9/9/2024. (Marrujo, C)

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Order

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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MARK A. VAUGHN,

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Case No. 1:17-cv-00966-HBK

Plaintiff,

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v.

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TERAN,

ORDER GRANTING IN PART AND
DENYING IN PART PLAINTIFF’S MOTION
TO SEAL
(Doc. Nos. 126, 128)

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Defendant.

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Pending before the Court is Plaintiff Mark A. Vaughn’s Motion to Seal, filed August 15,

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2024. (Doc. No. 128). Defendant filed an Opposition (Doc. No. 130), and Plaintiff filed a Reply

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(Doc. No. 131). For the reasons set forth below, the Court grants in part and denies in part

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Plaintiff’s Motion.

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BACKGROUND
On July 12, 2024, the Court granted in part Plaintiff’s Motion to Enforce the Settlement
Agreement in this case and directed Plaintiff to
file a document outlining his damages resulting from CDCR’s breach
of the Settlement Agreement, supported where possible with
documentary evidence, including his retention agreement with
Plaintiff.

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(Doc. No. 125 at 17 ¶ 2). On July 26, 2024, Plaintiff filed a two-page “Notice of Request to Seal”

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and separately submitted to the Court via email a request to seal, brief in support, proposed order,
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and 115 pages of documents supporting Plaintiff’s claim for more than $250,000 in damages.

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(See Doc. No. 126). Plaintiff argued that because the evidence contained sensitive and

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embarrassing financial information, it should not be served on Defendant. (Doc. No. 126 at 1-2).

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On August 15, 2024, the Court found it was not “clearly appropriate not to serve” the motion and

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damages brief on CDCR under Rule 141(b), and therefore directed Plaintiff to file a portion of his

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damages briefing, omitting the documentary evidence, as a motion to seal, and ordered Defendant

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to file a response. (Doc. No. 127). Plaintiff then filed the instant Motion, including a

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Supplemental Damages Brief (Doc. No. 128); a Request to Seal Documents (Doc. No. 128-1); a

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Proposed Order (Doc. No. 128-2); a Damages Brief on Breach of Settlement Agreement (Doc.

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No. 128-3); and a Proposed Judgment (Doc. No. 128-4). Defendant subsequently filed an

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Opposition to the Motion to Seal (Doc. No. 130) and Plaintiff filed a Reply (Doc. No. 131).

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PARTIES’ POSITIONS

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Plaintiff contends that pursuant to Federal Rule of Civil Procedure 5.2(d), the Court

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should grant his Motion because the documents demonstrating his damages include “financial

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records, contracts, and other evidence of debt . . . [that] are normally considered private.” (Doc.

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No. 128-1 at 1-2). Moreover, because these sensitive documents would not have been at issue

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absent CDCR’s breach of the settlement agreement, Plaintiff contends that “[g]ranting CDCR

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access to [his] records of debts is neither warranted nor fair.” (Id. at 1).

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Aside from addressing the merits of Plaintiff’s purported damages (which are not at issue

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at this stage), Defendant argues that it cannot meaningfully respond to Plaintiff’s damages claims

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without having an opportunity to review the documents on which those claims are based. (Doc.

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No. 130 at 3). Defendant asserts that denying CDCR the opportunity to do so constitutes a

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violation of its due process rights under the Fourteenth Amendment. (Id.). Further, Defendant

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contends that under California law, a party seeking damages waives the right to privacy in

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documents relevant to those damages. (Id.) (citing Britt v. Superior Court, 20 Cal. 3d 844, 859-

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60 (1993). And it would deny Defendant a fair hearing in violation of due process if it was

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unable to review and address the authenticity and relevance of the documents that Plaintiff’s

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counsel relies upon in proving damages. (Id. at 4).
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Plaintiff’s counsel1 responds in a Reply that Defendants are improperly attempting to shift

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the blame for the breach of contract to Plaintiff. In fact, he argues, Defense counsel and CDCR

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are responsible for the damages now being contested by the Parties. (Doc. No. 131 at 1).

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Plaintiff argues that Defendant should not be permitted to review or object to Plaintiff’s case

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expenses or unpaid debts. (Id. at 2). “Had Defendants handled the settlement professionally,” he

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argues, “the funds would have been used to pay those expenses without CDCR having to worry

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about whether the costs were expected or not.” (Id.). Plaintiff also asserts that Britt v. Superior

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Court is not applicable here because “[t]he matter before the Court is not to determine Mr.

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Vaughn’s damages” and that Britt only pertains to that issue. (Id. at 3).

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DISCUSSION

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A. Legal Standard

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Under Local Rule 141, “[d]ocuments may be sealed only by written order of the Court,

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upon the showing required by applicable law.” L.R. 141(a) (E.D. Cal. 2023). A party seeking to

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seal documents “shall submit . . . a ‘Notice of Request to Seal Documents,’ a ‘Request to Seal

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Documents,’ a proposed order, and all documents covered by the request.” L.R. 141(b). “Except

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in matters in which it is clearly appropriate not to serve the ‘Request to Seal Documents,’

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proposed order, and/or documents upon the parties, which would include criminal pre-indictment

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matters, all Requests, proposed orders, and submitted documents shall be served on all parties on

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or before the day they are submitted to the Court.” (Id.).

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There is a presumptive right of public access to court records based upon the common law

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and the first amendment. See Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978);

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Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206, 1212-13 (9th Cir. 2002).

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“Unless a particular court record is one traditionally kept secret, a strong presumption in favor of

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access is the starting point.” Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1178-80 (9th

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Cir. 2006) (citing Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003)).

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A party seeking to seal a judicial record then bears the burden of overcoming this strong

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Plaintiff’s counsel is now a real party in interest in this case, given that he seeks damages for CDCR’s
breach, and opposes disclosure of his and his client’s private financial information.
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presumption by meeting the “compelling reasons” standard. Foltz, 331 F.3d at 1135. That is, the

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party must “articulate[ ] compelling reasons supported by specific factual findings,” id. (citing

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San Jose Mercury News, Inc. v. U.S. Dist. Ct., 187 F.3d 1096, 1102–03 (9th Cir. 1999)), that

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outweigh the general history of access and the public policies favoring disclosure, such as the

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“‘public interest in understanding the judicial process.’” Hagestad, 49 F.3d at 1434 (quoting

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EEOC v. Erection Co., 900 F.2d 168, 170 (9th Cir. 1990)). In turn, the court must

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“conscientiously balance[ ] the competing interests” of the public and the party who seeks to keep

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certain judicial records secret. Foltz, 331 F.3d at 1135. After considering these interests, if the

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court decides to seal certain judicial records, it must “base its decision on a compelling reason and

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articulate the factual basis for its ruling, without relying on hypothesis or conjecture.” Hagestad,

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49 F.3d at 1434 (citing Valley Broadcasting Co. v. U.S. Dist. Ct., 798 F.2d 1289, 1295 (9th Cir.

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1986)).
However, a less exacting “good cause” standard “applies to private materials unearthed

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during discovery,” and to “previously sealed discovery attached to a nondispositive motion.” Id.

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(citing Pintos, 605 F.3d at 678). Compelling reasons for sealing information exist “when such

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‘court files might have become a vehicle for improper purposes,’ such as the use of records to

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gratify private spite, promote public scandal, circulate libelous statements, or release trade

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secrets.” Kamakana, 447 F.3d at 1179 (quoting Nixon, 435 U.S. at 598).

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B. Analysis

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Here, Plaintiff seeks not only to seal the documents pertaining to counsel’s case expenses2

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but also to prevent Defendants from reviewing the materials. (See Doc. No. 128; Doc. No. 128-1

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at 1). While Plaintiff’s order appears to request that all documentation supporting his damages be

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sealed,3 he only asserts good cause to seal four types of records: Bail Records, Liens, Fee

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Agreement, and Secured Debts. (Id.). For reasons set forth below, the Court will grant Plaintiff’s

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Motion as to those four categories of records. However, the Court does not find this to be an

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The briefing refers to Plaintiff’s various debts, somewhat dubiously, as “case expenses.”
As directed by the Court, Plaintiff identifies in general terms the contents of his documentary evidence,
which include: Depositions, Service of Process, Experts, Bail, Record Recovery, Postage, Photocopies,
Travel, Communications, Liens, Attorney Fees, and Secured Debts. (Doc. No. 128 at 2).
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instance where it is “clearly appropriate not to serve” the records on Defendant, particularly given

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that Defendant has no other means to dispute Plaintiff’s claim for damages. See L.R. 141(b); see

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also ATM Exp., Inc. v. ATM Exp., Inc., 2008 WL 4997600, at *2 (S.D. Cal. Nov. 20, 2008)

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(reasoning that “[i]n almost any case where a plaintiff seeks economic damages, it must present

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financial information in support of the requested amount. Should either party . . . seek to seal any

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financial information on which it intends to rely for proof of damages, it must show how the

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financial information in this case is more confidential, sensitive or proprietary than in a typical

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case where damages are sought.”). The Court therefore will permit Defendant to review the

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sealed documents for the limited purpose of responding to Plaintiff’s proposed claim for

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damages, subject to the protections set forth in this Order.
1. Bail Records
Plaintiff provides several documents from a bail bond company and a collection agency

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attempting to collect on unpaid bond payments. The documents include an indemnity agreement

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with the bond company, co-signed by Plaintiff’s counsel. Plaintiff contends that filing these

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records publicly would “not only expose [Plaintiff’s] private transactions to the public, but they

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also expose Plaintiff’s counsel to claims by creditors and scammers.” (Id.). The Court agrees

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that sealing these records is appropriate.

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Compelling reasons for sealing information exist “when such ‘court files might have

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become a vehicle for improper purposes,’ such as the use of records to gratify private spite,

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promote public scandal, circulate libelous statements, or release trade secrets.” Kamakana, 447

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F.3d at 1179 (quoting Nixon, 435 U.S. at 598). The court must “conscientiously balance[ ] the

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competing interests” of the public and the party who seeks to keep certain judicial records secret.

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Foltz, 331 F.3d at 1135. Here, the documents related to Plaintiff’s bond, the involvement of

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Plaintiff’s counsel in securing the bond and their respective liabilities under the bond agreement

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could be used to “gratify private spite” or otherwise expose Plaintiff and his counsel to financial

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disrepute. There is no obvious benefit to the public in disclosure of these private records, which

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have only a tangential bearing on a matter of public concern. The Court therefore finds good

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cause to grant Plaintiff’s motion to file them under seal. Nevertheless, the Defense is entitled to
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review the records for the limited purpose of responding to Plaintiff’s arguments in support of his

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damages, and the Court will therefore direct the Clerk to provide the records directly to Defense

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counsel, subject to protections set forth in this Order.

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2. Liens
Plaintiff provides records of liens held by Iowa Child Protective Service (“ICPS”) and the

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Department of Health Care Services (“DHCS”) Recovery Section, regarding an outstanding lien

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against Plaintiff arising from unpaid Medi-Cal bills.
As to the ICPS lien, Plaintiff argues that “[c]laims that a person is not paying child

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support do not belong in an unrelated civil case” and filing them publicly would expose him to

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“adverse public scrutiny.” (Id.). As to the Medi-Cal lien, Plaintiff claims that “[b]ecause medical

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bills are subject to HIPAA protections, they should not be published.” (Id.). Again, the Court

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agrees that these records should be sealed.
The records related to Plaintiff’s allegedly delinquent child support payments could be

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used to “gratify private spite” or otherwise expose Plaintiff to public disrepute. Plaintiff’s child

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support matter has marginal relevance to this case, and thus the public has a limited interest in

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disclosure of these records. The Court therefore finds good cause to grant Plaintiff’s motion to

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seal these records but will direct the Clerk of Court to provide them directly to Defense counsel

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for review in responding to Plaintiff’s damages claim, subject to protections set forth in this

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Order.

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As to Plaintiff’s DHCS records, “[t]he privacy interest in one's confidential medical

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records is conditional and a limited impairment of the right may be allowed if properly justified.

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Soto v. City of Concord, 162 F.R.D. 603, 618 (N.D. Cal. 1995) (calling for in camera review of

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records); see also Hutton v. City of Martinez, 219 F.R.D. 164, 167 (N.D. Cal. 2003) (noting that

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“HIPAA does not preclude production of . . . medical records and worker’s compensation files in

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response to either a discovery request, subpoena or” a Court order, where an adequate protective

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order is in place). Here, the Court does not find any significant public interest in disclosure of

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records pertaining to Plaintiff’s DHCS lien, which again has only tangential relevance to this

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case. Meanwhile, Plaintiff’s private financial and medical records have not otherwise been made
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public and contain arguably sensitive information that warrants protection. See United States v.

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Mahoney, 2019 WL 1040402, at *4 (W.D. Wash. Mar. 5, 2019) (finding good cause to grant

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motion to seal “medical bills, collection notices, and other correspondence containing sensitive

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personal information” regarding victim of crime). The Court therefore finds good cause to grant

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the motion as to Plaintiff’s DHCS records but will make the records available to Defense for the

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limited purpose of responding to Plaintiff’s damages claim, subject to the protections set forth in

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this Order.

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3. Fee Agreement
Plaintiff’s counsel has acknowledged that the fee agreement in this case “calls for a 35%

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fee” but asserts that the fee agreement is otherwise “a private communication between counsel

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and client, and . . . will provide no other relevant information about the CDCR’s breach of the

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settlement agreement than provided here.” (Id. at 2). The Court agrees in part. A legal services

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agreement “contains confidential client communications reciting private contractual terms” of the

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representation and sealing it “will have little effect on the public’s ability to understand the

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issues” addressed in this litigation. See BoxNic Anstalt v. Gallerie degli Uffizi, 2020 WL

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2991561, at *4 (D. Ariz. June 4, 2020). However, the legal services agreement may contain

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provisions pertaining to assumption of risk and liability, which could be relevant to whether

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Plaintiff’s counsel is liable for Plaintiff’s obligations to third parties. Accordingly, the Court will

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grant the motion to seal as to the fee agreement but will again permit Defense to review it for the

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limited purpose of responding to Plaintiff’s claims for damages, subject to the protections set

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forth in this Order.

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4. Secured Debts
Plaintiff notes that he entered into two non-recourse loans and that Plaintiff’s counsel

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agreed to repay the loans from settlement proceeds. (Doc. No. 128 at 2). After Plaintiff

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absconded with the settlement check, the lenders demanded payment from Plaintiff’s counsel.

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(Id.). Plaintiff contends that “[b]ecause this matter is leading to litigation, these records should

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remain private.” (Id. at 2-3). Counsel further asserts that he and Plaintiff should not be “exposed

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to outside critiques about the debts incurred.” (Doc. No. 128-1 at 1). As with the records
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discussed above, records of Plaintiff’s debts and counsel’s communication with debtors could be

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used to “gratify private spite” or otherwise expose Plaintiff and his counsel to public disrepute.

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Meanwhile, the records have minimal relevance to the issues in this case, beyond determining the

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measure of Plaintiff’s damages. Thus, the Court will grant the motion to seal as to the records

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pertaining to Plaintiff’s secured debts but will make those records available to the Defense for the

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limited purpose of responding to Plaintiff’s damages claim, subject to protections set forth in this

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Order.

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Beyond the four enumerated categories of documents identified by Plaintiff, he does not
set forth good cause as to any other documents submitted in support of his damages. (See

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generally Doc. No. 128). As he notes, “[t]he remaining case expenses are typical of a civil rights

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lawsuit and are offered as self-explanatory.” (Doc. No. 128-3 at 3). The Court therefore finds no

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reason to seal these non-sensitive records of counsel’s case expenses and will direct Plaintiff to

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file them to the docket.

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Accordingly, it is ORDERED:

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1. Plaintiff’s Motion to Seal (Doc. No. 128) is GRANTED IN PART and DENIED IN

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PART as set forth herein.
2. No later than five (5) days from the date of this Order, Plaintiff shall file the records of

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case expenses not pertaining to Bail Records, Liens, the Fee Agreement, and Secured

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Debts to the docket for this case.

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3. By the same date, Plaintiff shall submit a copy of this order, along with the documents

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pertaining to Bail Records, Liens, the Fee Agreement, and Secured Debts to

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[e-mail].

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4. The Clerk of Court is directed to file the records submitted pursuant to Paragraph 3 of

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this Order UNDER SEAL and provide to Defense counsel via email conformed copies

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of the same records filed under seal.

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5. Defense counsel may review the records identified in Paragraph 3 for the limited

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purpose of responding to Plaintiff’s claims for damages. Neither he nor any member

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of his office may reproduce, disseminate, or publish the records, under penalty of
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sanction.

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6. No later than ten (10) days from receipt of Plaintiff’s documentary evidence,

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Defendant/CDCR shall file a brief stating its position as to the damages sought in

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Plaintiff’s Motion (Doc. No. 128).
7. No later than five (5) days after the filing of Defendant’s brief addressing Plaintiff’s

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damages, Plaintiff may file a reply.
8. The Clerk of Court shall terminate Plaintiff’s Notice of Request to Seal (Doc. No.

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126) as a pending motion on the docket.

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Dated:

September 9, 2024
HELENA M. BARCH-KUCHTA
UNITED STATES MAGISTRATE JUDGE

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