Holly v. UPS Supply Chain Solutions, Inc. et al

Filing 57

MEMORANDUM OPINION AND ORDER by Magistrate Judge Colin H. Lindsay denying 43 Motion to Seal Objections filed by Defendants UPS Supply Chain Solutions, Inc. and Jeremy Fletcher. Clerk of Court directed to unseal Defendants' Objections (DN 44 ) and the exhibits thereto. cc: Counsel (JAC)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
BRUCE HOLLY,
Plaintiff,
v.

CASE NO. 3:13-CV-980-DJH-CHL

UPS SUPPLY CHAIN SOLUTIONS, INC.,
et al.,
Defendants.
MEMORANDUM OPINION AND ORDER DENYING DEFENDANTS’ MOTION TO
SEAL OBJECTIONS TO MAGISTRATE JUDGE’S REPORT AND ORDER
This matter is before the Court on a motion for leave to seal (“Motion to Seal
Objections”) (DN 43) filed by Defendants UPS Supply Chain Solutions, Inc. (“UPS SCS”) and
Jeremy Fletcher (collectively “Defendants”).

Defendants request that the Court seal their

objections (“Objections”) (DN 44) to the settlement conference report and order (“Settlement
Conference Report and Order”) (DN 38) issued by the Court on March 27, 2015. This matter is
ripe for review.
Background
1. The Settlement Conference and Subsequent Report and Order
The Court conducted a settlement conference (“Settlement Conference”) in this matter on
March 23, 2015. The parties did not reach an agreement. On March 27, 2015, the Court issued
the Settlement Conference Report and Order, finding that Defendants and their counsel violated,
in two ways, an Order of the Court. The Court has recounted the contents of the Settlement
Conference Report and Order in two other memorandum opinions issued in this case. (See DN
52 (denying DN 45, Defendants’ motion to stay execution of Settlement Conference Report and

Order), DN 56 (denying DN 40, Defendants’ Motion to Seal Settlement Conference Report and
Order).)1
2. Defendants’ Motion to Seal Objections
Defendants filed their Objections and Motion to Seal Objections on April 9, 2015. (DN
43, 44.) In the Motion to Seal Objections, Defendants state that they “believe that both the
Settlement Conference Report and Order and [their] Objections thereto reveal confidential
settlement communications.” (DN 43-1 at 1.) Defendants’ citations to case law in the Motion to
Seal Objections are identical to certain of their case citations in the Motion to Seal Settlement
Conference Report and Order. (See DN 40, 43.) Defendants state that the Sixth Circuit found
the existence of a formal settlement privilege “in recognition of ‘the need for, and the
constitutionality of, secrecy in settlement proceedings.’” (DN 43-1 at 1 (quoting Goodyear Tire
& Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 767 (6th Cir. 2003)).) Defendants cite a
decision of the Second Circuit for the following proposition:
Few cases would ever be settled if the press or public were in
attendance at a settlement conference or privy to settlement
proposals. A settlement conference is an opportunity for the
parties, with the court acting as an impartial mediator, to have a
frank discussion about the value of avoiding a trial.
(DN 43-1 at 1 (quoting United States v. Glens Falls Newspapers, Inc., 160 F.3d 853, 858 (2d Cir.
1998)).)

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The parties submitted a number of motions and other filings following the entry of the Settlement
Conference Report and Order. (DN 38.) On March 30, 2015, Defendants filed a Motion to Seal Settlement
Conference Report and Order. (DN 40.) The Court denied that motion to seal. (DN 56.) On April 3, 2015,
Plaintiff filed his Bill of Costs (DN 42) as directed in the Settlement Conference Report and Order. Thereafter, on
April 9, 2015, Defendants filed the following: (1) the Motion to Seal Objections (DN 43); (2) the Objections (DN
44); and (3) a motion styled, “Motion to Stay March 27, 2015 Settlement Conference Report and Order” (“Motion to
Stay”). (DN 45.) The Court denied the Motion to Stay on May 20, 2015. (DN 52.) On April 17, 2015, Plaintiff
filed a response (DN 47) to Defendants’ various filings, and on May 1, 2015, Defendants filed a reply. (DN 50.)

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Defendants go on to state that their Objections to the Settlement Conference Report and
Order, “similar to the Order itself, contain information regarding confidential settlement
communications and should not be a matter of public record.” (DN 43-1 at 2.) Defendants
conclude by asserting that failure by the Court to grant the Motion to Seal Objections “will chill
parties’ willingness to mediate cases.” (Id.)
3. Plaintiff’s Response and Defendants’ Reply
Plaintiff’s Response and Defendants’ Reply both address numerous documents filed by
Defendants subsequent to the entry of the Settlement Conference Report and Order. The Court
construes the Response (DN 47) as responding to Defendants’ Motion to Seal Settlement
Conference Report and Order (DN 40), Objections (DN 44), and Motion to Stay. (DN 45.)
Based on their Reply, Defendants appear to interpret the Response as addressing their Objections
and the Motion to Seal Settlement Conference Report and Order. (See DN 50 at 1.) The Reply
does not contain any arguments related to the Motion to Seal Objections. The Court does not
construe either the Response or the Reply to address the Motion to Seal Objections. (DN 43.)
Based on the foregoing, the Court does not consider the Response or Reply in its analysis in the
instant Memorandum Opinion and Order.
Discussion
1. Joint General Order on Sealed Documents
The Eastern and Western Districts of Kentucky have, by Joint General Order, established
a procedure for parties seeking to file a sealed document.
Civil Motion for Leave to Seal. A party seeking to file a sealed
document2 shall electronically file a motion for leave to seal. The
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A “sealed document” is defined as “a document or motion filed pursuant to (1) a protective order, (2) an
order granting leave to file the sealed document or motion, in conjunction with a motion for leave to seal or a

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motion must state why sealing is required and whether redaction
could eliminate or reduce the need for sealing. A motion for leave
to seal is not required if the document is (1) already subject to a
protective order or (2) included within a category of documents
considered sealed under a federal statute or federal rule of
procedure, local rule, or standing order of this court. The motion
for leave to seal and any attachments to the motion to seal will be
available to the public.
Joint General Order 11-01, § 8.1(a)(1) (amending Joint General Order 06-01) (emphasis in
original). The document that the party wishes to have sealed “must not be attached to the
motion, but rather must be electronically filed separately as a provisionally sealed document.”
Id. at § 8.1(a)(3) (emphasis in original). The document then “stays provisionally sealed until the
court rules on the motion to seal.” Id.
Defendants have complied with the procedure set forth in Joint General Order 11-01.
They filed the Motion to Seal Objections and filed the Objections contemporaneously therewith.
The Motion to Seal Objections states why Defendants believe sealing is required. None of the
exceptions to the requirement that a motion for leave to seal be filed is present here. See Joint
General Order 11-01, § 8.1(a)(1).

Defendants filed the Objections under provisional seal.

Having determined that Defendants complied with the procedural requirements for filing
documents under seal, the Court turns to the question of whether the Objections ought to remain
under seal.
2. Strong Presumption in Favor of Public Access to Judicial Documents
“Only the most compelling reasons can justify non-disclosure of judicial records.” In re
The Knoxville News Sentinel Co., Inc., 723 F.2d 470, 476 (6th Cir. 1983) (citation omitted).
previously filed redacted document, or (3) included within a category of documents considered sealed under a
federal statute or federal rule of procedure, local rule, or standing order of this court.” Joint General Order 11-01, §
1.8. A sealed document is “not available electronically or by any other means to the parties, attorneys or the public”
unless the Court orders otherwise. Id.

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“[T]he public has both a constitutional and a common law presumptive right of access to civil
proceedings and judicial records.” In re Southeastern Milk Antitrust Litig., 666 F. Supp. 2d 908,
915 (E.D. Tenn. 2009) (class certification granted in part and denied in part, In re Southeastern
Milk Antitrust Litig., 2010 U.S. Dist. LEXIS 94223 (E.D. Tenn. 2010)) (citing Brown &
Williamson Tobacco Corp. v. FTC, 710 F.2d 1165, 1179 (6th Cir. 1983) (rev’d on other grounds,
FTC v. Brown & Williamson Tobacco Corp., 778 F.2d 35 (D.C. Cir. 1984)).
A party seeking to seal court records must show “compelling reasons” in support thereof.
In re Southeastern Milk, 666 F. Supp. 2d at 915 (quoting Meyer Goldberg Inc. v. Fisher Foods,
Inc., 823 F.2d 159, 163 (6th Cir. 1987)). The party’s reasoning should be based on at least one
of two recognized exceptions to the “strong presumption in favor of public access: [1] those
based on the need to keep order and dignity in the courtroom and [2] those which center on the
content of the information to be disclosed to the public.” Id. (quoting Brown & Williamson, 710
F.2d at 1179). The Sixth Circuit has recognized several interests that might justify placing
records under seal. Such interests include a criminal defendant’s right to a fair trial, “certain
privacy rights of participants or third parties, trade secrets and national security.” Brown &
Williamson, 710 F.2d at 1179 (citing Nixon v. Warner Commun’s, 435 U.S. 589, 598 (1978))
(additional citations omitted).
3. No Compelling Reasons to Seal Defendants’ Objections
The Motion to Seal Objections implicates the second exception to the presumption in
favor of public access, circumstances that “center on the content of the information to be
disclosed to the public.” In re Southeastern Milk, 666 F. Supp. 2d at 915. Defendants contend
that their “Objections to [the] Settlement Conference Report and Order, similar to the Order
itself, contain information regarding confidential settlement communications and should not be a
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matter of public record.” (DN 43-1 at 2.) They further claim that the Sixth Circuit’s settlement
communications privilege mandates that their Objections be sealed, and that failure by the Court
to seal the Objections – and the Settlement Conference Report and Order – “will chill parties’
willingness to mediate cases.” (Id. at 2.)
The presiding District Judge will rule on the Objections. See Fed. R. Civ. P. 72(a)
(providing that “[t]he district court judge in the case must consider timely objections [to
nondispositive orders of magistrate judges] and modify or set aside any part of the order that is
clearly erroneous or is contrary to law”). As such, the Court need not comment on the merits of
the Objections. Nonetheless, in order to determine whether there are “compelling reasons” to
seal the Objections, the Court must look to the contents of the Objections.
The Court finds that, under the circumstances of this case, there are no “compelling
reasons” to seal Defendants’ Objections. There are no privacy rights, trade secrets, or matters of
national security at issue here. Defendants have merely set forth conclusory statements as to the
confidentiality of the contents of their Objections and their fears regarding potential
consequences of the Objections appearing in the public record. See Brown & Williamson, 710
F.2d at 1180 (“[N]aked conclusory statement[s]” as to potential harm to a party “fall[] woefully
short of the kind of showing which raises even an arguable issue as to whether it may be kept
under seal.”) (quoting Joy v. North, 692 F.2d 880, 894 (2d Cir. 1982)). Moreover, Defendants
chose to include in their Objections myriad details, including counsel’s mental impressions,
which were not necessary to support their (untrue) assertion that the Court revealed confidential
information regarding their valuation of the case.3 In the Court’s view, Defendants’ choice to

3

Defendants presented to the Court Objections spanning some fifteen pages, accompanied by lengthy
affidavits of two attorneys and Reza, the client representative. (DN 44, 44-1, 44-2, 44-3.)

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reveal more allegedly confidential information than was necessary to make their argument is not
a compelling reason to seal the Objections.
In both their Motion to Seal Settlement Conference Report and Order and their
Objections, Defendants insist that the Court has revealed confidential information regarding their
valuation of Plaintiff’s case. Defendants fail to recognize the basis of the Court’s decision to
issue sanctions against Defendants and their counsel. In reality, as is discussed at length in the
Memorandum Opinion and Order denying Defendants’ Motion to Seal Settlement Conference
Report and Order (DN 56), Defendants brought with them to the March 23, 2015 Settlement
Conference a client representative who lacked full settlement authority. This was a direct
violation of the Order for Settlement Conference issued by the Court prior to the conference.
(See DN 36.) In their Objections, Defendants and their counsel chose to recount, in great detail,
their version of the events surrounding the Settlement Conference. In both their Objections and
the Motion to Seal Settlement Conference Report and Order, Defendants repeatedly
mischaracterize the cap on their client representative’s authority as their valuation of the case.
This mantra—no matter how many times Defendants chose to repeat it—is simply untrue.
Defendants’ sanctionable conduct lay in bringing to the Settlement Conference a client
representative who lacked true settlement authority, not in how they valued the case.
Defendants contend that failure to seal their Objections will chill parties’ willingness to
mediate cases. The Court is unpersuaded. The Settlement Conference Report and Order, in
relation to which Defendants filed Objections, merely recounts Defendants’ sanctionable
conduct. There is no rational basis for parties in other cases to fear that their confidential
settlement communications will become part of the public record because that is not what
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happened in this case. Had Defendants complied with the clear terms of the Order for Settlement
Conference (DN 36) by bringing to the conference a client representative who possessed full
settlement authority, the Court would not have been compelled to include in the Settlement
Conference Report and Order (DN 38) any of the information to which Defendants object, and
likewise, Defendants would not have felt a need to file Objections. Any party wishing to avoid
finding itself in Defendants’ current position need only comply with the Court’s Orders. Again,
the Settlement Conference Report and Order contains information regarding the cap on
Defendants’ client representative’s authority.

It does not contain information regarding a

valuation of the case by Defendants or any other settlement communications that ought to remain
confidential.4

Accordingly, the Court finds that the claimed potential chilling effect on

settlement communications in other cases – or on further negotiations in this case – does not
amount to a compelling reason to seal the Objections.

(See generally DN 56 at 15-18

(addressing Defendants’ arguments regarding chilling effect).)
4. No Settlement Communications Privilege Applies
In the Motion to Seal Objections, Defendants cite Goodyear Tire & Rubber Co. v. Chiles
Power Supply, Inc., 332 F.3d 976 (6th Cir. 2003) for the proposition that the Sixth Circuit has
recognized the existence of a formal settlement privilege. (DN 43-1 at 1.) Defendants assert that
their Objections should remain under seal because the document contains confidential settlement
communications. Goodyear involved an issue of first impression in the circuit: whether the trial
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Relatedly, there is no evidence that the contents of the Settlement Conference Report and Order or
Objections have harmed the prospect of settlement in this case. Plaintiff states in his response to Defendants’ other
post-Settlement Conference motions (DN 47) that the Settlement Conference Report and Order had no influence on
the progress of settlement discussions in this case. (See DN 47 at 6 (stating that “the ridiculously low offers made
[by] the Defendants and lack of any real movement in their offers had already sent a message to the Plaintiff that the
only way he would possibly receive justice would be after the court ruled on [Defendants’] motion for summary
judgment and/or through a verdict of a reasonable jury”).) Plaintiff further states that his counsel communicated as
much when Defendants’ counsel reached out regarding the possibility of resuming settlement discussions. (Id.)

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court properly denied plaintiff-appellant’s motion to vacate or modify an existing confidentiality
order and permit discovery of any statements made by defendant-appellee Goodyear during
settlement negotiations in an action pending in another district. Id.
The Sixth Circuit looked to Rule 408 of the Federal Rules of Evidence, which provides as
follows:
Rule 408. Compromise Offers and Negotiations
(a) Prohibited Uses. Evidence of the following is not admissible
– on behalf of any party – either to prove or disprove the validity
or amount of a disputed claim or to impeach by a prior inconsistent
statement or a contradiction:
(1) furnishing, promising, or offering – or accepting, promising
to accept, or offering to accept – a valuable consideration in
compromising or attempting to compromise the claim; and
(2) conduct or a statement made during compromise
negotiations about the claim – except when offered in a
criminal case and when the negotiations related to a claim by a
public office in the exercise of its regulatory, investigative, or
enforcement authority.
(b) Exceptions. The court may admit this evidence for another
purpose, such as proving a witness’s bias or prejudice, negating a
contention of undue delay, or proving an effort to obstruct a
criminal investigation or prosecution.
Fed. R. Evid. 408. The Court reasoned that it was not aware of any cases in which the Rule 408
exceptions “have been used to allow settlement communications into evidence for any purpose,”
as advocated by the plaintiff-appellant, but rather, “the exceptions have been used only to admit
the occurrence of settlement talks or the settlement agreement itself for ‘another purpose.’” Id.
at 981 (citations omitted) (emphasis in original). The court concluded that “any communications
made in furtherance of settlement are privileged,” and that because any communications from the

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other action were “likely not relevant” to plaintiff-appellant’s case, he “ha[d] not demonstrated a
legitimate, admissible use.” Id. at 983.
The settlement communications privilege recognized by the Sixth Circuit in Goodyear
does not apply in relation to the Motion to Seal Objections. As Judge Russell stated in Westlake
Vinyls, Inc. v. Goodrich Corp., 2007 U.S. Dist. LEXIS 47857, *10 (W.D. Ky. 2007), the Sixth
Circuit’s holding in Goodyear is actually “quite limited.”

Lower court opinions issued

subsequent to Goodyear “frequently use a misnomer when referring to [the] Goodyear decision
and tend to refer to it as creating a ‘federal settlement privilege,’ which implies a far more
expansive ruling than the Goodyear panel announced.” Id. at *10-11. In truth, “by its own
language,” the privilege recognized in Goodyear “protects only ‘communications made in
furtherance of settlement.’”

Id. (quoting Goodyear, 332 F.3d at 983) (emphasis added in

Westlake Vinyls). In Westlake Vinyls, this Court “clarif[ied] that it does not interpret Goodyear,
or any other binding law as creating a ‘settlement privilege’ broader in scope than one which
shields from discovery communications made, or documents created, for the specific purpose of
furthering settlement negotiations.” Id. at *13; see also Winchester v. City of Hopkinsville, 2014
U.S. Dist. LEXIS 170592, *5 (W.D. Ky. 2014) (stating that Goodyear does not recognize a
broad ‘settlement privilege,’ but rather, “by its own language, it protects only communications
made in furtherance of settlement”) (quotation omitted).
Additionally, the language of Rule 408 demonstrates that the concerns implicated in the
privilege recognized in Goodyear are not present in this case. As yet, no party has attempted to
enter into evidence the contents of the Objections “to prove or disprove the validity or amount of
a disputed claim” or for purposes of impeachment. See Fed. R. Evid. 408(a). Nor is either of the
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situations contemplated by Rule 408(a)(1) or (2) present here. The Court further notes that Rule
408 itself identifies certain exceptions to the general prohibition on admission of settlement
communications. See Fed. R. Evid. 408(b) (“The court may admit this evidence for another
purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or
proving an effort to obstruct a criminal investigation or prosecution.”).
Defendants quote a decision of the Second Circuit, United States v. Glens Falls
Newspapers, Inc., 160 F.3d 853, 858 (2d Cir. 1998), for the proposition that “[f]ew cases would
ever be settled if the press or public were in attendance at a settlement conference or privy to
settlement proposals.” (DN 40-1 at 2; see also id. (“A settlement conference is an opportunity
for the parties, with the court acting as an impartial mediator, to have a frank discussion about
the value of avoiding a trial.”) (quoting Glens Falls Newspapers, 160 F.3d at 858).) The Court
agrees with the sentiments expressed by the Second Circuit in Glens Falls Newspapers.
However, Glens Falls Newspapers is not binding on this Court, and in any event, the analysis
therein has no bearing on this matter. The Objections do not address “frank discussion[s] about
the value of avoiding a trial” or “evaluat[ions of] both the strengths and weaknesses of [the
parties’] respective cases,” which the Second Circuit identifies as opportunities for parties
participating in settlement conferences. Glens Falls Newspapers, 160 F.3d at 858. The Glens
Falls Newspapers court expressed a strong desire to settle what it described as a “complex,
expensive, ten-year-old case of great public importance.” Here, those concerns are not present.
This is not a situation in which a third party, such as a media outlet, seeks publication of
confidential documents, and there is no great public interest that might outweigh the “strong
presumption” of public right of access to court proceedings. (See also DN 56, Memorandum
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Opinion and Order denying Motion to Seal Settlement Conference Report and Order (providing
extensive discussion of the Goodyear and Glens Falls Newspapers decisions, as well as other
decisions cited by Defendants in the Motion to Seal Settlement Conference Report and Order).)
In the event that Plaintiff seeks admission of any aspect of the Objections in a proceeding
before the District Judge in this case, Defendants are free to present arguments regarding
relevance, confidentiality, or admissibility pursuant to Rule of Evidence 408 or a settlement
communications privilege. At this juncture, however, neither the Sixth Circuit’s decision in
Goodyear nor Rule 408 dissuades the Court from its conclusion that the Objections should not be
filed under seal.

Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion to Seal Objections
(DN 43) is DENIED. The Clerk of Court is directed to UNSEAL Defendants’ Objections (DN
44) and the exhibits thereto.
June 22, 2015

Colin Lindsay, MagistrateJudge
United States District Court
cc: Counsel of record

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