Antech Diagnostics, Inc v. Morwalk, Inc. et al

Filing 16

MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 7/2/13. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
ANTECH DIAGNOSTICS, INC.
:
v.

:

Civil Action No. DKC 13-0068

:
MORWALK, INC., et al.
:
MEMORANDUM OPINION
Presently pending and ready for review in this breach of
contract dispute are the motion to dismiss filed by Defendants
Wendy

Walker,

D.V.M.,

and

Morwalk,

Inc.

(ECF

several motions to seal (ECF Nos. 5, 13, & 14).

No.

11),

and

The issues have

been briefed, and the court now rules, no hearing being deemed
necessary.

Local Rule 105.6.

For the reasons set forth below,

all pending motions will be denied.
I.

Background
A.

Factual Background

The

following

facts

complaint.

(ECF No. 8).

(“Antech”),

is

principal

a

place

are

in

the

first

amended

Plaintiff Antech Diagnostics, Inc.

California
of

alleged

business

corporation
in

Los

that

maintains

Angeles,

its

California.

Defendant Morwalk, Inc., doing business as Town & Country Animal
Clinic

(“Morwalk”

or

“Town

&

Country”),

is

a

Maryland

corporation that operates an animal hospital in Olney, Maryland.

Defendant Wendy Walker, D.V.M., is a citizen of Maryland and a
Morwalk shareholder.
In January 2010, Antech and Dr. Walker, “as president of
Town & Country,” signed a Lab Services Agreement (“the 2009
(ECF No. 8 ¶ 6).1

LSA”).

Antech alleges that, pursuant to the

2009 LSA, Morwalk agreed to use Antech “exclusively to provide
laboratory
[$7,000]

services
per

month

in
for

an

amount

equal

twenty-four

to

(24)

[a]

minimum

months.”

of

(Id.).

Antech, in turn, agreed to pay Town & Country a monthly rebate
“equal to a percentage of the total qualified services” for
which it paid Antech each month.

(Id.).

In early 2011, prior to the expiration of the 2009 LSA,
Walker

allegedly

approached

Antech

purchase of new laboratory equipment.

for

a

loan

to

fund

the

Antech agreed to provide

the loan in exchange for a new Lab Services Agreement (“the 2011
LSA”) pursuant to which Antech both “reduced the monthly minimum
require[d] services expected from Walker and/or Town & Country”
and “continued to provide the benefits of the 2009 LSA.”
No. 8 ¶ 10).
The first page of the 2011 LSA states as follows:
This Services Agreement (this “Agreement”)
is entered into by and between Antech
Diagnostics (“Antech”) and the party or

1

No party has submitted a copy of the 2009 LSA.
2

(ECF

parties listed below as “Animal Hospital
Owner(s)” as of the Effective Date (defined
below).
This Agreement shall consist of
this cover page, the attached terms and
conditions and all annexes and attachments
referred to below.
(ECF No. 11-1, at 1) (emphases in original).2

Immediately below

that, under the heading “SUMMARY,” the following appears:
Antech:
Address:

Antech Diagnostics
17672 Cowan Avenue
Irvine, California
800 783 8695

Facsimile:

Animal Hospital:
Owner(s):
Address:

92614

Town and Country Animal Clinic
Dr[.] Wendy Walker
2715 Olney Sandy Springs Rd[.]
Olney, MD 20832
301 774 7111

(Id.) (emphases in original).

Also under the heading “SUMMARY,”

the 2011 LSA states that the “Term of Agreement” is sixty (60)
months and that its effective date was March 1, 2010.

(Id.).

Antech

was

alleges,

typographical

however,

error

and

that

the

that

“the

reference
parties

to

understood

effective date of the 2011 LSA was March 1, 2011.”
¶ 8).

2010

a

the

(ECF No. 8

The cover page also contains the following provisions:
MINIMUM AVERAGE ANNUAL FEE: Animal Hospital
Owner is required to utilize Antech to

2

Because Antech expressly relies on the 2011 LSA in its
amended complaint and because Antech has not raised any
challenge to the authenticity of the version of the contract
submitted by Defendants (ECF No. 11-1), the 2011 LSA is
appropriately considered in ruling on Defendants’ Rule 12(b)(6)
motion to dismiss. See, e.g., Robinson v. Am. Honda Motor Co.,
551 F.3d 218, 222-23 (4th Cir. 2009).
3

provide Laboratory Services required by
Animal Hospital in an amount equal to a
minimum of $300,000 or $5,000 net per month
(the “Minimum Average Annual Fee”), in
accordance with the provisions of Section 1
below.
LOYALTY COMMITMENT As an incentive to enter
into this Agreement, Antech will rebate to
Animal Hospital Owner a monthly amount as
outlined in Annex #2 (the “Loyalty Rebate”).
The Loyalty Rebate will be subject to the
terms and conditions set forth in Section 3.
(ECF No. 11-1, at 1) (emphases in original).
The 2011 LSA requires the Animal Hospital Owner to “cause
all

veterinary

diagnostic

and

clinical

laboratory

services

(‘Laboratory Services’) that are to be performed for and on
behalf of the Animal Hospital, to be performed by a veterinary
diagnostic laboratory owned by Antech (an ‘Antech Lab’).”
§ 1.1) (“the Exclusivity Provision”).

(Id.

The 2011 LSA establishes

three exceptions to the Exclusivity Provision.

First, Section

1.1.1 allows the Animal Hospital Owner to cause its Laboratory
Services to be performed by a non-Antech laboratory so long as:
the fees paid to such other entity in the
aggregate during each ‘Contract Year’ (i.e.,
each twelve month period beginning on the
date or anniversary date of this Agreement)
are less than 10% of all fees paid by or on
behalf of the Animal Hospital in connection
with all Laboratory Services during that
Contract Year.
Second, Section 1.1.2 permits the Animal Hospital to use a nonAntech laboratory “to perform any services that a[n] Antech Lab

4

cannot perform.”
Hospital

“may

Third, Section 1.1.3 provides that the Animal

use

laboratory

equipment

owned

by

the

Animal

Hospital Owner and located at the Animal Hospital premises.”
In Section 3.1, titled “Terms of Rebate,” the 2011 LSA
states

that

“[a]s

long

as

Animal

Hospital

Owner

meets

the

minimum monthly volume (see Minimum Average Annual Fee), Antech
will credit the Animal Hospital’s monthly lab invoice with the
rebate as set forth in Annex 2 for the term of the agreement.”
(ECF No. 11-1 § 3.1).
monthly rebate.

Annex 2 specifies the amount of the

(See id. at 6).

In Section 3.2, titled “Default,” the 2011 LSA establishes
that two types of events constitute an “event of default with
respect

to

the

Rebate”:

(1)

a

breach

of

the

Exclusivity

Provision; and (2) a failure to pay invoices within thirty (30)
days of receipt from Antech.

(ECF No. 11-1, § 3.2).

Section

3.2 goes on to state:
At any time after the occurrence of an event
of default, Antech may declare the entire
amount of the Rebates previously paid to be
billable and due immediately; NOTE HOWEVER,
if the Animal Hospital Owner lab volume
during any month falls below the stated
rebate threshold in, [sic] the rebate will
not be apply [sic] to that month BUT that
does not constitute default as long as the
exclusivity provisions set forth in Section
1 are maintained.
(Id.).

The 2011 LSA also contains a confidentiality clause and

a California choice of law provision.
5

(See id. §§ 4 & 6).

On

the

fourth

page

of

the

2011

LSA,

under

the

heading

HOSPITAL OWNER,” is the signature of Wendy J. Walker.
11-1, at 4).

“ANIMAL
(ECF No.

Underneath that signature is a line titled “By:”

which is completed with the handwritten, printed name of “Wendy
J. Walker.”

The line titled “Its:” is blank.

Antech alleges that, on or about December 3, 2011, “Walker
and/or Town & Country entered into a service agreement with
IDEXX Laboratories, Inc. (‘IDEXX’), one of Antech’s competitors,
in

breach

of

their

contractual

laboratory services exclusively.”

obligation

to

use

(ECF No. 8 ¶ 12).

Antech’s
Antech

further alleges that, since that date, “Walker and/or Town &
Country have utilized IDEXX’s services to the complete exclusion
of Antech.”
B.

(Id.).

Procedural Background

On January 7, 2013, Antech filed a complaint against Walker
and “Town & Country Animal Clinic, Inc.”

(ECF No. 1).

On

February 21, Dr. Walker moved to dismiss, arguing that (1) she
is not a proper Defendant because she is not a party to the 2011
LSA in her individual capacity; (2) the complaint failed to
state a claim; and (3) the complaint contained a misnomer and
failed to name Morwalk, a necessary party.
1).

(See ECF Nos. 4 & 4-

On February 26, Antech filed a motion to seal Dr. Walker’s

motion to dismiss and all supporting memoranda and exhibits.
(ECF No. 5).
6

Antech then filed an amended complaint, which replaced the
entity “Town & Country Animal Clinic, Inc.” with Morwalk and
mooted Dr. Walker’s first motion to dismiss.

(ECF Nos. 7 & 8).

In its amended complaint, Antech alleges that Dr. Walker or
Morwalk knowingly breached the 2011 LSA in two ways:

(1) “by

failing to exclusively utilize Antech’s veterinary laboratory
services

in

through

the

the

amount

completion

agreed
of

services

the

upon

of

five-year

utilizing

IDEXX’s

“to

Antech.”

the

(ECF No. 8 ¶¶ 16, 21).

$60,000.00
term”

complete

and

per

year

(2)

by

exclusion

of

Antech asserts that, as a

result of these breaches, it has suffered damages in the form of
lost profits and unreturned rebates of $175,222.94.

(Id. ¶¶ 17,

22).
On April 19, 2013, Dr. Walker and Morwalk filed a motion to
dismiss

the

first

amended

complaint

pursuant

to

Fed.R.Civ.P.

12(b)(6) (ECF No. 11), a memorandum in support thereof (ECF No.
12), and a consent motion to seal the foregoing (ECF No. 13).
On May 6, Antech filed its opposition to Defendants’ motion (ECF
No. 15), along with a motion to seal (ECF No. 14).

Neither

Defendant filed a reply.
II.

Motion to Dismiss
A.

Standard of Review

The purpose of a motion to dismiss under Rule 12(b)(6) is
to test the sufficiency of the complaint.
7

Presley v. City of

Charlottesville,

464

F.3d

480,

(4th

483

Cir.

2006).

A

plaintiff’s complaint need only satisfy the standard of Rule
8(a), which requires a “short and plain statement of the claim
showing that the pleader is entitled to relief.”
8(a)(2).

Fed.R.Civ.P.

“Rule 8(a)(2) still requires a ‘showing,’ rather than

a blanket assertion, of entitlement to relief.”
v. Twombly, 550 U.S. 544, 555 n.3 (2007).

Bell Atl. Corp.

That showing must

consist of more than “a formulaic recitation of the elements of
a cause of action” or “naked assertion[s] devoid of further
factual enhancement.”

Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (internal citations omitted).
At this stage, all well-pleaded allegations in a complaint
must be considered as true, Albright v. Oliver, 510 U.S. 266,
268 (1994), and all factual allegations must be construed in the
light

most

favorable

to

the

plaintiff,

see

Harrison

v.

Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir. 1993)).

In evaluating the complaint, unsupported legal

allegations

not

need

be

accepted.

Revene

Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989).

v.

Charles

Cnty.

Legal conclusions

couched as factual allegations are insufficient, Iqbal, 556 U.S.
at 678, as are conclusory factual allegations devoid of any
reference to actual events, United Black Firefighters v. Hirst,
604

F.2d

844,

847

(4th

Cir.
8

1979);

see

also

Francis

v.

Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009).

“[W]here the

well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged—
but

it

has

not

relief.’”

‘show[n]’—‘that

Iqbal,

8(a)(2)).

556

U.S.

the

at

pleader

679

is

(quoting

entitled

to

Fed.R.Civ.P.

Thus, “[d]etermining whether a complaint states a

plausible claim for relief will . . . be a context-specific task
that

requires

the

reviewing

its

judicial

Defendants raise three arguments in their motion.

(ECF No.

experience and common sense.”
B.

court

to

draw

Id.

Analysis

12, at 1-4).

First, Defendants argue that Dr. Walker is not

properly named in her individual capacity.
argue

on

that

the

amended

complaint

lacks

Second, Defendants
sufficient

factual

allegations to establish the plausibility that the Exclusivity
Provision has been violated.

Third, Defendants contend that the

2011 LSA requires only that the contracting party use $300,000
worth

of

Laboratory

Services

performed

by

Antech

over

the

entirety of the contract’s five-year term, meaning that there
can be no breach based on the volume of services used until the
contract expires.

Each of these arguments will be addressed, in

turn.

9

1.

The Complaint States a Plausible Basis for Holding Dr.
Walker Liable in Her Individual Capacity.

Defendants’

sole

argument

in

support

of

dismissing

Dr.

Walker is that the amended complaint affirmatively alleges that
Dr. Walker signed the contract in her capacity “as president.”
(ECF No. 12 ¶¶ 2-4).

As Antech observes in its opposition (ECF

No. 15), however, this argument mischaracterizes the allegations
of the amended complaint.3

The only reference in the amended

complaint to Dr. Walker acting in her capacity “as president of
Town

&

Country”

is

in

connection

with

the

2009

LSA

(see

generally ECF No. 8) – which is not the contract upon which
Antech sues.
By contrast, the amended complaint states a plausible basis
for holding Dr. Walker liable in her individual capacity for the
alleged breaches of the 2011 LSA.

First, the amended complaint

itself does not specify whether Dr. Walker signed the 2011 LSA
in her individual capacity or on behalf of Town & Country but
instead asserts that “Walker and/or Town & Country” were bound

3

In its opposition, Antech also argues that Defendants’
motion to dismiss is untimely to the extent it is submitted on
behalf of Dr. Walker. (ECF No. 15, at 3). According to Antech,
Dr. Walker was served with its amended complaint on March 13,
2013, via the CM-ECF system. Antech contends that, pursuant to
Fed.R.Civ.P. 15(a)(3), Dr. Walker had fourteen (14) days to
respond, yet did not file her motion to dismiss until April 19,
2013, more than a month later.
Antech’s untimeliness argument
need not be considered because, as discussed below, Dr. Walker’s
motion to dismiss will be denied on its merits.
10

by the agreement.

(ECF No. 8 ¶¶ 8-9) (emphasis added).

Second,

the express provisions of the 2011 LSA contradict Defendants’
position.
contract

The cover page to the 2011 LSA indicates that the
is

“entered

into

by

and

between

Antech

Diagnostics

(“Antech”) and the party or parties lasted below as “Animal
Hospital Owner(s).”

(ECF No. 11-1, at 1).

Later on the same

page, the “Animal Hospital” is identified as “Town and Country
Animal

Clinic”

and

the

“Owner(s)”

as

“Dr[.]

Wendy

Walker.”

Later, Dr. Walker’s signature appears beneath the designation
“ANIMAL

HOSPITAL

OWNER”

“Its:______________.”

followed

by

(Id. at 4).

“By:

Wendy

Walker”

and

In addition, the 2011 LSA

also sets forth different obligations for the “Animal Hospital”
and the “Animal Hospital Owner.”

(Compare, e.g., id. § 1.1.1

with § 1.1.2).
Construing the allegations in Antech’s favor, and in light
of the 2011 LSA’s repeated references to the “Animal Hospital
Owner” as a contracting party, the amended complaint plausibly
states a basis for holding Dr. Walker liable in her individual
capacity.
Animal

See, e.g., Antech Diagnostics, Inc. v. Downers Grove

Hosp.

&

Bird

Clinic,

P.C.,

No.

12-C-2736,

2012

WL

2567045, at *3-4 (N.D.Ill. June 29, 2012) (in a case involving a
similarly worded exclusivity contract for Laboratory Services
provided

by

Antech,

declining

11

to

dismiss

the

individual

veterinarian defendants identified as “Owner(s)” on the cover
page of the contract).4
2.

The Amended Complaint Alleges a Plausible Claim for
Breach of the Exclusivity Provision in the 2011 LSA.

Defendants

next

contend

that

Antech’s

amended

complaint

fails to state a plausible claim for breach of the Exclusivity
Provision because the 2011 LSA permits the use of non-Antech
laboratories in certain circumstances.
Thus,

according

explicitly

that

to
none

Defendants,
of

the

(ECF No. 12 ¶¶ 11-16).

Antech

exceptions

needed
to

the

to

allege

Exclusivity

Provision could possibly apply in order to state a breach claim.
Defendants’ position is unavailing because the allegations
of the amended complaint, when taken as true and construed in
the light most favorable to Antech, establish the plausibility
that the exceptions to the Exclusivity Provision do not apply.

4

Judge Bredar’s decision granting summary judgment in favor
of an individual defendant in VCA Cenvet, Inc. v. Chadwell
Animal Hospital, LLC, No. JKB-11-1763, 2011 WL 6257190, at *3
(D.Md. Nov. 29, 2011), does not demand a different result.
Chadwell involved a similarly worded exclusivity contract for
Laboratory Services provided by Antech. See id. at *1-2. Judge
Bredar concluded that the contract was facially ambiguous as to
whether it bound the veterinarian who was designated as the
“Owner” on the cover page in his individual capacity.
Judge
Bredar’s finding of ambiguity was based primarily on the final
page of the contract at issue, where the veterinarian’s
signature was followed by “By: Keith Gold” and “Its: President.”
Id. at *3.
Here, by contrast, the “Its:” line is blank.
Moreover, even if the 2011 LSA were deemed ambiguous as to the
identity of the parties to be bound, that conclusion would not
require dismissing Dr. Walker at this stage.
12

Specifically, the amended complaint alleges that, beginning in
December 2011 and continuing until at least March 2013, “Walker
and/or Town & Country have utilized IDEXX’s services to the
complete

exclusion

of

Antech.”

(ECF

No.

8

¶

12)

(emphasis

added).

In other words, Antech alleges that Dr. Walker and/or

Town & Country have directed 100% of their Laboratory Services
to IDEXX and 0% to Antech.
these

allegations,

the

If Antech is able to substantiate

first

exception

to

the

Exclusivity

Provision – which permits the use of a non-Antech laboratory for
Laboratory Services so long as the fees for such services are
less than 10% of the Animal Hospital’s total expenditures for
Laboratory Services in a given year – clearly would not apply.
Antech’s allegations also establish the plausibility that
the second exception – which permits the use of a non-Antech
laboratory to perform “any services that a[n] Antech Lab cannot
perform” – is inapplicable.

Although the amended complaint does

not explicitly aver that Defendants have used IDEXX to perform
services that can be performed by an Antech Lab, that is the
most

reasonable

alleged.

inference

that

can

be

drawn

from

the

facts

First, Antech asserts that, pursuant to the 2011 LSA,

Antech “continued to provide the benefits of the 2009 LSA,”
i.e., a monthly rebate in an amount “equal to a percentage of
the total qualified services for which Town & Country utilized
Antech each month.”

(ECF No. 8 ¶¶ 6, 10).
13

Antech had no

obligation to pay such rebates unless Dr. Walker and/or Morwalk
were, in fact, using Antech’s Laboratory Services in accordance
with the Exclusivity Provision.

Antech also alleges that, in

December 2011, Walker and/or Town & Country signed a services
agreement with IDEXX, which is characterized as “one of Antech’s
competitors.”

(Id.

¶ 12).

Finally,

Antech

alleges

that

“[s]ince [early December 2011] Walker and/or Town & Country have
utilized IDEXX’s services to the complete exclusion of Antech.”
(Id.).

Defendants would apparently have the court conclude that

their needs for Laboratory Services changed so completely and
abruptly in December 2011 that Antech could no longer perform
any such services, even while IDEXX, Antech’s competitor, could.
Although

possible,

Defendants’

the

exclusive

more

use

of

plausible
IDEXX’s

inference

services

is

that

encompassed

at

least some Laboratory Services that could be performed (and had
previously been performed) by Antech Labs.
Accordingly,
Antech’s

because

allegations

that

it

can

the

reasonably

first

two

be

inferred

exceptions

to

from
the

Exclusivity Provision do not apply, and because Defendants make
no

arguments

relating

to

the

third

exception,

the

amended

complaint states a plausible claim for breach of the 2011 LSA’s
Exclusivity Provision.

14

3.

The Amended Complaint Also States a Plausible Breach
of Contract Claim Based on Defendants’ Alleged Failure
to Cause At Least $5,000 Worth of Laboratory Services
to be Performed by Antech Per Month.

Defendants’ final argument is that the 2011 LSA does not
require any monthly minimum payment but instead requires only a
total

payment

contract.

of

$300,000

over

(ECF No. 12, at 4).

the

five-year

term

of

the

Thus, according to Defendants,

there can be no breach based on insufficient payments until
after the 2011 LSA expires.

(Id.).

Antech maintains that its

breach of contract claims are ripe.

(ECF No. 15, at 5-6).

Antech has the better argument.
The parties agree that the 2011 LSA is to be interpreted
according to California law.

In California, “[t]he fundamental

rules of contract interpretation are based on the premise that
the interpretation of a contract must give effect to the mutual
intention of the parties,” as of the time of contract formation.
Waller

v.

Truck

Ins.

Exch.,

Inc.,

(internal quotation marks omitted).

11

Cal.4th

1,

18

(1995)

Where possible, such intent

is to be inferred “solely from the written provisions of the
contract,” according to their “clear and explicit meaning.”
(internal quotation marks omitted).
of

a

contract

susceptible

to

are
more

ambiguous
than

one

–

Only where the plain terms
i.e.,

where

reasonable

the

terms

construction

extrinsic evidence of the parties’ intent be considered.

15

Id.

–

are
may

Benach

v.

Cnty.

of

Los

Angeles,

Cal.App.4th

149

836,

847

(2007).

Determining whether contract language is ambiguous is a question
of law.
Cal.3d

Producers Daily Delivery Co. v. Sentry Ins. Co., 41
903,

904

(1986).

In

making

that

determination,

the

contract’s provisions must be interpreted together as a whole
“so as to give effect to every part, if reasonably practicable,
each clause helping to interpret the other.”

Cal. Civ. Code

§ 1641.
Here,

when

the

2011

LSA

is

considered

as

Defendants’ proposed interpretation is unavailing.

a

whole,

Section 3.2

of the agreement provides that “if the Animal Hospital Owner lab
volume during any month falls below the stated rebate threshold
in, [sic] the rebate will not be apply [sic] to that month BUT
that does not constitute default

as long as the exclusivity

provisions set forth in Section 1 are maintained.”
1

§ 3.2)

(emphasis

establishes
Services

that

volume

a

added).
drop

This

below

constitutes

provision

$5,000
a

breach

in

(ECF No. 11unambiguously

monthly
where

simultaneous breach of the Exclusivity Provision.

Laboratory

there

is

a

Because, as

discussed above, Antech asserts a plausible claim for breach of
the Exclusivity Provision, the amended complaint also states a
claim based on Defendants’ alleged failure to cause at least
$5,000 worth of Laboratory Services to be performed by Antech in

16

any month since December 2011.

Accordingly, Defendants’ motion

to dismiss must be denied.
III. Motions to Seal
The parties also seek to seal the 2011 LSA and each of the
briefs quoting provisions of the contract.
14).

(ECF Nos. 5, 13, &

In support of their requests, the parties rely primarily

on the confidentiality provision in the 2011 LSA, which bars the
Animal

Hospital

published)

Owner

the

from

publishing
existence,

contract’s

(or

causing

terms,

or

to

be

pricing

information without Antech’s consent and “except as required by
law or judicial process.”
submits

a

declaration

(ECF No. 11-1 § 4).
from

Controller,

who

conclusorily

confidential

and

that

cause

Antech

its

competitive

unfair advantage.”

Brian
avers

that

disclosure
harm

or

Brown,

put

to

Antech also

its

the

Assistant

2011

LSA

is

a

competitor

“could

that

competitor

at

(ECF No. 5-2, Brown Decl. ¶¶ 3-4).

an
As

discussed below, neither of these justifications warrant sealing
of the documents in question.
“The

right

of

public

access

to

documents

or

materials

filed in a district court derives from two independent sources:
the common law and the First Amendment.”

Va. Dep’t of State

Police v. Wash. Post, 386 F.3d 567, 575 (4th Cir. 2004), cert.
denied, 544 U.S. 949 (2005).

“The common law presumes a right

of the public to inspect and copy ‘all judicial records and
17

documents.’”

Id. at 575 (quoting Stone v. Univ. of Md. Med.

Sys. Corp., 855 F.2d 178, 180 (4th Cir. 1988)).
can

be

overcome

only

if

“countervailing

outweigh the public interests in access.”

This presumption
interests

heavily

Id. (quoting Rushford

v. New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir. 1988));
see also Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597–99
(1978).

The First Amendment provides a “more rigorous” right of

access for certain “judicial records and documents,” Va. Dep’t
of State Police, 386 F.3d at 575-76, which may be overcome “only
on the basis of a compelling governmental interest, and only if
the denial is narrowly tailored to serve that interest,” Stone,
855 F.2d at 180.
As a substantive matter, when a district court is presented
with

a

request

to

seal,

it

must

determine

two

things:

(1) whether the documents in question are “judicial records” to
which

the

common

(2) whether

the

law

presumption

documents

are

also

of

access

protected

rigorous First Amendment right of access.

applies;
by

the

and
more

See In re Application

of United States for an Order Pursuant to 18 U.S.C. Section
2703(D), 707 F.3d 283, 290 (4th Cir. 2013).

The Fourth Circuit

recently held that judicially authored or created documents are
“judicial records,” as are documents filed with the court that
“play

a

role

in

substantive rights.”

the

adjudicative

process,

or

adjudicate

Id. (citing Rushford, 846 F.2d at 252; In
18

re

Policy

Mgt.

Sys.

Corp.,

67

F.3d

296

(4th

Cir.

1995)

(unpublished table decision)).
The sealing of any judicial records must also comport with
certain procedural requirements.

First, the non-moving party

must be provided with notice of the request to seal and an
opportunity to object.
235 (4th Cir. 1984).

In re Knight Publ’g Co., 743 F.2d 231,

In addition, “less drastic alternatives to

sealing” must be considered.
F.3d at 576.

Va. Dep’t of State Police, 386

Finally, if sealing is ordered, such an order

“must state the reasons (and specific supporting findings)” for
sealing and why sealing is preferable over alternatives.

Id.;

cf. Local Rule 105.11 (requiring any motion to seal to include
both

“proposed

reasons

supported

by

specific

factual

representations to justify the sealing” and “an explanation why
alternatives

to

sealing

would

not

provide

sufficient

protection”).
Applying these principles here, it must first be determined
whether the documents the parties seek to seal are judicial
records, as recently defined by the Fourth Circuit.

The 2011

LSA forms the basis for this breach of contract action and thus
necessarily plays a role in adjudicating the substantive rights
of the parties, as illustrated by the their extensive citations
to

the

contract

Accordingly,

the

in

briefing

2011

LSA

Defendants’
and
19

any

motion

references

to

dismiss.

thereto

are

judicial records to which the common law right of public access
attaches.

To justify sealing, therefore, the parties must – at

a minimum – establish a significant countervailing interest that
outweighs the public’s interest in openness.5
The parties fail to meet their burden.

First, with respect

to their reliance on the confidentiality provision in the 2011
LSA, it is well-established that “parties cannot by agreement
overcome

the

public’s

right

of

access

to

judicial

records.”

Cochran v. Volvo Grp. N. Am., LLC, --- F.Supp.2d ---, No. 1:11–
CV–927, 2013 WL 784502, at *4 (M.D.N.C. Mar. 1, 2013); see also
Bureau

of

Nat’l

Affairs

v.

Chase,

No.

ELH–11–1641,

2012

WL

3065352, at *3 (D.Md. July 25, 2012) (“[p]rivate parties are
entitled to enter into confidential agreements, but the courts
ordinarily

are

not

confidentiality . . .”).

party

to

such

promises

of

Second, Antech’s assertions of harm

are unconvincing and are unsupported by any specific factual
details regarding the purported competitive disadvantage that
the company would face upon unsealing the 2011 LSA.

Nor is it

clear how the agreement’s terms are truly “confidential,” given
that similarly worded exclusivity contracts have been publicly
filed in other lawsuits involving Antech and have been discussed

5

Because, as discussed below, the parties fail to establish
such an interest, it need not be decided whether the 2011 LSA is
also protected by a First Amendment right of access.
20

at

length

in

publicly

those cases.

available

judicial

opinions

issued

in

See, e.g., VCA Cenvet, Inc. v. Chadwell Animal

Hosp., LLC, No. JKB-11-1763, 2012 WL 4005542 (D.Md. Sept. 10,
2012); VCA Cenvet, Inc. v. Vill. Veterinary Ctrs., Inc., No. 11cv-3119-WSD, 2012 WL 3779101 (N.D.Ga. Aug. 31, 2012); Antech
Diagnostics, Inc. v. Downers Grove Animal Hosp. & Bird Clinic,
P.C., 2012 WL 2567045 (N.D.Ill. June 29, 2012); Animal Hosp. of
Nashua, Inc. v. Antech Diagnostics, No. 11-cv-448-SM, 2012 WL
1801742 (D.N.H. May 17, 2012).
In sum, because the parties fail to establish any interest
that outweighs the public’s common law right of access, each of
the

motions

to

seal

will

be

denied,

and

the

documents

in

question will be ordered unsealed.
IV.

Conclusion
For the foregoing reasons, the motion to dismiss filed by

Defendants Wendy Walker and Morwalk, Inc., will be denied, and
the motions to seal filed by Defendants and by Plaintiff Antech
Diagnostics, Inc., will also be denied.

A separate Order will

follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

21