Vogel v. Albert et al

Filing 14

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 9/15/2016. (sat, Chambers)

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : RICHARD VOGEL : v. : Civil Action No. DKC 15-3300 : DAVID ALBERT, et al. : MEMORANDUM OPINION Presently pending and ready for resolution are (1) the motion to dismiss or alternatively for summary judgment filed by Defendants David Albert and David Albert & Associates (“Defendants”) (ECF No. 5), and (2) a renewed joint motion to seal by Plaintiff (ECF No. 11). Richard Vogel (“Plaintiff”) the following alternatively Defendants The motions have been briefed, and the court now rules, no hearing being deemed necessary. For and for reasons, summary the judgment Local Rule 105.6. motion will to be dismiss DENIED, and or the motion to seal will be GRANTED. I. Background The complaint alleges that Plaintiff was the founder, President, CEO, Secretary, majority shareholder, and sole voting shareholder of Innovative Therapies, Inc. (“ITI”), a Delaware corporation. (ECF No. 1 ¶¶ 1, 5, 9). ITI Defendants retained to provide In 2007, Plaintiff and legal advice related to changing ITI’s corporate structure. (Id. Plaintiff again sought to restructure. ¶ 10). In 2011, Acting on Defendants’ advice, Plaintiff drafted and ITI’s Board approved the issuance of new stock in several different forms without providing notice to ITI’s non-voting shareholders. (Id. ¶¶ 15-16). Even though those shareholders lacked voting rights under ITI’s certificate of incorporation, Delaware law required that they be given the opportunity to vote on an action, like this one, that would increase the aggregate number of authorized shares. (Id. ¶ 18). The issuance of stock and the resolution passed by the Board were thus void under Delaware law. resulted equity in than the distribution planned; of excessive (Id. ¶ 19). a greater distribution This mistake portion of of ITI’s dividends to Plaintiff as a majority shareholder, which he later repaid; a significant loss in profit for shareholders when ITI was sold to Cardinal Health correct the (“Cardinal”) stock Plaintiff and ITI. split; in 2014; and costs additional for services to legal costs for (Id. ¶¶ 20-26). As part of the Agreement and Plan of Merger for the sale to Cardinal, Plaintiff signed a release dated August 29, 2014 (the “Release”). Cardinal, (ECF ITI, and No. 5-3). The Plaintiff, “as Release an named individual representative for all of the Stockholders.” and parties as (Id. at 1). stockholders are the “Releasors” under the Release. 2 as the The The other three parties “Releasees.” and their (Id.). specified Plaintiff both associates releases are the certain other parties as a stockholder and is released by the stockholders in his other capacities. The Release (Id. ¶¶ 2-3). contains several definitions. First, the “Company Releasees” are ITI and “its Subsidiaries and each of their respective individual, joint or mutual, past, present, and future current representatives, and (Id. ¶ 2). respective predecessors, directors, employees successors, and (both assigns.” Second, the “Vogel Releasees” are Plaintiff and “his past, affiliates, assigns.” former), officers, present, subsidiaries, (Id. ¶ 3). and insurers, future attorneys, representatives, successors and Third, the Releasees are released by the Releasors from the “Released Claims,” which include, as relevant here: [A]ny and all claims, demands, proceedings, causes of action, orders, obligations, damages, interest, contracts, agreements, debts, liabilities, attorneys’ fees, and expenses, whatsoever, whether in law or equity, whether known or unknown, suspected or unsuspected, which such Releasor now has, has ever had or may hereafter have against the respective [] Releasees arising contemporaneously with or prior to the Closing or on account of or arising out of any matter, cause, or event occurring contemporaneously with or prior to the Closing, including, but not limited to, . . . (c) breach of fiduciary duty, . . . (f) any amendment, whether effective or ineffective, to the Company’s 3 Certificate of Incorporation or Bylaws, (g) the capitalization of the Company, (h) the Performance Unit Plan (including any amendments thereto) and the Performance Units issued thereunder . . . . Further, Releasor waives the right to recover from any complaints, charges, lawsuits, administrative proceedings . . ., False Claims Act proceedings or qui tam proceedings, filed by the Releasor or by any federal or state agency on the Releasor’s behalf, concerning the Releasees (as defined below) or any Released Claims. (Id. ¶ 2). except in The Release also states that it “may not be changed a writing signed by the interest such a change will operate.” After relating the to Release this was dispute, raised Plaintiff person(s) against whose (Id. ¶ 10). in and pre-suit discussions Cardinal signed an Amendment to the Agreement and Plan of Merger (“Amendment”) in June 2015. Cardinal (ECF No. 5-4). and Plaintiff In Paragraph 3.c of the Amendment, included a “Clarification Release” that states: [N]othing in the August 2014 Release or in this Amendment was or is intended to release any claims that Vogel or any other Stockholder Releasor has or had against any attorney or accountant who represented ITI, Vogel, and/or any other Stockholder Releasor prior to Closing in connection with the authorization or issuance of any shares, any amendments or restatements of the articles of incorporation of ITI stock splits, creation or elimination of any classes or categories of shares or shareholders, transfers of shares, or any matters relating to the capitalization of ITI (the “Advisor Claims”), specifically including, but not 4 of Prior limited to, any claims whatsoever against [Defendants]; and to the extent necessary to give effect to subsection (ii) immediately preceding this clause, the August 2014 Release is amended to explicitly exclude any release of [Defendants], and that amendment shall be nunc pro tunc to the date of the August 2014 Release. (Id. ¶ 3.c). Under Paragraph 3.d. of the Amendment, “[a]ny claims that ITI has or had against any of the [Defendants] are irrevocably assigned to Vogel.” Plaintiff negligent assignee Defendants filed legal of this suit malpractice ITI’s filed legal the (Id. ¶ 3.d). on alleging a his behalf claims. instant own (ECF motion to single No. 1 count and as of the ¶¶ 27-32). or in dismiss, the alternative, for summary judgment, on November 23, 2015, raising the defense that Plaintiff released all claims against them as Vogel Releasees under the Release. responded and Defendants replied. II. (ECF No. 5). Plaintiff (ECF Nos. 12; 13). Standard of Review Defendants’ motion is styled as a motion to dismiss, or in the alternative, for summary judgment. converting a motion to dismiss into A court may, without a motion for summary judgment, “consider documents attached to the complaint as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic.” Mem’l Hosp., 572 F.3d 176, 180 5 (4th Philips v. Pitt Cnty. Cir. 2009) (citation omitted). “An affirmative defense, such as release, is not ordinarily considered plaintiff is not on a required motion to to negate dismiss it in because the the complaint.” Alexander v. UIP Prop. Mgmt., No. DKC-14-2469, 2015 WL 1472004, at *3 (D.Md. Mar. 30, 2015); see Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). An affirmative defense can be considered on a motion to dismiss only “if all facts necessary to the affirmative defense ‘clearly appear on the face of the complaint.’” Goodman, 494 F.3d at 464 (quoting Richmond, Fredericksburg & Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993)). “[A] movant cannot merely show that the elements of the defense appear on the face of the complaint or in properly considered documents, but must also ‘show that the plaintiff’s potential rejoinder to the affirmative defense was foreclosed by the allegations in the complaint.’” Alexander, 2015 WL 1472004, at *2 (quoting Goodman, 494 F.3d at 466). parties have stipulated to the Here, although the authenticity of Defendants’ exhibits (ECF No. 5-1, at 2 n.2), the exhibits are integral only to Defendants’ defense, not the complaint. Defendants’ motion will be construed as a motion for summary judgment. A motion for summary judgment will be granted only if there exists no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 6 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). A dispute about a material fact is genuine “if the evidence is such that a nonmoving reasonable party.” jury could a Lobby, Liberty return verdict 477 U.S. at for the 249. In undertaking this inquiry, a court must view the facts and the reasonable inferences drawn therefrom “in the light most favorable to the party opposing the motion,” Matsushita Elec. Indus. Co. (quoting v. Zenith United Radio Corp., v. Diebold, States 475 U.S. Inc., 574, 369 587 U.S. (1986) 654, 655 (1962)); see also EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005), but a “party cannot create a genuine dispute of material fact through inferences,” Shin v. mere speculation Shalala, 166 or F.Supp.2d compilation 373, 375 of (D.Md. 2001). “Defendants bear the burden of proving that the elements of release are satisfied.” Auslander v. Helfand, 988 F.Supp. 576, 580 (D.Md. 1997) (citing Allen v. Zurich Ins. Co., 667 F.2d 1162, 1164 (4th Cir. 1982)). “A defendant asserting an affirmative defense in a summary judgment motion must initially prove that no disputed material fact exists regarding the defense,” at which point “the burden shifts to the plaintiff to demonstrate specific disputed material facts precluding application of the affirmative defense; if the plaintiff fails 7 to do so, the defendant’s motion must be granted.” Id. (citing Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir. 1997)). III. Motion for Summary Judgment A. Applicable Law In diversity actions, the choice of law rules of the state in which the district substantive law. court sits determine the applicable See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007). For contract claims, Maryland applies the doctrine of lex loci contractus, applying the law of the state where the contract was formed, unless the contract contains a choice of law provision. ARTRA Group, Inc., 338 Md. 560, Lipchin, 288 Md. 30 (1980). Am. Motorists Ins. Co. v. 572-73 (1995); Kronovet v. Because the sale agreement, the Release, and the Amendment all include choice of law provisions submitting to the “law[s] of the State of Delaware,” (ECF Nos. 5-2, at 78; 5-3, at 3; 5-4, at 5), Delaware law governs the contract dispute here. Under Delaware law, a release is “a form of contract with the consideration typically being the surrender of a claim or cause of action in exchange for surrender or an offsetting claim.” the payment of funds or E.I. DuPont de Nemours & Co. v. Fla. Evergreen Foliage, 744 A.2d 457, 462 (Del. 1999). In interpreting releases, like all contracts, Delaware courts “give 8 priority to the parties’ intentions as reflected in the four corners of the agreement,” construing the agreement as a whole. Riverbend Cmty., LLC v. Green Stone Eng’g, LLC, 55 A.3d 330, 334 (Del. 2012). Releases can be specific, renouncing certain claims known to the parties, or general, “intended to cover everything—what the parties presently have in mind, as well as what they arise.” do not have in mind, but what may, nevertheless, Hob Tea Room v. Miller, 89 A.2d 851, 856 (Del. 1952). B. Analysis The dispute over the Release in this case is complicated by the multiple roles that both Defendants and Plaintiff took on in this case. Plaintiff alleges that Defendants provided legal representation and breached the duty of care owed both to him and to ITI (ECF Nos. 1 ¶¶ 1, 10-11; 12, at 14), and “brings this action on his own behalf and as the assignee of ITI” (ECF No. 1 ¶ 6). It is unclear from the complaint whether Plaintiff’s own claim is brought on the basis of Defendants’ representation of ITI, or whether it is based on legal advice provided to him personally. (ECF No. 1 ¶¶ 27-32). Plaintiff now argues that, “[w]hile Mr. Albert and his firm did at times act as Mr. Vogel’s attorneys, they attorneys. are That sued was here the in capacity their in capacity which they as ITI’s provided negligently erroneous legal advice regarding ITI’s stock split.” (ECF No. 12, at 14). Under 9 the Release, Plaintiff is a Releasor, both as an individual stockholder and as the representative for all of the stockholders (ECF No. 5-3 ¶ 1), but he is also a Releasee, both as an officer and director of ITI (id. ¶ 2), and as an individual (id. ¶ 3). 1. ITI’s Claims as Assigned by the Amendment Plaintiff brings a negligence claim as the assignee of ITI. (ECF No. 1 ¶ 6). Release. ITI did not release any claims under the ITI was solely a “Releasee” in the Release, and none of the Release provisions could be construed to divest it of its rights to sue its lawyers. (ECF No. 5-3, at 1). The Release, therefore, did not affect ITI’s claim against Defendants for malpractice related to work that they did for ITI, and that claim was received by Cardinal when it purchased ITI. In the Amendment, Cardinal assigned any claims that ITI has or had against Defendants to Plaintiff (ECF Nos. 5-4 ¶ 3.d; 1 ¶ 6). in his individual capacity.1 Defendants do not challenge the validity of this assignment,2 and appear to concede in the reply 1 Plaintiff was once again a signatory to this document in his personal capacity and as a representative of the stockholders, but the Amendment distinguished between the two roles by referring to Plaintiff as “Vogel” when he was acting as an individual and as “Representative” when he was acting as a representative of the stockholders. (ECF No. 5-4, at 1). 2 Although Defendants contest the validity of the Amendment’s Clarification of Prior Release provision, the assignment provision at issue here is not subject to the same challenge because it does not change Defendants’ position under the Release. (See ECF No. 5-3 ¶ 10). Cardinal’s assignment 10 that Plaintiff can bring the claims Cardinal assigned to him on behalf of dismissal ITI. of (Compare entire ECF complaint) No. 5-1, at 10 with ECF No. (moving 13, at for 1-2, 6 (asking the court to “dismiss all claims brought by Mr. Vogel in his individual capacity and in his capacity as a representative of the ITI and/or Cardinal shareholders,” but not those brought by Plaintiff as the assignee of ITI’s claims)). Defendants’ motion for summary judgment on claims Plaintiff brings on behalf of ITI, as assigned to Plaintiff by Cardinal in the Amendment, will be denied. 2. Defendants Are Not Released under the Company Release As explained above, the Releasors under the Release are ITI’s stockholders, including Plaintiff. The Company Release provides that the Releasors released and discharged ITI, its representatives, officers, directors, others, from the Released Claims. and employees, among (ECF No. 5-3 ¶ 2). ITI’s attorneys are not included as Company Releasees. acknowledge this, noting that the parties to Defendants the Release “specifically excluded ITI’s attorneys from the Release.” No. 13, at 4). allegation that (ECF Plaintiff’s claim, however, is based on an Defendants were ITI’s attorneys and were simply transfers its rights to Plaintiff, and Defendants’ interests are the same regardless of who holds this claim. 11 accordingly not released.3 Under the plain language of the Release, Plaintiff did not, as a stockholder or in any other capacity, release any claims against Defendants in their capacity as ITI’s attorneys. 3. Defendants Are Released under the Vogel Release Solely in their Capacity as Plaintiff’s Attorneys Defendants rely on the Vogel Release in their motion. Vogel Releasees specifically include Plaintiff and The his “attorneys,” unlike the Company Releasees, which do not include ITI’s attorneys. (ECF No. 5-3 ¶¶ 2-3). Plaintiff argues that Defendants are sued here not as Plaintiff’s attorneys, but as ITI’s attorneys; that Defendants should be considered unnamed third parties under the release and therefore cannot meet their burden to establish that they were intended to be released; and that the Release was “clarified” by the Amendment, which establishes that the Release was not meant to release claims against Defendants. (See ECF No. 12, at 1-2). As discussed above, the Released Claims were not released by Plaintiff and the other stockholders against Defendants as ITI’s attorneys. Any work performed by Defendants for Plaintiff as an individual would fall under the Released Claims, however, and Plaintiff and the other stockholders appear to have released 3 Defendants do not admit that they were ITI’s attorneys, but at this stage Plaintiff’s allegation in the complaint is taken as true. 12 those claims against Defendants under the plain language of the Release. Plaintiff argues that Defendants are unnamed third parties seeking the benefit of a release, and as such must show that the release was “crystal clear and unambiguous” to establish that they were intended to be released. (ECF No. 12, at 2). Delaware law does set a high bar “where a third party, not specifically named . . . asserts rights under general language.” Chakov v. Outboard Marine Corp., 429 A.2d 984, 985 (Del. 1981). “[I]n order for a release to protect a third party as a matter of law, the language of the release must be crystal clear and unambiguous in its inclusion of that person among the parties released.” Rochen v. Huang, No. C.A. 87C-JN-96, 1989 WL 5374, at *1 (Del.Super.Ct. Jan. 4, 1989) (citing Chakov, 429 A.2d at 985). The Chakov and Rochen courts, however, were distinguishing between parties specifically enumerated in the release—an individual and “his heirs, executors, administrators, agents and assigns”—and those covered by the phrase “all other persons, firms or corporations liable or who might be claimed to be liable.” Chakov, 429 A.2d at 985; Rochen, 1989 WL 5374, at *1 (interpreting identical language). Although Defendants are not identified by name in the Release, Plaintiff’s “attorneys” are specifically “officers, referenced directors, in employees” 13 the and Release, others just are as ITI’s referenced. (ECF No. 5-3 ¶¶ 2-3). require being the specific released As Defendants rightly point out, to names would of wreak all “third havoc on party” the individuals Release, identifies only one individual—Plaintiff—by name. which Plaintiff’s argument would make the Release virtually meaningless; it would, for example, mean that the shareholders did not release any claims against Plaintiff in his capacities as an officer and director, because under the Company Release Plaintiff would be an “unnamed third party.” Assuming as alleged by both Plaintiff and Defendants that Defendants did at some point act as Plaintiff’s attorneys (ECF Nos. 1 ¶ 1; 5-1, at 1; 12, at 14; 13, at 2), Defendants are not unnamed third unambiguously parties Vogel under the Releasees.4 Release This but case rather is are therefore distinguishable from Chakov and the other cases Plaintiff cites, in each of which the non-parties to the release attempted to be released through an “all other” clause. 985 (relying on the phrase “all See Chakov, 429 A.2d at other persons, firms or corporations liable or, who might be claimed to be liable”); Snead v. Stout, No. C.A. 04C-10-021-THG, 2005 WL 1653944, at *1 4 Plaintiff attempts to inject ambiguity in the Release by asserting that the phrase “past, present, and future,” when read with the modifiers in the Company and Parent Releases, renders the Vogel Release ambiguous. (ECF No. 12, at 14-15). Plaintiff has not offered any argument or alternate interpretation of this language, however, which would exclude Defendants as Vogel Releasees even if the phrase does not govern “attorneys.” 14 (Del.Super.Ct. June 16, 2005) (same); Rochen, 1989 WL 5374, at *1 (same); see also Sellon v. Gen. Motors Corp., 521 F. Supp. 978, 980 (D. Del. 1981) (relying on the phrase “all other persons, firms, corporations, associations or partnerships”). Plaintiff also argues that the Release is ambiguous as to whether Plaintiff’s claim is within the scope of the Released Claims. Plaintiff argues that his claim is based on Defendants’ negligence in providing advice on the process for amending ITI’s Certificate of Incorporation, and did not therefore “arise from” the ineffective amendment. (ECF No. 12, at 15). Plaintiff’s claim is unambiguously covered by the Release. Delaware courts “have ‘long upheld awards of summary judgment in contract disputes unambiguous,’” where without the language consideration at issue is of extrinsic clear and evidence. Riverbend Cmty., 55 A.3d at 334 (quoting GMG Capital Invs., LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776, 783 (Del. 2012)). The Release specific releases. specifically contains both a (See ECF No. 5-3 ¶ 2). include those “on account general release and The Released Claims of or arising out of . . . (f) any amendment, whether effective or ineffective, to the Company’s Certificate of Incorporation or Bylaws, (g) the capitalization of the Company, [and] (h) the Performance Unit Plan (including any amendments Units issued thereunder.” (Id.). 15 thereto) and the Performance Plaintiff alleges negligence in Defendants’ “handling [of] the split and conversion of Mr. Vogel’s shares of ITI stock,” which allegedly resulted in an ineffective amendment to the Certificate of Incorporation and incorrect distributions under the Performance Unit Plan. No. 1 ¶ 29). (ECF Plaintiff’s alleged damages arise out of errors in ITI’s capitalization (id. ¶¶ 23-25), the ineffective amendment (id. ¶¶ 22, 26), and the distribution of Performance Units (id. ¶¶ 20-21). Plaintiff’s “claims, demands, . . . causes of action, . . . [and] damages” (ECF No. 5-3 ¶ 2), all plainly are asserted on account of or arise out of the alleged ineffective amendment, ITI’s capitalization, Performance Units. and the distribution of There is no ambiguity as to whether the Release covers Defendants’ alleged conduct. For the foregoing reasons, to the extent that Plaintiff raises any claim of negligence for legal representation of himself alone, as a director, officer, or individual, such claim was released by Plaintiff and the other shareholders. The question effective in “changed” only then reinstating through becomes those “a whether claims. writing the The signed Amendment Release by against whose interest such change will operate.” ¶ 10). the can was be person(s) (ECF No. 5-3 The Amendment was signed by Cardinal and Plaintiff, but not by Defendants. It “clarifies” the Release by stating that the Release was not intended to release “any claims that Vogel 16 or any other Stockholder Releasor has or had against any attorney or accountant who represented ITI, Vogel, and/or any other Stockholder Releasor prior to Closing, . . . specifically including, but not limited to, any claims whatsoever against David Albert, David Albert & Associates, LLC, or any of their respective affiliates, entities, or employees.” 3.c). (ECF No. 5-4 ¶ The Amendment directly contradicts the Release, and this provision cannot be a valid change to the Release because it was not signed by Defendants and the other affected persons. Defendants have proved the elements of release are satisfied, and Plaintiff has not demonstrated disputed material facts that preclude the application of the defense. has released any Released Claim he may have had Plaintiff against Defendants for work that they performed solely as his attorneys. Defendants’ release inclusion Defendants in as Vogel all Releasees capacities. does not, Defendants additional language in the Release that states: Releasor waives the right to recover from any complaints, charges, [or] lawsuits . . . filed by the Releasor or by any federal or state agency on the Releasor’s behalf, concerning the Releasees (as defined below) or any Released Claims. . . . . . . . Each Releasor hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, commencing, instituting, or causing to be commenced, any proceeding of any kind 17 however, point to against any Releasee, based upon any matter purported to be released hereby. (ECF No. 5-3 ¶¶ 2, 6). Defendants argue that, if they are Vogel Releasees, these then under provisions, “Mr. Vogel may not recover against Defendants in their capacity as ITI’s alleged attorneys.” destroy (ECF No. 5-1, at 6). the careful drafting of Such an interpretation would the Release’s provisions. “Releasee” is a defined term in the Release, referring to the Parent Releasees, Vogel Releasees, and Company Releasees. No. 5-3 ¶ 4). (ECF Defendants acknowledge that they are not Company Releasees; that they are Vogel Releasees does not allow them to circumvent this exclusion. Defendants are Releasees only so far as they were acting as Plaintiff’s attorneys, and not to the extent that they were retained in other capacities. The terms of Defendants’ representation of Plaintiff and ITI and the capacity in which they provided the legal advice underlying Plaintiff’s Plaintiff’s allegation claim that remain his claim in is dispute. based Taking solely on Defendants’ representation of ITI as true, however, Defendants’ motion must be denied. Defendants have not proved that such claims were released either by ITI or by its shareholders. 18 IV. Motion to Seal Defendants previously memorandum, and exhibits. moved to seal (ECF No. 6). their motion, The motion to seal was denied without prejudice to renewal because it did not provide specific factual representations to justify the sealing or explain why alternatives to sealing would not provide sufficient protection, as Amendment. required (ECF No. by Local 8). The Rule 105.11 parties and the subsequently First filed a renewed joint motion to seal Defendants’ Exhibits A, B, and C (ECF Nos. 5-2; 5-3; 5-4). (ECF No. 11). A motion to seal must comply with Local Rule 105.11, which requires: “(a) proposed reasons supported by specific factual representations to justify the sealing and (b) an explanation why alternatives protection.” to sealing would not provide sufficient This rule endeavors to protect the common law right to inspect and copy judicial records and documents, Nixon v. Warner recognizing Commc’ns, that Inc., 435 competing U.S. interests 589, 597 sometimes (1978), outweigh while the public’s right of access, In re Knight Publ'g Co., 743 F.2d 231, 235 (4th Cir. 1984). The court should consider “less drastic alternatives to sealing,” such as filing redacted versions of the documents. Va. Dep’t of State Police v. Wash. Post, 386 F.3d 567, 576 (4th Cir. 2004). If the court decides that sealing is appropriate, it should also provide reasons, supported by 19 specific factual findings, for its decision to seal and for rejecting alternatives. Id. In addition, the First Amendment provides a “more rigorous” right of access for certain “judicial records and documents.” Id. at 575-76. “attaches to This qualified First Amendment right of access materials judgment motion.” filed in connection with a summary Doe v. Pub. Citizen, 749 F.3d 246, 258, 267 (4th Cir. 2014) (citing Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 252-53 (4th Cir. 1988)); Va. Dep’t of State Police, 386 F.3d at 578. This right of access “may be restricted only if closure is ‘necessitated by a compelling government interest’ and the denial of access is ‘narrowly tailored to serve that interest.’” Doe, 749 F.3d at 266 (quoting In re Wash. Post Co., 807 F.2d 383, 390 (4th Cir. 1986)); see also In re U.S. for an Order Pursuant to 18 U.S.C. Section 2703(D), 707 F.3d 283, 290 (4th Cir. 2013) (explaining the “significant” distinction between the two rights of access). The exhibits are part of Cardinal and ITI’s Agreement and Plan of Merger. Although the existence of the Agreement is now public, the Agreement contains a confidentiality provision. The parties and assert that the exhibits contain the terms conditions of a confidential agreement and potentially sensitive information regarding the company’s employees. They further allege that alternatives to sealing 20 structure, finances, and would not provide business sufficient information protection contained to within, the which tangentially related” to the instant motion. 2). confidential is “only (ECF No. 11, at While the parties request that the exhibits be sealed in their entirety, they propose that Defendants’ motion and memorandum of law in support, as well as Plaintiff’s opposition and the reply, extensively providing from a be filed the public publicly. relevant record of The portions the briefing of basis the for quotes exhibits, the parties’ arguments. The parties have sufficiently offered reasons supported by specific factual representations to justify sealing the exhibits under the Local Rule. Because the parties’ public briefing and this memorandum opinion quote and therefore make available the portions of the exhibits relevant to this motion, the public’s right of access restricted. to judicial records and documents is not Accordingly, the parties’ motion will be granted and the exhibits to Defendants’ motion (ECF Nos. 5-2; 5-3; 5-4), will remain under seal. V. Conclusion For the alternatively foregoing for reasons, summary judgment the motion filed by to dismiss Defendants or David Albert and David Albert & Associates will be denied, and the 21 joint motion to seal will be granted. A separate order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 22

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