AVAYA INC. v. TELECOM LABS, INC. et al
Filing
504
OPINION. Signed by Judge Joseph E. Irenas on 7/6/2012. (dmr)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
AVAYA INC.
HONORABLE JOSEPH E. IRENAS
Plaintiff,
CIVIL ACTION NO. 06-2490
(JEI/KMW)
v.
OPINION
TELECOM LABS, INC.,
TEAMTLI.COM CORP., CONTINUANT,
INC., SCOTT GRAHAM, DOUGLAS
GRAHAM, and BRUCE SHELBY,
Defendants.
APPEARANCES:
ARCHER & GREINER, PC
Robert T. Egan
One Centennial Square
Haddonfield, NJ 08033
Counsel for Plaintiff
K&L GATES LLP
Anthony P. Larocco
One Newark Center
10th Floor
Newark, NJ 07201
and
KIRPATRICK & LOCKHART, PRESTON, GATES, ELLIS, LLP
David S. Kwon
One Newark Center
Tenth Floor
Newark, NJ 07102
and
HUGHES, HUBBARD & REED, LLP
Eric K. Blumenfeld
101 Hudson Street
Suite 3601
Jersey City, NJ 07302
Counsel for Defendants
IRENAS, Senior District Judge:
1
This case concerns Defendants’ access to proprietary
maintenance software that Plaintiff Avaya, Inc. and its
predecessors developed and embedded in complex telephony systems
that they designed, manufactured, and sold.1 Over the course of
six years, this case has become one of the most - if not the most
- complicated case in the district. Added to this complexity is a
thorough lack of transparency as the majority of the docket has
remained under temporary seal pending an anticipated, but as yet
unfiled, omnibus motion to seal. Presently before the Court are
the parties’ responses to this Court’s May 17, 2012 Order to Show
Cause why the entire record should not be unsealed. (See Dkt.
Nos. 496-98)
I.
On February 9, 2010, Judge Goodman entered a Consolidated
Consent Discovery Confidentiality Order. (Dkt. No. 134) The Order
provided, inter alia, thirty-nine categories of “Protected
Litigation Materials,” which restricted access of discovery
materials to both third parties and even named parties in this
case.2 The Order also provided a procedure by which the parties
1
For a more thorough recitation of the factual and procedural history
of this case see Opinion, Nov. 4, 2011, Dkt. No. 415 filed in redacted form at
Dkt. No. 488.
2
Also pending before the Court are motions to amend the parties’
agreement restricting access to named parties and their employees in
anticipation of litigation. That Motion is contingent upon the scope of
material sealed in this matter.
2
could file motions to seal documents filed on the docket.
The parties followed the February 9, 2010 Order until Judge
Brown, in an effort to accelerate dispositive motion practice, on
March 11, 2011, permitted the parties to file materials under
temporary seal.3 Using this procedure, the parties filed hundreds
of document entries under temporary seal. (See Dkt. Nos. 184-478)
Each document entry can contain hundreds of pages. (See, e.g.,
Dkt. No. 334, which contains over 400 pages)
Even judicial opinions have been filed under temporary seal.
For example, on February 24, 2012, Avaya filed a motion to redact
certain portions of Judge Brown’s January 26, 2012 Opinion, which
was granted on March 30, 2012. (Dkt. No. 469) The Order granting
the Motion directed Plaintiff to file a redacted copy of the
Opinion on the docket within five days. Plaintiff has yet to file
a redacted version of the Opinion on the docket and the Opinion
remains under temporary seal. At least two other Opinions also
remain under temporary seal with no redacted version available to
the public. (Dkt. Nos. 428, 430) The docket currently contains
thousands of pages of temporarily sealed documents with no clear
procedure for sifting through the morass.
On April 20, 2012, this case was reassigned to this Court.
On May 17, 2012, this Court issued an Order to Show Cause why the
3
The specific procedures were further refined in an Order dated August
17, 2011 and conference calls and emails.
3
entire record should not be unsealed. (Dkt. No. 496)
In response, Avaya now contends that only five categories of
documents should remain sealed.4 Defendants contend that only two
categories of documents should remain sealed: (1) customer list
documents, and (2) documents related to a settlement proposal
from 2004. Defendants further contend that documents containing
confidential business information should be filed on the docket
in redacted form.
For the reasons that follow, the Court finds the parties’
responses to the Order to Show Cause insufficient. Rather than
unsealing the entire record, however, the Court will permit the
parties one last opportunity to comply with this Court’s Order
and Third Circuit precedent.
II.
“It is well-settled that there exists, in both criminal and
civil cases, a common law public right of access to judicial
proceedings and records.” In re Cendant, Corp., 260 F.3d 183, 192
(3d Cir. 2001). “That presumption disallows the routine and
perfunctory closing of judicial records.” Id. at 193-94 (citing
4
Those five categories are: “(1) internal technical documents regarding
the proprietary PBX application software designed and developed by Avaya,
including security measures and technological controls; (2) the means and
methods by which unauthorized persons (such as Defendants) have gained or can
gain unauthorized access to Avaya’s PBX systems; (3)Avaya’s internal business
strategies and internal policies, practices and procedures for all aspects of
its PBX business; (4) Avaya’s detailed customer-specific information; (5)
Avaya’s detailed financial information.” (Pl.’s Br. 17-35, Dkt. No. 497)
4
Miller v. Indiana Hosp., 16 F.3d 549, 551 (3d Cir. 1994). “The
practical effect of the right to access doctrine is to create an
independent right for the public to view proceedings and to
inspect judicial records.” Id. at 193.
This common law right of access, however, is not absolute.
In certain limited circumstances, a party may seek the protection
of confidential materials by a showing of good cause. Pansy v.
Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994). The
Local Rules embody this standard by requiring moving papers to
describe: “(a) the nature of the materials or proceedings at
issue, (b) the legitimate private or public interests which
warrant the relief sought, (c) the clearly defined and serious
injury that would result if the relief sought is not granted, and
(d) why a less restrictive alternative to the relief sought is
not available.” L.Civ.R. 5.3(c)(2). “The burden is on the party
who seeks to overcome the presumption of access to show that the
interest in secrecy outweighs the presumption.” Leucadia, Inc. v.
Applied Extrusion Techs., Inc., 998 F.2d 157, 165 (3d Cir. 1993)
(quoting Bank of America Nat’l Trust and Savings Ass’n v. Hotel
Rittenhouse Assocs., 800 F.2d 339, 344 (3d Cir. 1986).
Applying these standards is a fact-specific inquiry in which
“specificity is essential.” In re Cendant, 260 F.3d at 194.
“Broad allegations of harm, bereft of specific examples or
articulated reasoning, are insufficient.” Id.
5
The first factor requires the movant to specify the
materials sought to be sealed. The Court rejects the parties’
approach to sealing documents by category. It is not up to the
parties to decide “in good faith” whether specific documents fall
within vague self-serving categories of documents. To retain a
sealing order, the movant shall identify the specific language at
issue in each document with a pin cite.
The movant then bears the burden of identifying the
interests at stake. Claims that necessarily affect the public such as class actions or, as here, antitrust violations - weigh
against sealing documents. See In re Cendant, 260 F.3d at 194-95.
Moreover, Courts have routinely refused to grant relief based on
the basis of generalized interests or private interests that do
not present a cognizable injury. See, e.g., Bank of America, 800
F.2d at 346 (“[T]he generalized interest in encouraging
settlements does not rise to the level of interests that we have
recognized may outweigh the public’s common law right of
access.”); Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1074
(3d Cir. 1984) (refusing to seal documents relating to poor
management decisions or bad business practices). The movant bears
the burden to establish a private interest sufficient to overcome
the public’s presumptive right of access.
The third element requires that an injury be both clearly
defined and sufficiently serious. See MEI, Inc. v. JCM American
6
Corp., 2010 WL 4810649, *2 (D.N.J. Nov. 17, 2010) (denying motion
to seal a settlement agreement based on conclusory proclamations
of competitive and monetary injuries); Warren Distributing Co. V.
InBev USA, ILC, 2010 WL 1491564, *2 (D.N.J. Apr. 13, 2010)
(“[S]tatements that the movant will suffer a ‘serious harm to
business interests’ without stating the specific harm do not
satisfy the requirements of L. Civ. R. 5.3(c)(2) and do not
demonstrate good cause.”). The parties’ initial submissions did
not clearly define the alleged injuries with respect to each
document sought to be sealed.
The third element also requires an injury to be sufficiently
serious. While the disclosure of certain confidential commercial
information may indeed cause a serious injury, a mere
reputational injury is insufficient. See Brumley v. Camin Cargo
Control, Inc., 2012 WL 300583, *3 (D.N.J. Feb. 1, 2012) (denying
motion to seal an FLSA settlement agreement, in part, because
private reputational harm was not sufficiently serious); Shine v.
TD Bank Fin. Grp., 2011 WL 3328490, * 8 (D.N.J. Aug. 2, 2011)
(“Generally, public embarrassment, without more, is not a clearly
defined and serious injury.”). Moreover, stale financial or
technical information may not cause a sufficiently serious
injury. In the parties’ quickly evolving technological industry,
the movant will bear the additional burden of demonstrating in
this six-year-old case that the document presents a clearly
7
defined and serious injury today.
Finally, the movant must demonstrate that less restrictive
alternatives are not available. For example, redaction is
preferable to sealing a document wholesale. See Houston v.
Houston, 2010 WL 2522689, *2 (D.N.J. June 14, 2012) (denying a
motion to seal where defendant failed to explain why “privacy
needs could not be equally well served by sealing more narrowly
tailored portions of the transcript and motion papers.”). It is
the burden of the movant, not the Court, to demonstrate that an
entire document should be sealed as opposed to redacted. That
burden becomes especially relevant where, as here, document
entries span hundreds of pages.
III.
For the foregoing reasons, the Court rejects the parties’
insufficient submissions. Should a party object to the unsealing
of a document - or portion of a document - the party shall submit
papers that address each factor discussed above. In response to
Plaintiff’s apparent confusion over the initial Order to Show
Cause, this Opinion applies to every sealed document on the
docket - including Opinions and Orders - whether or not a
previous motion to seal was granted. In the future, the parties
shall submit motions to seal pursuant to the Local Rules, this
Opinion and all previous Orders entered in this case.
8
The parties have 60 days to submit their renewed responses
to this Court’s May 17, 2012 Order to Show Cause. All submissions
shall be directed to Magistrate Judge Williams. If the parties
fail to meet their burden, the record will be promptly unsealed.
The parties shall also serve a copy of this Order on all
third parties that submitted discovery materials filed on the
docket under temporary seal within 5 days. Third parties shall
submit responses, if necessary, within 60 days of this Opinion.
Dated:
JOSEPH E. IRENAS, S.U.S.D.J.
9
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