FAIR LABORATORY PRACTICES ASSOCIATES et al v. RIEDEL et al
Filing
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OPINION AND ORDER granting 35 Motion to Seal; granting 39 Motion to Intervene. Signed by Judge William J. Martini on 2/29/16. (gh, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
FAIR LABORATORY PRACTICES
ASSOCIATES AND NPT ASSOCIATES,
Plaintiff,
Civ. No. 2:14-2581 (WJM)
OPINION & ORDER
v.
CHRIS RIEDEL AND HUNTER
LABORATORIES, LLC.
Defendant.
WILLIAM J. MARTINI, U.S.D.J.:
This matter comes before the Court on a motion to seal filed by Defendants Hunter
Laboratories LLC and Chris Riedel (collectively, “Hunter”) and a cross motion to intervene
filed by Quest Diagnostics, International (“Quest”). For the reasons stated below, the Court
will GRANT both motions.
I.
BACKGROUND
The Court assumes familiarity with the facts and writes primarily for the benefit of
Plaintiffs, Defendants, and non-party Quest. In 2010, Plaintiffs Fair Laboratory Practices
Associates and NPT Associates (collectively, “Fair Laboratory”) entered into a qui tam
sharing agreement (“the Agreement”) with Hunter. The Agreement concerned certain qui
tam lawsuits that each party was pursuing independently. Specifically, subject to certain
limitations, Hunter agreed to share 15% of any successful qui tam recovery with Fair
Laboratory and vice-versa. One qui tam suit subject to the Agreement was an action that
Hunter filed against non-party Quest in California state court (“the California Action”).
Hunter recovered a settlement from Quest in that action, but refused to share a portion of
the settlement with Fair Laboratory because Fair Laboratory had been disqualified from a
separate qui tam action subject to the Agreement. Fair Laboratory then filed suit in this
Court, alleging that it had a contractual right to a portion of Hunter’s California Action
recovery. The Court agreed and entered summary judgment in Fair Laboratory’s favor.
Fair Laboratory and Hunter then filed a stipulation and proposed order indicating that
the parties had entered into a settlement agreement (“the Settlement Agreement”). The
stipulation and order explained that Hunter had agreed to pay Fair Laboratory what was
owed under the Agreement, and in exchange, Fair Laboratory would consent to this Court
vacating its order of judgment against Hunter. After receiving the stipulation and proposed
order, the Court requested that the parties file the Settlement Agreement under seal. In
addition to filing the Settlement Agreement under seal, Hunter filed a motion to seal in
order to keep the Settlement Agreement confidential. Shortly thereafter, Quest filed a
cross-motion to intervene pursuant to Federal Rule of Civil Procedure 24(b). Through its
motion, Quest argues that the Settlement Agreement should be accessible to the public.
Now presently before the Court is Hunter’s motion to seal and Quest’s motion to intervene.
II.
MOTION TO INTERVENE
“On timely motion, the court may permit anyone to intervene who … has a claim or
defense that shares with the main action a common question of law or fact.” Fed. R. Civ.
P. 24(b)(1)(B). Moreover, “[a]ny interested person may move to intervene pursuant to Fed.
R. Civ. P. 24(b) before the return date of any motion to seal or otherwise restrict public
access.” L. Civ. R. 5.3(c)(4). Here, Quest’s motion to intervene is timely and has been
made for an appropriate purpose. Consequently, the Court will GRANT Quest’s motion
to intervene and will consider Quest’s arguments when deciding Hunter’s motion to seal.
III.
MOTION TO SEAL
The existence of a common law right of access to judicial records is “beyond dispute.”
Littlejohn v. Bic Corp., 851 F.2d 673, 677-78 (3d Cir. 1988). Consequently, there is a
strong presumption favoring access to documents filed in connection with civil
proceedings. See Publicker Indus. v. Cohen, 733 F.2d 1059, 1070 (3d Cir. 1984).
Typically, a settlement agreement not filed with the court is not a “judicial record” falling
within the right of access doctrine. See Enprotech Corp. v. Renda, 983 F.2d 17, 20-21 (3d
Cir. 1993). That said, “[o]nce a settlement is filed in the district court, it becomes a judicial
record, and subject to the access accorded such records.” Pansy v. Borough of Stroudsburg,
23 F.3d 772, 781 (3d Cir. 1994)
At first blush, it appears that there is a strong presumption favoring access here because
the Settlement Agreement was filed on this Court’s docket. See id. However, the
presumption favoring access is undermined where a district court instructs the parties to
file a settlement agreement and creates the impression that the agreement will remain
confidential. LEAP Systems, Inc. v. MoneyTrax, Inc., 638 F.3d 216 (3d Cir. 2011) is
instructive. In that case, the parties reached settlement agreements that resolved all
outstanding disputes in the litigation. The district court agreed to dismiss the action with
prejudice, but in connection with its decision to retain jurisdiction to enforce the
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agreements, the court also ordered that the parties place the terms of the agreements on the
record. However, the district court assured the parties that the terms of the agreements
would be kept confidential until it had opportunity to review a formal motion to seal.
Subsequently, the district court granted a motion to seal the portion of the record disclosing
the terms of settlement. Later, a third-party sought to have the terms of the settlement
agreements unsealed, but the district court declined.
In affirming the district court’s decision to keep the settlement agreements sealed, the
Third Circuit first held that the agreements were judicial documents subject to the right of
access because they were filed on the docket and subject to the district court’s continuing
jurisdiction. The court further acknowledged the parties seeking to keep the agreements
sealed did not state particularly convincing reasons for why allowing public access would
cause them injury. Notwithstanding those facts, the Third Circuit held that keeping the
agreements sealed was not an abuse of discretion because the district court had instructed
the parties to put the agreements on the record and made assurances that the agreements
would be kept confidential. Therefore, while a presumption of access existed, the
presumption was relatively weak. Moreover, the public’s interest in disclosure was
relatively minimal because the agreements involved private parties and addressed only
matters of private concern.
This case bears many similarities to LEAP. First, the Court acknowledges that Hunter
fails to specifically explain how it would be harmed by disclosure. However, as Hunter
correctly recounts, the parties’ initial plan was to merely file a stipulation and proposed
order generally indicating that the parties had entered into a settlement. Indeed, the parties
had no intention of taking any further action until this Court instructed the parties to file
the Settlement Agreement under seal. The Settlement Agreement would therefore have
never seen the light of day had this Court not instructed the parties to submit it on the
docket. Moreover, after receiving those instructions from this Court, the parties reasonably
operated under the assumption that the Settlement Agreement would remain confidential.
Consequently, like LEAP, the presumption of openness in this case is weak.
Also like LEAP, the public’s interest in disclosure of the Settlement Agreement is
minimal. The Settlement Agreement is between purely private litigants and addresses
matters that solely implicate private concerns. Quest does not make any strong arguments
for why the Settlement Agreement contains information relevant to the public. See Pansy,
23 F.3d at 377 (parties desire to keep record confidential is given less deference where the
record involves a matter of public concern). Quest does not even state convincing reasons
for why access to the Settlement Agreement would further its own interests. Consequently,
the Court concludes that the Settlement Agreement will remain sealed.
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IV.
CONCLUSION
For the foregoing reasons,
IT IS on this 29th day of February, 2016, hereby
ORDERED that Quest’s motion to intervene is GRANTED; and it is further
ORDERED that Hunter’s motion to seal is GRANTED; and it is further
ORDERED that the Settlement Agreement shall remain under seal.
/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
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