U.S. Tobacco Cooperative Inc. et al v. Big South Wholesale of Virginia, LLC d/b/a Big Sky International et al

Filing 211

ORDER granting 183 , 198 , 202 and 206 Motions to Seal. Signed by Senior Judge James C. Fox on 9/30/2014. (Grady, B.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:13-CV-527-F
U.S. TOBACCO INC., U.S FLUECURED TOBACCO GROWERS, INC.,
and BIG SOUTH DISTRIBUTION, LLC,

Plaintiffs,

v.
BIG SOUTH WHOLESALE OF
VIRGINIA, LLC, d/b/a BIG SKY
INTERNATIONAL, BIG SOUTH
WHOLESALE, LLC, UNIVERSAL
SERVICES FIRST CONSULTING, a/k/a
UNIVERSAL SERVICES CONSULTING
GROUP, JASON CARPENTER,
CHRISTOPHER SMALL, EMORY
STEPHEN DANIEL, and other unnamed
co-conspirators,
Defendants.

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ORDER

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This matter is before the court on the motion to seal [DE-183] filed by Defendants Emory
Stephen Daniel and Universal Services First Consulting, a/k/a Universal Services Consulting Group,
and the motions to seal [DE-198; DE-202, and DE-206] filed by Plaintiffs U.S. Tobacco Inc., U.S.
Flue-Cured Tobacco Growers, Inc., and Big South Distribution, LLC. For the reasons set forth
below, the motions are allowed.
Defendants Daniel and Universal seek to file their Memorandum in Opposition to Plaintiffs'
Motion for Equitable Relief and Request for Oral Argument partially under seal with certain exhibits
sealed, along with their Memorandum in Support of their Motion to Seal. Plaintiffs, for their part,

seek to:
1.

file under seal their Reply to Daniel's and Universal's Memorandum in Opposition
to Plaintiffs' Motion for Equitable Relief and Request for Oral Argument, and file
a publicly-available redacted copy of the same;

2.

file under seal the Affidavit of Clay Worden and all exhibits thereto;

3.

file under seal their response to the Big Sky Defendants' motion to stay and file a
publicly-available redacted copy of the same;

4.

file under seal Plaintiffs corrected Second Amended Complaint, and a publiclyavailable redacted version of the same;

5.

and file under seal all the briefs in support of their motions to seal.

The parties consent to the motions.
The Fourth Circuit has directed that prior to sealing judicial records, a district court must first
determine the source of the public's right to access the judicial records: the common law or the First
Amendment. Stone v. Univ. ofMd., 855 F.2d 178,180 (4th Cir. 1988). If the common law right of
access to judicial records applies, there is a presumption of public access to judicial records, which
can only be rebutted if countervailing interests outweigh the public's interest in access. Rushford

v. New Yorker Magazine, Inc., 846 F.2d 249,253 (4th Cir. 1988). "Some ofthe factors to be weighed
in the common law balancing test 'include whether the records are sought for improper purposes,
such as promoting public scandals or unfairly gaining a business advantage; whether release would
enhance the public's understanding of an important historic event; and whether the public already
had access to the information contained in the records."' Virginia Dep 't of State Police v.

Washington Post, 386 F.3d 567,575 (4th Cir. 2004) (quoting In re Knight Pub/. Co., 743 F.2d 231,
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235 (4th Cir. 1984)). Where the First Amendment guarantees access to judicial records, such access
may be denied only on the basis of a compelling governmental interest or other higher value, and
only if the denial is narrowly tailored to serve that interest or value. See Stone, 855 F.2d at 180; see

also Haas v. Golding Transp., Inc., No. 1:09-CV-1016, 2010 WL 1257990, *7 n.4 (M.D.N.C.
March 26, 201 0) (substituting "higher value" for "governmental interest" in the context of a civil
case involving nongovernmental litigants).
In weighing the competing interests between the presumption of access and the asserted
reason for sealing, a court must comply with the procedure set forth by In re Knight Publishing

Company. First, a court must give the public notice of a request to seal and a reasonable opportunity
to challenge it. 743 F.2d at 235. Although individual notice is not necessary, a court must notify
persons present in the courtroom of the request, or docket it "reasonably in advance of deciding the
issue." /d. A court must consider less drastic alternatives to sealing, and if it decides to seal
documents, it must "state the reasons for its decision to seal supported by specific findings, and the
reasons for rejecting alternatives to sealing in order to provide an adequate record for review." /d.
The directives ofthe Fourth Circuit have been implemented in this court by virtue of Local Civil
Rule 79.2 and the Section T of the CMIECF Policy Manual.
In this case, the procedural requirements of In re Knight Publishing Company have been
satisfied. The earliest motion to seal was filed on June 23,2014, and the latest motion was filed on
August 1, 2014. No third parties or members of the press have attempted to file an objection to the
motion to seal. The parties' briefing suggests that only the common law right of access applies to
the documents at issue in the pending motions to seal, and the court has not located any authority to
the contrary. For the reasons stated in the court's November 12, 2013, Order [DE-56], the court
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finds that the parties have demonstrated that there is a significant countervailing interest in support
of sealing that outweighs the public's right in access to the documents. Specifically, the parties have
shown that the unredacted versions of the documents, the specified exhibits to the briefs, along with
the briefs in support of the motion to seal, contain information that could subject certain individuals
to physical harm and/or harassment. The court again finds that these individuals' interest in their
safety outweighs the public's interest in access to the relevant documents. See Dish Network L. L. C.
v. Sonicview USA, Inc., No. 09-CV -1553 L(NLS), 2009 WL 2224596, at *7 (S.D. Cal. July 23, 2009)

(finding that protecting the identities of individuals who had served as confidential informants, and
thereby protecting them from being subjected to threats of physical harm, outweighed the
presumption of access to court records). Additionally, the court finds that redacting Daniel and
Universal's memorandum in opposition to Plaintiffs' Motion for Equitable Relief, as well as
Plaintiffs' replies in support of their motion for equitable relief, while filing the unredacted versions
of those documents under seal, is narrowly-tailored to protect the individuals while also providing
public access to most of the substance of the documents. The court also finds, however, that the
memoranda filed in support of the motions to seal, along with the specified exhibits to the parties'
memoranda, cannot be redacted in any meaningful manner, and therefore they may be sealed in their
entirety.
Accordingly, the Motions to Seal [DE-183, DE-198, DE-202, and DE-206] are ALLOWED.
The Clerk of Court is DIRECTED to maintain the following documents under SEAL:
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Memorandum in Opposition to Plaintiffs' Motion for Equitable Relief and Request
for Oral Argument [DE-182] and all exhibits thereto;
Memorandum in Support ofMotion to Seal [DE-184];
Plaintiffs' Reply [DE-196] and the exhibits thereto;
Memorandum in Support ofMotion to Seal [DE-197];
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Plaintiffs' Reply [DE-200] and the exhibits thereto;
Memorandum in Support ofMotion to Seal [DE-201];
Corrected Second Amended Complaint [DE-204];
Memorandum in Support of Motion to Seal [DE-205].

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SO ORDERED.
This the

day of September, 2014.

J#sc. Fox
Senior United States District Judge

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