Optima Tobacco Corporation v. U.S. Flue-Cured Tobacco Growers, Inc. et al

Filing 108

ORDER granting in part and denying in part 95 Motion to Seal Document ; granting in part and denying in part 103 Motion to Seal Document. Counsel should read the order in its entirety for critical deadlines and information. Signed by US Magistrate Judge James E. Gates on 8/20/2019. (Sellers, N.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
5:16-CV-889-D
OPTIMA TOBACCO CORP., a Florida
corporation,
Plaintiff,
V.

U.S. FLUE-CURED TOBACCO
GROWERS, INC. and UETA, INC.,
Defendants.

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ORDER

This case comes before the court on two motions (D.E. 95, 103) filed by defendants U.S.
Flue-Cured Tobacco Growers, Inc. and UETA, Inc. (collectively "defendants") and unopposed
by plaintiff Optima Tobacco Corporation ("plaintiff') to seal certain materials filed in support of
defendants ' motions for summary judgment (D.E. 90, 92). The motions to seal are supported by
memoranda. See D.E. 96, 104. For the reasons set forth below, the court will allow the motions
to seal in part and deny them in part.
DISCUSSION

The Fourth Circuit has directed that before sealing publicly filed documents the court
must determine if the source of the public' s right to access the documents is derived from the
common law or the First Amendment. Doe v. Public Citizen, 749 F.3d 246, 265-66 (4th Cir.
2014); Stone v. Univ. of Md. , 855 F.2d 178, 180 (4th Cir. 1988). The common law presumption
in favor of access attaches to all judicial records and documents, whereas First Amendment
protection is extended to only certain judicial records and documents, for example, those filed in
connection with a summary judgment motion.

Doe, 749 F.3d at 267.

Here, as noted, the

materials sought to be sealed were filed in connection with defendants' motions for summary
judgment, and therefore the right of access at issue arises under the First Amendment. Rushford
v. New Yorker Magazine, 846 F.2d 249, 252-53 (4th Cir. 1988).
While the presumption of access under the common law is not absolute and its scope is a
matter left to the discretion of the district court, "[ w]hen the First Amendment provides a right of
access, a district court may restrict access 'only on the basis of a compelling governmental
interest, and only if the denial is narrowly tailored to serve that interest. "' Virginia Dep 't of
State Police v. Washington Post, 386 F.3d 567, 575 (4th Cir. 2004). The burden of establishing
the showing necessary to overcome a First Amendment right of access falls upon the party
seeking to keep the information sealed.

Id.

Specific reasons must be presented to justify

restricting access to the information. Id. (citing Press-Enterprise Co. v. Superior Court, 478
U.S.1 , 15 (1986) ("The First Amendment right of access cannot be overcome by [a] conclusory
assertion")).
Here, this case arises from the alleged breach of a manufacturing agreement between the
parties, which operate in an extremely competitive business. The manufacturing agreement
contains a confidentiality provision and relates to confidential and proprietary business
information. A consent protective order was entered in this case to maintain the confidentiality
of information produced during discovery. Consent Prot. Ord. (D.E. 85). With consent of
plaintiff, defendants seek to seal legal memoranda and other materials filed in connection with
their motions for summary judgment that they contend are competitively sensitive and nonpublic and contain information about pricing costs, commissions, and territory provisions.
Defendants have demonstrated that the materials attached to their summary judgment
motions (D.E. 91; D.E. 91-2 through 91-79; D.E. 97; D.E. 97-2 through 97-5 ; D.E. 100; D.E.

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100-2 through 100-3) contain confidential business information that is subject to protection
under a confidentiality provision in the manufacturing agreement and consent protective order in
this case, is not generally available to the public, and does not bear importance to any public
matters. Based on this showing, the court finds that the presumption of access to the attached
materials has been overcome. Wolfe v. Green, No. 2:08-1023 , 2010 WL 5175165, at *2 (S.D.
W. Va. 15 Dec. 2010) (holding First Amendment right of access overridden with respect to
proposed redactions that included personal financial information).
Conversely, defendants have not demonstrated that the memoranda of law filed in
support of and opposition to the summary judgment motions (D.E. 91-1, 93 , 97-1 , 100-1 , 102)
need to be sealed in their entirety and are not amenable to redaction to protect the confidential
information contained therein. See Cochran v. Volvo Grp. NA. , LLC, 931 F. Supp. 2d 725,
(M.D.N.C. 2013) (denying motion to seal entire memorandum of law but ordering parties to file
redacted version to protect sensitive information). Notably, the memoranda filed in support of
defendants ' previously filed motions to dismiss were not filed under seal and contain similar
information.

See D.E. 20, 30, 32, 34. Because of their importance to the case, sealing the

memoranda in their entirety is not warranted. See Knight v. Manufacturers & Traders Trust Co.,
84 F. Supp. 3d 436, 446 (D. Md. 2015) ("[T]his 'already strong presumption of access is further
strengthened when a document directly affects an adjudication, such as a complaint in a motion
to dismiss proceeding, as is the case here. "' (quoting Tobacco Tech., Inc. v. Taiga Int'l. NV. , No.
CCB-06-563 , 2007 WL 172524, at *1 (D. Md. 17 Jan. 2007))).
In addition, the public must be given notice of a request to seal and a reasonable
opportunity to challenge it. In re Knight Publishing Co. , 743 F.2d at 235. Here, the motions to

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seal were filed on 30 November 2018 and 4 January 2019. No opposition to the motions has
been filed despite a reasonable opportunity to do so.
Finally, the court is obligated to consider less drastic alternatives to sealing, and where a
court 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." Id. Because, as discussed, the materials attached to the summary
judgment motion contain confidential information not generally available to the public and not
bearing importance to public matters, the court finds that alternatives to sealing them do not exist
at the present time. The portion of defendants' motions seeking to seal these documents (D.E.
91; D.E. 91-2 through 91-79; D.E. 97; D.E. 97-2 through 97-5; D.E. 100; D.E. 100-2 through
100-3) will therefore be allowed.
The court is not persuaded, however, that redaction is not a suitable alternative to sealing
the memoranda in their entirety. Accordingly, the portion of the motions seeking the sealing of
the memoranda will be denied. The memoranda shall remain under seal, but the parties must file
a proposed redacted version of them or file them as a publicly filed document, as set forth below,
if they wish the memoranda to be considered in connection with the summary judgment motions.
CONCLUSION

For the foregoing reasons, IT IS ORDERED that defendants' motions (D.E. 95, 103) to
seal are ALLOWED IN PART and DENIED IN PART as follows:
1.

The portion of defendants ' motions seeking the sealing of materials attached to

their motions for summary judgment (D.E. 91; D.E. 91-2 through 91-79; D.E. 97; D.E. 97-2
through 97-5; D.E. 100; D.E. 100-2 through 100-3) are ALLOWED, and the Clerk shall retain
these materials under permanent SEAL.

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2.

The Clerk shall retain the copies of the unredacted memoranda (D.E. 91-1 , 93 , 97-

1, 100-1, 102) under permanent seal in accordance with Local Civil Rule 79.2, E.D.N.C.
3.

The portion of defendants ' motions seeking the sealing of the memoranda is

DENIED.
4.

If defendants wish to have the memoranda considered by the court in connection

with their summary judgment motions, they shall file by 30 August 2019 either (1) a proposed
redacted version of each of the memoranda, accompanied by a motion to seal, or (2) the
unredacted memoranda as a public document.
This "2X>day of August 2019.

J

United States Magistrate Judge

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