Kelly v. Hospitality Ventures LLC, et al

Filing 212

ORDER granting 202 Motion to Seal Document 196 PROPOSED SEALED Exhibit, 195 PROPOSED SEALED Exhibit. Signed by Magistrate Judge Robert B. Jones, Jr on 6/2/2022. (Collins, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:17-CV-98-FL
WAI MAN TOM,

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Plaintiff,

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ORDER

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HOSPITALITY VENTURES LLC doing
business as Umstead Hotel and Spa; SAS
INSTITUTE, INC.; NC CULINARY
VENTURES LLC, doing business as An
Asian Cuisine,

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Defendants.

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This matter is before the court on Defendants' motion to seal. [DE-202]. No response was
filed, and the time to do so has expired. For the following reasons, the motion to seal is allowed.

I.

Background
This is a purported class action case regarding claims that Defendants failed to pay

adequate wages and overtime compensation in violation of federal and state laws. The parties
entered into a stipulated protective order to govern the production of certain confidential
information. [DE-74]. Defendants ask to seal certain exhibits, [DE-195, -196], filed in support of
Plaintiffs response to Defendants' motion for protective order. [DE-202]. The motion to seal was
filed more than three weeks ago, and no objection has been lodged.

II.

Discussion
"[T]he courts of this country recognize a general right to inspect and copy public records

and documents, including judicial records and documents." Nixon v. Warner Commc 'ns, Inc., 435
U.S. 589, 597 (1978) (internal footnote omitted). The Fourth Circuit has directed that before

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sealing publicly-filed documents, the court must first determine if the source of the public's right
to access the documents is derived from the common law or from the First Amendment. Stone v.
Univ. ofMd Med Sys. Corp., 855F.2d178, 180 (4thCir.1988). "[T]hecommonlawpresumption
in favor of access attaches to all 'judicial records and documents,' [while] the First Amendment
guarantee of access has been extended only to particular judicial records and documents[,]" such
as those filed in connection with a motion for summary judgment. Id (quoting Nixon, 435 U.S. at
597 & citing Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir. 1988); In re
Washington Post Co., 807 F.2d 383, 390 (4th Cir. 1986)). "[D]ocuments filed with the court are
'judicial records' if they play a role in the adjudicative process, or adjudicate substantive rights."
In re Application of the U.S. for an Order Pursuant to 18 U.S.C. Section 2703(D) ("Jn re
Application"), 707 F.3d 283, 290 (4th Cir. 2013) (citations omitted); see also United States v.
Amodeo, 44 F.3d 141, 145 (2d Cir. 1995) ("[T]he item filed must be relevant to the performance
of the judicial function and useful in the judicial process in order for it to be designated a judicial
document.").
Here, Defendants move to seal Exhibits A and B to Plaintiffs response to Defendants'
motion for protective order. The exhibits evidence Service Agreements between Defendants NC
Culinary Ventures and SAS that were produced pursuant to the protective order and were marked
"Attorneys Eyes Only." [DE-195, -196]. These documents are judicial records subject to the right
to access because they play a role in the adjudicative process. Because the documents sought to
be sealed are judicial records, there is at minimum a common law presumption to access. In re
Application, 707 F.3d at 291.
Courts apply the "experience and logic" test to determine whether there is also a First
Amendment right to access, which provides more substantive protection to the public's interest in

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access than does the common law. Id.; Rushford, 846 F.2d at 253. Under this test, the court
considers "(1) 'whether the place and process have historically been open to the press and general
public,' and (2) 'whether public access plays a significant positive role in the functioning of the
particular process in question."' In re Application, 707 F.3d at 291 (quoting Baltimore Sun Co. v.
Goetz, 886 F.2d 60, 64 (4th Cir. 1989)). The Fourth Circuit has determined that the more rigorous

First Amendment standard should apply to documents filed in connection with a summary
judgment motion in a civil case "[b ]ecause summary judgment adjudicates substantive rights and
serves as a substitute for a trial," which is generally open to the public. Rushford, 846 F.2d at 25253.
Here, the documents were filed in connection with a discovery dispute, and discovery is
not historically open to the press and general public, and they play no significant positive role in
the functioning of discovery. See Giri v. Integrated Lab y Sys., Inc., No. 5:17-CV-179-FL, 2019
WL 489104, at *8 (E.D.N.C. Feb. 7, 2019) (applying the common law right to access where
documents to be sealed were in relation to a discovery motion). Accordingly, the court finds the
common law right to access applies to these documents.
"The mere existence of a First Amendment right to access or a common law right of access
to a particular kind of document does not entitle[] the press and the public to access in every case."
Rushford, 846 F.2d at 253 (citation omitted). Where only the common law right of access exists,

the presumption to access can be rebutted "if countervailing interests heavily outweigh the public
interests in access," and the court considers "the interests advanced by the parties in light of the
public interests and the duty of the courts." Id. (quoting Nixon, 435 U.S. at 602). "To overcome
the First Amendment standard, sealing must be 'essential' to preserve important, higher interests,"
BASF Plant Sci., LP v. Commonwealth Sci. & Indus. Rsch. Organisation, No. 2:17-CV-503, 2019

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WL 8108115, at *2 (E.D. Va. Aug. 15, 2019) (citation omitted), and "narrowly tailored to serve
that interest," Rushford, 846 F.2d at 253. The party seeking to deny access bears the burden. Id.
To determine whether records should be sealed, the court must follow the procedure
established in In re Knight Publishing Company. The court must first provide public notice of the
request to seal and allow the interested parties a reasonable opportunity to object. 743 F.2d 231,
235-36 (4th Cir. 1984). Notice is sufficient where a motion is docketed reasonably in advance of
its disposition. Id. at 235. Second, the court considers less drastic alternatives, such as redaction
of any sensitive material. Id. at 235-36. Then, if the court determines that public access should
be denied, the court must provide specific reasons and factual findings supporting the decision to
seal. Id.
First, the motions to seal were docketed sufficiently in advance of the court's decision;
thus, the public has been provided with notice and an opportunity to object to the motions, and no
objection to sealing has been lodged. Next, the court considers whether there are less drastic
alternatives to sealing, such as redaction. The court reviewed each proposed sealed document and
finds that each contains sensitive and confidential information for which redaction is not feasible.
Finally, the court finds that Defendants have overcome the common law right to access in the
sealed material. All the proposed sealed documents contain sensitive commercial information that
is appropriately sealed. See Dynatemp Int'!, Inc. v. R421A, LLC, No. 5:20-CV-142-FL, 2021 WL
3284799, at *13 (E.D.N.C. July 30, 2021) (finding parties' interest in protecting their sensitive
commercial information overcame the First Amendment right to access). Accordingly, the motion
to seal is allowed.

III.

Conclusion

For the foregoing reasons, Defendants' motion to seal is allowed. The Clerk of Court is

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directed to permanently seal Docket Entries 195 and 196.
SO ORDERED, the 2- day of June, 2022.

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