CROSS CREEK SEED, INC. v. GOLD LEAF SEED COMPANY
Filing
30
MEMORANDUM OPINION AND ORDER signed by MAG/JUDGE L. PATRICK AULD on 02/26/2018, that the Sealing Motion (Docket Entry 26 ) is DENIED. (Garland, Leah)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
CROSS CREEK SEED, INC.,
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
GOLD LEAF SEED COMPANY,
Defendant.
1:16cv1432
MEMORANDUM OPINION AND ORDER
This case comes before the Court on the “Joint Motion to Seal
and Substitute Redacted Filings” (Docket Entry 26) (the “Sealing
Motion”).
For the reasons that follow, the Court will deny the
Sealing Motion.
BACKGROUND
On December 21, 2016, Cross Creek Seed, Inc. (the “Plaintiff”)
initiated
this
action
against
Gold
Leaf
Seed
Company
(the
“Defendant,” and collectively with Plaintiff, the “Parties”) for,
inter
alia,
violating
allegedly
Plaintiff’s
breaching
a
intellectual
Settlement
property
generally Docket Entry 1 (the “Complaint”).)
Agreement
rights.
and
(See
According to the
Complaint, the Parties entered into a Settlement Agreement to
resolve a 2006 lawsuit (id., ¶ 6) regarding “ownership of a number
of
plant
varieties
owned
by
[Plaintiff]”
(id.,
¶
5),
which
Settlement Agreement Defendant allegedly breached by “offering for
sale” in November 2016 (id., ¶ 7) certain goods in “the U.S.
market” (id., ¶ 8).
On January 26, 2017, Defendant moved to
dismiss the Complaint (see Docket Entries 11, 12), and, on February
16, 2017, Plaintiff moved to amend the Complaint (see Docket
Entries 13, 13-1, 14).
In March 2017, the Parties completed
briefing on the dismissal and amendment motions (see Docket Entries
15-17), with Defendant asserting in its response to the amendment
motion
that,
Agreement
in
“[b]y
a
revealing
public
the
filing,
details
of
Plaintiff
the
has
Settlement
breached
the
confidentiality provisions therein” (Docket Entry 16 at 3 n.1).1
On September 26, 2017, the Court (per United States District
Judge Loretta C. Biggs) granted “Plaintiff’s Motion for Leave to
Amend
Complaint”
and
granted
in
part
and
denied
in
part
“Defendant’s Motion to Dismiss.” (Docket Entry 19 (the “Order”) at
5
(citing
Docket
Entries
11,
13).)
Pursuant
to
the
Order,
Plaintiff filed its “Amended Complaint” (Docket Entry 20) on
October 5, 2017.
Thereafter, the Parties engaged in settlement
negotiations (see, e.g., Docket Entry 24, ¶ 2) and “reached a
settlement” by December 20, 2017 (Docket Entry 25, ¶ 2).
a
month
later,
the
Parties
filed
the
Sealing
More than
Motion,
which
“request[s] that the Court seal documents filed as [Docket Entries]
1, 12, 13-1, 14, 16, 17, and 20 and replace them with redacted
1 Citations herein to Docket Entry pages utilize the CM/ECF
footer’s pagination.
2
copies thereof filed as exhibits to the accompanying memorandum in
support” (Docket Entry 26 at 1).
DISCUSSION
I.
Applicable Standards
“The operations of the courts and the judicial conduct of
judges are matters of utmost public concern.”
Landmark Commc’ns,
Inc. v. Virginia, 435 U.S. 829, 839 (1978).
Accordingly, “the
courts of this country recognize a general right to inspect and
copy . . . judicial records and documents.”
Nixon v. Warner
Commc’ns, Inc., 435 U.S. 589, 597 (1978); see Columbus–America
Discovery Grp. v. Atlantic Mut. Ins. Co., 203 F.3d 291, 303 (4th
Cir. 2000) (“Publicity of such records, of course, is necessary in
the long run so that the public can judge the product of the courts
in a given case.
It is hardly possible to come to a reasonable
conclusion on that score without knowing the facts of the case.”);
see also Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 572
(1980) (opinion of Burger, C.J.) (“People in an open society do not
demand infallibility from their institutions, but it is difficult
for them to accept what they are prohibited from observing.”).
As
the United States Court of Appeals for the Fourth Circuit has
explained, “[t]he value of openness in judicial proceedings can
hardly be overestimated.
‘The political branches of government
claim legitimacy by election, judges by reason.
Any step that
withdraws an element of the judicial process from public view makes
3
the ensuing decision look more like fiat, which requires compelling
justification.’”
United States v. Moussaoui, 65 F. App’x 881, 885
(4th Cir. 2003) (quoting Union Oil Co. v. Leavell, 220 F.3d 562,
568 (7th Cir. 2000)).
“The right of public access to documents or materials filed in
a district court derives from two independent sources:
law and the First Amendment.”
the common
Virginia Dep’t of State Police v.
The Washington Post, 386 F.3d 567, 575 (4th Cir. 2004).
“The
common law presumes a right to inspect and copy judicial records
and documents.”
Stone v. University of Md. Med. Sys. Corp., 855
F.2d 178, 180 (4th Cir. 1988).
This “common law presumption in
favor of access attaches to all ‘judicial records and documents,’”
whereas “the First Amendment guarantee of access has been extended
only to particular judicial records and documents.”
Id. (quoting
Nixon, 435 U.S. at 597).
As relevant to these proceedings, the common law presumption
of access “is not insurmountable, and access may be denied if
certain substantive and procedural preconditions are satisfied.”
In re Application of the U.S. for an Order Pursuant to 18 U.S.C.
Section
2703(D),
707
F.3d
283,
293
(4th
Cir.
2013).2
“To
substantively overcome the common law presumption of access . . .,
a court must find that there is a ‘significant countervailing
2 As discussed below, the Parties fail to overcome the common
law right of access, rendering unnecessary any consideration of
access rights under the First Amendment.
4
interest’
in
support
of
interest in openness.”
sealing
Id.
that
outweighs
the
public’s
“The burden of establishing that a
particular document should be sealed rests on the party promoting
the denial of access.”
Moussaoui, 65 F. App’x at 889.
The factors
a court may consider in this balancing test include “whether the
records are sought for improper purposes, such as . . . unfairly
gaining a business advantage.”
In re Application, 707 F.3d at 293
(internal quotation marks omitted).
On the procedural front, a court must provide the public
“notice of [the] request to seal[] and an opportunity to object to
the request before the court ma[kes] its decision.”
Publ’g Co., 743 F.2d 231, 235 (4th Cir. 1984).
In re Knight
“[D]ocketing [the
request] reasonably in advance of deciding the issue” satisfies
this notice obligation.
Id.
Finally, if a court grants the
sealing request, it must “state the reasons for its decision to
seal supported by specific findings[] and the reasons for rejecting
alternatives to sealing.”
II.
Id.
Analysis
The Sealing Motion has appeared on the Court’s public docket
since January 23, 2018.
to present.)
(See Docket Entries dated Jan. 23, 2018,
This public docketing satisfies the procedural
prerequisites to consideration of the Sealing Motion.
Knight, 743 F.2d at 235.
Sealing Motion.
See In re
The docket contains no objections to the
(See Docket Entries dated Jan. 23, 2018, to
5
present.)
Nevertheless,
as
explained
below,
sealing
remains
inappropriate.
In support of their Sealing Motion, the Parties first maintain
that “[t]he limited information at issue that [they] seek to redact
should not be considered a ‘judicial record’ because it has played
no part in the adjudicative process.”
(Docket Entry 27 at 4.)3
According to the Parties,
[t]his case is in its infancy, and the terms of the
Parties’ confidential agreement that have been referenced
in the pleadings have not had an impact on any ruling
from this Court. The only substantive adjudication that
the Court has made was on a motion to dismiss, and that
Order did not rely on or even mention any of the terms of
the agreement.
[Docket Entry] 19.
As a result, the
public’s right to access this information, if any, is
minimal.
(Docket Entry 27 at 4.)
As a preliminary matter, the Parties’ settlement of this case
before a final adjudication on the merits of Plaintiff’s claims
does not, by itself, affect either the status of the relevant
material as judicial records or the public’s right of access
thereto.
See, e.g., Bernstein v. Bernstein Litowitz Berger &
Grossmann LLP, 814 F.3d 132, 140 (2d Cir. 2016) (“The fact that a
suit is ultimately settled without a judgment on the merits does
3
It bears noting that courts typically assess whether
documents — rather than specific information within those documents
— constitute judicial records. See, e.g., In re Application, 707
F.3d at 290 (evaluating status of “judicially authored or created
documents” and “documents filed with the court”).
6
not impair the ‘judicial record’ status of pleadings. . . .
Thus,
pleadings are considered judicial records ‘even when the case is
pending before judgment or resolved by settlement.’”).
Instead,
“documents filed with the court” qualify as “‘judicial records’ if
they play
a
substantive
role in
the
rights.”
In
adjudicative
re
process,
Application,
707
Complaints “plainly” qualify as judicial records.
or adjudicate
F.3d
at
290.
Bernstein, 814
F.3d at 140; see also Federal Trade Comm’n v. Abbvie Prods. LLC,
713 F.3d 54, 62-63 (11th Cir. 2013) (“[C]ourts have consistently
treated complaints as judicial records for purposes of determining
whether the common-law right of access applies.”) (collecting
cases).
Furthermore,
authored or
created
“it
is
documents
commonsensical
are
judicial
that
judicially
records.”
In
re
Application, 707 F.3d at 290.
Here, the Parties seek (i) to seal the Complaint, proposed
amended complaint, and Amended Complaint, as well as certain
dismissal and amendment motion-related filings and (ii) to replace
those documents with redacted versions.
1.)
(See Docket Entry 26 at
With one exception, the material that the Parties seek to
redact appears in at least one of the complaints.
(Compare Docket
Entries 1, 20, with Docket Entries 12, 13-1, 14, 16, 17, and Docket
Entries 27-2 to 27-6.) The complaints qualify as judicial records,
see Bernstein, 814 F.3d at 140, and, thus, at a minimum, a common
law right of access applies to them, see Stone, 855 F.2d at 180.
7
In addition, certain of the material that the Parties seek to
redact appears in the Order (see Docket Entry 19 at 1, 4), which
likewise qualifies as a judicial record subject to at least a
common law right of access, see In re Application, 707 F.3d at 290.
The only material at issue not derived directly from the
Complaint or Amended Complaint appears in Plaintiff’s reply in
support of the motion to amend.
at 4 n.1.)
(Docket Entry 17 (the “MTA Reply”)
Because the MTA Reply “w[as] filed with the objective
of obtaining judicial action” on the motion to amend, In re
Application,
707
F.3d
at
291,
and,
indeed,
was
explicitly
considered by the Court in ruling on that motion (see Docket Entry
19 at 4), the MTA Reply qualifies as a judicial record.
See In re
Application, 707 F.3d at 290 (holding that “documents filed with
the court” qualify as “‘judicial records’ if they play a role in
the
adjudicative
process”).
Thus,
at
least
a
common
law
presumption of access applies to the MTA Reply.
The Parties next maintain that sealing remains proper “under
the common law balancing test.”
and
capitalization
generically
assert
(Docket Entry 27 at 5 (emphasis
omitted).)
that
In
their
particular,
interest
in
the
Parties
maintaining
the
confidentiality of the Settlement Agreement’s terms to prevent
unfair competition outweighs the public’s right of access.
id. at 1-3, 5-6.)
(See
In appropriate circumstances, the protection of
confidential business information to prevent unfair competition can
8
constitute a sufficient countervailing interest to overcome the
common law presumption of access.
See In re Application, 707 F.3d
at 293.
Here, however, the Complaint has appeared on the public docket
since December 21, 2016.
(See Docket Entry 1.)
Aside from the
October 2017 Amended Complaint (see Docket Entry 20), the remaining
documents that the Parties seek to seal have appeared on the public
docket since January 2017 (Docket Entry 12), February 2017 (Docket
Entries 13-1, 14), and March 2017 (Docket Entries 16, 17).
One
such document, filed March 9, 2017, explicitly acknowledges that
the Complaint “reveal[s] the details of the Settlement Agreement in
a public filing.”
(Docket Entry 16 at 3 n.1.)
Yet, the Parties
have explained neither why they filed these documents in the public
record in the first place, nor why they waited more than a year
after filing the first such document — and more than ten months
after explicitly recognizing its public disclosure of the “details
of the Settlement Agreement” (id.) — to file their Sealing Motion.
(See Docket Entries 26, 27.)
Moreover, much of the information that the Parties seek to
redact appears elsewhere in these or other documents on the public
docket.
(Compare, e.g., Docket Entry 1, ¶ 6, and Docket Entry 27-
1, ¶ 6, with Docket Entry 19 at 1, 4.)
For instance, the Parties
propose redacting the paragraphs detailing the Second Cause of
Action in the Complaint, proposed amended complaint, and Amended
9
Complaint to remove references to the nature of their arrangement.
(Compare Docket Entry 1, ¶¶ 15, 16, Docket Entry 13-1, ¶¶ 23, 24,
and Docket Entry 20, ¶¶ 23, 24, with Docket Entry 27-1, ¶¶ 15, 16,
Docket Entry 27-3, ¶¶ 23, 24, and Docket Entry 27-7, ¶¶ 23, 24.)
However, they fail to request redaction of either the Second Cause
of Action’s descriptive caption or the Order’s reference to this
claim,
both
of
which
reveal
this
ostensibly
confidential
information (see Docket Entry 1 at 5; Docket Entry 13-1 at 8;
Docket Entry 19 at 1; Docket Entry 20 at 7).
(See Docket Entry 26
at 1; Docket Entry 27 at 1, 6.)
By way of further example, the Parties also seek redaction of
the descriptions of Exhibits A and B in the Complaint, proposed
amended complaint, and Amended Complaint, but fail to request
redaction
of
Exhibits
A
and
B
themselves,
whose
highlighted
notations reveal the allegedly confidential information.
(Compare
Docket Entry 1, ¶¶ 7, 9, Docket Entries 1-1, 1-2, Docket Entry 131, ¶¶ 7, 14, Docket Entry 20, ¶¶ 7, 14, and Docket Entries 20-1,
20-2, with Docket Entry 27-1, ¶¶ 7-9, id. at 11-16, Docket Entry
27-3, ¶¶ 7, 14, and Docket Entry 27-7, ¶¶ 7, 14.)
The Parties
provide neither an explanation of this inconsistent treatment nor
a justification for such selective redaction.
(See Docket Entries
26, 27.)
Under these circumstances, the Parties have not shown that
their confidentiality interests “outweigh[] the public’s interest
10
in openness,” In re Application, 707 F.3d at 293.
See Moussaoui,
65 F. App’x at 889 (observing that the party seeking sealing bears
“[t]he burden of establishing that a particular document should be
sealed”).
Accordingly, the Court will deny the Sealing Motion.
See, e.g., Morris Hatchery, Inc. v. Interlink Grp. Corp. USA, Inc.,
No. 10-24480-CIV, 2012 WL 13012495, at *2-3 (S.D. Fla. Apr. 16,
2012) (denying request to seal depositions and filings “quoting
those depositions,” which allegedly revealed trade secrets, where
the requesting party failed to explain, inter alia, “why the entire
depositions were filed in the public record” or “why nearly two
months passed before [the party] asked the [c]ourt to go back and
seal those public filings”).
CONCLUSION
The Parties fail to justify sealing the specified material.
IT IS THEREFORE ORDERED that the Sealing Motion (Docket Entry
26) is DENIED.
This 26th day of February, 2018.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
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