KIVETT v. NEOLPHARMA, INC. et al
MEMORANDUM. SIGNED BY HONORABLE JOSHUA D. WOLSON ON 3/31/21. 3/31/21 ENTERED AND COPIES E-MAILED.(amas, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
NEOLPHARMA, INC., et al.,
Case No. 2:20-00664-JDW
Open, public courts stand as a pillar of American democracy, to which motions
to seal stand in derogation. Yet all too often, parties pay little attention to a motion to
seal that accompanies a complicated filing. Instead, the sealing motion includes only
generalized recitations of the factors that a court must consider before placing
material under seal. Given the important public interest at stake, courts should not
permit parties to yada, yada, yada their way to a showing of injury. Instead, they must
require the party filing under seal to provide a specific, detailed description of the
way that disclosure of the information at issue would cause harm. Many parties could
make such a showing. Few do.
Defendants’ motion to seal exhibits is of the yada, yada, yada variety. It asserts
that Defendants’ competitors could use information in certain exhibits to their
summary judgment motion to compete unfairly, but it says nothing about how they
could use that information. The Court requires more before it can place material under
seal. It will therefore deny Defendants’ motion.
David Kivett claims in this case that Neolpharma Inc. engaged Mr. Kivett to find
business leads, including both manufacturing and sales opportunities. Mr. Kivett
claims that he found such leads, but that Neolpharma and two corporate affiliates
(collectively, “Neolharma”) have not paid him commissions that it owes him.
On March 26, 2021, Neolpharma filed a summary judgment motion. It also filed
a motion for leave to file under seal Exhibits E, G, and H to its summary judgment
motion. Exhibit E is an internal Neolpharma memorandum dated October 7, 2019, that
discusses Neolpharma’s plan to decommission all projects related to a particular
project. Neolpharma designated it “Highly Confidential—Attorney’s Eyes Only” in
discovery. Exhibits G and H are an interim and final distribution agreement between
Neolpharma and Lanett Co., Inc. Neolpharma designated the agreements “Highly
Confidential—Attorney’s Eyes Only” during discovery, and each agreement includes
a confidentiality provision.
The common law presumes that the public has a right of access to judicial
materials. See In re Avandia Marketing, Sales Practices and Prods. Liab. Litig., 924 F.3d
662, 672 (3d Cir. 2019). To overcome the common law presumption a movant must
show that an interest in secrecy outweighs the presumption by demonstrating that the
material is the kind of information that courts will protect and that disclosure will work
a clearly defined and serious injury to the party seeking closure. See id. Under Third
Circuit law, a party seeking to file material under seal must make a specific showing.
“Broad allegations of harm, bereft of specific examples or articulated reasoning, are
insufficient.” In re Cendant Corp., 260 F.3d 183, 194 (3d Cir. 2001). In addition, to mind
the public’s right of access, parties seeking to file material under seal should
distinguish between portions of a document containing protectible information and
portions of a document that do not. Where possible, they should propose redactions,
rather than placing a whole document under seal.
As the Court recently noted, this “arduous standard reflects the importance of
the public’s right to access public records, including those that are part of judicial
proceedings.” Midwest Athletics and Sports Alliance LLC v. Ricoh USA, Inc., Case no.
2:19-cv-00514-JDW, 2021 WL 915721, at *1 (E.D. Pa. Mar. 10, 2021). The need for
public access of judicial records is not a benefit to the parties, and the parties cannot
stipulate it away. At the same time, because the parties have no independent incentive
to protect the right of public access, the Court cannot rely on an adversarial system to
vindicate the public’s right of access. Instead, similar to questions about subject
matter jurisdiction, courts have an independent obligation to ensure that parties make
the required showing before material gets filed under seal.
Defendants have not carried their heavy burden. Defendants have not shown
that Exhibit E contains the type of information that courts will protect. Not every
internal document contains such information. Exhibit E says only that Neolpharma
discontinued its involvement with a product. Absent more, the Court has no basis to
find that it is the type of information that courts protect.
As for Exhibits G and H, they do appear to contain the type of information that
courts protect: confidential pricing terms. Even for these documents, though,
Defendants make no effort to parse the documents to identify which information courts
protect and which they do not. For example, while the term of an agreement and
pricing information might be confidential, government reporting obligations,
representations and warranties, and choice-of-law provisions might not be. The mere
fact that the contract includes a confidentiality provision, or that lawyers designate a
document “Confidential” or “Highly Confidential” in discovery does not mean that
the document contains the type of information that courts will protect. To hold
otherwise would be to offer parties a loophole that could gut the public’s right of
access to judicial records.
Even assuming that Exhibits G and H contain information that the Court can
protect, Defendants have not shown a clearly defined injury from their disclosure. In
their Motion, they say that if information in the exhibits were made public, Defendants’
competitors could “unfairly compete against Defendants in the marketplace.” (ECF
No. 34 at 2.) But they never say how any competitor could use the information or
describe any harm they might suffer. Their generalized assertion that disclosure could
cause them competitive harm does not satisfy their heavy burden. They had to show
more. While no single formula will satisfy this burden, the Court needs some detail
about the harm that will result. For information that has commercial sensitivity, a party
seeking to file it under seal must explain why the information is sensitive and what
they expect competitors might do with the information if they had it. Defendants did
not of that.
Motions to seal cannot be an afterthought that parties throw together as they
wrap up a big filing. Any party seeking to file material under seal must pay careful
attention and make a specific, detailed showing about the harm that would result from
disclosure. Defendants did not do that, so the Court will deny their motion. An
appropriate Order follows.
BY THE COURT:
/s/ Joshua D. Wolson
HON. JOSHUA D. WOLSON
United States District Judge
March 31, 2021
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?