Hood et al v. Cabins For You, LLC. et al (JRG2)

Filing 95

MEMORANDUM unsealed per 93 Order. Modified on 4/28/2017 (MDG).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
CASE NO. 3:16-cv-00058-JRG-HBG
TIMOTHY JOHN HOOD, Individually, and As
Parent and Statutory Guardian of S.H., a Minor

AND
JESSICA HOOD, Individually, and As Parent of
PLAINTIFFS,

S.H., a Minor,

VS.
CABINS FOR YOU, LLC
AND
IGLOO INVESTMENTS, LLC
AND
JERRY WILLIAMS D/B/A
CAROUSEL KIDS
AND
JAMES AND TERRI SCOUNTAS
D/B/A OUTDOOR SPAS
AND
WATKINS MANUFACTURING CORPORATION and
Its Subsidiary, AMERICAN HYDROTHERAPY SYSTEMS, LLC
As Successor In Interest to FREE FLOW PRODUCTS, INC,

DEFENDANTS.

MEMORANDUM
(Joint Motion for Leave to File Unredacted Documents Under Seal)

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 833

Filed 03/31/17 Page 1 of 11

Come now all parties, by and through their respective counsel, and submit
the following memorandum in support of their joint motion for leave to file under
seal an unredacted copy of their joint motion for approval of settlement including
certain exhibits and affidavits:
STATEMENT OF CASE
As set out in previous pleadings, this action was brought on behalf of a now
five-year-old child, S.H., who suffered a serious injury on October 8, 2015 while
her family was staying at a resort cabin located near Sevierville, Tennessee. She
was sitting on a bench in the hot tub when the lower portion of her body was
suddenly sucked into a filtration system causing both a rectal prolapse and
extensive perianal bruising.
In this action, her parents sought to recover special compensatory and
punitive damages as a result of physical injuries S.H. sustained in that accident and
her continued post-traumatic stress. The parents also asserted claims for infliction
of emotional distress. (Doc#: 1, Page ID#: 1-10)
Named as the original defendants were the cabin owner, Igloo Investments,
LLC, and its management company, Cabins For You, LLC. Later joined by
amended complaint were the putative manufacturer, Free Flow Products, Inc., and
its successors in interest, American Hydrotherapy Systems, LLC, and Watkins
Manufacturing Corporation. Also named were two contractors responsible for the
2

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 834

Filed 03/31/17 Page 2 of 11

maintenance and repair of the hot tub: Jerry Williams doing business as Carousel
Kids as well as James and Terri Scourtas of Outdoor Spas. (Doc#: 65, Page ID#:
620-640)
During the course of the action, the parties exchanged initial disclosures as
well as other responses to written discovery. This included the Minor Child’s
medical records detailing her treatment for injuries sustained in this accident. That
exchange, however, was subject to an agreed protective order so to recognize the
child’s right of privacy rules under HIPAA. (Doc#: 25, Page ID#: 100-102)
Upon completion of this written discovery, a private mediation conference
was held in this matter on February 13, 2017. As a result of those negotiations, a
global settlement was reached in satisfaction of all claims between all parties.
Pursuant to the parties’ agreement, the terms of the settlement are to remain
confidential except for disclosures necessary for Court approval. (See Motion for
Approval of Settlement-Exhibit 10.)
Prior to mediation, Mr. Hood had been appointed as his daughter’s statutory
guardian, sought approval by the Madison District Court in Richmond, Kentucky
where the family lives. (See Motion for Approval of Settlement-Exhibit 15.)
The Hoods now seek additional approval from this Court. Toward this end,
they are now filing an unredacted motion under seal with a separate redacted copy
which deletes information that is specific to the Minor Child and the parties’
3

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 835

Filed 03/31/17 Page 3 of 11

agreement. Plaintiffs ask that the unredacted motion for settlement remain under
seal.
ARGUMENT
It has long been recognized that every Court has supervisory power over its
own records and files. Nixon vs. Warner Communications, 435 U.S. 589, 598
(1977). It is within its discretion to seal the records “when interests of privacy
outweigh the public’s right to know.” In Re Knoxville News Sentinel Co., 723 F.
2d 470, 474 (6th Cir. 1983) [quoting from Brown & Williamson Tobacco Corp. vs.
FTC, 710 F. 2d 1165, 1179 (6th Cir. 1983)]; In Re Halkin, 598 F. 2d 176, 190-192
(D.C. Cir. 1979); Ottaway Newspapers, Inc. vs. Appeals Court, 362 N.E. 2d 1189
(1977).
In accordance with the general principles set out in these cases Plaintiffs do
not seek a “blanket order” that would preclude all information contained within the
motion for approval. Rather, they ask that portions dealing with the Minor Child’s
injuries as well as her medical treatment and the details of the confidential
settlement be redacted from the public record. They also ask that certain
documents and affidavits be excluded as privileged.
In accordance with Rule 5.2(a), the parties have throughout the course of
this action identified the Minor Child by her initials, S.H. Plaintiffs continue this
same reference throughout both of the present motions concurrently filed.
4

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 836

Filed 03/31/17 Page 4 of 11

Plaintiffs have also redacted portions of the motion describing the Minor
Child’s medical treatment and the expenses incurred on her behalf. As mentioned
previously, the parties had entered into an Agreed Protective Order which allowed
the exchange of these records but required that they be returned to the provider or
destroyed at the conclusion of the litigation. (Doc#: 25, Page ID: 101-102)
So the Court can be better apprised as to the extent of the Minor Child’s
injuries and residuals, the motion for approval provides a summary of her medical
treatment as well as the actual records outlining that treatment. By doing so,
however, Plaintiffs do not intend to make public their daughter’s very private
records.
This position is consistent with case law. In Whalen vs. Rowe, 429 U.S. 589
(1977), the Supreme Court implicitly recognized a privacy interest protected by the
Fourteenth Amendment including those inherent to a doctor-patient relationship
and the individual’s interest in avoiding disclosure of personal matters. Id. at 599
The Sixth Circuit has acknowledged that the same privacy concerns extend to
medical records which should not be revealed without legitimate grounds.
Gutierrez vs. Lynch, 826 F. 2d 1534, 1539 (6th Cir. 1987); Mann vs. University of
Cincinnati, 824 F. Supp. 1190 (S.D. Ohio 1993).

5

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 837

Filed 03/31/17 Page 5 of 11

The need for protecting her private medical information has since been
codified in the Health Insurance Portability and Accountability Act 42 U.S.C.
1320d et seq.
In the instant case, there is no specific public need for the disclosure of
S.H.’s injuries or her medical records. When weighing the individual privacy
interests, the balance is wholly in favor of protecting the Minor Child from any
exposure that may prove embarrassing and may have a dramatic effect upon her
later life.
Within the unredacted motion, Plaintiffs do describe in details the terms of
the settlement reached as well as the allocation of the funds. The settlement
agreement, however, requires the parties to hold such information confidential. All
of the parties have a substantial interest in preventing this information from being
published in the public forum.
In the case of Goodyear Tire & Rubber Co. vs. Chiles Power Supply, Inc.,
332 F. 3d 976 (6th Cir. 2003), the Court of Appeals held that any supposed “need”
for the disclosure of settlement terms were outweighed by the legitimate concern
for maintaining the confidentiality of all negotiations:
There exists a strong public interest in favor of secrecy of
matters discussed by parties during settlement negotiations.
This is true whether settlement negotiations are done under the
auspices of the court or informally between the parties. The
ability to negotiate and settle a case without trial fosters a more
efficient, more cost-effective, and significantly less burdened
6

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 838

Filed 03/31/17 Page 6 of 11

judicial system. In order for settlement talks to be effective,
parties must feel uninhibited in their communications. Parties
are unlikely to propose the types of compromises that most
effectively lead to settlement unless they are confident that their
proposed solutions cannot be used on cross examination, under
the ruse of "impeachment evidence," by some future third party.
Parties must be able to abandon their adversarial tendencies to
some degree. They must be able to make hypothetical
concessions, offer creative quid pro quos, and generally make
statements that would otherwise belie their litigation efforts.
Without a privilege, parties would more often forego
negotiations for the relative formality of trial. Then, the entire
negotiation process collapses upon itself, and the judicial
efficiency it fosters is lost.
332 F. 3d at 980
Within their memorandum seeking approval of the settlement, Plaintiffs
disclose the terms of their contingency fee and cost arrangement with their counsel.
Also, details are provided regarding equivalent hourly rates.
Again, Plaintiffs rely upon the work product and attorney-client privileges
recognized in Rule 502 of the Federal Rules of Evidence to exclude and redact
those portions from its motion as well as supporting affidavits. Counsel
specifically maintains that the invoices show litigation strategy and the specific
nature of the services provided which remain privileged. See Evenflo Co., Inc. vs.
Hantech Agents, Ltd., 2006 U.S. Dist. LEXIS 74684 (S.D. Ohio 2006).
Finally, deference should be extended to the Kentucky Court as it is the
Minor Child’s home state. The Madison District Court in this instance has sealed
the entire probate file relevant to Mr. Hood’s guardianship excluding the order of
7

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 839

Filed 03/31/17 Page 7 of 11

appointment. Included is its order approving the settlement and allocation of the
lump sum proceeds.
Such is consistent with KRS § 387.770(1) which provides in part:
All determinations of disability and orders of appointment,
modification, and termination shall be filed as public records
with the clerk of the court. All other court records of a
respondent made in all proceedings under KRS 387.500 to
387.770 shall be confidential and shall not be open to the
general public except as provided in subsection (3) of this
section.
Subsection (3) does allow persons to file a motion to obtain confidential
information but only upon a showing that “the disclosure is appropriate under the
circumstances and in the best interest of the person and/or public.”
In doing so, the statute presumes the confidentiality of a settlement
involving a minor. It allows for public dissemination only if good cause is first
shown by the party seeking disclosure. Plaintiffs believe that this Court should
adopt the same policy where the balance is clearly in favor of protecting private
interest of the Minor Child.
CONCLUSION
For the foregoing reasons, Plaintiff Timothy John Hood, individually and
as father and statutory guardian of the Minor Child, S.H., and Plaintiff Jessica
Hood, individually and as mother of the Minor Child, S.H., pray that an order be
8

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 840

Filed 03/31/17 Page 8 of 11

entered allowing leave to file under seal certain information that is confidential to
both their daughter and the settlement reached.
Kelley, Brown & Breeding, PSC
P. O. Drawer 490
London, Kentucky 40743-0490
Telephone: [phone]
Facsimile: 606-878-2364
Email: [e-mail]
By:

/s/ John F. Kelley, Jr.
Counsel for Plaintiffs Timothy John
Hood, Jessica Hood and S.H., a minor

SEEN AND AGREED TO BY:
/s/ Adam F. Rust, Esq.
Counsel for Defendant Cabins For You, LLC
/s/ David E. Long, Esq.
Counsel for Defendant Cabins For You, LLC
/s/ Rick L. Powers, Esq.
Counsel for Defendant Cabins For You, LLC
/s/ Emily L. Herman-Thompson, Esq.
Counsel for Defendant Igloo Investments, LLC
/s/ W. Tyler Chastain, Esq.
Counsel for Defendant Jerry Williams
d/b/a Carousel Kids
/s/ P. Alexander Vogel, Esq.
Counsel for Defendants James & Terri Scountas
d/b/a Outdoor Spas

/s/ J. Paul Brewer, Esq.
Counsel for Defendant
Watkins Manufacturing Corporation
9

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 841

Filed 03/31/17 Page 9 of 11

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy was served through this Court’s
CM/ECF electronic filing system to the following:
Adam F. Rust, Esq.
David E. Long, Esq.
Leitner, Williams, Dooley & Napolitan
900 S. Gay Street-Ste. 1800
Knoxville, TN 37902
Counsel for Defendant Cabins For You, LLC

[e-mail]
[e-mail]

Emily L. Herman-Thompson, Esq.
John W. Baker, Jr., Esq.
Baker, O’Kane, Atkins & Thompson, PLLP
P.O. Box 1708
Knoxville, TN 37901-1708
Counsel for Defendant Igloo Investments, LLC

[e-mail]
[e-mail]

Rick L. Powers, Esq.
Broderick L. Young, Esq.
Arnett, Draper & Hagood, LLP
P.O. Box 300
Knoxville, TN 37901-0300
Co-Counsel for Defendant Cabins For You, LLC

[e-mail]
[e-mail]

W. Tyler Chastain, Esq.
Bernstein, Stair & McAdams, LLP
116 Agnes Road
Knoxville, TN 37919
Counsel for Defendant Jerry Williams
d/b/a Carousel Kids

[e-mail]

P. Alexander Vogel, Esq.
O’Neil, Parker & Williamson
7610 Gleason Drive-Ste. 200
Knoxville, TN 37919
Counsel for Defendants James Scountas and
Terri Scountas d/b/a Outdoor Spas

[e-mail]

10

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 842

Filed 03/31/17 Page 10 of 11

J. Paul Brewer, Esq.
McAgnus, Goudelock & Courie, LLC
P.O. Box 198349
Nashville, TN 37219
Counsel for Defendant
Watkins Manufacturing Corporation

[e-mail]

Charles E. Pierce, Esq.
Moore Ingram Johnson & Steele, LLP
408 N. Cedar Bluff Road-Ste 500
Knoxville, TN 37923
Co-Counsel for Defendant
Watkins Manufacturing Corporation

[e-mail]

William R. Johnson, Esq.
Moore, Ingram, Johnson & Steele, LLP
326 Roswell Street
Marietta, GA 30060
Co-Counsel for Defendant
Watkins Manufacturing Corporation

[e-mail]

All on the 31st day of March, 2017.
/s/ John F. Kelley, Jr.
Of Counsel for Plaintiffs

11

Case 3:16-cv-00058-JRG-HBG Document 85 *SEALED*
PageID #: 843

Filed 03/31/17 Page 11 of 11