Qualawash Holdings, LLC v. Grace Trailer Service, Inc. et al

Filing 19

ORDER DENYING MOTION 13 TO SEAL CASE. Signed by Judge S. Thomas Anderson on 10/19/2015. (Anderson, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

QUALAWASH HOLDINGS, LLC,

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Plaintiff,
vs.

GRACE TRAILER SERVICE, INC., et al.,
Defendants.

No. 2:15-cv-02474-STA-cgc

ORDER DENYING DEFENDANTS’ MOTION TO SEAL CASE
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Before the court is Defendants Grace Trailer Service, Inc., Rose Fox, Chris Fox, Chris
Boak, and Fred Fox’s motion to seal the entire case in this matter. (ECF No. 13.) Plaintiff
Qualawash Holdings, LLC, opposes the motion. (ECF No. 17.) For the reasons set forth below,
the motion is DENIED.
This case is a declaratory judgment action and concerns Plaintiff’s alleged breach of an
Asset Purchase Agreement (“APA”) and a related Mutual Nondisclosure and Confidentiality
Agreement (“NDA”). (Cmplt., ECF No. 1-1.) The Court previously granted the parties’ joint
motion for an order sealing the APA. (Order Grt’ing Mot., ECF No. 18.) However, the Court
reserved ruling on Defendants’ motion to seal the entire case. Defendants contend that the entire
case should be sealed because the “terms and conditions of the APA are sensitive, confidential
information that the Parties previously agreed to keep confidential pursuant to the NDA.” (Defs’
Mot. p. 2, ECF No. 13.)

1

In response, Plaintiff points out that the confidentiality terms of the APA, which was
signed after the NDA,1 supersede the confidentiality terms of the NDA. (Pl’s Resp. pp. 2-3, ECF
No. 17.) The APA specifically states that it “embodies the entire agreement and understanding
between the parties hereto relating to the subject matter hereof and supersedes any prior
agreements and understandings relating to the subject matter hereof.” (Cmplt. Att. A, § 13.2,
ECF No. 1-3.) The APA limits the NDA by providing that only “due diligence materials and
other information provided [to] Buyer [Qualawash] pursuant to this Agreement or in connection
with the transaction contemplated under this Agreement . . . shall remain subject to the terms and
conditions of the [NDA].” (Id. § 7.13.) Accordingly, the Court finds that the confidentiality
terms of the NDA are not controlling, and, instead, the APA is the exclusive source of any
confidentiality obligations between Plaintiff and Defendants.
It is well-settled that the Court “has supervisory power over its own records and files,”2
and that this authority includes allowing parties to file certain documents under seal.3 The Court,
however, must balance this power with the “long-established legal tradition” of public access to
court documents.4 “Only the most compelling reasons can justify non-disclosure of judicial
records.”5 When exercising its discretion to seal judicial records, the Court must balance the

1

The NDA was signed on June 19, 2014, and the APA was signed on July 16, 2015. (Cmplt.,
ECF No 1-1; NDA, ECF No. 17-1.)

2

Nixon v. Warner Communications, Inc., 435 U.S. 589, 598 (1978).

3

See Fed. R. Civ. P. 26(c).

4

Brown & Williamson Tobacco Corporation v. Federal Trade Commission, 710 F.2d 1165,
1177 (6th Cir. 1983).

5

In re Knoxville NewsSentinel Co., Inc., 723 F.2d 470, 476 (6th Cir. 1983).

2

public's common law right of access against the interests favoring nondisclosure.6

A

corporation's interest in shielding “prejudicial information” from public view, standing alone,
cannot justify the sealing of that information.7
In the present case, any confidential information contained in the APA has already been
sealed, and Defendants have pointed to no other information that might be revealed during the
pendency of this matter that would be detrimental to them. Therefore, there is no basis to require
sealing of all proceedings in this matter, and Defendants’ motion is DENIED. The parties may
file a motion to seal a particular document or filing on a case by case basis if warranted.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE

Date: October 19, 2015.

6

See Nixon, 435 U.S. at 599 (the court must consider “relevant facts and circumstances of the
particular case”).
7

See Brown & Williamson, 710 F.2d at 1180.
3