Carter v. Halliburton Co. et al
Filing
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MEMORANDUM OPINION. Signed by District Judge James C. Cacheris on 11/29/2011. (jall)
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
UNITED STATES ex rel.
BENJAMIN CARTER,
Plaintiff,
v.
HALLIBURTON CO.,
et al.,
Defendants.
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1:11cv602 (JCC/JFA)
M E M O R A N D U M
O P I N I O N
This matter is before the Court on a series of motions
to seal filed by Defendants Halliburton Company, KBR, Inc.
(“KBR”), Kellogg Brown & Root Services, Inc. (“KBRSI”), and
Service Employees International, Inc.’s (“SEII”) (collectively,
“Defendants”) [Dkts. 13, 25, 33] and Relator Benjamin Carter
(“Relator” or “Carter”) [Dkts. 18, 28, 36].
For the following
reasons, the Court will (1) grant in part and deny in part
Defendants’ Motion to Seal Memorandum in Support of Defendants’
Motion to Dismiss; (2) grant in part and deny in part Relator’s
Motion to Seal Portions of the Opposition to Defendants’ Motion
to Dismiss; (3) grant in part and deny in part Defendants’
Motion to Seal Reply Memorandum in Support of Defendants’ Motion
to Dismiss; (4) deny Relator’s Motion to Seal his Motion for
Leave to File Sur-reply; (5) deny Defendants’ Motion to Seal
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Defendants’ Response to Relator’s Motion for Leave to File Surreply; and (6) deny Relator’s Motion to Seal his Reply
Memorandum in Support of his Motion for Leave to File Sur-reply.
I.
Background
The instant matter is substantively identical to two
earlier cases Carter filed in this Court, 1:08cv1162 (“Carter
2008”), which the Court dismissed in May of 2010, and 1:10cv864
(Carter 2010), which the Court dismissed in May of 2011.
The
procedural history is more fully set forth in this Court’s
Memorandum Opinion regarding Defendants’ Motion to Dismiss.
In Carter 2008, the parties agreed to a stipulated
protective order regarding the disclosure of confidential
information (the “Protective Order”), which was entered by
Magistrate Judge Anderson on October 23, 2009.
[Dkt. 149].)
(1:08cv1162
The Court notes that though this is informative,
this case is not Carter 2008, and a review of the docket in this
case shows there is not yet an entered protective order.
In Carter 2010, Carter moved to seal the unredacted
copy of his Opposition to Defendant’s Motion to Dismiss, and
Exhibits C through J thereto.
(1:10cv864 [Dkt. 37].)
Carter
asserted that his Opposition “reference[d] material designated
as ‘Confidential’ pursuant to the parties’ October 23, 2009
Protective Order in [Carter 2008].”
(Id. at 1.)
The Court
granted the motion to seal as to Exhibit J, a report of an
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internal KBR Employee Relations investigation, and the portions
of the Opposition in reference thereto, after finding that the
public’s interest in access was outweighed by Defendants’
interest in preserving confidentiality.
United States ex rel.
Carter v. Halliburton Co., No. 1:10cv864, 2011 WL 2077799, at *3
(E.D. Va. May 24, 2011).
The Court denied Carter’s other
sealing requests, as to which Carter failed to make the required
showing.
Id. at *3-4.
In the instant matter, both parties have moved to seal
various documents filed in connection with Defendant’s Motion to
Dismiss [Dkt. 11] and Carter’s Motion for Leave to File Surreply [Dkt. 32].
Specifically, Defendants have filed motions to
seal the Memorandum in Support of Defendants’ Motion to Dismiss
[Dkt. 13], the Reply Memorandum in Support of Defendants’ Motion
to Dismiss [Dkt. 25], and their Response to Relator’s Motion for
Leave to File Sur-reply [Dkt. 33].
Carter has in turn filed
motions to seal portions of his Opposition to Defendants’ Motion
to Dismiss [Dkt. 18], his Motion for Leave to File Sur-reply
[Dkt. 28], and his Reply Memorandum in Support of his Motion for
Leave to File Sur-reply [Dkt. 36].
In Carter’s motion to seal
portions of his Opposition to Defendants’ Motion to Dismiss,
Carter proposes that a partially redacted version of his brief
be filed in the public docket.
Carter opposes Defendants’
motion to seal the Memorandum in Support of Defendants’ Motion
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to Dismiss on the grounds that much of the material at issue is
a matter of public record, and that limited redactions would be
sufficient.
[Dkt. 20.]
On November 7, 2011, the Court granted
Defendants’ motion to seal the Memorandum in Support of their
Motion to Dismiss.
[Dkt. 24.]
Based on this Order, Defendants
oppose Carter’s proposed filing of a partially redacted version
of his Opposition to Defendants’ Motion to Dismiss.
[Dkt. 31.]
Defendants’ and Relator’s motions to seal are before the Court.
II.
Standard of Review
The common law presumes a right to inspect and copy
judicial records and documents.
Stone v. Univ. of Md. Med. Sys.
Corp., 855 F.2d 178, 180 (4th Cir. 1988) (citing Nixon v. Warner
Commc’ns, Inc., 435 U.S. 589, 597 (1978)).
The common law
presumption of access may be overcome if competing interests
outweigh the interest in access, and a court’s denial of access
is reviewable only for abuse of discretion.
omitted).
Id. (citations
Where the First Amendment guarantees access, however,
access may be denied only on the basis of a compelling
governmental interest, and only if the denial is narrowly
tailored to serve that interest.
Id. (citations omitted).
The 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, such as documents
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filed in connection with a summary judgment motion in a civil
case and documents filed in connection with plea hearings and
sentencing hearings in criminal case.
Id. at 180-81 (internal
quotation marks and citations omitted).
As to whether the common law presumption or the morestringent First Amendment guarantee applies in the motion to
dismiss context, this Court has previously applied the common
law presumption of access to documents relevant to its
consideration of a motion to dismiss.
GTSI Corp. v. Wildflower
Int’l, Inc., No. 1:09cv123, 2009 WL 1248114, at *8-9 (E.D. Va.
Apr. 30, 2009).
The Fourth Circuit, in an unpublished decision,
has addressed this issue, stating that “the First Amendment
guarantee of access should not be extended to documents filed in
connection with a motion to dismiss.”
In re Policy Mgmt. Sys.
Corp., Nos. 94-2254, 94-2341, 1995 WL 541623, at *3 (4th Cir.
Sept. 13, 1995).
Judge O’Grady has recently addressed this
issue, and stated that the “First Amendment right of access
. . . may not apply to documents filed with a motion to dismiss.
This distinction is logical.”
Am. Civil Liberties Union v.
Holder, 652 F. Supp. 2d 654, 661 (E.D. Va. 2009) (citing In re
Policy Mgmt. Sys. Corp, 1995 WL 541623, at *3), aff’d, --- F. 3d
----, 2011 WL 1108252 (4th Cir. Mar. 28, 2011).
Under well-established Fourth Circuit precedent, a
district court has the authority to seal court documents only
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“if the public’s right of access is outweighed by competing
interests.”
See Ashcraft v. Conoco, Inc., 218 F.3d 288, 302
(4th Cir. 2000) (internal quotation marks omitted).
Before
granting a motion to seal any court document, a district court
must follow a three-step process: (1) provide public notice of
the request to seal and allow interested parties a reasonable
opportunity to object; (2) consider less drastic alternatives to
sealing the documents, and (3) provide specific reasons and
factual findings supporting its decision to seal the documents
and for rejecting alternatives.
Id.
Additionally, Local Rule 5(C) requires a party moving
to seal to provide: (1) a non-confidential description of what
is to be sealed; (2) a statement as to why sealing is necessary,
and why another procedure will not suffice; (3) references to
governing case law; and (4) a statement as to the period of time1
the party seeks to have the matter maintained under seal and as
to how the matter is to be handled upon unsealing.
5(C).
Local Rule
Local Rule 5(C) also provides that the party moving to
seal shall provide a proposed order, and “[t]he proposed order
shall recite the findings required by governing case law to
support the proposed sealing.”
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As the parties did not specify a time period for sealing, the Court presumes
that they seek a permanent seal.
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III.
Analysis
Defendants and Carter move to seal the briefs (or
portions thereof) filed in connection with Defendants’ Motion to
Dismiss.
Defendants’ motion to seal the Memorandum in Support
of Defendants’ Motion to Dismiss is based on the fact that their
brief contains discussion of filings placed under seal by
another court (the “Under Seal Action”).
The Court granted this
motion on November 7, 2011.
Upon reconsideration of Defendants’ motion to seal
their Memorandum in Support of Defendants’ Motion to Dismiss,
the Court finds that the motion should be granted only in part.
Because Defendants’ discussion of the Under Seal Action is
confined to certain portions of their brief, there is a less
drastic remedy than sealing the brief in toto.
218 F.3d at 302.
See Ashcraft,
The confidentiality of the Under Seal Action
may be preserved by redacting any and all references made
thereto.
The remainder of the brief concerns matters of public
record, which are of interest to the general public and fail to
meet the Ashcraft standard.
Indeed, Defendants point to no
reason, aside from the references to the Under Seal Action, why
their brief should be sealed.
Consistent with Carter 2008, the Court finds that the
Ashcraft standard is satisfied with respect to the portions of
the brief that reference the Under Seal Action.
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First,
Defendants provided public notice of the request to seal that
allowed interested parties a reasonable opportunity to object.
(Mot. to Seal filed Oct. 21, 2010 [Dkt. 13].)
Moreover, the
public’s interest in access is outweighed by competing
interests.
The Under Seal Action is currently sealed pursuant
to 31 U.S.C. § 3730(b).
This statute requires relators to file
qui tam complaints in camera, where they remain under seal for
at least 60 days, during which time the Government may elect to
intervene and proceed with the action.
31 U.S.C. § 3730(b)(2).
As the Fourth Circuit recently noted, Congress adopted 31 U.S.C.
§ 3730(b) for numerous reasons:
1) to permit the United States to determine
whether it already was investigating the
fraud allegations (either criminally or
civilly);
(2) to permit the United States to
investigate the allegations to decide whether
to intervene;
(3) to prevent an alleged fraudster from
being tipped off about an investigation; and,
(4) to protect the reputation of a defendant
in that the defendant is named in a fraud
action brought in the name of the United
States, but the United States has not yet
decided whether to intervene.
Am. Civil Liberties Union v. Holder, --- F.3d ----, 2011 WL
1108252, at *4 (4th Cir. Mar. 28, 2011) (citations omitted).
These competing interests weigh against the public interest in
disclosure, and warrant redaction of those portions of the brief
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that reference the Under Seal Action.
See id. at *6-9
(rejecting argument that 31 U.S.C. § 3730(b)-(c) facially
violated the First Amendment).
In sum, the Court’s November 7, 2011 order granting
Defendants’ motion to seal shall be amended.
The motion is
granted only as to those portions of the Memorandum in Support
of Defendants’ Motion to Dismiss that reference the Under Seal
Action –- most notably Exhibit 3, which shall be excised in its
entirety.
Defendants shall file a partially redacted version of
the Memorandum in Support of Defendants’ Motion to Dismiss in
the public docket, redacting any and all references to the Under
Seal Action.
Defendants’ Reply Memorandum in Support of Defendants’
Motion to Dismiss also references the Under Seal Action.
For
the reasons given above, Defendants’ motion to seal their reply
brief is granted in part as to those portions that discuss the
Under Seal Action.
Defendants also note that Exhibit 9 of their
reply brief was submitted under seal in a prior iteration of
this action and remains under seal.
Exhibit 9 is Carter’s
settlement conference statement in Carter 2008.
The Court finds
that Exhibit 9 satisfies the Ashcraft standard.
Defendants
provided public notice of the request to seal that allowed
interested parties a reasonable opportunity to object.
Seal filed Nov. 8, 2011 [Dkt. 25].)
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(Mot. to
And, as other courts have
noted, it is important to maintain confidentiality in settlement
discussions for purposes of encouraging settlement agreements.
See Saunders v. Champ Sports, Inc., No. 2:07-cv-00655, 2008 WL
5142393, at *1 (S.D. W.Va. Dec. 8, 2008).
The Court finds that
under these circumstances, this competing interest outweighs the
public interest in disclosure.
Accordingly, the motion to seal
is also granted as to Exhibit 9, which shall be excised from
Defendants’ reply brief.
Carter likewise moves to seal portions of his
Opposition to Defendants’ Motion to Dismiss –- specifically
those containing material that reference the Under Seal Action
and which are subject to the Protective Order in Carter 2008.
As with Defendants’ motion to seal the Memorandum in Support of
Defendants’ Motion to Dismiss, the Court will grant the motion
to seal as to those portions of the Opposition which reference
the Under Seal Action.
Carter, however, fails to specify which
matters referenced in the Opposition are subject to the
Protective Order, nor does he provide any reasons why the
public’s right of access to these matters is outweighed by
competing interests.
Ashcraft, 218 F.3d at 302.
As this Court
held in Carter 2010, the mere fact that certain matters have
been designated “confidential” pursuant to the Protective Order
in Carter 2008 is insufficient.
See Carter, 2011 WL 2077799, at
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*3-4.
Accordingly, the motion is denied as to matters subject
to the Protective Order.
Defendants and Carter both move to seal their briefs
filed in connection with Carter’s Motion for Leave to File Surreply.
At the outset, the Court notes that none of these briefs
reference the Under Seal Action.
In Carter’s motion to seal his
Motion for Leave to File Sur-reply, he again points out that the
motion references material designated “confidential” in the
Protective Order in Carter 2008.
Carter again makes no argument
as to why the public’s right of access to these matters is
outweighed by competing interests.
Ashcraft, 218 F.3d at 302.
As this is Carter’s sole basis for sealing the Motion for Leave
to File Sur-reply, the motion is denied.
Defendants move to seal their Response to Relator’s
Motion for Leave to File Sur-reply and Carter seeks to seal his
Reply Memorandum in support thereof.
The parties premise these
requests on the fact that, when filed, all briefing on the
Motion to Dismiss was either under seal or subject to pending
motions to seal.
Following this Memorandum Opinion and the
accompanying Order, that of course will no longer be the case.
The parties provide no other reason why these two briefs should
be sealed.
Accordingly, Defendants’ motion to seal their
Response to Relator’s Motion for Leave to File Sur-reply and
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Carter’s motion to seal his Reply Memorandum in Support of his
Motion for Leave to File Sur-reply are denied.
IV.
Conclusion
For these reasons, the Court will (1) grant in part
and deny in part Defendants’ Motion to Seal Memorandum in
Support of Defendants’ Motion to Dismiss; (2) grant in part and
deny in part Relator’s Motion to Seal Portions of the Opposition
to Defendants’ Motion to Dismiss; (3) grant in part and deny in
part Defendants’ Motion to Seal Reply Memorandum in Support of
Defendants’ Motion to Dismiss; (4) deny Relator’s Motion to Seal
his Motion for Leave to File Sur-reply; (5) deny Defendants’
Motion to Seal Defendants’ Response to Relator’s Motion for
Leave to File Sur-reply; and (6) deny Relator’s Motion to Seal
his Reply Memorandum in Support of his Motion for Leave to File
Sur-reply.
An appropriate Order will issue.
November 29, 2011
Alexandria, Virginia
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
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