Friedman v. Leavitt ( 2009 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MICHAEL FRIEDMAN et al., :
:
Plaintiffs, : Civil Action No.: 08-0586 (RMU)
:
v. : Re Document No.: 31
:
KATHLEEN SEBELIUS, in her official :
capacity as Secretary of the Department of :
Health and Human Services,1 et al., :
:
Defendants. :
MEMORANDUM OPINION
GRANTING THE DEFENDANTS’ MOTION TO UNSEAL
I. INTRODUCTION
This matter comes before the court on the defendants’ motion to unseal this case. The
plaintiffs are current and former executives of the pharmaceutical company Purdue Frederick
Company, Inc. (“Purdue”). Plaintiff Michael Friedman is the former president and chief
executive officer of Purdue, plaintiff Paul D. Goldenheim is Purdue’s former chief scientific
officer and plaintiff Howard R. Udell is the executive vice president and chief legal officer of the
company. In April 2008, the plaintiffs sought to enjoin the defendants, Inspector General (“IG”)
Daniel R. Levinson and former Secretary of the United States Department of Health and Human
Services (“HHS”) Michael Leavitt, from issuing notices that would render them ineligible to
participate in federal health care programs. The court dismissed the plaintiffs’ claims in
December 2008. The defendants now move to unseal the case, and the plaintiffs oppose the
1
The court substitutes Kathleen Sebelius as the defendant pursuant to Federal Rule of Civil
Procedure 25(d)(1). See FED . R. CIV . P. 25(d)(1).
motion. Because the relevant factors weigh in favor of unsealing the case, the court grants the
defendants’ motion.
II. FACTUAL & PROCEDURAL BACKGROUND
In May 2007, the plaintiffs pleaded guilty in the United States District Court for the
Western District of Virginia to a single misdemeanor count of misbranding a drug in violation of
21 U.S.C. § 333(a)(1). See United States v. Purdue Frederick Co., 495 F. Supp. 2d 569, 570
(W.D. Va. 2007); see also Am. Compl. ¶ 28. They were convicted under the “responsible
corporate officer” provision of 21 U.S.C. § 333, which establishes that executive officers may be
convicted of strict liability misdemeanors if their company misbrands a drug in violation of 21
U.S.C. § 331(a). See 21 U.S.C. § 333(a)(1); Am. Compl. ¶ 30. As a result of this misdemeanor
conviction, the IG of HHS issued “exclusion notices” to the plaintiffs, making them ineligible to
participate in federal health care programs for a period of twenty years. Am. Compl. ¶ 34.
On April 4, 2008, the plaintiffs sought an injunction in this court to prevent HHS from
excluding them from federal health care programs, claiming that exclusion would destroy their
careers. Pls.’ Mot. for Prelim. Inj. at 1-2. The exclusion was to become effective on April 20,
2008, at which time their notices would be made publicly available. Id. at 1. The plaintiffs
simultaneously sought an order sealing the entire case because they claimed that they would be
irreparably harmed if the notices, which were attached as exhibits to the plaintiffs’ motions for a
preliminary injunction, became public. See generally Pls.’ Mot. to Seal. The court granted the
motion to seal the case, see Order (Apr. 4, 2008), and issued a temporary restraining order
enjoining the defendants from making the plaintiffs’ exclusion public, see Order (Apr. 8, 2008),
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but ultimately granted the defendants’ motion to dismiss on the grounds that the plaintiffs had
failed to exhaust their administrative remedies with HHS, see Mem. Op. (Dec. 5, 2008) at 14.
Thus, on January 13, 2009, the plaintiffs’ names were added to HHS’s “exclusions database,” see
Pls.’ Opp’n to Defs.’ Mot. to Unseal Docket (“Pls.’ Opp’n”) at 1, with the date of their exclusion
listed as April 20, 2008, see Defs.’ Mot. to Unseal Docket (“Defs.’ Mot.”) at 2. The defendants
then filed the instant motion to unseal the docket, which the plaintiffs oppose. The court now
turns to the applicable legal standard and the parties’ arguments.
III. ANALYSIS
A. Legal Standard for a Motion to Unseal Documents
“[T]he starting point in considering a motion to [un]seal court records is a ‘strong
presumption in favor of public access to judicial proceedings.’” United States ex rel. Schweitzer
v. Oce, N.V., 577 F. Supp. 2d 169, 171 (D.D.C. 2008) (alteration in original) (quoting Equal
Employment Opportunity Comm’n v. Nat’l Children’s Ctr., Inc., 98 F.3d 1406, 1409 (D.C. Cir.
1996)); see also In re Sealed Case, 237 F.3d 657, 666 (D.C. Cir. 2001) (citations omitted).
Although strong, this presumption is not absolute. The Supreme Court has stated that “[e]very
court has supervisory power over its own records and files, and access has been denied where
court files might have become a vehicle for improper purposes.” Nixon v. Warner Commc’ns,
Inc., 435 U.S. 589, 598 (1978) (internal citations omitted). “Courts have refused to permit their
files to serve as reservoirs of libelous statements for press consumption . . . or as sources of
business information that might harm a litigant’s competitive standing.” Id.3
Whether the public should have access to judicial records and proceedings is a decision
“best left to the sound discretion of the trial court, a discretion to be exercised in light of the
relevant facts and circumstances of the particular case.” Nixon, 435 U.S. at 599 (cited in United
States v. Hubbard, 650 F.2d 293, 316-17 (D.C. Cir. 1980)). To aid the court’s analysis, the D.C.
Circuit has established a six-factor balancing test for determining whether documents should be
sealed. These factors are:
(1) the need for public access to the documents at issue; (2) the extent to which the
public had access to the documents prior to the sealing order; (3) the fact that a party
has objected to disclosure and the identity of that party; (4) the strength of the
property and privacy interests involved; (5) the possibility of prejudice to those
opposing disclosure; and (6) the purposes for which the documents were introduced.
Johnson v. Greater Se. Cmty. Hosp., 951 F.2d 1268, 1277 n.14 (D.C. Cir. 1991) (citing Hubbard,
650 F.2d at 317-22).
Moreover, this Circuit has determined that “where both the public interest in access and
the private interest in non-disclosure are strong, partial or redacted disclosure would satisfy both
interests.” Hubbard, 650 F.2d at 324-25. The district court may exercise its discretion to grant
or deny a motion to seal in part or whole. Id. at 324. In exercising that discretion, “it is
imperative that the district court articulate its reasons for electing to seal or not to seal a record.”
Nat’l Children’s Ctr., Inc., 98 F.3d at 1410 (citing Johnson, 951 F.2d at 1277-78).
B. The Court Grants the Defendants’ Motion to Unseal the Docket
To determine whether this action should be unsealed, the court examines the case in light
of the six factors articulated in United States v. Hubbard. See 650 F.2d at 317-22.
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1. Need for Public Access
The first Hubbard factor concerns the need for public access to the documents sought to
be sealed. See id. at 317. The defendants argue that lifting the seal will eliminate confusion as to
why exclusion notices that were issued in April 2008 were not made public until nearly a year
later. Defs.’ Mot. at 2. The plaintiffs counter that the defendants can easily explain that the late
publication of the notices is due to ongoing sealed litigation, and thereby avoid the need to unseal
the record. Pls.’ Opp’n at 2. The defendants, in turn, argue that there is no reason to keep this
case sealed if those who ask will be told about its existence. Defs.’ Reply in Supp. Mot. to
Unseal Docket (“Defs.’ Reply”) at 2-3 n.2.
There is a stronger presumption of transparency in some judicial proceedings than in
others. See Hubbard, 650 F.2d at 317. For example, situations involving “access to the
courtroom conduct of a criminal trial [or] a pre-trial suppression motion,” or “documents which
have been introduced as evidence of guilt or innocence in a trial,” command a relatively strong
presumption of openness. Id. Additionally, “in cases where the government is a party . . . [t]he
appropriateness of making court files accessible” is enhanced. Nat’l Children’s Ctr., Inc., 98
F.3d at 1409 (quoting Fed. Trade Comm’n v. Standard Fin. Mgmt. Corp., 830 F.2d 404, 410 (1st
Cir. 1987)). Further, a party seeking to seal court documents must “come forward with specific
reasons why the record, or any part thereof, should remain under seal.” Johnson, 951 F.2d at
1278.
The fact that the instant case does not fall within one of the aforementioned situations
described in Hubbard weighs in favor of keeping the docket sealed. See Hubbard, 650 F.2d at
317. On the other hand, the fact that the plaintiffs ask the court to maintain a blanket seal of the
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case rather than requesting only that the allegedly damaging portions of the record remain under
seal – despite the fact that the purported harm will be caused by the release of only a few
documents in the record, see generally Pls.’ Opp’n – weighs against the plaintiffs’ position, cf.
Hubbard, 650 F.2d at 318 (noting that the fact that the defendants sought only to seal a set of
documents used for a limited purpose worked in favor of allowing the case to be sealed). Finally,
the fact that the defendants have been sued in their official capacity, see Am. Compl. ¶¶ 18-19,
weighs in favor of unsealing, see Standard Fin. Mgmt. Corp., 830 F.2d at 410 (noting that “[t]he
appropriateness of making court files accessible is accentuated in cases where the government is
a party”).
2. Prior Public Access
The second factor in the Hubbard analysis is the extent to which the public has had
access to the documents at issue prior to their being sealed. See Hubbard, 650 F.2d at 318. The
defendants argue that the initial rationale for sealing the record – the fact that the notices of
exclusion had not yet been made public – no longer applies because HHS has released the
notices. Defs.’ Mot. at 2. The defendants add that the court should not bow to the plaintiffs’
shift in litigation strategy: the plaintiffs initially asked that the court seal the matter until the
preliminary injunction had been ruled on, but now they seek to keep this case sealed indefinitely.
Defs.’ Reply at 1-2. The plaintiffs respond that lifting the seal will compound the harm to which
they have already been subjected through HHS’s release of the exclusion notices. Pls.’ Opp’n at
2-3.
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The fact that a document was accessible to the public prior to being sealed “may weigh in
favor of subsequent access.”2 Hubbard, 650 F.2d at 318; see also In re Nat’l Broad. Co., 653
F.2d 609, 614 (D.C. Cir. 1981). Consideration of this factor assumes that the public availability
of the sealed documents hinges on whether or not there is a sealing order in place. But this
assumption does not apply in the instant matter: the notices became publicly available through
the OIG after they were initially sealed in this matter in April 2008, and they remain publicly
available. Defs.’ Mot. at 2. Consistent with what this court determines to be the rationale behind
treating prior access as favoring unsealing – that it is less harmful to release a document that was
once public than to release one that has never been made publicly accessible – this factor weighs
in favor of unsealing. See, e.g., Nat’l Children’s Ctr., Inc., 98 F.3d at 1409-10 (holding that the
lack of previous public access to documents “goes to the appropriateness of sealing those
documents); In re Application of N.Y. Times Co., 575 F. Supp. 2d 83, 93 (D.D.C. 2008) (holding
that the fact that “critical information is in the public forum . . . weighs in favor” of unsealing).
2
Although the Supreme Court has held that “[t]he presence of an alternative means of public
access tips the scales in favor of denying release,” Nixon v. Warner Commc’ns, Inc., 435 U.S.
589, 606 (1978) (holding that a seal on audiotapes of President Nixon’s voice was proper where
the Presidential Recordings Act provided procedures for public use of the tapes), the D.C. Circuit
has consistently interpreted prior public access to weigh in favor of unsealing, see Equal
Employment Opportunity Comm’n v. Nat’l Children’s Ctr., Inc., 98 F.3d 1406, 1409-10 (D.C.
Cir. 1996) (holding that “[t]he lack of previous public access to documents . . . goes to the
appropriateness of sealing those documents”); United States v. Hubbard, 650 F.2d 293, 318-19
(D.C. Cir. 1980) (holding that because documents at issue had not yet been released, there was
“no previous access to weigh in favor of access . . . granted through [an] unsealing order”);
United States ex rel. Schweitzer v. Oce, 577 F. Supp. 2d 169, 173 (D.D.C. 2008) (holding that “to
the extent certain sealed materials are already in the public domain, this factor favors unsealing
those materials”); McConnell v. Fed. Elections Comm’n, 251 F. Supp. 2d 919, 936 (D.D.C.
2003) (holding that documents warranted less protection under the Hubbard analysis where they
had been released in advertisements seven years prior to the litigation). As explained below, the
balance of the Hubbard factors would still tip in favor of unsealing even if this factor militated
against it.
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3. Party’s Objection to Disclosure
The third Hubbard factor considers whether a party objects to disclosure of the
documents at issue and the identity of the party making that objection. See Hubbard, 650 F.2d at
319. The plaintiffs wish to keep the record sealed, Pls.’ Opp’n at 2, and the fact that a party
objects to unsealing the record weighs in that party’s favor in the Hubbard analysis, see Nat’l
Children’s Ctr., Inc., 98 F.3d at 1410 (holding that the only Hubbard factor that supported the
defendant’s position in favor of sealing the record was the fact that the defendant objected to
disclosure of a document).
4. Strength of Property and Privacy Interests
The fourth Hubbard factor concerns the property and privacy interests of the party
objecting to disclosure. Hubbard, 650 F.2d at 320. The plaintiffs argue that the notices of
exclusion contain “highly inflammatory and unsupported statements” that would cause them
irreparable harm.3 Pls.’ Opp’n at 3. They add that the seal is appropriate because the record
contains “confidential and sensitive information, including descriptions of settlement
negotiations between the plaintiffs and defendants and correspondence regarding plaintiffs’
exclusions between third parties, including Purdue Pharma L.P. and defendants.” Id. They
further assert that the nature of the exclusion that appears in the notices of exclusion is different
than the exclusion that the administrative law judge ultimately imposed.4 Id. Moreover, the
3
The sentence from the exclusion notices that the plaintiffs take most umbrage with is one
claiming that they were responsible for “losses to federal health care programs” as well as for
“personal injuries and deaths.” Pls.’ Mot., Exs. A-3, B-3, C-3.
4
While the notices of exclusion indicated that the plaintiffs would be barred for twenty years from
federal health care programs, the administrative law judge reduced that term to fifteen years. See
Pls.’ Opp’n at 3.
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plaintiffs argue that this matter should remain sealed while they exhaust their administrative
remedies and then seek review in this court, so as to avoid any adverse impacts should this court
overturn a negative ruling in the administrative proceeding. Id. at 4. Lastly, the plaintiffs argue
that retaining the seal will not prejudice the government. Id. The defendants respond that the
argument regarding prejudice to the government is inapposite: the presumption, the defendants
note, is in favor of open judicial proceedings. Defs.’ Reply at 2.
The Hubbard court addressed this factor by examining the objecting party’s privacy
interest in the particular documents, see Hubbard, 650 F.2d at 320 (noting there was a strong
privacy interest in documents that were seized from a private area in a church), rather than the
effect that unsealing the documents would have on the party’s property and privacy interests
generally, which is an alternative interpretation of this factor, see Greater Se. Cmty. Hosp. Corp.,
789 F. Supp. 2d at 430 (noting that a hospital and its employee both had a privacy interest in
proceedings involving peer review documents because disclosure of the documents would affect
the plaintiff’s reputation).
In the memorandum opinion granting the defendants’ motion to dismiss, the court already
considered the effect that the release of the notices of exclusion would have on the plaintiffs’
privacy interests, concluding that the plaintiffs’ predictions of reputational harm did not entitle
them to the relief they sought, see Mem. Op. (Dec. 5, 2008) at 12-13. More specifically, the
court recognized that “there is ‘no significant loss of reputation . . . inflicted by procedural
irregularities’ when the damage can be ‘fully corrected by an administrative determination
requiring the agency to conform to the applicable regulations.’” Id. at 13 (quoting Sampson v.
Murray, 415 U.S. 61, 91 (1974)).
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Moreover, the plaintiffs have failed to point to specific documents, other than the notices
of exclusion, that they claim warrant protection, instead making broad reference to “confidential
and sensitive information.” Pls.’ Opp’n at 3. The court declines to sift through the record to
attempt to divine the portions to which the plaintiffs are referring. And while the plaintiffs note
that certain documents in the record should remain sealed because they represent correspondence
involving third parties, none of these parties have filed a motion objecting to disclosure. See In
re Sealed Case, 237 F.3d at 664 (quoting Hubbard, 650 F.3d at 311) (noting that “a third party
may attempt to ‘maintain the confidentiality’ of materials that are under the control of a court in a
pending case by filing a motion initiating a distinct ancillary proceeding”). In sum, the plaintiffs’
privacy and property interests will not be irreparably harmed by unsealing the record in this
matter: they still have the opportunity to prevail in the administrative proceeding and have their
notices of exclusion withdrawn. For these reasons, the fourth Hubbard factor weighs in favor of
unsealing.
5. Possibility of Prejudice to the Party Opposing Disclosure
The fifth Hubbard factor considers whether disclosure of the documents will lead to
prejudice in future litigation to the party seeking the seal. See Hubbard, 650 F.2d at 320-21.
“[S]ensational disclosure” that will cause a party prejudice in later proceedings goes to the
appropriateness of sealing. Id. at 320-21. The plaintiffs have not claimed that unsealing this
matter would affect them in any future litigation; rather, they refer only to generalized
reputational harm. See Pls.’ Opp’n at 4. Therefore, this factor does not weigh strongly in favor
of either maintaining the seal or unsealing the case.
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6. Purposes for Which the Documents Were Introduced
The sixth consideration in the Hubbard analysis concerns the purposes for which the
documents were introduced. See Hubbard, 650 F.2d at 321-22. If the documents were obtained
through discovery, for example, they are afforded a stronger presumption of privacy, as those
materials typically are not publicly accessible. See Nat’l Children’s Ctr., Inc., 98 F.3d at 1411.
On the other hand, if the documents sought to be sealed are entered as evidence during a trial,
there is a strong presumption against sealing because a “trial is a public event” and “[w]hat
transpires in the court room is public property.” In re Nat’l Broad. Co., 653 F.2d at 614(alteration in original) (quoting United States v. Mitchell, 551 F.2d 1252, 1261 (D.C. Cir. 1976),
rev’d on other grounds sub nom. Nixon v. Warner Commc’ns, Inc., 435 U.S. 589 (1976). The
documents specifically referred to in the plaintiffs’ opposition were attached as exhibits to their
motion for a preliminary injunction. See Pls.’ Mot. for Prelim. Inj., Exs. A-3, B-3, C-3. The
court denied the motion for a preliminary injunction when it granted the defendants’ motion to
dismiss. See generally Mem. Op. (Dec. 5, 2008). In their motion to seal, filed concurrently with
their motion for preliminary injunction, the plaintiffs asked the court to seal the case only until
the court ruled on the preliminary injunction motion. See Pls.’ Mot to Seal at 6. Given that the
plaintiffs introduced those documents to support their motion for preliminary injunction, and
sought to seal those documents only through that motion’s disposition, this factor weighs in favor
of unsealing the case.
On balance, the Hubbard factors weigh in favor of unsealing this case. Indeed, the only
factor that supports maintaining the seal is the fact that the plaintiffs object to unsealing. As a
result, the court grants the defendants’ motion to unseal.
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IV. CONCLUSION
For the foregoing reasons, this court grants the defendants’ motion to unseal the docket.
An Order consistent with this Memorandum Opinion is separately and contemporaneously issued
this 7th day of December, 2009.
RICARDO M. URBINA
United States District Judge
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