Vantage Health Plan, Inc. v. Willis-Knighton Med. Ctr.

Case: 17-30867 Document: 00514787522 Page: 1 Date Filed: 01/09/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 17-30867 FILED
January 9, 2019
Lyle W. Cayce
VANTAGE HEALTH PLAN, INCORPORATED, Clerk
Plaintiff - Appellee
v.
WILLIS-KNIGHTON MEDICAL CENTER, doing business as
Willis-Knighton Health System
Defendant
v.
HUMANA HEALTH BENEFIT PLAN OF LOUISIANA, INCORPORATED,
Appellant
Appeal from the United States District Court
for the Western District of Louisiana
Before JONES, BARKSDALE, and WILLETT, Circuit Judges.
EDITH H. JONES, Circuit Judge:
In the midst of a complex antitrust case, the district court ordered that
certain confidential business documents belonging to a non-litigant party should
be unsealed (but redacted) if and when they are filed on the public docket. The
non-litigant appealed. This court has jurisdiction under the collateral order
doctrine. We conclude that the district court did not abuse its discretion in issuing
the order because it applied the proper legal standards and provided sufficiently
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specific reasons to enable meaningful appellate review. Accordingly, the district
court’s order is AFFIRMED.
BACKGROUND
The appellant, Humana Health Benefit Plan of Louisiana, Inc. (“Humana”),
is not a party to the larger antitrust action underlying this interlocutory appeal.
In that action, plaintiffs University Health Shreveport, a medical provider, and
Vantage Health Plan, Inc. (“Vantage”), a health insurer, sued Willis-Knighton
Medical Center, a medical provider in the Shreveport area. Plaintiffs’ amended
complaint did not mention Humana, but alleged that Willis-Knighton engaged in
anticompetitive practices, creating a health-care monopoly by acquiring many
physicians’ practices to force insurers to include Willis-Knighton as an “in-
network” provider. Plaintiffs also alleged that Willis-Knighton refused to deal
with Vantage.
During discovery plaintiffs learned of documents relevant to an alleged
agreement between Willis-Knighton and Humana. Vantage served two Rule 45
subpoenas on Humana to obtain the documents. After Humana refused to comply,
the court granted Vantage’s motion to compel and ordered Humana to produce
documents related to the alleged agreement. Fifty documents—a mix of emails
and draft contracts—are the subject of this appeal.
The court issued a protective order designed to cover all parties’ documents
that were regarded as sensitive and confidential. Under the initial protective
order, any party could designate a document as confidential or for attorneys’ eyes
only “provided that such designation [wa]s made in good faith and provided
further that any [p]arty may . . . challenge any such designation.” If one party
challenged another’s designation of confidentiality, the producing party was
required to furnish reasons for the designation within twenty days. If the parties
could not agree, the objecting party could request that the court withdraw the
confidential designation.
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The court amended its protective order in an order dated June 29, 2017,
because the parties were filing too many documents under seal and creating
“issues” for the court and clerk’s office. Sealing documents “bec[ame] a matter of
routine, rather than a genuine belief that the documents contain[ed] confidential
or sensitive information.” The court observed that the parties’ confidentiality
designations contained “only boilerplate recitations” and failed to specify why the
documents should be sealed. Recognizing “that there is a presumption that all
records should remain unsealed and open for [public] review,” the amended
protective order changed the procedure for designating a document confidential.
A party that wished to file a confidential document was to ask the designating
party for “permission to file the discovery as unsealed in the public record.” Such
permission was not to be “unreasonably denied.” If the designating party denied
permission, the filing party was required to obtain “leave of court . . . before any
document [was] filed under seal.”
As part of the amended order, the court prospectively denied all motions to
seal, but ruled the documents would remain confidential pending the court’s
process for resolving the issue. If a party wished to file a document in the record,
it was required to “either file (a) a motion to seal with the Court, explaining with
specificity why each exhibit or piece of information needs to be kept under seal, or
(b) a rule to show cause, demanding the opposing party or third party explain to
the court why it will not allow its documents to be filed in the open record.” At
two subsequent hearings in which multiple parties participated, the court
proceeded document-by-document and line-by-line to determine which sections of
the claimed confidential documents should be redacted or sealed entirely.
Humana offered no specific reasons for confidentiality and was wholly
unprepared to engage in the court’s painstaking process. Unsurprisingly, the
court ruled that none of Humana’s fifty documents would be sealed in their
entirety but instead should be redacted to protect “information that revealed
reimbursement rates and percentages, fee schedules, overall percentage increases
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from year to year, and amounts and percentages of bonuses.” Humana appealed,
contending that the district court abused its discretion by ordering Humana’s
documents to be redacted but not sealed.
APPELLATE JURISDICTION
This court requested supplemental briefing concerning our appellate
jurisdiction to review an interlocutory sealing or unsealing order concerning a
non-party. Reasoning that the court’s order is effectively unreviewable on appeal,
Humana premises jurisdiction on the collateral order doctrine. Vantage also
prefers to resolve the merits of this appeal and suggests that if the court lacks
interlocutory jurisdiction, we may treat Humana’s appeal as a petition for
mandamus, which must be denied in the absence of a clear abuse of district court
discretion.
We conclude, as have other circuits, that sealing and unsealing orders like
those involved here are reviewable on interlocutory appeal as exceptions to the
final judgment rule under the collateral order doctrine. These orders are
effectively unreviewable on appeal from a final judgment principally because a
decision to unseal a document cannot be undone; once confidential information is
released, there is no going back. Equally pertinent to this case, non-litigant
parties lack appellate remedies available to the contenders in litigation.
Appellate jurisdiction is generally confined to “final decisions of the district
courts of the United States.” 28 U.S.C. § 1291. A final decision is one that “ends
the litigation on the merits and leaves nothing more for the court to do but execute
the judgment.” Dig. Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867,
114 S. Ct. 1992, 1995 (1994) (quoting Catlin v. United States, 324 U.S. 229, 233,
65 S. Ct. 631, 633 (1945)). Restricting appeals to final judgments serves
important interests. First, “[p]ermitting piecemeal, prejudgment appeals . . .
undermines ‘efficient judicial administration.’” Mohawk Indus., Inc. v. Carpenter,
558 U.S. 100, 106, 130 S. Ct. 599, 605 (2009) (quoting Firestone Tire & Rubber Co.
v. Risjord, 449 U.S. 368, 374, 101 S. Ct. 669 (1981)). Second, the rule recognizes
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“the deference owed by appellate courts to trial judges charged with managing the
discovery process.” Cunningham v. Hamilton Cty., 527 U.S. 198, 209, 119 S. Ct.
1915, 1922 (1999). Third, Congress has expressed a preference for rulemaking,
and “not expansion by court decision,” as the appropriate method of determining
which orders are immediately appealable. Swint v. Chambers Cty. Comm’n,
514 U.S. 35, 48, 115 S. Ct. 1203, 1211 (1995); see also Cunningham, 527 U.S. at
210, 119 S. Ct. at 1923.
It is true that a “narrow class of decisions” is immediately appealable as
collateral orders even if no final judgment has been rendered. Dig. Equipment
Corp., 511 U.S. at 867, 114 S. Ct. at 1995. But the Supreme Court cautions that
the collateral order doctrine must “never be allowed to swallow the general rule.”
Id. at 868, 114 S. Ct. at 1996 (citation omitted). To qualify as a collateral order,
an “order must (1) conclusively determine the disputed question, (2) resolve an
important issue completely separate from the merits of the action, and (3) be
effectively unreviewable on appeal from a final judgment.” Henry v. Lake Charles
Am. Press, L.L.C., 566 F.3d 164, 171 (5th Cir. 2009) (quoting Coopers & Lybrand
v. Livesay, 437 U.S. 463, 468, 98 S. Ct. 2454 (1978)).
The first and second prongs of the collateral order doctrine are met here.
The district court order weighed Humana’s and the public’s interests and
conclusively determined that if a party enters Humana’s documents into the
public record they will be unsealed, albeit redacted. Exposing potentially
confidential information is an important issue wholly separate from the merits of
the underlying litigation.
As to the third prong, the “decisive consideration” of the “effectively
unreviewable” analysis concerns “whether delaying review until the entry of final
judgment ‘would imperil a substantial public interest’ or ‘some particular value of
a high order.’” Mohawk, 558 U.S. at 107, 130 S. Ct. at 605 (quoting Will v.
Hallock, 546 U.S. 345, 352–53, 125 S. Ct. 952, 959 (2006)). This decision must be
made “on a categorical basis, looking only at whether ‘the class of claims, taken
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as a whole, can be vindicated by other means’ than immediate appeal.” Martin v.
Halliburton, 618 F.3d 476, 483 (5th Cir. 2010) (quoting Mohawk, 558 U.S. at 107,
130 S. Ct. at 605). The bar set by the collateral order doctrine is high. The sole
fact “[t]hat a ruling may burden litigants in ways that are only imperfectly
reparable by appellate reversal of a final district court judgment . . . has never
sufficed” to make a decision effectively unreviewable. Mohawk, 558 U.S. at 107,
130 S. Ct. at 605 (quoting Dig. Equip., 511 U.S. at 872, 114 S. Ct. at 1992). If that
class of claims, taken as a whole, can be adequately vindicated by other means,
“the chance that the litigation at hand might be speeded, or a ‘particular
injustic[e]’ averted,” does not provide a basis for jurisdiction under § 1291. Id. at
107, 130 S. Ct. at 605–06 (quoting Van Cauwenberghe v. Baird, 486 U.S. 517, 529
(1988)). Pretrial discovery orders are generally not considered final decisions;
even an order to disclose potentially privileged material is likewise insufficient by
itself to provide jurisdiction. See id. at 108, 130 S. Ct. at 606.
But unsealing a document cannot be undone, for “[s]ecrecy is a one-way
street” and “[o]nce information is published, it cannot be made secret again.” In
re Copley Press, Inc., 518 F.3d 1022, 1025 (9th Cir. 2008). This problem has led
other circuits to conclude that sealing and unsealing orders are effectively
unreviewable on appeal from a final judgment. 1
This rationale is even more persuasive where, as here, a third party like
Humana was required to produce potentially sensitive documents. The harm to
third parties is not the admission of adverse evidence at trial (an error potentially
correctable for a party on retrial), but the disclosure of their confidential and
1See, e.g., United States v. HSBC Bank USA, N.A., 863 F.3d 125, 134 (2d Cir. 2017);
Rudd Equip. Co., Inc. v. John Deere Constr. & Forestry Co., 834 F.3d 589, 593 (6th Cir. 2016);
Apple Inc. v. Samsung Elec. Co., 727 F.3d 1214, 1220 (Fed. Cir. 2013); Ameziane v. Obama,
620 F.3d 1, 5 (D.C. Cir. 2010). Other circuits have reviewed on appeal sealing and unsealing
orders under the collateral order doctrine, but these cases arose prior to Mohawk. See, e.g.,
Va. Dep’t of State Police v. Wash. Post, 386 F.3d 567, 674 n.4 (4th Cir. 2004); Romero v.
Drummond Co., 480 F.3d 1234, 1242 (11th Cir. 2008).
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sensitive information without full access to appellate review. Third parties have
no power to control the course of litigation nor any influence over appeal from a
final judgment. A third party may of course petition for a “writ of mandamus” or
may “defy a disclosure order and incur court-imposed sanctions.” Mohawk,
558 U.S. at 109–12, 130 S. Ct. 606–608; see also In re United States Dep’t of
Homeland Sec., 459 F.3d 565, 568 (5th Cir. 2006) (“Mandamus is appropriate if
the district court errs in ordering the discovery of privileged documents, as such
an order would not be reviewable on appeal.”). Mandamus review, however, is
very narrow, and incurring sanctions is risky.
Like the other circuits, we conclude that because sealing and unsealing
orders are effectively unreviewable on appeal, and because Humana’s appeal
otherwise suits the criteria for collateral order review, we have appellate
jurisdiction. 2
THE UNSEALING ORDER
Appellate review of a motion to seal or unseal documents is for abuse of
discretion. United States v. Holy Land Found. for Relief & Dev., 624 F.3d 685, 689
(5th Cir. 2010). The deferential abuse-of-discretion standard is violated “when
[the court’s] ruling is based on an erroneous view of the law or a clearly erroneous
assessment of the evidence.” Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 224,
233 (5th Cir. 2016) (quotation omitted).
The decision whether to allow public access to court records “is one best left
to the sound discretion of the trial court, a discretion to be exercised in light of the
2 In a recent case involving the collateral order doctrine and a third-party document
production order, this court did not reach the question whether third-party status alone,
absent some constitutional or other issue that calls into question the “general familiarity of
courts with standards governing [the dispute],” may suffice to invoke the collateral order
doctrine. Whole Woman’s Health v. Smith, 896 F.3d 362, 368 (5th Cir. 2018). At issue there
was the First Amendment claim of a religious institution to protection from discovery of
internal governance documents. Here, the question is the unsealing of assertedly
confidential business information, and the issue of appealability has been discussed in
numerous other courts.
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relevant facts and circumstances of the particular case.” Nixon v. Warner
Commc’ns, Inc., 435 U.S. 589, 599, 98 S. Ct. 1306, 1312–13 (1978). In exercising
this discretion, “the court must balance the public’s common law right of access
against the interests favoring nondisclosure.” Sec. & Exch. Comm’n. v. Van
Waeyenberghe, 990 F.2d 845, 848 (5th Cir. 1993). Undergirding balancing is a
“presumption in favor of the public’s common law right of access to court records.”
Id. at 849. This presumption reflects the fact that “[p]ublic confidence [in our
judicial system] cannot long be maintained where important judicial decisions are
made behind closed doors and then announced in conclusive terms to the public,
with the record supporting the court’s decision sealed from public view.” Holy
Land Found., 624 F.3d at 690 (second alteration in original) (citation omitted).
The parties dispute whether this presumption in favor of public access
equates to a burden of proof, and if so, who bears the burden. Several other
circuits have held that the presumption is “strong.” See, e.g., EEOC v. Erection
Co., 900 F.2d 168, 170 (9th Cir. 1990); Bank of Am Nat’l Trust v. Hotel
Rittenhouse, 800 F.2d 339, 344 (3d Cir. 1986). But this court has repeatedly
refused to so characterize the public access presumption as “strong” or require a
strong showing of proof. See, e.g., United States v. Sealed Search Warrants,
868 F.3d 385, 393–95 (5th Cir. 2017); Van Waeyenberghe, 990 F.2d at 848 n.4; Belo
Broad. Corp. v. Clark, 654 F.2d 423, 433–34 (5th Cir. 1981). Rather, in this circuit
the decision to seal or unseal records is to be analyzed on a case-by-case basis,
Sealed Search Warrants, 868 F.3d at 390, and the individualized decision is best
left to the sound discretion of the district court. Belo, 654 F.2d at 430 (citing
Nixon, 435 U.S. at 599, 98 S. Ct. at 1312–13). Although this court in Holy Land
cited out-of-circuit precedent to characterize the presumption in favor of public
access as “strong,” Holy Land, 624 F.3d at 690, the language did not translate to
a burden of proof or otherwise play any role in the court’s analysis. This circuit
plainly adheres to the principles articulated in Sealed Search Warrants, Van
Waeyenberghe, and their progeny.
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Consequently, in two scenarios we have held that a district court abuses its
discretion in decisions to seal or unseal documents: failure to identify and apply
the proper legal standards, or failure to provide sufficient reasons for its decision
to enable appellate review. See Sealed Search Warrants, 868 F.3d at 396–98; Van
Waeyenberghe, 990 F.2d at 848–49. The district court committed neither error
here, and in fact diligently provided Humana every opportunity to vindicate its
interests. While the district court did characterize the presumption as “strong,”
this characterization does not seem to have improperly influenced the court’s
analysis. The court held two hearings and proceeded document-by-document and
line-by-line to determine which sections of the documents should be redacted or
sealed entirely. Humana, as noted above, did not engage in this discussion. When
Humana could not articulate any specific harm created by the disclosure, offered
nothing but conclusory statements to support a blanket claim of confidentiality,
and was unprepared to defend its claim that specific portions of the documents
were confidential, the district court did not abuse its discretion by concluding that
the public access presumption overbore Humana’s interest in confidentiality.
Humana repeats on appeal that making these documents publicly
accessible would provide the company’s competitors with confidential information
such as “negotiating strategy, prices, rates, projections, and other financial
information.” Humana’s argument fails in three respects. First, the bald
assertion of competitive harm is insufficient, and Humana was repeatedly unable
to articulate a specific harm that would be caused by the disclosure of the
documents. Second, Humana ignores the fact that any documents not placed into
the record will remain subject to the district court’s protective order and are
restricted to “attorney’s eyes only.” This fact was noted by Judge Foote several
times. Third, those documents that are ultimately filed on the record are still
subject to the court’s redaction requirements, which cover all “information that
reveal[s] reimbursement rates and percentages, fee schedules, overall percentage
increases from year to year, and amounts and percentages of bonuses.” Thus,
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despite Humana’s lack of engagement with the sealing and unsealing process, the
court’s order properly respected the confidential nature of sensitive business
information and adequately protected information whose disclosure might
conceivably cause competitive harm.
Humana additionally contends that the district court failed to make a
gateway determination that the relevant documents were “judicial records”
prefatory to issuing its protective order. See Sealed Search Warrants, 868 F.3d at
396 n.4 (whether documents are “judicial records” subject to the public access
presumption is a “gateway issue”). This argument misapprehends the court order.
The district court’s order addressed, prior to filing the documents in the public
record, “whether or not these would be filed under seal.” In other words, the
district court was undertaking to determine in advance whether documents would
be filed sealed or unsealed once placed into the record. Once a document is filed
on the public record it becomes a “judicial record.” See, e.g., Van Waeyenberghe,
990 F.2d at 849. Humana’s position would require the district court to wait until
a document is filed before ruling on a motion to seal. Such a ruling would not only
be inefficient but would “require [this court] to direct the trial judge in the
practical management and operation of [her] courtroom, a course we are loath to
take in any but the most extreme circumstances.” Belo, 654 F.2d at 432.
For these reasons, the district court’s order was not an abuse of discretion.
The court identified and applied the proper legal standards and provided its
reasons with sufficient specificity to enable meaningful appellate review. The
court conducted multiple hearings, which offered Humana an ample, but
squandered, opportunity to defend the entire confidentiality of its documents.
Finally, the court attempted to protect Humana’s legitimate business needs by
redacting competitively sensitive confidential information.
CONCLUSION
The district court’s amended protective order, as elaborated in its orders
with respect to Humana’s documents, is AFFIRMED.
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