Le v. Exeter Fin

Case: 20-10377 Document: 00515768605 Page: 1 Date Filed: 03/05/2021
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
March 5, 2021
No. 20-10377 Lyle W. Cayce
Clerk
Binh Hoa Le,
Plaintiff—Appellant,
versus
Exeter Finance Corporation; Enzo Parent, L.L.C.,
Defendants—Appellees.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:15-CV-3839
Before King, Elrod, and Willett, Circuit Judges.
Don R. Willett, Circuit Judge:
After being fired, Bihn Hoa Le sued Exeter Finance Corporation and
Exeter’s parent company, Enzo Parent, L.L.C, for breach of contract, fraud,
and quantum meruit. The district court granted summary judgment for
Exeter. On appeal, Le argues that the district court improperly excluded
certain evidence and erred in granting summary judgment against him. On
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this record—three-quarters of which is troublingly sealed from the public—
we AFFIRM summary judgment in favor of Exeter. 1
I
After leaving a previous employer, Lennox, Le began working for
Exeter as the Chief Human Resources Officer and Executive Vice President.
When Exeter hired him, Le signed an Employment Agreement that
contemplated he would have the option to enter a severance and non-
compete agreement. Le was later presented with such an agreement but did
not sign it.
At Exeter, Le participated in an Executive Team profits interest pool,
which entitled him to compensation in the form of Profits Interest Units
(PIUs)—that is, an equity interest in Enzo (Exeter’s parent company).
Approximately eight months after Le started working at Exeter, he executed
a PIU Agreement and received PIUs. The PIU Agreement provided that
the board would conclusively determine the fair market value of PIUs in the
event of a call.
Exeter fired Le after eighteen months. At this point, Enzo provided Le
with a call notice, seeking to exercise the option to purchase Le’s earned
PIUs. The board determined that the fair market value of the PIUs was
$0.00.
Le sued Exeter in state court for breach of contract, fraudulent
inducement, quantum meruit, violations of the Texas Commission on Human
Rights Act, and violations of federal law. Exeter removed the case to federal
court. Following prolonged litigation and discovery disputes, Exeter moved
1
Judge King concurs in the judgment.
2
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for summary judgment. The district court resolved several pending motions
and granted summary judgment for Exeter on all claims.
II
Le timely raises two issues on appeal. First, Le argues that the district
court abused its discretion by excluding certain evidence. Second, Le argues
that the district court erred in granting summary judgment against him on his
contract, fraudulent inducement, and quantum meruit claims. We disagree.
A. Excluded Evidence
Le contends the district court improperly excluded evidence in two
ways: (1) by denying a continuance to resolve discovery disputes over audit
reports; and (2) by declining to consider Le’s filings and evidence that
supplemented his response in opposition to summary judgment.
Le first challenges the district court’s denial of his motion to continue
summary-judgment deadlines. This denial effectively precluded Le’s use of
a set of financial audit reports. Every year, Duff & Phelps, an outside
accounting firm, independently audited the PIUs and ascribed some value to
them; the value of the PIUs and the reports, to the extent they reflect that
value, are at the core of this dispute.
We review a district court’s ruling on a motion for a continuance for
abuse of discretion. 2 “When a party requests a continuance of a summary
judgment motion to conduct discovery, the moving party
must . . . (1) ʻdemonstrat[e] . . . specifically how the requested discovery
pertains to the pending motion,’ and (2) ʻdiligently pursue relevant
2
Cf. Resolution Tr. Corp. v. Sharif-Munir-Davidson Dev. Corp., 992 F.2d 1398, 1401
(5th Cir. 1993).
3
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discovery.’” 3 As to the first requirement, the party must explain “how the
additional discovery will create a genuine issue of material fact.” 4
The district court concluded that Le did not demonstrate the second
requirement because he failed to diligently pursue discovery within the
relevant deadlines. Specifically, Le moved to continue based on a lingering
discovery dispute that arose after the court-ordered discovery deadline.
Granting this untimely motion would, the district court explained, “violate[]
the court’s prohibition against such continuances.” The district court then
assessed the first requirement (though Le had already flunked the second) by
considering whether the Duff & Phelps audit reports would have affected the
summary-judgment analysis. The analysis would not have changed, the court
concluded, because the reports did not create a genuine dispute of material
fact.
We agree. The PIU Agreement assigns to the board of directors the
task of determining the fair market value of PIUs at the time of a call. The
Duff & Phelps audit reports indicate that their PIU valuations rely on
methods and dates tailored to the limited financial-reporting purpose of the
reports. The reports do not provide a valuation of the PIUs using the
methods or dates required by the PIU Agreement. Therefore, on the record
before us, the audit reports do not create a genuine dispute of material fact as
to the PIUs’ value under the PIU Agreement’s terms. 5 The district court
3
Campbell Harrison & Dagley, L.L.P. v. PBL Multi-Strate� Fund, L.P., 744 F.
App’x 192, 197 (5th Cir. 2018) (quoting Wichita Falls Off. Assocs. v. Banc One Corp., 978
F.2d 915, 919 (5th Cir. 1992)).
4
Krim v. BancTexas Grp., Inc., 989 F.2d 1435, 1442 (5th Cir. 1993).
5
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (noting that evidence
that is “merely colorable,” “or is not significantly probative,” does not preclude summary
judgment (citations omitted)).
4
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did not abuse its discretion in denying the motion for a continuance. 6 Le’s
challenge based on the exclusion of the Duff & Phelps audit reports fails.
Next, Le challenges the district court’s exclusion of filings and
evidence to supplement his response in opposition to summary judgment,
pointing to a case stating that courts shouldn’t summarily exclude relevant
evidence that doesn’t unfairly prejudice the opposing party. But Le does not
specify which of his many supplemental filings the district court should have
considered. And Le does not explain what legal standard the district court
violated by declining to do so. When a party pursues an argument on appeal
but does not analyze relevant legal authority, the party abandons that
argument. 7 Le has not identified the relevant legal standards, nor has he
pointed us in the direction of any relevant Fifth Circuit cases. Accordingly,
Le has abandoned his remaining arguments challenging the exclusion of his
evidence.
B. Summary Judgment
Next, Le asks us to reverse summary judgment against him on his
claims for breach of contract, fraudulent inducement, and quantum meruit.
We review de novo a district court’s grant of summary judgment,
applying the same standards as the district court. Our inquiry is limited to the
6
See Campbell Harrison, 744 F. App’x at 198; Krim, 989 F.2d at 1443.
7
DeVoss v. Sw. Airlines Co., 903 F.3d 487, 489 n.1 (5th Cir. 2018) (failure to
adequately brief an argument forfeits the claim on appeal); Willis v. Cleco Corp., 749 F.3d
314, 318 n.3 (5th Cir. 2014) (disregarding an argument “giv[ing] scant, if not conclusory
attention to the record: citations are minimal, and legal analysis relating facts to the law is
largely absent”); United States v. Torres-Aguilar, 352 F.3d 934, 936 n.2 (5th Cir. 2003)
(abandoned argument was “only briefly mention[ed] it in a footnote of [the] opening brief
without providing any legal citation or analysis”). See also Fed. R. App. P. 28(a)(8).
5
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summary-judgment record, and new theories not raised before the district
court may not be advanced for the first time on appeal. 8
1. Breach of Contract
Le presents two breach-of-contract theories: (1) that Exeter breached
the PIU Agreement when it called his vested equity at $0.00; and (2) that
Exeter breached a severance agreement by terminating him.
The elements of a breach of contract claim under Texas law are:
“(1) the existence of a valid contract; (2) performance or tendered
performance by the plaintiff; (3) breach of the contract by the defendant; and
(4) damages sustained by the plaintiff as a result of the breach.” 9
Le’s first contract claim, based on the PIU Agreement, is premised
on the fact that the board ascribed a value of $0.00 to his PIUs on the call
date. But this was the board’s prerogative under the contract. As Le
acknowledged before the district court, the board was “entitled to call the
PIUs, and the valuation of those PIUs is governed by the PIU Agreement’s
method for calculating the fair market value of his PIUs.” Le points to the
non-zero PIU projected values in 2013 when he was hired, and to non-zero
PIU values from subsequent Duff & Phelps audit reports. But neither has
any bearing on whether the board properly determined the fair market value
of Le’s PIUs at the time of the call. The PIU Agreement demands a
valuation using specific methods and dates. Le cannot demonstrate that the
board improperly valued his PIUs by setting forth evidence that uses the
wrong methods and dates. Because, on this record, there is no evidence that
8
Little v. Liquid Air Corp., 37 F.3d 1069, 1071 n.1 (5th Cir. 1994).
9
Smith Int’l, Inc. v. Egle Grp., LLC, 490 F.3d 380, 387 (5th Cir. 2007) (applying
Texas law and citing Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345, 351 (Tex.
App.—Houston [1st Dist.] 2001, no pet.)).
6
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the board did anything but value the PIUs pursuant to the terms of the PIU
Agreement, there is no evidence of breach. And so, the district court
correctly concluded that Le’s contract claim, based on the PIU Agreement,
fails as a matter of law.
For his second claim, Le says that a severance agreement was formed
when he signed Exeter’s Employment Agreement and that his termination
constitutes a breach of this severance agreement. But Le’s Employment
Agreement indicated that he would later have the option of entering a
severance and non-compete agreement. Indeed, he later had that option, but
he declined to sign the severance agreement that was offered to him.
Therefore, no severance agreement was ever fully formed. Under the terms
of the Employment Agreement, the parties had nothing more than an
“unenforceable agreement to agree” as to the severance. 10 The district court
correctly concluded that, absent evidence of a valid severance agreement,
Le’s breach of contract claim fails as a matter of law.
2. Fraudulent Inducement
We turn now to Le’s fraudulent inducement claims. Insofar as Le
argues that he was fraudulently induced to enter into a severance agreement,
no severance agreement was ever formed, as explained above. Le could not
have been fraudulently induced to enter into a nonexistent agreement. 11
10
Musallam v. Ali, 560 S.W.3d 636, 639 (Tex. 2018); see also Fischer v. CTMI,
L.L.C., 479 S.W.3d 231, 237 (Tex. 2016) (“If an agreement to make a future agreement is
not sufficiently definite as to all of the future agreement’s essential and material terms, the
agreement to agree is nugatory.” (quotation omitted)).
11
See Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001) (“Fraudulent
inducement . . . is a particular species of fraud that arises only in the context of a contract
and requires the existence of a contract as part of its proof.”).
7
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Likewise, we reject Le’s contention that he was fraudulently induced
to join Exeter based on misrepresentations as to the PIUs’ projected value.
Under Texas law, a plaintiff claiming fraud in the inducement must show:
(1) the defendant knowingly or recklessly made a material representation;
(2) the representation was false; (3) the defendant intended the plaintiff to
act on the representation; (4) the plaintiff actually and justifiably relied on the
representation; and (5) the plaintiff thereby suffered an injury. 12
As the district court concluded, the undisputed record evidence
shows that Le did not rely on Exeter’s representations as to the PIUs’
projected value when he decided to join the company. Whatever Le now says
he relied on, the record contains ample evidence that Le himself believed that
PIUs were inherently risky; for instance, Le stated that the PIU opportunity
sounded “outlandish.” The record evidence does not give rise to a genuine
dispute as to whether Le, a sophisticated party who understood the volatility
of PIUs, actually—much less justifiably—relied on the representations that
form the basis of his fraud claim. 13 The district court properly adjudicated
Le’s fraud claims as a matter of law.
3. Quantum Meruit
Last, we address Le’s contention that, in lieu of recovering on a
contract theory, he was entitled to recover promised pay in the form of
12
See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323,
337 (Tex. 2011); Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913, 923
(Tex. 2010); Taft v. Sherman, 301 S.W.3d 452, 457 (Tex. App.—Amarillo 2009, no pet.)
(fraud in the inducement).
13
See Grant, 314 S.W.3d at 923 (explaining that “given a fraud plaintiff’s individual
characteristics, abilities, and appreciation of facts . . . it is extremely unlikely that there is
actual reliance on the plaintiff’s part”).
8
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severance under a quantum meruit theory. The district court concluded that
Le acted with unclean hands, foreclosing equitable relief. We agree.
Quantum meruit is an equitable theory of recovery based on an implied
agreement to pay for benefits received. 14 “[T]he doctrine of ʻunclean hands’
allows a court to ʻrefuse to grant equitable relief . . . sought by one whose
conduct in connection with the same matter or transaction has . . . violated
the principles of equity and righteous dealing.’” 15
The district court’s unclean hands determination turns on whether Le
misrepresented his relationship with his previous employer, Lennox, when
negotiating his employment with Exeter. The record establishes that Le
made statements referencing his employment with Lennox that were not
true. Therefore, the district court correctly determined that Le’s conduct in
connection with the transactions before the court was inequitable, precluding
any equitable remedy.
III
Having decided the substantive issues, we hasten to add a peripheral-
yet-essential point: Judicial records are public records. And public records,
by definition, presume public access.
In this case, the district court granted an agreed protective order,
authorizing the sealing, in perpetuity, of any documents that the parties
themselves labeled confidential. Result: nearly three-quarters of the record—
14
Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992).
15
Stewart Beach Condo. Homeowners Ass’n, Inc. v. Gili N Prop Invs., LLC, 481
S.W.3d 336, 351 (Tex. App.—Houston [1st Dist.] 2015, no pet.) (quoting Park v. Escalera
Ranch Owners’ Ass’n, Inc., 457 S.W.3d 571, 597 (Tex. App.—Austin 2015, no pet.)).
9
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3,202 of 4,391 pages—is hidden from public view, for no discernable reason
other than both parties wanted it that way.
The public deserves better. The presumption of openness is Law 101:
“The public’s right of access to judicial records is a fundamental element of
the rule of law.” 16 Openness is also Civics 101. The Constitution’s first three
words make clear that ultimate sovereignty is wielded not by government but
by the governed. 17 And because “We the People” are not meant to be
bystanders, the default expectation is transparency—that what happens in
the halls of government happens in public view. Americans cannot keep a
watchful eye, either in capitols or in courthouses, if they are wearing
blindfolds.
“Providing public access to judicial records is the duty and
responsibility of the Judicial Branch.” 18 Why is this important? Because
accessibility enhances legitimacy, the assurance that things are on the level.
Article III courts are independent, and it is “particularly because they are
independent” that the access presumption is so vital—it gives the federal
judiciary “a measure of accountability,” in turn giving the public
“confidence in the administration of justice.” 19 Put simply, protecting the
public’s right of access is “important to maintaining the integrity and
16
In re Leopold to Unseal Certain Elec. Surveillance Applications & Orders, 964 F.3d
1121, 1123 (D.C. Cir. 2020).
17
Collins v. Mnuchin, 938 F.3d 553, 562 (5th Cir. 2019) (en banc), cert. granted, 141
S. Ct. 193 (2020) (“No mere tinkerers, the Founders’ upended things. Three rival
branches deriving power from three unrivaled words—ʻWe the People’—inscribed on the
page in supersize script. In an era of kings and sultans, nothing was more audacious than
the Preamble’s first three words, a script-flipping declaration that ultimate sovereignty
resides not in the government but in the governed.”).
18
Leopold, 964 F.3d at 1134.
19
United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995) (emphasis added).
10
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legitimacy of an independent Judicial Branch.” 20 And hopefully, more access
to judicial records means more trust in judicial officers and more respect for
judicial orders.
Judicial records belong to the American people; they are public, not
private, documents. Certainly, some cases involve sensitive information that,
if disclosed, could endanger lives or threaten national security. But
increasingly, courts are sealing documents in run-of-the-mill cases where the
parties simply prefer to keep things under wraps.
This is such a case. The secrecy is consensual, and neither party frets
that 73 percent of the record is sealed. But we do, for three reasons. First,
courts are duty-bound to protect public access to judicial proceedings and
records. Second, that duty is easy to overlook in stipulated sealings like this
one, where the parties agree, the busy district court accommodates, and
nobody is left in the courtroom to question whether the decision satisfied the
substantive requirements. Third, this case is not unique, but consistent with
the growing practice of parties agreeing to private discovery and presuming
that whatever satisfies the lenient protective-order standard will necessarily
satisfy the stringent sealing-order standard. 21 Below, we review the interests
at stake and the exacting standard for sealing that protects those interests.
Then, we explain the concerns raised by the sealings in this case.
* * *
20
MetLife, Inc. v. Fin. Stability Oversight Council, 865 F.3d 661, 663 (D.C. Cir.
2017).
21
See Seth Katsuya Endo, Contracting for Confidential Discovery, 53 U.C. Davis
L. Rev. 1249, 1283 (2020) (collecting empirical data wherein most agreed sealing orders
fell short of the substantive requirements to seal).
11
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The public’s right of access to judicial proceedings is fundamental.
The principle traces back to Roman law, where trials were res publica—public
affairs. 22 Public access was similarly fundamental to English common law.
Seventeenth-century English jurist Sir Edward Coke explained that “all
Causes ought to be heard, ordered, and determined before the Judges of the
King’s Courts openly in the King’s Courts, wither all persons may resort.” 23 A
century or so later, English philosopher and judge Jeremy Bentham observed,
“Publicity is the very soul of justice.” 24
In this tradition, American judicial proceedings are public. 25 And
judges must protect public accessibility for three mutually reinforcing
reasons: (1) the public has a right to monitor the exercise of judicial
authority; 26 (2) judges are “the primary representative[s] of the public
interest in the judicial process”; 27 and (3) the judiciary’s institutional
legitimacy depends on public trust. Public trust cannot coexist with a system
22
David S. Ardia, Court Transparency and the First Amendment, 38 Cardozo L.
Rev. 835, 843 (2017) (citing Bruce W. Frier, The Rise of the Roman
Jurists: Studies In Cicero’s Pro Caecina 57 (1985) (“[T]he Urban Praetor’s
court was set up in the open air at the southeastern end of the Forum . . . .”)).
23
Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 565 n.6 (1980) (quoting 2 E.
Coke, Institutes of the Laws of England 103 (6th ed. 1681)).
24
Jeremy Bentham, Draught For The Organization Of Judicial Establishments, in 4
The Works of Jeremy Bentham (John Bowring ed., Edinburgh, William Tait,
1838–43), available at https://oll.libertyfund.org/title/bowring-the-works-of-jeremy-
bentham-vol-4#lf0872-04_head_164.
25
Matter of Krynicki, 983 F.2d 74, 75 (7th Cir. 1992) (Easterbrook, J.).
26
See Bradley on behalf of AJW v. Ackal, 954 F.3d 216, 224 (5th Cir. 2020) (“The
public ʻhas a common law right to inspect and copy judicial records.’”); Citizens First Nat.
Bank of Princeton v. Cincinnati Ins. Co., 178 F.3d 943, 945 (7th Cir. 1999) (Posner, J.)
(“[T]he public at large pays for the courts and therefore has an interest in what goes on at
all stages of a judicial proceeding.”).
27
Citizens, 178 F.3d at 945.
12
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wherein “important judicial decisions are made behind closed doors” and,
worse, private litigants do the closing. 28
In our view, courts should be ungenerous with their discretion to seal
judicial records, 29 which plays out in two legal standards relevant here. The
first standard, requiring only “good cause,” applies to protective orders
sealing documents produced in discovery. 30 The second standard, a stricter
balancing test, applies “[o]nce a document is filed on the public record”—
when a document “becomes a ʻjudicial record.’” 31 Under both standards,
the working presumption is that judicial records should not be sealed. 32 That
must be the default because the opposite would be unworkable: “With
28
Vantage Health Plan, Inc. v. Willis-Knighton Med. Ctr., 913 F.3d 443, 450 (5th Cir.
2019) (quoting United States v. Holy Land Found. for Relief & Dev., 624 F.3d 685, 690 (5th
Cir. 2010)); accord Bradley, 954 F.3d at 224 (public access to judicial records “promotes
the trustworthiness of the judicial process, curbs judicial abuses, and provides the public
with a better understanding of the judicial process, including its fairness[, and] serves as a
check on the integrity of the system” (quoting United States v. Sealed Search Warrants, 868
F.3d 385, 395 (5th Cir. 2017)).
29
Holy Land, 624 F.3d at 690 (“[T]he power to seal court records must be used
sparingly in light of the public’s right to access.”); S.E.C. v. Van Waeyenberghe, 990 F.2d
845, 848 (5th Cir. 1993) (“[T]he district court’s discretion to seal the record of judicial
proceedings is to be exercised charily.” (quotation omitted)).
30
Harris v. Amoco Prod. Co., 768 F.2d 669, 684 (5th Cir. 1985) (discussing Fed. R.
Civ. P. 26); Fed. R. Civ. P. 26 (c)(1) (requiring good cause for sealing discovery
documents). See also Arthur R. Miller, Confidentiality, Protective Orders, and Public Access to
the Courts, 105 Harv. L. Rev. 427, 433 (1991) (describing good cause as a “particularized
factual showing of the harm” to be avoided by sealing).
31
Vantage, 913 F.3d at 451. One explanation of the different sealing standards for
discovery and judicial records is that “material filed with discovery motions is not subject
to the common-law right of access, whereas discovery material filed in connection with
pretrial motions that require judicial resolution of the merits is subject to the common-law
right.” Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304, 1312 (11th Cir.
2001). Accord Endo, supra n.21, at 1283 (dispositive filings generally subject to a more
stringent sealing standard than discovery documents).
32
Vantage, 913 F.3d at 450.
13
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automatic sealing, the public may never know a document has been filed that
might be of interest.” 33
True, even under the stricter balancing standard, litigants sometimes
have good reasons to file documents (or portions of them) under seal, such
as protecting trade secrets or the identities of confidential informants. But
“[m]ost litigants have no incentive to protect the public’s right of access.” 34
That’s why “judges, not litigants” 35 must undertake a case-by-case,
“document-by-document,” “line-by-line” balancing of “the public’s
common law right of access against the interests favoring nondisclosure.” 36
Sealings must be explained at “a level of detail that will allow for this Court’s
review.” 37 And a court abuses its discretion if it “ma[kes] no mention of the
presumption in favor of the public’s access to judicial records” and fails to
“articulate any reasons that would support sealing.” 38
Here, there is no separate sealing order at all. There is only the
protective order entered for purposes of “discovery in this matter.” That
order granted the parties wide latitude to designate “Confidential” any
33
Gregg Costa, Federal Appellate Judge: Too Many Sealed Documents, Nat’l Law
J. (Feb. 15, 2016, 12:00 AM), https://www.law.com/nationallawjournal/almID/
1202749628845/Federal-Appellate-Judge-Too-Many-Sealed-Documents/?rss=rss_nlj
(describing the crucial role of unsealed court documents in the Boston Globe exposé of the
cover-up of sexual abuse by Catholic priests).
34
BP Expl. & Prod., Inc. v. Claimant ID 100246928, 920 F.3d 209, 211 (5th Cir.
2019).
35
Id.36
Sealed Search Warrants, 868 F.3d at 390 (case-specific approach (citing Nixon v.
Warner Commc’ns, Inc., 435 U.S. 589, 599 (1978)); Vantage, 913 F.3d at 451; Bradley, 954
F.3d at 225 (quoting Van Waeyenberghe, 990 F.2d at 850).
37
Sealed Search Warrants, 868 F.3d at 397.
38
Van Waeyenberghe, 990 F.2d at 849. In our court, although we sometimes allow
information to be sealed, we may require parties to file a redacted copy for the public.
14
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information they believed in good faith was “not generally known” and
would ordinarily be revealed in confidence or not at all. In addition, if
confidential information appeared “in any affidavits, briefs, memoranda of
law or other papers filed in court in this action,” the entire document was filed
under seal. 39 Not only that, the order “survive[s] the final termination of this
action.” In other words, the parties decided unilaterally what judicial records
to keep secret, and their decision was permanent; once sealed, the records
would stay that way.
And because there is no sealing order, there is no sealing analysis—no
reasons given, no authorities cited, no document-by-document inquiry.
Instead, the parties wielded nigh-boundless discretion to label things
confidential. And again, the secrecy they granted is “perpetual” and
“wholesale.” 40 Perhaps most disquieting, documents marked confidential
provided the basis for summary judgment—a dispositive order adjudicating
the litigants’ substantive rights (essentially a substitute for trial)—yet there
was “no mention of the presumption in favor of the public’s access to judicial
records.” 41 There was no grappling with public and private interests, no
39
Practically speaking, this provision of the parties’ agreed protective order
doubles as the court’s sealing order. It authorizes sealing for “all documents and all
transcripts of deposition testimony,” labeled confidential “in whole or in part,” “including
all pleadings, deposition transcripts, exhibits, discovery responses or memoranda
purporting to reproduce or paraphrase such information.”
40
Krynicki, 983 F.2d at 77 (perpetual); United States v. Corbitt, 879 F.2d 224, 228
(7th Cir. 1989) (rejecting “wholesale sealing”); In re Providence Journal Co., Inc., 293 F.3d
1, 15 (1st Cir. 2002) (citing United States v. Biagi, 828 F.2d 110, 116 (2d Cir. 1987) (same));
Leucadia, Inc. v. Applied Extrusion Techs., Inc., 998 F.2d 157, 165 (3d Cir. 1993) (same).
41
Van Waeyenberghe, 990 F.2d at 849. See also Laurie Kratky Dore, Secrecy by
Consent: The Use and Limits of Confidentiality in the Pursuit of Settlement, 74 Notre Dame
L. Rev. 283, 375 (1999) (“[M]aterials used by a court in granting summary judgment, a
dispositive motion that adjudicates the legal merits of a case and that essentially substitutes
for trial, present the clearest example of judicial records presumptively subject to public
scrutiny.”). Whatever its relevance in this case, the good-cause standard would not justify
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consideration of less drastic alternatives. There was no assurance that the
extent of sealing was congruent to the need. 42
At the discovery stage, when parties are exchanging information, a
stipulated protective order under Rule 26(c) may well be proper. Party-
agreed secrecy has its place—for example, honoring legitimate privacy
interests and facilitating the efficient exchange of information. 43 But at the
adjudicative stage, when materials enter the court record, the standard for
shielding records from public view is far more arduous. This conflation
error—equating the standard for keeping unfiled discovery confidential with
the standard for placing filed materials under seal—is a common one and one
that over-privileges secrecy and devalues transparency.
Given the judiciary’s solemn duty to promote judicial transparency,
we must be alert to conflation errors (extending protective-order standards
to material filed with the court). 44 The secrecy of judicial records, including
stipulated secrecy, must be justified and weighed against the presumption of
sealing documents filed on the record in support of summary judgment. Vantage, 913 F.3d
at 451. Accord Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299, 307 (6th Cir.
2016) (Kethledge, J.) (sealing abused discretion where “the parties and the district court
plainly conflated the standards for entering a protective order under Rule 26 with the vastly
more demanding standards for sealing off judicial records from public view”). Equating the
discovery and judicial-record sealing standards appears to be a troublingly common error.
See Endo, supra n.21, at 1254 (empirical data showing frequent conflation of the standard
to seal records with the standard for confidential discovery).
42
E.g., In re Gee, No. 19-30953, slip op. at 6–7 (5th Cir. Nov. 27, 2019) (Elrod, J.,
concurring) (noting failure to “grapple with the general incongruity of sealing a New York
Times Op-Ed,” failure to consider redaction instead of sealing, and failure to provide any
legal reasons to seal).
43
Endo, supra n.21, at 1262.
44
E.g., In re Gee, slip op. at 6–7 (Elrod, J., concurring) (expressing concern over
extensive sealings without legal reasoning and without acknowledging the presumption of
public access).
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openness that can be rebutted only by compelling countervailing interests
favoring nondisclosure. All too often, judicial records are sealed without any
showing that secrecy is warranted or why the public’s presumptive right of
access is subordinated. This mistake harms the public interest, however
interested the public is likely to be. Sealings are no less rampant in low-profile
cases (like this one) than in high-profile cases featured on the front page (like
Bill Cosby’s deposition testimony) or the Oscars stage (like records detailing
the cover-up of child sexual abuse, as depicted in 2016 Best Picture Winner
Spotlight). 45 And a steady flow of unjustified low-profile sealings is capable of
far greater damage—a gradual, sub silentio erosion of public access to the
judiciary, erosion that occurs with such drop-by-drop gentleness as to be
imperceptible.
* * *
The Judicial Branch belongs to the American people. And our
processes should facilitate public scrutiny rather than frustrate it. Excessive
secrecy—particularly displacing the high bar for sealing orders with the low
bar for protective orders—undercuts the public’s right of access and thus
undermines the public’s faith in our justice system.
Legal arguments, and the documents underlying them, belong in the
public domain. American courts are not private tribunals summoned to
resolve disputes confidentially at taxpayer expense. 46 When it comes to
protecting the right of access, the judge is the public interest’s principal
45
See Costa, supra note 33.
46
Accord BP Expl., 920 F.3d at 212 (“As is its right, Claimant ID 100246928 has
used the federal courts in its attempt to obtain millions of dollars it believes BP owes
because of the oil spill. But it should not able to benefit from this public resource while
treating it like a private tribunal when there is no good reason to do so.”).
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champion. And when the parties are mutually interested in secrecy, the judge
is its only champion.
To be sure, entrenched litigation practices harden over time,
including overbroad sealing practices that shield judicial records from public
view for unconvincing (or unarticulated) reasons. Such stipulated sealings
are not uncommon. But they are often unjustified. With great respect, we
urge litigants and our judicial colleagues to zealously guard the public’s right
of access to judicial records—their judicial records—so “that justice may not
be done in a corner.” 47
IV
For the reasons discussed in Part II, summary judgment is
AFFIRMED.
47
New Jersey Provincial Charter ch. 23, July 29, 1674, reprinted in
5 Francis Newton Thorpe, The Federal and State Constitutions,
Colonial Charters, and Other Organic Laws 2551 (1909).
18