In re: Application of LA Times

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 2, 2022 Decided March 18, 2022
No. 21-5128
IN RE: APPLICATION OF LOS ANGELES TIMES
COMMUNICATIONS LLC TO UNSEAL COURT RECORDS,
LOS ANGELES TIMES COMMUNICATIONS LLC,
APPELLANT
v.
UNITED STATES,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:21-mc-00016)
Katie Townsend argued the cause for appellant. With her
on the briefs was Grayson Clary.
Selina MacLaren was on the brief for amici curiae Media
Organizations in support of appellant.
Elizabeth H. Danello, Assistant U.S. Attorney, argued the
cause for appellee. With her on the brief were Chrisellen R.
Kolb and Molly Gaston, Assistant U.S. Attorneys.
2
Before: ROGERS, MILLETT and KATSAS, Circuit Judges.
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The Los Angeles Times appeals
the district court’s denial of its motions to unseal court records
relating to a search warrant allegedly executed on Senator
Richard Burr in connection with an insider-trading
investigation and the government’s memorandum opposing its
motion to unseal. It claims rights of access to these materials
pursuant to the common law and the First Amendment of the
U.S. Constitution. It maintains that sealing the government’s
opposition memorandum violated its rights under the Due
Process Clause of the Constitution. The court remands the case
to the district court to reconsider its common law analysis in
light of new disclosures from a related investigation by the
Securities and Exchange Commission and Senator Burr’s
public acknowledgment of the Justice Department’s
investigation, as well as precedent governing how the common
law right should be balanced against competing interests.
I.
On February 13, 2020, Senator Richard Burr and his wife
sold stocks valued between $628,000 and $1.72 million, as
disclosed in mandatory Senate filings. Soon after, the stock
market fell sharply as news about the COVID-19 pandemic
spread. Because, shortly before those sales, Senator Burr had
received briefings on the pandemic in his capacity as a Senator
and member of the Senate Committee on Health, Education,
Labor and Pensions, the February 13 trades quickly garnered
media scrutiny and public attention. See, e.g., Eric Lipton &
Nicholas Fandos, Senator Richard Burr Sold a Fortune in
Stocks as G.O.P. Played Down Coronavirus Threat, N.Y.
3
TIMES (Mar. 19, 2020), https://www.nytimes.com/2020/03/19
/us/politics/richard-burr-stocks-sold-coronavirus.html.
On May 13, 2020, Los Angeles Times Communications
LLC reported that Senator Burr had been served with a search
warrant and that his cellphone had been seized in connection
with an alleged investigation by the Justice Department into his
stock trades. Del Quentin Wilber & Jennifer Haberkorn, FBI
Serves Warrant on Senator in Investigation of Stock Sales
Linked to Coronavirus, L.A. TIMES (May 13, 2020),
http://lat.ms/2N0cTNh. The article was based on the
comments of a “law enforcement official” who was “speaking
on condition of anonymity to discuss a law enforcement
action.” Id. Eight months later, Senator Burr issued a public
statement noting that the investigation into the stock
transactions had been closed. See Vanessa Romo, DOJ Drops
Insider Trading Investigation Into Sen. Richard Burr, NPR
(Jan. 19, 2021), https://www.npr.org/202l/01/19/958622574
/doj-drops-insider-trading-investigation-into-sen-richard-burr.
On February 24, 2021, the L.A. Times filed a motion in
the U.S. District Court for the District of Columbia pursuant to
Local Criminal Rule 57.6, requesting that the district court
unseal court records related to the search warrant allegedly
executed on Senator Burr’s cellphone. In support, the L.A.
Times claimed rights of access under the common law and the
First Amendment to the U.S. Constitution. The government
opposed the motion, filing ex parte and under seal. The L.A.
Times then moved to unseal the government’s opposition or, in
the alternative, to order the government to file a redacted
version of its sealed filings on the public docket.
The district court ruled that even if a common law or First
Amendment right of access attached, “no disclosure of search
warrant materials would be appropriate in a closed, non-public
4
investigation that has not resulted in criminal charges, and
where individual privacy and governmental interests may be
implicated.” D.D.C. Mem. Op. & Order at 6 (May 26, 2021)
(hereinafter “2021 Mem. Op.”). Applying United States v.
Hubbard, 650 F.2d 293, 317–22 (D.C. Cir. 1980), the court
explained that “investigations that had not been acknowledged
by the government” may implicate several distinct privacy
interests, including “privacy interests of the subject of the
investigation, privacy interests of third parties, and
investigative interests of the government.” 2021 Mem. Op. at
7. Further, the court observed that “[w]ithout acknowledgment
by the government, media coverage regarding the existence of
a criminal investigation or search warrant does not extinguish
the substantial privacy interests underlying search warrant
materials, particularly where the specific information in the
materials has not been disclosed.” Id. at 8. Concluding that
the “various privacy and government interests . . . would
outweigh the public’s interest in disclosure,” id. at 9, the court
denied the motion to unseal the hypothesized search warrant
materials, id. at 10.
The district court also denied the motion to unseal the
government’s opposition for the same reason. Id. at 9 n.3.
Responding to the L.A. Times’ reliance on Washington Post v.
Robinson, 935 F.2d 282 (D.C. Cir. 1991), the district court
stated that Robinson “sets forth ‘Procedures for Sealing Plea
Agreements,’ that do not necessar[ily] apply generally to all
motions to seal.” 2021 Mem. Op. at 9 n.3 (internal citation
omitted). The L.A. Times subsequently appealed the district
court’s memorandum opinion and accompanying order.
Several months after the district court’s opinion was
issued, the Securities and Exchange Commission (“SEC”) filed
an enforcement action in the U.S. District Court for the
Southern District of New York for a subpoena issued to Senator
5
Burr’s brother-in-law, Gerald Fauth. Application for Order to
Show Cause and Order Requiring Compliance with an
Investigative Subpoena, SEC v. Fauth, No. 1:21-mc-00787
(S.D.N.Y. Oct. 22, 2021). In the accompanying memorandum
of law, the SEC disclosed that it was investigating stock trades
by Senator Burr and Mr. Fauth, and that its investigation
paralleled an investigation by the Justice Department.
Memorandum of Law, SEC v. Fauth, No. 1:21-mc-00787, at 3,
6 (S.D.N.Y. Oct. 22, 2021). The filing also disclosed some of
the underlying facts, including records of phone calls among
Burr, Fauth, and their brokers. Id. at 4–5. A separate
declaration by Fauth’s counsel recounted a conversation in
which Justice Department prosecutors stated that the criminal
investigation of Fauth was closed. Decl. of F. Joseph Warin
(counsel for Gerald Fauth), SEC v. Fauth, No. 1:21-mc-00787,
at 3–4 (S.D.N.Y. Oct. 27, 2021).
II.
The common law right of access attaches to “judicial
records,” which this court has characterized as documents
intended to “influence a judge’s decisionmaking.” CNN v. FBI,
984 F.3d 114, 116, 118 (D.C. Cir. 2021). The government’s
opposition memorandum is a classic example of a document
intended to influence judicial decision-making and is therefore
a judicial record. See League of Women Voters v. Newby, 963
F.3d 130, 136 (D.C. Cir. 2020). So, too, are the hypothesized
search warrant materials, which would have been intended to
influence a judicial decision to find probable cause to issue a
search warrant. This court has concluded that electronic
surveillance applications, which serve a similar purpose to
search warrant materials, are subject to the common law right
of access. In re Application of Leopold, 964 F.3d 1121, 1128–
29 (D.C. Cir. 2020). And other circuit courts of appeals have
held that search warrant applications and their supporting
6
affidavits are judicial records. See, e.g., United States v. Bus.
of the Custer Battlefield Museum & Store, 658 F.3d 1188, 1193
(9th Cir. 2011); In re Application of Newsday, Inc., 895 F.2d
74, 79 (2d Cir. 1990).
Where the common law right attaches, there is a “strong
presumption in favor of public access to judicial proceedings,”
but “that presumption may be outweighed by competing
interests.” Leopold, 964 F.3d at 1127 (quoting Hubbard, 650
F.2d at 317) (internal quotation marks omitted). In Hubbard,
650 F.2d at 317–22, this court outlined a six-factor test
describing the relevant interests to be considered upon a motion
to unseal. The test is summarized in MetLife v. Financial
Stability Oversight Council, 865 F.3d 661 (D.C. Cir. 2017):
[W]hen a court is presented with a motion to seal or
unseal, it should weigh (1) the need for public access
to the documents at issue; (2) the extent of previous
public access to the documents; (3) the fact that
someone has objected to disclosure, and the identity
of that person; (4) the strength of any property and
privacy interests asserted; (5) the possibility of
prejudice to those opposing disclosure; and (6) the
purposes for which the documents were introduced
during the judicial proceedings.
Id. at 665 (internal citations and quotation marks omitted). The
court continued:
A seal may be maintained only “if the district court,
after considering the relevant facts and circumstances
of the particular case, and after weighing the interests
advanced by the parties in light of the public interest
and the duty of the courts, concludes that justice so
requires.”
7
Id. at 665–66 (quoting In re Nat’l Broad. Co., 653 F.2d 609,
613 (D.C. Cir. 1981)). For the following reasons, this court
need not now reach the L.A. Times’ arguments under the First
Amendment.
This court reviews the district court’s balancing of the
Hubbard factors for abuse of discretion. E.E.O.C. v. Nat’l
Children’s Ctr., Inc., 98 F.3d 1406, 1410 (D.C. Cir. 1996).
Although its discretion is “wide,” the district court must
provide a “full explanation” for its decision, detailed enough to
permit “review [of] the district court’s exercise of its
discretion.” Id. Because the SEC’s parallel investigation
released details after the district court had denied the L.A.
Times’ motions, the district court should on remand re-evaluate
and re-weigh the Hubbard factors to determine whether it is
still appropriate to seal the hypothesized search warrant
materials and the government’s opposition memorandum. To
the extent the hypothesized search warrant materials exist and
any materials contain details that were not public when the
district court denied L.A. Times’ motion to unseal, the district
court should reconsider whether sealing is still justified in view
of the Hubbard factors or whether redaction would be an
appropriate alternative.
In addition, the district court’s Hubbard analysis is flawed
in ways that are independent of the SEC disclosures and should
be reconsidered on remand. First, the district court’s analysis
of the first Hubbard factor — the need for public access — falls
short of the “full explanation” expected to enable this court to
review the district court’s reasoning. Nat’l Children’s Ctr., 98
F.3d at 1410. Although the court acknowledges the possible
existence of a public interest in disclosure, 2021 Mem. Op. at
9 (noting that “the various privacy and government interests
. . . outweigh the public’s interest in disclosure”), its opinion
8
does not discuss either the nature or scope of that interest or the
powerful public interest in learning of a sitting Senator’s
potential violation of insider-trading laws based on information
acquired in his official capacity. Without further elaboration
on the nature of the public interest that the district court found
to be outweighed by the privacy and government interests, this
court will be unable to determine whether the district court
acted properly within its discretion.
Second, the district court placed almost no weight on the
extensive media reporting relating to the Justice Department
investigation, including the Senator’s own acknowledgment of
the investigation, when evaluating the privacy interests at
stake. The court concluded that the privacy interests referenced
by Hubbard’s fourth factor are “no less great where some of
the relevant information has been reported on in the news
media,” stating that “[w]ithout acknowledgment by the
government, media coverage regarding the existence of a
criminal investigation or search warrant does not extinguish the
substantial privacy interests underlying search warrant
materials, particularly where the specific information in the
materials has not been disclosed.” Id. at 8. Even if the interests
are not “extinguish[ed],” the district court appears not to have
contemplated the possibility that those interests would be
attenuated where the very subject of the investigation has
acknowledged it. As the Supreme Court has instructed, a
district court’s Hubbard analysis must consider the “relevant
facts and circumstances of the particular case,” Nixon v.
Warner Commc’ns, Inc., 435 U.S. 589, 599 (1978), which in
the instant case would include the Senator’s own
acknowledgment of the investigation. Nor did the district court
address whether Senator Burr’s privacy interest was further
diminished because the investigation involved actions taken by
a public official in his public capacity.
9
Third, the district court did not address the sixth factor of
the Hubbard test — the purposes for which the documents were
introduced during the judicial proceedings. Although the
relevance of this factor may vary from case to case, it will
“oftentimes carry great weight” when “a sealed document is
considered as part of judicial decisionmaking.” CNN, 984 F.3d
at 120. Because the hypothesized search warrant materials and
the government’s opposition memorandum would have been
considered as part of judicial decision-making, the district
court’s failure to discuss that factor similarly frustrates
appellate review of its balancing of the Hubbard factors.
Accordingly, the court remands the case to the district
court to reconsider its Hubbard analysis in light of the public
disclosures in the SEC investigation, the Senator’s public
acknowledgment of the Justice Department investigation, and
this court’s precedent governing the application of the Hubbard
test. The district court shall reconsider the L.A. Times’
challenge that it was “fundamental[ly] disadvantage[d]” by the
court’s decision to seal the government’s opposition
memorandum and attached exhibits. Mot. to Unseal Mot. for
Leave to File Doc. Under Seal, Gov’t Resp. in Opp. to Mot. to
Unseal, and Attached Exhibits, In re L.A. Times, No. 1:21-mc-
00016, at 4 (D.D.C. April 5, 2021).