Rapid City Journal v. Delaney

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2011 S.D. 55IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
RAPID CITY JOURNAL,
ASSOCIATED PRESS and
SOUTH DAKOTA NEWSPAPER
ASSOCIATION, Applicants,
v.
THE HONORABLE JOHN J. DELANEY,
SOUTH DAKOTA SEVENTH CIRCUIT
COURT JUDGE, Respondent.
* * * *
ORIGINAL PROCEEDING
* * * *
JON E. ARNESON
Sioux Falls, South Dakota Attorney for applicants
Associated Press and
South Dakota Newspaper
Association.
RODNEY SCHLAUGER of
Bangs, McCullen, Butler,
Foye and Simmons, LLP
Rapid City, South Dakota Attorneys for applicant
Rapid City Journal.
MARTY J. JACKLEY
Attorney General
JEFFREY P. HALLEM
HAROLD H. DEERING, JR.
Assistant Attorneys General
Pierre, South Dakota Attorneys for respondent.
* * * *
ARGUED ON MARCH 21, 2011
OPINION FILED 09/07/11
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MEIERHENRY, Retired Justice
[¶1.] This is an original proceeding for an alternative writ of mandamus or
prohibition brought by the Rapid City Journal, the Associated Press, and the South
Dakota Newspaper Association (collectively referred to as the Media) against the
Honorable John J. Delaney, circuit court judge. The Media brought this action
because Judge Delaney (1) imposed a gag order on the parties and (2) closed the
trial and court records in a civil action involving the shareholders of Bear Country
USA, Inc. The Media now requests that we grant a permanent writ of mandamus
or prohibition requiring Judge Delaney to rescind “both the participant gag order
and closure order and prohibit[ ] him from enforcing either.” 1
1. The Media asserts that either a writ of mandamus or prohibition is “logically
appropriate” in this matter. In its petition to commence an original
mandamus or prohibition proceeding, the Media stated that “from the
affirmative – mandamus – perspective, [the] Media are asking the Supreme
Court to ‘compel the admission of a party to the use and enjoyment of a right .
. . to which [they are] entitled, and from which [they are] unlawfully
precluded by [Judge Delaney].’” See SDCL 21-29-1. “From the negative –
prohibition – view, [the] Media are requesting the Court to issue a writ that
‘arrests the [judicial] proceedings . . . in excess of [Judge Delaney’s]
jurisdiction . . . or . . . [legal] powers of authority.’” See SDCL 21-30-1.
Although this distinction does not matter in this case as the relief sought is
the same under either mandamus or prohibition, we analyze this application
as a writ of prohibition by following Jundt v. Fuller, 2007 S.D. 62, ¶ 14, 736
N.W.2d 508, 514:
It has been held that: “a court may issue a writ [of prohibition] to
confine a lower court to its proper jurisdiction, to compel the
court to exercise a jurisdiction properly before it, or to prevent a
clear abuse of discretion by the lower court.” In re State of S.D.,
692 F.2d 1158, 1160 n.3 (8th Cir. 1982). See also In re State, 180
S.W.3d 423, 425 (Tex. App. 2005) (writ of prohibition operates
like injunction issued by superior court to control, limit, or
prevent action in court of inferior jurisdiction). Thus, in Swezy v.
Bart-Swezy, 866 So. 2d 1248 (Fla. Dist. Ct. App. 2004), the
(continued . . .)
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Background
[¶2.] Bear Country is a family-owned South Dakota corporation. The
underlying action involved a dispute among Bear Country’s family-member
shareholders concerning the management and control of the business. The family-
member shareholders were split into two factions. Because the two factions could
not agree on the management and direction of Bear Country, they asked Judge
Delaney to determine Bear Country’s value so that one faction could buy out the
other.
[¶3.] Before trial, the two factions anticipated submitting financial records
and expert testimony on Bear Country’s value as part of the evidence. Both factions
submitted motions to close the courtroom when the financial information and
testimony was to be presented on Bear Country’s value. The parties claimed that
the proceedings needed to be closed to protect “confidential business information.”
______________________
(. . . continued)
Florida District Court of Appeals granted a writ of prohibition to
prevent a circuit court’s referral of a child support matter to a
general master in violation of that state’s procedural
requirements. More recently, this Court issued its own writ of
prohibition on January 18, 2007, directing a circuit court to
vacate an invalid writ of prohibition that it had previously issued
in a case. See Gray v. Gienapp, 2007 S.D. 12, 727 N.W.2d 808.
Id. As in Jundt, “we hold that a writ of prohibition is the appropriate remedy
for [Judge Delaney’s] actions here.” Id. See Sioux Falls Argus Leader v.
Miller, 2000 S.D. 63, ¶ 12, 610 N.W.2d 76, 83 (recognizing that a writ of
prohibition was the appropriate writ when media outlets alleged that circuit
court judge exceeded his authority by ordering a gag order in a criminal case).
Furthermore, “A writ of prohibition proceeding is not specifically a review of
the record below; it is a review of the trial court’s jurisdiction and authority in
respect to the challenged order and ‘is preventative in nature rather than
corrective.’” Id. (quoting Black’s Law Dictionary at 1212 (6th ed. 1990)).
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Neither side objected. Judge Delaney entered an order that (1) imposed a gag order
on the parties and (2) closed the trial and court records. This order indicated that it
was to protect Bear Country’s “financial information,” “proprietary and financial
matters,” and “trade secrets and proprietary information.”
[¶4.] After learning of Judge Delaney’s order, the Media moved to intervene.
The Media asserted that Judge Delaney did not have the authority to impose a gag
order and close court proceedings and records. Judge Delaney rejected the Media’s
arguments. The Media then petitioned this Court for a writ of mandamus or
prohibition. The Media asserted that Judge Delaney’s gag order “unlawfully
interfered with Media’s First Amendment right to gather and report the news.” The
Media also asserted “that Judge Delaney’s order excluding them from most of the
court trial and court record improperly infringed on their qualified First
Amendment and common law right of access to courts, trial participants and
record.”
[¶5.] After reviewing the Media’s petition, we granted the alternative writ
because the Media did not have “a plain, speedy and adequate remedy in the
ordinary course of law.” We ordered Judge Delaney to show cause why the “writ
should not be made permanent and why this Court should not enter a peremptory
writ of mandamus directing [Judge Delaney] to rescind [his] orders of April 21,
2010, nunc pro tunc to April 19, 2010.”
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Analysis
Mootness
[¶6.] Judge Delaney initially argues that the Media’s claims are moot
because the Media had “a plain, speedy, and adequate remedy at law” in the form of
a direct appeal. The Media initially filed both a notice of appeal and this writ to
ensure that it complied with Court rules. The Media dismissed the direct appeal
after we granted the alternative writ. By accepting original jurisdiction and
granting the alternative writ, we acknowledged that seeking an alternative writ
was the appropriate procedure.
[¶7.] Judge Delaney also claims the Media’s issues are moot because the
trial has been completed and “there are no further proceedings which the public
may attend and the parties are free to speak even if the mandamus relief” is not
granted. Accordingly, Judge Delaney concludes that “[m]andamus cannot compel
an act – opening the trial to the public, or allowing parties the ability to speak to
the media – that [are] no longer possible to perform.”
[¶8.] Although Bear County’s trial is complete, we will consider this case
under an exception to the mootness doctrine because the issue presented is “capable
of repetition yet evading review.” Sullivan v. Sullivan, 2009 S.D. 27, ¶ 12, 764
N.W.2d 895, 899. This exception applies when: “(1) the challenged action [is] in its
duration too short to be fully litigated prior to cessation or expiration, and (2) there
[is] a reasonable expectation that the same complaining party [will] be subject to
the same action again[.]” Id. (citing Matter of Woodruff, 1997 S.D. 95, ¶ 15, 567
N.W.2d 226, 229 (citing Rapid City Journal v. Cir. Ct. of the Seventh Jud. Cir., 283
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N.W.2d 563, 565-66 (S.D. 1979) (citing Neb. Press Ass’n v. Stuart, 427 U.S. 539, 546,
96 S. Ct. 2791, 2797, 49 L. Ed. 2d 683, 690 (1976)))). Here, the Media’s challenge
was not fully litigated because Bear Country’s action ended before the Media’s
petition for an alternative writ was granted. See id. Additionally, there is a
“reasonable expectation” that the Media will be prevented from attending court
proceedings in the future under similar circumstances. See id. ¶ 13. We therefore
address the issues presented.
Right of Access to Trials
[¶9.] We first address whether the media and public have a qualified right
to attend a civil trial and access documents filed with a court. It is established that
a right of access to civil court proceedings exists. See Miller, 2000 S.D. 63, ¶ 10, 610
N.W.2d at 82 (recognizing the media and public’s equal First Amendment right to
attend court proceedings). But whether that right stems from the First Amendment
or the common law has not been specifically addressed by this Court. Both the
First Amendment and the common law involve a presumption of openness, but the
scrutiny required of the trial judge’s decision to close the proceedings differs. Under
a First Amendment analysis, the presumption of openness can only be overcome
with a showing of an “overriding interest based on findings that closure is essential
to preserve higher values and is narrowly tailored to serve that interest.” Press-
Enterprise Co. v. Superior Ct. of Cal., Riverside Cnty., 464 U.S. 501, 510, 104 S. Ct.
819, 823, 78 L. Ed. 2d 629 (1984). The common law, on the other hand, balances the
competing interests of the parties. With either analysis, we review the trial court’s
findings of fact under a clearly erroneous standard, its application of the law de
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novo, and the ultimate decision to close a proceeding for an abuse of discretion. See
In the Matter of M.C., 527 N.W.2d 290, 293 (S.D. 1995). 2
[¶10.] In applying a First Amendment analysis, the United States Supreme
Court held in Richmond Newspapers, Inc. v. Virginia that “the right to attend
criminal trials is implicit in the guarantees of the First Amendment: without the
freedom to attend such trials, which people have exercised for centuries, important
aspects of freedom of speech and of the press could be eviscerated.” 448 U.S. 555,
580, 100 S. Ct. 2814, 2829, 65 L. Ed. 2d 973 (1980) (citations and quotations
omitted). The Supreme Court in a later case highlighted the value of an open trial
as follows:
The open trial thus plays as important a role in the
administration of justice today as it did for centuries before our
separation from England. The value of openness lies in the fact
that people not actually attending trials can have confidence
that standards of fairness are being observed; the sure
knowledge that anyone is free to attend gives assurance that
established procedures are being followed and that deviations
will become known. Openness thus enhances both the basic
fairness of the criminal trial and the appearance of fairness so
essential to public confidence in the system.
Press-Enterprise Co., 464 U.S. at 508, 104 S. Ct. at 823 (citing Richmond
Newspapers, Inc., 448 U.S. at 569-71, 100 S. Ct. at 2823-24).
[¶11.] Justification for closing a criminal trial must be “weighty,” supported
by a compelling interest, and “narrowly tailored.” Id. at 509-510, 104 S. Ct. at 824
2. We note from the start that a court’s decision to deny the media and public
access to a trial is different from its decision to close court records.
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(quoting Globe Newspapers Co. v. Superior Ct., 457 U.S. 596, 102 S. Ct. 2613, 73 L.
Ed. 2d 248 (1982)). The Supreme Court explained:
‘[T]he circumstances under which the press and public can be
barred from a criminal trial are limited; the State’s justification
in denying access must be a weighty one. Where . . . the State
attempts to deny the right of access in order to inhibit the
disclosure of sensitive information, it must be shown that the
denial is necessitated by a compelling governmental interest,
and is narrowly tailored to serve that interest.’ The presumption
of openness may be overcome only by an overriding interest
based on findings that closure is essential to preserve higher
values and is narrowly tailored to serve that interest. The
interest is to be articulated along with findings specific enough
that a reviewing court can determine whether the closure order
was properly entered.
Id. at 509-510, 104 S. Ct. at 824 (quoting Globe Newspapers Co., 457 U.S. at 596,
102 S. Ct. at 2620). See also El Vocero de Puerto Rico, et al. v. Puerto Rico et al., 508
U.S. 147, 151, 113 S. Ct. 2004, 2006, 124 L. Ed. 2d 60 (1993). As noted by Justice
Brennan, closing a criminal trial to the public requires more than just an
agreement between the parties and the trial judge. See Richmond Newspapers,
Inc., 448 U.S. at 585, 100 S. Ct. at 2831 (Brennan, J., concurring).
[¶12.] In a more recent case involving access to jury voir dire in a criminal
trial, the Supreme Court reiterated its prior rulings that:
[a] public trial right rest[s] upon two different provisions of the
Bill of Rights, [the First and Sixth Amendments] both applicable
to the States via the Due Process Clause of the Fourteenth
Amendment. . . . The Court has further held that the public
trial right extends beyond the [Sixth Amendment Right of the]
accused and can be invoked under the First Amendment. This
requirement, too, is binding on the States.
Presley v. Georgia , __ U.S. __, __, 130 S. Ct. 721, 723, 175 L. Ed. 2d 675 (2010)
(citations and quotations omitted).
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[¶13.] In Presley, a Georgia trial court did not allow a family member of the
defendant to sit in the courtroom during jury voir dire. The trial court denied a
motion for a new trial because it did not want family members intermingling with
prospective jurors because the jurors could overhear some “inadvertent comment or
conversation.” Id. at __, 130 S. Ct. at 722. The Georgia Supreme Court affirmed
and “rejected Presley’s argument that the trial court was required to consider
alternatives to closing the courtroom.” Id. The United States Supreme Court
reversed and stated:
The conclusion that trial courts are required to consider
alternatives to closure even when they are not offered by the
parties is clear not only from this Court’s precedents but also
from the premise that ‘the process of juror selection is itself a
matter of importance, not simply to the adversaries but to the
criminal justice system.’ The public has a right to be present
whether or not any party has asserted the right.
Id. at __, 130 S. Ct. at 724-25 (citation omitted). The Supreme Court made it clear
that in order for a trial court to exclude the public, it must articulate and make
specific findings as to an overriding interest and must “consider all reasonable
alternatives to closure,” even if the parties have not proffered alternatives. Id. at
__, 130 S. Ct. at 725.
[¶14.] We acknowledge that Supreme Court cases dealing with the public
right of access to trials have been in the context of criminal cases. The Eighth
Circuit Court of Appeals, however, applied the same principles to a civil proceeding
involving contempt. In re Iowa Freedom of Info. Council, 724 F.2d 658 (8th Cir.
1983). The court analyzed the issue as follows:
In Globe Newspaper Co. the Court stated that two features of
criminal trials explain why a right to access should be afforded
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protection by the First Amendment. First, the criminal trial has
historically been open to the public. Second, such access can
enhance the quality and safeguard the integrity of the fact-
finding process and foster an appearance of fairness. Without
going into historical analysis, this Court notes, as was noted by a
plurality opinion of Chief Justice Burger, that “historically both
civil and criminal trials have been presumptively open.” In
addition, the presence of the public and press at civil proceedings
will enhance and safeguard the quality of the fact-finding
process, just as it does at criminal trials. Arguably, the public
interest in securing the integrity of the fact-finding process is
greater in the criminal context than the civil context, since the
condemnation of the state is involved in the former but not the
latter, but it is nonetheless true that the public has a great
interest in the fairness of civil proceedings. Hence, we conclude
that the protection of the First Amendment extends to
proceedings for contempt, a hybrid containing both civil and
criminal characteristics.
Id. at 661 (citations omitted).
[¶15.] In that case, the Eighth Circuit upheld limited closure because the
record showed that trade secrets were involved. See id. The court recognized that
in order for a trial court to determine if trade secrets are involved, it would need an
in camera hearing, “as strictly limited as possible.” Id. The in camera hearing
would be closed but would be limited to testimony or evidence on “the issue of the
existence of trade secrets and the damage that disclosure of those secrets might
cause.” Id. at 662. The court further admonished the district court for “simply
accepting the representation of counsel . . . that trade secrets were involved.” Id. at
663. The court stated, “Whether trade secrets are involved or not, and whether
their revelation will cause damage to someone, are questions of fact, to be decided
after receiving evidence. In such an important matter, courts should not simply
take representations of interested counsel on faith.” Id. Additionally, the court
noted “that the presence of trade secrets will [not] in every case and at all events
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justify the closure of a hearing.” Id. at 663. Thus, “courts must proceed cautiously
and with due regard to the uniqueness of the particular facts before them.” Id.
[¶16.] The Third Circuit Court of Appeals also determined that “the public
and the press possess a First Amendment and a common law right of access to civil
proceedings; indeed, there is a presumption that these proceedings will be open.”
Publicker Indus. Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir. 1984). That case
involved alleged “sensitive” and “confidential” stockholder information. The
Publicker court determined that “to limit the public’s access to civil trials there
must be a showing that the denial serves an important governmental interest and
that there is no less restrictive way to serve that governmental interest.” Id. at
1070. The record “must demonstrate an overriding interest based on findings that
closure is essential to preserve higher values and is narrowly tailored to serve that
interest.” Id. at 1069 (citation omitted). The court emphasized the importance of
“findings specific enough that a reviewing court can determine whether the closure
order was properly entered.” Id. (citing Press-Enterprise, 464 U.S. at 510, 104 S. Ct.
at 824). Possible overriding interests warranting closure may involve such things
as trade secrets, attorney client privilege information, or contractual non-disclosure
agreements. Id. at 1073.
[¶17.] In Publicker, the court reversed the trial court’s closure because it was
too extensive and constituted an abuse of discretion. Likewise, the trial court’s
sealing of certain transcripts was reversed. The trial court abused its discretion
because it “failed to articulate overriding interests based on specific findings
showing that the sealing of the transcripts essential to articulated interests of
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Publicker and . . . failed to consider less restrictive means to keep the information
from the public.” Id. The court noted that “sensitive information” will not in all
cases amount to “the kind of confidential commercial information that courts have
traditionally protected.” Id.
[¶18.] In South Dakota, the media’s right of access to juvenile trials was
acknowledged in In the Matter of M.C., 527 N.W.2d at 293. At that time the law
provided that all juvenile trials were closed “unless the court [found] compelling
reasons to require otherwise.” Id. at 291 n.1. Although juvenile trials were closed
by statute, we agreed with the media that it had a “qualified constitutional right of
access” to a juvenile proceeding absent legislative design to protect and rehabilitate
juveniles. Id. at 293. This qualified right was first discussed in an earlier case,
Associated Press v. Bradshaw, 410 N.W.2d 577 (S.D. 1987), superseded by statute
SDCL 26-7A-36. Although we discussed the need to balance the various
constitutional rights and interests of the parties, we ultimately concluded that
closure could only occur if it was “necessary to preserve higher values.” Id. at 580.
We stated, “Closure of juvenile proceedings should not occur unless specific
supportive findings are made which demonstrate that closure is necessary to
preserve higher values and the order must be narrowly tailored to serve that
interest.” Id. at 580.
[¶19.] “Specific supportive findings” led us to affirm the trial court’s closure
of a juvenile proceeding in In the Matter of Hughes County, 452 N.W.2d 128, 133
(S.D. 1990). There, the trial court considered the factors outlined in Bradshaw and
entered findings accordingly. These findings were not clearly erroneous and
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supported the closure decision. The State’s “strong interest in preserving the
confidentiality of juvenile proceedings” outweighed the public and media’s First
Amendment right of access. Id. at 132. The trial court had also considered
alternatives to closure that were rejected by the media. Additionally, the closure
was temporary, in that the trial court only closed the adjudicatory hearing, not the
dispositional hearing.
[¶20.] In summary, the United States Supreme Court has established the
media and public’s First Amendment right of access to criminal trials. The Eighth
Circuit Court of Appeals extended that right to civil contempt trials. And our Court
has recognized the right as applied to juvenile trials. The rationale applied in
reaching those conclusions is similar and consistent – “openness enhances both the
basic fairness of . . . trials and the appearance of fairness so essential to public
confidence in the system.” Press-Enterprise Co., 464 U.S. at 508, 104 S. Ct. at 823
(citing Richmond Newspapers, Inc., 448 U.S. at 569-71, 100 S. Ct. at 2823-24).
Logically, the rationale for openness applies equally to civil trials. Open civil trials
also protect the integrity of the system and assure the public of the fairness of the
courts and our system of justice. We, therefore, hold that the First Amendment
affords the media and public a qualified right of access to civil trials in this state.
[¶21.] The Publicker court succinctly set forth the procedure and substance a
trial court should follow before closing a trial. The court explained:
Procedurally, a trial court in closing a proceeding must both
articulate the countervailing interest it seeks to protect and
make findings specific enough that a reviewing court can
determine whether the closure order was properly entered.
Substantively, the record before the trial court must
demonstrate an overriding interest based on findings that
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closure is essential to preserve higher values and is narrowly
tailored to serve that interest.
733 F.2d at 1071 (citations and quotations omitted). We now adopt the Publicker
court’s analysis as it comports with, and augments, the review and analysis we
applied in In re M.C., 527 N.W.2d at 293, and In re Hughes County, 452 N.W.2d at
133.
The Procedure and Reasoning Used by Judge Delaney was Flawed.
[¶22.] Turning to the case before us, we find several problems with the
procedure used and decision reached by Judge Delaney. First, Judge Delaney did
not correctly apply the First Amendment or the common law presumption of
openness. Second, he did not require the parties to show that closure was necessary
“to preserve higher values.” Third, he failed to “articulate[ ] . . . findings specific
enough that a reviewing court c[ould] determine whether the closure order was
properly entered.” And finally, he failed to narrowly tailor the closure order.
[¶23.] Judge Delaney’s initial order excluding the media and public was
entered in response to motions from the parties. The order “closed the trial and
records of this matter from the public including the press.” After the media
intervened, Judge Delaney acknowledged that the first order may have been too
broad. He then modified his order closing all portions of the trial dealing with
“internal financial affairs (General Ledgers, P&L’s) of Bear Country and its
proprietary data (past and future plans for development, expansion, and the like)
and trade secrets (sources of stock, care and operating methods for maintaining the
health and exhibition of the stock, etc.).”
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[¶24.] In determining Bear Country’s value, Judge Delaney found that “a
number of exhibits and testimony will directly involve trade secrets, proprietary
matters, or the internal financial information of Bear Country.” When and how
Judge Delaney arrived at that finding is unclear. The record does not indicate that
a prior in camera proceeding took place or that the parties had provided him with
information to support that finding. Judge Delaney’s conclusory findings appear to
be based on what he expected the evidence to be. Such conclusory findings are
insufficient and prevent meaningful appellate review.
[¶25.] Further, Judge Delaney indicated that he closed the proceedings and
records based on SDCL 15-15A-8, which limits public access to certain court
records, and SDCL 37-29-5, which limits public access to trade secret information.
In reference to these two statutes, Judge Delaney stated: “Upon request of the
parties, there seems to be no leeway for the Court but to grant protection for these
items.” He reasoned that the legislature had “broad power” to close hearings, such
as juvenile cases and abuse and neglect cases; “Ergo, the aforementioned statutes
should receive the same respect.”
[¶26.] Initially, Judge Delaney’s reliance on SDCL 15-15A-8 as authority to
close the trial is misplaced. SDCL 15-15A-8 does not pertain to trial closure. It
pertains only to court records and provides that confidential numbers and financial
documents can be excluded from public access. 3 Further, SDCL 15-15A-9 requires
3. SDCL 15-15A-8 permits limiting public access to certain court records:
The following information in a court record is not accessible to
the public.
(continued . . .)
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litigants to file a confidential information form to prevent public access to
confidential numbers and financial documents. In addition, the procedure for
accessing the confidential information is outlined in SDCL 15-15A-10, which allows
access “if the court finds that the public interest in granting access or the personal
interest of the person seeking access outweighs the privacy interests of the parties
or dependent children. In granting access the court may impose conditions
necessary to balance the interests consistent with this rule.” Id. 4 While SDCL 15-
______________________
(. . . continued)
(1) Social security numbers, employer or taxpayer
identification numbers, and financial account
numbers of a party or party’s child.
(2) Financial documents such as income tax returns,
W-2’s and schedules, wage stubs, credit card
statements, financial institution statements, credit
card account statements, check registers, and
other financial information.
4. SDCL 15-15A-10 provides:
(a) Any person may file a motion, supported by affidavit
showing good cause, for access to confidential financial
documents. Written notice of the motion shall be
required.
(b) If the person seeking access cannot locate a party to
provide the notice required under this rule, after making
good faith reasonable effort to provide such notice as
required by applicable court rules, an affidavit may be
filed with the court setting forth the efforts to locate the
party and requesting waiver of the notice provisions of
this rule. The court may waive the notice requirement of
this rule if the court finds that further good faith efforts to
locate the party are not likely to be successful.
(c) The court shall allow access to confidential financial
documents, or relevant portions of the documents, if the
court finds that the public interest in granting access or
the personal interest of the person seeking access
outweighs the privacy interests of the parties or
(continued . . .)
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15A-8 may have allowed Judge Delaney to deny access to certain information in the
court records, such as social security numbers or tax identification numbers, his
actual closure was much broader and inconsistent with statutory procedure. Based
on the broad closure order, we are unable on review to determine if a legitimate
reason existed to seal parts of the record. See United States v. McDougal, 103 F.3d
651, 656 (8th Cir. 1996).
[¶27.] The trial court’s reliance on SDCL 37-29-5 is similarly misplaced. 5
This statute allows trial and record closure to “preserve the secrecy of an alleged
trade secret by reasonable means, which may include granting protective orders in
connection with discovery proceedings, holding in-camera hearings, sealing the
records of the action, and ordering any person involved in the litigation not to
disclose an alleged trade secret without prior court approval.” Id. 6 The trial court,
______________________
(. . . continued)
dependent children. In granting access the court may
impose conditions necessary to balance the interests
consistent with this rule.
5. SDCL 37-29-5 provides:
In an action under this chapter, a court shall preserve the
secrecy of an alleged trade secret by reasonable means, which
may include granting protective orders in connection with
discovery proceedings, holding in-camera hearings, sealing the
records of the action, and ordering any person involved in the
litigation not to disclose an alleged trade secret without prior
court approval.
6. Trade secrets are afforded protection in some cases. See SDCL ch. 37-29 &
SDCL ch. 1-27. SDCL 37-29-1(4) sets forth the definition of what constitutes
a trade secret:
(4) “Trade secret,” information, including a formula, pattern,
(continued . . .)
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however, did not follow the procedure outlined in the statute. The trial court did
not conduct an in camera hearing, make specific findings, or narrowly limit closure
to the trade secret evidence. See SDCL ch. 37-29; Weins v. Sporleder, 1997 S.D.
111, ¶ 16, 569 N.W.2d 16, 20 (recognizing that the existence of a trade secret
requires both a legal and factual inquiry into whether the information in question
fits the statutory definition of a trade secret); Standard & Poor’s Corp., Inc. v.
Commodity Exch. News Serv., 541 F. Supp. 1273, 1278 (S.D.N.Y. 1982). In fact, a
review of the record indicates that the evidence at trial involved little, if any,
information concerning trade secrets. 7
______________________
(. . . continued)
compilation, program, device, method, technique or process,
that:
(i) Derives independent economic value, actual or
potential, from not being generally known to, and not
being readily ascertainable by proper means by, other
persons who can obtain economic value from its disclosure
or use; and
(ii) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
7. Below is a list of all witnesses who testified at Bear Country’s trial, an
indication whether the media and public were excluded during their
testimony, and a summary of the general subjects the witnesses discussed:
Sean Casey: The media and public were excluded from the courtroom after
Sean’s background with Bear Country was established. Testimony was given
after the media and public were removed on the following topics: Sean’s
position at Bear Country; Bear Country’s financial position, both general and
specific; Bear Country’s growth; capital improvements; number of annual
visitors; advertising strategy; Casey family dysfunction; Bear Country Board
activities; and, Sean’s opinion on Bear Country’s value.
Ken Simpson: While not entirely clear from the record, it appears that the
media and public were excluded from all of Simpson’s testimony. Simpson is
(continued . . .)
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______________________
(. . . continued)
a real estate appraiser testifying about Bear Country’s value. He testified
about his qualifications; the appraisal process, and his ultimate appraisal of
Bear Country.
Ericka Heiser: The media and public were excluded from all of Heiser’s
testimony. Heiser is a CPA from Ketel Thorstenson, LLP testifying about
Bear Country’s value. She testified about her qualifications; the valuation
process used, and Bear Country’s value.
Margaret Pauline Casey: President and founder of Bear Country. The media
and public were initially excluded from hearing her testimony but were
allowed to enter the courtroom after a break. Margaret testified about her
position at Bear Country, conflicts related to a statue of Doc Casey
(Margaret’s deceased husband and Bear Country’s co-founder), Bear
Country’s revenue, Casey family dysfunction, legal fees, and Bear Country’s
general financial position.
Kevin Casey: The media and public were initially present but were asked to
leave while Kevin was examined on financial matters. Kevin testified about
his role at Bear Country, Bear Country’s finances, capital expenditures, and
dividends. Kevin also testified as a rebuttal witness about Bear Country’s
development plan.
Dennis Casey: The media and public were excluded from all of Dennis’s
testimony. Dennis testified about his role at Bear Country, Bear Country’s
finances, capital expenditures, and dividends.
Michael Zeeb: Zeeb is a CPA who testified about Bear Country’s total
valuation. The media and public were excluded from hearing all of Zeeb’s
testimony. Zeeb testified about his background, his valuation methodology,
and his opinion on Bear Country’s total value.
Joe Lux: Lux testified about attorneys’ fees. The media and public were
excluded from all of Lux’s testimony.
Michael Casey: The press was permitted to hear Michael’s testimony.
Michael testified about his background at Bear Country, Bear Country’s
capital expenses, employee salaries, and improvements made at Bear
Country.
At the beginning of the final day of trial, plaintiff’s attorney made an offer of
proof on Pauline Casey’s financial records. Plaintiff’s attorney then asked
(continued . . .)
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[¶28.] In addition to citing SDCL ch. 15-15A and SDCL ch. 37-29 as
justification for closing the trial, Judge Delaney stated:
It seems that the analysis in terms of benefit to the public and
detriment to the parties is both simple and heavily one-sided.
Beyond the fact that there will likely be a realignment of the
family holdings in Bear Country, disclosure and publication of
the financial records for most the past decade, the analysis of
income, expenses, past and future projects, the costs associated
therewith and the expected return on investments will have
little or no impact whatsoever on the public save, perhaps,
casual conversation and the curiosity. It will certainly sell
papers, but it has little value as news. On the other hand the
actual and potential harm to the interests of the existing
shareholders, and those who may remain, is significant and
results in an invasion of privacy in affairs never intended nor
expected to become the subject of headlines, videos, news
commentators and street gossip. In addition to being an
invasion of privacy the publication of the data referenced above
carries an unnecessary risk of irreparable damage to the parties
and the business.
Most of Judge Delaney’s pronouncement, however, is not supported by specific
findings. He speaks generally of “potential harm” and “unnecessary risk of
irreparable damage to the parties and business.” But without specific findings,
meaningful review is illusive.
[¶29.] Because Judge Delaney erroneously applied the First Amendment’s
presumption of openness, did not require the parties to show that closure was
necessary to preserve higher values, did not articulate specific findings permitting
meaningful review, and did not narrowly tailor the closure order, we conclude that
______________________
(. . . continued)
that the press be removed from the courtroom. Judge Delaney agreed and
the press was removed during the offer of proof.
In sum, a review of the trial transcripts indicates that nearly 90% of all trial
proceedings were closed.
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he abused his discretion in closing the trial proceedings from the media and public.
Accordingly, we agree with the Media that a permanent writ of prohibition be
issued, effectively rescinding Judge Delaney’s order preventing the Media and
public from attending Bear Country’s trial proceedings.
Judge Delaney’s Gag Order
[¶30.] The Media also challenges Judge Delaney’s participant gag order.
Judge Delaney issued a gag order preventing the parties to the Bear Country
litigation from discussing “privileged and financial information” and “the trial
proceedings in whole.”
[¶31.] Although Judge Delaney imposed the gag order to protect “privileged
and financial information,” in his response brief, he does not detail any basis for
imposing a gag order to protect those interests other than “an inherent power, as
well as a duty, to conduct a fair and orderly trial [and] . . . [that] the court has the
authority to issue such proper orders as may be necessary from time to time.” This
inherent power, however, has only been discussed in criminal cases in South
Dakota. See State v. Means, 268 N.W.2d 802, 808 (S.D. 1978) (involving a trial
court’s order to “requir[e] spectators to stand as [the judge] entered the courtroom”
in an apparent attempt to “maintain orderly proceedings”). Gag orders in criminal
cases are usually designed to protect a defendant’s right to a fair trial by an
impartial jury. See Miller, 2000 S.D. 63, 610 N.W.2d 76. The Casey family’s
dispute over Bear Country’s value was a civil case tried to the court, not a jury.
Therefore it is unclear how prohibiting the trial participants from discussing the
case with others would affect Judge Delaney’s ability to “conduct a fair and orderly
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[civil bench] trial.” Even though Judge Delaney had the unquestioned authority to
ensure a “fair and orderly trial,” that standard has no application here. See id. ¶
12.
[¶32.] We are not persuaded that Judge Delaney had statutory or legal
authority to issue the gag order under the facts and circumstances of this case.
Accordingly, we agree with the Media that a permanent writ of prohibition be
issued, effectively rescinding Judge Delaney’s order preventing the parties from
discussing the case outside of court.
[¶33.] The Media’s request for a permanent writ of prohibition is granted.
[¶34.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and
SEVERSON, Justices, concur.
[¶35.] WILBUR, Justice, not having been a member of the Court at the time
this action was submitted to the Court, did not participate.
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