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Companion Property and Casualty Insurance Co. v. Wood

United States District Court, D. South Carolina, Columbia Division

January 23, 2017

COMPANION PROPERTY AND CASUALTY INSURANCE COMPANY, Plaintiff,
v.
CHARLES DAVID WOOD, JR.; AMS STAFF LEASING, INC., d/b/a/ AMS Staff Leasing Corporation; BRECKENRIDGE ENTERPRISES, INC., d/b/a/ AMS Staff Leasing II; AMS Staff Leasing II, Inc.; HIGHPOINT RISK SERVICES, LLC; and ASPEN ADMINISTRATORS, INC., Defendants.

          OPINION AND ORDER ON MOTIONS TO SEAL (ECF NOS. 200, 218, 240, 244, 248, 250)

          CAMERON MCGOWAN CURRIE, Senior United States District Judge

         This matter is before the court on six motions to seal documents filed in support of or opposition to the parties' cross-motions for partial summary judgment and one related evidentiary motion. ECF Nos. 200, 218, 240, 244, 248, 250.[1] The underlying motions were resolved by order entered January 10, 2017. ECF No. 258 (“January 10, 2017 Order”). For reasons set forth below, the motions to seal are denied and the parties are directed to file the subject documents in the public record by the deadlines set forth in Section II of this order. The court has allowed an extended filing deadline to afford the parties time to redact sensitive information such as account numbers and personal identifiers.

         STANDARD

         As explained in Ashcraft v. Conoco, Inc., “before a district court may seal any court documents, . . . it must (1) provide public notice of the request to seal and allow interested parties a reasonable opportunity to object, (2) consider less drastic alternatives to sealing the documents, and (3) provide specific reasons and factual findings supporting its decision to seal the documents and for rejecting the alternatives.” 218 F.3d 288, 302 (4th Cir. 2000); see also Stone v. Univ. of Maryland Med. Sys. Corp., 855 F.2d 178, 182 (4th Cir.1988) (“The public's right of access to judicial records and documents may be abrogated only in unusual circumstances.”).

         The last step in this process requires the court to first determine the source of the public right of access. Doe v. Public Citizen, 749 F.3d 246, 266 (4th Cir. 2014) (relying on Stone in holding district courts must first determine source of right-of-access as to each document for which sealing is sought); Stone, 855 F.2d at 180. As explained in Stone:

The common law presumes a right to inspect and copy judicial records and documents. . . . The common law presumption of access may be overcome if competing interests outweigh the interest in access, and a court's denial of access is reviewable only for abuse of discretion.
Where the First Amendment guarantees [apply], . . . [public] access may be denied only on the basis of a compelling governmental interest, and only if the denial is narrowly tailored to serve that interest.

Stone, 855 F.2d at 180. Because summary judgment substitutes for trial, judicial records filed in connection with a summary judgment motion may be sealed only if the First Amendment standard is satisfied. Id. (citing Rushford v. The New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir. 1988)); see also Doe, 749 F.3d at 267 (“We have squarely held that the First Amendment right of access attaches to materials filed in connection with a summary judgment motion.”).

         The “compelling governmental interest” necessary to support sealing when the First Amendment right of access applies may, nonetheless, consider private interests. As explained in Doe, which addressed First Amendment protections, “[a] corporation may possess a strong interest in preserving the confidentiality of its proprietary and trade-secret information, which in turn may justify partial sealing of court records.” Doe, 749 F.3d at 269 (noting courts had previously found “interests . . . sufficiently compelling to justify” sealing included “a defendant's right to a fair trial before an impartial jury, . . . protecting the privacy rights of trial participants such as victims or witnesses, . . . and risks to national security.”). In contrast, a company's bare interest in reputational harm does not warrant sealing under either the First Amendment or common-law standards. Id. at 269-70. As the court explained in Doe:

Adjudicating claims that carry the potential for embarrassing or injurious revelations about a corporation's image . . . are part of the day-to-day operations of federal courts. But whether in the context of products liability claims, securities litigation, employment matters, or consumer fraud cases, the public and press enjoy a presumptive right of access to civil proceedings and documents filed therein, notwithstanding the negative publicity those documents may shower upon a company.

Id. at 269.

         To support sealing, the party seeking such protection must not only identify a protectable interest, but must also proffer evidence that substantiates the risk of harm. Id. at 270 (finding, after “scouring the record on appeal, . . . no credible evidence to support Company Doe's fear that disclosure of the challenged report of harm and the facts of this case would subject it to reputational or economic injury”).[2] As the majority explained, it had “never permitted wholesale sealing of documents based upon unsubstantiated or speculative claims of harm[.]” Id.

         In his concurring opinion in Doe, Senior Judge Hamilton acknowledged the “common sense” assumption that the documents at issue could result in harm if not sealed, but nonetheless agreed that Company Doe had failed to establish an adequate basis for sealing:

The district court's reasoning founders for the simple reason that it misunderstood the quantum of evidence necessary to trump the First Amendment rights of, for example, the Consumer Groups [that challenged sealing.] Had Company Doe supported its motion to seal with expert testimony establishing a high likelihood that denying its motion to seal would cause it to suffer substantial and irreparable economic harm, the disposition of the present appeal, in my view, would be completely different.
* * *
First Amendment jurisprudence requires more than a common sense feeling about what harm may befall Company Doe. It requires concrete proof of a high likelihood of substantial and irreparable economic harm. Because Company Doe failed to present such concrete proof . . ., we are left only with a common sense feeling of ...

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