Free Speech

Motion to Unseal Acting White House Chief of Staff Mick Mulvaney's Sealed Real Estate Case

|The Volokh Conspiracy |

I blogged about this sealing controversy on Jan. 28, and I thought I'd pass along the just-filed memorandum supporting the motion to unseal. The memorandum is on behalf of Public Citizen and Georgetown Prof. Adam Levitin (who had written about the underlying case), and was filed by Paul Alan Levy of Public Citizen (see his post on the subject) and local counsel Jay Bender of Baker, Ravenel & Bender, L.L.P.

Paul (who has a lot of experience with unsealing cases) has been working on the unsealing since before I wrote about it, but I didn't feel comfortable writing about the upcoming motion before it was filed. But now I'm happy to present his argument, which strikes me as quite correct:

In this case, plaintiff Indian Land Ventures, a company involving John M. ("Mick") Mulvaney, sued to foreclose on a piece of property, thereby cutting off the rights of a junior landholder. Mulvaney is a high-ranking federal official—indeed, he is both the acting chief of staff for President Donald Trump and director of the Office of Management and Budget, an agency within the Executive Office of the President. Consequently, there has been considerable media interest in this litigation.

To keep the factual details underlying the cross-motions for summary judgment from the public, plaintiff, with the consent of defendants, asked this Court to seal both the memoranda and the evidence filed in support of and in opposition to summary judgment. The sole basis offered to justify sealing was that discovery had been conducted under a protective order and that the parties had agreed, for unspecified reasons, that the entire briefing and evidence should remain secret. The parties' joint request offered no evidence that any of these materials contained trade secrets or any sensitive information, and offered no explanation of why a partial sealing would not sufficiently protect any genuine secrets. Moreover, the Court's ruling in favor of secrecy made no findings on the need for secrecy or the inadequacy of alternatives to sealing.

"Judicial proceedings and court records are presumptively open to the public under the common law, the First Amendment of the federal constitution, and the [Open Courts provision of] the state constitution." Ex parte Capital U–Drive–It, 369 S.C. 1 (2006). The Supreme Court's decision in Capital U-Drive-It, together with well developed caselaw in the Fourth Circuit and Rule 41.1 of the South Carolina Rules of Civil Procedure, lay down both substantive and procedural standards for assessing motions to seal court records. As explained in the memorandum below, the sealing order in this case does not meet those standards, and should be lifted.

Background

The plaintiff in this case, a company in which Mick Mulvaney holds a major stake, sued to foreclose on a mortgage. Because Mulvaney has served as a prominent member of Congress and holds prominent positions in the administration of President Donald Trump, his real estate activities have attracted significant public interest. The Washington Post, Charlotte Observer, and several other publications covered the real estate transaction that is the subject of this litigation.

The parties took discovery from each other under a protective order. When plaintiff moved for summary judgment, the parties agreed to file all of the motion papers under seal. After summary judgment was granted, the parties filed an agreed motion to maintain the seal on the summary judgment memoranda and three deposition transcripts that plaintiff had attached to its motion. Their motion recited their agreement that the summary judgment motion itself, as well as the order granting summary judgment, should be considered to be in the public record, and that, as far as they were concerned, the factual recitals in those papers together with the initial pleadings contained enough of the "underlying facts of this case necessary for an understanding of the issues in dispute."

The agreed motion did not provide any evidence of a need for confidentiality of the summary judgment briefs and exhibits. Rather, the parties stated that "the privacy issues set forth in and forming the basis of the initial Protective Order still apply." Instead of analyzing the factors set forth in Rule 41.1 of the Rules of Civil Procedure, the parties rested on the conclusory statement that "balancing the factors set forth in Rule 41.1 supports the relief requested." The parties submitted a proposed order that recited the facts set forth in the agreed motion and concluded: "The privacy interests set forth in and forming the basis for the initial Protective Order still apply. Balancing the factors set forth in Rule 41.1 of the South Carolina Rules of Civil Procedure supports the relief requested. The public interest in this specific matter and in open Court proceedings generally is protected by the pleadings that are already part of the Court record."  The Court issued a letter that was filed, with the draft consent order attached, saying "so ordered." The Court's online docket reflects that the entire case is sealed.

Proposed intervenor Adam Levitin, a professor at Georgetown University Law Center who specializes in bankruptcy, commercial law, and financial regulation, wrote a January 22, 2020 blog post about the sealing of the court papers and the interesting legal issues raised by this "pretty amazing case that is fantastic for teaching purposes …." On January 23, 2020, counsel for Public Citizen contacted the lawyers for the parties to ask about the justification for sealing each of the documents in the litigation. Counsel for plaintiff, identifying himself as Mick Mulvaney's lawyer, responded that the parties' intention was only to have certain papers sealed; counsel explained that the problem was likely that the Court's electronic docket did not properly reflect the limited nature of the sealing. Public Citizen then contacted the Clerk's office to seek access to all the documents that were not within the limited scope of the sealing order as described by plaintiff's counsel. However, the Clerk's office representative said that, because the file was marked sealed, Public Citizen could not get access to any of the papers on the docket.

Plaintiff's counsel then sent Public Citizen copies of the summary judgment motion, the sealing motion and the sealing order However, the parties' counsel have not agreed to unseal or share the memoranda and filed transcripts.

Argument

In Ex parte Capital U–Drive–It, the South Carolina Supreme Court ruled that "[j]udicial proceedings and court records are presumptively open to the public under the common law, the First Amendment of the federal constitution, and the state constitution. S.C. Const. art. I § 9 ('[a]ll courts shall be public')." Its decision is in accord with a line of authority from the United States Court of Appeals for the Fourth Circuit, which has stated, "The right of public access springs from the First Amendment and the common-law tradition that court proceedings are presumptively open to public scrutiny." Company Doe v. Public Citizen, 749 F.3d 246, 265 (4th Cir. 2014) (citing Virginia Dep't of State Police v. Washington Post, 386 F.3d 567, 575 (4th Cir. 2004)). Under these cases, along with decisions by other federal and state courts across the country, the common law and the First Amendment afford the public a presumptive right of access to court hearings and court records in civil cases. Like rulings on dispositive motions, Company Doe, 740 F.3d at 267, briefs and evidence submitted in support of or in opposition to dispositive motions, Rushford v. New Yorker Magazine, 846 F.2d 249, 253 (4th Cir. 1988), are within the ambit of the First Amendment right of public access.

The South Carolina Supreme Court enumerated in Capital U-Drive It the very limited circumstances in which public access to court records may be restricted: "matters involving juveniles, legitimate trade secrets, or information covered by a recognized privilege," "trade secrets, identity of confidential informants, and privacy of children," and "intelligence-related information in possession of communications service providers due to national security concerns." On the merits, the presumption of public access is a heavy one that can be overcome only if the party seeking secrecy shows (1) that restricting access is necessary to further a compelling governmental interest; (2) that the restriction is narrowly tailored to serve that interest; and (3) that no less restrictive means are available to adequately protect that interest. See Virginia Dep't of State Police, 386 F.3d at 575 (quoting Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 180 (4th Cir. 1988)). Similarly Rule 41.1 provides: "The motion shall state the reasons why sealing is necessary [and] explain why less drastic alternatives to sealing will not afford adequate protection."

More specifically, general references to litigants' interests in "privacy" and the potential for embarrassment, although they may be enough to warrant issuance of a protective order at the outset of discovery, do not override the right of public access to documents that the parties have properly filed in support of their summary judgment arguments: "Litigants who carry disputes to a publicly funded forum for resolution must necessarily expect to surrender a good measure of their right to privacy. 'A claim that a court file contains extremely personal, private, and confidential matters is generally insufficient to constitute a privacy interest warranting the sealing of the file. Likewise, prospective injury to reputation, an inherent risk in almost every civil lawsuit, is generally insufficient to overcome the strong presumption in favor of public access to court records.'" Capital U-Drive It.

Capital U-Drive It also requires adherence to procedural standards before a motion to seal may be granted: "In deciding whether to seal or unseal a court record, the court must make specific factual findings, on the record, which weigh the need for secrecy against the right of access. The burden is on the party who seeks to overcome the presumption of access to show that the interest in secrecy outweighs the presumption. Davis [v. Jennings], 304 S.C. [502,] 506, 405 S.E.2d [601,] 603 [1991)]." "Even with findings adequate to support closure, the trial court must consider reasonable alternatives before access may be restricted." In re Knight Pub. Co., 743 F.2d 231, 234 (4th Cir. 1984). The Supreme Court requires that lower courts consider the seven factors set forth in Rule 41.1.

The sealing decision in this case contravened both the procedural and the substantive requirements imposed by these precedents. The motion did no more than recite the seven factors set forth in Rule 41.1, without any explanation or any effort to provide the Court with both evidence and reasoning that the Court could consider in deciding whether sealing was warranted. Nor was there any discussion of alternatives to sealing and why such alternatives did not adequately protect the relevant interests in secrecy. Moreover, so far as movants can tell, it is Mulvaney who was trying to protect his privacy—yet it was Mulvaney's company that initiated this litigation. In those circumstances, both he and his company "must necessarily expect to surrender a good measure of [their] right to privacy." Moreover, the pro forma recitals in the motion and order to the effect that access to other documents gives the public information it may want understates the constitutional requirement. The burden is not on the public to show a need for sealed information. Rather as Capital-U-Drive It, Fourth Circuit decisions, and Rule 41.1 all state, the burden is on the proponent of secrecy to show such need for confidentiality before the constitutional right of public access can be overridden.

As a powerful figure in the federal government, Mulvaney has a reduced claim to privacy. And as Professor Levitin has explained, the case raises significant legal issues that would better understood in light of the entire summary judgment record. Because the parties have not made the required showing of a need for confidentiality that overrides the public's constitutional and common-law rights of access, the full record in this case should be unsealed.

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  1. This case seems even more peculiar than most; if both parties want secrecy so badly, and agree on it, why are they even in court? Why not hire a private arbitrator? The only thing government courts offer is government enforcement.

    1. “The only thing government courts offer is government enforcement.”

      The plaintiff may want government enforcement. The plaintiff may vastly prefer a jury to an arbitrator. And maybe the defendant wants to preserve a right to appeal.

      It’s not obvious that both sides want the information kept private. We don’t know, for instance, whether the defendant had pressed for a protective order in discovery, and that the plaintiff relented because privacy was unimportant. I do see that it was the plaintiff who moved to seal the documents for summary judgment, but it’s possible that was simply a condition of the defendant’s request to exchange discovery (subject to a protective order) in exchange for not having to do things the hard way.

      In our practice these protective orders are fairly common even in disputes where at least one of the parties doesn’t care if it’s kept private. Sometimes it’s just easier to accept a protective order than go to court on a motion to compel.

      1. Preferring a jury to an arbitrator and wanting the right to appeals are part and parcel of government enforcement.

        The only thing government courts offer is government enforcement. And if somebody wants that, at taxpayer expense, then this taxpayer wants the trial itself to be public.

    2. “Government courts”

      SMGDH

      1. OtisAH: I’m not sure I grasp the reaction to “government courts” — while we usually use “courts” to refer to government-run bodies, it makes sense to view private tribunals as similar in many ways to courts, and to use “government courts” to stress the connection. Arbitration tribunals can be seen a form of court; so can religious courts (e.g., Beth Dins, which orthodox Jews often use to resolve their disputes, or church courts that resolve disputes within religious organizations), sports arbitration tribunals, and the like.

        1. Because “court” and “arbitration” are easily understood without the qualifiers and “government courts” rings similarly as the derisive “government schools” appellation. Adding “government” to “courts” is unnecessary and, I suspect, is likely used with the same ill-intent. That is, to drive a wedge between the people and their government.

    3. Because foreclosure requires court action?

  2. So Kirkland wasn’t able to do it, eh? I knew he wasn’t really a lawyer.

    1. No need for the smart-ass comment. Kirkland did highlight the issue in this case, although it seems that EV already was involved by that time.

      I’m a lawyer, with 25+ years and 500+ trials. But, still, I would have NO IDEA how to go about filing these types of “unseal” motions. I get that you are not a lawyer, so you do not understand why merely being a member of the bar (in my case, in one state + federal courts only) does not give you the expertise to do incredibly complicated litigation in a very different area of law. And you seem to not understand why, generally-speaking, it is difficult for a lawyer admitted to State A to just go into State B and insert yourself in a case…let alone a case where you do not represent one of the parties.

      It’s like you sidled up to a podiatrist at a party and sarcastically said, “You refused to perform that eye surgery. I *knew* you weren’t really a medical doctor.”

      I get the idea that you wanted to take advantage of the opportunity to make an anti-Rev comment. But I think your comment illustrated your lack of understanding of the legal profession, rather than being an “Ah-HA. Gotcha!!!” take-down of your target.

      1. Naw. He’s not a lawyer.

        1. I’m a lawyer.

          You’re a bigot.

          Neither of those will be changed by your yapping.

      2. “EV already was involved by that time”

        I did not find his name on that pleading, although I just skimmed it.

        The jury is still out on my ‘I hope I am wrong about Prof. Volokh’s unwillingness to cross Mick Mulvaney’ comment, but this pleading seems consistent with taking a partisan pass.

        1. I don’t see the name “Arthur Kirkland” or “Al Pacino” or “Steve Burns” on the pleading either. Because none of those people are real lawyers.

          1. What about Frank Galvin?

            1. “What about Frank Galvin?”

              Sounds like the kind of guy that’ll kick you in the balls when you’re not expecting it.

              1. I don’t recall that part, but Frank Galvin was fighting some people who deserved a swift kick or two for starters.

      3. Sounds more like RAK is either lazy or doesn’t have friends in other States or Federal courts. If he/she/it is a lawyer, in good standing in his/hers/its State; instead of just another JD that never bothered to pass the bar.

        1. I’ve been working on the winning side of the culture war for decades, FlameCCT, while right-wingers have mostly whined, ranted, lost, and complied with the preferences of their betters. How do you like the results so far?

  3. I have been very strongly in agreement with Prof Volokh’s position that sealing of documents and court cases is almost always bad for society. The more I read and think about this issue, though, the less sure I am that it’s entirely right.

    Clearly criminal cases should be as open as possible. The court is exerting the coercive power of the state and the life and/or liberty of the accused is at risk. We citizens have a strong need to see those cases and to ensure that the actions being done in our name are just.

    We also have a strong interest in seeing the workings of any case where the government is a party to the suit. Those civil cases should be presumptively open.

    I’m getting less sure about the scenario where both parties to a civil suit are private, though. If you and I are in an argument over a tree branch at the property line and we solve it over a beer, nobody else gets to know, well, anything about our dispute or the resolution unless one of us tells them. If we both agree to ask the bartender’s opinion and abide by that decision (arbitration), there’s nothing that says we can’t ask for and even insist on privacy as part of that deal. It stays among us chickens.

    What makes civil court suddenly different? Why does asking a judge instead of an arbitrator to make the call on our private dispute suddenly turn this into a public issue? What interest do we citizens have that justifies overriding a voluntary agreement between the parties?

    Is it merely the fact that we pay the judge’s salary? I don’t get to pry into my neighbor’s home remodel filings to the building inspector or the IRS auditor’s working papers yet we also pay their salaries.

    Is it the risk that private dispute resolution could be abused? You already have that risk if we resolve it over a beer or through an arbitrator. And that risk is easily mitigated because the injured party can go public at any time. My scenario is limited to situations where the parties truly want privacy on both sides.

    So what moral or philosophical justification do we citizens have to demand access to the dispute that trumps the privacy requests of the parties involved? Why do we automatically get to butt in?

    1. Ross,
      Is that true re your neighbor’s home remodeling? I would have thought that any plans approved by the city/county are public records, and are therefore available to the public.
      My guess is that: If the govt is involved, then the public has access as a default. If you go to a *private* (ie, non-governmental) judge, then parties can agree to limit public access. Heck, in all these adhesion contracts that force arbitration, one party seems to be able to force arbitration and therefore compel a lack of public access.
      I certainly understand why many many people would want to keep their civil cases private. For embarrassment reasons alone. But, given the costs and benefits, I think most people would want trials to be open to the public. Including access to related documents.

    2. My feeling (IANAL) is that if the two parties want to keep a case secret, out of embarrassment or whatever, then take it to private arbitration. If you want the government (ie, taxpayers) to pay court costs and ultimate enforcement, then I need to see that justice has been done. I don’t want some cronies cooking up a sweetheart deal that might have public ramifications later, or some poor schlub getting railroaded by a richer party who makes him an offer he can’t refuse.

  4. Yes, if a person does not want embarrassing actions to be made public in court proceedings than one should not undertake actions which prove to be embarrassing.

    But I may be premature here but I would have thought that by now Prof. Vololkh would have published a near incendiary post on the most egregious violation of free speech we have seen in our lifetime, namely the attempts by the Trump administration to block in totality the publication of the Bolton book. Has there ever been a more blatant disregard for Constitutionally guaranteed liberties? So hopefully the omission so far on this forum of a post utterly condemning the President as violating a most basic right is soon forthcoming.

    If not, to paraphrase as Groucho once said about a magazine that was publishing then scandalous articles about him that suggested he liked the company of women, “If this continues I shall be forced to cancel my subscription”.

    1. “Has there ever been a more blatant disregard for Constitutionally guaranteed liberties?”

      Yes.

      1. Well, there probably has been, but those who style themselves watchdogs, and bark at lesser offenses, might bark at this as well.

        They might also bark at retaliation against Amazon for criticism by the Washington Post, but so far not a peep.

        1. Generally not a fan of “you can’t bark at that unless you bark at this harder” arguments. People have finite energy but the amount of wrongness out there is infinite. Prof. Volokh is entitled to pick and choose.

          And the people who were bashing him for (supposedly) ignoring Mulvaney look kind of bad now. Well, actually, they looked bad already….

          1. Generally not a fan of “you can’t bark at that unless you bark at this harder” arguments.

            Sure, but if you make a point of criticizing 1A violations, and position yourself as a champion of free expression, it’s a bit suspicious when your criticisms are heavily weighted in one direction or another.

            The issue is not that EV doesn’t criticize everything. Nobody could do that. It’s that his choices, not to mention the facts of the cases he cites, seem pretty heavily weighted to one side of the political spectrum.

            He is free criticize what he likes, of course, and readers are free to draw conclusions from his choices.

    2. Sidney R. Finkel: The rules having to do with screening publications by ex-government-employees who had access to classified material are quite complicated, see, e.g., Snepp v. United States (1980); Stillman v. CIA (D.C. Cir. 2003); McGehee v. CIA (D.C. Cir. 1983). It seems to me that there’s a sound basis for imposing some such restrictions; it also seems to me that many such restrictions are probably over-imposed, especially when the information in the publication can be highly embarrassing to the administration. I don’t know much about the details of the relevant legal rules — this is an odd and complicated corner of the law that abuts on First Amendment law, but that I’m not up on, much as I’m not up on technical campaign finance rules, ballot access rules, and some other such fields. And I certainly don’t know enough about the facts (I’m not sure how many of them have been released).

      So I’m not sure that this is a First Amendment violation, though it certainly might well be, and I’m pretty sure I don’t have much to add to the discussion of the subject. (I’ve blogged about the Mulvaney matter, even chiefly relying on Paul’s papers, because I actually have gotten to know a lot about sealing law, and in particular enough to express my agreement with Paul’s argument.)

      1. Thanks Prof. Volokh for taking the time to reply, and for your excellent explanation. But how can the prohibition by the executive branch of publication of political speech that is not classified be anything other than a 1st amend. violation?

        I don’t think there is any disagreement that preventing publication of classified information is not a 1st amend. violation and is certainly justified. But the past practice, as I understand it, with to any publication that potentially contains classified information is for the appropriate government agency to cause the author/publishers to redact only that information, and to let the rest of the material be published.

        Here we have an administration that not only is working to ban the entire work, but also openly admits, at least according to some reports, that their motivation for doing so is the prevention of non-classified reporting that is political embarrassing until after the election. It seems to me that this is exactly the situation that the 1st amend was enacted to prevent and that if the ban is allowed to remain in place until the fall election the danger from a government in the U. S. prohibiting political speech is real and alarming.

        As for the comment just below, it may be that the Bolton book, without classified info is not worth reading, but isn’t that a decision to be made by readers and the market, and not the executive branch or any branch of government?

        1. “ But how can the prohibition by the executive branch of publication of political speech that is not classified be anything other than a 1st amend. violation?”

          It can’t. And yet whether it’s classified or not is precisely the question.

          Not knowing the details of the Bolton situation, but knowing a lot about dealing with memoirs that may contain classified content, part of what they’re looking for is information that can be derived from non-classified information, rather than the mere presence of classified information itself.

          As an example, if Bolton mentioned the dates of many trips abroad to specific cities a clever person could link that with passenger flight records to detect who arrives in cities he’s in to identify his support and protection staff, many of who may be traveling commercial in advance in non-official cover, while Bolton travels on a government plane. Combined you’ve now determined who are undercover US agents, which is classified.

    3. The problem with the Bolton book is that if its worth reading it contains information affecting national security, if it doesn’t contain vany NATSEC information then its probably not worth reading.

      Ine example is Trump’s Mideast peace plan came out just a month or so after Bolton left. Information about the tradeoffs,prenegotiaions, fallback positions, what countries were consituted could all affect vital American interests.

      Same thing with the Afghanistan peace plan.

      You aren’t claiming Bolton can unilaterally declassify information, are you? Or that he isn’t bound by the NDA he signed when he took the job?

    4. “I would have thought that by now Prof. Vololkh would have published a near incendiary post on the most egregious violation of free speech we have seen in our lifetime, namely the attempts by the Trump administration to block in totality the publication of the Bolton book.”

      Welcome, newcomer. This is a right-wing (white, male) blog. The Trump administration, right-wing schools, Republican judges, and the like are customarily issued a pass here.

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