MLB Letter in Yankees Sign-Stealing Investigation Should Be Unsealed, Says Federal Judge

The decision has been promptly appealed.

From Judge Jed Rakoff's decision Friday in Olson v. Major League Baseball:

[T]his is a putative class action lawsuit brought by players of DraftKings Inc. … fantasy baseball contests against certain major league baseball entities and teams. In February, defendants moved to dismiss for failure to state a claim plaintiffs' First Amended Complaint ("FAC"), which asserted various claims of fraud, negligence, unjust enrichment, and violations of consumer protection laws. The Court granted the dismissal with prejudice, partially on the ground that the FAC failed to plausibly allege any actionable misrepresentation by the defendants that could support their various theories of liability.

Thereafter, plaintiffs moved for reconsideration of the Court's conclusion that the complaint should be dismissed with prejudice. In support of this motion, plaintiffs submitted a proposed amended complaint ("PAC") that they argued cured the FAC's deficiencies. One of the primary ways in which the PAC did so, according to plaintiffs, was by alleging two new actionable misrepresentations by the defendants.

One such misrepresentation was allegedly made by MLB Commissioner Manfred in a September 15, 2017 press release relating to the results of an MLB investigation into possible misconduct by the New York Yankees …. Specifically, plaintiffs alleged that the 2017 Press Release falsely suggested that the investigation found that the Yankees had only engaged in a minor technical infraction, whereas, according to plaintiffs, the investigation had in fact found that the Yankees engaged in a more serious, sign-stealing scheme.

In support of this allegation, plaintiffs filed a letter sent from MLB Commissioner Robert Manfred to the General Manager of the New York Yankees (the "Yankees Letter") discussing the same investigation, which plaintiffs argued proved Manfred's duplicity. The Yankees Letter—which plaintiffs obtained from defendants during discovery—was filed under seal at the request of MLB and the third-party Yankees. In its memorandum order denying plaintiffs' motion for reconsideration, the Court found it necessary to refer to the Yankees Letter. Despite the Court's reference to the letter, MLB and the Yankees now seek its continued sealing….

The Yankees Letter is … a judicial document … to which a very strong presumption of public access attaches. "[T]he weight to be given the presumption of access must be governed by the role of the material at issue in the exercise of Article III judicial power and the resultant value of such information to those monitoring the federal courts." Thus, the presumption is "at its zenith" where documents "directly affect an adjudication, or are used to determine litigants' substantive legal rights," and is at its weakest where a document is neither used by the Court nor "presented to the court to invoke its powers or affect its decisions." Thus, for example, documents submitted to a court in connection with a granted summary judgment motion are entitled to a strong presumption of public access, while documents exchanged between parties during discovery and never presented to the Court are subject to a low presumption of access. In addition, a more weighty presumption of access attaches to where a document is of greater "value … to those monitoring the federal courts."

The Yankees Letter represents the kind of document to which the strongest presumption of access applies. It was submitted to the Court in connection with a motion for reconsideration of the Court's grant of a motion to dismiss, the Court's final adjudication the parties' substantive legal rights. Moreover, the Yankees Letter formed one of the primary bases for the plaintiffs' motion for reconsideration, and was thus squarely "presented to the court to invoke its powers or affect its decisions." … [T]he Court's very discussion of both the 2017 Press Release and the Yankees Letter [in the decision denying the motion for reconsideration] demonstrates that both letters were integral to the Court's reasoning in this case. As a result, a member of the public—or perhaps the substantial putative class on whose behalf plaintiffs acted—seeking to understand the Court's reasons would require access to these letters. This renders the Yankees Letter of significant "value … to those monitoring the federal courts," further reinforcing the Court's determination that the presumption of access is at its strongest….

[B]oth MLB and the Yankees argue that their privacy interests in avoiding disclosure of the letter outweigh the presumption of access. The privacy interests of MLB and the Yankees, however, are modest at best, and not nearly strong enough to overcome the robust presumption of access that attaches to the Yankees Letter…. Both MLB and the Yankees assert that the Yankees Letter, as the product of an internal investigation that has not previously been shared beyond these two parties, is a traditionally private document to which a significant privacy interest attaches. The 2017 Press Release, which publicized the results of the same investigation discussed in the Yankees Letter, however, contradicts this notion. While the parties may not wish to publicize the particular wording included in the Yankees Letter, its substance, as MLB itself argued in its motion for reconsideration briefing, is already public. Thus, the Yankees Letter is not a particularly private affair.

Furthermore, neither MLB nor the Yankees has pointed to a particularly significant injury that will result from disclosure. MLB primarily argues that it will be injured by the disclosure of the Yankees Letter because such disclosure will undermine its ability to conduct internal investigations in the future by undermining teams' faith in their confidentiality. As indicated above, however, this argument is undermined by the MLB's own 2017 Press Release, as well as other MLB press releases, which demonstrate that MLB regularly releases the results of internal investigations as a matter of course….

The Yankees argue that they have a strong privacy interest because public disclosure of the Yankees Letter would cause the Yankees significant reputational injury…. [But] embarrassment on the part of MLB or the Yankees about the precise contents of the letter is not particularly weighty, and the privacy interests of any individuals mentioned in the letter may be remedied by minimal redaction….