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Attorney Fees Motion Can't Be Decided with the Attorney Fees Sealed

"[O]nce a matter is brought before a court for resolution, it is no longer solely the parties' case, but also the public's case."


From Wagner v. Simpson Performance Products, Inc., decided Wednesday by Judge Kenneth D. Bell (W.D.N.C.):

On February 5, 2021, the Court entered Summary Judgment in favor of Defendants (Doc. No. 100) on Plaintiff's claims related to her assertion that she should have been named a co-inventor on the "074 Patent at issue in this action. Defendants then filed a motion for attorneys' fees on February 19, 2021, seeking attorneys' fees against the individual plaintiff, Julie Wagner, pursuant to 35 U.S.C. § 285. Together with this motion, Simpson filed an "unopposed" motion to seal from public view the supporting documents which specify the calculation and total amount of attorneys' fees requested (which is not stated in Simpson's motion)….

The right of access to judicial records pursuant to common law is well-established. This right extends to the inspection and the copying of court records and documents, but it is not absolute. In general, the public has a right of access to judicial proceedings that stems from two sources: the common law and the First Amendment. Under the more rigorous First Amendment standard, "denial of access must be necessitated by a compelling government interest and narrowly tailored to serve that interest."

More specifically, the First Amendment right of access applies to documents submitted in support of summary judgment motions in civil cases. Accordingly, "a party moving to seal documents filed in support of a motion for summary judgment in a civil case bears a heavy burden." This standard similarly applies to a motion seeking attorneys' fees in connection with a motion for summary judgment, which is itself a dispositive motion seeking a monetary judgment against another party.

Again, to limit access to documents submitted in connection with a dispositive motion, the party seeking to seal the documents must make a showing "that the denial [of access] serves an important governmental interest and that there is no less restrictive way to serve that governmental interest." However, courts have recognized that in certain circumstances, "private interests might also implicate higher values sufficient to override (or, in an alternative mode of analysis, to except the proceeding or materials at issue from) the First Amendment presumption of public access." … "In the past, this court and others have concluded that the need to keep confidential proprietary business information or trade secrets may constitute a 'higher value' that can overcome both the common law and the First Amendment rights of access in appropriate circumstances." …

[Yet] Simpson makes only a minimal effort to support its motion, arguing in a conclusory manner that "presumption of access" is "rebutted [by] countervailing interests heavily outweigh[ing] the public interests in access" and "public access to these documents would not 'enhance the public's understanding of [any] important historical event.'" …

Simpson asks the Court to seal the amount of attorneys' fees being requested—the very substance of the relief that it is seeking from the Court—along with how it calculated the fees (counsel's hourly rates and the time expended during their representation). Thus, the effect of a request to seal this information is tantamount to a request to issue a secret order, as the Court could not even grant much less fully discuss the merits of Simpson's request without disclosing the amount of fees requested along with counsel's hourly fees, etc. {And, if this is not Simpson's intent, then sealing the filings is completely ineffective in preventing disclosure of the information.} As noted above, except in very limited circumstances, the Court's business must be conducted openly, with public access guaranteed to instill confidence in the fairness of the proceedings and inform the public about the law. Accordingly, by choosing to seek attorneys' fees in an open court, Simpson must necessarily disclose the amount of the award it seeks and the underlying basis for its fees.

Next, Simpson's characterization of its "attorney hourly rates" as "confidential" is wholly unsupported by the record. Neither Simpson nor its counsel has made a showing that counsel offered their hourly rates to Simpson only under a non-disclosure agreement or some other legal promise of confidentiality. {Indeed, in the Court's experience such an agreement would be exceedingly rare (and even if such an agreement did exist it would likely contain a provision allowing the attorneys' hourly rate to be disclosed in the context of a court filing). Otherwise, as discussed above, the client would not be able to seek reimbursement of the fees in appropriate circumstances.}

Further, Simpson represents that the hourly rates set forth in Exhibit E [the rates it seeks to seal] are the "ordinary and customary rates" that its counsel Nelson Mullins charges in its patent litigation matters. And, to be accepted by the Court, the rates have to be reasonable in comparison to rates charged in the community, which means almost by definition that they are not likely to be "confidential" nor would confidentiality even be important (absent special circumstances not argued here). Thus, the Court cannot accept Simpson's argument that its attorneys' hourly rates are "confidential." …

In sum, once a matter is brought before a court for resolution, it is no longer solely the parties' case, but also the public's case. Thus, even when, as in this case, the motion to seal is presented without any challenge from the litigants, the judge remains "the primary representative of the public interest in the judicial process and is duty-bound therefore to review any request to seal the record (or part of it). He may not rubber stamp a stipulation to seal the record.'"

Having performed that duty, the Court finds that Simpson's motion to seal the documents supporting its motion for attorneys' fees must be denied. However, to avoid any surprise to Simpson or its counsel, the Court will allow Simpson to either withdraw the motion for attorneys' fees or refile the motion and supporting documents in unredacted form….