The Volokh Conspiracy
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No "Private Matter Among Friends" Exception to Public Access to Court Records
"Public access [to judicial records] serves to promote trustworthiness of the judicial process, to curb judicial abuses, and to provide the public with a more complete understanding of the judicial system, including a better perception of its fairness."
From Judge Lee H. Rosenthal's opinion in Cooke v. Kengatharan:
This case involves an investment deal between friends that went wrong….
The plaintiffs alleged that Kengatharan invited them to invest in a newly formed company, Espero BioPharma, Inc., which Kengatharan told them would be taken public in 2019. The plaintiffs alleged that Kengatharan told them that there was a stock purchase agreement between his private equity firm and Espero BioPharma, entitling him to at least 85,000 shares of stock of Espero BioPharma when it went public. In September 2018, based on these assurances, the Ariels purchased the rights to 60,000 shares in Espero BioPharma from Kengatharan for a total of $180,000, and Cooke purchased the rights to 25,000 shares in Espero for a total of $75,000. The plaintiffs asserted that they made these purchases with the understanding that there was a stock purchase agreement. No IPO occurred, and, in November and December of 2019, the Ariels and Cooke each wrote to Kengatharan asking for the money to be returned. Kengatharan failed to pay, and the plaintiffs sued in April 2020. After several months of mediation and settlement discussions, the parties settled in February 2021 and filed a stipulation of dismissal.
Kengatharan now asks the court to seal the file in this case. The plaintiffs do not oppose. Kengatharan argues that this case is a private matter among friends that has been resolved, and that all parties desire privacy. The court considers the requests to seal, in whole or in part, under the applicable legal standards.
Courts presume that the public should have access to judicial records. "Public access [to judicial records] serves to promote trustworthiness of the judicial process, to curb judicial abuses, and to provide the public with a more complete understanding of the judicial system, including a better perception of its fairness." The presumption in favor of access applies even when information is uninteresting to the public.
The court acknowledged that sealing is sometimes allowed:
The court has "supervisory power over its own records and files" and may also seal documents "where court files might  become a vehicle for improper purposes" or information that could be used for "scandalous or libelous purposes." "[I]n extreme cases the entirety of a trial record can be sealed."
Yet the court refused to seal the record here:
The court must use care in "weighing the interests advanced by the parties in light of the public interest."
The parties believe the case is of no public importance, but that is not the test. The public is entitled to access to judicial records. The parties have not demonstrated that keeping the case unsealed would cause the type of harm that warrants sealing in whole or in part. A personal privacy interest does not outweigh the public interest in transparency.