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Settlement Agreement with Charter School Can't Be Sealed, If It's Submitted for Court Approval


From Judge Colleen Kollar-Kotelly's (D.D.C.) opinion in Lee v. Seed Public Charter School of Washington, D.C., decided last week:

In this case, Plaintiff Chante Lee, on behalf of her minor child M.L., brings claims against the Seed Charter Public School of Washington, D.C., for alleged violations of the Rehabilitation Act of 1973, as well as common law torts of gross negligence and negligent infliction of emotional distress. These claims arise out of alleged instances of violence and bullying M.L. experienced while he was a student at the Seed charter school in 2016 and 2017.

The parties have now reached a settlement agreement to resolve this dispute. But because this settlement agreement involves a minor, the parties were required seek court approval for the final settlement before it went into effect. On August 9, 2021, the parties jointly moved for this Court's settlement approval, but filed both their joint motion and the settlement documents under seal. On October 14, 2021, the Court issued an order granting the parties' request for approval of their settlement agreement….

[T]he Court DENIES the parties' Motion to Seal these documents….

The D.C. Circuit has unequivocally " 'recogniz[ed] this country's common law tradition of public access to records of a judicial proceeding,' noting that '[a]ccess to records serves the important functions of ensuring the integrity of judicial proceedings.'" This "common law right" to the public access of judicial records "is fundamental to a democratic state." "Accessing judicial records" is also essential "to 'the rule of law' and 'important to maintaining the integrity and legitimacy of an independent Judicial Branch.'" For these reasons, there exists a "strong presumption in favor of public access to judicial proceedings."

The right to access judicial records, however, is not absolute. Rather, "competing interests may outweigh the strong presumption favoring disclosure." "In Hubbard, [the D.C. Circuit] crafted a six-factor test to balance the interests presented by a given case" …: (1) the need for public access to the documents at issue; (2) the extent of previous public access to the documents; (3) the fact that someone has objected to disclosure, and the identity of that person; (4) the strength of any property and privacy interests asserted; (5) the possibility of prejudice to those opposing disclosure; and (6) the purposes for which the documents were introduced during the judicial proceedings….

[T]he Court's threshold task is to determine whether the documents the parties seek to seal are "judicial records" subject to the presumption of openness. "Whether something is a judicial record depends on the role it plays in the adjudicatory process." The touchstone of this "judicial records" inquiry turns on the purpose for which a document is filed: "If the goal in filing a document is to influence a judge's decisionmaking, the document is a judicial record."

In this case, the documents subject to the parties' Motion to Seal are indeed "judicial records." The first of these documents is the parties' Joint Motion for Court Approval of a Settlement Involving a Minor and to Fund a Structured Settlement. District of Columbia law required the parties to seek such Court approval for their settlement agreement, because it involves a minor child. Accordingly, the parties' joint motion duly requested the Court's approval for their settlement agreement and explained why such approval would be appropriate and reasonable. After a thorough review of this joint motion, the Court ultimately granted the parties' request for settlement approval in an October 14, 2021 order. In this way, the parties' joint motion, which successfully sought the Court's settlement approval, is clearly a document that was intended "to influence a judge's decisionmaking." …

The second document under consideration is the parties' Settlement Agreement and Release and its corresponding Addendum, which are collectively attached to the joint motion for settlement approval as "Exhibit 1." This settlement agreement sets forth the specific terms of the settlement recently considered by the Court, given the parties' request for settlement approval. Put otherwise, the parties submitted the settlement documents in Exhibit 1 for the Court to review and evaluate before ultimately granting the parties' joint motion for approval of the settlement …. Framed as such, the settlement documents in Exhibit 1 were also intended "to influence a judge's decisionmaking," i.e., the undersigned's decision regarding the validity of the settlement documents themselves….

The Court begins its analysis with the first Hubbard factor, which accounts for "the need for public access to the documents at issue." Here, the parties broadly argue that "there is no need for public access" to the joint motion for settlement approval or to the settlement documents in Exhibit 1. The parties contend that "[a]ny individuals with reason to be interested in th[is] information … are already aware of the terms of the settlement."

But the Court is not persuaded by this assertion, which appears to assume that only the litigants currently before the Court have an interest in the settlement of this case. Not so. To start, the Seed charter school is a public institution formed under District of Columbia law for the purpose of providing public educational services to local students. As such, the public writ large, and District of Columbia residents in particular, have an enhanced interest in the transparent operation of this publicly-funded institution, including the terms of its litigation settlements. In fact, Plaintiffs' own pleadings corroborate this public interest by noting that local media outlets have already reported on instances of bullying at the the Seed charter school.

Moreover, the D.C. Circuit has previously recognized that where documents address alleged wrongdoing at a local institution that "provides services to children," "the public interest in disclosure is compelling." … Standing on its own, judicial approval of settlement agreements is a matter of public interest, "which the public has the right to know about and evaluate." "The public has an interest in knowing what terms of settlement a federal judge would approve and perhaps therefore nudge the parties to agree to."

The court walked through the other Hubbard factors, but particularly focused on this:

[T]he parties contend that that disclosure of the settlement agreement would undermine the confidentiality clause in that agreement and thereby prejudice the parties. To be sure, the settlement agreement does contain a confidentiality provision, which compels the parties to hold the terms and conditions of the settlement agreement in confidence. And the D.C. Circuit has stated that consideration of confidentiality provisions, in the context of a motion to seal, is "appropriate." That said, the D.C. Circuit and multiple courts in this district have reasoned that such confidentiality provisions are but one, non-dispositive factor weighing against disclosure, which may well be overcome by the public interest in judicial transparency….

[T]he parties introduced their joint motion and the settlement documents for the purpose of seeking this Court's mandatory approval of their settlement agreement, under D.C. Code § 21-120(a). This provision of the D.C. Code "reflects a well-established 'policy that a minor plaintiff, under certain circumstances, requires special consideration from the court not ordinarily accorded other litigants.'" "And this policy of protecting minors is vindicated, rather than undermined, by the disclosure of records generated in connection with a court's approval of a minor settlement, for such disclosure facilitates public scrutiny of the judicial approval process." At bottom, "[b]ecause § 21–120(a) is designed to protect minors from disadvantageous settlements, and because disclosure of the minor settlement documents would advance this goal by inviting public scrutiny of the Court's decisions approving those settlements, the sixth Hubbard factor weighs heavily in favor of disclosure."

The court therefore ordered that the documents be unsealed, though with redactions to "the Plaintiffs' personal identifying information, such as Ms. Chante Lee's social security number, M.L.'s full name, or other related information that might implicate their privacy interests, especially those of a minor child." The settlement, by the way, was for $225,000.