Parties Can't Seal Entire (Settled) Case Despite Risk of "Reputational Damage and Embarrassment"

"[W]e apply the strongest presumption of public access to the Memorandum Opinion issued by this Court ..., which, as an official decision of the Court, is considered the 'quintessential business of the public's institutions,' and is 'core to the transparency of the court's decisionmaking process.''"

From Friday's decision by Judge James Boasberg in Kartte v. Davis:

Defendant Trevor Davis hired Plaintiff Felix Kartte in 2020 to work at Davis's security-consulting companies. Over the course of Plaintiff's brief employment and in the period following, Defendant allegedly called him offensive names, made threats, shared false information about him with third parties, and invented claims of extortion. Plaintiff thus sued, alleging, inter alia, defamation, discrimination, and fraudulent misrepresentation. After over six months of litigation, the parties reached a settlement agreement.

They now seek to seal the entire case record. The Court denies that Motion because the documents at issue are judicial records that bear a strong presumption in favor of public access, which the parties have not overcome here….

Kartte began his employment with Davis in September 2020 as the Director of European Operation of CounterAction, LLC, one of Davis's companies. Davis owns and operates both CounterAction, LLC and ToSomeone, Inc., which provide consulting services including "threat assessments, risk management, and information operations." After Plaintiff began his new position, the two parties' relationship quickly became acrimonious, with Davis firing him in a text message in November 2020. The Court's prior Opinion provides all the gory details….

The right of "public access to judicial records 'is a fundamental element of the rule of law, important to maintaining the integrity and legitimacy of an independent Judicial Branch.'" The common-law right "antedates the Constitution," and "serves to produce an informed and enlightened public opinion." …

The parties' position that their filings are not judicial records [to which the right of access applies] is untenable. The unsealed documents on the docket have all been readily available to the Court and, for the most part, were "intended to influence the [C]ourt." For example, the Complaints, Motion to Dismiss, Opposition, Reply, and Answer and Counterclaim are archetypical attempts to persuade the Court; others such as the Motions for Extension of Time, Motion to Seal Exhibits, Motion for Leave to File a Second Amended Complaint, and Motion to Seal the Case resulted, or will result, in judicial decisions. In addition, we apply the strongest presumption of public access to the Memorandum Opinion issued by this Court on May 6, 2022, which, as an official decision of the Court, is considered the "quintessential business of the public's institutions," and is "core 'to the transparency of the court's decisionmaking process.'"

The Motion alternatively urges the Court that documents that did not affect the Memorandum Opinion did not play a "role in any substantive decision by the Court" and are therefore not judicial records. To the extent that the parties construe the Opinion as the only judicial decision in this case, they ignore the Minute Orders directly deciding other Motions [citing Mot. for Leave to File SAC, Mot. for Extension of Time, and Mot. to Seal Exhs.]. The documents that affected the Court's decisionmaking, therefore, extend far beyond those directly cited by the Memorandum Opinion.

Affecting a judicial decision is not a prerequisite for a document to be a judicial record, however. If that were the only inquiry, it would be difficult to identify judicial records because a document "can affect a court's decisionmaking process even if the court's opinion never quotes or cites it." The Court instead asks whether the record was "intended to influence the court," not whether it actually affected decisionmaking.

On a comprehensive review of the case's docket, the Court finds that six documents were not intended to influence it. Those are ECF Nos. 2 (Summons), 4 (Random Assignment to Boasberg, J.), 5 (Davis's Proof of Service), 6 (CounterAction's Proof of Service), 7 (ToSomeone's Proof of Service), and 25 (Stipulation of Dismissal). Yet, sealing those documents would not afford the relief that the parties are seeking because they do not contain any information that would be "damaging in the court of public opinion," as the Motion alleges. As the parties make clear, their understandable preference is to seal the documents that describe the substance of the allegations.

And the court held that the presumption of public access wasn't overcome here; among other things,

The Motion claims that the unsealed documents on the record will cause the parties "reputational damage and embarrassment" if they remain accessible to the public. The Motion cites various cases in support of its contention that the parties' potential embarrassment and reputational damage create strong privacy interests. Those cases, however, all involve materials that were either subject to a protective order, were not already accessible to the public, or were not already filed with the court. Since the record in this case has long been docketed and publicly available and no documents are subject to a protective order, the Court does not find strong privacy interests that weigh in favor of sealing the currently unsealed documents.

In addition, any privacy interests that might be protected by sealing documents other than the Opinion are substantially weakened because the Opinion is unquestionably a judicial record with the strongest presumption of public availability, and it contains most of the substantive information that the parties claim is damaging to their reputation. In other words, the only real issue is the strength of the privacy interests that are implicated by the continued accessibility of documents beyond the Opinion. Here, they are weak because the Opinion covers most of the sensitive ground contained in the other documents that the parties allege would embarrass them and damage their reputations.

UPDATE: Here is an excerpt from the parties' motion to seal; I appreciate the arguments they are making, but it seems to me that their objections—for instance, that the plaintiff makes "disputed allegations against Defendants that are extremely damaging to Defendants' reputations"—would apply to a vast range of lawsuits, and if accepted would sharply move our system from one of overwhelmingly open court records to one of largely closed court records.

Plaintiff's various pleadings contain disputed allegations against Defendants that are extremely damaging to Defendants' reputations. Although the Court rightly rejected the basis for many of these claims—for example, finding the alleged conduct supporting the IIED claim was not actionable as a matter of law and that there was no jurisdiction to hear the D.C. Human Rights Act claim—these allegations are extremely damaging in the court of public opinion. Although legally deficient, allegations of discrimination and the like (even meritless ones) are inflammatory in today's climate.

Defendants have lost numerous existing contracts and business opportunities due to the pendency of these allegations, as third parties have explicitly advised Defendants that various organizations have declined to do business with them as a result of this lawsuit. Most recently, Defendants lost an opportunity with a major research university after the university learned of this lawsuit. Because this case was not litigated through discovery, the publicly-available allegations tell only one, incomplete side of the story, with Defendants having received no opportunity to publicly correct the record. Plaintiff, for his part, has also suffered career and reputational damage due to the publication of the litigation and record, particularly with regard to the Defendants' counterclaims, which Plaintiff did not have the opportunity to publicly refute.

Following the Court's dismissal ruling, the parties have reached agreement on a settlement resolving Plaintiff's claims, as well as the claims asserted against Plaintiff by Defendants in their Counterclaim. One of the material, essential terms of the settlement is that the parties move to seal the record in this case….

The Court should seal the entire record in this action. First, the majority of the filings on the docket do not implicate the public interest in access because they did not eventuate in or support any decision of the Court and therefore are not judicial records. Even for documents that are judicial records, however, sealing is important because of the completely private nature of this dispute, the lack of any public interest in access, and the reputational damage that Defendants and Plaintiff will continue to suffer from public availability….

[T]here is no legitimate need for public access to the record in this case. The disputes at issue in this litigation are purely private in nature. No party in this case is a public entity or even a figure of public note. Neither Defendants nor Plaintiff provide services linked to public health or welfare, or involving any relationship of trust and confidence with customers. The events giving rise to this case almost entirely involve private communications between a small number of non-public figures. There is no specific need for the public to access these documents….

[And] Defendants and Plaintiff have privacy interests in the exhibits because they carry the potential to cause significant reputational harm and embarrassment to the parties that have already caused Defendants to lose contracts and otherwise firm expectancies. This Court has recognized that reputational damage and embarrassment are proper bases for sealing. See, e.g., Willingham, 355 F. Supp. 2d at 391 ("the privacy interests at stake are high because the documents reveal allegations that could cause tremendous embarrassment if they remain in the public file"); also Roberson v. Bair, 242 F.R.D. 130, 133 (D.D.C. 2007) (sealing justified because "these documents reveal allegations that could cause embarrassment to the parties and non-parties if they are disseminated to the public"); Anonymous v. Fed. Deposit Ins. Corp., 617 F. Supp. 509, 512 (D.D.C. 1985) (maintaining secrecy of FDIC complaint because disclosure "will irreparably destroy his reputation in the [redacted in opinion] banking community"), superseded by statute in unrelated part. Moreover, the fact that this case settled before Defendants and Plaintiff have had an opportunity to publicly refute their serious allegations against each other also heightens the privacy interests at stake, supporting sealing. Anonymous, 617 F. Supp. at 512 ("The release of some, but not all, of the information brought forward in this proceeding would necessarily create a significant possibility that the publicly available information would create a distorted, misleading impression of the allegations and evidence involved").