"Mo Money Mo Problems": No Pseudonymity for Maine Lottery Winner Suing Over Alleged Violation of Non-Disclosure Agreement

"[O]ur precedent makes paramount the principle of transparency as a bulwark of the effectiveness of our judicial system and the public's trust in it."

From today's First Circuit opinion in Doe v. Smith, decided by "Roe, Circuit Judge," the footnote accompanying the Judge Roe notation (the panel was Judges O. Rogeriee Thompson, joined by Judges Gustavo Gelpí and Joshua Dunlap):

Just kidding—Judge Thompson authoring here.

But wouldn't it raise eyebrows if the parties and the public didn't know who was deciding the case? Thankfully, even if the panel opted to publish a per curium opinion so that the identity of the authorizing judge was not disclosed, we've still got all our names on the cover page to let the public know the judicial arbiters.

As you'll see throughout today's opinion, we believe our precedent makes paramount the principle of transparency as a bulwark of the effectiveness of our judicial system and the public's trust in it. As Chief Justice of the United States Warren Burger once said, "People in an open society do not demand infallibility from their institutions, but it is difficult for them to accept what they are prohibited from observing." And increased secrecy in the courts has not gone unnoticed. In the view of one recent New York Times article, "[s]ecrecy in lawsuits has 'run amok'" in federal courts, and studies show that "judges are not doing enough to protect the public interest in openness." If true, some would view this as troubling. So putting spotlight on the problem via a creative little formatting tweak in our opening line is an easy thing we can do to remind the public of the historical scaffolding that undergirds our judicial framework of transparency and public access.

All that's to say: that eye-grabbing opener isn't just for show but rather, a preview of what we think today's case highlights, and more importantly, legally demands.

And some excerpts from the text of the (longish) opinion:

Hitting the jackpot isn't always everything it's cracked up to be. Just ask "John Doe," today's appellant.

Doe won 1.35 billion (yes, billion with a "b") dollars in the Maine State Lottery. And then he made "Sara Smith," the mother of his child, sign a non-disclosure agreement ("NDA") swearing her to secrecy about the win and his identity. But Smith may have spilled about Doe's lotto win anyway, thus violating the NDA, so Doe brought Smith to federal court (whose jurisdiction arose via the diversity of the parties) seeking an injunction and damages.

For a while, the district court let the parties litigate under pseudonyms. (That's why we're calling these two "John Doe" and "Sara Smith"—those, of course, aren't their real names.) Yet, as trial neared, Doe moved to shutter the courtroom from the public during the trial and, alternatively, to proceed under pseudonyms throughout trial. Doe sought such drastic measures, he said, mainly to preserve his daughter's privacy and protect her, given the increased risks that came alongside his sudden wealth.

But federal judges take an oath to "do equal right to the poor and to the rich" …. Faithful to that oath, the district court denied Doe's requests in a comprehensive forty-page opinion….

We can well appreciate some of Doe's concerns—certainly, we respect his worries about his family's safety lest his identity be unveiled. Yet we discern no abuse of discretion in the district court's careful judgment preserving the common-law tradition of public access to—and oversight of—our judicial proceedings….

[A]s the vast font of human experience has shown time and time again, [the] newfound wealth posed new challenges to Doe. Cf. The Notorious B.I.G., Mo Money Mo Problems, on Life After Death. Within a month of the NDA's taking effect, Doe and Smith had become embroiled in a custody dispute.

Around September 2023, Doe apparently discovered that Smith had violated the NDA by wrongfully disclosing details of the Protected Subject Matter to Doe's father and stepmother. And, as a result of that disclosure, Doe claims that "other third parties," including his sister, were now also in possession of the relevant information, even though they shouldn't have been in-the-know. (For her part, Smith denies these allegations, pointing to Doe's sworn declarations where he admits to telling his father about the lotto win.) …

Much procedure happened, but eventually the case came to the First Circuit on the question whether Doe could proceed pseudonymously, and the court said no:

[T]here is a "strong presumption against the use of pseudonyms in civil litigation." … There are plenty of good reasons for this presumption. For one, our country has a long-running tradition "of doing justice out in the open, neither in a corner nor in any covert manner."

For another, "anonymizing the parties lowers the odds that journalists, activists, or other interested members of the public would catch wind of [judicial] mischief," such mischief being something we strive to avoid. And for a third, "litigating behind a curtain creates a shroud of mystery, giving the impression that something secret is going on," another thing we strive to avoid, given that a "judicial system replete with Does and Roes invites cynicism and undermines public confidence in the courts' work." All those reasons explain why "litigation by pseudonym should occur only in exceptional cases." …

The court noted that pseudonymity is sometimes allowed when a plaintiff "reasonably fears that coming out of the shadows will cause him unusually severe harm (either physical or psychological)," but it upheld the district court's conclusion that this exception isn't applicable here:

The district court … explicitly considered the ten potential harms Doe claimed due to what he called "the unique risks inherent to being an ultra-high-net-worth individual, especially where, as here, the individual's increase in wealth is swift and drastic" … {: "(1) kidnap for ransom, (2) stalking and harassment, (3) unwanted attention to his daughter, (4) increased attention to his other family members, (5) cybersecurity vulnerabilities, (6) impersonation and financial fraud, (7) media attention, (8) extortion, (9) solicitation for financial support, and (10) disruptions and restricted movement in daily life."} But the district court reasonably explained why this situation didn't constitute "unusually severe" harm: "this rationale could be applied to a relatively large and certainly prominent slice of the American population." And, as the district court explained,

[The rationale] would extend beyond lottery winners to heirs to large fortunes, top tier professional athletes, highly successful entrepreneurs, nationally prominent entertainers, including actors and musicians, celebrities of all ilks, including those newly famous on social media; the list goes on and the risks can include members of their families.

We think that amply explains why the harm wouldn't be "unusually" severe. And, either way, we don't think the district court erred in deciding that Doe's general invocations of the possibility of such harms wasn't sufficient to meet his burden of rebutting the presumption against pseudonymity; and, on appeal, Doe does not, in our view, present more specific evidence of these purported harms….

Doe [also] argues that disclosing his and Smith's true identities would cause … harm to their daughter, who is undoubtedly an innocent non-party. The district court addressed this concern concisely yet comprehensively. It explained:

[Doe's daughter] would be identified only by initials and Mr. Doe has provided no evidence for the Court to conclude that if his name were revealed, her privacy would be in jeopardy. Even if it could happen, this possibility does not justify denying the public the right to access this court proceeding.

Given that the district court holds "broad discretion" as to whether "the need for anonymity in the case before it … outweighs the public's transparency interest," we discern no abuse of discretion in its balancing here.

Pseudonymity is also sometimes allowed in "… cases in which anonymity is necessary to forestall a chilling effect on future litigants who may be similarly situated," including cases where "the injury litigated against would be incurred as a result of the disclosure of the party's identity." But here too the court of appeals upheld the district court's conclusion that this exception doesn't apply here:

As the district court explained, Doe's "NDA contained the seeds of its own ineffectiveness" insofar as it failed to include a confidentiality clause requiring arbitration or mediation. So … we don't think it was clearly wrong for the district court to find this to be a situation of his own making. In that respect, we must agree with Smith that "the only chilling effect on future lottery winners is that they will not use the NDA" that Doe used….

Doe responds by saying that he shouldn't be forced to choose between his right to sue in court [as opposed to via arbitration -EV] and his right to privacy. But we think the district court nailed it when it explained as follows:

A publicly filed court case is no longer a private matter. In bringing this case, Mr. Doe turned to a forum established by the United States Constitution, funded by American taxpayers, comprising a branch of the federal government, whose procedures must be open and whose rulings must be a matter of public record.

We couldn't agree more…. [J]ust because Doe has a right to sue does not mean he has a right to sue anonymously….

And the court had this to say about the relevance of Doe's wealth to this analysis:

Doe argues that the district court denied him pseudonymity because he was wealthy…. Doe … draw[s] our attention to the district judge's statements about how he was part of the "entire tier of rich and famous persons" that could face harm because of their publicity and how, with his newfound wealth, he had more resources to mitigate risk and protect himself.

But Doe … seems to forget that he was the one who raised the issue of his wealth. Straight from one of his filings: "There are unique risks inherent to being an ultra-high-net-worth individual, especially where, as here, the individual's increase in wealth is swift and dramatic." That the district court explained why his wealth, as well as the risks it brings, did not entitle him to pseudonymity is not an abuse of discretion….

The district court honorably upheld its duty to "do equal right to the poor and to the rich." So we affirm. (And, btw, costs to appellees.)

The court also rejected Doe's argument that the trial in the case should be closed; I have more on that in this post.

Peter J. Brann (Brann & Isaacson) argued on behalf of Smith, with Hannah L. Wurgaft as co-counsel; I argued on behalf of the Maine Trust for Local News, with Sigmund D. Schutz and Alexandra Harriman (Preti, Flaherty, Beliveau & Pachios, LLP) as cocounsel.