No Closed Trial for Billion-Dollar Maine Lottery Winner Suing Over Alleged Violation of Non-Disclosure Agreement
I have more details on this morning's First Circuit decision (written by Judge O. Rogeriee Thompson) in Doe v. Smith in this post, which deals with the court's rejection of the winner's attempt to sue pseudonymously; but the short version of the facts is:
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.
Doe sought a closed trial, to protect his anonymity, but the court said no:
For starters, "historically both civil and criminal trials have been presumptively open." The Federal Rules of Civil Procedure reflect that common-law history of transparency. Consider Rule 77(b): "Every trial on the merits must be conducted in open court and, so far as convenient, in a regular courtroom." Or consider Rule 43(a): "At trial, the witnesses' testimony must be taken in open court," unless another authority requires otherwise. And while courts applying those rules have sometimes recognized that such openness requirements might "be overcome in proper circumstances," everyone agrees that an open trial is the baseline….
First, Doe opens his attack on the district court's decision by saying that it failed to consider Doe's constitutional "contractual privacy rights" in its analysis. But we can make quick work of this one. In his opening brief, Doe cites only one case to support his proposition that such a constitutional contract right exists, Adkins v. Child. Hosp. of the D.C. (1923). But there is a big problem for Doe: the Supreme Court overruled that Lochner-era case almost ninety years ago. And although Doe rightfully acknowledges that error in his reply brief, he doesn't provide any other caselaw that explains why his NDA should constitutionally compel the district court to shutter the courtroom doors. So that settles that.
Along similar lines, Doe says the district court overlooked "relevant case law that … recognizes the propriety of excluding the media and public from a civil trial to protect competing contractual and privacy interests." But none of Doe's cases come close to supporting what he wants: full-scale closure of a federal civil trial. And the only example of full trial closure that Doe produces on appeal is a juvenile case—which is apples-and-oranges different from his suit (as that case itself explains). See In re T.R. (Ohio 1990) ("Juvenile courts differ significantly from courts of general jurisdiction…. Consequently, juvenile courts have adopted unique methods of conducting their proceedings."). No error here.
Second, Doe says the district court misunderstood the balancing test established in U.S. v. Kravetz (1st Cir. 2013) … [under which] the court must weigh "the nature and degree" of injury that public disclosure would cause, considering "the sensitivity of the information and the subject" and "how the person seeking access intends to use the information." …
But we think the district court's decision evinced careful consideration of Kravetz, as well as these factors and facts. It acknowledged that Doe has argued this is a sensitive case focusing "on the parties' individual finances, family affairs including those involving their minor daughter, and may include information the parties deem to be embarrassing and that they would prefer to keep private." And while the district court explained that it took such "considerations seriously," it remained true that (1) "courts often deal with information that people would prefer to keep out of the public eye," and (2) "if the wishes of litigants for privacy trumped the right of public access, courts would become publicly funded forums for private litigation, unaccountable to the public itself."
Further, the district court cited several cases in Maine highlighting how "courts routinely describe in published divorce cases the intimate financial circumstances of the divorcing couple, sometimes in detail," and "where children are involved, even in custody disputes, courts routinely issue publicly available orders." Such discussion surely goes to the "nature and degree" of the injury, as well as the "sensitivity of the information and the subject," so we can't agree with Doe that the district court neglected evaluating the relevant factors under Kravetz.
Nor, on the question of how the people "seeking access intend[] to use [Doe's] information," do we think the district court erred in rejecting the notion that public access to this trial will "simply … cater to a morbid craving for that which is sensational and impure," despite Doe's contention otherwise. That statement from Kravetz (itself cribbed from past cases) largely concerns the unnecessary release of "peripheral" information, which is why the "simply" is there in that quote. But we agree with the district court that, like it or not, Doe's identity is at "the heart of this dispute" that he's sued over.
Third, Doe claims the district court misconstrued the NDA by implicitly asserting Doe was "weaponizing" it against Smith to "gain leverage over her in their custody dispute." Doe says that the district court's discussion of how NDAs are a matter "of public interest" actually reveals (1) an incorrect factual assumption by the district court, (2) an improper suggestion that Doe's NDA was unenforceable, and (3) an injudicious appearance of "misplaced sympathy for Smith as the silenced victim of a weaponized NDA."
But after our own careful review of the record, we again see no reversible error. As to the first point, the district court simply said that this case takes place in "the broader context of contested custody litigation in state court." That's undoubtedly true. This lawsuit was filed six months into the custody dispute which, as we understand it, was still ongoing when the district court considered the closure motion.
As to the second point, the district court's discussion of caselaw about NDAs (including their unenforceability) was just an explanation of why a family dispute and an NDA would constitute a matter of public interest. And as to the third point, we see no evidence that the district court based its decision on "misplaced sympathy" for Smith, given its careful explanation of the parties' positions and its extensive discussion of the law.
Fourth and finally, Doe asserts that "the District Court seemingly denied Doe's Motion for closure of trial because he is rich" (emphasis Doe's). We can't agree. True, the district court noted that a "party's wealth alone is not a legitimate reason to restrict the right of public access" and that federal judges swore an oath to "do equal right to the poor and to the rich."
But in doing so, the district court was simply responding to a throughline of Doe's briefing—that his newfound wealth, and the dangers that come with it, require closure of trial. See, e.g., [decision below] (identifying Doe's filings stating that "[t]here 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")….
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.