Trial Magazine

In 2000, a simple change to Federal Rule of Civil Procedure 5 laid the groundwork for the blanket confidentiality orders—signed at the outset of any mass tort or antitrust action—that are now the norm.¹ These far-reaching confidentiality orders effectively allowed parties to contract away the public’s right to access many stages of litigation. And courts began interpreting the common law balancing test that governs public access as requiring them to weigh the public’s interest in information against a perceived need to shield corporations from reputational injury.

Yet, the Third Circuit’s 2019 decision in In re Avandia Marketing, Sales Practices, and Products Liability Litigation, alongside the district court opinion on remand, suggests that courts may be aware that the pendulum has swung too far in the direction of secrecy and public exclusion from court proceedings.² As judicial awareness builds, judges have moved to protect the public’s right to access key evidence earlier in the adjudicative process.

In Avandia, the Third Circuit reversed two one-page orders that sealed thousands of pages of summary judgment exhibits at the request of defendant GlaxoSmithKline (GSK)—a multinational pharmaceutical company. The appellate court held that the district court failed to properly apply the common law right of access to the judicial records at issue—decades-old clinical trial results and drug marketing materials.³ It further directed the lower court to determine whether the First Amendment applied in the event that the court found the documents could be sealed under the common law.⁴

On the heels of this opinion, GSK agreed to unseal most of the records at issue. Nonetheless, it requested the continued sealing of expert reports and requested redactions to the clinical trial records. But the district court rejected this request, unsealing all of the expert reports used at summary judgment and overruling GSK’s requested redactions.

To unseal records in your case, you’ll need a thorough understanding of the public’s right to access judicial records and how the recent Avandia decisions impact that right, the various sealing standards, and their application to different stages of litigation and types of documents.

Right of Access Standards

Three distinct standards—favoring access on an escalating basis—govern the public’s ability to view a document used or uncovered in litigation. Which standard applies depends on the type of document and the purpose for which is it being used. While courts and litigants may muddle them, the standards are distinct: each requires a party seeking sealing to meet a different burden before the documents may be sealed, and the test for whether each standard applies to a particular document or proceeding is different.

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Three distinct standards—favoring access on an escalating basis—govern the public’s ability to view a document used or uncovered in litigation.

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Rule 26 standard. The first and most lenient standard for sealing is the Rule 26(c) standard, which permits district courts to, “for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”⁵ As the Third Circuit has explained, such “a protective order is ‘intended to offer litigants a measure of privacy, while balancing against this privacy interest the public’s right to obtain information concerning judicial proceedings.’”⁶

Because Rule 26’s good cause standard applies to “all litigation materials—not just those filed in court,”⁷ parties (especially defendants) routinely rely on it to protect unfiled discovery materials. Different circuits weigh different factors to determine whether a particular document may be sealed under Rule 26.

For example, the Third Circuit balances seven factors (called Pansy factors) that “are neither mandatory nor exhaustive” to decide whether a certain document can be sealed.⁸ Those factors include whether disclosure will violate any privacy interests; whether the information is being sought for a legitimate purpose; whether disclosure will cause a party embarrassment; whether the information is important to public health and safety; whether the sharing of information will promote fairness and efficiency; whether a party benefitting from the order of confidentiality is a public entity or official; and whether the case involves issues important to the public.⁹

The Ninth Circuit test is simpler. Courts in that circuit conduct a two-step analysis: “First, [a court] must determine whether ‘particularized harm will result from disclosure of information to the public.’”¹⁰ If the court concludes that harm will result from disclosure, it must then “balance ‘the public and private interests to decide whether [maintaining] a protective order is necessary.’”¹¹ Nonetheless, the Ninth Circuit has directed courts performing this balancing to consider the Third Circuit’s Pansy factors.¹²

Under Rule 26, the party seeking sealing always bears the burden of demonstrating that good cause for sealing exists.¹³ And district courts must “articulate on the record findings supporting [the] decision to grant or deny a protective order.”¹⁴

The common law right of access. The common law right of access demands a much more rigorous showing than Rule 26 before documents may be sealed. As the Third Circuit explained in Avandia, “the public right of access—unlike a Rule 26 inquiry—begins with a presumption in favor of public access.”¹⁵

The distinction between Rule 26 and the common law right of access—and the heightened burden the common law imposes—is well recognized across the circuits.¹⁶ The common law offers greater protection to the public’s right of access because it applies to court proceedings and judicial documents, not all discovery materials. What constitutes a “judicial document” is not uniformly defined across the circuits: Some have sketched the boundaries of this term with greater precision than others.¹⁷ In the Second Circuit, for example, “to be designated a judicial document, ‘the item filed must be relevant to the performance of the judicial function and useful in the judicial process.’”¹⁸

The common law right of access generally protects non-dispositive briefing filed with the court—although not always attached exhibits and discovery materials. For dispositive briefing, such as summary judgment briefing, many courts recognize that the common law right of access also applies to exhibits and evidence.¹⁹

Under the common law right of access, the party seeking sealing must generally show “that the material is the kind of information that courts will protect and that disclosure will work a clearly defined and serious injury to the party seeking closure.”²⁰ Of course, the party seeking sealing bears the burden of showing “that the interest in secrecy outweighs the presumption.”²¹

Before granting sealing, district courts must articulate “‘compelling, countervailing interests to be protected,’ make ‘specific findings on the record concerning the effects of disclosure,’ and ‘provide an opportunity for interested third parties to be heard.’”²² Some circuit courts require district courts to conduct document-by-document reviews of the challenged documents.²³

The First Amendment right of access. The First Amendment right of access applies to a much smaller set of proceedings and documents than either Rule 26 or the common law right. The U.S. Supreme Court first recognized the public’s First Amendment right to observe court proceedings in Richmond Newspapers, Inc. v. Virginia, when the public’s right to attend a criminal trial was at issue.²⁴ In Richmond, the Court explained that “presumptive openness of the trial” is “one of the essential qualities of a court of justice”²⁵ and that logic favors access because public attendance holds “significant community therapeutic value,”²⁶ “aids accurate fact-finding,”²⁷ and strengthens public understanding of and confidence in the judicial system.²⁸

Since Richmond, the Supreme Court and federal appellate courts have clarified that the right extends beyond access to criminal trials. The Supreme Court has held that the right protects the public’s access to certain preliminary criminal hearings,²⁹ and other circuits have determined it applies to civil proceedings,³⁰ summary judgment records,³¹ bills of particulars in criminal cases,³² the inspection of docket sheets,³³ “written documents filed in connection with pretrial motions,”³⁴ “documents filed in connection with plea hearings and sentencing hearings in criminal cases, as well as to the hearings themselves,”³⁵ and various other court documents and records.³⁶

To determine whether the First Amendment applies to a particular judicial proceeding or record, courts follow Richmond and examine whether “experience” (in other words, history) and “logic” call for the First Amendment’s application.³⁷ Courts presume that proceedings will be open to the public,³⁸ and any restrictions on the right of public access are “evaluated under strict scrutiny.”³⁹

The First Amendment right of access “may be overcome only by an overriding interest based on findings that closure is essential to preserve higher values and is narrowly tailored to serve that interest.”⁴⁰ A party seeking closure must delineate its compelling need for secrecy with “specificity.”⁴¹ Once again, the party seeking sealing in the face of the First Amendment “bears the burden of showing that the material is the kind of information that courts will protect.”⁴²

Class actions. Note that courts have found the “right of public access is particularly compelling” in class actions “because many members of the ‘public’ are also plaintiffs in the class action.”⁴³ The right of access “diminishes the possibility that ‘injustice, incompetence, perjury, [or] fraud’ will be perpetrated against those class members who have some stake in the case but are not at the forefront of the litigation.”⁴⁴ As a result, “the test for overriding the right of access should be applied in [class actions] with particular strictness.”⁴⁵

Tips for Unsealing Documents

To counter defendants’ sealing requests in your case, here are a few takeaways from the Avandia decisions and other recent unsealing decisions.⁴⁶

Embarrassment is not an injury sufficient to overcome the public’s right of access. In your unsealing request, distinguish between the harm that results from the disclosure of confidential business practices and that which results from negative publicity. Remind defendants that adverse publicity is, in and of itself, not sufficient to justify sealing.

Corporations frequently assert that the negative publicity they would receive due to public access to their documents constitutes serious injury. But “simply showing that the information would harm the company’s reputation is not sufficient to overcome the strong common law presumption in favor of public access to court proceedings and records.”⁴⁷

The Third Circuit in Avandia pointed out that consideration of “reputational concerns” or embarrassment distinguishes the Rule 26 analysis from the common law balancing test: Under Rule 26, a court may consider reputational damage to the party seeking closure; not so under the common law right of access.⁴⁸

The Third Circuit also distinguished between harm to competitive standing resulting from the disclosure of business strategies—a legitimate consideration under the common law right to access—and harm to competitive standing resulting from negative publicity, which is not a legitimate consideration. In Avandia, GSK complained that records documenting the safety and efficacy (or lack thereof) of its diabetes drug would harm its relationships with patients and doctors. But the Third Circuit rejected this argument, explaining that the harm resulting from such disclosure would not reveal any secret business strategies—rather, it would merely embarrass GSK.⁴⁹

Stale or defunct business practices cannot be shielded from public view. Force defendants to show they currently use the business practices or strategies described in their documents. Remind defendants that any request for sealing must be based on current evidence that disclosure would now harm the party seeking closure and that courts should not seal materials describing defunct or outdated business practices.⁵⁰ Parties seeking closure must put forth “credible and convincing evidence that certain similar or identical strategies are still in use today.”⁵¹

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Remind defendants that adverse publicity is, in and of itself, not sufficient to justify sealing.

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A 2021 decision from the Eastern District of New York affirmed this principle: “Stale business records cannot support the necessary finding of harm, and therefore ‘cannot overcome the public’s strong interest in disclosure.’”⁵² In Avandia, GSK primarily relied on a declaration that a GSK employee wrote eight years earlier to support its requests for continued confidentiality. In response, the Third Circuit explained, “outdated evidence . . . is insufficient to overcome the presumption of public access.”⁵³

As another Third Circuit decision explains, the “strong presumption of public access forces district courts to be cognizant of when the reasons supporting sealing in a specific case (if any are found) have either passed or weakened” and to be prepared to unseal documents.⁵⁴ Even when “a sealing order was proper at the time when it was initially imposed, the sealing order must be lifted at the earliest possible moment when the reasons for sealing no longer obtain.”⁵⁵

Parties seeking closure must justify sealing on a document-by-document basis. If defendants want to keep documents under seal, remind them that they must articulate specific reasons for the sealing of each and every document. Defendants often attempt to justify sealing by grouping large numbers of documents into buckets and then providing a bullet point or two of justification for those buckets. The law does not permit this approach: Remind defendants of their burden to justify why each document must be sealed.

In Avandia, the Third Circuit emphasized this requirement. The court faulted the district court for failing to conduct “a document-by-document review, instead analyzing sixty-five disputed documents in a single paragraph contained in a footnote.”⁵⁶ The party seeking closure must provide the district court in the first instance with these individualized justifications.

Parties seeking closure must articulate specific reasons for sealing documents. Related to the requirement of document-by-document review is the rule that any justification for sealing must be made with specificity. A defendant may not cite generalized harm as grounds for sealing. To overcome the public’s common law right of access, a party seeking closure must present specific evidence that justifies the requested sealing.

For example, in Avandia, the Third Circuit rejected GSK’s proffered justification as insufficiently specific. GSK claimed that disclosure of its old research strategies “would still aid competitors in developing research strategies and could be used to harm GSK’s relationship with patients and physicians.”⁵⁷ However, the appellate court found this rationale inadequately specific, noting that GSK failed to explain “how twenty-year-old research strategies could assist current competitors or harm GSK’s current relationships with patients and physicians.”⁵⁸

Articulate how the public would benefit from the disclosures at issue. Parties seeking disclosure should explain how public scrutiny of the documents at issue will either protect the public from similar misconduct in the future or otherwise play an important educational role.

Both the Third Circuit’s decision in Avandia and the district court’s opinion on remand make this point clear. The appellate court stressed that the public’s interest in the clinical trials, drug marketing materials, and expert reports in Avandia were “particularly important” because the case “implicate[d] the public’s trust in a well-known and (formerly) widely-used drug.”⁵⁹ The district court echoed this reasoning: “These interests are especially acute when it comes to the specific documents at issue because the information GSK seeks to redact includes records submitted to the FDA, the federal agency tasked with protecting the public from harmful drugs, by a U.S. corporation concerning the regulation of a drug in this country.”⁶⁰

Emphasize the finality of the proceeding. If you are arguing for unsealing on First Amendment grounds, be sure to emphasize (when applicable) the finality of the proceeding and its potential to replace a jury trial.

Judge Restrepo’s concurrence in the Avandia decision provides an outline on how to make this argument. First, emphasize how the proceeding “play[s] an increasingly prominent role in federal civil litigation.”⁶¹ Second, where applicable, highlight that “the expanding federal caseload has contributed to a drift in many areas of federal litigation toward substituting [the proceeding at issue] for trial.”⁶²

The Third Circuit’s Avandia decision suggests courts are aware that excessive confidentiality designation is a serious problem that will impede the public’s ability to play the watchdog role on which the judicial system’s legitimacy turns. Where appropriate, challenge defendants’ confidentiality designations of discovery material filed in support of key motions and force defendants to justify them—they may have been slapped on documents without real consideration.

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Hannah Brennan is an associate at Hagens Berman Sobol Shapiro in Boston and can be reached at hannahb@hbsslaw.com.

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Notes

1. Prior to 2000, Federal Rule of Civil Procedure 5(d) had provided that discovery materials were to be filed “within a reasonable time.” See Fed. R. Civ. P. 5(d) (1937) (submitted in 1937 to be effective in 1938); see also Judith Resnik, The Contingency of Openness in Courts: Changing the Experiences and Logics of the Public’s Role in Court-Based ADR, 15 Nev. L.J. 1631, 1648 (2015).
2. 924 F.3d 662 (3d Cir. 2019); 2020 WL 5358287 (E.D. Pa. Sept. 3, 2020).
3. In re Avandia Mktg., Sales Practices & Prods. Liab. Litig. (Avandia I), 924 F.3d 662, 677 (3d Cir. 2019).
4. Id. at 680.
5. Fed. R. Civ. P. 26(c)(1).
6. Avandia I, 924 F.3d at 671 (quoting Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994)).
7. Id. (quoting Pansy, 23 F.3d at 785) (internal alteration omitted).
8. Id. (quoting Glenmede Tr. Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995)).
9. Id.
10. In re Roman Cath. Archbishop of Portland in Or., 661 F.3d 417, 424 (9th Cir. 2011) (quoting Phillips ex rel. Ests. of Byrd v. Gen. Motors Corp., 307 F.3d 1206, 1211 (9th Cir. 2002)).
11. Id. (quoting Phillips, 307 F.3d at 1211).
12. Id.
13. Avandia I, 924 F.3d at 672.
14. Id. (internal quotation marks and citation omitted).
15. Id. at 670 (emphasis added).
16. See Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299, 305 (6th Cir. 2016) (emphasizing that “there is a stark difference between so-called ‘protective orders’ entered pursuant to the discovery provisions of [Rule] 26, on the one hand, and orders to seal court records, on the other,” and Rule 26 poses a much lower bar to sealing); Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir. 2010) (“[A] different standard applies to ‘private materials unearthed during discovery,’ as such documents are not part of the judicial record. . . . This ‘good cause’ standard presents a lower burden for the party wishing to seal documents than the ‘compelling reasons’ standard.”); Kamakana v. City & Cty. of Honolulu, 447 F.3d 1172, 1184 (9th Cir. 2006) (“[A] ‘good cause’ showing without more will not satisfy a ‘compelling reasons’ test.”); Va. Dep’t of State Police v. Wash. Post, 386 F.3d 567, 576 (4th Cir. 2004) (noting that the First Amendment standard is “more rigorous” than the Rule 26 standard and applies to “documents filed in connection with a summary judgment motion in a civil case” (internal quotation marks omitted)); United States v. Amodeo, 71 F.3d 1044, 1050 (2d Cir. 1995); Poliquin v. Garden Way, Inc., 989 F.2d 527, 533 (1st Cir. 1993).
17. In Avandia I, the Third Circuit offered a helpful definition of the term: A “‘judicial record’ is a document that ‘has been filed with the court . . . or otherwise somehow incorporated or integrated into a district court’s adjudicatory proceedings.’” See Avandia I, 924 F.3d at 672 (quoting In re Cendant Corp., 260 F.3d 183, 192 (3d Cir. 2001)).
18. Lugosch III v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006) (quoting United States v. Amodeo, 44 F.3d 141, 142 (2d Cir. 1995)).
19. See, e.g., Republic of Phil. v. Westinghouse Elec. Corp., 949 F.2d 653, 663 (3d Cir. 1991); Joy v. North, 692 F.2d 880, 893 (2d Cir. 1982); Rushford v. New Yorker Magazine, 846 F.2d 249 (4th Cir. 1988); accord In re Continental Illinois Sec. Litig., 732 F.2d 1302, 1309 (7th Cir. 1984) (presumption of access applies to hearings held and evidence introduced in connection with motion to terminate derivative action).
20. Avandia I, 924 F.3d at 672 (quoting Miller v. Ind. Hosp., 16 F.3d 549, 551 (3d Cir. 1994)).
21. Id. (quoting Bank of Am. Nat’l Tr. & Sav. Ass’n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 344 (3d Cir. 1986)).
22. Id. at 672–73 (quoting In re Cendant Corp., 260 F.3d at 194) (internal alteration omitted).
23. See id. at 673.
24. 448 U.S. 555 (1980).
25. Id. at 567 (internal quotation marks omitted).
26. Id. at 571.
27. Id. at 596 (Brennan, J., concurring); see id. 570–71.
28. Id. at 572.
29. See Press-Enter. Co. v. Super. Ct. of Cal. for Riverside Cty. (Press-Enter. II), 478 U.S. 1, 10–12 (1986).
30. See Del. Coal. for Open Gov’t, Inc. v. Strine, 733 F.3d 510, 514 (3d Cir. 2013).
31. See Lugosch III, 435 F.3d at 121 (“[D]ocuments submitted to a court for its consideration in a summary judgment motion are—as a matter of law—judicial documents to which a strong presumption of access attaches, under both the common law and the First Amendment.”); Rushford, 846 F.2d at 253 (“[T]he more rigorous First Amendment standard should also apply to documents filed in connection with a summary judgment motion in a civil case.”).
32. See United States v. Smith, 776 F.2d 1104, 1111–12 (3d Cir. 1985).
33. See Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 91 (2d Cir. 2004).
34. Matter of N.Y. Times Co., 828 F.2d 110, 114 (2d Cir. 1987).
35. In re Wash. Post Co., 807 F.2d 383, 390 (4th Cir. 1986).
36. See, e.g., United States v. McVeigh, 119 F.3d 806, 811 (10th Cir. 1997) (recognizing that the First Amendment right applies to “some categories of court documents and records”); Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d 1165, 1177 (6th Cir. 1983) (First Amendment right of access to court documents).
37. See Press-Enter. II, 478 U.S. at 10–12; Del. Coal. for Open Gov’t, Inc. v. Strine, 733 F.3d 510, 513–14 (3d Cir. 2013).
38. Avandia I, 924 F.3d at 673 (quoting Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1073 (3d Cir. 1984)).
39. Id. (quoting PG Publ’g Co. v. Aichele, 705 F.3d 91, 104 (3d Cir. 2013)).
40. Press-Enter. II, 478 U.S. at 9 (quoting Press-Enter. Co. v. Super. Ct. of Cal. for Riverside Cty. (Press-Enter. I), 464 U.S. at 510 (1984)).
41. Publicker Indus., Inc., 733 F.2d at 1071.
42. Id.
43. In re Cendant Corp., 260 F.3d at 193.
44. Id. (alteration in original) (quoting Littlejohn v. Bic Corp., 851 F.2d 673, 678 (3d Cir. 1988)).
45. Id. at 194.
46. See, e.g., Dawson v. Merck & Co., 2021 WL 242148 (E.D.N.Y Jan. 24, 2021).
47. Brown & Williamson Tobacco Corp., 710 F.2d at 1179–80 (6th Cir. 1983) (explaining that the desire to shield prejudicial information from competitors and the public is understandable, but “cannot be accommodated by courts without seriously undermining the tradition of an open judicial system”); see Doe v. Pub. Citizen, 749 F.3d 246, 269 (4th Cir. 2014) (collecting cases demonstrating consensus that “a company’s bare allegation of reputational harm” is insufficient to overcome the public right of access); Dawson, 2021 WL 242148 at *7 (“Adverse publicity on the business, by itself, is not sufficient.”).
48. Avandia I, 924 F.3d at 676.
49. Id. at 679 (quoting Westinghouse Elec. Corp., 949 F.2d at 662).
50. Zavala v. Wal-Mart Corp., 2007 WL 2688934, at *10 (D.N.J. Sept. 12, 2007) (documents over three years old were not entitled to protection); see also Westinghouse Elec. Corp., 949 F.2d at 663 (finding that defendants failed to meet their burden under the common law right of access because they “relied entirely on [two-year-old] affidavits”); Pennsylvania v. Think Fin., Inc., 2017 WL 3215416, at *3 (E.D. Pa. July 28, 2017) (holding that publication of documents between three and six years old would not cause any harm); Koch v. Greenberg, 2012 WL 1449186, at *4 (S.D.N.Y. Apr. 13, 2012) (“Generally . . . a court will not protect several-year-old information without a specific explanation of the harm that would be caused by disclosure.”); Heintz Corp. v. Judson, 1995 WL 649331, at *4 (E.D. Pa. Nov. 3, 1995) (“[A]n attempt to show that disclosure will indeed work a competitive disadvantage might be undermined if the information sought to be protected were stale.” (quoting Zenith Radio Corp. v. Matsushita Elec. Indus. Co., Ltd., 529 F. Supp. 866, 890–92 (E.D. Pa. 1991)).
51. Royal Mile Co. v. UPMC and Highmark, Inc., 2013 WL 6920206, at *7 (W.D. Pa. Sept. 16, 2013), report and recommendation adopted, 2014 WL 47775 (W.D. Pa. Jan. 6, 2014).
52. Dawson v. Merck & Co., Inc., 2021 WL 242148, at *8 (E.D.N.Y. Jan. 24, 2021) (quoting Alcon Vision, LLC v. Lens.com, 2020 WL 3791865, at *8 (E.D.N.Y. July 7, 2020)).
53. Avandia I, 924 F.3d at 678 (citing Miller, 16 F.3d at 551–52 (instructing courts that, even if the initial sealing of documents was justified, they should “closely examine whether circumstances have changed sufficiently to allow the presumption allowing access to court records to prevail”)); Westinghouse Elec. Corp., 949 F.2d at 663 (explaining that Westinghouse’s reliance on old affidavits “without any current evidence to show how public dissemination of the pertinent materials now would cause the competitive harm it claims” is insufficient to meet the exacting common law burden).
54. Cendant, 260 F.3d at 196.
55. Id.; see also In re Avandia Mktg., Sales Practices & Prods. Liab. Litig. (Avandia II), 484 F. Supp. 3d 249, 262–263 (E.D. Pa. 2020).
56. Avandia I, 924 F.3d at 677.
57. Avandia I, 924 F.3d at 679.
58. Id. (emphasis added).
59. Id. at 677.
60. Avandia II, 484 F. Supp. 3d at 267; see also id. at 265.
61. Avandia I, 924 F.3d at 683 (Restrepo, J., concurring).
62. Id. (alterations in original) (quoting Wallace v. SMC Pneumatics, Inc., 103 F.3d 1394, 1397 (7th Cir. 1997)).