“The foregoing eight exhibits thus are subject to the right of access granted by the First Amendment, because they were filed in connection with a motion to dismiss.”
How later courts described this case
- “The foregoing eight exhibits thus are subject to the right of access granted by the First Amendment, because they were filed in connection with a motion to dismiss.”
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NORTH CAROLNIA
WESTERN DIVISION
Case No. 5:20-cv-46-M
ACCREDITATION COMMISSION FOR
HEALTH CARE, INC.,
Plaintiff,
ORDER
NEXTLOGIK, INC.,
Defendant.
This matter is before the Court on NextLOGiK, Inc.’s (“Defendant”) “Motion to File
License Agreement [D.E. 12-1] Attached to Memorandum in Suppo[r]t of Motion to Dismiss or
Change Venue [D.E. 12] Under Seal” [DE-14 (the “Motion”)]. Defendant, with consent of
Plaintiff, seeks to seal the memorandum in support [DE-12 (the “Memorandum”’)] of its motion to
dismiss or transfer venue [DE-11] and the exhibit attached thereto [DE-12-1 (the “Agreement”)]
because they contain confidential and sensitive business information. Having reviewed the
Motion, the Court finds that Defendant has established that sealing the Agreement and
Memorandum is warranted and therefore GRANTS the Motion. Specifically:
1. Defendant filed its Memorandum [DE-12] and the Agreement [DE-12-1] in
connection with its motion to dismiss or transfer venue [DE-11] on April 20, 2020. The
Memorandum and Agreement identify confidential and proprietary business information. Such
information includes the bargained-for value the Accreditation Commission for Health Care, Inc.
(‘ACHC” or “Plaintiff’) agreed to pay Defendant pursuant to the Agreement, proprietary
information concerning ACHC’s accreditation and business operations, and information
concerning the software at issue in this action, including detailed, confidential descriptions of its
functionality.
2. _NextLOGiKk filed the instant Motion on April 27, 2020. Thus, the public received
notice of the request to seal and has had a reasonable opportunity to object. See In re Knight
Publ’g Co., 743 F.2d 231, 235 (4th Cir. 1984).
3. “T]he common law presumes a right to access all judicial records and
documents.” Jn re U.S. for an Order Pursuant to 18 U.S.C. Section 2703(d), 707 F.3d 283, 290
(4th Cir. 2013) (citations omitted). By contrast, “the First Amendment provides a right of access
only to particular judicial records and documents.” /d. (citation omitted). The common law’s
“presumption of access. . . can be rebutted if countervailing interests heavily outweigh the
public interests in access.” Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir.
1988). Under the First Amendment, on the other hand, “the Court may grant the parties’ motion
to seal ‘only upon a showing of a compelling interest, and only if the sealing is narrowly tailored
to serve that interest.’” Volvo Grp. N. Am., LLC v. Forja de Monterrey S.A. de C.V., No. 1:16-
cv-114, 2019 WL 6307540, at *1 (M.D.N.C. Nov. 25, 2019) (citations omitted).
4. Documents filed and properly considered by the Court in connection with a
motion to dismiss are subject to the more stringent First Amendment protection. See e.g., Taylor
v. Kellog Brown & Root Servs., Inc., No. 2:09cv341, 2009 WL 10689733, at *2 (E.D. Va. Dec.
18, 2009) (“Because dispositive motions ‘serve[] as a substitute for trial,’ they are subject to ‘the
more rigorous First Amendment standard.’” (quoting Rushford, 846 F.2d at 252-53)); Marks v.
Licul, No. DKC-13-0347, 2013 WL 6014026, at *7 (D. Md. Nov. 7, 2013) (“As these exhibits
were properly part of a dispositive motion, they are subject to the more rigorous First
Amendment right of access.” (citation omitted)); Jn re Marriot, PWG-10-2879, 2019 WL
4855202, at *3 (D. Md. Aug. 30, 2019) (“I find that the First Amendment right of access attaches
to the judicial records that Plaintiff seeks to unseal”); Louisiana Pac. Corp. v. Akzo Nobel
Coatings, Inc., No. 1:12CV625, 2013 WL 249609, at *2 (M.D.N.C. Jan. 23, 2013) (applying
First Amendment to affidavit and exhibits filed in opposition motion to dismiss and stating that
the “more rigorous First Amendment standard applies to documents related to dispositive
motions.” (citation omitted)); ATI Indus. Automation, Inc. v. Applied Robotics, Inc., 801 F. Supp.
2d 419, 427 (M.D.N.C. 2011) (“The foregoing eight exhibits thus are subject to the right of
access granted by the First Amendment, because they were filed in connection with a motion to
dismiss.”); Hanwha Azdel, Inc. v. C&D Zodiac, Inc., No. 6:12-CV-00023, 2013 WL 12314517,
at *1 (W.D. Va. Aug. 7, 2013) (“Here, the exhibit Hanwha seeks to redact is being relied upon
by Zodiac in seeking the dispositive relief of dismissal of Hanwha's claims. As such, it is subject
to the First Amendment right of access.” (citation omitted)); but see U.S. ex rel. Carter v.
Halliburton Co., No. 1:11¢v602 (JCC/JFA), 2011 WL 8204612, at *2 (E.D. Va. Nov. 29, 2011)
(applying only common law presumption). Accordingly, the Court applies the First Amendment
protection to the Memorandum.
5. The Agreement, in contrast, will play no role in the Court’s adjudication of the
motion to dismiss. Instead, it is relevant only to the motion to transfer portion of Defendant’s
motion to dismiss or transfer venue. While the Court is unable to find a Fourth Circuit case
squarely on point, courts within our Circuit have consistently held that the First Amendment
does not attach to non-dispositive civil motions, like the motion to transfer here. See e.g.,
Universal Underwriters Ins. Co. v. Lallier, No. 7:17-CV-30-D, 2019 WL 1085180, at *1
(ED.NC. Mar. 6, 2019) (“Here, the exhibits relate to a motion for a protective order, and not a
motion that seeks dispositive relief. Therefore, the right of access at issue arises under the
common law.” (citation omitted)); Covington v. Semones, No. 7:06 CV 00614, 2007 WL
1170644, at *2 (W.D. Va. Apr. 17, 2007) (motion to quash) (“In this instance, as the exhibits at
issue were filed in connection with a non-dispositive motion, it is clear there is no First
Amendment right of access.”); BASF Plant Science, LP v. Commonwealth Scientific and
Industrial Res. Org., No. 2:17-CV-503-HCM, 2020 WL 973751, at *14 n.22 (E.D. Va. Feb. 7,
2020) (“In the Fourth Circuit, the First Amendment right does not attach to pre-trial, non-
dispositive civil proceedings, such as discovery matters.” (citation omitted)); Hopeman Bros.,
Inc. v. Cont'l Cas. Co., No. 416CV00187MSDLRL, 2018 WL 10562400, at *1 (E.D. Va. Jan. 17,
2018) (“The documents for which sealing is requested here were not filed in support of a
dispositive motion and are subject to the common law standard.”); but see Rensselaer
Polytechnic Institute v. Amazon.com, Inc., No. 1:18-cv-00549 (BKS/CFH), 2019 WL 2918026,
at *3 (N.D.N.Y. June 18, 2019) (“[T]hey are judicial documents that trigger the common law and
First Amendment rights to public access.”). This Court assumes without deciding that only the
common law protection applies to documents filed in connection with a motion to transfer venue.
But, regardless of whether the First Amendment presumption of access also applies, Defendant
has met its burden. “[T]he court need not determine whether the First Amendment or common
law presumption of access applies, as the parties’ arguments are sufficient to overcome even the
more stringent standard.” 360 Mortgage Grp., LLC v. Stonegate Mortgage Corp., No. 5:14-CV-
00310-F, 2016 WL 4939308, at *1 (E.D.N.C. Sept. 14, 2016).
6. NextLOGiK’s request to seal overcomes both the First Amendment and common
law presumptions of access because the filed materials contain confidential and proprietary
business information. Sealing nonpublic, confidential business information is appropriate, when,
as in this case, the interest of protecting the disclosure of the confidential business information is
compelling and outweighs any public interest in disclosing such information. See, e.g., id.
(“Generally speaking, the need to keep proprietary business information confidential is often a
sufficiently compelling justification for sealing judicial documents.” (citation omitted)); Silicon
Knights, Inc. v. Epic Games, Inc., No. 5:07-CV-275-D, 2011 WL 901958, at *2 (E.D.N.C. Mar.
15, 2011); Hanwha Azdel, Inc., 2013 WL 12314517, at *2 (“Hanwha has demonstrated that the
proposed redactions contain confidential and proprietary commercial information, including
information related to highly sensitive pricing and payment terms as well as product specifications,
which is of great importance to Hanwha but is not generally available to the public”); Big Rock
Sports, LLC v. AcuSport Corp., No. 4:08-CV-00159-F, 2011 WL 1213071, at *2 (E.D.N.C. Mar.
31, 2011).
7. The Court is also obligated to consider less drastic alternatives to sealing. In re
Knight Publ’g Co., 743 F.2d at 235. The public has access to all non-confidential information
contained in Defendant’s Memorandum and Agreement because Defendant has filed appropriately
redacted versions of the same. [DE-15-1.] The Court finds that the limited redactions therein are
narrowly tailored to protect Defendant’s proprietary business information while also providing
public access to the judicial documents.
It is therefore ORDERED that Defendant’s Motion [DE-14] is GRANTED. The Clerk is
DIRECTED to seal DE-12 and to permanently seal DE-12-1. Defendant shall have ten (10) days
from the date of this Order to file the redacted Memorandum and Agreement [DE-15-1] as a
separate docket entry.
SO ORDERED. This the bay of May, 2020
iad af Noss
RICHARD E. MYERS II
UNITED STATES DISTRICT JUDGE