Merck v. Walmart Inc.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

THOMAS MERCK,

:

Plaintiff, Case No. 2:20-cv-2908

Judge Sarah D. Morrison

v. Magistrate Judge Elizabeth A.

Preston Deavers

WALMART INC.,

:

Defendant.

OPINION AND ORDER

Plaintiff Thomas Merck, individually and as representative of a proposed

class, alleges that Defendant Walmart Inc. violated the pre-adverse action notice

requirements of the Fair Credit Reporting Act, 15 U.S.C. § 1681(b)(3), by failing to

provide Mr. Merck with a copy of the credit report on which it relied in rejecting his

employment application. The matter is now before the Court on Mr. Merck’s

Unopposed Motion for Reconsideration (ECF No. 95) and Walmart’s Unopposed

Motion to File Document Under Seal (ECF No. 96). Mr. Merck’s Motion for Class

Certification (ECF No. 67) and Walmart’s Motion for Summary Judgment (ECF No.

75) are also pending.

For the reasons set forth below, Mr. Merck’s Motion for Reconsideration is

GRANTED; Walmart’s Motion to File Document Under Seal is GRANTED in part

and DENIED in part; and the Motions for Class Certification and Summary

Judgment are DENIED without prejudice to refiling in compliance with this

Opinion and Order within seven days of the date hereof.

I. PROCEDURAL HISTORY

A. The Court adopted the parties’ proposed Protective Order in

October 2020.

Mr. Merck first filed this action more than two years ago. (See ECF No. 1.) In

October of 2020, the parties proposed, and this Court adopted, a Stipulated

Protective Order. (Protective Order, ECF No. 29.) The Protective Order permits the

parties to designate “any documents, testimony, written responses, or other

materials produced in this case” as Confidential or Attorneys’ Eyes Only. (Id.,

PAGEID # 190–91.) Material may be designated as Confidential if:

the Producing Entity asserts in good faith [that it] is protected from

disclosure by statute or common law, including, but not limited to,

confidential personal information, medical or psychiatric information,

trade secrets, personnel records, or such other sensitive commercial

information that is not publicly available.

(Id.) Material may be designated as Attorneys’ Eyes Only if it satisfies the above

test and:

the Producing Entity also asserts in good faith that the information is

so competitively sensitive that the receipt of the information by parties

to the litigation could result in competitive or personal harm to the

Producing Entity.

(Id.)

Although a Confidential- or Attorneys’ Eyes Only-designation subjects the

material to the terms of the Protective Order, it does not constitute “a judicial

determination” that the material is “subject to protection under Rule 26(c) of the

Federal Rules of Civil Procedures or otherwise[.]” (Id., PAGEID # 201.) Accordingly,

the parties must seek leave of court to file under seal any materials they believe are

not appropriate for the public docket. (See id., PAGEID # 196.) See also S.D. Ohio

Civ. R. 5.2.1(a) “Unless permitted by statute, parties may not file documents under

seal without obtaining leave of Court upon motion and for good cause shown.”).

B. The parties filed heavily redacted briefing in support of their

motions, without first moving for leave to file documents under

seal.

In Spring of 2022, Mr. Merck filed a Motion for Class Certification (ECF No.

67) and Walmart filed a Motion for Summary Judgment (ECF No. 75). But seven of

the thirteen total exhibits supporting those motions were withheld from the docket.

“Placeholders” were filed instead:

EXHIBIT 1 PLACEHOLDER

DOCUMENT DESIGNATED CONFIDENTIAL BY DEFENDANT

PURSUANT TO ECF NO. 29

Transcript and Exhibits from September 24, 2021 Deposition of Natalie Bartlett

(to be filed under seal, pending Court order on forthcoming Motion to Seal to be filed by

Walmart Inc.)

(ECF No. 67-2.) The briefs are similarly opaque, redacted to a degree more suited

for national security secrets than the hiring practices of the country’s largest

private employer. Take the following example:

Because Walmart was taking “adverse action based in whole or in part™

on a consumer report, it had an obligation under the FCRA to provide Plaintiff “a copy of the

report” on which it was going to base its decision. 15 U.S.C. § 1681b(b)(3)(A) (emphasis added).

This was not an action that merely ran “a nsk of violating the law;” rather, it is an action that

objectively violated the law and there is clear evidence to support it:

, i

ee

Se

(ECF No. 83, PAGEID # 1081.) Clear evidence, indeed.

The parties filed their motions to seal the information redacted and withheld

only after the Motion for Class Certification and Motion for Summary Judgment

were fully briefed. (ECF Nos. 88, 90.)

C. The Magistrate Judge denied Walmart’s Motion to File Under

Seal and granted in part and denied in part Mr. Merck’s.

On October 3, 2022, Magistrate Judge Deavers issued an Opinion and Order

on the motions to seal. (Oct. 3 Opinion & Order, ECF No. 93.) Her Honor concluded

that Mr. Merck could file certain personal details under seal—including his health

information and unrelated criminal history—but could not seal the settlement

agreement he entered into with Sterling Infosystems, Inc. (Id., 4–6.) As to Walmart,

the Magistrate Judge found that, “in many significant ways, [its] motion falls short

of meeting the standards in this Circuit for sealing court documents.” (Id., 9.) In

particular, she noted that “Walmart appears to blur the distinction between

information deemed confidential under the terms of the [P]rotective [O]rder and

truly proprietary information.” (Id., 7 (citing Wiggins v. Bank of Am., N.A., No. 2:19-

cv-3223, 2020 WL 5891565, at *1 (S.D. Ohio Oct. 5, 2020) (Jolson, M.J.)).) And, in

doing so, Walmart failed to carry its heavy burden, as articulated by the Sixth

Circuit. (Id. (citing Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d

299, 305 (6th Cir. 2016) (requiring a movant to “analyze in detail, document by

document, the propriety of secrecy, providing reasons and legal citations”)).)

Magistrate Judge Deavers denied the motion without prejudice to refiling a

properly supported successor.

The matter is now before the Court on motions made in response to the

October 3 Opinion and Order.

II. LEGAL STANDARD

Magistrate Judge Deavers summarized the standard for analyzing a motion

for leave to file documents under seal:

It is well established that “[e]very court has supervisory power over its

own records and files.” Nixon v. Warner Commc’ns, 435 U.S. 589, 598

(1978). A court’s discretion to seal records from public inspection,

however, is limited by “the presumptive right of the public to inspect

and copy judicial documents and files[,]” which the United States

Court of Appeals for the Sixth Circuit has described as a “long-

established legal tradition.” In re Knoxville News Sentinel Co., Inc., 723

F.2d 470, 473–74 (6th Cir. 1983); see also Brown & Williamson Tobacco

Corp. v. FTC, 710 F.2d 1165, 1178–80 (6th Cir. 1983) (discussing the

justifications for the “strong presumption in favor of openness”).

Therefore, “[o]nly the most compelling reasons can justify non-

disclosure of judicial records.” [Shane Grp., Inc., 825 F.3d at 305]

(internal quotation marks and citation omitted). The Sixth Circuit has

indicated that exceptions fall into two categories: (1) exceptions “based

on the need to keep order and dignity in the courtroom”; and

(2) “content-based exemptions,” which “include certain privacy rights of

participants or third parties, trade secrets, and national security.”

Brown & Williamson Tobacco Corp., 710 F.2d at 1179 (citations

omitted).

In addition, the Sixth Circuit has recently emphasized the public’s

“strong interest in obtaining the information contained in the Court

record.” Shane Grp., Inc., 825 F.3d at 305 (internal quotation marks

and citation omitted); see also In re Nat’l Prescription Opiate Litig., 927

F.3d 919, 939 (6th Cir. 2019) (“‘[T]he greater the public interest in the

litigation’s subject matter, the greater the showing necessary to

overcome the presumption of access.’”) (quoting Shane Grp., Inc., 825

F.3d at 305). Accordingly, district courts must consider “each pleading

[to be] filed under seal or with redactions and to make a specific

determination as to the necessity of nondisclosure in each instance”

and must “bear in mind that the party seeking to file under seal must

provide a ‘compelling reason’ to do so and demonstrate that the seal is

‘narrowly tailored to serve that reason.’” In re Nat’l Prescription Opiate

Litig., 927 F.3d at 940 (quoting Shane Grp., Inc., 825 F.3d at 305). If a

district court “permits a pleading to be filed under seal or with

redactions, it shall be incumbent upon the court to adequately explain

‘why the interests in support of nondisclosure are compelling, why the

interests supporting access are less so, and why the seal itself is no

broader than necessary.’” Id. (quoting Shane Grp., Inc., 825 F.3d at

306).

(Oct. 3 Opinion & Order, 2–4.)

III. ANALYSIS

A. Mr. Merck’s Motion for Reconsideration

Mr. Merck now seeks leave to file the full Sterling Settlement Agreement

under seal, and a redacted version on the public docket “with the only redaction

being of the settlement amount.” (ECF No. 95, 1.) Mr. Merck contends that this

“alternative proposal” appropriately balances the public interest in disclosure with

his and Sterling’s private interest in confidentiality by “protect[ing] that piece of

information . . . that is most private[.]” (Id., 2.) The Court agrees. “[S]ettlement

amounts can be—and often are—sealed.” In re Black Diamond Mining Co., LLC,

No. 15-96-ART, 2016 WL 4433356, at *3 (E.D. Ky. Aug. 18, 2016) (Thapar, J.). That

is particularly true where, as here, the settlement agreement involves a non-party

to the litigation. Id.

Mr. Merck’s Motion (ECF No. 95) is GRANTED.

B. Walmart’s Motion to Seal

Walmart also moves in response to the October 3 Opinion and Order. (ECF

No. 96.) Through its motion, Walmart seeks leave to file only the cited portions of

depositions as exhibits, and renews its request to seal certain deposition testimony

and documents related to the parties’ briefing.

1. Walmart may file excerpted deposition transcripts.

This Court generally requires a litigant to file the entirety of any deposition

that is cited to or relied upon in a motion or briefing. Hon. Sarah D. Morrison

Standing Order re: Filings and Decorum, ¶ 8 (available online at

https://www.ohsd.uscourts.gov/standingordersJMorrison). Walmart seeks relief

from this requirement. (ECF No. 96, 3.) Instead, it proposes to file only the cited

deposition testimony, because the “uncited testimony contains confidential

information[.]” (Id., 4.) Mr. Merck does not object to Walmart’s request.

The standing order on filing deposition transcripts is intended to mitigate the

risk of parties misrepresenting testimony. It is a protective measure that ensures

the Court has the context necessary to make an informed ruling. But if the parties

do not want the benefit of that protection, the Court will not force it. Walmart’s

Motion is GRANTED to the extent it seeks to file only those portions of the

deposition testimony cited in the briefing.

2. Walmart fails to properly support its renewed request to

file “confidential” materials under seal.

Walmart next renews its motion to file under seal certain deposition

testimony and documents that contain “personally identifiable information” and

“confidential and proprietary business information.” (Id., 5.)

a) Personally identifiable information

Given the nature of Mr. Merck’s claims, the information in his background

report appears throughout relevant evidence. Walmart’s motion is GRANTED to

the extent it seeks to redact information described in Rule 5.2(a) as to Mr. Merck

and any putative class members. Fed. R. Civ. P. 5.2(a). For the avoidance of doubt,

Walmart is granted leave to redact only the first five digits of Mr. Merck’s Social

Security Number and the date and month of his birth from Exhibits 3, 4, and 24.

b) Confidential and proprietary business information

After Walmart’s first motion to seal confidential and proprietary business

information, the Magistrate Judge observed:

Certainly, as Walmart contends, courts grant motions to seal in order

to protect a company’s proprietary information. See, e.g., Whitestone

Grp., Inc. v. Excalibur Assocs., Inc., No. 2:22-CV-551, 2022 WL 985665,

at *2 (S.D. Ohio Apr. 1, 2022). Indeed, “[t]his Court has repeatedly

‘recognized that protecting confidential information that would

otherwise allow competitors an inside look at a company’s business

strategies is a compelling reason to restrict public access to filings.’”

Total Quality Logistics, LLC v. Riffe, No. 1:19-CV-23, 2020 WL

5849408, at *2 (S.D. Ohio Sept. 30, 2020) (quoting Ethicon Endo-

Surgery, Inc. v. Covidien, Inc., No. 1:11-CV-871, 2017 WL 4168290, at

*2 (S.D. Ohio Sept. 20, 2017)).

. . . Walmart appears to blur the distinction between information

deemed confidential under the terms of the [P]rotective [O]rder and

truly proprietary information. This distinction is important because

the Sixth Circuit recognizes “a ‘stark difference’ between court orders

which preserve the secrecy of proprietary information while parties

trade discovery and orders which seal the court’s record.” Wiggins v.

Bank of Am., N.A., No. 2:19-CV-3223, 2020 WL 5891565, at *1 (S.D.

Ohio Oct. 5, 2020) (quoting Borum v. Smith, No. 4:17-CV-17, 2017 WL

2588433, at *1 (W.D. Ky. June 14, 2017)).

Thus, Walmart’s request to seal is insufficient to the extent it relies on

the parties’ confidentiality agreement. See Shane Grp., Inc., 825 F.3d

at 305 (“The proponent of sealing therefore must ‘analyze in detail,

document by document, the propriety of secrecy, providing reasons and

legal citations.’”). . . . [R]egardless of the parties’ agreement during

discovery or otherwise, the Court has an independent obligation to

explain the basis for sealing court records. United States ex rel. Scott v.

Humana Inc., No. 318CV00061GNSCHL, 2021 WL 4449277, at *9

(W.D. Ky. Sept. 28, 2021) (citing Shane Grp., Inc., 825 F.3d at 306).

Further, to the extent that Walmart truly considers particular

information proprietary, it fails to explain how disclosure would give a

significant advantage to its competitors or result in any other “clearly

defined and serious injury.” Shane Grp., Inc., 825 F.3d 15 307.

Walmart instead offers declarative and conclusory assertions,

apparently expecting the Court to take its word, rather than provide

the Court with meaningful explanation or other information necessary

to make an independent determination. The Court, despite having

completed an in camera review, is not inclined to guess based on

Walmart’s deficient effort. “A party cannot expect to reap the benefits

of an overbroad request by placing the onus on the Court to determine

on a ‘line-by-line basis—that specific information in the court record

meets the demanding requirements for a seal.’” Humana Inc., 2021 WL

4449277, at *9 (quoting Rudd Equip. Co., Inc. v. Volvo Constr. Equip.

N. Am., LLC, No. 3:19-CV-778-DJH-CHL, 2020 WL 6946577, at *4

(W.D. Ky. Nov. 25, 2020) (quoting Shane Grp., Inc., 825 F.3d at 305)).

Moreover, much of the information Walmart seeks to seal appears to

have been revealed already either by the very nature of Plaintiff’s

claim and its supporting factual allegations or by discussions in the

parties’ briefing. . . . These observations should not be construed as an

exhaustive list but are intended to highlight that, in many significant

ways, Walmart’s current motion falls short of meeting the standards in

this Circuit for sealing court documents. This is especially so because,

given Walmart’s status as one of the country’s largest employers, the

public may well have a strong interest in access to the information

contained in the court record of this putative class action.

(Oct. 3 Opinion & Order, 7–9.) The Magistrate Judge denied the motion without

prejudice, giving Walmart fourteen days to refile a properly supported motion. (Id.,

9.)

But Walmart’s second take is as deficient as the first. It could have used the

Magistrate Judge’s observations to improve the motion, thereby improving its

chances at success. Instead, Walmart “apologize[d to the Court] for any confusion”

its first motion may have caused (ECF No. 96, 1, 5); “narrowed its confidentiality

designations” (id., 8); and offered two brief sentences purporting to justify why vast

swaths of information should be shielded from public view (id., 6–7). The additions

are declarative and conclusory in a familiar way, and altogether fail to remedy the

deficiencies identified by the Magistrate Judge. (Compare ECF No. 90 with ECF No.

96.) There is no explanation of why the material is properly considered confidential

or proprietary, and there is no explanation of why its disclosure would be harmful.

Cf. Shane Grp., Inc., 825 F.3d at 307–08 (“[I]n delineating the injury to be

prevented, specificity is essential.”). The Court is in no better position to fulfill its

independent obligation to explain why the subject materials deserve secrecy than it

was at the outset.1 As the Magistrate Judge explained—without mistake or

confusion—Walmart’s ipse dixit does not make it so.

Accordingly, the balance of Walmart’s Motion is DENIED.

C. Other Pending Motions

In view of the foregoing, the Motion for Class Certification and Motion for

Summary Judgment are DENIED without prejudice to refiling, in a form that

comports with this Opinion and Order, within seven days of the date hereof.

IV. CONCLUSION

Mr. Merck’s Motion for Reconsideration (ECF No. 95) is GRANTED. He may

file the full settlement agreement under seal, and a redacted version on the public

docket.

Walmart’s Motion to File Under Seal (ECF No. 96) is GRANTED to the

extent it seeks an exception to the Court’s standing order requiring full deposition

transcripts be filed, and to the extent it seeks to redact Rule 5.2(a) information. The

balance of the Motion is DENIED.

1 On this record, the Court has reason to doubt whether it could ever permit

Walmart to file these materials under seal under the Shane Grp., Inc. standard. In

the most flagrant example of why, Walmart seeks to seal a chart showing the

reporting structure of its “Associate Vetting Team” as it existed in 2017. Walmart

first argued that the chart contained “[c]onfidential and proprietary information

regarding Walmart’s metrics, internal processes and resource allocation as it relates

to conducting background checks for employment purposes.” (ECF No. 90, 5.) In its

renewed motion, Walmart seems to concede that the chart is not really “confidential

and proprietary,” and instead seeks to redact the names of individuals listed

therein, purportedly to protect the privacy of “non-parties and non-fact witnesses.”

(ECF No. 96, 11.)

Finally, the pending Motion for Class Certification (ECF No. 67) and Motion

for Summary Judgment (ECF No. 75) are DENIED without prejudice to refiling

in compliance with this Opinion and Order within seven days of the date hereof.

IT IS SO ORDERED.

/s/ Sarah D. Morrison

SARAH D. MORRISON

UNITED STATES DISTRICT JUDGE