weighing whether confidentiality was a factor in the parties’ decision to settle in determining whether sealing was proper
How later courts described this case
- weighing whether confidentiality was a factor in the parties’ decision to settle in determining whether sealing was proper
Written by the judges who cited it.
The opinion
Case: 23-50890 Document: 118-1 Page: 1 Date Filed: 04/18/2025
United States Court of Appeals
for the Fifth Circuit
____________ United States Court of Appeals
Fifth Circuit
FILED
No. 23-50890
April 18, 2025
____________
Lyle W. Cayce
8fig, Incorporated, Clerk
Plaintiff,
Newsweek Digital, L.L.C.,
Intervenor—Appellee,
versus
Stepup Funny, L.L.C., doing business as Stepup Funny, doing
business as AA7 Days; Benlong Hall, L.L.C., doing business as
Benlong; Calixo, L.L.C.; Ultimate Glam, L.L.C., doing
business as Glamhiv; Rootstim, L.L.C., doing business as
Overseas Jar; Spectra Hope, Incorporated, doing business as
Stepeak, doing business as Beautieszilla; Tigris Venture,
L.L.C., doing business as Venturelaze; Micro Universe,
L.L.C., doing business as HuanXi; Great Commission
University, Incorporated,
Defendants—Appellants.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:23-CV-943
______________________________
Case: 23-50890 Document: 118-1 Page: 2 Date Filed: 04/18/2025
No. 23-50890
Before Elrod, Chief Judge, and Higginbotham and Southwick,
Circuit Judges.
Patrick E. Higginbotham, Circuit Judge:
Newsweek Digital, LLC (“Newsweek”), a news platform, moved to
intervene and unseal the judicial record. The district court granted the
motion, and the Defendants appealed.
I.
A.
8fig, Incorporated (“8fig”) is a technology company that offers to
purchase a set amount of projected revenue from e-commerce merchants in
exchange for an up-front purchase price. The complaint alleges that 8fig
entered into agreements with the Defendant-Appellants and deposited the
purchase price to each Defendant-Appellant but that 8fig did not receive the
required remittances in accordance with those agreements. Instead, the
Defendant-Appellants transferred the funds to a religious movement, World
Olivet Assembly (the “Assembly”), closed their bank accounts, and went out
of business.
8fig filed this suit under 18 U.S.C. §§ 1964, 1962 and asserted various
state and common law claims. In 2023, the parties filed a Joint Agreed Motion
to Administratively Close and Seal Proceedings. As recounted by Newsweek:
In the Motion to Seal, the litigants represented that “a settlement
agreement is presently in place that will require some time to
complete,” and asked the court to close the case and seal all
documents “so that the parties may make an effort to resolve their
dispute without interference from third-parties.” As support for their
motion, they contended that “[t]he case contains confidential and
proprietary information that could cause harm to the parties named
herein if third-parties disseminate the documents in this case, and the
parties are in agreement that the nature of the allegations and interest
2
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No. 23-50890
from third-party media sources rises to the level to need to seal the
case until further notice.”
The district court granted the Motion to Seal, and the case settled
quickly—before 8fig served any defendant.
B.
One week after the district court granted the Motion to Seal,
Newsweek moved to intervene, urging that the seal “significantly hindered”
its reporting. The district court granted Newsweek’s Motion to Unseal,
finding that Newsweek met the requirements of Federal Rule of Civil
Procedure 24(a) and permitting any party to propose a redacted version of
any docket entry. Certain defendants filed, and the district court granted,
proposed redactions, and the district court denied a motion to extend the
filing deadlines. As of the date of this opinion’s publication, the district court
proceeding has been unsealed for more than one year except for the
documents for which redacted versions were filed.
II.
A.
Federal Rule of Civil Procedure 24 authorizes intervention by right or
by permissive intervention. 1 A putative intervenor without a statutory right
to intervene must: (1) file a timely motion; (2) show that they “claim[] an
interest relating to the property or transaction that is the subject of the
action”; (3) be “so situated that disposing of the action may as a practical
matter impair or impede the movant’s ability to protect its interest”; and (4)
show that “existing parties [do not] adequately represent that interest.” 2 “It
_____________________
1
Fed. R. Civ. P. 24.
2
Fed. R. Civ. P. 24(a).
3
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No. 23-50890
is the movant’s burden to establish the right to intervene, but ‘Rule 24 is to
be liberally construed.’” 3 “Federal courts should allow intervention ‘where
no one would be hurt and the greater justice could be attained.’” 4
To intervene by permissive intervention, a putative intervenor must
show that they are: “(A) given a conditional right to intervene by a federal
statute; or (B) [have] a claim or defense that shares with the main action a
common question of law or fact.” 5 In exercising its discretion to grant or deny
permissive intervention, “the court must consider whether the intervention
will unduly delay or prejudice the adjudication of the original parties’
rights.” 6 The gate of intervention remains closed, however, in a
jurisdictionally or procedurally defective case. 7
B.
We review a district court’s denial of a motion to intervene as of right
de novo and a district court’s denial of permissive intervention for clear abuse
_____________________
3
La Union del Pueblo Entero v. Abbott, 29 F.4th 299, 305 (5th Cir. 2022) (quoting
Brumfield v. Dodd, 749 F.3d 339, 341 (5th Cir. 2014)).
4
Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th Cir. 1994) (quoting McDonald v. E.J.
Lavino Co., 430 F.2d 1065, 1074 (5th Cir. 1970)); see Miller v. Vilsack, No. 21-11271, 2022
WL 851782, at *4 (5th Cir. Mar. 22, 2022) (noting “our broad policy favoring
intervention” and the intervenor's “minimal burden” (internal quotation marks omitted)).
5
Fed. R. Civ. P. 24(b). While the standard for permissive intervention for a
government officer or agency is different, Newsweek is not a government officer or agency.
6
Fed. R. Civ. P. 24(b)(3).
7
Sommers v. Bank of Am., N.A., 835 F.3d 509, 513, n.5 (5th Cir. 2016) (citing
Truvillion v. King's Daughters Hosp., 614 F.2d 520, 526 (5th Cir. 1980)).
4
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No. 23-50890
of discretion. 8 As the district court’s order granted Newsweek’s intervention
by right, we review it de novo. 9
Appellants argue that there are four procedural and jurisdictional
defects: (i) Appellants were never served with the complaint; (ii) the district
court lacks personal jurisdiction over the Appellants; (iii) the court lacks
subject-matter jurisdiction over the case; and (iv) Newsweek lacks standing
to intervene. We take each in turn.
C.
Federal Rule of Civil Procedure 4 requires that “[i]n General,” “[a]
summons must be served with a copy of the complaint.” 10 Appellants allege
that 8fig’s failure to serve them was a procedural defect and rightly note that
actual notice of insufficient service alone is insufficient to satisfy Rule 4.11
The rub is that Appellants were sufficiently active in the case to obviate
service. 12 They appeared, allowed their attorneys to negotiate a settlement,
_____________________
8
OOGC Am., L.L.C. v. Chesapeake Expl., L.L.C., 975 F.3d 449, 453 (5th Cir. 2020)
(citations omitted).
9
The timeliness requirement of intervention as of right is typically reviewed for
abuse of discretion, but it is reviewed de novo where the district court failed to make any
findings regarding its timeliness conclusion. Ford v. City of Huntsville, 248 F.3d 1139, 2001
WL 85866, at *2 (5th Cir. 2001) (unpublished table decision). The timeliness requirement,
however, is not at issue in this case.
10
FED. R. CIV. P. 4(c).
11
Ayika v. Sutton, 378 F. App'x 432, 434 (5th Cir. 2010) (“We further note that,
although the defendants apparently had actual notice of the insufficient service, the
‘defendant's actual notice of the litigation . . . is insufficient to satisfy Rule 4's
requirements.’”) (quoting Way v. Mueller Brass Co., 840 F.2d 303, 306 (5th Cir. 1988)).
12
See Trust Co. of Louisiana v. N.N.P. Inc., 104 F.3d 1478 (5th Cir. 1997) (holding
that participation in trial and failure to raise the issue of sufficiency of service at trial
constituted waiver).
5
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No. 23-50890
filed status reports, and invoked the authority of the district court to seal the
proceedings. In short, the court did not err.
D.
Appellants argue that, in any event, 8fig “never successfully asserted
that the court has the specific or general personal jurisdiction over the
defendants that is necessary to ensure the suit is free of vice” and that the
court lacks personal jurisdiction because 8fig cited no case where an e-
commerce platform was subject to specific or general jurisdiction in a state
where a customer bought the goods through the sales platform. 13
This slips past the basic principle that objections to personal
jurisdiction may be waived through general appearance when a party makes
“some presentation or submission to the court.” 14 This can arise:
from a defendant’s seeking, taking, or agreeing to some step or
proceeding in the cause beneficial to himself or detrimental to plaintiff
other than one contesting only the jurisdiction or by reason of some
act or proceedings recognizing the case as in court. 15
That is, an action such as filing an application for admission pro hac
vice, filing for a motion for an extension of time, or a joint notice of appearance
are not a general appearance as they do not evince the “seeking, taking, or
_____________________
13
See Quick Techs v. Sage Group PLC., 313 F.3d 338, 343 (5th Cir. 2002).
14
Tango Marine S.A. v. Elephant Grp. Ltd., 19 F.4th 808, 813 (5th Cir. 2021) (citing
Cactus Pipe & Supply Co. v. M/V Montmartre, 756 F.2d 1103, 1108 (5th Cir. 1985)). Note
that the panel in Tango Marine “specifically withdr[ew] its interpretation of Great Prize,
S.A. v. Mariner Shipping Party, Ltd., 967 F.2d 157, 159 (5th Cir. 1992),” but that action did
not impact the reasoning of the prior opinion. Tango Marine S.A. v. Elephant Grp. Ltd., 28
F.4th 600, 601 (5th Cir. 2022).
15
Tango Marine S.A., 19 F.4th at 813 (citing Cactus Pipe & Supply Co., 756 F.2d at
1108).
6
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No. 23-50890
agreeing to some step or proceeding in the cause,” a prerequisite to a general
appearance. 16
Appellants here took the steps of a general appearance by filing status
reports and moving to seal the proceeding, waiving their right to assert a want
of personal jurisdiction. 17 The district court had personal jurisdiction.
E.
Appellants allege that Newsweek lacks standing to intervene because
it has not shown an injury in fact fairly traceable to a challenged act and that
is likely to be redressed by the requested remedy.
It is a given that Newsweek must have standing to intervene in this
proceeding. “An intervenor of right must have Article III standing in order
to pursue relief that is different from that which is sought by a party with
standing.” 18 “To establish standing, [a] news agency must show an injury in
fact that is fairly traceable to the challenged act and that is likely to be
redressed by the requested remedy.” 19
_____________________
16
Id. (quoting Cactus Pipe & Supply Co., 756 F.2d at 1108).
17
Appellee argues that Fifth Circuit precedent in Broadcast Music, Inc. stands for
the proposition that a party waived their right to assert a lack of personal jurisdiction when
that party allowed their attorney to negotiate a settlement. See Broad. Music, Inc. v. M.T.S.
Enterprises, Inc., 811 F.2d 278 (5th Cir. 1987). But negotiating settlement was only one
action that the attorney in Broadcast Music, Inc. took among many others. That attorney’s
office also accepted service of deposition subpoenas, and the attorney attended a pretrial
conference, moved to withdraw from representation in the case, and was served a motion
for continuance due to the addition of another defendant. Broad. Music, Inc., 811 F.2d at
280. Moreover, that attorney was served with a motion and notice of hearing on an
impending default judgment. Id. We decline to hold that negotiating a settlement alone
waives a party’s right to assert a lack of personal jurisdiction.
18
Town of Chesterv. Laroe Estates, Inc., 581 U.S. 433, 440 (2017).
19
Davis v. E. Baton Rouge Par. Sch. Bd., 78 F.3d 920, 926 (5th Cir. 1996).
7
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And “[a]lleged violations of the public right to access judicial records
and proceedings and to gather news are cognizable injuries-in-fact sufficient
to establish standing,” such as a gag order frustrating a journalist’s right to
gather news. 20 Indeed, a news organization had standing to intervene when a
court order directed individuals to “refrain from making written or oral
comments about any aspects of any drafts of [a] proposed desegregation
plan” because “[t]he district court’s orders impede the news agencies’
abilities to gather the news and to receive protected speech, abilities which
are arguably protected by the First Amendment.” 21
This court has recognized that other federal circuits “have held that
news agencies have standing to challenge confidentiality orders in an effort
to obtain information or access to judicial proceedings, although they are
neither parties to the litigation nor restrained directly by the orders.” 22 And
we have also found standing to intervene when a putative intervenor was
“deprived of information that he [was] uniquely well-qualified to study and
publicize in his academic work, and which information he can get nowhere
else.” 23
While Newsweek has not been subject to a gag order in this
proceeding, it nonetheless has standing to seek intervention. It is true that
the district court’s order to seal was filed at the request of the parties to
facilitate their settlement and once settlement was reached, 24 the order to
_____________________
20
U.S. ex rel. Hernandez v. Team Fin., L.L.C., 80 F.4th 571, 577 (5th Cir. 2023).
21
Davis, 78 F.3d at 926-27.
22
Id. at 926.
23
U. S. ex rel. Hernandez, 80 F.4th at 577.
24
8fig and the Defendants had complied with the terms of a settlement agreement
by November 14, 2023.
8
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No. 23-50890
seal had run its course. But that did not diminish Newsweek’s right to gather
the news.
III. The District Court’s Discretion to Unseal Judicial Records.
A.
“The public has a common law right of access to judicial records.” 25
“Public access serves important interests in transparency and the
‘trustworthiness of the judicial process’” 26 and is a “fundamental element
of the rule of law.” 27 There is a presumption in favor of access to judicial
records and “sealing judicial records is . . . heavily disfavored.” 28
A court may seal a judicial record only on a case-by-case, document-
by-document, line-by-line basis 29 and must balance “the public’s common
law right of access against the interests favoring nondisclosure.” 30 The
weight of the public’s right to access information is even greater when the
case involves matters of public interest. 31 But the presumption in favor of
access to judicial records has not been assigned any particular weight or
_____________________
25
Sealed Appellant v. Sealed Appellee, No. 22-50707, 2024 WL 980494, at *2 (5th
Cir. Mar. 7, 2024) (citing Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597–98 (1978)).
26
Sealed Appellant, 2024 WL 980494, at *2.
27
June Med. Servs., L.L.C. v. Phillips, 22 F.4th 512, 519 (5th Cir. 2022) (internal
quotation marks omitted).
28
Sealed Appellant, 2024 WL 980494, at *2 (cleaned up) (citing June Med. Servs.,
L.L.C., 22 F.4th at 519); see also Bradley on behalf of AJW v. Ackal, 954 F.3d 216, 225 (5th
Cir. 2020).
29
Sealed Appellant, 2024 WL 980494, at *2 (citing Binh Hoa Le v. Exeter Fin. Corp.,
990 F.3d 410, 419 (5th Cir. 2021)).
30
Binh Hoa Le, 990 F.3d at 419.
31
Bradley on behalf of AJW, 954 F.3d at 233.
9
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assigned a burden of proof to a party arguing that a judicial record should or
should not be sealed. 32
And finally, this presumption signifies that while the United States
Supreme Court has cautioned that inspection of court records may not be
used “to gratify private spite or promote public scandal” or to “serve as
reservoirs of libelous statements for press consumption,” 33 a record may not
be sealed “merely because it could lead to a litigant’s embarrassment.” 34
B.
Mindful of these concerns, this court reviews a district court’s ruling
on a motion to unseal for an abuse of discretion. 35 “A district court abuses its
discretion if it: (1) relies on clearly erroneous factual findings; (2) relies on
erroneous conclusions of law; or (3) misapplies the law to the facts.” 36 A
federal district court abuses its discretion in sealing or unsealing documents
when it “fails to identify and apply the proper legal standard” and when it
“fails to provide sufficient reasons for its decision to enable appellate
review.” 37 A court also abuses its discretion when it “‘ma[kes] no mention
_____________________
32
Id. at 225.
33
Nixon, 435 U.S. at 598 (quoting In re Caswell, 29 A. 259, 259 (R.I. 1893)).
34
Sealed Appellant, 2024 WL 980494, at *2 (cleaned up) (citing Kamakana v. City
& County of Honolulu, 447 F.3d 1172, 1179 (9th Cir. 2006)).
35
LaBranche v. Dep’t of Def., 720 F. App’x 182, 185 (5th Cir. 2018) (citing N.
Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 203 (5th Cir. 2015)
(collecting cases)).
36
Allen v. C&H Distribs., L.L.C., 813 F.3d 566, 572 (5th Cir. 2015) (quoting
McClure v. Ashcroft, 335 F.3d 404, 408 (5th Cir. 2003)).
37
June Med. Servs., L.L.C., 22 F.4th at 519.
10
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of the presumption in favor of the public's access to judicial records’ and fails
to ‘articulate any reasons that would support sealing.’” 38
C.
Appellants argue that the district court’s grant of Newsweek’s motion
to unseal should be reversed for two reasons: (i) because of “deeply valued
legal principles, including the freedom to contract, privacy, and
confidentiality,” which lead the Appellants to believe that the alleged
existence of a settlement agreement and an arbitration agreement requires
the court to seal the case; and (ii) because “the district court failed to factor
the spiteful, improper actions of the media, which harmed and continue to
harm the defendants.”
D.
Appellants also argue that they have a privacy interest that weighs
against the public interest in unsealing the record, but they did not
convincingly explain what their privacy interest is or how this court should
weigh that interest, and we can find no abuse of discretion by the district
court in failing to properly weigh any privacy interest.
E.
Appellants claim that Newsweek Chief Executive Officer Dev
Pragad’s “spite should have been weighed against the right [of the public] to
access [the judicial records]” because Pragad “promised to drop a nuclear
bomb on his personal enemies—and carried out his vowed vendetta” by
publishing negative and defamatory articles about the Appellants. Appellants
highlight the United States Supreme Court’s opinion in Nixon v. Warner
_____________________
38
Binh Hoa, 990 F.3d at 419 (quoting S.E.C. v. Van Waeyenberghe, 990 F.2d 845,
848 (5th Cir. 1993)).
11
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No. 23-50890
Communications, Inc., which recognizes that courts have refused to unseal
judicial records merely to gratify private spite or promote public scandal or
to be used for libelous statements for press consumption. 39
The Supreme Court in Nixon did not hold that courts should refuse to
unseal records when a news organization seeks to use those records to shed
light on a public scandal or for non-libelous statements. It rather noted that
courts have refused to do so when a party seeking to unseal a case has been
motivated by something like promoting public scandal or libel.
Regardless, it is far from clear that Newsweek was motivated by a
desire to promote public scandal or libel. Pragad’s personal desires aside, the
newsworthiness of the case itself remains: executives pleaded guilty to
participating in a scheme to defraud, Olivet University graduate JianGang
Lan has been arrested for being part of an e-commerce money laundering
scheme with ties to “Olivet Entities,” and 8fig has accused e-commerce
platforms associated with World Olivet Assembly of fraud. These cases are
newsworthy at least in part because of how they impact members of the
Assembly itself, entities that contract with the Assembly, and others. They
are also newsworthy given the public’s interest in ensuring that courts
administer justice for any wronged party.
Newsworthiness here is lighted by articles from other news
organizations—including The New York Times, the New York Post,
Christianity Today, and Mercury News—that have reported on legal
proceedings involving entities associated with the Assembly. A naked
allegation that Newsweek was motivated solely or primarily by an improper
purpose, like spite or desire to promote public scandal, as opposed to its First
Amendment protected right to report on a newsworthy case does not support
_____________________
39
See Nixon, 435 U.S. at 598.
12
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No. 23-50890
a finding that the district court abused its discretion in granting the Motion
to Unseal.
Appellants also argue that “Pragad’s Spite should have been weighed
against the right to access” based primarily on three Fifth Circuit opinions:
June Medical Services, L.L.C. v. Phillips, Binh Hoa Le v. Exeter Finance Corp.,
and Bradley v. Ackal. 40
Appellants highlight June’s restatement of precedent from Binh Hoa
that “[t]o decide whether something should be sealed, the court must
undertake a document-by-document, line-by-line balancing of the public's
common law right of access against the interests favoring nondisclosure.” 41
The Court in Binh Hoa explained in its discussion of the “line-by-line”
requirement that:
Sealings must be explained at “a level of detail that will allow for this
Court's review.” And a court abuses its discretion if it “ma[kes] no
mention of the presumption in favor of the public's access to judicial
records” and fails to “articulate any reasons that would support
sealing.” 42
Appellants correctly note that nothing in the record indicates that the district
court undertook the required line-by-line balancing analysis. But a line-by-
line balancing analysis to determine that a document should be unsealed is a
different matter. We require such analysis only when a district court is
determining whether to seal a document for good reason: there is a
presumption that a case should remain unsealed. The line-by-line
requirement ensures that district courts do not seal a case without thorough
_____________________
40
See June Med. Servs., L.L.C., 22 F.4th 512; Binh Hoa, 990 F.3d 410; Bradley, 954
F.3d 216.
41
June Med. Servs., L.L.C., 22 F.4th at 521 (cleaned up).
42
Binh Hoa, 990 F.3d at 419 (citation omitted).
13
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No. 23-50890
analysis—this, a vindication of First Amendment guarantees. But that
exercise is not essential when the question is whether to unseal a document.
Next, Appellants cite to our opinion in Bradley, which implied that if
keeping settlement terms confidential was a factor in the parties’ decision to
settle, this should weigh in favor of sealing the settlement. 43 But here,
Appellants have cited to no evidence that keeping the settlement terms
confidential was a factor in the parties’ decision to settle. Its purpose was to
facilitate the settlement negotiations. And even if the Appellants had
provided such evidence, that would only weigh in favor of keeping the terms
of settlement sealed, not the entire judicial record.
Neither Nixon nor Fifth Circuit precedent allow this court to find that
the district court abused its discretion in unsealing the instant proceeding.
Indeed, the able district court here preserved a cherished constitutionally
protected freedom—the First Amendment.
IV.
The district court’s order granting Newsweek’s motion to intervene
and motion to unseal the proceeding is AFFIRMED.
_____________________
43
Bradley, 954 F.3d at 228.
14