Brown v. Advantage Engineering, Inc.

FAY, Circuit Judge:

This appeal once again concerns the public’s right of access to judicial records in a civil case. The appellant seeks to review pleadings, motions, and evidence openly submitted in district court that were subsequently sealed pursuant to a court monitored settlement. Because we conclude that the district court abused its discretion in sealing court records without a compelling reason, we VACATE the district court’s protective order sealing the file in this case and REMAND for proceedings consistent with this opinion.

I. BACKGROUND

On July 30, 1986, Antonio Brown suffered severe injuries from scalding oil resulting from an explosion at the Amoco Torlon Products’ (“Torlon”) plant in Atlanta, Georgia. Brown recovered workers’ compensation benefits for his injuries from Torlon. In 1987, Brown brought a personal injury suit against Amoco Chemical Company (“Amoco Chemical”), Torlon’s parent company. At the close of discovery, Amoco Chemical moved for summary judgment on the ground that it was immune from suit under Georgia’s workers’ compensation law because Amoco Chemical was Tor-Ion’s alter-ego at the time Brown was injured.

The district court rejected Amoco Chemical’s alter-ego defense, holding that there remained material issues of fact with respect to the alter-ego issue. 1 Amoco Chemical subsequently reached a settlement with Brown. One of the key negotiated elements of the settlement agreement was a provision that the record would be sealed. Amoco Chemical apparently agreed to settle the case for an amount exceeding any of its previous settlement offers in exchange for Brown’s agreement that the record be sealed. The district court entered an order on July 27, 1990, sealing the record and dismissing the case.

On October 13, 1989, in an unrelated action, Westlands Water District (“West-lands”) sued Amoco Chemical and Amoco Reinforced Plastics Company (“ARPCO”), in the United States District Court for the Eastern District of California. ARPCO, like Torlon, is a subsidiary of Amoco Chemical. The complaint alleged that ARPCO designed, manufactured, and sold defective pipe to Westlands for use in an underground water system. In its suit, West-lands seeks to show that Amoco Chemical is the alter-ego of ARPCO.

After extensive discovery in the California action, Westlands contacted Amoco Chemical directly to obtain copies of Amoco Chemical’s summary judgment motion and other related documents from the Georgia action. Westlands agreed to be bound by the blanket protective order of the United States District Court for the Northern District of Georgia if Amoco Chemical would provide the requested documents. Amoco Chemical refused Westlands’ request. 2 On December 14, 1990, the district court issued an order permitting the destruction of the sealed documents in the absence of any *1015 objection from counsel to preserve the record. (R8:182 at 1). Due to several letters in response from counsel, the record remained intact.

On February 7, 1991, Westlands filed a Federal Rule of Civil Procedure 24(b) motion for permissive intervention in the Georgia action for the purpose of unsealing the record. Westlands explained that the requested documents reportedly contained admissions by Amoco Chemical regarding Torlon that could prove helpful in West-lands’ action against Amoco Chemical and ARPCO in California. Amoco Chemical principally objected on the grounds that no pending action existed in which Westlands could intervene, and that the motion to intervene was untimely because it was filed more than one year after Amoco Chemical’s summary judgment was denied.

The district court denied Westlands’ motion to intervene under Stallworth v. Monsanto Co., 558 F.2d 257 (5th Cir.1977), which set forth four factors for use as guidelines in determining the timeliness of a motion to intervene pursuant to Rule 24(b). 3 Moreover, the district court stated that “[i]f [Westlands] had tried to intervene at the time of the summary judgment order, [Amoco Chemical] could have factored [Westlands’] request into its settlement decision. But because [Westlands] waited until after the court sealed the record, their intervention would deprive [Amoco Chemical] of a crucial benefit of the settlement.” (R8:200 at 8).

Westlands appeals the district court’s denial of its motion to intervene on the ground that the record in the Georgia action should never have been sealed absent a compelling reason, and the district court abused its discretion in finding Westlands’ motion to intervene untimely even if thé record was properly sealed. Amoco Chemical argues that the district court actively participated in the settlement of the dispute memorializing the condition that the record be sealed, and that the district court properly followed Stallworth regarding a motion to intervene.

II. DISCUSSION

We squarely addressed the central issue presented in this case in Wilson v. American Motors Corp., 759 F.2d 1568 (11th Cir.1985). The facts in Wilson are strikingly similar to the case at hand: a plaintiff who had filed a wrongful death action against a jeep manufacturer in California state court requested that the judicial records in a federal district court action in Georgia be unsealed in order to permit the plaintiff to invoke offensive collateral estoppel against the jeep manufacturer in the California action. Id. at 1569 . As here, all pleadings, motions, and evidence were filed with the Clerk of the Court and open to the public. The only distinction of note between Wilson and the instant case is that in Wilson the record was sealed after a jury verdict and here the record was sealed prior to trial, but it is a distinction without a difference.

In Wilson , we took great pains “weighing the competing interests of preserving the district court’s authority in encouraging settlement agreements and the public’s right to access to public trials.” Id. We found that “[t]he starting point in such a discussion is the proposition that, absent some exceptional circumstances, trials are public proceedings.” Id. After discussing the strong common law presumption in favor of access, we applied the following standard:

We do not hold that every hearing, deposition, conference or even trial in a case of this kind must be open to the public. We do hold that “where, as in *1016 the present case, the [court] attempts to deny [ ...] access in order to inhibit the disclosure of sensitive information, it must be shown that the denial is necessitated by a compelling governmental interest, and is narrowly tailored to [...] that interest.” ’

Id., at 1571 (quoting Newman v. Graddick, 696 F.2d 796, 802 (11th Cir.1983) (quoting Globe Newspaper Co. v. Superior Court, 457 U.S. 596, 606-07 , 102 S.Ct. 2613, 2619-20 , 73 L.Ed.2d 248 (1982))) (emphasis added).

It is immaterial whether the sealing of the record is an integral part of a negotiated settlement between the parties, even if the settlement comes with the court’s active encouragement. Once a matter is brought before a court for resolution, it is no longer solely the parties’ case, but also the public’s case. Absent a showing of extraordinary circumstances set forth by the district court in the record consistent with Wilson , the court file must remain accessible to the public.

Thus, because it is the rights of the public, an absent third party, that are at stake, any member of the public has standing to view documents in the court file that have not been sealed in strict accordance with Wilson , and to move the court to unseal the court file in the event the record has been improperly sealed. As we find nothing in the record to support the sealing of the court file, we treat the appellant’s motion to intervene as a motion to unseal the file.

Accordingly, we VACATE the district court’s protective order sealing the record and REMAND for proceedings consistent with Wilson and this opinion.

. For the district court’s opinion denying Amoco Chemical Company's motion for summary judgment, see Brown v. Advantage Engineering, Inc., 732 F.Supp. 1163 (N.D.Ga.1990).

. Had the district court found that Amoco Chemical was the alter-ego of Torlon in the Georgia action, Amoco Chemical would have been immune from suit because of Georgia’s workers’ compensation exclusivity provisions. However, in the California action, an alter-ego relationship would be detrimental to Amoco Chemical as ARPCO is apparently an unfunded subsidiary in terms of paying judgments, exposing Amoco Chemical as the parent company.

. The four factors are: (1) "[t]he length of time during which the would-be intervenor actually knew or reasonably should have known of his interest in the case before he petitioned for leave to intervene”; (2) “[t]he extent of the prejudice that the existing parties to the litigation may suffer as a result of the would-be inter-venor’s failure to apply for intervention as soon as he actually knew or reasonably should have known of his interest in the case"; (3) “[t]he extent of the prejudice that the would-be inter-venor may suffer if his petition for leave to intervene is denied"; and (4) “[t]he existence of unusual circumstances militating either for or against a determination that the application is timely.” Stallworth v. Monsanto Co., 558 F.2d 257, 264-66 (5th Cir.1977).