Opinion
02 Civ. 4791 (HB).
August 1, 2002.
OPINION AND ORDER
I. INTRODUCTION
Plaintiff Virginia Gambale brought suit against defendants Deutsche Bank AG and Bankers Trust Company for violations of New York State Human Rights Law, Executive Law § 296 et seq. and the Administrative Code of the City of New York § 8-107 et seq. Gambale alleged that defendants discriminated against her on the basis of gender by failing to promote her on a series of occasions and retaliated against her by revoking her quarterly compensation payments after she filed her lawsuit. Defendants brought a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure ("FRCP") to dismiss the complaint in its entirety and oral argument was heard on May 6, 2003. Except for a claim in regard to one of the promotions, the Court, in large part, denied defendants' motion for summary judgment. The jury trial for this action was scheduled to commence on May 27, 2003. On the eve of trial, the parties agreed to a multi-million dollar settlement. The parties appeared before the Court on the day of trial, and sought to have the Court retain jurisdiction over the settlement for the purpose of appointing a special master if a dispute arose in regard to payments to plaintiff. In addition, the parties sought to have the stipulation of settlement sealed in the Court records.
The Court directed the parties to submit letter briefs in support of their request to preserve the confidentiality of the stipulation of settlement. After further consideration, the parties decided against filing the settlement with the Court and withdrew their request for the Court to retain jurisdiction. The parties chose instead to file, on June 11, 2003, a stipulation of discontinuance, pursuant to FRCP 41(a)(1)(ii).
On June 13, 2003, this Court issued an Order ("June 13 Order") directing defendants, pursuant to the stipulation entered and ordered by Magistrate Judge Eaton, to whom general pretrial case management was referred, to move on or before June 23, 2003 to have certain documents, which are now under temporary seal, permanently sealed. See Mar. 17, 2003 Stip. and Order Pertaining to the Filing of Documents Under Seal ("Temporary Stipulation Order"). In addition, this Court directed plaintiff in the June 13 Order to submit her opposition, if any, to having the records at issue remain under seal. Neither plaintiff nor defendants filed any brief on the merits of whether to keep the records sealed. Rather, defendants submitted a letter brief on June 20, 2003 contending that the stipulation of discontinuance terminated this Court's "jurisdiction" to render any further order or decision in this case, including whether to remove the interim seal on the records at issue here.
In the Temporary Stipulation Order, plaintiff agreed and the Magistrate Judge ordered that she place certain original documents, submitted in support of her opposition to defendants' motion for summary judgment, under seal and substitute in their place in the open record "a one-page document stating that `the original documents have been temporarily filed under seal until such time as [this Court] rules on Defendants' request that these items be placed permanently under seal'." (emphasis added).
II. DISCUSSION
It is beyond dispute that "[e]very court has supervisory power over its own records and files." Nixon v. Warner Communications, 435 U.S. 589, 598 (1978). Once a document has been filed in this Court, which the Court relies on in the exercise of its Article III judicial power, it becomes a part of the judicial record, and thus subject to the Court's sound discretion to accord access to such records. United States v. Amodeo, 44 F.3d 141, 145-46 (2d Cir. 1995) (" Amodeo I") ("the item filed must be relevant to the performance of the judicial function and useful in the judicial process in order for it to be designated a judicial document."); In re "Agent Orange" Prod. Liability Litig., 821 F.2d 139, 147 (2d Cir. 1987). Here, this Court relied on the sealed documents at issue, which were filed in opposition to defendants' motion for summary judgment, as a basis to deny in part defendants' motion for summary judgment.
More specifically, the Compensation Planning Chart for Martin Loat, Raskin Exh. M, suggests that defendants' e-GCI business, to which Daniel Marovitz was promoted to head, did not cease operation as alleged by defendants, see Def. Rule 56.1 Statement at ¶ 108, and that heading the business allowed him to "indirectly influence the direction, strategy, and management of 15,000 people," which Marovitz opined was a role he could use "as a real developmental opportunity." The Court found this to be evidence, inter alia, from which a reasonable juror could conclude that defendants' decision to promote Marovitz, instead of plaintiff, was an adverse employment decision. The compensation history of Martin Loat and Michael Cohrs, see Raskin Exhs. S, V, helped create genuine issues of material fact as to whether plaintiff's opportunity for compensation was materially and adversely affected because of defendants' discriminatory failure to promote her to the position that both Martin and Cohr occupied. See Pl. Rule 56.1 Statement at ¶¶ 252, 263. In regard to the compensation planning chart for Marovitz, Raskin Exh. T, it shows that he is listed as CEO of e-GCI. This evidence appears to belie defendants' claim that they were unaware that plaintiff sought the position given to Marovitz, particularly after she proposed a business model, which would have placed her as the CEO of e-GCI. The Global Diversity study by Deutsche Bank shows that the percentage of women promoted to managing director positions is disturbingly low, Raskin Exh. DD, and well out of proportion to the number of women that make up Deutsche Bank's workforce. In fact, Deutsche Bank admits that in stark contrast to competitors, such as Citigroup, CSFB, Goldman Sachs, Merrill Lynch, Morgan Stanley, and UBS Warburg, "[it has] no women in top management positions." Supplemental Raskin Affid. Exh. B. Further, Deutsche Bank admits that although a sizable percentage of women hold lower level management positions, the incommensurate and exceedingly low number of females at senior management levels suggest a glass ceiling for women. From this evidence, notwithstanding Deutsche Bank's self-serving denials, the Court concluded that plaintiff had demonstrated a genuine issue of material fact as to whether plaintiff, among other women, was discriminatorily denied advancement to senior management levels at Deutsche Bank. These documents are therefore judicial documents that are subject to the right of public access under the Court's supervisory power. See Nixon, 435 U.S. at 1312-13 ("the decision as to access is one best left to the sound discretion of the trial court, a discretion to be exercised in light of the relevant facts and circumstances of the particular case"); Amodeo I, 44 F.3d at 145.
The Supplemental Affidavit in Opposition to Defendants' Motion for Summary Judgment was submitted to the Court, but not filed with the Clerk of the Court. Pursuant to the Temporary Stipulation and Order, plaintiff stated that it was willing to file the document with the accompanying exhibits under temporary seal until this Court ruled on defendants' motion to seal documents. Defendants have not, however, sought to have the Supplemental Affidavit or attached exhibits sealed. Finding no opposition to having this document open to the public at this time, the Court will file the document in its possession with the Clerk of the Court subject to a temporary protective order that will expire July 14, 2003, to permit defendants time to initiate an appeal of this Opinion and Order and obtain a further stay, should they so choose.
The public's right to access of judicial records, while presumed, is not unlimited. FRCP 26(c) authorizes district courts to issue "any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense." The Supreme Court construed this language as conferring "broad discretion on the trial court to decide when a protective order is appropriate and what degree of protection is required." Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984). Neither the stipulations nor orders entered in the instant case, binds this Court's inherent power to grant or deny a party's application for a protective order. Although the parties may stipulate between themselves to keep and preserve the secrecy of these documents, the Court has sole discretionary authority, as custodian of the judicial record, to issue a protective order to limit the public's access to the judicial records. Accordingly, the grant of a protective order is not as of right, as defendants perhaps would like to believe, but rather in the court's discretion.
To obtain a protective order under FRCP 26(c), the moving party has the burden of showing good cause. Dove v. Atlantic Capital Corp., 963 F.2d 15, 18-19 (2d Cir. 1992); In re "Agent Orange ", 821 F.2d at 145. In choosing whether to grant such request, the Court must balance the demonstrated interests of the movant in the secrecy of the information in question against the importance of the material to the adjudication and the public's interest in access to such materials. Nixon, 435 U.S. at 97-99; DiRussa v. Dean Witter Reynolds, Inc., 121 F.3d 818, 826 (2d Cir. 1997); United States v. Amadeo, 71 F.3d 1044, 1053 (2d Cir. 1995) (" Amadeo II"); Joy v. North, 692 F.3d 880, 893 (2d Cir. 1982). As the Second Circuit explained in Amadeo II:
Although courts have a number of internal checks, such as appellate review by multi-judge tribunals, professional and public monitoring is an essential feature of democratic control. Monitoring both provides judges with critical views of their work and deters arbitrary judicial behavior. Without monitoring, moreover, the public could have no confidence in the conscientiousness, reasonableness, or honesty of judicial proceedings. Such monitoring is not possible without access to testimony and documents that are used in the performance of Article III functions.71 F.3d at 1048. For this reason, judicial records are presumed open to the public. The weight of the presumption depends on the value of such information in the exercise of Article III judicial power, which must then be weighed against demonstrated countervailing factors, such as law enforcement concerns, judicial efficiency and the privacy interests of the parties. Id. at 1049-1052.
Although the presumption of access appears to reverse towards non-disclosure if there is a pre-existing sealing order from which "a party clearly and justifiably relied on the [permanence of the] protective order in the production of discovery," Martindell v. International Tel. Tel. Corp., 594 F.2d 291, 295 (2d Cir. 1979); In re "Agent Orange, or where the government is the intervening party because of its broad investigatory powers, see In re NASDAQ Market-Makers Antitrust Litig., 164 F.R.D. 346, 356 (S.D.N.Y. 1996) (citing Palmieri v. New York, 779 F.2d 861, 866 (2d Cir. 1985); Byrnes v. Empire Blue Cross Blue Shield, 2000 WL 60221, at *1 n. 1 (S.D.N.Y. Jan. 25, 2000), neither situation applies here. The magistrate judge in the instant case had clearly indicated in his order that the seal on the documents were temporary, issued as a matter of convenience until this Court could first resolve the summary judgment motion and thereafter determine whether such documents are "judicial records," which presumptively should be publically accessible. Temporary Stipulation Order at ¶¶ 1, 4; see Amadeo I, 44 F.3d at 145-46. Nothing in the magistrate judge's order guarantees the seal would remain should the parties settle. Further, having left the issue of the temporary seal on documents unresolved, the parties can hardly claim that the continuing secrecy of these documents was instrumental in reaching a settlement. See In re "Agent Orange ", 821 F.2d at 144 ("We . . . have difficulty accepting appellants' assertion that maintenance of the protective orders was a sine qua non of the settlement and was central to resolution of the litigation" after receiving notice that the protective order might be lifted or modified later.); cf. Palmieri v. New York, 779 F.2d 861, 862 (2d Cir. 1985) (reversing district court's order to unseal records that would not have existed but for magistrate judge's order assuring confidentiality in such material to the settling parties).
The mere fact that the parties have settled the case does not cause the court's supervisory power to evaporate, as defendants suggest. Indeed, defendants recognize that were a non-party to move to unseal documents in this Court's record, for example, the Court would not be powerless to render a decision to such a request. See Def. June 20, 2003 Letter at 2. It is widely recognized that the district courts retain the inherent power to control access to their records on a case long after it has been resolved or settled. See, e.g., S.E.C. v. TheStreet.Com, 273 F.3d 222 (2d Cir. 2001); United States v. Davis, 702 F.2d 418 (2d Cir. 1983); see also Philips v. General Motors Corp., 307 F.3d 1206 (9th Cir. 2002) (finding no error of the district court, after case settled, in modifying an interim protective order entered by magistrate judge, which was explicitly made subject to further review by the district court to decide whether documents produced should be sealed); Jessup v. Luther, 277 F.3d 926 (7th Cir. 2002) (reversing district court and finding settlement agreement filed with court presumptively open); Brown v. Advantage Eng'g, Inc., 960 F.2d 1013 (11th Cir. 1992) (finding district court abused its discretion in maintaining seal on court record in previous litigation without showing of extraordinary circumstances); S.E.C. v. Van Waeyenberghe, 990 F.2d 845 (5th Cir. 1993) (reversing district court for failing to articulate reasons to support sealing the final order after a settlement had been reached); Rushford v. New Yorker Magazine, 846 F.2d 249 (4th Cir. 1988) (remanding case to have district court determine whether to enforce or modify protective order after third party intervene to have the record unsealed); In re Search Warrant for Secretarial Area Outside Office of Gunn, 855 F.2d 569 (8th Cir. 1988) (upholding district court's decision to maintain protective order after the close of a case); Meyer Goldberg, Inc., of Lorain v. Fisher Foods, Inc., 823 F.2d 159 (6th Cir. 1987) (remanding case for a hearing to have district court decide whether to unseal documents from a settled case and noting that "only compelling reasons justify denial or continued denial of access to" sealed records); Bank of Am. Nat'l Trust and Savs. Ass'n v. Hotel Rittenhouse Assocs., 800 F.2d 339 (3d Cir. 1986) (holding district court abused its discretion in denying motion to unseal documents after case settled); Kalinauskas v. Wong, 151 F.R.D. 363, 365-66 (Nev. 1993) ("despite the freedom to contract [by settlement, for example, a sexual harassment case], the courts must carefully police the circumstances under which litigants seek to protect their interests while concealing legitimate areas of public concern. This concern grows more pressing as additional individuals are harmed by identical or similar action.").
The "inherent power" of the federal courts "extends to the management of judicial business," including control over the access of its judicial records to the public. United States v. Janik, 10 F.3d 470, 472 (7th Cir. 1993); U.S. v. Gold, 1995 WL 307296, at *2 (N.D. Ill. Feb. 15, 1995).
Under the Stipulation and Order Governing the Protection and Exchange of Confidential Material ("Confidentiality Stipulation Order") that the parties entered and which this Court ordered, the parties agreed that if a party sought to preserve the confidentiality of a document filed with the Court, the party "may apply for a protective order from the Court." Confidentiality Stipulation Order at 4, ¶ 7 (emphasis added). Pursuant to the Confidentiality Stipulation Order, defendants moved before Magistrate Judge Eaton to seal the above-identified documents submitted by plaintiff in opposition to defendants' motion for summary judgment. Magistrate Judge Eaton ordered that the records at issue be sealed on an interim basis, "[u]ntil such time as [this Court] rules on Defendants' request that the . . . items be placed permanently under seal." Temporary Stipulation and Order, at 2, ¶ 1. Documents, such as those at issue here for "opposing, summary judgment should not remain under seal," Joy v. North, 692 F.2d 880, 893 (2d Cir. 1982), absent a showing that the presumption of public access is outweighed by countervailing factors. Amadeo II, 71 F.3d at 1050. Although this Court gave defendants ample opportunity to demonstrate that their privacy interests overcame the presumption of access, defendants provided the Court with nothing to meet their burden, perhaps under the erroneous hope that if they did not renew its motion to seal documents, the Court would have no power to sua sponte unseal the records. They are incorrect. See Nixon, 435 U.S. at 597 ("American decisions generally do not condition enforcement of this right [of access] on a proprietary interest in the document or upon a need for it as evidence in a lawsuit."); In re NASDAQ Market-Makers Antitrust Litig., 164 F.R.D. 346, 357 (S.D.N.Y. 1996) ("Defendants are . . . reminded that a showing of good cause may later be required by intervention of a third party, or by the Court sua sponte, with regard to these or any other documents filed [with the Court] under the terms of the Protective Order."); Laurie Kratky, Secrecy by Consent: The Use and Limits of Confidentiality in the Pursuit of Settlement, 74 Notre Dame L. Rev. 283, 355 (1999) ("a court always retains the inherent power to modify or dissolve its protective orders, either sua sponte or on motion of a party or interested nonparty"). Having failed to demonstrate good cause, the "materials in question should not receive judicial protection and therefore [should] be open to the public for inspection." In re "Agent Orange ", 821 F.2d at 145; see also DiRussa, 121 F.3d at 826 ("[t]he burden of demonstrating that a document submitted to a court should be sealed rests on the party seeking such action").
Defendants argued in its June 20 letter brief that under GMAC Commercial Mortgage Corp., v. LaSalle Bank Nat'l Ass'n, 213 F.R.D. 150 (S.D.N.Y. 2003) and Steiner v. Atochem, S.A., 2002 WL 1870322, at *4 (S.D.N.Y. Aug. 13, 2002) (quoting University of S. Ala. v. American Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999)), a voluntary dismissal moots all pending motions, including the motion for a protective order. Assuming defendants are correct, I would have to still conclude that the documents at issue should be unsealed. If the motion is indeed moot, e.g., having "no practical significance," Black's Law Dictionary 422 (pocket ed. 1996), it may be treated as a nullity, as though no motion was ever filed. If the motion to seal documents has no legal significance, as defendants contend, then the seal on the records, which was brought on an interim basis by defendants' motion, should dissolve, and the documents at issue should be open for public inspection.
III. CONCLUSION
The Clerk of the Court is directed to file the Supplemental Affidavit of Raskin and attached exhibits under seal until July 14, 2003. To give defendants an opportunity to resolve on appeal or obtain a stay with respect to this Court's discretionary authority over judicial records of a case that has settled, the Clerk of the Court is directed to maintain the seal on the documents at issue ( e.g., Raskin Exhs. M, S, T, V, DD and Supplemental Affidavit of Raskin with exhibits) until July 14, 2003.