In re: Avandia Marketing v. , 924 F.3d 662 ( 2019 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 18-2259 & 18-2656
_____________
IN RE: AVANDIA MARKETING, SALES PRACTICES
AND PRODUCTS LIABILITY LITIGATION
UNITED FOOD AND COMMERCIAL WORKERS LOCAL
1776 AND PARTICIPATING EMPLOYERS HEALTH
AND WELFARE FUND;
JB HUNT TRANSPORT SERVICES, INC.,
Appellants
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court Nos. 2-07-md-01871,
2-10-cv-02475, 2-11-cv-04013
District Judge: The Honorable Cynthia M. Rufe
Argued March 6, 2019
Before: SMITH, Chief Judge, AMBRO, and RESTREPO,
Circuit Judges
(Filed: May 15, 2 019)
Hannah W. Brennan [ARGUED]
Edward Notargiacomo
Thomas M. Sobol
Hagens Berman Sobol Shapiro
55 Cambridge Parkway
Suite 301
Cambridge, MA 02142
James R. Dugan
Douglas R. Plymale
The Dugan Law Firm
365 Canal Street
Suite 1000
New Orleans, LA 70130
Counsel for Appellant
Kyle A. Dolinsky
Sean P. Fahey [ARGUED]
Nina M. Gussack
Pepper Hamilton
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103
Counsel for Appellee
Christopher Morten
Yale Law School
127 Wall Street
P.O. Box 209090
New Haven, CT 06520
2
Counsel for Amicus Appellant
________________
OPINION OF THE COURT
________________
SMITH, Chief Judge.
Following a decision of the District Court granting
summary judgment to GlaxoSmithKline LLC (“GSK”), the
losing parties, two health benefit plans, appealed from that
final order. 1 While briefing the appeal, the parties sought to
include in their joint appendix certain documents filed in
connection with the summary judgment proceedings. GSK had
previously designated some of these documents as confidential
and contended that they should remain so on appeal; the plans
disagreed. That led GSK to ask the District Court, on two
occasions and pursuant to the applicable protective order, to
maintain the confidentiality of certain documents. The plans
opposed these requests, arguing that the common law right of
access and the First Amendment right of public access required
the unsealing of the documents. The District Court largely
sided with GSK, refusing to unseal most of the documents.
The plans have appealed the District Court’s two post-
judgment sealing orders.
1
We are separately considering that appeal, No. 18-
1010, which challenges the District Court’s summary
judgment ruling.
3
We conclude that the District Court failed to apply the
proper legal standard for the common law right of access,
which requires as a starting point the application of a
presumption of public access. See Bank of Am. Nat’l Tr. &
Sav. Ass’n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 344 (3d
Cir. 1986). By applying, instead, our standard for a protective
order under Federal Rule of Civil Procedure 26, the able
District Judge incorrectly placed a burden on the plans to show
an interest in disclosure—rather than on GSK to justify
continued sealing. We will therefore vacate and remand to
allow the District Court to consider GSK’s motions for
continued confidentiality under the appropriate standard.
I. 2
A.
GSK manufactures, markets, and sells Avandia, a drug
indicated to treat Type II diabetes. 3 In re Avandia Mktg., Sales
Prac. & Prod. Liab. Litig. (Avandia I), 804 F.3d 633, 635 (3d
Cir. 2015). The plans contend that GSK concealed evidence
of Avandia’s cardiovascular risk and, instead, promoted
2
As previously mentioned, the plans have separately
appealed the District Court’s grant of summary judgment. We
therefore recount only the limited facts and procedural history
necessary to decide the sealing issues.
3
The word “indicated” is a term of art within the
pharmaceutical industry meaning to use a drug or device for an
approved purpose. Cf. Buckman Co. v. Plaintiffs’ Legal
Comm., 531 U.S. 341, 345–46 (2001).
4
Avandia as providing cardiovascular benefits. According to
the plans, this marketing strategy was false and misleading
because GSK’s own studies showed that Avandia increased
certain markers of cardiovascular risk. The plans assert that,
for years, GSK buried bad study results, misrepresented the
truth about Avandia’s cardiovascular profile to doctors and
pharmacy benefit managers, and reaped billions of dollars in
profits. In 2007, an independent researcher published an article
in the New England Journal of Medicine claiming that Avandia
increased the risk of heart attack and cardiovascular disease.
Id.; App. 1064. Lawsuits ensued, the United States Food and
Drug Administration (“FDA”) investigated, and even the
United States Senate Finance Committee released a report
revealing GSK’s misdeeds.
B.
On May 21, 2010, in the midst of heightened regulatory
and public scrutiny of Avandia, United Food and Commercial
Workers Local 1776 and Participating Employers Health and
Welfare Fund (“UFCW”) filed suit against GSK in the United
States District Court for the Eastern District of Pennsylvania.
UFCW alleged violations of the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), as well as various state
consumer protection laws. J.B. Hunt Transport Services, Inc.
(“J.B. Hunt”) filed a complaint containing similar claims on
June 20, 2011. Both UFCW and J.B. Hunt (collectively
referred to as “the plans”) filed suit on behalf of a proposed
class of United States health benefit providers that had
purchased Avandia. These third-party payor cases became part
of a multi-district litigation (“MDL”), which also included
5
consumer and personal injury cases. 4 As part of the MDL, the
cases were governed by a protective order, PTO 10, which
covered discovery of confidential materials.
In November 2010, GSK moved to dismiss the plans’
complaints, arguing that the plans lacked standing to bring
RICO claims. In October 2013, the District Court denied that
motion; it later certified its decision for interlocutory appeal.
We granted permission to appeal and, in October 2015,
affirmed the District Court’s denial of GSK’s motion to
dismiss. Avandia I, 804 F.3d at 646.
Less than a year later, GSK moved for summary
judgment as to the plans’ consumer protection claims on
federal preemption grounds. GSK also contended that the
plans’ RICO claims should be dismissed for failing to identify
a distinct RICO enterprise. In the course of briefing GSK’s
motion for summary judgment, the parties filed documents
under seal pursuant to PTO 10. At that time, neither party
raised any issue as to the confidentiality of the sealed exhibits.
On December 7, 2017, the District Court granted GSK’s
motion for summary judgment.
After the plans appealed the District Court’s summary
judgment ruling, GSK indicated that it wanted to maintain the
confidentiality of certain sealed documents that had been filed
in connection with the summary judgment motion. GSK
therefore moved in the District Court to keep some of the
4
District Judge Rufe has presided over the Avandia
MDL with commendable care and efficiency since October
2007.
6
summary judgment records under seal. On May 31, 2018, the
District Court granted in part and denied in part GSK’s motion
(the “May Sealing Order”). App. 2459. The Court unsealed
its own summary judgment opinion but maintained the
confidentiality of the remainder of the documents. Id.
A few weeks later, GSK again moved to maintain under
seal additional summary judgment records. The District Court
granted in part and denied in part the second sealing motion on
July 24, 2018 (the “July Sealing Order”). Id. at 2460–61. The
Court directed GSK to file a redacted statement of undisputed
material facts but otherwise maintained the seal. Id.
The plans timely appealed the May Sealing Order (No.
18-2259) and the July Sealing Order (No. 18-2656).
II.
We apply three distinct standards when considering
various challenges to the confidentiality of documents. We
apply the factors articulated in Pansy v. Borough of
Stroudsburg, 23 F.3d 772, 783–92 (3d Cir. 1994), when we
review orders preserving the confidentiality of discovery
materials pursuant to Federal Rule of Civil Procedure 26. But
we apply the more rigorous common law right of access when
discovery materials are filed as court documents. In addition
to recognizing fewer reasons to justify the sealing of court
records, the public right of access—unlike a Rule 26 inquiry—
begins with a presumption in favor of public access. Goldstein
v. Forbes (In re Cendant Corp.), 260 F.3d 183, 192–93 (3d Cir.
2001). Finally, the First Amendment right of public access
7
attaches to, inter alia, civil trials. Publicker Indus., Inc. v.
Cohen, 733 F.2d 1059, 1061 (3d Cir. 1984). We will discuss
each standard in turn.
A.
Federal Rule of Civil Procedure 26(c) permits the
District Court to enter a protective order to shield a party “from
annoyance, embarrassment, oppression, or undue burden or
expense.” Fed. R. Civ. P. 26(c)(1). A protective order is
“intended to offer litigants a measure of privacy, while
balancing against this privacy interest the public’s right to
obtain information concerning judicial proceedings.” Pansy,
23 F.3d at 786. A protective order may apply to all litigation
materials—not just those filed in court—because “[c]ourts
have inherent power to grant orders of confidentiality over
materials not in the court file.” Id. at 785.
The proponent of the protective order shoulders “[t]he
burden of justifying the confidentiality of each and every
document sought to be” sealed. 5 Id. at 786–87. The District
Court “must balance the requesting party’s need for
5
As we have previously stated, “in cases involving
large-scale discovery, the court may construct a broad umbrella
protective order upon a threshold showing by the movant of
good cause.” Pansy v. Borough of Stroudsburg, 23 F.3d 772,
787 n.17 (3d Cir. 1994). Once a party challenges the protective
order, however, “the party seeking to maintain the seal” must
justify the continued sealing of those documents. Id. At that
point, the district court must conduct a document-by-document
review.
8
information against the injury that might result if uncontrolled
disclosure is compelled.” Id. at 787. The party seeking a
protective order “over discovery material must demonstrate
that ‘good cause’ exists for the order.” Id. at 786 (quoting Fed.
R. Civ. P. 26(c)); see also Seattle Times Co. v. Rhinehart, 467
U.S. 20, 37 (1984) (holding that the good cause requirement
for protective orders does not violate the First Amendment).
Good cause means “that disclosure will work a clearly defined
and serious injury to the party seeking closure. The injury must
be shown with specificity.” Pansy, 23 F.3d at 786 (quoting
Publicker Indus., 733 F.2d at 1071). To that end, “[b]road
allegations of harm, unsubstantiated by specific examples or
articulated reasoning, do not support a good cause showing.”
Id. (internal quotation marks omitted).
We have set forth various factors—“which are neither
mandatory nor exhaustive”—that courts may consider when
determining whether good cause exists and, by extension,
whether a protective order should issue:
1. whether disclosure will violate any
privacy interests;
2. whether the information is being sought
for a legitimate purpose or for an
improper purpose;
9
3. whether disclosure of the information will
cause a party embarrassment; 6
4. whether confidentiality is being sought
over information important to public
health and safety;
5. whether the sharing of information among
litigants will promote fairness and
efficiency;
6. whether a party benefitting from the order
of confidentiality is a public entity or
official; and
7. whether the case involves issues
important to the public.
Glenmede Tr. Co. v. Thompson, 56 F.3d 476, 483 (3d Cir.
1995) (citing Pansy, 23 F.3d at 787–91). The District Court
“is best situated to determine what factors are relevant to” any
6
Although “preventing embarrassment may be a factor
satisfying the ‘good cause’ standard,” the proponent of a
protective order “must demonstrate that the embarrassment
will be particularly serious.” Id. (internal quotation marks
omitted).
10
given dispute. 7 Id. The Court’s analysis, however, “should
always reflect a balancing of private versus public interests.”
Id. The District Court “should articulate on the record findings
supporting its” decision to grant or deny a protective order.
Pansy, 23 F.3d at 789.
B.
Analytically distinct from the District Court’s ability to
protect discovery materials under Rule 26(c), the common law
presumes that the public has a right of access to judicial
materials. In both criminal and civil cases, a common law right
of access attaches “to judicial proceedings and records.” In re
Cendant Corp., 260 F.3d at 192. The common law right of
access “antedates the Constitution.” Bank of Am., 800 F.2d at
343. The right of access “promotes public confidence in the
judicial system by enhancing testimonial trustworthiness and
the quality of justice dispensed by the court.” Littlejohn v. BIC
Corp., 851 F.2d 673, 678 (3d Cir. 1988). Public observation
facilitated by the right of access “diminishes possibilities for
injustice, incompetence, perjury, and fraud.” Id. Moreover,
“the very openness of the process should provide the public
with a more complete understanding of the judicial system and
a better perception of its fairness.” Id.7
The Court also “retains the power to modify or lift
confidentiality orders that it has entered.” Id. at 784. When
deciding whether to modify a protective order, the District
Court should consider reliance by the original parties. Id. at
789–90.
11
The right of access includes the right to attend court
proceedings and to “inspect and copy public records and
documents, including judicial records and documents.” In re
Cendant Corp., 260 F.3d at 192. Whether the common law
right of access applies to a particular document or record “turns
on whether that item is considered to be a ‘judicial record.’”
Id. A “judicial record” is a document that “has been filed with
the court . . . or otherwise somehow incorporated or integrated
into a district court’s adjudicatory proceedings.” Id. Once a
document becomes a judicial record, a presumption of access
attaches. See id. at 192–93.
“[T]here is a presumptive right of public access to
pretrial motions of a nondiscovery nature, whether preliminary
or dispositive, and the material filed in connection therewith.”
Id. Summary judgment proceedings are no exception—
documents filed in connection with a motion for summary
judgment are judicial records. Republic of the Philippines v.
Westinghouse Elec. Corp., 949 F.2d 653, 660–62 (3d Cir.
1991).
Yet the common law right of access is “not absolute.”
Bank of Am., 800 F.2d at 344. “The presumption [of access] is
just that, and thus may be rebutted.” Westinghouse Elec.
Corp., 949 F.2d at 662. The party seeking to overcome the
presumption of access bears the burden of showing “that the
interest in secrecy outweighs the presumption.” Bank of Am.,
800 F.2d at 344. The movant must show “that the material is
the kind of information that courts will protect and that
disclosure will work a clearly defined and serious injury to the
party seeking closure.” Miller v. Ind. Hosp., 16 F.3d 549, 551
(3d Cir. 1994) (internal quotation marks omitted). The “strong
12
presumption of openness does not permit the routine closing of
judicial records to the public.” Id. (internal quotation marks
omitted).
To overcome that strong presumption, the District Court
must articulate “the compelling, countervailing interests to be
protected,” make “specific findings on the record concerning
the effects of disclosure,” and “provide[] an opportunity for
interested third parties to be heard.” In re Cendant Corp., 260
F.3d at 194 (emphasis omitted). “In delineating the injury to
be prevented, specificity is essential.” Id. “Broad allegations
of harm, bereft of specific examples or articulated reasoning,
are insufficient.” Id. “[C]areful factfinding and balancing of
competing interests is required before the strong presumption
of openness can be overcome by the secrecy interests of private
litigants.” Leucadia, Inc. v. Applied Extrusion Techs., Inc., 998
F.2d 157, 167 (3d Cir. 1993). To that end, the District Court
must “conduct[] a document-by-document review” of the
contents of the challenged documents.” Id.C.
Finally, the public and the press have a First
Amendment right of access to civil trials. Publicker Indus.,
733 F.2d at 1070. Although the constitutional right of access
is “not absolute, . . . as a First Amendment right it is to be
accorded the due process protection that other fundamental
rights enjoy.” Id.
It remains an open question in this Circuit whether the
First Amendment right of access applies to records of summary
judgment proceedings. We use a two-prong test to assess
13
whether the right of access attaches: (1) the experience prong
asks “whether the place and process have historically been
open to the press”; and (2) the logic prong evaluates “whether
public access plays a significant positive role in the functioning
of the particular process in question.” N. Jersey Media Grp.
Inc. v. United States, 836 F.3d 421, 429 (3d Cir. 2016). If both
prongs “are satisfied, a qualified First Amendment right of
public access attaches.” Id.; see also PG Publ’g Co. v. Aichele,
705 F.3d 91, 104 (3d Cir. 2013) (explaining that the experience
and logic test “balances the interests of the People in observing
and monitoring the functions of their government against the
government’s interest and/or long-standing historical practice
of keeping certain information from public scrutiny”).
“The First Amendment right of access requires a much
higher showing than the common law right [of] access before
a judicial proceeding can be sealed.” In re Cendant Corp., 260
F.3d at 198 n.13. Any restriction on the right of public access
“is . . . evaluated under strict scrutiny.” PG Publ’g Co., 705
F.3d at 104. If the First Amendment right of access applies,
“there is a presumption that the proceedings will be open to the
public.” Publicker Indus., 733 F.2d at 1073. The party seeking
closure may rebut the presumption of openness only if able to
demonstrate “an overriding interest [in excluding the public]
based on findings that closure is essential to preserve higher
values and is narrowly tailored to serve that interest.” Id.; see
also id. at 1070 (explaining that “to limit the public’s access to
civil trials there must be a showing that the denial serves an
important governmental interest and that there is no less
restrictive way to serve that governmental interest”).
14
The party seeking closure or sealing in the face of the
First Amendment right of access “bears the burden of showing
that the material is the kind of information that courts will
protect and that there is good cause for the order to issue.” Id.
at 1071. Good cause means “that disclosure will work a clearly
defined and serious injury to the party seeking closure”; “[t]he
injury must be shown with specificity.” Id. “For example, an
interest in safeguarding a trade secret may overcome a
presumption of openness.” Id. at 1073. Bad business
practices, in the absence of other circumstances, do not
overcome the presumption. Id. at 1074.
Procedurally, the District Court “must both articulate
the countervailing interest it seeks to protect and make findings
specific enough that a reviewing court can determine whether
the closure order was properly entered.” Id. at 1071 (internal
quotation marks omitted). Absent those findings, we will not
“speculate” as to the District Court’s reasoning. Id. at 1072.
15
III. 8
A.
Although the plans invoked the common law right of
access, the District Court assessed GSK’s motions for
continued confidentiality by applying the Rule 26 standard
governing protective orders. In its one-page May Sealing
Order, the District Court granted in part and denied in part
GSK’s motion to preserve the confidentiality of the summary
judgment records. App. 2459. The Court denied GSK’s
motion with respect to the summary judgment opinion, which
the Court unsealed without redaction. The Court granted the
motion as to all other documents. In doing so, the District
Court neither cited the applicable legal standard nor discussed
the specific documents at issue. The Court later explained that
its reasoning in the July Sealing Order applied equally to the
May Sealing Order.
In its July Sealing Order, the Court again granted in part
and denied in part GSK’s second motion to maintain
confidentiality. Id. at 2460–61. The District Court ordered
GSK to file a redacted version of its statement of undisputed
material facts. The Court otherwise granted the motion for
8
We exercise jurisdiction under 28 U.S.C. § 1291. We
review the District Court’s decision to deny the right of access
for abuse of discretion. See Goldstein v. Forbes (In re Cendant
Corp.), 260 F.3d 183, 197 (3d Cir. 2001); Bank of Am. Nat’l
Tr. & Sav. Ass’n v. Hotel Rittenhouse Assocs., 800 F.2d 339,
344 (3d Cir. 1986). We exercise plenary review over the legal
questions presented in this appeal. See Pansy, 23 F.3d at 776.
16
continued confidentiality. In a footnote, the District Court
quoted the Pansy factors, explaining that this Court has
instructed district courts to weigh the factors when determining
whether good cause exists to justify a protective order under
Rule 26. The District Court mentioned the common law right
of access, acknowledging that the moving party must show that
disclosure “will work a clearly defined and serious injury to
it.” Id. at 2460 n.1 (internal quotation marks omitted) (quoting
Miller, 16 F.3d at 551). But the District Court reasoned that
both the Rule 26 standard and the common law right of access
doctrine required “identifying the harm to the designating party
and balancing the [Pansy] factors.” Id. at 2460–61 n.1 (citing
LEAP Sys., Inc. v. MoneyTrax, Inc., 638 F.3d 216, 222–23 (3d
Cir. 2011)).
The District Court’s analysis, contained in the same
footnote, went as follows:
In this case, [GSK] has articulated a specific and
substantial harm from making public its
confidential communications to the FDA,
including harm to its competitive standing, to its
commercial reputation, and to its relationships
with physicians and patients. [GSK] is thus
seeking to preserve the confidentiality of these
documents for a legitimate purpose. Given the
potential harm to [GSK] by disclosing these
communications with the FDA, and the fact that
there are no substantial countervailing interests
other than the public’s broad right to review a
judicial proceeding, the Court will grant [GSK]’s
Motion with respect to the identified documents
17
containing communications with the FDA. The
Court will deny the motion, however, with
respect to preserving the confidentiality of the
entirety of the submitted statement of undisputed
facts. [GSK] may redact the confidential
communications with the FDA contained in the
statement of undisputed facts, but [GSK] ha[s]
not demonstrated why the full submission should
be kept confidential.
Id. at 2461 n.1 (internal citations omitted). The Court
acknowledged that its rulings had “no bearing on the
confidentiality designation such documents are given on
appeal.” 9 Id.B.
It is undisputed that each of the challenged documents
are “judicial records” subject to the common law right of
access because the parties filed the documents on the District
Court’s public docket in support of, or in opposition to, GSK’s
motion for summary judgment. See Westinghouse Elec. Corp.,
949 F.2d at 660–61. As such, the District Court was obligated
9
To that end, the parties have briefed the sealing of
certain appendices on appeal. Because our assessment of the
appellate motions to seal overlaps with the District Court’s
analysis on remand, we will defer such an assessment until
after the District Court has had the opportunity to consider
GSK’s motions under the correct standard. All disputed
documents filed in this appeal will continue to be held
provisionally under seal.
18
to apply the exacting common law right of access standard,
including the “strong presumption” of access, before granting
GSK’s motions for continued confidentiality. In failing to do
so, the learned District Judge erred. 10 Instead, by conflating
the Pansy factors with the standard governing the common law
right of access, the District Court gave no effect to the
presumption of public access.
The District Court, relying on LEAP Systems, seems to
have considered the Pansy factors as the only applicable legal
standard, equating the Rule 26 analysis with the common law
right of access analysis. But LEAP Systems does not support
such an approach. There, after years of contentious litigation
and failed mediation attempts, the parties entered into a
settlement agreement with the district court’s assistance.
LEAP Sys., Inc., 638 F.3d at 218, 221. Fearing that the deal
would soon unravel, the parties recorded a transcript
containing the terms of the settlement agreement. Id. at 218.
10
Even under the more lenient standard for a protective
order, the District Court’s analysis would not be sufficient. We
have repeatedly counseled that the party seeking
confidentiality must bear the burden of justifying sealing.
Leucadia, Inc. v. Applied Extrusion Techs., Inc., 998 F.2d 157,
166 (3d Cir. 1993). Once sealing is challenged, the proponent
of sealing “must make a particularized showing of the need for
continued secrecy if the documents are to remain under seal.”
Id. (internal quotation marks omitted). The District Court must
then undertake “a document-by-document review,” id. at 167,
to ascertain whether continued sealing is proper and “articulate
on the record findings” to support its decision, Pansy, 23 F.3d
at 789.
19
The parties repeatedly asked the district court if the settlement
terms would remain under seal; the district court repeatedly
assured them that the terms would be kept confidential. Id.But the parties filed the transcript in the district court, and a
third party intervened to unseal the transcript. Id. at 218–19.
The district court recognized that, once the parties had filed the
transcript, it became a judicial record subject to the common
law right of access. Id. at 219. The court reasoned, however,
that the parties’ interest in preventing competitors from using
proprietary information contained in the transcript—coupled
with their reliance on the district court’s assurances of
confidentiality—outweighed the intervenor’s interest in the
terms of the settlement agreement. Id.
Reviewing for abuse of discretion, we agreed. Id. at
223. We recognized the “strong presumption in favor of public
accessibility” and agreed that a party’s “vague assertions that
the transcript contains secretive business information, and that
disclosure would render [it] at a tactical disadvantage” were
insufficient to overcome that strong presumption. Id. at 221–
22 (internal quotation marks omitted). We found persuasive,
however, the district court’s specific finding that the parties
“would not have entered into the settlement agreements but for
the [c]ourt’s assurance of confidentiality.” Id. at 222. Given
the circumstances, we concluded that the parties’ “reliance on
the [d]istrict [c]ourt’s assurances of confidentiality [was]
entirely reasonable and sufficient to outweigh the public’s
common law right of access.” Id.
Weighing the public’s interest in disclosure, we
considered the district court’s reliance on some of the Pansy
factors: whether confidentiality was being sought over
20
information important to public health and safety, whether the
sharing of information among litigants would promote fairness
and efficiency, whether the party benefitting from the order of
confidentiality was a public entity or official, and whether the
case involved issues important to the public. See id. We
discerned no error in the district court’s conclusion that the
public’s interest in disclosure under the common law right of
access had been rebutted. Id. at 222–23.
Nowhere in LEAP Systems did we hold that the Pansy
factors supplanted our longstanding common law right of
access standard. Rather, we determined that the district court
did not abuse its discretion by weighing some of these factors
when considering the public’s interest in disclosure. In short,
while the Pansy factors may provide useful guidance for courts
conducting the balancing required by the common law test, the
Pansy factors do not displace the common law right of access
standard. The difference is not merely semantic—the Pansy
factors are not sufficiently robust for assessing the public’s
right to access judicial records. Unlike the Rule 26 standard,
the common law right of access begins with a thumb on the
scale in favor of openness—the strong presumption of public
access. Compare Pansy, 23 F.3d at 780–83 (discussing the
common law right of access doctrine and recognizing the
presumption of access), with id. at 783–92 (discussing the
standard applicable to protective orders and enumerating the
Pansy factors).
Moreover, some of the Pansy factors are incompatible
with our case law on the common law right of access. One of
the Pansy factors assesses “whether disclosure of the
information will cause a party embarrassment.” Glenmede Tr.
21
Co., 56 F.3d at 483. But we have repeatedly said that concern
about a company’s public image, embarrassment, or
reputational injury, without more, is insufficient to rebut the
presumption of public access. Westinghouse Elec. Corp., 949
F.2d at 663; see also Littlejohn, 851 F.2d at 685 (reasoning that
the proponent of the seal’s “desire to preserve corporate
reputation” is insufficient to rebut the presumption); Publicker
Indus., 733 F.2d at 1074 (explaining that public disclosure of
poor management is inadequate to justify sealing); Brown &
Williamson Tobacco Corp. v. Fed. Trade Comm’n, 710 F.2d
1165, 1180 (6th Cir. 1983) (explaining that the desire to shield
prejudicial information from competitors and the public is
understandable, but “cannot be accommodated by courts
without seriously undermining the tradition of an open judicial
system”).
Pansy also considers “whether the information is being
sought for a legitimate purpose or for an improper purpose.”
Glenmede Tr. Co., 56 F.3d at 483. But a person’s motive for
inspecting or copying judicial records is irrelevant under the
common law right of access. See Leucadia, Inc., 998 F.2d at167–68; see also Bank of Am., 800 F.2d at 345 (“The
applicability and importance of these interests [served by the
common law right of access] are not lessened because they are
asserted by a private party to advance its own interests . . . .”).
We conclude that by conflating the Pansy factors with
the common law right of access standard, the District Court
committed an error of law.
22
C.
Having explained that the Pansy factors are not a
substitute for the common law right of access standard—which
begins with the presumption of access—we turn to whether the
District Court nonetheless applied the strong presumption
required by the common law right of access. We conclude that
it did not, and we must therefore remand.
As noted above, the District Court did acknowledge the
common law right of access. It failed, however, to
acknowledge the presumption of public accessibility. It
reasoned that continued sealing is proper given that “there are
no substantial countervailing interests other than the public’s
broad right to review a judicial proceeding.” App. 2461 n.1
(emphasis added). This analysis gave insufficient weight to the
public’s interest in openness. Consideration of the public’s
right of access must be the starting point, not just one of
multiple factors. The scale is tipped at the outset in favor of
access. And the right of access is not a mere formality—it
“promotes public confidence in the judicial system”;
“diminishes possibilities for injustice, incompetence, perjury,
and fraud”; and “provide[s] the public with a more complete
understanding of the judicial system and a better perception of
its fairness.” Littlejohn, 851 F.2d at 678. These interests are
particularly important in a case such as this one, which
implicates the public’s trust in a well-known and (formerly)
widely-used drug. By giving insufficient weight to the public’s
strong interest in the openness of judicial records, the District
Court erred as a matter of law in applying the common law
right of access.
23
The District Court also erred by not conducting a
document-by-document review, instead analyzing sixty-five
disputed documents in a single paragraph contained in a
footnote. This collective evaluation of the harm allegedly
suffered by GSK falls short of the exacting analysis our
precedent requires. See Leucadia, Inc., 998 F.2d at 167(explaining that the district court’s broad-brush approach “was
inconsistent with our prior statements that careful factfinding
and balancing of competing interests is required before the
strong presumption of openness can be overcome by the
secrecy interests of private litigants”). 11
Again, the strong presumption of openness inherent in
the common law right of access “disallows the routine and
perfunctory closing of judicial records.” In re Cendant Corp.,
260 F.3d at 193–94. To overcome the presumption, GSK must
show that “the material is the kind of information that courts
will protect and that disclosure will work a clearly defined and
serious injury to the party seeking closure.” Miller, 16 F.3d at
551 (internal quotation marks omitted). And on remand, the
District Court should articulate “the compelling[,]
countervailing interests to be protected,” make “specific
11
To be clear, we do not require a district court to
provide lengthy, detailed discussion of each individual
document. Yet it must be clear from the record that the district
court engaged in a particularized, deliberate assessment of the
standard as it applies to each disputed document. We are
unable to discern such exacting review from the single
paragraph provided in the July Sealing Order, in which a
multitude of documents spanning several years were divided
into broad categories.
24
findings on the record concerning the effects of disclosure, and
provide[] an opportunity for interested third parties to be
heard.” In re Cendant Corp., 260 F.3d at 194 (emphasis and
internal quotation marks omitted); see id. at 197–98 (holding
that the district court abused its discretion in sealing bids for
lead class counsel because the court “did not provide any clear
reason for why it sealed the bids,” “did not recognize the
presumption of access,” and did not “engage in [the] balancing
process to determine whether the bids were the type of
information normally protected or whether there was a clearly
defined injury to be prevented”).
D.
In remanding for the District Court to apply the
appropriate standard in the first instance, we offer a few
observations about the evidence GSK submitted in support of
sealing. To support its requests for continued confidentiality,
GSK provided an eight-year-old declaration—the Armand
Declaration—which actually supported sealing a different set
of documents. 12 Outdated evidence such as this is insufficient
12
The declaration of former Executive Product Director
for Avandia, Timothy Armand, was originally submitted in
support of a 2010 challenge to the confidentiality of
documents. Although GSK argues that “the same types of
documents” covered by the Armand Declaration are at issue
here, Br. of Appellee 40, we have no way to verify that
assertion. See Br. of Appellants 25 n.93 (explaining that the
Armand Declaration references documents by Bates numbers,
which are then listed on a separate appendix not provided to
the plans or the Court).
25
to overcome the presumption of public access. See Miller, 16
F.3d at 551–52 (instructing courts that, even if the initial
sealing of documents was justified, they should “closely
examine whether circumstances have changed sufficiently to
allow the presumption allowing access to court records to
prevail”); Westinghouse Elec. Corp., 949 F.2d at 663(explaining that Westinghouse’s reliance on old affidavits
“without any current evidence to show how public
dissemination of the pertinent materials now would cause the
competitive harm it claims” is insufficient to meet the exacting
common law burden). “[S]ealing must be based on current
evidence to show how public dissemination of the pertinent
materials now would cause the competitive harm.” In re
Cendant Corp., 260 F.3d at 196 (internal quotation marks
omitted).
Perhaps realizing the deficiencies of the Armand
Declaration, GSK submitted a second declaration in its reply
brief in support of its second motion to seal. This declaration,
the Walker Declaration, contains broad, vague, and conclusory
allegations of harm that are, standing alone, insufficient to
26
overcome the presumption of public access. 13 For example,
the Walker Declaration claims that disclosure of GSK’s old
research strategies “would still aid competitors in developing
research strategies and could be used to harm GSK’s
relationship with patients and physicians.” S.A. 1956, ¶ 31
(emphasis added). The Walker Declaration does not explain,
however, how twenty-year-old research strategies could assist
current competitors or harm GSK’s current relationships with
patients and physicians. These blanket assertions of harm that
“could” come to fruition fall short of the clearly defined and
serious injury that GSK must articulate to obtain sealing under
any standard.
Finally, it seems that GSK is relying on allegations of
reputational injury to support continued confidentiality. For
example, the District Court discussed the “harm to [GSK’s]
competitive standing, to its commercial reputation, and to its
relationships with physicians and patients.” App. 2461 n.1. To
be sure, courts may permissibly seal judicial records “where
they are sources of business information that might harm a
litigant’s competitive standing.” Westinghouse Elec. Corp.,
13
The plans urge us to disregard entirely the Walker
Declaration because it was inappropriately submitted on reply.
The plans argue that they raised the deficiencies of the Armand
Declaration in their opposition to the first sealing motion but
that GSK failed to submit the Walker Declaration, which was
designed to correct those deficiencies, until its reply to the
second sealing motion. Because we will remand for the
District Court’s consideration of GSK’s first and second
sealing motions, we leave for that Court to decide whether to
consider the Walker Declaration.
27
949 F.2d at 662 (internal quotation marks omitted). Here,
however, the District Court did not articulate—and we are
unable to see—how the purported harm to GSK’s competitive
standing chalks up to anything more than mere
embarrassment. 14 Mere embarrassment is insufficient to
overcome the strong presumption of public access inherent in
the common law right. Publicker Indus., 733 F.2d at 1074
(explaining that courts generally should not seal evidence of
“bad business practice[s]”); see Brown & Williamson Tobacco
Corp., 710 F.2d at 1180 (“Indeed, common sense tells us that
the greater the motivation a corporation has to shield its
operations, the greater the public’s need to know.”).
We will vacate the May and July Sealing Orders and
remand this matter to permit the District Court to conduct a
detailed review of the challenged documents by applying the
proper standard for accessibility under the common law. See
Leucadia, Inc., 998 F.2d at 167 (emphasizing that “the required
balancing should be done in the first instance by the district
court”).
14
GSK has not claimed that any of the sealed documents
contain trade secrets—a noted exception to the presumption of
public access. Confidential business information “is not
entitled to the same level of protection from disclosure as trade
secret information.” Republic of the Philippines v.
Westinghouse Elec. Corp., 949 F.2d 653, 663 (3d Cir. 1991)
(quoting Littlejohn v. BIC Corp., 851 F.2d 673, 685 (3d Cir.
1988)).
28
E.
The plans and amici have asked us to go further.
According to them, the First Amendment right of public access
applies to summary judgment records. But, whereas we have
extended the common law right of access to summary
judgment records, we have yet to do so under the First
Amendment right of public access. 15
We have repeatedly declined to tackle the contours of
the First Amendment right of public access when the common
law right has been sufficient to permit access. See, e.g., In re
Cendant Corp., 260 F.3d at 198 n.13 (declining to reach the
First Amendment issue because the District Court’s order
failed to satisfy the requirements for abridging the common
law right of access, “the parameters of the First Amendment
right of access to civil proceedings are undefined,” and
“significant constitutional questions” remain as to “what
documents are subject to its reach”); Leucadia, Inc., 998 F.2d
at 161 n.6 (declining to reach the First Amendment right of
access and instead “limit[ing] our inquiry to the common
law”); Westinghouse Elec. Corp., 949 F.2d at 659 (declining to
15
Two of our sister circuits have held that the First
Amendment right of public access applies to summary
judgment documents. See Lugosch v. Pyramid Co. of
Onondaga, 435 F.3d 110, 124 (2d Cir. 2006); Rushford v. New
Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir. 1988). But
see In re Reporters Comm. for Freedom of the Press, 773 F.2d
1325, 1338 (D.C. Cir. 1985) (declining to extend a pre-
judgment First Amendment right of access to summary
judgment documents).
29
reach the First Amendment right of access and instead
“confin[ing] our analysis to the common law”); Littlejohn, 851
F.2d at 677 n.8 (declining to reach the First Amendment right
of access because “[w]e can dispose of most of the parties’
contentions without reaching the constitutional issue”); Bank
of Am., 800 F.2d at 343 (ruling that the common law right of
access is applicable and declining to decide whether a right to
access certain records “might also be grounded on the First
Amendment”).
Although the constitutional issue is an interesting one,
we again decline to define the parameters of the First
Amendment right in a case where the common law right
affords sufficient protection. Indeed, at oral argument counsel
for the plans agreed that we need not reach the First
Amendment issue if unsealing is required under the common
law right of access. See Tr. of Oral Arg. 3:24–4:13, (Mar. 6,
2019); see also In re Cendant Corp., 260 F.3d at 198 n.13
(citing Hagans v. Lavine, 415 U.S. 528, 547 (1974), for the
proposition that “a federal court should not decide federal
constitutional questions where a dispositive nonconstitutional
ground is available”).
If on remand the District Court concludes that any of the
sealed documents merits continued confidentiality under the
common law right of access, then the Court should also
consider the parties’ arguments regarding the First Amendment
30
right of public access. 16 At this juncture, we discern no need
to express an opinion as to whether the First Amendment right
of public access extends to summary judgment documents.
IV.
Instead of applying the common law right of access, the
District Court assessed GSK’s motions for continued
confidentiality using the rule applicable to protective orders.
Because the District Court should conduct the required
document-by-document review under the correct legal
standard in the first instance, we will vacate and remand the
May Sealing Order as well as the July Sealing Order.
16
Because we do not reach the First Amendment issue,
we decline to address GSK’s arguments that the plans lack
Article III standing to assert First Amendment claims, or that
they have partially waived these claims.
31
RESTREPO, Circuit Judge, concurring in part and dissenting
in part.
I join the majority opinion in its entirety, with the
exception of Part III.E. In that portion of the opinion, the
majority, as a matter of constitutional avoidance, “decline[s] to
define the parameters of the First Amendment” because, in the
majority’s view, “the common law right affords sufficient
protection” in this case. I depart from the majority because, in
my view, the Court should address the First Amendment issues
raised by the plans. I write separately to express my view that
the doctrine of constitutional avoidance is inapplicable to the
facts of this case and that the First Amendment right of public
access extends to documents submitted in connection with
motions for summary judgment.
I.
The Court could reach the First Amendment issues in
this case without running afoul of the doctrine of constitutional
avoidance. The Supreme Court indeed has counseled that
federal courts “should not decide federal constitutional
questions where a dispositive nonconstitutional ground is
available,” but, in my view, the majority has not given proper
weight to the key modifier in that clause—“dispositive.”
Hagans v. Lavine, 415 U.S. 528, 547 (1974). In other words,
federal courts should avoid deciding constitutional questions
only when there is a nonconstitutional ground that “bring[s]
about a final determination.” Dispositive, Black’s Law
Dictionary (10th ed. 2014). While I agree with the majority
that this case should be remanded for the District Court to
apply the appropriate standard under the common law right of
access, such a holding is not dispositive: we cannot be certain
that “the common law right affords sufficient protection” in
this case because the District Court will make that
determination on a document-by-document basis on remand.
The majority appears to acknowledge that our holding
is not a final determination on the merits of this matter insofar
as the majority recognizes that this litigation will continue, and
the Court subsequently will be required to address the First
Amendment issues, if the District Court finds on remand that
certain of the sealed documents merit continued confidentiality
under the more lenient common law right of access standard.
In such an event, as one of our sister circuits has recognized,
“[e]ach passing day” between the District Court’s decision to
maintain the confidentiality of a sealed document and this
Court’s eventual adjudication of the First Amendment issues
“may constitute a separate and cognizable infringement of the
First Amendment.” Lugosch v. Pyramid Co. of Onondaga, 435
F.3d 110, 126 (2d Cir. 2006) (quoting Grove Fresh Distrib.,
Inc. v. Everfresh Juice Co., 24 F.3d 893, 897 (7th Cir. 1994)).
Thus, given the possibility that our present avoidance of the
First Amendment issues may result in a potentially continual
constitutional violation if, on remand, the District Court does
not unseal particular documents, our holding cannot be fairly
characterized as “dispositive.” For that reason, we should
address the First Amendment issues raised by the plans.
The cases cited by the majority—in which this Court
utilized only the common law right of access standard, rather
than the more rigorous First Amendment standard—do not
persuade me otherwise. In all but one of the cited cases, this
Court definitively held that the documents in question should
be unsealed pursuant to the common law right of access,
leaving no room for doubt as to whether it might later become
necessary to apply the more rigorous First Amendment
2
standard to unseal such documents. See In re Cendant Corp.,
260 F.3d 183, 201 (3d Cir. 2001) (directing “the District Court
[to] enter an order unsealing all sealed bids and documents in
the record”); Republic of the Philippines v. Westinghouse Elec.
Corp., 949 F.2d 653, 665 (3d Cir. 1991) (denying a stay
pending appeal of the district court’s order “unsealing the
material filed in connection with Westinghouse’s motion for
summary judgment”); Littlejohn v. Bic Corp., 851 F.2d 673,
687 (3d Cir. 1988) (affirming “the district court[’s] order
granting [the Philadelphia Inquirer] access to the judicial
records”); Bank of Am. Nat’l Tr. & Sav. Ass’n v. Hotel
Rittenhouse Assocs., 800 F.2d 339, 346 (3d Cir. 1986)
(remanding to the district court with the direction to enter an
order unsealing documents relating to a settlement agreement).
Unlike this case, the Court, in each of the above-cited cases,
did not remand to the district court to apply the appropriate
standard under the common law right of access; rather, in each
of the above-cited cases, the Court’s holding was dispositive of
all the issues, and thus it was proper for the Court to decline to
adjudicate First Amendment claims. Further, in the remaining
case cited by the majority, the appellant “d[id] not rely on the
First Amendment as the basis for his claimed right of access to
the discovery material,” and thus constitutional avoidance was
not at issue. Leucadia, Inc. v. Applied Extrusion Techs., Inc.,
998 F.2d 157, 162 (3d Cir. 1993). In contrast, the plans and
amici explicitly raised First Amendment issues in this case.
For the reasons stated above, I respectfully disagree
with the majority’s decision not to address the First
Amendment issues raised by the plans in this case, and I would
join our two sister circuits that took up this constitutional issue
when it was presented to them in a similar posture. See
Lugosch, 435 F.3d at 124 (“[W]e may not avoid the question
3
of whether a First Amendment presumption of access also
exists, for the Newspapers ask us to impose the higher
constitutional burden in requiring disclosure.”); accord
Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th
Cir. 1988). As a result of the Court’s holding, the adjudication
of the First Amendment issues hinges on the outcome of the
District Court’s fact-finding on remand, and, in the meantime,
constitutional rights potentially are being abridged on a
continual basis. Such a result, in my view, is not dispositive of
all the issues in this case, and therefore the doctrine of
constitutional avoidance does not bar us from reviewing the
First Amendment issues raised by the plans.
II.
Having determined that the Court should address the
First Amendment issues raised by the plans, 1 I would join the
1
As an ancillary matter, GSK’s argument regarding the
plans’ lack of “standing” is something of a misnomer. This is
not a case in which a named plaintiff failed to demonstrate
Article III standing to bring the substantive claim in a
complaint on behalf of a putative class; it is undisputed that the
District Court has jurisdiction over the underlying matter.
Rather, this appeal arises out of the District Court’s grant of
two motions filed by GSK in the underlying matter to preserve
the confidentiality of the documents submitted in connection
with its motion for summary judgment. The plans opposed
both of these motions and, either explicitly or through citation
to case law, raised (and, consequently, preserved) arguments
with respect to the First Amendment right of public access.
The plans—as the named plaintiffs in a putative class action—
are required to “fairly and adequately protect the interests of
4
Second and Fourth Circuits in holding that the First
Amendment right of public access extends to documents filed
in connection with motions for summary judgment. See
Lugosch, 435 F.3d at 124; Rushford, 846 F.2d at 253.
This Court previously has held that “the First
Amendment, independent of the common law, protects the
public’s right of access to the records of civil proceedings”—
specifically, civil trials. Westinghouse, 949 F.2d at 659 (citing
Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1070 (3d Cir.
1984)). Since the Court first recognized a First Amendment
right of public access to civil trials in Publicker, 733 F.2d 1059,
however, summary judgment has played an increasingly
prominent role in federal civil litigation. As one distinguished
jurist has noted, “[t]he expanding federal caseload has
the class,” Fed. R. Civ. P. 23(a)(4), in order “to ensure that
absentees’ interests are fully pursued,” Georgine v. Amchem
Prods., Inc., 83 F.3d 610, 630 (3d Cir. 1996). The obligation
to protect the interests of the class undoubtedly extends to
opposing motions—and appealing orders—that adversely
affect the interests of absentee class members, whose interests
are at issue in a “peculiar” way when litigation centers on the
right of access. See Cendant, 260 F.3d at 194 (holding that the
“right of access should be applied . . . with particular strictness”
due to “the peculiar posture of class actions whereby some
members of the public are also parties to the class action”). To
accept GSK’s argument that the plans do not have “standing”
to raise issues with respect to the First Amendment rights of
absentee putative class members—who received notice of
neither GSK’s motions nor the District Court’s orders and
whose rights are peculiarly at issue—would be to contravene
both the letter and spirit of Rule 23.
5
contributed to a drift in many areas of federal litigation toward
substituting summary judgment for trial.” Wallace v. SMC
Pneumatics, Inc., 103 F.3d 1394, 1397 (7th Cir. 1997) (Posner,
C.J.). This view has been echoed by commentators. See, e.g.,
Samuel Issacharoff & George Loewenstein, Second Thoughts
About Summary Judgment, 100 Yale L.J. 73, 89 (1990) (“There
is evidence . . . that summary judgment has moved beyond its
originally intended role as a guarantor of the existence of
material issues to be resolved at trial and has been transformed
into a mechanism to assess plaintiff’s likelihood of prevailing
at trial.”). Statistical analysis performed by the Federal
Judicial Center supports these commentators’ claims and
confirms that district courts are granting motions for summary
judgment more frequently: between 1975 and 2000, “the rate
of cases with [summary judgment] motions granted in whole
or in part, and the rate at which cases were terminated by
summary judgment, doubled.” Joe S. Cecil et al., Fed. Judicial
Ctr., Trends in Summary Judgment Practice: 1975–2000, at
20 (2007), https://www.uscourts.gov/sites/default/files/
summary_judgment_1975-2000.pdf.
Given the increasing frequency with which district
courts utilize summary judgment to resolve federal civil
litigation, in my view, the First Amendment public right of
access that this Court extended to “records of civil
proceedings,” Westinghouse, 949 F.2d at 659 (citing Publicker,
733 F.2d at 1070), also extends to documents submitted in
connection with motions for summary judgment. As the
Fourth Circuit recognized, “summary judgment adjudicates
substantive rights and serves as a substitute for a trial,” and
thus there is no principled basis to hold that the First
Amendment right of public access extends to records of civil
trials, but not records submitted in connection with motions for
6
summary judgment. Rushford, 846 F.2d at 252. Further, much
of the Supreme Court’s rationale in Press-Enterprise Co. v.
Superior Court (Press-Enterprise II), 478 U.S. 1 (1986)—a
seminal right-of-access case in which the Supreme Court held
that the First Amendment right of public access extends not
only to criminal trials, but also to preliminary hearings in
criminal cases—applies with equal force to summary judgment
proceedings. Because of the modern trend toward resolving
civil litigation through motions for summary judgment, in
many cases, the summary-judgment stage “is often the final
and most important step” of civil litigation. Id. at 12. Further,
given that motions for summary judgment are adjudicated
solely by judges, “the absence of a jury, long recognized as ‘an
inestimable safeguard against . . . the compl[ia]nt, biased, or
eccentric judge,’ . . . makes the importance of public access to
[summary judgment proceedings] even more significant.” Id.at 12–13 (citations omitted) (quoting Duncan v. Louisiana, 391
U.S. 145, 156 (1968)).
For the reasons stated above, the Court should hold that
the First Amendment right of public access extends to
documents submitted in connection with motions for summary
judgment. In light of the contemporary trend toward disposing
of civil cases through summary judgment, the public should
have a qualified right to view the documents submitted by
parties in connection with motions for summary judgment. As
the Supreme Court has stated, “[p]eople in an open society do
not demand infallibility from their institutions, but it is difficult
for them to accept what they are prohibited from observing.”
Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 572
(1980). The public can only have confidence in the propriety
of summary judgment procedure—which plays an increasingly
important role in civil litigation—if the documents that form
7
the bases of district courts’ decisions to grant summary
judgment are open for review and inspection, rather than
shielded from public scrutiny.
III.
In sum, I respectfully disagree with the majority’s
application of the doctrine of constitutional avoidance, which
should only be invoked by a federal court when the court can
decide a case on a “dispositive nonconstitutional ground.”
Hagans, 415 U.S. at 547 (emphasis added). The doctrine of
constitutional avoidance is prudential in nature, yet its
invocation in this case may lead to the imprudent result of
piecemeal litigation while constitutional rights potentially are
being violated on a continual basis. Therefore, it is not only
appropriate, but also necessary, for the Court to address the
First Amendment issues raised by the plans at this juncture, and
I would resolve the First Amendment issues in favor of
transparency and broader public access to the federal courts.
8