Pennsylvania National Mutual C v. New England Reinsurance Corpor ( 2020 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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Nos. 20-1635 and 20-1872
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PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE GROUP
v.
NEW ENGLAND REINSURANCE CORPORATION; HARTFORD FIRE
INSURANCE COMPANY;
EVEREST REINSURANCE COMPANY
(Intervenor in District Court)
Pennsylvania National Mutual Casualty Insurance Group,
Appellant in No. 20-1635
Everest Reinsurance Company,
Appellant in No. 20-1872
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On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil No. 1-18-mc-00278)
District Judge: Honorable John E. Jones, III
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Submitted Under Third Circuit L.A.R. 34.1(a):
December 11, 2020
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Before: MCKEE, PORTER, and FISHER,
Circuit Judges.
(Filed: December 24, 2020)
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OPINION
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PORTER, Circuit Judge.
Pennsylvania National Mutual Casualty Insurance Company (“Penn National”)
filed an arbitration award with the District Court under seal. Everest Reinsurance
Company seeks to unseal that award pursuant to the common-law right of access. The
District Court ordered the award unsealed because the award constituted a judicial record
to which the common-law right of access applied, and Penn National did not articulate a
clear and serious injury that would result from the unsealing of the award. We will affirm
the judgment of the District Court.
I
Penn National entered arbitration with two of its reinsurance companies over a
contractual dispute. The issue in the arbitration was whether Penn National was entitled
to proceeds based on insurance claims it made to the reinsurers. The arbitration panel
issued an award to Penn National. Penn National petitioned the District Court to confirm
the award in order to reduce the award to a judgment, as required by federal law. See 9
U.S.C. § 9. As part of the confirmation process, Penn National filed the award with the
District Court. 9 U.S.C. § 13. One day after Penn National filed the award, the District
Court granted Penn National’s request to seal it. Before the reinsurers responded to Penn

This disposition is not an opinion of the full Court and, under I.O.P. 5.7, is not binding
precedent.
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National’s petition to confirm, the parties settled, and Penn National sent a letter to the
District Court withdrawing its petition to confirm. Thus, the District Court took no action
on the petition to confirm.
Afterwards, Everest, another one of Penn National’s reinsurers not subject to the
arbitration proceeding, moved to intervene and unseal the award. Everest sought to unseal
the award under the common-law right of access. The District Court denied Everest’s
motion after using the “Pansy factors”—used to determine whether to modify a
confidentiality order issued under Federal Rule of Civil Procedure 26(c). We reversed the
District Court’s order and instructed it to apply the common-law-right-of-access analysis
to determine whether to unseal the award. Pennsylvania Nat’l Mut. Cas. Ins. Co. v. New
England Reinsurance Corp., 794 F. App’x 213, 215–16 (3d Cir. Dec. 6, 2019). On
remand, the District Court applied the common-law-right-of-access analysis and granted
Everest’s motion to unseal the award, but stayed its order pending appeal.
II1
“[A] common law right of access attaches ‘to judicial proceedings and records.’”
In re Avandia Mktg., Sales Pracs. & Prod. Liab. Litig., 924 F.3d 662, 672 (3d Cir. 2019)
(quoting In re Cendant Corp., 260 F.3d 183, 192 (3d Cir. 2001)). The common-law right
of access permits members of the public to access documents in a judicial proceeding. Id.To determine if the common-law right of access applies to a document, a court must first
1
The District Court had subject-matter jurisdiction to determine whether to unseal the
award under 28 U.S.C. § 1331. See N. Jersey Media Grp. Inc. v. United States, 836 F.3d
421, 428 n.8 (3d Cir. 2016). We have appellate jurisdiction under 28 U.S.C. § 1291.
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determine if the document is a “judicial record.” Id. If the document is a judicial record, a
court must presume the common-law right of access attaches. Id. A party opposing access
to the judicial record can overcome the presumption by articulating a “clearly defined and
serious injury” that would result from the disclosure of the document. Id. (internal
quotation marks omitted) (quoting Miller v. Ind. Hosp., 16 F.3d 549, 551 (3d Cir. 1994)).
The court must then determine if the harm from the articulated injury outweighs the
presumption of access. See id.We review a district court’s conclusion of law de novo. Avandia, 924 F.3d at 674
n.8. We review a district court’s decision on whether to unseal a document under the
common-law right of access for abuse of discretion. Id.
A
Penn National first argues that the arbitration award is not a judicial record to
which the common-law right of access applies. Subject to several exceptions mentioned
below, “the filing of a document gives rise to a presumptive right of public access,” thus
making the document a judicial record. Pansy v. Borough of Stroudsburg, 23 F.3d 772,
782 (3d Cir. 1994) (internal quotation marks omitted) (quoting Leucadia, Inc. v. Applied
Extrusion Techs., Inc., 998 F.2d 157, 161–62 (3d Cir. 1993)).
Penn National claims that a different test applies for determining when a document
becomes a judicial record. Penn National points to North Jersey Media Group, Inc., 836
F.3d 421 (3d Cir. 2016), where we quoted language from Pansy and stated, “[T]he issue
of whether a document is a judicial record should turn on the use the court has made of it
rather than on whether it has found its way into the clerk’s file.” Id. at 435 (alteration in
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original) (internal quotation marks omitted) (quoting Pansy, 23 F.3d at 783). Use of this
language in North Jersey Media was dictum: the plaintiffs in that case sought discovery
materials, a category of judicial filings that “are generally not ‘judicial records’ and do
not fall within the common law right of access.” Id.Furthermore, the quoted language from Pansy does not reference our test. That
language references the test used by the First Circuit. Under this test, the common-law
right of access depended on the “use” made of the document rather than whether the
document “found its way into the clerk’s file.” Pansy, 23 F.3d at 783 (explaining test
from FTC v. Standard Fin. Mgmt. Corp., 830 F.2d 404 (1st Cir. 1987)). We rejected this
test. See id. Thus, if the document does make its way into the clerk’s file, then the
common-law right of access ordinarily attaches. See id. Finally, in another portion of the
Pansy opinion, we discussed the more functional “use” test for settlement agreements.
See id. at 781. Settlement agreements, like discovery materials, are a category of
documents “ordinarily inaccessible to the public,” and we do not read Pansy’s
recognition of a “use” test for anything else but settlement agreements. Leucadia, Inc.,
998 F.2d at 164.
Penn National filed the arbitration award on the docket with the District Court as
part of its motion to confirm the award. Thus, according to our precedents, the award
became a judicial record subject to the common-law right of access.
B
Penn National next argues that the District Court erred in holding that it did not
demonstrate a specific harm sufficient to overcome the presumption of public access. To
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demonstrate a “clearly defined and serious injury” sufficient to overcome the
presumption of access, Penn National submitted an affidavit in which one of its officers
asserted that other reinsurers might choose to forego paying Penn National and contest
their contractual obligation to pay if they learned of the contents in the arbitration award.
The District Court did not abuse its discretion in asserting that no “clearly defined” injury
existed as stated in the affidavit because it could not “determine how many possible
relationships could be impacted, the amount of money that could be at stake, the types of
actions other parties may pursue, or the likelihood that any such actions would be
successful.” App. 15.2
* * *
For the foregoing reasons, we will affirm the judgment of the District Court.
2
Everest filed a cross appeal seeking to reverse the District Court’s order staying its
order to unseal the award pending appeal. That appeal is moot since we have affirmed the
District Court’s judgment to unseal the award.
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