147 F.3d 7 (1st Cir. 1998), 98-1109, Siedle v. Putnam Investments, Inc.

Docket Nº:98-1109.
Citation:147 F.3d 7
Party Name:Edward A.H. SIEDLE, Plaintiff, Appellee, v. PUTNAM INVESTMENTS, INC., Defendant, Appellant.
Case Date:June 16, 1998
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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147 F.3d 7 (1st Cir. 1998)

Edward A.H. SIEDLE, Plaintiff, Appellee,


PUTNAM INVESTMENTS, INC., Defendant, Appellant.

No. 98-1109.

United States Court of Appeals, First Circuit

June 16, 1998

Heard May 7, 1998.

Dennis M. Kelleher, with whom Andrew J. Hachey and Skadden, Arps, Slate, Meagher & Flom LLP were on brief, for appellant.

Morris M. Goldings, with whom Richard S. Jacobs and Mahoney, Hawkes & Goldings were on brief, for appellee.

Before SELYA, Circuit Judge, CAMPBELL and CYR, Senior Circuit Judges.

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SELYA, Circuit Judge.

Like competing centrifugal and centripetal forces, the presumptive right of public access to judicial records and the duty of confidentiality that an attorney owes to a former client push and pull in this appeal. Reconciling these important interests, we hold that the district court abused its discretion when it summarily unsealed all the filings in an action brought by a lawyer against his former client.


Defendant-appellant Putnam Investments, Inc. (Putnam) operates a large, multifaceted financial services business. It employed plaintiff-appellee Edward A.H. Siedle as an in-house counsel at its Boston headquarters in the mid-1980s. Siedle's responsibilities included monitoring Putnam's compliance with federal and state securities laws and with the company's self-imposed code of ethics.

The circumstances surrounding Siedle's departure from Putnam's ranks are conflicted. For present purposes, it suffices to say that disagreements between Siedle and senior management rendered a continuing employment relationship infeasible. Putnam and Siedle parted company on October 21, 1988, and Siedle promptly retained counsel to iron out various wrinkles incident to the severing of this tie. Negotiations produced a termination agreement (the Agreement), signed on February 14, 1989, in which the parties agreed that Siedle's departure had come about by mutual consent, that each would "refrain from making any adverse public or private comment about the other," and that Siedle would not disclose any "non-public documents, materials or information in whatever form" obtained in the course of his employment. The parties specifically acknowledged that this last obligation was cumulative of Siedle's duties under the "Code of Professional Responsibility and the common law governing the attorney-client privilege."

Notwithstanding his departure, Siedle elected to maintain a retirement account with Putnam. In early 1997, Putnam informed him that, due to a clerical bevue, it had erroneously credited Siedle's account to the tune of approximately $15,000. Putnam unilaterally deducted the alleged overpayment from Siedle's account balance. This action proved to be the wind that fanned the still-smoldering embers of the failed relationship. A conflagration erupted.

In short order, Siedle told his tale to Pensions & Investments (P & I ), a prominent weekly trade magazine. 1 In a May 1997 issue, P & I published an article captioned "Putnam, Ex-Employee At Odds Over Benefits." The story attributed to Siedle some unflattering comments about Putnam's administration of retirement accounts. Putnam promptly criticized the article for "tak[ing] an isolated record-keeping dispute between Putnam and a lawyer the company fired nine years ago and suggest[ing] a whole range of questions about our performance and capabilities." P & I published Putnam's rejoinder as a "letter to the editor" in its May 26 issue.

Siedle took umbrage and sued Putnam in a Massachusetts state court for breach of contract, interference with advantageous business relationships, and conversion. Noting the parties' diverse citizenship and Siedle's large ad damnum, Putnam removed the action to the federal district court, see 28 U.S.C. §§ 1332(a), 1441, and asserted a coterie of counterclaims.

Siedle's complaint shapes the contours of the current controversy. It contains a paragraph that, in Putnam's view, needlessly divulges information obtained in the course of the parties' attorney-client relationship. Putnam contends that the applicable disciplinary rule, Massachusetts Supreme Judicial Court (SJC) Rule 3:07, Canon 4, DR 4-101 (West 1997), requires that Siedle hold the contents of this scarlet paragraph in strictest

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confidence. 2 Moreover, Putnam insists that this breach of trust was hardly a slip of the pen; to bolster this point, a Putnam executive signed an affidavit in which he swore that Siedle threatened to disclose other privileged materials unless the company knuckled under and effected a lucrative settlement of Siedle's lawsuit.

In rapid sequence, Putnam obtained a temporary restraining order, a seal order, and a preliminary injunction. Collectively, these edicts impounded virtually all the pleadings, directed the parties to submit all future filings under seal, and prohibited Siedle from disclosing any information that was subject to the attorney-client privilege or the confidentiality requirements of the Agreement. 3 Siedle did not oppose any of these requests for interim relief, and they remained in effect for the next several months.

On January 12, 1998, the New York Times sought and received, without opposition from either party, access to the seal order. At a February 6 scheduling conference, a lawyer for the newspaper appeared and requested that the court lift the seal. With surprisingly little fanfare, the court acquiesced and opened the case file. Putnam moved for reconsideration in the district court and, when that motion failed, successfully sought an...

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