377 F.3d 133 (2nd Cir. 2004), 03-7621, Gambale v. Deutsche Bank AG

Docket Nº:03-7621.
Citation:377 F.3d 133
Party Name:Virginia GAMBALE, Plaintiff-Appellee, v. DEUTSCHE BANK AG, Bankers Trust Company, Defendants-Appellants.
Case Date:August 02, 2004
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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377 F.3d 133 (2nd Cir. 2004)

Virginia GAMBALE, Plaintiff-Appellee,


DEUTSCHE BANK AG, Bankers Trust Company, Defendants-Appellants.

No. 03-7621.

United States Court of Appeals, Second Circuit

August 2, 2004

Argued: April 21, 2004.

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Ronald M. Green, Epstein, Becker & Green, P.C., New York, NY, for Defendants-Appellants.

Debra L. Raskin, Vladeck, Waldman, Elias & Engelhard, PC, New York, NY, for Plaintiff-Appellee (did not participate).

Eugene R. Scheiman (Daniel J. Friedman, of counsel), Buchanan Ingersoll, Professional Corporation, New York, NY, Amicus Curiae.

Before: McLAUGHLIN, SACK, and SOTOMAYOR, Circuit Judges.

SACK, Circuit Judge:

By July 2, 2003, the parties to this action had settled the underlying dispute, which involved alleged sex discrimination by the defendants-appellants, Deutsche Bank AG and Bankers Trust Company (together, the "Bank"), against the plaintiff-appellant, Virginia Gambale. The parties had therefore entered into a settlement agreement in the United States District Court for the Southern District of New York reflecting the terms of the settlement. In it, they had agreed that the terms of the settlement would be maintained in confidence. They had also filed with the Clerk of Court a stipulation of dismissal pursuant to Fed.R.Civ.P. 41(a)(1)(ii).

On July 2, 2003, the district court (Harold Baer, Jr., Judge) publicly disclosed some of the settlement terms in the course of ordering, sua sponte, the unsealing of several sealed documents relating to the

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action. The Bank appeals from the district court's order, asserting that after the stipulation of dismissal was filed, the court lacked jurisdiction to issue such an order. It also asserts that even if the court had jurisdiction, the order was improper. We conclude that the district court had jurisdiction to issue the order unsealing the documents and did not abuse its discretion in doing so. We remand the action to the court, however, with an instruction to maintain under seal the transcript of a conference in which the parties revealed to the court the confidential amount that the Bank was to pay Gambale in accordance with the confidential settlement agreement, unless all confidential information and direct and indirect references to confidential information are first redacted and no party has otherwise carried its burden of establishing that the document should be sealed in its entirety.


On June 20, 2002, Virginia Gambale, a former Managing Director of the Bank, brought an action against the Bank in the United States District Court for the Southern District of New York. She alleged that the Bank had discriminated against her on the basis of her sex and had retaliated against her for complaining about it, in violation of the New York State and New York City Human Rights Laws. On October 24, 2002, during the initial discovery phase of the litigation, the parties executed and the district court "so ordered" a "Stipulation and Order Governing the Protection and Exchange of Confidential Material" (the "Stipulation of Confidentiality"). The Stipulation of Confidentiality permitted the parties to designate any produced documents, information, or deposition testimony as confidential if they thought that such material contained confidential or proprietary information. It also permitted a party producing material labeled as confidential to move for a protective order before the opposing party filed the material.

During the course of discovery, the Bank produced documents, some of which it labeled confidential. Those documents included the compensation planning charts relating to two Bank employees, the compensation history of two Bank employees, and four pages of an internal Bank study of diversity at the Bank, which contained information about the gender composition of the Bank's employees. Gambale v. Deutsche Bank AG, No. 02 CIV. 4791 HB, 2003 WL 21511851, at *2, 2003 U.S. Dist. LEXIS 11180, at *4-*7 (S.D.N.Y. July 2, 2003). Gambale filed these documents as exhibits to her response in opposition to the Bank's motion for summary judgment.

On March 11, 2003, based on the Stipulation of Confidentiality, the Bank sought from Magistrate Judge Douglas F. Eaton a protective order requiring that those documents be sealed in the court files. The magistrate judge entered an order providing that "[u]ntil such time as Judge Baer rules on Defendants' request that the ... items be placed permanently under seal, Plaintiff will remove the ... documents from the opposition papers that she files with the [court] Clerk ... and ... will file such documents under seal with the Clerk." March 20, 2003, Stipulation and Order Pertaining to the Filing of Documents Under Seal, at 2. The order also provided:

Upon resolution of the summary judgment motion by Judge Baer or the trial of the matter, whichever comes first, Defendants shall renew before Judge Baer the request set forth in their March 11, 2003 letter to Magistrate Judge Eaton. This Order shall remain in effect pending Judge Baer's issuing a ruling on Defendants' renewed request.

Id. at 3.

Gambale subsequently requested that Magistrate Judge Eaton order that the

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entire diversity study be disclosed to her for purposes of discovery. The magistrate judge declined to order full disclosure, concluding that most of the study was privileged. Instead, he ordered the Bank to produce four additional pages of the study because those pages were not privileged. See April 8, 2003, Memorandum and Order. The Bank did not object to the order. As part of her opposition to the Bank's motion for summary judgment, Gambale filed with the district court the documents that the Bank had disclosed pursuant to the magistrate judge's order.

By order dated May 13, 2003, the district court granted the Bank's motion for summary judgment as to Gambale's claim regarding the allegedly discriminatory appointment of another Bank employee to head a particular steering committee. The court denied the motion for summary judgment on Gambale's many other claims.

According to the Bank, on May 23, 2003, the parties jointly advised the court that they had reached a settlement of the action in principle. The Bank asserts that the settlement was motivated significantly by its desire to avoid public disclosure at trial of the temporarily sealed documents. The Bank also asserts that the district court then advised the parties to appear before it four days later to present a stipulation of discontinuance pursuant to the settlement agreement. By May 27, 2003, the Bank says, the parties had executed a "Confidential Settlement and General Release Agreement" (the "Settlement Agreement"). According to the Bank, the Settlement Agreement contains (1) a non-admission of liability clause; (2) a confidentiality provision that covers the entire Settlement Agreement, including the amount that the Bank would pay to Gambale in settlement of her claims; and (3) a clause that provides that any documents filed under seal with the district court shall remain permanently under seal.

On May 27, 2003, the parties appeared before the district court. They advised the court that the litigation had been settled on a confidential basis. They asked the court to retain jurisdiction over the action in order to permit it to appoint a special master to hear future disputes, if any, about settlement payments.

The district court then asked the parties to share with it the specific dollar amount of settlement "since at the moment it's all confidential." May 27, 2003, Transcript, at 2. The parties did so, with counsel for the Bank reiterating that he was disclosing it "[s]ince at the moment it's all confidential." Id.

The district court judge wondered aloud why the public should not know about discrimination at a major banking institution. A lawyer for one of the parties answered, first, that the Settlement Agreement contains no admission of liability and, second, that such a disclosure would deter settlement. The district court asked the parties to file letters with it addressing whether the settlement terms should be made public. The transcript of the conference was filed with the district court clerk's office under seal.

On May 29, 2003, the Bank submitted a letter in support of its position that the Settlement Agreement should be kept confidential. The Bank argued that both parties had agreed that the information would be maintained in confidence and that no public interest favored public disclosure.

According to the Bank, at a June 9, 2003, conference, the district court refused to adhere to the parties' agreement that the terms of the Settlement Agreement remain confidential. According to the Bank, the court declared that it would disclose the contents of the Settlement

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Agreement unless the Bank agreed to conduct a global gender review through a third party during several subsequent years. Under the district court's proposal, the Bank would be required to bind itself to provide the results of the review to the court. The court would then either accept the report or reject it and require further affirmative steps to combat discrimination. The Bank refused to agree to these conditions.

Two days later, on June 11, 2003, the parties filed a Stipulation of Dismissal with Prejudice (the "Stipulation of Dismissal") pursuant to Fed.R.Civ.P. 41(a)(1)(ii). The Bank then sent the district court a letter asserting that, as a result of the Stipulation of Dismissal, the court no longer had jurisdiction over the action between Gambale and the Bank. In the Bank's view, the district court therefore had no authority to permit disclosure of the settlement terms or to unseal any documents related to the action or the settlement.


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