Lugosch v. Pyramid Co. of Onondaga

• Decision Date: 10 January 2006
• Docket Number: Docket No. 05-3620-CV.
• Citation: 435 F.3d 110
• Parties: Daniel J. LUGOSCH III, Robert L. Ungerer, John A. Bersani, Edward A. Kellogg, John C. Charters and Peter C. Steingraber, Plaintiffs-Counter-Defendants, Richard K. Askin and William Tapella, Plaintiffs, Capital Newspaper Division of the Hearst Corporation, Intervenor, The Herald Company, Intervenor-Appellant, v. PYRAMID COMPANY OF ONONDAGA, EklecCo LLC, James A. Tuozzolo, Robert Brvenik, Marc A. Malfitano and Scott R. Congel, Defendants-Counter-Defendants-Appellees, Robert V. Hunter, As Trustee of the Congel Family Trust which are General Partners of Woodchuck Hill Associates, Riesling Associates, Madeira Associates and Moselle Associates, George Schunck, As Trustee of the Congel Family Trust which are General Partners of Woodchuck Hill Associates, Riesling Associates, Madeira Associates and Moselle Associates, William Bucci, As Trustee of the Congel Family Trust which are General Partners of Woodchuck Hill Associates, Riesling Associates, Madeira Associates and Moselle Associates, S & R Group, Inc., Bontel Corporation and DiMarco, Abiusi & Pascarella, Certified Public Accountants, P.C., Defendants-Appellees, Riesling Associates, Madeira Associates, Moselle Associates, Robert J. Congel and Woodchuck Hill Associates, Defendants-Counter-Claimants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

435 F.3d 110

Daniel J. LUGOSCH III, Robert L. Ungerer, John A. Bersani, Edward A. Kellogg, John C. Charters and Peter C. Steingraber, Plaintiffs-Counter-Defendants, Richard K. Askin and William Tapella, Plaintiffs, Capital Newspaper Division of the Hearst Corporation, Intervenor, The Herald Company, Intervenor-Appellant, v. PYRAMID COMPANY OF ONONDAGA, EklecCo LLC, James A. Tuozzolo, Robert Brvenik, Marc A. Malfitano and Scott R. Congel, Defendants-Counter-Defendants-Appellees, Robert V. Hunter, As Trustee of the Congel Family Trust which are General Partners of Woodchuck Hill Associates, Riesling Associates, Madeira Associates and Moselle Associates, George Schunck, As Trustee of the Congel Family Trust which are General Partners of Woodchuck Hill Associates, Riesling Associates, Madeira Associates and Moselle Associates, William Bucci, As Trustee of the Congel Family Trust which are General Partners of Woodchuck Hill Associates, Riesling Associates, Madeira Associates and Moselle Associates, S & R Group, Inc., Bontel Corporation and DiMarco, Abiusi & Pascarella, Certified Public Accountants, P.C., Defendants-Appellees, Riesling Associates, Madeira Associates, Moselle Associates, Robert J. Congel and Woodchuck Hill Associates, Defendants-Counter-Claimants-Appellees.

Docket No. 05-3620-CV.

United States Court of Appeals, Second Circuit.

Argued: November 15, 2005.

Decided: January 10, 2006.

COPYRIGHT MATERIAL OMITTED

Michael J. Grygiel (John J. Privitera, William A. Hurst, on the brief), McNamee, Lochner, Titus & Williams, P.C., Albany, NY, for Appellant The Herald Company.

Christopher D. Moore (Paul F. Ware, Jr., David J. Apfel, Anthony S. Fiotto, Julie M. Wade, on the brief), Goodwin Procter LLP, Boston, MA, for all Appellees.

Before: MINER, KATZMANN, and WESLEY, Circuit Judges.

KATZMANN, Circuit Judge.

This case involves the efforts of certain news organizations to intervene to secure access to documents filed under seal in regard to a motion for summary judgment. It calls upon us to determine, inter alia, whether the media intervenors can appeal a district court order that was not a final judgment, whether such documents constitute "judicial documents," and whether an immediate right of access under both the common law and First Amendment obtains.

In June 2004, the Herald Company and Capital Newspapers Division of the Hearst Corporation ("Newspapers") sought to intervene in J. Daniel Lugosch, III et al. v. Robert J. Congel et al., 00-CV-0784 (NAM/RFT) (N.D.N.Y.), in which various plaintiffs, none of whom are parties to this appeal, alleged various financial improprieties in the business operations of defendant Pyramid Company of Onandaga, New York and its majority general partner Robert J. Congel. In particular, the Newspapers sought access to certain documents filed under seal in connection with the defendants' motion for summary judgment, arguing that these were "judicial documents" to which they had an immediate right of access under both the common law and First Amendment. Approximately nine months after the filing of the Newspapers' intervention motion, the magistrate judge (Treece, M.J.) to whom the motion had been referred issued an order holding the motion "in abeyance" until after the district court (Mordue, J.) ruled on the summary judgment motion, reasoning that it was not in a position to assess the strength of the Newspapers' argument until that time. Approximately four months after that, still without having ruled on the summary judgment motion, the district court upheld the magistrate judge's decision to hold the Newspapers' intervention motion in abeyance. The Herald Company now appeals this decision. We conclude that the district court erred in holding the motion in abeyance because the contested documents are judicial documents to which a presumption of immediate access applies under both the common law and the First Amendment. Because we are not in a position to assess whether the presumption is overcome by countervailing factors, we remand for the district court to make specific — and immediate — findings.

BACKGROUND

The underlying litigation in the district court pits the plaintiffs, who are minority general partners in ten general partnerships controlled by defendant Robert Congel, against Congel, The Pyramid Company, and associated defendants, which collectively operate over twenty large regional shopping centers in the Northeast. In their ten-count third amended complaint, the plaintiffs alleged civil RICO violations, fraud, conversion, conspiracy, aiding and abetting, breach of contract, breach of fiduciary duty, and constructive trust. Much of the case has already survived a motion to dismiss.

During the same period in which the lawsuit has proceeded, the defendants have been involved in lobbying the New York State Senate and the governor's office to obtain various tax credits and other sources of public funding to construct a highly publicized mega-mall in Syracuse, New York called "DestiNY USA." Although nothing about this particular construction project is at issue in the lawsuit, the plaintiffs' complaint generally raises questions about the business practices of the entities and individuals lobbying the state.

On May 7, 2004, the defendants filed a motion for summary judgment, attaching at least twenty-five sealed documents or sets of documents, for a total volume of approximately 4000 pages. On July 12, 2004, the plaintiffs filed their opposition to this motion, attaching at least fifteen volumes of sealed appendices, as well as a sealed memorandum of law and a sealed response to the defendants' statement of material facts.

On June 23, 2004, the Newspapers filed a motion to intervene for the limited purpose of obtaining immediate public access to the sealed motion papers under the common law and the First Amendment. The Newspapers' motion papers were accompanied by a proposed Order to Show Cause that the Newspapers requested be made returnable no later than June 30, 2004.¹ The district court did not act within this requested time frame. Instead, almost a month later, in a letter dated July 20, 2004, the district court informed counsel that he was referring the motion to intervene and the proposed Order to Show Cause to a magistrate judge. The district court also commented on the Newspapers' request for leave to attend oral argument on defendants' summary judgment motion:

As matters now stand, the Court does not intend to hear oral argument on the summary judgment motion, but rather intends to take the motion on submission. Therefore, this issue is moot. In the event that the Court ultimately decides to hear oral argument, all parties and the newspapers will be notified.

On August 11, 2004, the magistrate judge signed an Order to Show Cause, "find[ing] that such an intervention may have merit." The magistrate judge cautioned, however, that "[w]hile the Court acknowledges the important constitutional issues at stake herein, in light of the pace of this litigation and the fact that the pending summary judgment motion has not been fully briefed, the Court does not share the Proposed Intervenors' sense of urgency in terms of expediting the within matter." Accordingly, the magistrate judge set August 20, 2004 as the deadline for the Newspapers to serve the court's order and the motion papers on the parties; thirty days after August 20 as the deadline for any responses to the motion; and fifteen days after that for any reply papers. The magistrate judge then stated that "[u]pon receipt and consideration of all papers submitted, as set forth above, the Court will then set a date for oral argument."

In accordance with these deadlines, the motion to intervene was fully briefed as of September 28, 2004, three months after the motion had been filed. However, the magistrate judge apparently never conducted oral argument.

In a letter agreement between the Newspapers and the defendants dated November 5, 2005, the defendants agreed to withdraw their objections to public disclosure except for the portions of the parties' summary judgment materials for which defendants claimed attorney-client privilege.² For their part, the Newspapers agreed not to object to certain redactions of personal information. The letter agreement also provided that in the event the district court decided to hold oral argument on the pending summary judgment motion, the Newspapers' reporters would be authorized to be present in the courtroom during the argument. A copy of this letter agreement was sent to the magistrate judge on November 8, 2004.

Months passed without any decision on the intervention motion. By letter dated March 7, 2005, in advance of a March 8, 2005 settlement conference among the parties, the Newspapers requested from the magistrate judge a prompt determination of their motion, noting that it had been fully submitted for over five months and pointing out that the sole remaining issue in contention was the extent to which the defendants' claims of privilege could overcome the public's presumptive First Amendment and common law right of access to the allegedly privileged documents.

Another month passed. By letter dated April 12, 2005, the Newspapers again requested that the magistrate judge issue a prompt decision on the motion to intervene, noting that the court had not acknowledged or responded to their March 7 letter. The Newspapers stated that unless the Court rendered a decision by April 20, 2005, the Newspapers would seek immediate relief in the form of a mandamus petition filed with this Court.

On April 15, 2005, the magistrate judge finally issued an order on the intervention motion. Lugosch, et. al. v. Congel, et. al., 2005 WL 1523412 (N.D.N.Y. Apr.15, 2005). Instead of resolving the motion on the merits, however, the magistrate judge ordered that the motion be held "in abeyance" pending the district court's determination of the defendants' summary judgment motion. I...