Cont'l Indem. Co. v. Timothy Coffey Nursery/Landscape, Inc.

• Docket Number: 2:21-CV-0853 (JS) (JMW)
• Decision Date: 14 February 2022
• Parties: CONTINENTAL INDEMNITY COMPANY, Plaintiff, v. TIMOTHY COFFEY NURSERY/LANDSCAPE, INC., TIMOTHY COFFEY, ANN AMIAGA, and ISAAC ORELLANA, Defendants.
• Court: U.S. District Court — Eastern District of New York

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CONTINENTAL INDEMNITY COMPANY, Plaintiff, v. TIMOTHY COFFEY NURSERY/LANDSCAPE, INC., TIMOTHY COFFEY, ANN AMIAGA, and ISAAC ORELLANA, Defendants.

No. 2:21-CV-0853 (JS) (JMW)

United States District Court, E.D. New York

February 14, 2022

Steven M. Rosato, Esq., DLA Piper LLP Attorney for Plaintiff.

Jack S. Dweck, Esq., The Dweck Law Firm, LLP Attorney for Defendants.

MEMORANDUM DECISION AND ORDER

JAMES M. WICKS, United States Magistrate Judge.

“It is clear that the courts of this country recognize a general right to inspect and copy public records and documents including judicial records and documents. In contrast to the English practice, . . .American decisions generally do not condition enforcement of this right on a proprietary interest in the document or upon a need for it as evidence in a lawsuit.”^[1]

This action, commenced on February 17, 2021, arises out of allegations of fraudulent inducement, fraud, breach of contract, and unjust enrichment. The parties appeared for two settlement conferences before the undersigned and successfully achieved an agreement to resolve the matter in its entirety.

(Electronic Order dated Nov. 16, 2021; Electronic Order dated Dec. 16, 2021.) Before the Court is Defendants' unopposed motion “to seal the entire record of this case.” (DE 35 and 36^[2].) For the reasons that follow, the motion to seal is denied.

FACTUAL BACKGROUND

The circumstances giving rise to Plaintiff's claims are an unfortunate series of events that arose out of a single tragic accident.

Defendant Timothy Coffey is the owner, founder and president of Defendant Coffey Nursery/Landscape (“Coffey Landscape”) and Defendant Ann Amiaga is Coffey Landscape's office manager. (DE 1; DE 15.) Defendant Isaac Orellana was performing tree trimming and tree removal services for Coffey Landscape when a branch fell on him causing paralysis of his lower extremities. (DE 1.) Plaintiff alleges that leading up to and including the date of the accident, Defendants had not disclosed Defendant Orellana as an employee in the weekly payroll reports submitted to Plaintiff, nor did Defendants pay premiums for Defendant Orellana. (Id.) Plaintiff further alleges that a week after the accident, Defendants submitted a payroll report stating that Defendant Orellana was hired two days before the accident, when in reality he had been working for the company for 25 years and was paid in cash. (Id.) Based on this alleged materially false representation Defendants submitted a claim to Plaintiff for workers' compensation insurance coverage for the accident. (Id.) Plaintiff also asserts that in order to escape paying a higher premium, Defendants did not disclose that Coffey Landscaping performed tree removal services in addition to landscaping services. (Id.)

Issue was joined by Defendants' answer, which denies all material allegations of the complaint and asserts thirteen affirmative defenses. (DE 15.)

On June 24, 2021, the Hon. Joanna Seybert held a status conference at which time she set a briefing schedule on Plaintiff's anticipated motion to strike certain defenses (DE 16) and “directed [the parties] to confer and discuss the potential of settling this matter short of trial. If the parties agree that settlement negotiations will not be fruitful, plaintiff may proceed with their motion based upon the above briefing schedule.” (DE 27.) A settlement conference was thereafter scheduled before the undersigned. (DE 33.) The court held two confidential settlement conferences before depositions were held. (Electronic Order dated Nov. 16, 2021; Electronic Order dated Dec. 16, 2021), and the case successfully settled on December 16, 2021.

Now, almost a year after the action was commenced, Defendants move “to seal the entire record of this case.” (DE 36.) Plaintiff has taken no position on this application. Notwithstanding that the motion is uncontested, the court is obligated to consider whether public access to the court records should be denied. See Bernstein v. Bernstein Litowitz Berger & Grossman LLP, 814 F.3d 132, 136 (2d. Cir. 2016) (affirming district court's denial of motion to seal after applying balancing test for the common-law right of access, despite parties' joint application for sealing).

Notably, the public docket does not include any discovery exchanged between the parties, and the parties entered into a stipulation and order of confidentiality “so ordered” by the court that governed their discovery disclosures. (DE 26.) Aside from general scheduling Orders and conference dates, the substantive docket consists of pleadings: Plaintiff's Complaint (DE 1), Defendants' Answer (DE 15), Plaintiff's motion to strike affirmative defenses (DE 16), and Defendants' opposition (DE 17). The only document attached to any of those items is a copy of the subject workers' compensation policy. (DE 1-1.) There are no medical or personal records contained within any of the subject documents.

Defendants argue that the Complaint and other records filed contain personal and sensitive information including confidential business practices, medical information, statements regarding Defendants' character and integrity, financial information that would affect Defendant Coffey's credit, and statements about business practices that would impair the business's survival. See Jack S. Dweck Decl. ¶¶ 3-4 (DE 36-2.) Defendants further argue that statements within the pleadings, if disclosed, would be defamatory and constitute trade libel. (Id.) Plaintiff does not oppose the motion and Defendant points out that the settlement agreement includes an agreement between the parties to seal the file because of the “sensitive and private statements disclosed as alleged in the Complaint and discovery responses.” (DE 36-2; DE 36-3.)

DISCUSSION

The public right of access is embedded in our Country's history. Indeed, that concept existed well before the right appeared in our Constitution. “Judicial documents are subject at common law to a potent and fundamental presumptive right of public access that predates even the U.S Constitution. That right includes ‘a general right to inspect and copy' such judicial documents.” Mirlis v. Greer, 952 F.3d 51, 58-59 (2d Cir. 2020) (internal citations omitted).

It is by now axiomatic that there is a presumption of public access to judicial documents and records. See Bernstein, 814 F.3d at 139; Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006). However, “the right to inspect and copy judicial records is not absolute. Every court has supervisory power over its own records and files, and access has been denied where court files might have become a vehicle for improper purposes.” Nixon, 435 U.S. at 598. Whether right of access to court proceedings and records is overcome, “depends on the nature of the proceeding, not on the personal characteristics of the litigant.” Hartford Courant Co., LLC v. Carroll, 986 F.3d 211, 219 (2d Cir. 2021).

The Second Circuit has adopted a three-part analysis for determining whether litigation documents can be placed under seal. See Lugosch, 435 F.3d at 119-20; see also King Pharm., Inc. v. Eon Labs, Inc., No. 04-CV-5540 (DGT), 2010 WL 3924689, at *4 (E.D.N.Y. Sept. 28, 2010). First, the court “must determine whether documents are judicial documents that are relevant to the performance of the judicial function and useful in the judicial process.” See Saadeh v. Kagan, No. 20-CV-1945 (PAE)(SN), 2021 WL 965334, at *2 (S.D.N.Y. Mar. 15, 2021) (internal quotation and citations omitted). Second, the Court must weigh the common law and constitutional presumption of access attached to the documents in question. See Saadeh, 2021 WL 965334 at *2 (citing Lugosch, 435 F.3d. at 119-120). And third, the Court must use its discretion to determine “whether there are any countervailing concerns that would weigh against full public access to the documents.” See Saadeh, 2021 WL 965334 at *2 (citing Lugosch, 435 F.3d. at 120).

Judicial documents that are tantamount to performance of Article III functions likely carry a strong presumption of access whereas documents that are insignificant in helping a court reach an adjudicative decision demonstrate a low presumption of access. See United States v. Amodeo, 7144 F.3d 1044, 1049-50 (2d Cir. 1995). A complaint is an obvious example of a judicial document to which a strong presumption of access attaches because it assists the Court's exercise of Article III functions. See Bernstein, 814 F.3d at 140-41 (holding that a complaint should be afforded a presumption of accessibility despite the action's settlement on confidential terms).

The moving party seeking to seal bears the burden of showing that higher values outweigh the presumption of public access. See Under Seal v. Under Seal, 273 F.Supp.3d 460, 469 (S.D.N.Y. 2017). “Privacy interests” may, under certain circumstances satisfy that higher burden. The Second Circuit articulated three factors that the courts must consider in making a sealing determination based on privacy interests. Amodeo, 71 44 F.3d at 1051. First, “courts should consider the degree to which the subject matter is traditionally considered private rather than public. Financial records of a wholly owned business family affairs, illness, embarrassing conduct with no public ramifications, and similar matters will weigh more heavily against access than conduct affecting a substantial portion of the public.” Id. Next, courts should consider “[t]he nature and degree of injury. . . . This will entail consideration not only of the sensitivity of the information and the subject but also of how the person seeking access intends to use the information.” Id. Lastly, courts should consider the reliability of the information and err on the side of...