Jessup v. Luther

• Decision Date: 17 January 2002
• Docket Number: No. 01-1523,01-1523
• Parties: Page 926 277 F.3d 926 (7th Cir. 2002) Goble Jessup, Plaintiff-Appellee, v. Robert Luther, et al., Defendants-Appellees. Appeal of Mid-Illinois Newspapers, Inc., Intervenor/Appellant. In the United States Court of Appeals For the Seventh Circuit
• Court: U.S. Court of Appeals — Seventh Circuit

Page 926

277 F.3d 926 (7th Cir. 2002)

Goble Jessup, Plaintiff-Appellee, v. Robert Luther, et al., Defendants-Appellees.

Appeal of Mid-Illinois Newspapers, Inc., Intervenor/Appellant.

No. 01-1523

In the United States Court of Appeals For the Seventh Circuit

Argued September 28, 2001

Decided Janaury 17, 2002

Appeal from the United States District Court for the Central District of Illinois. No. 97 C 2241--David G. Bernthal, Magistrate Judge.

Before Posner, Easterbrook, and Kanne, Circuit Judges.

Posner, Circuit Judge.

A newspaper publisher appeals from the denial of its motion to unseal a settlement agreement that had been sealed and deposited in the federal district court in which the motion was made. The agreement resolved a dispute between a former vice president of a public college, and the college, concerning the termination of his contract of employment. He had sued the college in federal district court under 42 U.S.C. sec. 1983, charging that the termination had deprived him of property and liberty without due process of law, in violation of the Fourteenth Amendment. The suit was filed in 1997 and the following year settlement discussions were conducted that a magistrate judge presided over as authorized to do by a local rule of the district court. The parties reached an agreement and embodied it in a signed document that they gave the judge. He "approved" the agreement, we are told, but the significance of this approval is unclear. He did not embody his approval in a judicial order that would have made the agreement enforceable by contempt proceedings in the event that either party violated its terms. He merely ordered that the suit be dismissed with prejudice and that "all documents related to the settlement are to be sealed. This will include any documents submitted by the parties other than the order of dismissal." The publisher inter vened, see Jessup v. Luther, 227 F.3d 993 (7th Cir. 2000), but, as we have said, its motion to unseal the agreement was denied, precipitating this appeal. The denial of the motion was a final, appealable order, 28 U.S.C. sec. 1291, for nothing remained pending in the district court after its entry.

The general rule is that the record of a judicial proceeding is public. Press- Enterprise Co. v. Superior Court, 464 U.S. 501, 509-10 (1984); United States v. Ladd, 218 F.3d 701, 704 (7th Cir. 2000); Smith v. United States District Court Officers 203 F.3d 440, 441 (7th Cir. 2000); In re Cendant Corp., 260 F.3d 183, 192 (3d Cir. 2001); In re Sealed Case, 237 F.3d 657, 666 (D.C. Cir. 2001). Not only do such records often concern issues in which the public has an interest, in which event concealing the records disserves the values protected by the free-speech and free-press clauses of the First Amendment, but also the public cannot monitor judicial performance adequately if the records of judicial proceedings are secret. Union Oil Co. v. Leavell, 220 F.3d 562, 567-68 (7th Cir. 2000); United States v. Eppinger, 49 F.3d 1244, 1252-53 (7th Cir. 1995); B.H. v. McDonald, 49 F.3d 294, 301 (7th Cir. 1995); United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995). These considerations, however, support a strong presumption rather than an absolute rule. When there is a compelling interest in secrecy, as in the case of trade secrets, the identity of informers, and the privacy of children, portions and in extreme cases the entirety of a trial record can be sealed. Citizens First National Bank v. Cincinnati Ins. Co., 178 F.3d 943, 945 (7th Cir. 1999); Doe v. Blue Cross & Blue Shield United of Wisconsin, 112 F.3d 869, 872 (7th Cir. 1997); Miller v. Indiana Hospital, 16 F.3d 549, 551 (3d Cir. 1994). The interest in secrecy is weighed against the competing interests case by case. Central National Bank v. United States Dep't of Treasury, 912 F.2d 897, 900 (7th Cir. 1990); Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304, 1314-15 (11th Cir. 2001); Miller v. Indiana Hospital, supra, 16 F.3d at 551; see also United States v. Ladd, supra, 218 F.3d at 705-06.

Parties who settle a legal dispute rather than pressing it to resolution by the court often do so, in part anyway,because they do not want the terms of the resolution to be made public. Defendants in particular are reluctant to disclose the terms of settlement lest those terms encourage others to sue. See generally Laurie Kratky Dore, "Secrecy by Consent: The Use and Limits of Confidentiality in the Pursuit of Settlement," 74 Notre Dame L. Rev. 283 (1999). This might seem a material consideration in the present case, since the settlement was with an employee of the defendant and if the terms were favorable to the employee it might encourage other employees of the defendant to sue as well--yet it was the plaintiff rather than the defendant that requested that the terms of the settlement be kept secret, and the judge gave no reason why he acceded to the request. Ordinarily, though, settlement agreements, like most arbitration awards and discovery materials, are private documents, Union Oil Co. v. Leavell, supra, 220 F.3d at 568, not judicial records, and so the issue of balancing the interest in promoting settlements by preserving secrecy against the interest in making public materials upon which judicial decisions are based does not arise--there is no judicial decision. Even if the parties reach settlement after suit has been filed, the settlement agreement will not be a judicial record, B.H. v. McDonald, supra, 49 F.3d at 300, because the parties will file a stipulation of dismissal pursuant to which the suit will be dismissed without further ado or court action, Fed. R. Civ. P. 41(a)(1)(ii), and the settlement agreement that motivated the stipulation of dismissal will then have the identical status as any other private contract. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 380-81 (1994); Professional Service Network, Inc. v. American Alliance Holding Co., 238 F.3d 897 (7th Cir. 2001); Montgomery v. Aetna Plywood, Inc., 231 F.3d 399 (7th Cir. 2000); Carr v. Runyan, 89 F.3d 327, 331 (7th Cir. 1996); McAlpin v. Lexington 76 Auto Truck Stop, Inc., 229 F.3d 491, 501-04 (6th Cir. 2000); Langley v. Jackson State University, 14 F.3d 1070, 1072-75 (5th Cir. 1994).

Settlement agreements that contain equitable terms, an injunction for example, will usually be embodied in a consent decree so that the judge will have continuing jurisdiction to enforce their terms. But consent decrees are judicial orders and therefore are public except insofar as particular provisions may be concealed in order to protect trade secrets or other compelling interests in secrecy. B.H. v. McDonald, supra, 49 F.3d at 300; EEOC v. National Children's Center, Inc., 98 F.3d 1406, 1409 (D.C. Cir. 1996).

What is unusual about this case is that even though the settlement agreement does not contemplate the retention by the district court of jurisdiction to enforce any of its terms-- for remember that upon "accepting" the agreement the judge dismissed the suit with prejudice--the agreement was submitted to and approved by the judge and a copy deposited in the files of the court and then ordered sealed. The district judge's "approval" of a settlement, unless that approval is embodied in a judicial order retaining jurisdiction of the case in order to be able to...