Policy Management Systems Corp., In re
| Decision Date | 13 September 1995 |
| Docket Number | Nos. 94-2254,94-2341,s. 94-2254 |
| Parties | 23 Media L. Rep. 2486 NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. In re: POLICY MANAGEMENT SYSTEMS CORPORATION, Appellant, Samuel SPEAR; Lee Foy Early; D.A. Early, III; Frederick R. Ennis; Jerry Rosenbaum; Barry Roseman, Trustee of Barry Roseman Profit Sharing Plan; Thomas Moore, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, KNIGHT RIDDER, Incorporated, Intervenor, v. ERNST & YOUNG; Arthur Andersen & Company, Defendants. Samuel SPEAR, on his own behalf and on behalf of all similarly situated; jerry Rosenbaum; Barry Roseman, Trustee of Barry Roseman Profit Sharing Plan; Frederick R. Ennis; D.A. Early, III; William Thomas Moore; Lee Foy Early, Plaintiffs-Appellees, KNIGHT RIDDER, Incorporated, Intervenor, v. POLICY MANAGEMENT SYSTEMS CORPORATION, Defendant-Appellant, and George L. Wilson; Robert L. Gresham; David T. Bailey; Charles E. Callahan; Bernard C. Mazon; Donald A. Coggiola; Sterling E. Beale; Lutz F. Hahne; John P. Seibels; Richard G. Trub; Donald W. Fedderson, Defendants. |
| Court | U.S. Court of Appeals — Fourth Circuit |
ARGUED: George Taylor Manning, JONES, DAY, REAVIS & POGUE, Washington, DC, for appellant. Terry E. Richardson, Jr., Barnwell, SC, for appellees. James M. Brailsford, III, ROBINSON, MCFADDEN & MOORE, P.C., Columbia, SC, for intervenor. ON BRIEF: R. Dal Burton, David J. Schenck, JONES, DAY, REAVIS & POGUE, Washington, DC, for appellant. Sherrie R. Savett, Catherine A. Sullivan, Genna C. Driscoll, BERGER & MONTAGUE, P.C., Philadelphia, PA; Robert P. Sugarman, Paul D. Young, MILBERG, WEISS, BERSHAD, HYNES & LERACH, New York, NY, for appellees. David W. Robinson, II, ROBINSON, MCFADDEN & MOORE, P.C., Columbia, SC, for intervenor.
Before RUSSELL and MICHAEL, Circuit Judges, and MESSITTE, United States District Judge for the District of Maryland, sitting by designation.
Appellant Policy Management Systems Corporation ("PMSC") appeals the district court's order to release sealed documents to the public. The documents had been filed as exhibits to a memorandum in opposition to a motion to dismiss in a related case, but the court did not consider them in ruling on the motion. Because we hold that such documents are not entitled to a presumption of public access under either the common law or the First Amendment, we reverse.
I.
PMSC shareholders (the "plaintiffs") filed two shareholder class actions in the United States District Court for the District of South Carolina. In April 1993, the plaintiffs sued PMSC for alleged violations of federal and state securities laws, and for negligent misrepresentation under South Carolina common law. In re Policy Management Sys. Corp., Civ. A. No. 3-93-0807-17 (D.S.C.) ("PMSC "). In April 1994, the plaintiffs filed a complaint alleging similar claims against PMSC's former auditors, Ernst & Young and Arthur Andersen & Co. Spear v. Ernst & Young, Civ. A. No. 3-94-1150-17 (D.S.C.) ("Ernst & Young ").
During the course of the PMSC action, the plaintiffs and PMSC reached an agreement to facilitate discovery. On August 26, 1993, the district court entered a confidentiality order consistent with that agreement. The order directed the parties to identify and mark confidential documents, which the clerk of the court would maintain under seal. On September 20, 1993, the court amended the order to comply with the notice and hearing procedures of In re Knight Publishing Co., 743 F.2d 231 (4th Cir.1984), and Rushford v. The New Yorker Magazine, Inc., 846 F.2d 249 (4th Cir.1988). When the plaintiffs filed their complaint against PMSC's auditors, the parties agreed to a similar confidentiality order. PMSC was not a defendant in the Ernst & Young action, but it also signed the order.
On June 8, 1994, Ernst & Young and Arthur Andersen & Co. filed motions to dismiss in Ernst & Young under Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. On July 12, 1994, the plaintiffs filed under seal a memorandum of law in opposition to the motions to dismiss and attached to it an affidavit with exhibits. These exhibits included documents designated as confidential that were produced by Ernst & Young and PMSC's current accountants, Coopers & Lybrand, during discovery in PMSC. The plaintiffs provided notice of the filing to PMSC and to PMSC's auditors. On July 26, 1994, PMSC and Ernst & Young moved to maintain the confidentiality of the documents.
On August 15, 1994, the district court granted in part the auditors' motions to dismiss. The court also issued an order requesting the parties to inform the court of their positions on the sealed documents filed by the plaintiffs. In this order, the court stated that it "did not rely upon the documents filed and designated as confidential." After providing notice to the local press, the court conducted a hearing, heard all interested parties, and ordered the unsealing of the documents. On September 30, 1994, the court entered a written order requiring the clerk to release the documents, in redacted form, 1 to the public at 4:00 p.m. on October 3, 1994.
On October 3, 1994, PMSC filed in the district court a notice of appeal and a request for a stay of the order to unseal the documents in Ernst & Young. 2 The district court granted the stay pending this appeal. On November 16, 1994, this Court allowed Knight Ridder, Inc., the publisher of The State, a daily newspaper in Columbia, South Carolina, to intervene as an appellee and file a brief. On December 6, 1994, one day prior to oral argument before this Court, PMSC, Ernst & Young, Arthur Andersen & Co., and the plaintiffs notified the district court that they had reached a settlement agreement in both underlying actions. PMSC proceeded with this appeal, however, in order to reverse the district court's order to release the documents. 3 II.
As a preliminary matter, we note that this Court has jurisdiction over PMSC's appeal under the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546 (1949). A collateral order is immediately appealable if it: (1) conclusively determines the disputed question; (2) resolves an important issue completely separate from the merits of the action; and (3) cannot be effectively reviewed on appeal from a final judgment. Johnson v. Jones, 115 S.Ct. 2151, 2155 (1995). As indicated by its recent restatement of Cohen, the Supreme Court has abandoned the requirement that the issue on appeal must present a serious and unsettled question. Id.; see Carolina Power & Light Co. v. United States Dep't of Labor, 43 F.3d 912, 916 & n. 3 (4th Cir.1995) ().
We find that the district court's order to unseal the documents readily satisfies the three requirements of the collateral order doctrine. First, the court's order has conclusively determined the question of whether the documents are to be unsealed. Second, the issue of public access to documents is important and completely separate from the issues raised in a shareholder derivative action. Finally, PMSC cannot receive effective review on appeal from a final judgment--even if the parties had not settled--because once the documents are released to the public, they cannot be unreleased. Having established this Court's jurisdiction, we turn to the merits of this appeal.
III.
The narrow issue on appeal is whether the documents filed by the plaintiffs are subject to a right of public access. 4 The right of public access derives from two independent sources: the common law and the First Amendment. The common law presumes a right of public access to inspect and copy all judicial records and documents. Nixon v. Warner Communications, Inc., 435 U.S. 589, 597 (1978); Stone v. University of Md. Medical Sys. Corp., 855 F.2d 178, 180 (4th Cir.1988). A court may seal judicial documents if competing interests outweigh the public's common law right of access. Nixon, 435 U.S. at 598-99, 602-03; In re Knight Publishing Co., 743 F.2d 231, 235 (4th Cir.1984). The court's balancing of interests is reviewable only for abuse of discretion. Nixon, 435 U.S. at 599; Stone, 855 F.2d at 180.
Unlike the common law right, the First Amendment guarantee of access has a more limited scope that "has been extended only to particular judicial records and documents." Stone, 855 F.2d at 180. The right of access attaches under the First Amendment if: (1) "the place and process have historically been open to the press and general public"; and (2) "public access plays a significant positive role in the functioning of the particular process in question." Press-Enterprise Co. v. Superior Court, 478 U.S. 1, 8-9 (1986), quoted in The Baltimore Sun Co. v. Goetz, 886 F.2d 60, 64 (4th Cir.1989). The First Amendment guarantee of access, however, provides much greater protection than the common law right because "it must be shown that the denial [of access] is necessitated by a compelling governmental interest, and is narrowly tailored to serve that interest." Globe Newspaper Co. v. Superior Court, 457 U.S. 596, 606-07 (1982); Stone, 855 F.2d at 180.
We first address the district court's conclusion that "First Amendment considerations arise" when materials are filed with the court. Neither the Supreme Court nor this Court has ever held that the mere filing of a document triggers the First Amendment guarantee of access. In Rushford v. The New Yorker Magazine, Inc., 846 F.2d 249, 253 (4th Cir.1988), we held that the First Amendment...
To continue reading
Request your trial
-
Courthouse News Serv. v. Schaefer
...to a pretrial hearing on a non-dispositive civil motion or to the transcript of such a hearing."); In re: Policy Mgm't Systs. Corp., 67 F.3d 296, 1995 WL 541623, at *3 (4th Cir. 1995) (Table) ("Neither the Supreme Court nor this Court has ever held that the mere filing of a document trigger......
- Reyazuddin v. Montgomery Cnty.
-
Reyazuddin v. Montgomery Cnty.
... ... (“CSRs”) to accept, transfer, and block calls while allowing management to monitor various metrics such as time spent on a call and time spent ... breadth means that any tool has to interact successfully with more systems which adds to the complexity, and consequently, the cost. He also believed ... Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); ... Policy Mgmt. Sys. Corp., 526 U.S. 795, 806, 119 S.Ct. 1597, 143 L.Ed.2d 966 ... ...
-
NEEDREPLACE
... ... (“CSRs”) to accept, transfer, and block calls while allowing management to monitor various metrics such as time spent on a call and time spent ... breadth means that any tool has to interact successfully with more systems which adds to the complexity, and consequently, the cost. He also believed ... Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); ... Policy Mgmt. Sys. Corp., 526 U.S. 795, 806, 119 S.Ct. 1597, 143 L.Ed.2d 966 ... ...
-
Protecting and enforcing protective orders: easier said than done: with challenges, even from third parties, increasing, counsel must carefully consider how these orders are drafted and entered.
...Grower's Corp. v. Dobbins, 616 F.2d 458 (10th Cir. 1980). (13.) See, e.g., TheStreet.com, 273 F.3d at 233; In re Policy Mgmt. Sys. Corp., 67 F.3d 296, 303-04 (4th Cir. 1995) (reversing district court's order to unseal documents previously attached to motion to dismiss because documents fail......