Under Seal v. Under Seal

• Decision Date: 27 July 2017
• Docket Number: 16–cv–7820 (KBF)
• Citation: 273 F.Supp.3d 460
• Parties: [UNDER SEAL], Plaintiff, v. [UNDER SEAL], Defendant.
• Court: U.S. District Court — Southern District of New York

273 F.Supp.3d 460

[UNDER SEAL], Plaintiff,

v.[UNDER SEAL], Defendant.

16–cv–7820 (KBF)

United States District Court, S.D. New York.

Signed July 27, 2017

Filed August 10, 2017

OPINION & ORDER

KATHERINE B. FORREST, District Judge:

This is a contract and copyright matter arising from work performed by plaintiff Michael Krechmer ("plaintiff") on Tied Up in Knots (the "Book"), a book officially authored by defendant Andrea Tantaros ("defendant") and published in 2016. Plaintiff filed this matter under seal "out of an abundance of caution" in light of a confidentiality provision in the parties' written agreement ("Collaboration Agreement"), but plaintiff has since argued vigorously that the seal should be lifted.

Before the Court is defendant's motion for a preliminary injunction prohibiting plaintiff from violating the confidentiality provision of the Collaboration Agreement during the pendency of any sealing order in this case. (Def. Motion for Preliminary Injunction, Nov. 21, 2016.) Defendant has also argued for the continued sealing of this matter. For the following reasons, the motion is DENIED, and three business days from the date of this decision, this matter will be unsealed in its entirety. To be clear, all prior sealed filings shall be unsealed at that time. In the future, the caption shall contain the full names of the litigants herein.

I. BACKGROUND

On or about May 4, 2015, both parties entered into a written agreement (the "Collaboration Agreement") for plaintiff to assist defendant in writing the Book. (Compl. ¶ 11). The Collaboration Agreement included a confidentiality provision that provided as follows:

Client's [defendant's] confidentiality is essential to this agreement. Collaborator may not discuss or mention his involvement in the work in any venue without prior approval, in writing, from Client.

Collaborator [plaintiff] will ... disclose any Confidential Information as required in response to a valid court order or other legal process, but only to the extent required by that order or process and only after Collaborator has provided Client with written notice and the opportunity for Client to seek a protective order or confidential treatment of such Confidential Information ....

(Ex. 1 to Compl. ¶ 10). Plaintiff alleges that in July 2015, he and defendant agreed to terminate the Collaboration Agreement and enter into a new, separate, completely oral "Ghostwriting Agreement," pursuant to which plaintiff would ghostwrite the Book in exchange for a flat fee of $150,000. (Id. ¶ 17–19, 23, 25). Plaintiff contends that apart from the payment schedule of the Collaboration Agreement no other provisions of said agreement were incorporated into the Ghostwriting Agreement. (Id. ¶ 32–33).

Plaintiff alleges that defendant did not want to negotiate this new agreement with plaintiff's agent because she "feared" that (a) it would "cause her editor to discover that she was not writing the book herself;" (b) "Harper Collins [the Book's publisher] would cancel the book if they discovered that there were any negative issues in the writing process, particularly since she was already running more than two years behind schedule;" and (c) she would "suffer professional repercussions and personal humiliation if her colleagues at Fox News discovered that the publication agreement with Harper Collins was cancelled." (Id. ¶ 20–22).

Plaintiff claims that at the time the complaint was filed he had been paid a total of $30,000 for his work on the Book. (Id. ¶ 36–37). On March 17, 2016, in response to plaintiff's queries about payment, defendant allegedly emailed plaintiff telling him that she was preparing financial disbursements for the Book, and demanded that he sign a non-disclosure agreement that would forbid him from stating that he was the editor of the Book, even though defendant had publicly his assistance in the book's acknowledgements. Plaintiff refused to sign the nondisclosure agreement. (Id. ¶ 60).

Defendant disputes plaintiff's claim that the confidentiality clause of the Collaboration Agreement is no longer binding. She argues that the Collaboration Agreement is still in effect because "mere failure to pay is not a material breach of the Collaboration Agreement," and, by its own terms, the Collaboration Agreement cannot be orally modified. (Mem. in Support of Motion for Preliminary Injunction at 9.) Defendant also argues that even if there were an oral modification or rescission of the Collaboration Agreement, any new agreement incorporated the same confidentiality terms as the Collaboration Agreement because confidentiality was essential to her willingness to engage plaintiff in the project, and plaintiff was and is aware of defendant's reliance upon the confidentiality terms. (Id. at 7–9.)

On October 6, 2016, plaintiff commenced this action by filing the complaint under seal, claiming that he is the rightful owner of the copyright in the Book due to defendant's alleged breach of the Collaboration Agreement and any subsequent oral agreement rescinding or modifying the Collaboration Agreement. On November 21, 2016, defendant moved for a preliminary injunction prohibiting plaintiff from violating the confidentiality provision of the Collaboration Agreement during the pendency of any sealing order in this case.

Defendant argues that she will be irreparably harmed absent such a restraint because her professional credibility and career as a journalist would be seriously jeopardized by public revelation of plaintiff's claims that he is the actual author of her book. (Id. at 7–8.) Defendant also argues she would be irreparably harmed because she would be deprived of the noncompensable benefit of her bargain, i.e., the confidentiality provision of the Collaboration Agreement, the effectiveness of which is at issue in this case. (Id. ) Plaintiff contends, inter alia, that defendant has not shown irreparable harm to justify a preliminary injunction, that any potential harm from public disclosure cannot overcome the common-law presumption in favor of public access to judicial documents, and that the requested preliminary injunction would be a prior restraint on speech in violation of the First Amendment.

I. PRINCIPLES OF LAW

1. Preliminary Injunctions

A preliminary injunction "is an extraordinary remedy never awarded as of right. In each case, courts must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief. In exercising their sound discretion, courts of equity should pay particular regard for the public consequences in employing the extraordinary remedy of injunction." Salinger v. Colting, 607 F.3d 68, 79 (2d Cir. 2010) (quotation marks omitted).

A party seeking a preliminary injunction must show: (1) "either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them fair ground for litigation;" (2) "that [plaintiff] is likely to suffer irreparable injury in the absence of an injunction;" (3) that the "balance of hardships between the plaintiff and defendant ... tips in the plaintiff's favor;" and (4) that the "public interest would not be disserved by the issuance of the preliminary injunction." Id. at 79–80 (internal quotation marks and citations omitted). A district court "has wide discretion in determining whether to grant a preliminary injunction." Abbott Labs. v. H & H Wholesale Servs., 670 Fed.Appx. 6, 7 (2d Cir. 2016) (quotation marks omitted).

2. Public Right of Access

"The common law right of public access to judicial documents is firmly rooted in our nation's history." Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006). A presumption of public access is essential for judicial documents because "the monitoring of the judicial function is not possible without access to documents that are used in the performance of Article III functions." Standard Inv. Chartered, Inc. v. FINRA, 347 Fed.Appx. 615, 616 (2d Cir. 2009) (quotation marks and emphasis omitted); see also Lugosch, 435 F.3d at 123 ("[O]nce [documents submitted to support or oppose a motion] come to the attention of the district judge, they can fairly be assumed to play a role in the court's deliberations."). The presumption of access is "based on the need for federal courts to have a measure of accountability and for the public to have confidence in the administration of justice." United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995). Therefore, motions to seal documents must be "carefully and skeptically review[ed] ... to insure that there really is an extraordinary circumstance or compelling need" to seal the documents from public inspection. Video Software Dealers Ass'n v. Orion Pictures, 21 F.3d 24, 27 (2d Cir. 1994).

However, "the right to inspect ... 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 [ ] become a vehicle for improper purposes" such as using records to gratify spite or promote scandals or files that might "serve as reservoirs of libelous statements for press consumption." Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 598, 602, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1978) ; see also Amodeo, 71 F.3d at 1051 ("Courts have long declined to allow public access simply to cater ‘to a morbid craving for that which is sensational and impure.’ " (quoting In re Caswell, 18 R.I. 835, 29 A. 259, 259 (1893) ).

There are two "related but distinct presumptions in favor of public access to court ... records: a strong form rooted in the First Amendment and a slightly weaker form based in federal common law." Newsday LLC v. Cnty. of Nassau, 730 F.3d 156, 163 (2d Cir. 2013). For both common-law and First Amendment purposes, courts must first determine whether the document at issue is a judicial document because the public's right of access applies only to "judicial documents." See Lugosch, 435 F.3d at 119. If the...