(Diego M. Radzinschi/NLJ)
The identity of a manufacturer that fought under the pseudonym “Company Doe” to block the public from seeing a consumer product safety report could soon be revealed.
A federal appeals court in Richmond on April 16 overturned a trial judge’s decision to allow the company to keep its name — and the product at issue — secret in a lawsuit against the Consumer Product Safety Commission.
“Regrettably, the district court allowed the entire litigation — from filing to judgment — to occur behind closed doors, keeping all documents filed in the case under seal, not even reflected on the public docket,” wrote Judge Henry Floyd of the U.S. Court of Appeals for the Fourth Circuit. “As a result, neither the press nor the public was able to monitor the litigation as it unfolded.”
The company, represented by Gibson, Dunn & Crutcher, sued to prevent the product safety commission from posting an incident report on a government-run online database of product complaints. The report, which an unidentified government agency provided to the commission, attributes the death of an infant to one of the company’s products. Consumer advocates, including Public Citizen, challenged the secrecy.
REPUTATIONAL, ECONOMIC HARM
Company Doe’s lawyers argued that publication of its name would cause reputational and economic harm. The Gibson team also disputed the accuracy of the incident report, which the commission intended to publish online in a searchable database that features tens of thousands of incident reports — many filed directly by consumers — that involve other companies and products.
The safety commission and Company Doe clashed over proposed redactions to the report but failed to reach an agreement. The company then turned to the judiciary to seek an order to prohibit the agency from publishing the report. U.S. District Judge Alexander Williams Jr. issued an injunction — keeping the report, and the company’s name, under wraps.
Public Citizen didn’t challenge the injunction but, rather, fought to expose information about the litigation. The appeals court said the district judge’s sealing order violated the First Amendment and that Company Doe “failed to identify any exceptional circumstances to justify the use of a pseudonym.”
Company Doe found some sympathy on the panel, but not enough to win.
“Common sense tells us that some harm will befall Company Doe by the publication of the false and misleading reports at issue in this case,” Senior Judge Clyde Hamilton wrote. “In the electronically viral world that we live in today, one can easily imagine how such publications could be catastrophic to Company Doe’s fiscal health, allowing it never to recover.”
But, Hamilton added, “First Amend­ment jurisprudence requires more than a common sense feeling about what harm may befall Company Doe.”
The court records, and the real name of Company Doe, were not immediately unsealed. Gibson litigation partner Baruch Fellner in Washington said the company was reviewing the court’s decision to determine whether to take any additional action.
“We agree with both the district and circuit courts’ statements that the [safety commission] report in question was false and misleading,” Fellner said on behalf of the company. “Importantly, too, as has been noted by the courts, the product in question was not related to the death of an infant, and the [safety commission] is not pursuing any claims against Company Doe.”
The consumer groups argued, among other things, that Company Doe’s decision to use the federal courts to challenge the safety commission’s intent to disclose the report exposed the manufacturer to the transparency of the judiciary.
“We want our courts to be open and accountable,” Public Citizen’s Scott Michelman, who argued in the Fourth Circuit, said in an interview. “This ­ruling is very good for consumers. The only people who might not like this ruling are companies that are ­worried they might have to discuss some things they’d rather not discuss in open court.”
The Fourth Circuit rejected what Floyd described as the “wholesale” ­sealing of certain records — including summary judgment motions. The trial judge released an opinion on the public docket “with redactions to virtually all of the facts, the court’s analysis, and the evidence supporting its decision,” Floyd wrote.
“Without access to judicial opinions, public oversight of the courts, including the processes and the outcomes they produce, would be impossible,” he added.
Lawyers who advocate for business interests expressed disappointment with the ruling, saying companies might now shy from taking the safety commission to court over a particular product safety report.
“There was already a huge disincentive for a company to go to court over one of these reports,” said Charles Samuels, a partner at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. “Now, essentially, there will be extensive publicity through the republication of the facts of the litigation and about the very report that the company was challenging. That’s unfortunate.”
Nearly anyone can submit a report to the safety commission’s consumer products database “even if they do not have firsthand knowledge of the incident, injury or threat of harm that they are reporting,” said Cary Silverman of Shook, Hardy & Bacon, who represented the National Association of Manufacturers in an amicus brief in support of Company Doe.
“A public database of unverified, inaccurate reports not only poses an unwarranted risk to the reputations of responsible businesses, but does a disservice to consumers,” Silverman said.