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The 7th U.S. circuit Court of Appeals is leading a campaign to ensure that all documents in an appellate record are made public unless the documents fall into a few protected areas-even documents that were initially filed under seal with the agreement of the district court. This development has had a big impact on cases involving products liability, contracts, securities law, patent law and employment law causes of action. Federal trial courts normally have a distaste for discovery disputes and feel strongly that attorneys should reach an agreement on discovery issues. Consequently, when plaintiffs and defendants reach confidentiality agreements, federal trial courts routinely enter consensual protective orders based upon these agreements, pleased that the parties have agreed on discovery. However, the 7th Circuit has reacted adversely to confidentiality agreements and documents filed under seal, treating them as contrary to the public’s right to know the basis for a court’s decision. The 7th Circuit advises parties who want privacy and secrecy to choose arbitration. Led by judges Richard A. Posner and Frank H. Easterbrook, the court has become increasingly dismissive of parties’ tendency to label evidence as confidential without any recognized legal basis. For this reason, the 7th Circuit requires parties to justify any claim of confidentiality for evidence under stringent rules. Otherwise, all documents or testimony are unsealed and open to public scrutiny. 7th Circuit requires parties to justify confidentiality In a series of recent decisions, the 7th Circuit has warned trial courts not to rubber-stamp confidentiality agreements, and to draw a distinction between the confidentiality of discovery materials and that of evidence presented to the court. See Citizens First Nat’l Bank v. Cincinnati Ins. Co., 178 F.3d 943 (7th Cir. 1999); Union Oil Co. v. Leavell, 220 F.3d 562 (7th Cir. 2000); Jessup v. Luther, 277 F.3d 926 (7th Cir. 2002); and Baxter Int’l Inc. v. Abbott Labs., 297 F.3d 544 (7th Cir. 2002). See also 7th Circuit Internal Operating Procedure 10 (effective 2000). The court requires parties to justify confidentiality “document by document” with specific legal and factual reasons, since information transmitted to it is presumptively public. Baxter, 297 F.3d at 548. Citing a common law right of access and the First Amendment, the 7th Circuit, and increasingly other federal appellate courts, have emphasized that the courts are publicly subsidized institutions and that without access to the documents on which judges rely when rendering their opinions, the courts cannot be held accountable. See Grove Fresh Distribs. Inc. v. Everfresh Juice Co., 24 F.3d 893, 897 (7th Cir. 1994). The 7th Circuit appears exasperated with both litigants and its own district courts on this subject. In Union Oil, the court pointedly stated: “Even disputes about claims of national security are litigated in the open. Briefs in the Pen-tagon Papers case . . . and the hydrogen bomb plans case were available to the press . . . .People who want secrecy should opt for arbitration. When they call on the courts, they must accept the openness that goes with subsidized dispute resolution by public (and publicly accountable) officials.” 220 F.3d at 567-68. While the goal of creating a more open judicial system is laudable, the 7th Circuit, along with the 3d and 8th circuits, which have similar practices, is catching litigants who believe that their documents are protected unawares. Under 7th Circuit Internal Operating Procedure 10, “every document filed in or by [the 7th Circuit] (whether or not the document was sealed in the district court) is in the public record unless a judge of [the 7th Circuit] orders it to be sealed.” This rule is subject to only a few narrow exceptions; that is, “portions of the record [that] are required to be sealed by statute . . . or a rule of procedure” are excepted from the otherwise blanket effects of the rule. Thus, in the 7th Circuit, the default is that all documents in the record will become public even if they were previously sealed in the district court. Litigants who believe that they have protected their documents by filing them under seal pursuant to a blanket protective order in the district court can be in for a nasty surprise when those documents become part of the appellate record. The 7th Circuit rule gives litigants just 14 days, during which the documents remain under seal, to file a motion requesting that the documents be kept under seal. The 7th Circuit takes this rule seriously, recently publishing an opinion denying a joint motion to maintain documents under seal. In Baxter, the 7th Circuit explained that it would not maintain documents under seal on appeal on the basis of a “generic” motion that merely stated that “the parties had agreed on secrecy [and] that the documents contained commercially sensitive information,” when the motion “did not attempt to separate genuinely secret documents from others in the same box or folder that could be released without risk” or “to justify the claim of secrecy.” 297 F.3d at 545-46. Instead, the court explained that a motion to maintain documents under seal on appeal must “analyze in detail, document by document, the propriety of secrecy, providing reasons and legal citations.” Even then, “only trade secrets, information covered by a recognized privilege (such as the attorney-client privilege), and information required by statute to be maintained in confidence (such as the name of a minor victim of a sexual assault), is entitled to be kept secret on appeal.” Id. at 546, 548. Litigants in the 3d and 8th circuits face a similar situation. In the 3d Circuit, documents that have been “impound-[ed]” by the district court “ will remain under seal in [the 3d Circuit] for thirty (30) days after the filing of the notice of appeal to give counsel an opportunity to file a motion to continue the impoundment.” 3d Cir. Misc. R. 106.1(c)(2). Also, as in the 7th Circuit, “[a] motion to continue impoundment must explain the basis for sealing and specify the desired duration of the sealing order.” Id. The 3d Circuit generously allows the documents at issue to remain under seal until further order of the court once a motion to continue impoundment has been filed. Id. In the 8th Circuit, although there is no rule governing sealed documents, the clerk’s office has a policy of requiring litigants to file a motion to maintain documents under seal if they were subject to a protective order in the district court. The issue of unsealing documents usually arises when the parties have stipulated to a broad protective order in the district court and assume that their documents will be protected throughout the course of the litigation. Litigants frequently cite the protective order or some other confidentiality agreement as the basis of their request to file documents under seal in the court of appeals. Confidentiality agreements facilitate discovery by reducing resistance to turning over sensitive documents as well as limiting the need to examine the documents in depth at the discovery stage to determine which individual documents or portions of documents must be kept confidential. See Krynicki v. Lopacich, 983 F.2d 74, 75 (7th Cir. 1992). The U.S. Supreme Court has approved the use of broad protective orders at the discovery stage, where there is no tradition of public access and the practical benefits are great. See Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984). And the U.S. courts of appeals do not appear to have any quarrel with the practice. See, e.g., Baxter, 297 F.3d at 545. In any case, discovery materials are not usually filed with the court. Union Oil, 220 F.3d at 568. The subset of documents that become part of the record and are relied on by the district court and later the court of appeals, however, are a completely different story. Because “the public at large pays for the courts [it] therefore has an interest in what goes on at all stages of a judicial proceeding.” Citizens First Nat’l Bank, 178 F.3d at 945. “The political branches of government claim legitimacy by election, judges by reason.” Union Oil, 220 F.3d at 568. Requiring court papers to be made public facilitates “[p]ublic scrutiny over the court system [and] serves to (1) promote community respect for the rule of law, (2) provide a check on the activities of judges and litigants, and (3) foster more accurate fact finding.” Grove Fresh, 24 F.3d at 897. Litigants should be aware of appellate rules on sealing A rule that requires a court of appeals to re-evaluate the propriety of sealing documents has several consequences. Rules that allow litigants to produce documents under seal during discovery, but may later require that the documents be made part of the public record, create a pitfall for the uninitiated, who may not find out about the court of appeals rule until they have already put sensitive documents into the record. On the other hand, to the extent that litigants are aware of the possibility that their documents will ultimately become part of the public record, the rule will require litigants to resolve, early on, the legitimacy of their claimed confidential evidence and to avoid knee-jerk labeling of documents. Nonetheless, uncertainty regarding the outcome of a motion to maintain records under seal on appeal will greatly diminish the benefits of broad protective orders at the discovery stage. Litigants who wish to avoid the risk of having their documents become part of the public record may choose to arbitrate instead. But if litigants choose to utilize the court system, the 7th Circuit has suggested that parties can reduce their exposure by “par[ing] down the appellate record” and requesting that any documents that are unnecessary for the appeal be “returned to the district court.” Baxter, 297 F.3d at 548. Whether litigants choose to look inside or outside the public courts, however, the key to a system that is both fair and open is early notice of the appellate rules governing the maintenance of documents under seal so that litigants can be informed before it is too late to protect their claimed confidential documents. William E. Deitrick is a partner, and Audrey Fried-Grushcow is an associate, at Chicago’s Mayer, Brown, Rowe & Maw. They practice in the area of litigation.

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