(Photo: Diego M. Radzinschi/NLJ.)
The sealing of the identity of a company that fought to block public access to a consumer safety report was improper, a federal appeals court said Wednesday in ordering the disclosure of its name and publication of case documents.
“Company Doe,” represented by Gibson, Dunn & Crutcher, sued in Maryland federal district court to prevent the Consumer Product Safety Commission from posting an incident report on a government-run online database of product complaints. The report, which is under seal, attributes the death of an infant to one of the company’s products.
The company’s lawyers argued that publication of its name would cause reputational and economic harm. The Gibson team also disputed the accuracy of the product incident report, which the safety commission intended to include online with tens of thousands of incident reports that involve other companies and products. A trial judge agreed to allow the company to litigate under a pseudonym.
A three-judge panel of the U.S. Court of Appeals for the Fourth Circuit rejected the secrecy of the litigation.
“We hold that the district court’s sealing order violates the public’s right of access under the First Amendment and that the district court abused its discretion in allowing Company Doe to litigate pseudonymously,” Judge Henry Floyd wrote for the panel.
Litigation conducted under a pseudonym, the court said, “undermines the public’s right of access to judicial proceedings.” Company Doe, the appeals court said, “failed to identify any exceptional circumstances to justify the use of a pseudonym.”
A lawyer for Company Doe, Gibson litigation partner Baruch Fellner, said in a statement on behalf of the company that “we agree with both the district and circuit courts’ statements that the CPSC report in question was false and misleading. Importantly, too, as has been noted by the courts, the product in question was not related to the death of an infant, and the CPSC is not pursuing any claims against Company Doe.”
Fellner said that “if the name of Company Doe is revealed, both media and the public will readily understand that these false and misleading reports harm a company that has a perfect record of product safety.”
The company could decide to ask the full appeals court to review the panel decision or take the dispute to the U.S. Supreme Court. “We will review the court’s decision to determine further action,” Company Doe’s statement said.
The records were not expected to be unsealed Wednesday. The Fourth Circuit did not immediately issue a mandate instructing the district judge to open up the court files.
Many of the documents in the case—including the nature of the product—are secret. Summary judgment motions and accompanying materials, the appeals court said, had been sealed “wholesale.” The trial judge, Alexander Williams Jr., issued a public opinion “with redactions to virtually all of the facts, the court’s analysis and the evidence supporting its decision,” Floyd wrote.
The public, the Fourth Circuit panel said, has an interest in learning about case evidence in addition to the legal ground supporting a judge’s ruling.
“Without access to judicial opinions, public oversight of the courts, including the processes and the outcomes they produce, would be impossible,” Floyd wrote.
A corporation, Floyd said, “very well may desire that the allegations lodged against it in the course of litigation be kept from public view to protect its corporate image, but the First Amendment right of access does not yield to such an interest.”
Scott Michelman of the consumer advocacy group Public Citizen, which challenged the sealing of the court records, called the Fourth Circuit decision a “strong vindication of the First Amendment.”
The consumer groups argued, among other things, that Company Doe’s decision to use the federal courts to challenge the public disclosure of the consumer safety report exposed it to the transparency of the judiciary.
“We want our courts to be open and accountable,” Michelman said in an interview. “This ruling is very good for consumers. It makes it difficult to drag out in secret a challenge to a report of harm in the consumer product safety database.”
Writing separately, Senior Judge Clyde Hamilton, who agreed with the disposition of the case, sympathized with Company Doe.
“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,” Hamilton said. “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.”
Contact Mike Scarcella at email@example.com.
This post was updated at 6:31 p.m. with comment from Company Doe.