No. 15-1211

IN THE

Supreme Court of the United States

FCA US LLC, f/k/a/ CHRYSLER GROUP LLC,

Petitioner,v.

THE CENTER FOR AUTO SAFETY,

Respondent.

On Petition for a Writ of Certiorari to theU.S. Court of Appeals for the Ninth Circuit

BRIEF OF WASHINGTON LEGAL FOUNDATIONAS AMICUS CURIAE IN SUPPORT OF PETITIONER

Richard A. Samp (Counsel of Record)Mark S. ChenowethWashington Legal Foundation2009 Massachusetts Ave., NWWashington, DC 20036202-588-0302rsamp@wlf.org

Date: April 28, 2016

QUESTION PRESENTED

Whether “good cause” is sufficient to maintainunder seal discovery documents governed by aprotective order issued under Federal Rule of CivilProcedure 26(c), when they are filed with the court.

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TABLE OF CONTENTSPage

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . v

INTERESTS OF AMICUS CURIAE . . . . . . . . . . . . 1

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . 2

SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . 5

REASONS FOR GRANTING THE PETITION . . . . 8

I. THE NINTH CIRCUIT’S HEIGHTENEDREVIEW STANDARD FINDS NOSUPPORT IN THE COMMON LAW ORFEDERAL STATUTORY LAW . . . . . . . . . . . 8

A. The Common Law HistoricallyImposed the Burden of Proof onThose Seeking Disclosure, andEven Today Requires No Morethan “Good Cause” to JustifyNondisclosure . . . . . . . . . . . . . . . . . . . . 9

B. Rule 26(c)’s “Good Cause”Standard Supersedes MoreStringent Judge-Made Standards . . . 11

II. REVIEW IS WARRANTED TORESOLVE CONFLICTS BOTH AMONGTHE APPEALS COURTS ANDBETWEEN THE DECISION BELOWAND THIS COURT’S DECISIONS . . . . . . . 15

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Page

A. The Ninth Circuit’s “CompellingReasons” Standard of ReviewConflicts with Decisions fromNumerous Other Appeals Courts . . . 15

B. The Ninth Circuit’s Decision Is inConsiderable Tension with thisCourt’s Nixon and Seattle TimesDecisions . . . . . . . . . . . . . . . . . . . . . . 19

III. THE NINTH CIRCUIT’S DECISIONWILL COMPLICATE ALREADYC U M B E R S O M E L I T I G A T I O NPROCEDURES AND THREATENS TODESTROY PROPERTY RIGHTS . . . . . . . . 22

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

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TABLE OF AUTHORITIESPage(s)

Cases:

American Elec. Power Co. v. Connecticut, 131 S. Ct. 2527 (2011) . . . . . . . . . . . . . . . . . . . . . 12Apple, Inc. v. Samsung Electronics, Inc., 727 F.3d 1214 (Fed. Cir. 2013) . . . . . . . . . . . 18, 25Baten v. Houston Oil Co. of Texas, 217 S.W. 394 (Tex. Civ. App. 1919) . . . . . . . . . . . 10Beam Sys., Inc. v. Checkpoint Sys., Inc., 1998 WL 364081 (C.D. Cal. 1997) . . . . . . . . . . . . 23Belo Broadcasting Corp. v. Clark, 654 F.2d 423 (5th Cir. 1981) . . . . . . . . . . . . . . . . 17Burton v. Reynolds, 68 N.W. 217 (Mich. 1896) . . . . . . . . . . . . . . . . . . . 10Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d 1304 (11th Cir. 2001) . . . . . . . . . 1, 15, 16City of Milwaukee v. Illinois, 451 U.S. 304 (1981) . . . . . . . . . . . . . . . . . . . . . . . 12Commonwealth v. Pon, 469 Mass. 296 (2014) . . . . . . . . . . . . . . . . . . . . . . 11In re Caswell, 29 A. 259 (R.I. 1893) . . . . . . . . . . . . . . . . . . . . . . . 10In re Cincinnati Enquirer, 5 F. Cas. 686 (C.C.S.D. Ohio 1879) . . . . . . . . . . . 10In re Reporters Comm. for Freedom of the Press, 773 F.2d 1325 (D.C. Cir. 1985) . . . . . . . . . . . . . . 13Nixon v. Dispatch Printing Co., 112 N.W. 258 (Minn. 1907) . . . . . . . . . . . . . . . . . 10Nixon v. Warner Communications, Inc., 435 U.S. 589 (1978) . . . . . . . . . . . . . . . . . . . passimRuckelshaus v. Monsanto Co., 467 U.S. 986 (1984) . . . . . . . . . . . . . . . . . . . . . . . 24

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Page(s)SEC v. Van Waeyenberghe, 990 F.2d 845 (5th Cir. 1993) . . . . . . . . . . . . . . . . 17Schmedding v. May, 85 Mich. 1 (1896) . . . . . . . . . . . . . . . . . . . . . . . . . 10Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984) . . . . . . . . . . . . . . . . 7, 19, 21, 22State Farm Fire and Cas. Co. v. U.S. ex rel. Rigsby, No. 15-513 (U.S., pet. pending) . . . . . . . . . 1United States v. McDougal, 103 F.3d 651 (8th Cir. 1996) . . . . . . . . . . . . . . . . 18

Statutes and Rules:

Rules Enabling Act, 28 U.S.C. § 2072 . . . . . . . . . . 13

Fed.R.Civ.P. 26(c) . . . . . . . . . . . . . . . . . . . . . . passim

Fed.R.Civ.P. 26(c)(1) . . . . . . . . . . . . . . . . . . . . . . 3, 13

Fed.R.Civ.P. 26(c)(1)(G) . . . . . . . . . . . . . . . . . . . . . 13

Miscellaneous:

Arthur R. Miller, Confidentiality, Protective Orders, and Public Access to the Courts, 105 HARV. L. REV. 427 (1991) . . . . . . . . . . . . . . . 23

Kyle J. Mendenhall, Can You Keep a Secret? The Court’s Role in Protecting Trade Secrets and Other Confidential Business Information from Disclosure in Litigation, 62 DRAKE L. REV. 885 (2014) . . . . . . . . . . . . . . . . 23

INTERESTS OF AMICUS CURIAE

Washington Legal Foundation (WLF) is a non-profit public interest law firm and policy center withsupporters in all 50 states.1 WLF devotes a substantialportion of its resources to defending free enterprise,individual rights, a limited and accountablegovernment, and the rule of law.

WLF has appeared in federal court on numerousoccasions to support the rights of litigants to preventdisclosure of confidential documents. See, e.g., ChicagoTribune Co. v. Bridgestone/Firestone, Inc., 263 F.3d1304 (11th Cir. 2001); State Farm Fire and Cas. Co. v.U.S. ex rel. Rigsby, No. 15-513 (U.S., pet. pending). Inparticular, WLF devotes considerable resources toprotecting intellectual property rights. Becausejudicially mandated document-releases frequentlyresult in destruction of trade secrets and otherintellectual property, WLF opposes such releases in theabsence of an overriding public interest in disclosure.

WLF is concerned that the decision below, ifallowed to stand, poses a serious threat to propertyrights. By imposing on parties opposing disclosure aheavy burden of demonstrating “compelling reasons” tomaintain the confidentiality of discovery documents,the Ninth Circuit makes it extremely difficult for

1 Pursuant to Supreme Court Rule 37.6, WLF states thatno counsel for a party authored this brief in whole or in part; andthat no person or entity, other than WLF and its counsel, made amonetary contribution intended to fund the preparation orsubmission of this brief. More than 10 days prior to the due date,counsel for WLF provided counsel for Respondent with notice of itsintent to file. All parties have consented to the filing; letters ofconsent have been lodged with the Court.

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companies to prevent the disclosure of their tradesecrets.

WLF is also concerned that the decision below islikely to cause discovery disputes to proliferate and tounduly complicate already cumbersome and costlylitigation procedures. Litigants are far more likely tochallenge document requests if they come to believethat protective orders will not prevent the publicdisclosure of confidential information contained indiscovery material.

STATEMENT OF THE CASE

The plaintiffs in the underlying lawsuit areseveral individuals who owned Chrysler vehicles. Theyfiled suit against Petitioner FCA US LLC f/k/a ChryslerGroup LLC (“Chrysler”), alleging that a device in theirvehicles known as the TIPM-7 was defectivelydesigned. Because documents potentially relevant tothe plaintiffs’ claims (and thus potentially subject todiscovery) contained or reflected “trade secrets or otherconfidential research and development, financial,commercial, or personal information,” the district courtentered a Rule 26(c) protective order that preventedthe public disclosure of such documents. The protectiveorder required the parties, should they seek to file anysuch documents with the district court, to submit themunder seal.

The plaintiffs later attached several of theChrysler-sourced confidential documents to theirmotion for a preliminary injunction. In compliancewith the protective order, they filed those documentsunder seal, as did Chrysler with respect to several

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confidential documents attached to its opposition brief. The district court summarily denied the motion, andthe parties thereafter settled their lawsuit.

Even before the preliminary injunction motioncould be argued, Respondent The Center for AutoSafety (“Center”) moved to intervene for the purpose ofseeking access to the documents filed under seal. Thedistrict court denied the Center’s motion, ruling thatthe documents should not be unsealed “at this time.” Pet. App. 37a-50a.

In determining whether Chrysler’s documentsshould be released to the Center, the court applied the“good cause” standard set forth in Rule 26(c).2 Id. at45a. The court concluded that “there is good cause tokeep the documents sealed at this time.” Ibid. Inparticular, it cited evidence that the documentscontained trade secrets regarding Chrysler’smanufacturing and testing processes, and thatdisclosure of this information “would enablecompetitors to ‘leapfrog’ Defendant’s hard engineeringwork and unfairly reap the competitive rewards.” Id.at 45a-46a. The court also expressed concern thatreleased information “could become a vehicle forimproper purposes.” Id. at 47a. It explained:

There is some danger that the wide publicationof selected, out-of-context materials, in a matter

2 Fed.R.Civ.P. 26(c)(1) permits district courts “for goodcause” to issue protective orders limiting access to discoverymaterials. Protective orders are designed “to protect a party orperson from annoyance, embarrassment, oppression, or undueburden or expense.”

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that is only in the early stages of litigation, couldunnecessarily harm Defendant and present anunfair picture of the alleged facts to the public.

Ibid.

A divided Ninth Circuit panel vacated thedistrict court’s order and remanded. Pet. App. 1a-36a. It concluded that the district court had applied anincorrect legal standard in evaluating the motion tounseal. The appeals court said that, under the commonlaw, there exists a “strong presumption in favor ofaccess to court records.” Id. at 8a (emphasis added). Itconcluded that when the records at issue have beenattached to a motion that “is more than tangentiallyrelated to the merits of a case,” the common-law rightof access applies, id. at 19a, and that under thosecircumstances “a court may seal records only when itfinds ‘a compelling reason and articulate[s] the basisfor its ruling, without relying on hypothesis orconjecture.’” Id. at 8a. Concluding that the plaintiffs’preliminary injunction motion was “more thantangentially related to the merits of the case,” theappeals court directed the district court on remand “toconsider the documents under the compelling reasonstandard.” Id. at 22a.

In dissent, Judge Ikuta asserted that the districtcourt acted properly in applying the less-stringent“good cause” standard to the Center’s motion to unseal,id. at 25a-36a, a standard that requires courts to“balance the protection afforded litigants under Rule26(c) with the presumption that the public has a rightof access to public documents, including judicialrecords.” Id. at 25a-26a. She argued that “the

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majority’s rule upsets th[at] balance” because it“deprives protective orders issued under Rule 26(c) ofany force or effect.” Id. at 34a-35a.

Judge Ikuta noted that the plaintiffs were ableto gain access to “86,000 documents from Chrysler(including confidential and trade secret documents)without being put to the cost and delay of fightingdiscovery battles because Chrysler could confidentlyrely on the district court’s protective order.” Id. at 35a. She asserted that, as a result of the panel’s adoption of“the intentionally stringent ‘compelling reasons’standard, ... no future litigant can rely on a protectiveorder and will have to chart its course throughdiscovery cautiously and belligerently, to the detrimentof the legal system.” Id. at 36a (emphasis added).

SUMMARY OF ARGUMENT

The decision below, by imposing a heightenedevidentiary standard in reviewing efforts to protect theconfidentiality of discovery documents, threatenssignificant disruption of the discovery process andundermines private property rights. Review iswarranted to resolve the sharp conflict between thatdecision and decisions of both this Court and otherfederal appeals courts.

The Ninth Circuit contended that its heightened review standard was mandated by the common-lawright of access to public records, including judicialrecords. Yet, the Ninth Circuit has never cited anycourt decisions—other than its own—to support itscontention that the common law has mandatedheightened scrutiny of confidentiality claims.

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Certainly, that contention draws no support fromNixon v. Warner Communications, Inc., 435 U.S. 589(1978)—which contains this Court’s most detailedexposition of the common-law right of access—or fromthe 19th and 20th century case law cited by Nixon.

Indeed, that case law indicates that common-lawcourts generally: (1) imposed the burden of proof on theparty seeking public disclosure; and (2) did notrecognize a right of access until after a judge issued adecision signifying his confirmation of the veracity ofthe documents in question. Modern-day state courtdecisions applying a common-law right of access tostate court records routinely apply a “good cause”standard—not a heightened standard—to efforts toprotect the confidentiality of court records.

Moreover, even if the Ninth Circuit were correctthat the common law mandates a heightened standardof review, that standard would apply in federal courtsonly so long as Congress and this Court (through itsrulemaking authority) have not established a differentstandard. But Congress and this Court have adoptedRule 26(c)’s “good cause” standard, which requires acourt to balance (without placing its thumb on thescale) the litigants’ privacy interests against thepublic’s interest in disclosure.

The Ninth Circuit asserted that the “good cause”standard should be replaced by its heightened“compelling reasons” standard once the document inquestion has been attached to a motion that is “morethan tangentially related to the merits of the case.” Pet. App. 22a. But the court provided no logical orprecedential support for that assertion. It may

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sometimes be true that the public interest in disclosureincreases once a document has been attached to amotion filed with the district court. But that increasedpublic interest can be adequately taken into account inconnection with the court’s “good cause” determination.

Review is also warranted to resolve the sharplyconflicting decisions among federal courts that haveaddressed the standard-of-review issue. As thePetition well documents, the decision below conflictswith decisions of the numerous other federal courtsthat have applied a “good cause” standard to motionsseeking public access to documents filed under seal. The decision below also is in sharp tension withdecisions of this Court, particularly Nixon and SeattleTimes Co. v. Rhinehart, 467 U.S. 20 (1984).

Finally, review is warranted in light of thenegative impact that the decision below will have onthe litigation process. The decision permits a litigantto facilitate disclosure of an opponent’s confidentialdocuments by attaching them to a substantive motion,without regard to whether most of the information inthe documents is related to any contested issue. Oncethe documents have been filed with the Court, theNinth Circuit’s “compelling reasons” standard makes itextremely difficult for the litigant to maintainconfidentiality. Under those circumstances, anyrational litigant will be much more likely to contest aninitial request for document production, even if therequesting party agrees to a Rule 26(c) protectiveorder. The alternative requires risking the destructionof one’s intellectual property. The likely end result: discovery disputes will proliferate, and alreadycumbersome litigation procedures will become even

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more complicated and expensive.

Alternatively, potential litigants will forgoaltogether their right to seek judicial resolution ofdisputes rather than risk the possibility that litigationwill force disclosure of confidential information. Thatresult runs counter to the primary purpose of civillitigation (and its accompanying discovery rules): facilitating the resolution of disputes, not generatinginformation for the public.

REASONS FOR GRANTING THE PETITION

I. THE NINTH CIRCUIT’S HEIGHTENEDREVIEW STANDARD FINDS NO SUPPORTIN THE COMMON LAW OR FEDERALSTATUTORY LAW

The Ninth Circuit’s recognition of a common-lawright of access to judicial records is unexceptionable. As this Court noted in Nixon, “It is clear that the courtsof this country recognize a general right to inspect andcopy public records and documents, including judicialrecords and documents.” Nixon, 435 U.S. at 597. TheCourt emphasized, however, that it is “uncontested”that the common-law “right to inspect and copy judicialrecords is not absolute” and is overcome whenoutweighed by competing interests, such as litigants’interests in preventing release of confidential businessinformation. Id. at 598.

While recognizing that there are limits on thecommon-law right of access, the Ninth Circuit assertedthat the presumption in favor of granting access is“strong” and that a litigant may overcome that

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presumption only by demonstrating “compellingreasons” for doing so. Pet. App. 8a. Yet, the NinthCircuit has never cited any court decisions—other thanits own—to support its contention that the common lawhas mandated heightened scrutiny of confidentialityclaims. That failure is readily explainable: there is nocommon-law tradition of applying heightened scrutinyto litigants’ efforts to prevent disclosure of documentssubmitted to a court in connection with civil or criminalproceedings. Review is warranted to determinewhether the Ninth Circuit’s significant expansion ofthe common-law doctrine is warranted.

A. The Common Law HistoricallyImposed the Burden of Proof onThose Seeking Disclosure, and EvenToday Requires No More than “GoodCause” to Justify Nondisclosure

The Ninth Circuit purported to base its “strong”presumption and its “compelling reasons” standard ofreview on the centuries-old common-law tradition ofgranting access to public records. But that common-law tradition includes no hint that heightened scrutinyshould be applied to efforts to prevent disclosure ofcourt records.

Indeed, far from imposing a “compelling reasons”burden on those resisting disclosure, 19th-centuryAmerican courts generally imposed the burden of proofon individuals seeking access to court records. Theywere required to show some particularized interest inthe document in question that amounted to more thanan interest in determining that courts were properlyperforming their judicial functions. See, e.g., In re

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Cincinnati Enquirer, 5 F. Cas. 686, 687-88 (C.C.S.D.Ohio 1879); In re Caswell, 29 A. 259 (R.I. 1893); Burtonv. Reynolds, 68 N.W. 217, 218 (Mich. 1896). Forexample, in Burton, a man “engaged in the business ofmaking abstracts of titles to land” was denied access tothe records of a lawsuit over title to property located inDetroit. Although he had a professional interest in theoutcome of the suit and land titles generally, the courtheld that he lacked a right of access in the absence ofa showing that he had been hired to create an abstractof the precise parcel at issue in the lawsuit. Ibid.

Early common-law courts also generally deniedthe public access to the parties’ pleadings and motionsand instead limited the common-law right of access totrial proceedings and orders issued by the judge. According to the Michigan Supreme Court, publicaccess “d[id] not extend to nor include the papers filedin the case necessary to frame the issue to be tried, norto the entries thereof made by the clerk” because“[s]uch papers are usually filed and the entries madeout of court.” Schmedding v. May, 85 Mich. 1, 5 (1896). The court reasoned that while “it is desirable that thetrial of causes should take place under the public eye,”the right of access did not extend to pleadings andmotions that had not been filed during the trial andthus had not been subject to any judicial determinationregarding their truthfulness. Ibid (emphasis added). Accord, Nixon v. Dispatch Printing Co., 112 N.W. 258,258-59 (Minn. 1907); Baten v. Houston Oil Co. of Texas,217 S.W. 394, 398 (Tex. Civ. App. 1919).

More recently, state courts have generallyimposed the burden of proof on the party resisting

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public access to court records. State courts nonethelessgenerally have judged nondisclosure requests under a“good cause” standard. See, e.g., Commonwealth v.Pon, 469 Mass. 296, 312 (2014). Pon upheld a requestto permanently seal trial records of an individual whohad reached a nolle prosequi agreement withprosecutors regarding criminal charges of drivingunder the influence of alcohol and leaving the scene ofa motor vehicle accident. The individual admitted tofacts sufficient for a finding of guilt, but the judge (withthe agreement of prosecutors) dismissed the casefollowing successful completion of a rehabilitationprogram. The Massachusetts Supreme Judicial Courtconcluded that the individual had demonstrated “goodcause” sufficient to overcome the common-law right ofaccess to court records, noting that disclosure of thecriminal proceedings significantly impaired his abilityto find employment. Id. at 316-17. The court citednumerous other state-court decisions that employedgood-cause balancing tests when evaluating whether toseal court records. Id. at 314-15.

In sum, the Ninth Circuit’s “compelling reasons”standard finds no support in the common law.

B. Rule 26(c)’s “Good Cause” StandardSupersedes More Stringent Judge-Made Standards

Whether and under what circumstances federalcourts should grant public access to documentsproduced in connection with a federal court proceedingis a federal question that is appropriately decided as amatter of federal law. In the absence of direction from

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Congress, federal courts act appropriately when theystep into the breach and create a federal common-lawrule governing uniquely federal issues. See, e.g., Cityof Milwaukee v. Illinois, 451 U.S. 304, 314 (1981)(stating that “federal common law is a necessaryexpedient“ that is “resorted to in the absence of anapplicable Act of Congress . . . and because the Court iscompelled to consider federal questions which cannotbe answered from federal statutes alone.”) (citationsomitted). Thus, in the absence of a congressional ruleaddressing public access to federal court documents,the Court has held as a matter of federal common lawthat a limited right of access exists; it based thatholding on the existence of a centuries-old common-lawtradition of access to public records. Nixon, 481 U.S. at597-98.

But in the post-Erie era, federal common law isunderstood as a rarely-to-be-exercised expedient. TheCourt has “always recognized that federal common lawis subject to the paramount authority of Congress.” City of Milwaukee, 451 U.S. at 313. “When Congressaddresses a question previously governed by a decisionrested on federal common law ... the need for such anunusual exercise of lawmaking by federal courtsdisappears.” American Elec. Power Co. v. Connecticut,131 S. Ct. 2527, 2537 (2011) (quoting City ofMilwaukee, 451 U.S. at 314). The Court does notdemand evidence of “a clear and manifest congressionalpurpose” to establish a governing federal rule beforeconcluding that federal common law is displaced,because “it is primarily the office of Congress, not thefederal courts, to prescribe national policy in areas ofspecial federal interest.” Ibid.

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Congress has established a rule governing howfederal district courts should evaluate theconfidentiality claims of a party required to producedocuments in connection with litigation. Rule 26(c)(1)of the Federal Rules of Civil Procedure states thatdistrict courts may issue protective orders limitingaccess to discovery materials “for good cause.”3 Because Congress has established the governing “goodcause” standard, the Ninth Circuit exceeded its powerswhen it sought to establish a heightened “compellingreasons” standard under the federal common law.4 SeeIn re Reporters Committee for Freedom of the Press, 773F.2d 1325, 1340 (D.C. Cir. 1985) (Scalia, J.) (statingthat the Federal Rules of Civil Procedure trumppreviously existing federal common-law rulesgoverning document disclosure).

The Ninth Circuit recognized that the “goodcause” standard should govern requests for access todocuments submitted to a district court in connectionwith a motion that is only “tangentially related to themerits of a case.” Pet. App. 19a. It held, however, thata far more stringent “compelling reasons” standardshould apply to confidentiality claims asserted with

3 The rule explicitly authorizes orders “requiring that atrade secret or other confidential research, development, orcommercial information not be revealed or be revealed only in aspecified way.” Fed.R.Civ.P. 26(c)(1)(G).

4 Congress authorized creation of the Federal Rules ofCivil Procedure through its enactment of the Rules Enabling Act,28 U.S.C. § 2072. Amendments to the Rules do not take effectuntil after they are approved by the Court and submitted toCongress for its review.

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respect to documents attached to a motion that is“more than tangentially related.” Ibid. Yet the appealscourt failed to explain why, as a matter of logic, the“good cause” standard established by Rule 26(c) shouldnot apply in both situations.

The “good cause” standard has been universallyunderstood as requiring courts, without placing athumb on the scale, to “balance the protection affordedlitigants under Rule 26(c) with the presumption thatthe public has a right of access to public documents,including judicial records.” Id. at 25a-26a (Ikuta, J.,dissenting). By jettisoning the Rule 26(c) standard inconnection with a significant number of documentssubmitted to federal courts in connection with pre-trialmotions, the Ninth Circuit is vastly expanding thescope of the common-law right of access to courtdocuments, thereby making it extremely difficult forlitigants to prevent public disclosure of thosedocuments.

It may sometimes be true that the public interestin disclosure increases once a document has beenattached to a motion filed with the district court. Thepublic has an interest in gleaning information aboutthe federal court decision-making process, Nixon, 435U.S. at. 597-603, and discovery documents attached tomerits-related motions might help to illuminate thedecision-making process more than would otherdiscovery documents not attached to such motions. Butthat increased public interest can adequately be takeninto account in connection with the district court’sbalancing process mandated by Rule 26(c)’s “goodcause” standard; there is no reason why the courts

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should also impose a heightened “compelling reasons”standard. Review is warranted to determine whetherthe Ninth Circuit was justified in invoking federalcommon law to jettison the Rule 26(c) “good cause”standard authorized by Congress.

II. REVIEW IS WARRANTED TO RESOLVECONFLICTS BOTH AMONG THE APPEALSCOURTS AND BETWEEN THE DECISIONBELOW AND THIS COURT’S DECISIONS

A. The Ninth Circuit’s “CompellingReasons” Standard of ReviewConflicts with Decisions fromNumerous Other Appeals Courts

As the Petition amply demonstrates, the decisionbelow—which requires a showing of “compellingreasons” before a district court may deny public accessto discovery documents submitted to the court inconnection with motions that are more-than-tangentially related to the merits—directly conflictswith decisions from several other federal appealscourts. Review is warranted to resolve the conflict.

The conflict with the Eleventh Circuit’s ChicagoTribune decision is the most pronounced. That courtheld that virtually all requests for public access todiscovery documents should be judged under Rule26(c)’s “good cause” standard, “which balances theasserted right of access against the other party’sinterest in keeping the information confidential.” Chicago Tribune, 263 F.3d at 1309. The EleventhCircuit mandated application of the “good cause”

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standard even to discovery documents submitted to thedistrict court in connection with a motion for summaryjudgment. Id. at 1312. It held that the district courterred when it applied a stringent “compelling interest”standard, under which such documents must bereleased unless the party resisting disclosure candemonstrate that the denial of public access “isnecessitated by a compelling government interest, andis narrowly tailored to that interest.” Id. at 1311-12.5

The Eleventh Circuit held that “theconfidentiality imposed by Rule 26 is not automaticallyforgone” simply because the documents in question areattached to a “substantive motion.” Id. at 1313. Rather, the issue continues to be subject to the Rule26(c) “good cause” standard, which “requires the courtto balance the respective interests of the parties.” Ibid.

The conflict between the Ninth and EleventhCircuits could not be sharper. The court below heldthat the district court abused its discretion when itupheld Chrysler’s confidentiality claims under the“good cause” standard, and it remanded the case forreconsideration under its heightened “compellingreasons” standard. In contrast, the Eleventh Circuit inChicago Tribune held that the district court abused itsdiscretion when it invoked a “compelling interest”standard as its basis for rejecting a confidentiality

5 The court explained that a heightened review standardis reserved for unusual cases in which “the trial court conceals therecord of an entire case, making no distinction between thosedocuments that are sensitive or privileged and those that are not.” Id. at 1311.

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request for documents attached to substantive motions,and it remanded the case for reconsideration under theRule 26(c) “good cause” standard.

Indeed, the conflict among the federal appealscourts regarding the proper standard of review extendswell beyond the case law cited by the Petition. Forexample, the Fifth Circuit has explicitly rejected the“compelling circumstances” standard adopted byseveral circuits, concluding that Nixon “offers no basisfrom which one can derive the overpoweringpresumption of access discovered” by those courts. BeloBroadcasting Corp. v. Clark, 654 F.2d 423, 433-34 (5thCir. 1981). The court added:

The Supreme Court has not directed lowercourts to measure requests for access to evidenceonly against the “most compellingcircumstances.” Rather, we read the Court’spronouncements as recognizing that a number offactors may militate against public access. Inerecting such stout barriers against thoseopposing access and in limiting the exercise ofthe trial court’s discretion, our fellow circuitshave created standards more appropriate forprotection of constitutional than of common lawrights.

Id. at 434. See also, SEC v. Van Waeyenberghe, 990F.2d 845, 848 n.4 (5th Cir. 1993) (“While other circuitshave held that there is a strong presumption in favor ofthe public’s common law right of access to judicialrecords, we have refused to assign a particular weight

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to the right.”).6

The Ninth Circuit’s standard of review isparticularly stringent in that, once a document hasbeen attached to a motion that is related to the meritsof the case, the “compelling reasons” standard appliesto confidentiality claims—without regard to the degreeto which the document (or segregable portions thereof)is actually relevant to the merits. In sharp contrast,the Federal Circuit has held that no specialpresumption of access exists for documents that were attached as exhibits to substantive motions but werenever cited by the parties. Apple Inc. v. SamsungElectronics Co., 727 F.3d 1214, 1228 (Fed. Cir. 2013). It explained that while the common law creates alimited right of access to court documents to assist thepublic in understanding judicial proceedings, exhibitsto motions that “were neither cited nor discussed beforethe district court [would not] assist the public inunderstanding the proceedings in this case.” Ibid.

This case is a particularly good vehicle forresolving the inter-circuit conflict because the choice ofstandard of review was outcome-determinative. If theless-demanding Rule 26(c) “good cause” standard wereapplied, we know (based on the district court’s

6 Similarly, the Eighth Circuit has rejected the “strongpresumption” standard adopted by the court below. United Statesv. McDougal, 103 F.3d 651, 657 (8th Cir. 1996) (although findingthat Nixon recognized “a common law presumption in favor ofpublic access to judicial records,” the court stated that it“specifically rejected the strong presumption standard adopted bysome circuits.”) (emphasis in original).

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application of that standard, an application with whichthe Ninth Circuit did not find fault) that Petitioner’snondisclosure claims would prevail. On the otherhand, the Ninth Circuit’s “compelling reasons”standard is sufficiently stringent that its application ishighly likely to require disclosing virtually alldocuments at issue. Indeed, WLF notes that the NinthCircuit has almost never concluded that a litigantopposing a request for public disclosure of documentshas articulated “compelling reasons” for nondisclosure.

B. The Ninth Circuit’s Decision Is inConsiderable Tension with thisCourt’s Nixon and Seattle TimesDecisions

Review is also warranted because the decisionbelow is in sharp tension with decisions of this Court,particularly Nixon and Seattle Times. This Court’sdiscussions of the common-law right of access tojudicial records has emphasized the limited nature ofthat right. They are inconsistent with the NinthCircuit’s recognition of a “strong” presumption of accessto such records that can be overcome only bydemonstrating “compelling reasons” for nondisclosure.

Nixon repeatedly emphasized the limited natureof the public’s “right to inspect and copy judicialrecords.” 435 U.S. at 598. Among the common-lawrationales cited approvingly by the Court as bases fordenying access to such records: release (1) would“promote public scandal,” as in the publication of“details of a divorce case”; (2) would cause court files“to serve as reservoirs of libelous statements for press

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consumption”; and (3) would serve as “sources ofbusiness information that might harm a litigant’sbusiness standing.” Ibid.

The Court did not discuss the common-law rightof access in relation to the standards established underRule 26(c) for obtaining protective orders. Itnonetheless described the “normal[ ]” process fordetermining whether non-litigants have a right ofaccess to judicial records as one that entails “weighingthe interests advanced by the parties in light of thepublic interest and the duty of the court.” Id. at 602. That formulation is akin to the “good cause” standardprescribed by Rule 26(c), and dissimilar to the NinthCircuit’s “compelling reasons” standard—a standardthat is heavily biased in favor of disclosure. None ofNixon’s language supports such a bias.

Nixon ultimately denied newspapers’ efforts toobtain copies of tapes played at a public trial,concluding that Congress had superseded the common-law right by adopting a statute specifying an alternateprocedure for handling access to the tapes in question. Id. at 603-06. In light of that disposition, the Courtwas not required to rule on whether discoverydocuments—that is, documents provided to opposingcounsel pursuant to pretrial discovery procedures andlater filed with the district court—are ever subject tothe common-law right of access. Indeed, the Courtstated explicitly that it was not deciding thatfoundational question:

As we assume for purposes of this case ... thatthe common-law right of access is applicable, we

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do not reach or intimate any view as to themerits of these various contentions by petitioner[including a contention that] ... exhibit materialssubpoenaed from third parties are not “courtrecords” in terms of the common-law right ofaccess.

Id. at 599 n.11. Thus, the Ninth Circuit is applying itsextremely stringent nondisclosure standard to acategory of court records that this Court has never heldare actually subject to the common-law right of access.

The decision below is also in considerabletension with Seattle Times. That decision unanimouslyrejected contentions that a newspaper—the defendantin a libel suit—had a First Amendment right todisseminate allegedly newsworthy documents it hadobtained in the course of pre-trial discovery but thatwere subject to a protective order issued on the basis ofa Rule 26(c) “good cause” finding. 467 U.S. at 37. TheCourt held, “The unique character of the discoveryprocess requires that the trial court have substantiallatitude to fashion protective orders.” Id. at 36.

The Court explained that the pretrial discoveryprocess has a “significant potential for abuse” that“may seriously implicate privacy interests of litigants.” Id. at 34-35. It stated that the process provides “anopportunity ... for litigants to obtain—incidentally orpurposely—information that not only is irrelevant butif publicly released could be damaging to reputationand privacy. The government clearly has a substantialinterest in preventing this sort of abuse of itsprocesses.” Id. at 35 (emphasis added). The Court

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ruled that the interest in preventing the unwarrantedrelease of such information “is sufficient justificationfor the authorization of protective orders.” Id. at 36.

It is difficult to reconcile Seattle Times’srecognition of a “substantial interest” in protectingprivacy interests by limiting public access to discoverydocuments, with the Ninth Circuit’s recognition of aheightened standard of review that makes itexceedingly difficult for litigants to resist requests forpublic access to discovery documents. Review iswarranted to address the considerable tension betweenthe decision below and both Nixon and Seattle Times.

III. THE NINTH CIRCUIT’S DECISION WILLCOMPLICATE ALREADY CUMBERSOMELITIGATION PROCEDURES ANDTHREATENS TO DESTROY PROPERTYRIGHTS

Review is also warranted in light of the negativeimpact that the decision will have on the litigationprocess. In particular, litigants wary of courts’willingness to protect their confidential documents aremore likely to resist discovery requests—a sure recipefor the proliferation of discovery disputes. Moreover,the Ninth Circuit’s stringent nondisclosure standardwill inevitably lead to the public disclosure ofnumerous trade secrets contained in confidentialdocuments. Such disclosures constitute the destructionof valuable property rights, given that trade secretslose their value once disclosed.

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Judge Ikuta was hardly the first commentator tosee a direct correlation between stringentnondisclosure standards and increases in discoverydisputes. See, e.g., Arthur R. Miller, Confidentiality,Protective Orders, and Public Access to the Courts, 105HARV. L. REV. 427, 446 (1991); Kyle J. Mendenhall,Can You Keep a Secret? The Court’s Role in ProtectingTrade Secrets and Other Confidential BusinessInformation from Disclosure in Litigation, 62 DRAKE L.REV. 885, 900 (2014); Beam Sys., Inc. v. CheckpointSys., Inc., 1998 WL 364081, at *2 (C.D. Cal. 1997) (“[I]fprotective orders were widely believed to be ineffective,... discovery disputes would proliferate, as partiesstruggled to withhold confidential information frompotentially ruinous disclosure whenever possible.”).7

Litigants have good reason to fear that the NinthCircuit’s “compelling reasons” standard “deprivesprotective orders issued under Rule 26(c) of any forceor effect.” Pet. App. 35a (Ikuta, J., dissenting). Thatstandard permits a litigant to facilitate disclosure of anopponent’s confidential documents by attaching themto a substantive motion, without regard to their

7 Increases in discovery disputes not only are inefficientbut also are likely to hamper the ability of litigants to gatherinformation necessary for a fair adjudication of disputes—a resultthat directly conflicts with the goal of discovery procedures. Forexample, if contested documents contain confidential informationthat nonetheless could later be subject to public disclosure underthe Ninth Circuit’s “compelling reasons” standard, a district judgemight well decide to exercise his/her discretion under Rule26(c)(1)(G) to deny the opposing litigant any access to thedocuments rather than order their production to opposing counselpursuant to a protective order.

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relevance to contested issues. Once the documents arefiled with the Court, the Ninth Circuit’s “compellingreasons” standard makes it very difficult for thelitigant to maintain confidentiality of any portion of thedocument. Under that standard, it is irrelevant thatonly minor portions of each attached document arepertinent to the issues raised by the motion, or thatneither the briefing nor the court’s decision refers tothe document. The “compelling reasons” standard willapply to efforts to maintain the confidentiality of allsuch documents, and effectively will require the partyseeking nondisclosure to offer detailed, document-by-document evidentiary showings.8

It often can be very difficult to convey to a judge“compelling reasons” why the disclosure of confidentialinformation will cause a company to suffer competitiveharm, given that judges rarely possess specializedknowledge of the company’s field of business. Theinevitable result: the heightened standard of reviewwill lead to the public disclosure (and thus destruction)of trade secrets. Yet the Ninth Circuit established itsheightened standard without any apparent recognitionthat the standard runs headlong into constitutionalprohibitions against uncompensated takings ofintellectual property. See, e.g., Ruckelshaus v.Monsanto Co., 467 U.S. 986, 1011-12 (1984).

8 Indeed, the “compelling reasons” standard provides theplaintiffs’ bar with strong incentives to file lawsuits whose primarypurpose is to obtain public access to confidential documents, ratherthan to obtain compensation for an aggrieved client. The decisionbelow thus raises the specter of the discovery tail wagging thedispute-resolution dog.

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Alternatively, litigants may choose to forgoaltogether their right to seek redress of grievances infederal court rather than place their property rights atrisk. Indeed, the parties to a major patent dispute nowpending before this Court were so concerned thatunrestrained federal court litigation could result inmassive public disclosure of both sides’ highly sensitivebusiness data that they agreed not to contest eachothers’ damages models at trial—thereby obviating theneed to present any of the evidence to the district court,even under seal. See Apple, 727 F.3d at 1219. See alsoid. at 1228 (cautioning that “[w]hile protecting thepublic’s interest in access to the courts, we mustremain mindful of the parties’ right to access thosesame courts upon terms which will not unduly harmtheir competitive interest.”) Review is warranted toprevent the Ninth Circuit’s erosion of private propertyrights.

CONCLUSION

The Court should grant the Petition.

Respectfully submitted,

Richard A. Samp (Counsel of Record)Mark S. ChenowethWashington Legal Found.2009 Massachusetts Ave, NWWashington, DC 20036202-588-0302rsamp@wlf.org

April 28, 2016