Bernstein v. Bernstein Litowitz Berger & Grossmann LLP, No. 15-374 (2d Cir. 2016)
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Plaintiff filed suit against his former law firm and five of its partners, alleging that he had been forced to resign after blowing the whistle on what he considered to be the firm’s unethical litigation conduct. The parties eventually settled the suit and then sought an order directing the clerk of the court to close the file while leaving it permanently sealed. The district court denied the parties' request. The court held that pleadings, even in settled cases, are judicial records subject to a presumption of public access. The court concluded that the district court engaged in a thoughtful analysis of the competing interests at stake and the district court's conclusions were amply supported. Finally, the court concluded that sealing of the complaint is not justified in order to protect “confidential client information.” Accordingly, the court affirmed the judgment.
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15 374 cv Bernstein v. Bernstein Litowitz Berger & Grossmann LLP, et al. 1 2 In the 3 United States Court of Appeals 4 For the Second Circuit 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 ________ AUGUST TERM, 2015 SUBMITTED: OCTOBER 23, 2015 DECIDED: FEBRUARY 24, 2016 No. 15 0374 cv BRUCE BERNSTEIN, Plaintiff, v. BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP, MAX BERGER, STEVEN SINGER, SALVATORE GRAZIANO, EDWARD GROSSMANN AND GERALD SILK, Defendants Appellants.* ________ Appeal from the United States District Court for the Southern District of New York. No. 14 Civ. 6867 (VEC) – Valerie E. Caproni, Judge. ________ Before: KEARSE, WALKER, and CABRANES, Circuit Judges. ________ The Clerk of Court is respectfully directed to amend the caption to conform to the above. * 2 No. 15 374 cv 1 Attorney Bruce Bernstein sued his former law firm, Bernstein 2 Litowitz Berger & Grossmann LLP (“BLB&G”), and five of its 3 partners, alleging that he had been forced to resign after blowing the 4 whistle on what he considered to be the firm’s unethical litigation 5 conduct. The firm argued that the relevant facts were “confidential 6 client information” that could not be disclosed by Bernstein in a 7 complaint raising claims of, inter alia, retaliatory breach of contract. 8 Bernstein sought and obtained permission from the United States 9 District Court for the Southern District of New York (Kevin P. 10 Castel, Judge) to file a complaint under seal, with the sealing to 11 automatically expire fourteen days after service of process on 12 defendants, unless extended by the court. Thirteen days after the 13 complaint was filed, the parties settled the suit on confidential 14 terms. The parties then sought an order directing the clerk of court 15 to close the file while leaving it permanently sealed. 16 The United States District Court for the Southern District of 17 New York (Valerie E. Caproni, Judge) denied the parties’ request. 18 The district court concluded that the complaint is a judicial 19 document subject to a presumption of public access under the First 20 Amendment and the common law. The district court also held that 21 keeping the complaint secret was not necessary to protect 22 “confidential client communications.” Finally, applying the 23 balancing test for the common law right of access, the court found 3 No. 15 374 cv 1 that the weak private interests at stake did not rebut the 2 presumption of access, which is supported by substantial public 3 interests. We agree with the district court and AFFIRM. 4 5 6 7 8 9 10 11 ________ Gregory P. Joseph, Pamela Jarvis, and Courtney A. Solomon, on the brief, Joseph Hage Aaronson LLC, New York, NY, for Defendants Appellants. ________ JOHN M. WALKER, JR., Circuit Judge: 12 Attorney Bruce Bernstein sued his former law firm, Bernstein 13 Litowitz Berger & Grossmann LLP (“BLB&G”), and five of its 14 partners, alleging that he had been forced to resign after blowing the 15 whistle on what he considered to be the firm’s unethical litigation 16 conduct. The firm argued that the relevant facts were “confidential 17 client information” that could not be disclosed by Bernstein in a 18 complaint raising claims of, inter alia, retaliatory breach of contract. 19 Bernstein sought and obtained permission from the United States 20 District Court for the Southern District of New York (Kevin P. 21 Castel, Judge) to file a complaint under seal, with the sealing to 22 automatically expire fourteen days after service of process on 23 defendants, unless extended by the court. Thirteen days after the 24 complaint was filed, the parties settled the suit on confidential 4 No. 15 374 cv 1 terms. The parties then sought an order directing the clerk of court 2 to close the file while leaving it permanently sealed. 3 The United States District Court for the Southern District of 4 New York (Valerie E. Caproni, Judge) denied the parties’ request. 5 The court concluded that the complaint is a judicial document 6 subject to a presumption of public access under the First 7 Amendment and the common law. The district court also held that 8 keeping the complaint secret was not necessary to protect 9 “confidential client communications.” Finally, applying the 10 balancing test for the common law right of access, the court found 11 that the weak private interests at stake did not rebut the 12 presumption of access, which is supported by substantial public 13 interests. We agree with the district court and AFFIRM. 14 BACKGROUND 15 We recite the facts alleged in the complaint that are necessary 16 to understand the substantial public interest in the complaint’s 17 disclosure, as the complaint in a case discloses the nature of the 18 proceeding. We emphasize, however, that at this point in the 19 proceeding the facts alleged are exactly that—simply allegations, the 20 truth of which has not been proven. 21 Bernstein became of counsel with BLB&G in 2008. At the firm, 22 he worked on In re Satyam Computer Services, Ltd., Securities 23 Litigation, a class action which arose from a “massive financial 5 No. 15 374 cv 1 scandal involving . . . Satyam Computer Services, Ltd. (Satyam), one 2 of India’s largest information technology and outsourcing 3 companies.” 609 F. Supp. 2d 1375, 1375 (J.P.M.L. 2009). Suits 4 brought by various investors against Satyam and others were 5 consolidated in the Southern District of New York by the Judicial 6 Panel on Multidistrict Litigation. Id. In May 2009, the Mississippi 7 Public Employees’ Retirement System (“MPERS”) was appointed as 8 one of four lead plaintiffs in the case. In re Satyam Comput. Servs., 9 Ltd., Sec. Litig., 1:09 md 02027 BSJ [Doc. No. 8] (May 12, 2009). The 10 Office of the Mississippi Attorney General (“AG’s Office”) was 11 inside counsel for MPERS. BLB&G was outside counsel. 12 In September 2010, BLB&G partner Steven Singer informed 13 Bernstein that a solo practitioner based in Jackson, Mississippi, 14 Vaterria Martin, would act as “local counsel” and “occasionally 15 check on the status of the case for MPERS, even though BLB&G was 16 already providing this information directly” to the AG’s Office. In 17 December 2010, the lead plaintiffs in the Satyam class action reached 18 an agreement in principle to settle with Satyam for $125 million. On 19 February 16, 2011, Satyam and the lead plaintiffs executed a 20 stipulation setting forth the terms of the agreement.1 On March 8, 2011, the lead plaintiffs reached an agreement in principle to settle with Satyam’s codefendants—various PricewaterhouseCoopers entities that were Satyam’s auditors—for $25.5 1 6 1 No. 15 374 cv On March 1, 2011—after the agreement in principle with 2 Satyam had been reached and the stipulation had been executed— 3 another BLB&G partner, Max Berger, “assigned two unnecessary 4 legal research projects” to Martin. Bernstein protested the 5 assignment, but his concerns were dismissed, with Singer saying, 6 “Do you ever want us to work with Mississippi again?” Martin 7 ultimately produced an eighteen page memorandum on April 26, 8 2011, several weeks after the case was settled in principle. Singer 9 and Berger agreed with Bernstein that the memorandum “addressed 10 the wrong pleading,” “contained no meaningful analysis,” and was 11 “ridiculous.” Martin reported a total of 207 hours’ work on the case, 12 primarily spent producing the useless memorandum. 13 After the settlement became final, Bernstein learned from 14 BLB&G’s comptroller that the firm had paid Martin $112,500 from 15 the proceeds of the Satyam class settlement. BLB&G did not disclose 16 the payment to the court in its August 1, 2011 fee petition.2 million. The district court entered amended preliminary settlement approval orders on March 21, 2011 and May 12, 2011. In re Satyam Comput. Servs., Ltd., Sec. Litig., 1:09 md 02027 BSJ [Docs. No. 259 & 319]. The final judgment and order as to Satyam issued on September 13, 2011. Id. [Doc. No. 363]. 2 Formerly, the local civil rules of the Southern District of New York required that all fee applicants in derivative and class actions disclose to the court “any fee sharing agreements with anyone.” By a rule amendment effective July 11, 2011—three weeks before BLB&G submitted its fee petition—the automatic disclosure provision was repealed as to 7 No. 15 374 cv 1 Concerned with the ethical and legal implications of the 2 arrangement, Bernstein inquired further. He learned that Martin 3 had been admitted to the bar only five years before Satyam was filed, 4 and was married to Deshun T. Martin, a special assistant attorney 5 general in the AG’s Office. 6 Bernstein allegedly raised his ethical concerns again in several 7 contentious meetings with partners. The firm’s leadership—Berger, 8 Salvatore Graziano, and Edward Grossmann—dismissed Bernstein’s 9 misgivings. Graziano and Berger informed Bernstein that there was 10 “local pressure on the Mississippi AG” to use “local firms,” told him 11 “you need to drop this,” and made a veiled threat to “blackball” 12 Bernstein if he became “a whistleblower.” 13 In December 2011, Bernstein reported his concerns to the U.S. 14 Attorney’s Office for the Southern District of New York. Soon 15 afterward, Bernstein became concerned about BLB&G’s conduct in 16 another class action, in which the firm allocated work to Mississippi 17 firms that lacked relevant experience. class actions. See S.D.N.Y. Local Civil Rule 23.1 (repealed effective July 11, 2011); S.D.N.Y. Local Civil Rule 23.1.1. According to the Joint Committee on Local Rules note, the committee recommended that the automatic disclosure rule as applied to class actions be deleted “because it is redundant [with] . . . Fed. R. Civ. P. 23(h).” Federal Rule 23(h), in turn, does not mandate automatic disclosure of all fee sharing arrangements in class actions. 8 No. 15 374 cv 1 Bernstein claims that the issue took its toll on his relationship 2 with the firm’s leadership. In October 2012, after realizing that his 3 termination was inevitable, he resigned from the firm. Bernstein 4 alleges that after his departure, BLB&G interfered with his 5 relationship with a lead plaintiff in one case, and BLB&G partners 6 made various threats toward him before attempting to “buy [his] 7 silence” by offering him compensation from a future settlement in 8 an unrelated case on the condition that he keep the Mississippi 9 counsel arrangement secret. Bernstein declined. 10 At two mediation sessions held before Bernstein filed suit, 11 BLB&G expressed its belief that Bernstein’s claims were based on 12 facts learned in the course of representation of a client and thus 13 could not be disclosed under the New York Rules of Professional 14 Conduct. Bernstein, by contrast, maintained that the facts 15 underlying his claims were “neither privileged nor confidential” and 16 that he was free to disclose them in court filings. 17 Notwithstanding Bernstein’s position that he was free to 18 disclose the facts at issue, Bernstein filed a motion with the district 19 court prior to filing the complaint requesting—“out of an abundance 20 of caution”—the entry of “an order sealing all materials filed in this 21 case until the Court resolves these issues of confidentiality.” 22 Judge Kevin Castel, sitting in Part I, granted the motion on 23 July 24, 2014, before the suit was filed. Noting that “it is doubtful 9 No. 15 374 cv 1 that sealing is appropriate,” the district court nevertheless out of an 2 “abundance of caution” ordered that “[t]he action may be filed 3 under seal and the sealing shall expire within 14 days of service of 4 process on defendants unless extended by order of the judge to 5 whom the case is assigned.” 6 On August 22, 2014, Bernstein filed the complaint under seal 7 against BLB&G and five individual BLB&G partners: Berger, Singer, 8 Graziano, Grossmann, and Gerald Silk. He alleged, in substance, 9 that defendants (1) engaged in a kickback scheme in violation of the 10 Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 11 §§ 1962(c), 1964(c), and (2) breached their contract with Bernstein in 12 retaliation for reporting an ethical breach. 13 After filing the sealed complaint, the parties returned to the 14 negotiating table. As Judge Caproni, to whom the case had been 15 assigned, wrote: “Armed now with the ticking time bomb provided 16 by the Court’s order, Bernstein was able to accomplish what he 17 could not without the assistance of a filing in this Court: he 18 negotiated a mutually acceptable settlement.” The settlement 19 agreement “includes a provision that voids the settlement if [the] 20 action is unsealed or otherwise becomes public.” 21 On September 4, 2014—one day short of the automatic 22 unsealing provided for by the court’s July 24 order—Bernstein filed 23 a notice of dismissal pursuant to the settlement. The following day, 10 No. 15 374 cv 1 the parties jointly moved for an order directing the clerk of court “to 2 close the file without ordering the file unsealed.” The parties 3 apparently believed that obtaining a stipulated dismissal before the 4 expiration of the sealing order would “ensure that the [c]omplaint 5 would never see the light of day.” 6 On January 12, 2015, following a hearing and multiple rounds 7 of briefing, the district court issued its opinion and order. After 8 determining that it had jurisdiction, the district court held that the 9 complaint is a judicial document subject to a presumption of public 10 access under both the First Amendment and the common law. Next, 11 the district court held that the complaint does not contain 12 confidential client communications or information and therefore 13 public access to the complaint would not plausibly implicate values 14 “higher” than First Amendment values. Finally, the district court 15 held that even if the First Amendment presumption did not apply, 16 the common law presumption of access to judicial documents 17 would require the complaint to be public because the “considerable” 18 public interest in disclosure outweighs the “weak” private interests 19 favoring secrecy. accordingly, the district court denied the parties’ 20 request to continue the sealing order and directed the clerk of court 21 to unseal the case thirty days from the issuance of its order, with the 22 thirty day period to be tolled during the pendency of any appeal. 11 1 No. 15 374 cv Defendants timely appealed. Bernstein has not filed a brief. 2 Although he continues to contest defendants’ claim that the 3 complaint contains “confidential client information,” he supports 4 BLB&G’s position that the case should remain sealed so as not to 5 risk unwinding the settlement. 6 DISCUSSION 7 The sole issue is whether the district court correctly denied the 8 parties’ request to continue the sealing order. In reviewing a district 9 court’s order to seal or unseal, we examine the court’s factual 10 findings for clear error, its legal determinations de novo, and its 11 ultimate decision to seal or unseal for abuse of discretion. See United 12 States v. Doe, 63 F.3d 121, 125 (2d Cir. 1995); United States v. Amodeo, 13 44 F.3d 141, 146 (2d Cir. 1995) (Amodeo I). 14 I. Pleadings as judicial records. 15 We first consider whether a complaint is a judicial document 16 subject to a presumption of access and easily conclude that a 17 complaint is such a document. A “judicial document” or “judicial 18 record” is a filed item that is “relevant to the performance of the 19 judicial function and useful in the judicial process.” Lugosch v. 20 Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006) (internal 21 quotation marks omitted). Such documents are presumptively 22 public so that the federal courts “have a measure of accountability” 23 and so that the public may “have confidence in the administration of 12 No. 15 374 cv 1 justice.” United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995) 2 (Amodeo II). In determining whether a document is a judicial record, 3 we evaluate the “relevance of the document’s specific contents to the 4 nature of the proceeding” and the degree to which “access to the 5 [document] would materially assist the public in understanding the 6 issues before the . . . court, and in evaluating the fairness and 7 integrity of the court’s proceedings.” Newsday LLC v. Cty. of Nassau, 8 730 F.3d 156, 166 67 (2d Cir. 2013). 3 9 Pleadings plainly meet the Newsday test for reasons that are 10 readily apparent. “A complaint, which initiates judicial 11 proceedings, is the cornerstone of every case, the very architecture of 12 the lawsuit, and access to the complaint is almost always necessary 13 if the public is to understand a court’s decision.” Fed. Trade Comm’n 14 v. AbbVie Prods. LLC, 713 F.3d 54, 62 (11th Cir. 2013). Moreover, in 15 commencing an action and thus invoking the court’s jurisdiction, the 16 parties’ substantive legal rights and duties may be affected. For 17 example, “a large number of lawsuits . . . are disposed of at the 18 motion to dismiss stage, where a court determines solely on the While “the mere filing of a paper or document with the court is insufficient to render that paper a judicial document subject to the right of public access,” Lugosch, 435 F.3d at 119 (internal quotation marks omitted), a document is judicial not only if the judge actually relied upon it, but also if “the judge should have considered or relied upon [it], but did not.” Id. at 123 (internal quotation marks omitted). Such documents “are just as deserving of disclosure as those that actually entered into the judge s decision.” Id. (internal quotation marks omitted). 3 13 No. 15 374 cv 1 basis of the complaint whether the plaintiff has made sufficient 2 factual allegations to state a claim.” Id. The filing of a complaint 3 triggers other legal consequences as well. E.g., Kronisch v. United 4 States, 150 F.3d 112, 126 (2d Cir. 1998) (obligation to preserve 5 evidence); Mattel, Inc. v. Louis Marx & Co., 353 F.2d 421, 424 (2d Cir. 6 1965) (when duplicative actions are commenced, the first filed 7 complaint normally determines the district of adjudication). For 8 these reasons, the “modern trend in federal cases” is to classify 9 “pleadings in civil litigation (other than discovery motions and 10 accompanying exhibits)” as judicial records. IDT Corp. v. eBay, 709 11 F.3d 1220, 1223 (8th Cir. 2013); accord AbbVie, 713 F.3d at 62–63 12 (collecting cases); United States v. Martin, 746 F.2d 964, 968 (3d Cir. 13 1984). 14 The fact that a suit is ultimately settled without a judgment on 15 the merits does not impair the “judicial record” status of pleadings. 16 It is true that settlement of a case precludes the judicial 17 determination of the pleadings’ veracity and legal sufficiency. But 18 attorneys and others submitting pleadings are under an obligation 19 to ensure, when submitting pleadings, that “the factual contentions 20 [made] have evidentiary support or, if specifically so identified, will 21 likely have evidentiary support after a reasonable opportunity for 22 further investigation or discovery.” Fed. R. Civ. P. 11(b)(3). 23 In any event, the fact of filing a complaint, whatever its veracity, is a 14 No. 15 374 cv 1 significant matter of record. Even in the settlement context, the 2 inspection of pleadings allows “the public [to] discern the 3 prevalence of certain types of cases, the nature of the parties to 4 particular kinds of actions, information about the settlement rates in 5 different areas of law, and the types of materials that are likely to be 6 sealed.” Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 96 (2d Cir. 7 2004). Thus, pleadings are considered judicial records “even when 8 the case is pending before judgment or resolved by settlement.” IDT 9 Corp., 709 F.3d at 1223 (citations omitted); accord Stone v. Univ. of Md. 10 Med. Sys. Corp., 855 F.2d 178, 180 n.* (4th Cir. 1988); Laurie Doré, 11 Secrecy by Consent: The Use and Limits of Confidentiality in the Pursuit 12 of Settlement, 74 NOTRE DAME L. REV. 283, 378 (1999). 13 14 15 We therefore hold that pleadings—even in settled cases—are judicial records subject to a presumption of public access. II. Presumptive right of access to the complaint. 16 A “[f]inding that a document is a ‘judicial document’ triggers 17 a presumption of public access, and requires a court to make 18 specific, rigorous findings before sealing the document or otherwise 19 denying public access.” Newsday, 730 F.3d at 167 n.15. The 20 “presumption of access” to judicial records is secured by two 21 independent sources: the First Amendment and the common law. 22 Lugosch, 435 F.3d at 121. The analysis with respect to each is 23 somewhat different. 15 No. 15 374 cv 1 A. The First Amendment presumptive right of access. 2 Defendants argue that the First Amendment presumption 3 does not apply here. We disagree. 4 “We have articulated two different approaches for 5 determining whether ‘the public and the press should receive First 6 Amendment protection in their attempts to access certain judicial 7 documents.’” Id. at 120 (internal quotation marks omitted). The first 8 approach considers “experience and logic”: that is, “whether the 9 documents have historically been open to the press and general 10 public and whether public access plays a significant positive role in 11 the functioning of the particular process in question.” Id. (internal 12 quotation marks omitted). “The second approach considers the 13 extent to which the judicial documents are derived from or are a 14 necessary corollary of the capacity to attend the relevant 15 proceedings.” Id. (alterations and internal quotation marks omitted). 16 A complaint—especially in a case that is ultimately settled— 17 is best evaluated under the “experience and logic” approach, 18 because the alternative approach is relevant only after court 19 proceedings have commenced. Experience and logic both support 20 access here. Complaints have historically been publicly accessible 21 by default, even when they contain arguably sensitive information. 22 Cf. Sealed Plaintiff v. Sealed Defendant, 537 F.3d 185, 189 90 (2d Cir. 23 2008). Defendants acknowledge that since the adoption of the 16 No. 15 374 cv 1 Federal Rules of Civil Procedure in 1938, federal lawsuits have been 2 commenced by the filing of the complaint. Fed. R. Civ. P. 3. But 3 they argue that since “many federal courts did not require 4 complaints to be filed unless and until judicial intervention was 5 sought” before 1938, there is no strong historical tradition of public 6 access to complaints. This argument is unpersuasive. It ignores the 7 history of the last eight decades under the Federal Rules. Moreover, 8 the fact that pre 1938 law may have allowed actions to commence 9 without the filing of a complaint says nothing about whether the 10 public at that time had access to documents that were permitted or 11 required to be filed. 12 Logical considerations also support a presumption of public 13 access. Public access to complaints allows the public to understand 14 the activity of the federal courts, enhances the court system’s 15 accountability and legitimacy, and informs the public of matters of 16 public concern. Conversely, a sealed complaint leaves the public 17 unaware that a claim has been leveled and that state power has been 18 invoked—and public resources spent—in an effort to resolve the 19 dispute. These considerations indicate that public access to the 20 complaint and other pleadings has a “significant positive role,” 21 Lugosch, 435 F.3d at 120 (internal quotation marks omitted), in the 22 functioning of the judicial process. 23 17 No. 15 374 cv 1 B. The common law presumption of access. 2 The district court concluded that in addition to the First 3 Amendment presumption of access, the common law presumption 4 of access attached. Defendants contend that the common law 5 presumption “lacks weight here” and that unsealing the complaint 6 constituted an abuse of discretion. 7 The courts have long recognized the “general right to inspect 8 and copy public records and documents, including judicial records 9 and documents.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 10 (1978) (footnote omitted). This right “is said to predate the 11 Constitution.” Amodeo I, 44 F.3d at 145. 12 The “right to inspect and copy judicial records is not 13 absolute,” however, and a court may exercise its “supervisory 14 power over its own records and files” to deny access “where court 15 files might have become a vehicle for improper purposes.” Nixon, 16 435 U.S. at 598 (internal quotation marks omitted). “Once the court 17 has determined that the documents are judicial documents and that 18 therefore a common law presumption of access attaches, it must 19 determine the weight of that presumption.” Lugosch, 435 F.3d at 119. 20 The weight of the presumption is a function of (1) “the role of 21 the material at issue in the exercise of Article III judicial power” and 22 (2) “the resultant value of such information to those monitoring the 23 federal courts,” balanced against “competing considerations” such 18 No. 15 374 cv 1 as “the privacy interests of those resisting disclosure.” Lugosch, 435 2 F.3d at 119 20 (internal quotation marks omitted); see also Amodeo II, 3 71 F.3d at 1049 51. We take each factor in turn. 4 Where a document’s “role in the performance of Article III 5 duties” is “negligible . . . , the weight of the presumption is low.” 6 Amodeo II, 71 F.3d at 1050. Conversely, where documents “directly 7 affect an adjudication,” id. at 1049, or are used to determine litigants’ 8 substantive legal rights, the presumption of access is at its zenith, 9 Lugosch, 435 F.3d at 121, and thus can be overcome only by 10 “extraordinary circumstances,” Amodeo II, 71 F.3d at 1048 (internal 11 quotation marks omitted). The locus of the inquiry is, in essence, 12 whether the document “is presented to the court to invoke its 13 powers or affect its decisions.” Id. at 1050. 14 Applying this standard, we have determined that a report 15 submitted to a court in connection with a summary judgment 16 motion is entitled to a strong presumption of access. Joy v. North, 17 692 F.2d 880, 894 (2d Cir. 1982). Since such a document “is the basis 18 for the adjudication, only the most compelling reasons can justify” 19 sealing. Id. By contrast, documents “such as those passed between 20 the parties in discovery” often play “no role in the performance of 19 No. 15 374 cv 1 Article III functions” and so the presumption of access to these 2 records is low. Amodeo II, 71 F.3d at 1050.4 3 Under the two factor Lugosch approach, we easily determine 4 that the weight of the presumption here is strong. Pleadings, such 5 as the complaint here, are highly relevant to the exercise of Article 6 III judicial power. Of all the records that may come before a judge, a 7 complaint is among the most likely to affect judicial proceedings. It 8 is the complaint that invokes the powers of the court, states the 9 causes of action, and prays for relief. We have already discussed the 10 second basis supporting the weight of the presumption: the utility of 11 the complaint to those who monitor the work of the federal courts. 12 We now move to the crux of the weight of the presumption 13 analysis: balancing the value of public disclosure and 14 “countervailing factors” such as “(i) the danger of impairing law 15 enforcement or judicial efficiency and (ii) the privacy interests of 16 those resisting disclosure.” Id.; see also Amodeo I, 44 F.3d at 146–47. 17 In striking this balance, we agree with the district court’s careful 18 opinion that the value of public disclosure is substantial and the 19 privacy interests at stake are minimal. Cf. United States v. Glens Falls Newspapers, Inc., 160 F.3d 853, 857 (2d Cir. 1998) (settlement negotiations and draft agreements “do not carry a presumption of public access” because “[t]he judge cannot act upon these discussions or documents until they are final, and the judge may not be privy to all of them”). 4 20 No. 15 374 cv 1 As the district court noted, the complaint alleges that 2 defendants, as counsel for a state employees’ pension fund that was 3 a lead plaintiff in a major securities class action, “regularly engage in 4 a kickback scheme with the Mississippi Attorney General’s Office, a 5 public entity whose constituents might otherwise be in the dark 6 about the arrangement.” Whether true or not, this allegation would 7 naturally be of legitimate interest to the public (especially those who 8 contribute to and receive payments from MPERS) and to federal 9 courts in the future (e.g., those considering whether to name BLB&G 10 as lead class counsel or find MPERS to be an adequate class 11 representative in future class actions). Moreover, the complaint also 12 did not come “within [the] court’s purview solely to [e]nsure [its] 13 irrelevance.” Lugosch, 435 F.3d at 119 (internal quotation marks 14 omitted). Although the speedy settlement of the claim meant that 15 the court did not adjudicate the merits of the case, the district courts 16 routinely engage in adjudicatory duties even in connection with 17 complaints that are dismissed or settled. 18 In the circumstances here presented, the interests favoring 19 secrecy, meanwhile, are weak. This is not a case in which disclosure 20 would reveal details of an ongoing investigation, pose a risk to 21 witnesses, endanger national security, or reveal trade secrets. See 22 Amodeo I, 44 F.3d at 147. Moreover, as we will show, the case does 23 not implicate the duty to protect either privileged attorney client 21 No. 15 374 cv 1 material or confidential client information. Once these rationales fall 2 away, only insubstantial arguments remain. 3 On appeal, defendants spend much of their brief arguing that 4 the complaint is unreliable and contesting the truth of the allegations 5 in the complaint. They argue that unsealing the complaint “assumes 6 the truth” of the allegations within it. But unsealing does no such 7 thing. As the district court noted: 8 9 10 11 12 13 14 15 16 17 Complaints can—and frequently do— contain allegations that range from exaggerated to wholly fabricated. That is the nature of judicial proceedings—not everything alleged by one party can or should be taken as ground truth. Still, the pleadings can and do properly frame the proceeding and provide outer boundaries on the claims advanced . . . and the redress sought. 19 (Internal citation omitted). Following defendants’ logic to its 20 conclusion, moreover, would create an untenable result—the sealing 21 of all complaints in actions in which the plaintiff does not prevail, 22 and all indictments in a criminal prosecution in which the defendant 23 is acquitted. 18 24 In sum, the district court engaged in a thoughtful and 25 extended analysis of the competing interests at stake. The district 26 court concluded that (1) the weight of the presumption of public 22 No. 15 374 cv 1 access accorded to the complaint was high because (a) the document 2 was highly relevant to the exercise of Article III judicial power and 3 (b) the public interest in disclosure was substantial, while the private 4 interests in secrecy are weak; and (2) BLB&G did not come forth 5 with a sufficient rationale to rebut this strong presumption of access. 6 These conclusions were amply supported, and there is no basis to 7 disturb them. 8 9 III. Sealing of the complaint is not justified in order to protect “confidential client information.” 10 On appeal, BLB&G renews its argument that a need to protect 11 “confidential client information” justifies or requires continued 12 sealing of the complaint. We reject this claim. 13 After Bernstein left BLB&G, George W. Neville—a special 14 assistant attorney general in the civil litigation division of the AG’s 15 Office—exchanged several letters with Bernstein’s attorney. In these 16 letters, Neville ordered Bernstein to keep the existence of the alleged 17 kickback scheme private, writing: “As counsel for the State of 18 Mississippi . . . and on behalf of the State of Mississippi and its 19 agency MPERS, I am directing [Bernstein] not to disclose any 20 confidential information he learned as counsel to Mississippi and its 21 agency MPERS.” 22 Relying in part on these letters, defendants argued to the 23 district court that all or virtually all of the facts alleged in the 23 No. 15 374 cv 1 complaint are “confidential” under the New York Rules of 2 Professional Conduct and thus permanent sealing is required.5 The 3 district court rejected this claim. On appeal, defendants renew this 4 confidentiality argument. We reach the same conclusion as did the 5 district court. 6 As a threshold matter, we note that defendants rely in large 7 part on the conclusions of their legal ethics expert made in a 8 declaration filed in the district court. We do not consider arguments 9 based on this declaration because of our longstanding rule that 10 expert testimony on issues of domestic law is not to be considered. 11 See Amnesty Int’l USA v. Clapper, 638 F.3d 118, 128 n.12 (2d Cir. 2011) 12 (holding that the court was “not compelled to accept” a legal ethics 13 expert’s declaration regarding whether an ethical duty had been 14 triggered, because the question was for the court to decide), rev’d on 15 other grounds, 133 S. Ct. 1138 (2013); see also Hygh v. Jacobs, 961 F.2d Rule 1.6 provides: “A lawyer shall not knowingly reveal confidential information, . . . or use such information to the disadvantage of a client or for the advantage of the lawyer or a third person” unless an exception applies. N.Y. R. Prof’l Conduct 1.6(a)(3). One such exception is “when permitted or required under these Rules or to comply with other law or court order.” Id. at 1.6(b)(6). “Confidential information” is “information gained during or relating to the representation of a client, whatever its source, that is (a) protected by the attorney client privilege, (b) likely to be embarrassing or detrimental to the client if disclosed, or (c) information that the client has requested be kept confidential.” Id. at 1.6. Rule 1.9(c) provides that a lawyer shall not “use” or “reveal” a former client’s confidential information, except as the Rules “permit or require.” 5 24 No. 15 374 cv 1 359, 363 (2d Cir. 1992); Marx & Co. v. The Diners’ Club, Inc., 550 F.2d 2 505, 509 11 (2d Cir. 1977).6 3 We now turn to the merits. To overcome the First 4 Amendment right of access, the proponent of sealing must 5 “demonstrat[e] that closure is essential to preserve higher values 6 and is narrowly tailored to serve that interest.” In re N.Y. Times Co., 7 828 F.2d 110, 116 (2d Cir. 1987) (internal quotation marks omitted). 8 “Broad and general findings” and “conclusory assertion[s]” are 9 insufficient to justify deprivation of public access to the record, id. 10 (internal quotation marks omitted); “specific, on the record 11 findings” are required. United States v. Erie Cnty., 763 F.3d 235, 243 12 (2d Cir. 2014) (internal quotation marks omitted). 13 Here, defendants argue that “protection of confidential client 14 communication” is a higher value. This assertion raises the question 15 of whether any confidential client information is actually implicated 16 in this case. Putting that aside for a moment, however, the assertion 17 itself is questionable. We have implied—but never expressly held— 18 that protection of the attorney client privilege is a “higher value” 19 under the First Amendment that may rebut the presumption of 20 access. E.g., id.; Lugosch, 435 F.3d at 125. Defendants go further, To the extent that expert interpretations of the ethical rules are useful, they are better presented in an amicus brief or the parties’ citations to treatises, rather than a declaration or affidavit. 6 25 No. 15 374 cv 1 however, arguing that the protection of “confidential client 2 information” is a “higher value” superseding the First Amendment 3 right of access and should have “equal status” to the attorney client 4 privilege. 5 The attorney client privilege and the duty to preserve client 6 confidences and secrets are “not co extensive,” however. Doe v. A 7 Corp., 330 F. Supp. 1352, 1355 (S.D.N.Y. 1971), adopted sub nom. Hall v. 8 A. Corp., 453 F.2d 1375, 1376 (2d Cir. 1972) (per curiam). The 9 broader “ethical duty to preserve a client’s confidences . . .[,] unlike 10 the evidentiary privilege, exists without regard to the nature or 11 source of information or the fact that others share the knowledge.” 12 Brennan’s, Inc. v. Brennan’s Restaurants, Inc., 590 F.2d 168, 172 (5th 13 Cir. 1979) (internal quotation marks omitted). We share the district 14 court’s skepticism of BLB&G’s claim that “this broader ethical duty 15 should be treated identically to . . . the narrower and more venerable 16 attorney client privilege.” 17 In any event, even if we were to accept defendants’ “higher 18 value” argument, the complaint here does not contain “confidential” 19 client information. 20 First, the complaint does not include information that is 21 “likely to be embarrassing or detrimental to the client if disclosed.” 22 N.Y. R. Prof’l Conduct 1.6. Of course, the information may be 23 seriously embarrassing to counsel (BLB&G and the AG’s Office), but 26 No. 15 374 cv 1 not to the client, MPERS. Indeed, it is counterintuitive to suggest 2 that MPERS was somehow complicit in an alleged kickback scheme 3 that caused it to pay legal fees for unnecessary work. If anything, 4 MPERS would appear to benefit from disclosure; the worst that can 5 be said about it is that it was unlucky in its choice of counsel. In 6 sum, BLB&G’s claim about possible harm to MPERS is a mere 7 “naked conclusory statement that publication . . . will injure” it. Joy, 8 692 F.2d at 894. Such a statement “falls woefully short of the kind of 9 showing which raises even an arguable issue as to whether it may be 10 kept under seal.” Id. 11 Moreover, the fact of representation is generally neither 12 privileged nor confidential. See In re Grand Jury Subpoenas, 803 F.2d 13 493, 496 (9th Cir. 1986). The complaint’s allegation that BLB&G 14 routinely assigns work to unqualified local counsel at the AG’s 15 Office’s direction relates to a business practice, not to a “client 16 confidence.” 17 Finally, as the district court noted, “[t]he request to keep the 18 alleged kickback scheme confidential was made by the member of 19 the Attorney General’s Office whose conduct is discussed in the 20 Complaint. Insofar as this request (and perhaps even the underlying 21 scheme) was adverse to the interests of MPERS, for the purpose of 22 applying the ethical rule, the Court does not presume that the 27 No. 15 374 cv 1 attorney’s request for confidentiality signifies the client’s desire” 2 (citation omitted). 3 CONCLUSION 4 For the reasons stated above, we AFFIRM the judgment of the 5 district court.
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