Hunton v. American Zurich Insurance Company

          ORDER

          Douglas L. Rayes, United States District Judge.

         After a jury found in favor of Plaintiff and against Defendant, the parties reached a settlement and stipulated to the dismissal of this action with prejudice. (Docs. 356, 362, 365.) Plaintiff then filed a Motion to Unseal Trial Exhibits, which the Court construed as a motion challenging Defendant's designation of certain trial exhibits as confidential and seeking relief from the Protective Order's restriction on the disclosure of confidential information produced during discovery. (Docs. 366, 369.) So construed, the Court granted Plaintiff's motion on December 4, 2018. (Doc. 369.)

         On December 28, 2018, Defendant noticed an appeal of the Court's order. Several days later, Defendant moved to stay the effect of the Court's December 4, 2018 order pending resolution of its appeal. (Doc. 372.) In the alternative, Defendant asks that the Court temporarily stay its order for a period of 7 days to allow Defendant time to seek a stay from the Ninth Circuit. (Doc. 380 at 4.) The motion to stay is fully briefed and suitable for resolution without oral argument. (Docs. 379, 380.) For the following reasons, Defendant's motion to stay the Court's order during the pendency of the appeal is denied, but its alternative request for a 7-day stay is granted.

         I. Legal Standard

         A stay is a matter of discretion, not a matter of right. Lair v. Bullock, 697 F.3d 1200, 1203 (9th Cir. 2012). When deciding whether to grant stay, the Court balances four factors: (1) the likelihood that the movant will succeed on appeal; (2) whether the movant will be irreparably injured without a stay; (3) whether a stay will substantially harm others; and (4) whether a stay serves the public interest. Id. The movant has the burden of showing that circumstances justify a stay. Id.

         II. Discussion

         At the outset, the last two factors do not weigh against a stay. A stay merely would delay disclosure of the documents at issue, and a relatively modest delay would not substantially harm Plaintiff or the public. With that said, the Court finds that a stay is not warranted because Defendant has not carried its burden on the first two factors.

         A. Likelihood of Success on the Merits

         Perhaps counterintuitively, the phrase “likelihood of success on the merits” does not mean that the movant is more likely than not to prevail on appeal. Id. at 1204. Instead, the movant must at a minimum show that it has a “substantial case for relief on the merits.” Id.

         The Court granted Plaintiff's motion primarily because Defendant waived the confidentiality of the exhibits at issue by not objecting to their unsealed admission at trial. (Doc. 369 at 7); see In re Bard IVC Filters Prods. Liab. Litig., No. MDL 15-02641-PHX-DGC, 2019 WL 186644, at *2-4 (D. Ariz. Jan. 14, 2019) (explaining that trial exhibits, regardless of whether they appear on the public docket or are openly displayed or discussed in court, become judicial records subject to the public's right of access by virtue of their admission at trial, and that the unsealed admission of exhibits that otherwise might be covered by a protective order waives such confidentiality protections). Assuming Defendant had not waived confidentiality, the Court alternatively concluded that compelling reasons did not justify confidentiality. (Doc. 369 at 7-8.)

         In arguing for a stay, Defendant primarily contends that the Court lacked jurisdiction to consider Plaintiff's motion after the parties stipulated to dismissal with prejudice.^[1]Defendant relies on out-of-circuit authority for the proposition, perhaps most explicitly stated in McCall-Bey v. Franzen, 777 F.2d 1178, 1185 (7th Cir. 1985), that “[a]n unconditional dismissal terminates federal jurisdiction except for the limited purpose of reopening and setting aside the judgment of dismissal within the scope allowed by Rule 60(b).” Stated differently, Defendant argues that, once the Court entered an unconditional dismissal of this action, it “no longer retained jurisdiction to hear Plaintiff's dispute over confidentiality, merely because the Court had jurisdiction over the case that was settled.” (Doc. 380 at 2.)

         Contrary to Defendant's argument and in contrast to the cases it relies on, the Court did not assert jurisdiction over the confidentiality dispute simply because it once had jurisdiction over the merits of the case itself. Rather, the Court concluded that it retained jurisdiction over the confidentiality dispute because the parties had explicitly agreed that the Protective Order would survive the final termination of the lawsuit and that the Court would “retain jurisdiction to resolve any dispute concerning the use of the documents protected under, ” the Protective Order.” (Doc. 369 at 6; Doc. 36 ¶¶ 24-25.) The parties agreed that the Court would retain jurisdiction over these types of disputes even after the final termination of the lawsuit, and nothing in the authorities cited by Defendant suggests that such an agreement would become null simply because the lawsuit terminated through a settlement and stipulation of dismissal.

         Defendant also argues that Plaintiff waived his right to challenge Defendant's confidentiality designations because paragraph 9 of the Protective Order allows parties to challenge confidentiality designations “during this litigation, ” and Plaintiff waited until the litigation ended before raising his confidentiality objections. Defendant contends that the Court misread and misapplied the Protective Order when it entertained and sustained Plaintiff's objections, despite their timing.

         Although this argument has more teeth than Defendant's jurisdiction challenge, it also has its problems, the most glaring of which is that Defendant did not clearly raise or develop this argument in its response in opposition to Plaintiff's original motion. Defendant argued that the Court lacked jurisdiction because the case had since been terminated through a stipulated dismissal. Defendant also argued that Plaintiff waived his confidentiality objections because earlier he had stipulated to allowing some of the documents at issue to be filed under seal in conjunction with the summary judgment briefing. But Defendant did not ...