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Cosgrove v. National Fire & Marine Insurance Co.

United States District Court, D. Arizona

August 20, 2019

KAREN COSGROVE, a single person, Plaintiff,
v.
NATIONAL FIRE & MARINE INSURANCE COMPANY, a foreign insurer, Defendant.

          ORDER

          H. Russel Holland United States District Judge.

         Motion to Unseal

         Intervenor United Policyholders moves to unseal the minute entry at Docket No. 170 and the order at Docket No. 171.[1] The motion to unseal is opposed.[2] Oral argument was requested but is not deemed necessary.

         Background

         Plaintiff Karen Cosgrove asserted breach of contract and bad faith claims against defendant. Plaintiff and defendant cross-moved for partial summary judgment, and at oral argument on April 7, 2017, the court resolved the motions.[3] On April 10, 2017, the court entered a written order in which it provided a detailed explanation of its oral rulings.[4] Both the minute entry at Docket No. 170 and the court's written order at Docket No. 171 were filed publically on the docket and the court's written order at Docket No. 171 was flagged as a “written decision” pursuant to the EGovernment Act of 2002, Pub. L. No. 107-347, § 205, 116 Stat. 2899, 2913 (codified as amended at 44 U.S.C. § 3501 note (2006)), so that it would be reported.

         On May 4, 2017, the parties formally notified the court that they had reached a settlement.[5] As part of their settlement, the parties requested that the court vacate and seal its orders on the cross-motions for partial summary judgment (Docket Nos. 170 and 171).[6]Defendant's attorney avers that the settlement agreement “was expressly conditioned on the vacating and sealing of” the partial summary judgment orders and that “[t]his was a material term of the Agreement. . . .”[7] On May 5, 2017, the court entered an order vacating and sealing the documents at Docket Nos. 170 and 171.[8] On May 9, 2017, the parties filed a stipulation of dismissal, [9] which the court granted on May 10, 2017, dismissing this case in its entirety, with prejudice.[10]

         On November 3, 2017, United Policyholders moved to intervene for the limited purposes of unsealing and reinstating the court's orders resolving the cross-motions for partial summary judgment.[11] On January 18, 2018, the court denied United Policyholders' motion to intervene.[12] United Policyholders appealed. On May 6, 2019, the Ninth Circuit affirmed in part and vacated and remanded in part.[13] The Ninth Circuit affirmed this court's denial of United Policyholders' motion to intervene for the purpose of reinstating the vacated orders.[14]The Ninth Circuit, however, held that this court erred in denying United Policyholders' motion to intervene for the purpose of unsealing the vacated orders.[15] The Ninth Circuit instructed this court, on remand, to “balanc[e] the public interest with potential prejudice to the parties and the other factors to be considered in deciding a permissive intervention motion.”[16]

         On remand, this court granted United Policyholders' motion to intervene for the limited purpose of seeking to unseal the court's orders resolving the cross-motions for partial summary judgment.[17] Thereafter, United Policyholders timely filed its motion to unseal the minute entry at Docket No. 170 and the court's written order at Docket No. 171 (referred to herein collectively as the “subject documents”).

         Discussion

         “‘It is clear that the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents.'” Center for Auto Safety v. Chrysler Group, LLC, 809 F.3d 1092, 1096 (9th Cir. 2016) (quoting Nixon v. Warner Commnc'ns, Inc., 435 U.S. 589, 597 (1978)). But, “[t]he common law right of access . . . is not absolute and can be overridden given sufficiently compelling reasons for doing so.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). In deciding a motion to unseal, “[t]he judge need not document compelling reasons to unseal; rather the proponent of sealing bears the burden with respect to sealing.” Kamakana v. City and County of Honolulu, 447 F.3d 1172, 1182 (9th Cir. 2006). “A failure to meet that burden means that the default posture of public access prevails.” Id. “Examples” of compelling reasons to seal “include when a court record might be used to ‘gratify private spite or promote public scandal,' to circulate ‘libelous' statements, or ‘as sources of business information that might harm a litigant's competitive standing.'” Center for Auto Safety, 809 F.3d at 1097 (quoting Nixon, 435 U.S. at 598-99).

         United Policyholders and defendant agree that the subject documents do not contain libelous or scandalous information nor do they contain trade secrets. But, they disagree as to whether there are other compelling reasons for sealing the subject documents.

         United Policyholders argues that the only reason defendant gave for sealing the subject documents was that it purchased the right to do so from plaintiff as part of the parties' settlement. But, United Policyholders argues that “[t]he right of access to court documents belongs to the public, and the [parties] were in no position to bargain that right away.” San Jose Mercury News, Inc. v. U.S. Dist. Court--Northern Dist. (San Jose), 187 F.3d 1096, 1101 (9th Cir. 1999).

         Defendant, however, argues that there are other compelling reasons for sealing the subject documents and that these reasons were explained to the court in an April 11, 2017 conference call. Defense counsel avers that during that conference call, he

explained the reasons and need for the request to vacate and seal the rulings, including the impact the fact[s] found and legal principles adopted . . . may have on a third party involved in the underlying lawsuit who was referenced in the MPSJ ...

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