News & Events

Sixth Circuit Lifts the Lid On Pre-Approved Filings Under Seal

Any thought that the Sixth Circuit’s June decision regarding filings under seal in Shane Group, Inc. v. BlueCross Blue Shield of Michigan, 825 F.3d 299 (6th Cir. 2016) [1], might be narrowly construed based upon the nature of the case—a challenge to a class settlement where the parties’ filings under seal prevented the class from knowing or reviewing key bases for the settlement—should be dispelled once and for all.

In an unpublished decision issued in July, the Sixth Circuit on its own motion vacated a district court order that allowed the parties to file any documents designated “Confidential” under seal.  John W. Beauchamp et al. v. Federal Home Loan Mortgage Corp., et al., Case No. 15-6067 (July 11, 216).  In Beauchamp, a couple’s personal possessions were destroyed when a contractor hired by Freddie Mac to prepare a foreclosed condominium and garage for resale hit the wrong unit.  The couple sued Freddie Mac, claiming vicarious liability for the contractor’s actions.  In the course of the case, the parties had entered a fairly standard discovery protective order allowing the parties to designate certain discovery materials as “Confidential” and providing that any party filing such materials or documents incorporating such materials must file them under seal.  The parties then filed numerous documents under seal without a separate, specific motion or ruling from the district court.  The district court ultimately granted summary judgment to Freddie Mac.

On appeal, the Sixth Circuit reversed the summary judgment ruling. The Court did not stop there, however, instead declaring, “[t]here remains one issue we raise on our own motion.”  That issue was that the parties had filed numerous documents “at the nub of this dispute” under seal and unavailable to the public.  Citing its prior ruling in Shane Group, the Court explained the following:

During discovery, courts often issue blanket protective orders that empower the parties themselves to designate which documents contain confidential information.  Once the parties place the document in the record, however, “very different considerations apply.”

The Court then reiterated the Shane Group holding that filings under seal require (i) that the proponent overcome a very high hurdle and provide compelling reasons to seal documents and demonstrate as much with respect to each document proposed to be filed under seal, and (ii) that the district court, even when there is no objection, “set forth specific findings and conclusions which justify nondisclosure to the public.”

Noting that, in this case, the filings under seal all were made in accordance with a discovery protective order and lacked both independent justifications proffered by the parties and specific findings by the district court of the kind required in Shane Group, the Court quickly determined that the record did not justify filing under seal.

Beauchamp highlights the emphasis – arguably new – that the Sixth Circuit places on filings under seal.  The blanket discovery protective order of old, providing for automatic filings under seal of documents designated “Confidential,” common in many cases, will no longer carry the day.  Filings under seal will be heavily scrutinized and will require substantial justification in every case, whether opposed by any other party or not.  Even if that fails to occur at the district court level, the Sixth Circuit will take it upon itself to remedy the situation.

John C. Hayworth

HayworthJohn091543Fxc

Valerie Diden Moore

Valerie Moore

[1] This blog is Part Two of a three-part series on the Sixth Circuit’s recent rulings on filings under seal and some of their potential impacts on litigants and practitioners.  Part One, Sixth Circuit Denies Seal of Approval for Unjustified Filings Under Seal, addressed the Sixth Circuit’s June 7, 2016, decision in Shane Group, Inc. v. Blue Cross Blue Shield of Michigan. This Part Two addresses the Sixth Circuit’s subsequent, unpublished ruling on filings under seal issued in July 2016.  Part Three will address the impact of these rulings on third-parties who are compelled to produce documents by subpoena.