Under Seal v. Under Seal, Under Seal v. Under Seal

326 F.3d 479, 2003 U.S. App. LEXIS 7010, 2003 WL 1871055

• Court: Court of Appeals for the Fourth Circuit
• Decided: April 14, 2003
• Docket: 02-1683, 02-1684
• Status: Published

Opinions

Affirmed by published opinion. Judge LUTTIG wrote the opinion, which Judge TRAXLER joined. Judge DIANA GRIBBON MOTZ wrote an opinion concurring in the judgement.

OPINION

LUTTIG, Circuit Judge:

Appellants, two corporations who participate in the National Flood Insurance Program (“NFIP”), object to a district court order unsealing a False Claims Act (“FCA”) complaint brought against them by the government as intervenor in a previously sealed complaint brought under the FCA’s qui tarn provision. Finding no error in the district court’s exercise of discretion in unsealing the record, we affirm.

I.

In 2000, an unidentified party filed a qui tarn action, as relator, under the FCA against the appellants for allegedly wrongful insurance payments they made under the NFIP. The action was filed under seal, pursuant to the terms of the FCA’s qui tarn provision, which reads as follows:

(1) A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. ...

(2) A copy of the complaint and written disclosure of substantially all material evidence and information the person possesses shall be served on the Government ... The complaint shall be filed in camera, shall remain under seal for at least 60 days, and shall not be served on the defendant until the court so orders ....

(3) The Government may, for good cause shown, move the court for extensions of the time during which the complaint remains under seal under paragraph (2)....

(4)Before the expiration of the 60-day period or any extensions obtained under paragraph (3), the Government shall—

(A) proceed with the action ...; or

(B) notify the court that it declines to take over the action

31 U.S.C. § 3730(b). The relator’s action lay fallow as the government extended its investigative period. Then, on January 8, 2002, the government notified appellants that it would intervene in the suit and proceed against them.

Before the government filed an intervening complaint, the appellants moved to compel the government to arbitrate the controversy with them, as required by the Subsidy Arrangement that governs participation in the NFIP. See 42 C.F.R. Ch. 1, Pt. 62, App. A (2001). Shortly thereafter, the government filed its intervening complaint with the district court, along with a motion to unseal the action. On June 3, 2002, the court issued an order (1) compelling arbitration, (2) staying the government’s complaint, and (3) unsealing the action.

The court stayed the effect of its unsealing order for ten days in order to allow appellants to take an appeal to this court. Appellants did appeal, and a motions panel of this court stayed the unsealing order pending our disposition.

II.

As an initial matter, there is a significant question as to whether we have jurisdiction to hear this appeal. The government contends that the appeal is interlocutory, and therefore foreclosed from our review by 28 U.S.C. § 1291 (providing the court of appeals with jurisdiction to hear appeals only “from [] final decisions of the district courts”). Appellants, on the other hand, argue that the district court’s order is a collateral order, reviewable under Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). The binding effect of our precedent compels us to conclude that the district court’s order unsealing the record is appealable.

A.

Our analysis of the collateral order doctrine begins with the twist, uncommon in this circuit, that our precedent sets forth two different standards for determining whether a district court order qualifies as a collateral order.

The parties approach the collateral order analysis principally via our decision in James v. Jacobson, 6 F.3d 233, 239 (4th Cir.1993). Citing James, along with Taylor v. Nelson, 788 F.2d 220, 224 (4th Cir.1986), they both proceed on the assumption that the district court’s order unsealing the record must meet four criteria to qualify for Cohen collateral appealability. They say the order must (1) conclusively determine the question, (2) resolve an important question independent of the merits, (3) be effectively unreviewable on appeal from final judgment, and (4) present a serious and unsettled question on appeal. Elsewhere in our precedent, however, this last factor, the fourth “factor,” is not applied, and the first three factors are alone determinative of appealability. See, e.g., Hopkins v. Prince George’s County, 309 F.3d 224 (4th Cir.2002).

Cohen v. Beneficial Industrial Loan Corp. first laid the framework for the collateral order doctrine. There, the Supreme Court held collateral orders appeal-able because they:

finally determine claims of right separable from, and collateral to, rights asserted in the action, [are] too important to be denied review and [are] too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated. 337 U.S. at 546. Since Cohen, the Court has described and/or applied the collateral order analysis at least twenty-nine times in majority opinions. In every one of those instances, save one, the Court either identified or both identified and applied the three factors recited in Cohen.1 And, in numerous of those cases

the Court explicitly denominated its test as a three-factor, three pronged, or three part test.² The twenty-eight uniform opinions — identifying the collateral order test as having three factors — sandwich the lone opinion, Nixon v. Fitzgerald, in which the Court asserted that the test includes the fourth “factor.”³ On the few other occasions on which the Supreme Court has noted the “serious and unsettled” factor in its opinions, the Court has noted the “factor” as a circuit rule. That is, the Court there has noted that a particular circuit has applied the fourth “factor,” not that the “factor” is required by Supreme Court precedent. See, e.g., Gulfstream Aerospace Corp., 485 U.S. at 291, 108 S.Ct. 1133 (Scalia, J., concurring) (“I note that today’s result could also be reached by application of the rule adopted by the First Circuit, that to come within the Cohen exception the issue on appeal must involve an important and unsettled question of controlling law ...” (emphasis added)); McDonald v. Smith, 472 U.S. 479, 482 n. 3, 105 S.Ct. 2787, 86 L.Ed.2d 384 (1985) (noting our circuit’s application of the fourth “factor”).⁴

Because the Court’s most recent pronouncement and virtually all of its other opinions establish that the collateral order test is a three factor test, we now understand the Supreme Court’s collateral order test to be such, and, by implication, we conclude that the fourth “factor” is not part of the test. See Cunningham v. Hamilton County, 527 U.S. 198, 202, 119 S.Ct. 1915, 144 L.Ed.2d 184 (1999) (“[T]he collateral order doctrine [] provides that certain orders may be appealed, notwithstanding the absence of final judgment, ... when they are [1] conclusive, ... [2] resolve important questions separate from the merits, and [3] are effectively unreviewable on appeal from the final judgment in the underlying action.” (citing Swint v. Chambers County Comm’n, 514 U.S. 35, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995) (citing Cohen))).

In determining that the Supreme Court’s collateral order test is a three factor test we are not only consistent with the Court’s most recent pronouncement, but also with the overwhelming majority of all its pronouncements on the subject. Furthermore, our conclusion in this regard is consistent with the Court’s earliest pronouncement on the matter, see Swift & Co. Packers, and with its seminal pronouncement in Abney v. United States, 431 U.S. 651, 97 S.Ct. 2034, 52 L.Ed.2d 651 (1977), in which it first adopted the term “collateral order,” see id. at 657, 97 S.Ct. 2034.

In Abney, the Court made abundantly clear through its detailed analysis that under Cohen’s holding only three factors govern the determination of whether a court order is an appealable collateral order:

[In Cohen ], the Court identified several factors which, in its view, rendered the District Court’s order a “final decision” within the statute’s meaning. First, the District Court’s order had fully disposed of the question of the state security statute’s applicability in federal court; in no sense, did it leave the matter “open, unfinished or inconclusive.” Second, the decision was not simply a “step toward final disposition of the merits of the case (which would) be merged in final judgment”; rather, it resolved an issue completely collateral to the cause of action asserted. Finally, the decision had involved an important right which would be “lost, probably irreparably,” if review had to await final judgment; hence, to be effective, appellate review in that special limited setting had to be immediate.

Abney, 431 U.S. at 658, 97 S.Ct. 2034 (emphasis added) (citations omitted). The Abney Court did not so much as mention Cohen’s note that the issue there presented a “serious and unsettled question.”

Our circuit began applying the fourth “factor” in Bever v. Gilbertson, 724 F.2d 1083, 1085 (4th Cir.1984) (citing Cohen) (abrogated on different grounds by Young v. Lynch, 846 F.2d 960 (4th Cir.1988)). There, we noted that Cohen described the order being reviewed as “present[ing] a serious and unsettled question.” Since Bever, we have, in fourteen instances, treated that notation as a fourth element to the collateral order analysis, see, e.g., Taylor v. Nelson, 788 F.2d 220, 224 (4th Cir.1986) (citing Bever). Those fourteen instances compare with one-thousand-plus cases over the same period of time in which we did not apply that fourth “factor” when applying Cohen’s collateral order doctrine. From In re: Investigation, 568 F.2d 652 (4th Cir.1977), to Miller v. Simmons, 814 F.2d 962 (4th Cir.1987), to Hopkins v. Prince George’s County, 309 F.3d 224 (4th Cir.2002), we have at all other times hewed to the Supreme Court’s prescribed analysis, applying Cohen’s three factors.

As a panel of the full court, we cannot overrule prior decisions of the court, panel or en banc, and we are bound to apply principles decided by prior decisions of the court to the questions we address. But here, where we confront two different rules governing the same question, we are left no option but to choose from between our differing precedents. We would rather not hold this judicial license. However, until such time as the en banc court addresses itself to the jurisprudential dilemma presented by these different precedents, such is the only course available to us.

Sitting en banc in Jenkins v. Medford, 119 F.3d 1156 (4th Cir.1997), we applied the Cohen collateral appealability test without any reference to the fourth “factor.” And we have never otherwise applied the fourth “factor” while sitting en banc. Though Jenkins did not claim to overrule Bever, and though after Jenkins a panel again reinserted the fourth “factor” into our Cohen doctrine, see Eagle Energy, Inc. v. Secretary of Labor, 240 F.3d 319 (4th Cir.2001), we believe that Jenkins, along with the numerous similar panel applications of Cohen, is grounds for concluding that our circuit’s preference in practice is to hew strictly to Cohen’s three factor test. To the extent that any thought has even been given to the issue, this preference may be attributable to the twin facts that, to do otherwise, would not only conflict necessarily with Supreme Court authority but also lead to doctrinally indefensible results. As to the first of these putative reasons, imposition of an additional element conflicts necessarily with the Supreme Court’s standard, since the elements of its collateral order test establish a minimum threshold for our jurisdiction. And as to the second reason, by way of example, if one may not immediately appeal unless the issue is unsettled, then he would be foreclosed from interlocutory review of an order which, under established precedent, would clearly be violative of the Double Jeopardy Clause. For these reasons, we choose not to apply the fourth “factor” here, a decision that, happily, keeps us as true as possible to our prior circuit practice.

B.

The government pitched its argument against appealability of the unsealing order solely on the contention that the order did not satisfy the fourth “factor.” It conceded (insofar as one can “concede” a jurisdictional issue) that the “other” three Cohen appealability factors were met. Obviously, the government’s position takes on significance in light of our conclusion that the fourth “factor” is not applicable. But, irrespective of whether we would agree with the government’s assessment of the three factors, our decision in James v. Jacobson, 6 F.3d at 237, compels the conclusion that the order in question here is a collateral order. See id. (holding that a district court order denying anonymity to the parties is a collateral order).

In James, the subject of the district court’s order was a matter of discretion, involving the court’s interest in trial management. And it involved a determination as to whether the rights of public access to trial proceedings were outweighed by the parties’ privacy rights. Here, in identical fashion, the subject of the court’s order is a matter of discretion, founded on the court’s interest in trial management. And it equally involves a determination of whether rights of public access are outweighed by the parties’ privacy rights. Furthermore, in both cases the privacy concern of the objecting parties is that the court’s order will result in their being publicly identified with the action. On these similarities, we cannot avoid the conclusion that James applies, nor can we but hold that the order in this case is likewise ap-pealable.⁵

III.

Turning to the merits, we review the district court’s order to unseal the record for an abuse of discretion. See Nixon v. Warner Communications, Inc., 435 U.S. 589, 598-99, 98 S.Ct. 1306, 55 L.Ed.2d 570 (1978) (concluding that decisions as to court record access are best left to the trial court’s discretion since that court can best evaluate whether one of the three established exceptions to the presumption of public access — (1) where disclosure may be used to gratify private spite or promote public scandal, (2) where disclosed records may serve as reservoirs of libelous statements for press consumption, or (3) where disclosure might reveal trade secrets — creates a countervailing privacy right that supports sealing in light of the particular facts and circumstances of the ease).

Appellants argue that the combined effect of the FCA’s initial sealing of qui tarn actions and the Subsidy Agreement’s commitment of government suits against NFIP insurers to private arbitration, governed by the Federal Arbitration Act (“FAA”), work to create a substantial privacy interest for them that overcomes the public’s right to access court documents. They also argue that to rule otherwise would be to “reward the government’s improper conduct,” Appellant’s Br. at 10, which conduct they contend entails “prematurely seeking] to make its case public in contravention of the private arbitration protocol of the Subsidy Arrangement of the NFIP,” id. at 10.

In response, the government first argues, quite correctly, that the presumption in favor of public disclosure of court records can only be overcome by a significant countervailing interest. See Rushford v. New Yorker, 846 F.2d 249, 253 (4th Cir.1988). Secondly, it rightly points out that there is no bar on litigants filing pleadings in cases where arbitration is required, whether that filing is to challenge the scope of arbitration, preserve an action before a statute of limitations runs, or for another reason. See, e.g., Long v. Silver, 248 F.3d 309 (4th Cir.2001) (determining applicability of arbitration provision to non-signatory, and collecting cases of court consideration of arbitration related issues). Lastly, the government correctly notes that the FCA’s purpose in initially sealing qui tam suits does not extend to the sealing appellants seek. See Lujan v. Hughes Aircraft Co., 67 F.3d 242 (9th Cir.1995) (explaining that purpose of § 3730(b)(2)’s sealing provision is to allow the government to study and evaluate, out of public view, the relator’s information for possible intervention or overlapping criminal investigation). We add that neither the Subsidy Agreement nor the FAA requires that the parties maintain secrecy during arbitration. They only deny the public any right to access arbitration records. Where a party, of its own accord, places information in a public domain, it offends neither the regulatory nor the statutory regime.

These points, taken together, confirm that appellants have no privacy rights in the contents of the court record. Since the purpose of the FCA does not support continued sealing, and only justifies sealing in order that the government may investigate, appellants’ reliance on that Act is misplaced. And, appellants cannot rely on either the Subsidy Arrangement or the FAA, as neither prohibits the government from placing its complaint against appellants in the public domain. Since appellants lack privacy rights to this information, and since there is no bar to filing court pleadings in connection with an arbitrated matter, the government’s conduct cannot be characterized as “improper.”

Unable to demonstrate any relevant privacy right, appellants fail to satisfy Rush-ford ’s high standard and to overcome the public’s right to access court documents. The district court’s discretionary order unsealing the record is therefore not an abuse of discretion.

CONCLUSION

For the foregoing reasons, the judgment of the district court is affirmed.

AFFIRMED

1 . Compare Cunningham v. Hamilton County, 527 U.S. 198, 119 S.Ct. 1915, 144 L.Ed.2d 184 (1999), Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996), Behrens v. Pelletier, 516 U.S. 299, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996), Johnson v. Jones, 515 U.S. 304, 115 S.Ct. 2151, 132 L.Ed.2d 238 (1995), Swint v. Chambers County Comm'n, 514 U.S. 35, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995), Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994), Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993), Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 109 S.Ct. 1976, 104 L.Ed.2d 548 (1989), Midland Asphalt Corp. v. United States, 489 U.S. 794, 109 S.Ct. 1494, 103 L.Ed.2d 879 (1989), Van Cauwenberghe v. Biard, 486 U.S. 517, 108 S.Ct. 1945, 100 L.Ed.2d 517 (1988), Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988), Stringfellow v. Concerned Neighbors in Action, 480 U.S. 370, 107 S.Ct. 1177, 94 L.Ed.2d 389 (1987), Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985), Richardson-Merrell, Inc. v. Roller, 472 U.S. 424, 105 S.Ct. 2757, 86 L.Ed.2d 340 (1985), Richardson v. United States, 468 U.S. 317, 104 S.Ct. 3081, 82 L.Ed.2d 242 (1984), Flanagan v. United States, 465 U.S. 259, 104 S.Ct. 1051, 79 L.Ed.2d 288 (1984), Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), United States v. Hollywood Motor Car Co., Inc., 458 U.S. 263, 102 S.Ct. 3081, 73 L.Ed.2d 754 (1982), Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 101 S.Ct. 669, 66 L.Ed.2d 571 (1981), Federal Trade Com'n v. Standard Oil Co. of Ca., 449 U.S. 232, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980), Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980), Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978), United States v. MacDonald, 435 U.S. 850, 98 S.Ct. 1547, 56 L.Ed.2d 18 (1978), National Socialist Party of America v. Village of Skokie, 432 U.S. 43, 97 S.Ct. 2205, 53 L.Ed.2d 96 (1977), Abney v. United States, 431 U.S. 651, 97 S.Ct. 2034, 52 L.Ed.2d 651 (1977), Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), Local No. 438 Const. and General Laborers’ Union, AFL-CIO v. Curry, 371 U.S. 542, 83 S.Ct. 531, 9 L.Ed.2d 514 (1963), and Swift & Co. Packers v. Compania Colombiana Del Caribe, S.A., 339 U.S. 684, 70 S.Ct. 861, 94 L.Ed. 1206 (1950), with Nixon v. Fitzgerald, 457 U.S. 731, 102 S.Ct. 2690, 73 L.Ed.2d 349 (1982) (asserting that the Cohen test includes the fourth "factor” without examining the Court’s contrary precedent).

2 . See, e.g., Digital Equip. Corp.; Lauro Lines s.r.l.; Van Cauwenberghe; Gulfstream Aerospace Corp.; Mitchell; Richardson.

3 . The concurring opinion notes that in Eisen and Quackenbush the Court articulated the collateral order test as having two and four factors, respectively. See post at 489. A close reading of those articulations, however, reveals that both cases simply repackage Cohen ’s three factors in different dress. Thus, in Eisen, the Court bundled Cohen 's second and third factors into a single "second” factor. And in Quackenbush, the Court divided Cohen's second factor into two factors, its "second” and "fourth” factors.

4 .The concurring opinion suggests that Hohn v. United States, 524 U.S. 236, 118 S.Ct. 1969, 141 L.Ed.2d 242 (1998), and Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), ought also be included in our tabulation of Supreme Court decisions describing and/or applying the collateral order test, see post at 487. We do not include them, however, for the simple reason that neither describes and/or applies the collateral order doctrine.

As to the first, Hohn, it involved no collateral order issue at all, and merely recited the holding of Nixon v. Fitzgerald, along with other holdings on different doctrinal matters, in order to illustrate that Court precedent foreclosed the conclusion that "a request to proceed before a court of appeals should be regarded as a threshold inquiry separate from the merits,” Hohn, 524 U.S. at 246, 118 S.Ct. 1969. Obviously, we agree with Hohn 's recitation of Nixon's holding. But we do not agree that the Court, in reciting Nixon's holding for purposes entirely unrelated to conducting a collateral order inquiry, can be said there to have described the collateral order doctrine in the sense that we mean it, that is, as describing the doctrine in order to enable its direct application.

As to the second, Brady, the language at issue is found in the facts section, in a footnote. That footnote begins: “Neither party suggests that the decision below is not a final judgment [.]” 373 U.S. at 85 n. 1, 83 S.Ct. it 94 (emphasis added). From that beginning, it proceeds to cite Cohen only for the proposition that the serious and unsettled factor is relevant to the conclusion that "no attack on the reviewability of the lower court’s judgment could be successfully maintained.” It nowhere suggests that a collateral order (i.e., an order that represents a final decision, though not a final judgment) is at issue. In line with the case's posture, all the other precedent this footnote relies on are pre-Cohen decisions. The only post-Cohen collateral order decision to which it cites, Local No. 438 Const, and General Laborers’ Union, it cites as a "cf.”, that is, as a case that provides parallel, not controlling, reasoning. Clearly then, Brady, in this footnote in its fact section, does not contain an instructive description and/or application of the collateral order inquiry.

5 . While we faithfully apply James ’ principle in light of the similarities of the cases, we are skeptical of the government's concession, and equally of James ’ conclusion, that the district court order satisfies the third Cohen-Abney factor — the likely irreparable loss of an important right. The third factor — the likely irreparable loss of important rights if review has to await final judgment — would not appear to be implicated by district court orders on motions to seal court records or proceedings because, unique to this realm, denial of collateral review does not result in the consequence that review must then await final judgment. Rather, parties dissatisfied with sealing or unsealing orders have at their disposal what is in fact the preferred vehicle for review: petitions for mandamus. Petitions for mandamus have long been recognized as the appropriate vehicle for challenges to cloture and unsealing orders. Cf. Baltimore Sun Co. v. Goetz, 886 F.2d 60 (4th Cir.1989) (“Mandamus, not appeal, is the preferred method of review for orders restricting press activity related to criminal proceedings."); In re: Washington Post Co., 807 F.2d 383, 388 (4th Cir.1986) (treating an appeal by a non-party to a district court order sealing documents in a criminal case as a petition for mandamus); Central South Carolina Chapter, Society of Professional Journalists, Sigma Delta Chi v. Martin, 556 F.2d 706 (4th Cir.1977) (noting that "mandamus is the proper remedy to request the relief prayed for here” where appellant, on an interlocutory appeal, challenges a district court protective order); see also United States v. Gonzales, 150 F.3d 1246 (10th Cir.1998) (treating an interlocutory appeal from a district court’s order to seal the record as a petition for mandamus, in light of the fact that mandamus is the proper vehicle for such review).

Mandamus relief, though limited to circumstances where the petitioner’s "right to issuance of the writ is clear and indisputable,” Kerr v. U.S. Dist. Court, 426 U.S. 394, 403, 96 S.Ct. 2119, 48 L.Ed.2d 725 (1976), suffices to protect the parties' rights here. As James ’ discussion of the two varieties of "discretionary rulings" makes clear, see 6 F.3d at 238, a properly made discretionary ruling does not implicate important rights of the parties. Only an improperly made discretionary ruling implicates the parties' rights, either substantive or procedural. Because this distinction, on which the availability of collateral appeal rests, can only be made after review, mandamus is instead appropriate. Requiring that review be had via mandamus would ensure that trials do not grind to a halt where a discretionary sealing judgment is properly made, while also ensuring the vindication of the important rights implicated by an improperly made sealing judgment.