Court Can't Seal Case to Protect Accused Company

By William Peacock, Esq. on April 17, 2014 | Last updated on March 21, 2019

What do you think of when you hear the name GM? If you've been watching news, you're thinking faulty ignition switches and rolling death traps, even though only thirty-four cars, out of millions recalled, have actually crashed as a result of recalled switches.

Of course, that defect is real. In the case of Company Doe, the report of an allegedly unsafe product, which was linked to a child's death, was labeled "materially inaccurate" by a Maryland federal judge in 2012. He then sealed the case files, hoping to avoid unfairly damaging the company's reputation by releasing the report.

Noble intentions, but with constitutional implications, it seems. The Fourth Circuit yesterday reversed the trial court's ruling and ordered all case files unsealed and unredacted, though likely appeals mean that the public won't hear much about Company Doe or the allegedly defective product any time soon.

Court Case Sealed

It began with a report to the Consumer Product Safety Commission, which posts complaints on its website. Though the CPSC worked with the company to clear up inaccuracies in the report, it wanted to post the report online anyway.

Company Doe filed suit in 2011, and the district court agreed. Judge Alexander Williams ordered the company's name, and the court records, sealed, holding that "[t]he challenged report is materially inaccurate, injurious to the Plaintiff's reputation, and risks harm to Plaintiff's economic interests," reports The Wall Street Journal.

The ruling made sense, in a way. An apparently defective report, with questionable credibility, linked a company and a product to a child's death. Making the report public would unquestionably harm the company's bottom line, much like GM's handful of crashed Cobalts (and the company's disturbing decade-long wait to recall the vehicles) has obliterated its reputation. The difference is, Company Doe may not have deserved the flak.

Press Access

Deserving or not, Company Doe may be headed for press scrutiny. The Fourth Circuit reversed the district court's order, writing:

[W]e hold that the district court's sealing order violates the public's right of access under the First Amendment and that the district court abused its discretion in allowing Company Doe to litigate pseudonymously. Accordingly, we vacate in part, reverse in part, and remand to the district court with instructions to unseal the case in its entirety.

The majority opinion also reminded the court that "the right  of public access, whether arising under the First Amendment or the common law, 'may be abrogated only in unusual circumstances,'" and those circumstances were not present here:

"Measured against the heightened public interests presented in this case, Company Doe has failed to demonstrate any interest sufficient to defeat the public's First Amendment right of access and to justify continued sealing."

Senior Circuit Judge Hamilton, in a separate concurring opinion, acknowledged the viral nature the Internet, the likely harm to Company Doe, and the that the equities fell with the company, but the bottom line is, the company failed to present sufficient evidence of the "high likelihood that denying its motion to seal would cause it to suffer substantial and irreparable economic harm."

In other words, common sense says that the company would be harmed, but it needs to meet a higher "high likelihood" of "substantial and irreparable economic harm" burden of proof.

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