John A. PANSY, Plaintiff/Appellee, v. BOROUGH OF STROUDSBURG; Harold A. Bentzoni; Kathryn Mikels; John W. Osborne, II; William Reber; Mary Jean Knapik; Maryann West Kowalshyn; Richard F. Osswald; Carl R. Rogers Defendants/Appellees, v. OTTAWAY NEWSPAPERS, INC. t/a Pocono Record, Ronald F. Bouchard; Pennsylvania Newspaper Publishers Association, Intervenors/Appellants.
No. 93-7396.
United States Court of Appeals, Third Circuit.
Argued Jan. 11, 1994. Decided May 2, 1994.
23 F.3d 772
A contemporaneous objection enables the record to be made with respect to the constitutional claim when the recollections of witnesses are freshest, not years later in a federal habeas proceeding. It enables the judge who observed the demeanor of those witnesses to make the factual determinations necessary for properly deciding the federal constitutional question. . . . A contemporaneous-objection rule may lead to the exclusion of the evidence objected to, thereby making a major contribution to finality in criminal litigation . . . the jury may acquit the defendant, and that will be the end of the case; or it may nonetheless convict the defendant, and he will have one less federal constitutional claim to assert in his federal habeas petition. . . . An objection on the spot may force the prosecution to take a hard look at its whole card.
433 U.S. at 88-89, 97 S.Ct. at 2507 (footnote omitted).
Perhaps the Court gave the most succinct summary of the rationale for its habeas jurisprudence in Sykes where it stated: “the state trial on the merits” should be “the ‘main event,’ . . . rather than a ‘tryout on the road’ for what will later be the determinative federal habeas hearing.” 433 U.S. at 90, 97 S.Ct. at 2508.
On remand from this court, the district court made the “deliberate bypass” inquiry and found that it was bound by the findings of the state evidentiary hearing, which “was by all accounts full, fair, and adequate.” Reynolds v. Ellingsworth, 1992 WL 404453, at *8 (D.Del. Dec. 31, 1992). Based on those findings and the court‘s review of the record, the court concluded that Reynolds’ attorneys chose not to object to the prosecutor‘s opening statement, preferring “to gamble that the jury would forget the references and eventually find Reynolds not guilty in light of the scanty case presented by the State.” Id. at *9. That was “precisely the kind of calculated decision that Henry v. Mississippi and related precedent warned against.” Id. The court concluded, similar to the holding in Brownstein, that “[a] defendant in state court may not, in short, use federal habeas proceedings as a hedge against the chance that his or her guess with regard to the jury will turn out to be incorrect.” Id.
I agree with the district court. Reynolds took his chances and he lost. He engaged in the kind of strategic behavior that disentitles him to habeas relief.
George W. Westervelt, Jr. (argued), Stroudsburg, PA, for appellants Ottaway Newspapers, Inc., t/a Pocono Record and Ronald F. Bouchard.
James A. Swetz, Cramer, Swetz & McManus, Stroudsburg, PA, for appellee John A. Pansy.
Ralph A. Matergia (argued), Matergia & Dunn, Stroudsburg, PA, for appellees Borough of Stroudsburg, Harold A. Bentzoni, Kathryn Mikels, John W. Osborne, II, William Reber, Mary Jean Knapik, Maryann West Kowalshyn, Richard F. Osswald, Carl R. Rogers.
Before: STAPLETON, COWEN and ALITO, Circuit Judges.
COWEN, Circuit Judge.
This appeal raises several questions of first impression in this court concerning the ability of intervenors to challenge orders of confidentiality pertaining to settlement agreements. These questions are extremely important in light of the widespread and increasing use by district courts of confidentiality orders to facilitate settlements, and the consequential sacrifice of public access to the information deemed confidential by such orders.
Ottaway Newspapers, Inc. (“Ottaway“), The Pocono Record (“the Record“), Ronald F. Bouchard and the Pennsylvania Newspaper Publishers Association (collectively, “the Newspapers“) filed this action in the district court seeking to intervene in an action that had been settled between John A. Pansy and the Borough of Stroudsburg (“the Borough“). The Newspapers’ purpose for intervening was to gain access to the Settlement Agreement which was entered into between Pansy and the Borough. The Newspapers argued that either the Agreement was a judicial record to which it had a right of access, or that the Order of Confidentiality which the court entered concerning the Agreement should be modified or vacated. The district court ruled that the Newspapers’ motion for intervention was untimely. In the alternative, the district court held that the Agreement was not a judicial record, and therefore not accessible under the right of access doctrine. The district court denied the Newspapers’ Motion to Intervene and Motion to Reconsider, Vacate or Modify the Order of Confidentiality. This appeal followed.
For the reasons stated below, we will reverse the order of the district court and direct that the Newspapers be permitted to intervene. We will remand the case to the district court for proceedings consistent with this opinion.
The district court entered a final order denying the Motion to Intervene and the Motion to Amend, Vacate or Modify by the Newspapers. Accordingly, we have jurisdiction under
The standard of review for each issue raised in this appeal will be discussed in the analysis of the issue. Where this appeal raises a legal question, we exercise plenary review. Prisco v. Talty, 993 F.2d 21, 24 (3d Cir.1993).
DISCUSSION
A. BACKGROUND
In May, 1991, Pansy filed an action in the district court pursuant to
Pansy and the Borough agreed to settle the civil rights action and the Settlement Agreement was presented to and reviewed by the district court. The Newspapers were not involved with the settlement. On June 5, 1992, the district court entered an order indicating that it had reviewed the terms of settlement and directing that the case be considered dismissed with prejudice upon the expiration of sixty days or consummation of settlement. The order also stated that “the terms of settlement are confidential and the parties hereby are ordered and directed to abide by the order of confidentiality.” App. at 54-55. The Settlement Agreement was never filed with the district court.
On October 22, 1992, the Record sent the Borough a request for information pursuant to the Pennsylvania Right to Know Act (“the Right to Know Act“),
On November 25, 1992, the Borough sent a response to the Record which included some information concerning the monetary cost to the Borough in settling the case. However, the Borough refused to provide access to the Settlement Agreement itself, and related documents, ostensibly because the district court‘s June 5, 1992 Order of Confidentiality prohibited its divulgence. The Borough has continued to refuse to provide the Settlement Agreement to the Newspapers.
On December 23, 1992, the Newspapers filed a petition in the Court of Common Pleas of Monroe County, Pennsylvania, challenging the Borough‘s refusal to produce documents pursuant to
On December 23, 1992, the Newspapers also filed the motions in the district court which are the subject of this appeal. They filed a Motion to Intervene in the settled civil rights action between Pansy and the Borough, as well as a Motion to Reconsider, Vacate, or Modify the district court‘s June 5, 1992 Order. Specifically, the Newspapers sought the Settlement Agreement as a judicial record. In the alternative, they sought to modify or vacate the June 5, 1992 Order of Confidentiality so they could obtain the Settlement Agreement pursuant to the Pennsylvania Right to Know Act.
The district court concluded that the Motion to Intervene was untimely. Alternatively, the district court addressed the merits of the right of access claim. It found that even if intervention was proper, the Settlement Agreement was not a judicial record because it was never filed with the court and, therefore, the Newspapers had no right to obtain the Settlement Agreement under the right of access doctrine. The district court also de
B. ANALYSIS
1. Standing
The appellees have not challenged the Newspapers’ standing in this appeal. Nevertheless, we are obliged to consider whether the Newspapers have standing to intervene in this action to either obtain the sought-after Settlement Agreement under the right of access doctrine, or to attack the Order of Confidentiality so that they may seek access to the document under the Pennsylvania Right to Know Act. The requirements for an Article III case or controversy were stated in Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 758, 70 L.Ed.2d 700 (1982):
Art. III requires the party who invokes the court‘s authority to show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant, and that the injury fairly can be traced to the challenged action and is likely to be redressed by a favorable decision.
Id. at 472, 102 S.Ct. at 758 (internal quotations and citations omitted).
We have routinely found, as have other courts, that third parties have standing to challenge protective orders and confidentiality orders1 in an effort to obtain access to information or judicial proceedings. E.g., Brown v. Advantage Eng‘g, Inc., 960 F.2d 1013, 1016 (11th Cir.1992); Public Citizen v. Liggett Group, Inc., 858 F.2d 775, 787 & n. 12 (1st Cir.1988), cert. denied, 488 U.S. 1030, 109 S.Ct. 838, 102 L.Ed.2d 970 (1989); In re Alexander Grant & Co., Litig., 820 F.2d 352, 354 (11th Cir.1987); United States v. Cianfrani, 573 F.2d 835, 845 (3d Cir.1978); City of Hartford v. Chase, 733 F.Supp. 533, 534 (D.Conn.1990), rev‘d on other grounds, 942 F.2d 130 (2d Cir.1991). The Newspapers may have standing notwithstanding the fact that “they assert rights that may belong to a broad portion of the public at large. So long as the ‘injury in fact’ alleged by each intervenor is ‘a distinct and palpable injury to himself,’ standing should not be denied ‘even if it is an injury shared by a large class of other possible litigants.‘” Cianfrani, 573 F.2d at 845 (quoting Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1975)).
Moreover, to establish standing, it is not necessary for litigants to demonstrate that they will prevail on the merits of their claim. See Warth, 422 U.S. at 500, 95 S.Ct. at 2206. Therefore, in determining whether the Newspapers have standing, we need not determine that the Newspapers will ultimately obtain access to the sought-after Settlement Agreement. We need only find that the Order of Confidentiality being challenged presents an obstacle to the Newspapers’ attempt to obtain access. The Newspapers have met the standing requirements in this case: they have shown that the putatively invalid Confidentiality Order which the district court entered interferes with their attempt to obtain access to the Settlement Agreement, either under the right of access doctrine or pursuant to the Pennsylvania Right to Know Act.
2. Intervention
The district court denied the Newspapers’ Motion for Intervention. We normally review the district court‘s denial of the Newspapers’ Motion for Intervention for abuse of discretion. Harris v. Pernsley, 820 F.2d 592, 597 (3d Cir.), cert. denied, 484 U.S. 947, 108 S.Ct. 336, 98 L.Ed.2d 363 (1987). However, because the question raised is whether the district court applied the correct legal standard for intervention, we exercise plenary review. Cf. Savarese v. Agriss, 883 F.2d 1194, 1200 (3d Cir.1989).
The district court denied the Newspapers’ Motion for Intervention for two reasons. First, it determined that the Motion for In
The district court applied incorrect legal standards in denying the Newspapers’ Motion for Intervention. As to the district court‘s finding that the Newspapers have not shown that their claim has anything in common with a question of law or fact in the case, the district court ruled contrary to a forming consensus in the federal courts. We agree with other courts that have held that the procedural device of permissive intervention is appropriately used to enable a litigant who was not an original party to an action to challenge protective or confidentiality orders entered in that action. E.g., Beckman Indus., Inc. v. International Ins. Co., 966 F.2d 470, 473-74 (9th Cir.), cert. denied, U.S. —, 113 S.Ct. 197, 121 L.Ed.2d 140 (1992); United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424, 1427 (10th Cir.1990), cert. denied, 498 U.S. 1073, 111 S.Ct. 799, 112 L.Ed.2d 860 (1991); Public Citizen, 858 F.2d 775, 783-87; Meyer Goldberg, Inc., of Lorain v. Fisher Foods, Inc., 823 F.2d 159, 161-64 (6th Cir.1987); Martindell v. International Tel. & Tel. Corp., 594 F.2d 291, 294 (2d Cir.1979); In re Beef Indus. Antitrust Litig., 589 F.2d 786, 788-89 (5th Cir.1979); City of Hartford v. Chase, 733 F.Supp. 533, 534 (D.Conn.1990), rev‘d on other grounds, 942 F.2d 130 (2d Cir.1991); In re Franklin Nat‘l Bank Sec. Litig., 92 F.R.D. 468, 470-71 (E.D.N.Y.1981), aff‘d sub nom. Federal Deposit Ins. Corp. v. Ernst & Ernst, 677 F.2d 230 (2d Cir.1982) [hereinafter FDIC]. In Beckman, the Court of Appeals for the Ninth Circuit stated:
[S]pecificity, e.g., that the [intervenors‘] claim involve . . . the same legal theory [that was raised in the main action], is not required when intervenors are not becoming parties to the litigation. There is no reason to require such a strong nexus of fact or law when a party seeks to intervene only for the purpose of modifying a protective order.
966 F.2d at 474.3 The reasoning in Beckman is persuasive, and we adopt it. We therefore reject the district court‘s conclusion that the Newspapers have not shown their claim has anything in common with a question of law or fact in the case, and therefore cannot intervene. By virtue of the fact that the Newspapers challenge the validity of the Order of Confidentiality entered in the main action, they meet the requirement of
The district court‘s second reason for denying the Newspapers’ motion for intervention was that the motion to intervene was untimely, as it was made approximately six and one-half months from the date of settlement. In support of its holding, the district court cited dicta from a footnote in an opinion by this court, Littlejohn v. Bic Corp., 851
We do not follow the dicta quoted above from Littlejohn because it announces an inappropriate rule and is contrary to the majority of courts that have decided the issue. These courts have allowed intervention by parties for the limited purpose of modifying a confidentiality or protective order even after the underlying dispute between the parties has been settled. See, e.g., Beckman, 966 F.2d at 471, 473-75; Brown v. Advantage Eng‘g, Inc., 960 F.2d 1013, 1014-16 (11th Cir.1992); United Nuclear, 905 F.2d at 1426-29; Public Citizen, 858 F.2d at 783-87; Meyer Goldberg, 823 F.2d at 161-64; Stallworth v. Monsanto Co., 558 F.2d 257, 260-70 (5th Cir.1977); In re Franklin Nat‘l Bank Sec. Litig., 92 F.R.D. at 469-71; see Bank of Am. Nat‘l Trust and Sav. Ass‘n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 342 n. 2 (3d Cir.1986).5 Discussion in a recent decision by this court reflects the growing consensus among the courts of appeals that intervention to challenge confidentiality orders may take place long after a case has been terminated. In Leucadia, Inc. v. Applied Extrusion Technologies, Inc., 998 F.2d 157 (3d Cir.1993), we stated that “a district court may properly consider a motion to intervene permissively for the limited purpose of modifying a protective order even after the underlying dispute between the parties has long been settled.” Id. at 161 n. 5. This recognition in Leucadia, in combination with the forming consensus in other courts of appeals, provides strong reasons to allow a district court to grant permissive intervention in order to allow litigation of ancillary issues even after a case has been concluded.
In Public Citizen, the Court of Appeals for the First Circuit reasoned that where an intervenor is litigating an ancillary issue, the potential for prejudice to the original parties due to the delay in intervention is minimized6:
[A] factor to be considered is the prejudice to existing parties due to [a litigant‘s] delay in intervening. This factor encompasses the basic fairness notion that intervention should not work a “last minute disruption of painstaking work by the parties and the court.” For purposes of this factor, therefore, it is necessary to ask why a would-be intervenor seeks to participate, for if the desired intervention relates to an ancillary issue and will not disrupt the resolution of the underlying merits, untimely intervention is much less likely to prejudice the parties. Here, of course, [the intervenor‘s] motion pertains to a particularly discrete and ancillary issue, as demonstrated by the fact that the merits of the case have been already concluded and are no longer subject to review. Because [the intervenor] sought to litigate only the issue of the protective order, and not to reopen the merits, we find that its delayed intervention caused little prejudice to the existing parties in this case.
858 F.2d at 786 (citations omitted).
This reasoning is persuasive and we adopt it. We also note that in cases dealing with access to information, the public and third parties may often have no way of knowing at the time a confidentiality order is granted what relevance the settling case has to their interests. Therefore, to preclude third parties from challenging a confidentiality order once a case has been settled would often make it impossible for third parties to have their day in court to contest the scope or need for confidentiality. We therefore expressly hold today what we observed in our opinion in Leucadia: “a district court may properly consider a motion to intervene permissively for the limited purpose of modifying [or vacating] a [confidentiality] order even after the underlying dispute between the parties has long been settled.” 998 F.2d at 161 n. 5.7
The facts of this case lead us to conclude that intervention should not be deemed untimely. In United Nuclear, intervention was permitted approximately three years after the underlying action was settled and dismissed, 905 F.2d at 1427, and in Beckman, intervention was allowed approximately two years after the underlying case was terminated, 966 F.2d at 471, 473. In the instant case, there was only a six and one-half month delay between the time of settlement and the motion for intervention.8 This relatively short delay, in itself, leads us to the conclusion that intervention should be permitted.9
3. The Right of Access Doctrine
Although the district court denied intervention by the Newspapers, it made an alternative holding. Assuming that intervention was proper, the district court considered the merits of the Newspapers’ challenge to the Order of Confidentiality and their attempt to obtain access to the Settlement Agreement. The district court determined that the Settlement Agreement was not a “judicial record,” and it therefore denied the Newspapers’ motion to obtain access to the Settlement Agreement under the right of access doctrine.
We have previously recognized a right of access to judicial proceedings and judicial records, and this right of access is “beyond dispute.” Littlejohn v. Bic Corp., 851 F.2d 673, 677-78 (3d Cir.1988) (quoting Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1066 (3d Cir.1984)). “The balancing of factors for and against access is a decision committed to the discretion of the district court, although it is not generally accorded the narrow review reserved for discretionary decisions based on first-hand observations.” Bank of Am. Nat‘l Trust and Sav. Ass‘n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 344 (3d Cir.1986) (citations omitted). In this case, however, the district court reached its conclusion through a legal determination that the Settlement Agreement was not a “judicial record” accessible under the right of access doctrine. We will therefore exercise plenary review over the district court‘s legal determination. See 1st Westco Corp. v. School Dist. of Phila., 6 F.3d 108, 112 (3d Cir.1993).
The Newspapers argue that the Settlement Agreement which Pansy and the Borough entered into is a “judicial record,” accessible under the right of access doctrine. If the Settlement Agreement is a judicial record, then Rittenhouse would be binding and the Agreement should be released by the district court. In Rittenhouse, this court held that a settlement agreement deemed a judicial record is accessible under the right of access doctrine. 800 F.2d at 344-45. We specifically held that the strong presumption of access outweighed the interest in promoting settlements, which in the matter before us is the only interest which the Borough has argued in favor of maintaining the Order of Confidentiality. Id. Therefore, if the Settlement Agreement is a judicial record, it should be released by the district court itself under the right of access doctrine, and there would be no need for the Newspapers to demonstrate that the Settlement Agreement is a public record under the Pennsylvania Right to Know Act.
However, our prior decisions preclude a finding that the Settlement Agreement is a judicial record accessible under the right of access doctrine. See Internal Operating Procedures of the United States Court of Appeals for the Third Circuit 9.1 (July 1990) (“It is the tradition of this court that the holding of a panel in a reported opinion is binding on subsequent panels.“). In Enprotech Corp. v. Renda, 983 F.2d 17 (3d Cir.1993), we indicated that when a settlement agreement is not filed with the court, it is not a “judicial record” for purposes of the right of access doctrine. Id. at 20-21. In Enprotech, we held that since the “Settlement Agreement ha[d] not been filed with, placed under seal, interpreted or enforced by the district court,” it was not a judicial record. Id. at 20. The Enprotech court went on to hold: “Moreover, the Agreement will not become a part of the public record unless and until the district court may order the parties to comply with its terms.” Id. at 21. The Enprotech Court so held even though the district court in that case specifically retained jurisdiction over the settlement agreement until its expiration so that it could enforce its terms. Id.
In the instant case, the Settlement Agreement which is subject to the Order of Confidentiality was never filed with, interpreted or enforced by the district court. The district court has not ordered any of the terms of the Settlement Agreement to be complied with. Accordingly, Enprotech controls the instant case and leads us to conclude that the Settlement Agreement is not a judicial record, and the right of access doctrine cannot be a basis for the Newspapers to obtain access to the Agreement. In contrast, in Rittenhouse we found that the settlement agreement was a judicial record because it had been filed with and enforced by the district court. 800 F.2d at 344-45.
Another decision by this court indicates that the Settlement Agreement is not a judicial record accessible under the right of access doctrine. In Littlejohn v. Bic Corp., 851 F.2d 673 (3d Cir.1988), we addressed the question of whether documents which were admitted into evidence and had become judicial records were accessible under the right of access doctrine after the underlying litigation had been settled and the documents had been returned to the party resisting disclosure. We stated:
We . . . hold that, absent allegations of fraud or other extraordinary circumstances, trial exhibits that were restored to their owner after a case has been completely terminated and which were properly subject to destruction by the clerk of court are no longer judicial records within the “supervisory power” of the district court.
Id. at 683. Under Littlejohn, even where there is no dispute that documents were at one time judicial records, once such documents are no longer part of the court file they lose their status as judicial records.10 Thus, in Littlejohn, as in Enprotech, we focused on the technical question of whether a document is physically on file with the court. If it is not, it is not a “judicial record.” We pointed out in Leucadia that “[n]umerous other courts have also recognized the principle that the filing of a document gives rise to a presumptive right of public access.” 998 F.2d at 161-62 (emphasis added). See also Rittenhouse, 800 F.2d at 345 (“Once a settlement is filed in the district court, it becomes a judicial record, and subject to the access accorded such records.” (emphasis added)). In the matter presently before the court, the parties agree that the Settlement Agreement has never been filed with the court.
The Newspapers nevertheless argue that since the district court has entered an Order of Confidentiality over the Settlement Agreement, this in effect has converted the unfiled Settlement Agreement into a judicial record. This argument fails. Simply because a court has entered a confidentiality order over documents does not automatically convert those documents into “judicial records” accessible under the right of access doctrine. For example, when a court enters an order of protection over documents exchanged during discovery, and these documents have not been filed with the court, such documents are not, by reason of the protective order alone, deemed judicial records to which the right of access attaches. See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 30-37, 104 S.Ct. 2199, 2206-10, 81 L.Ed.2d 17 (1984); Leucadia, 998 F.2d at 163 & n. 9; Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1119-20 (3d Cir.1986), cert. denied, 484 U.S. 976, 108 S.Ct. 487, 98 L.Ed.2d 485 (1987).
The district court in this case stated that “it is further ordered that the terms of the settlement are confidential and the parties hereby are ordered and directed to abide by the order of confidentiality.” App. at 54-55. Therefore, the district court granted an order of confidentiality over the terms of the Settlement Agreement. It did not order the terms of the Settlement Agreement to be abided by the parties—nor could it, since the Settlement Agreement itself was never filed with the court.
The Order of Confidentiality is independent of any of the terms included within the Settlement Agreement, just as protective orders over discovery materials are independent of the items actually exchanged subject to such protective orders. Indeed, we have no way of knowing whether the Settlement Agreement itself includes a provision for confidentiality because the Settlement Agreement was never filed with the court and is not a part of the court record. It is therefore not possible for us to find, as Enprotech requires in order to deem a settlement agreement a judicial record, that the district court ordered the parties to comply with the terms of the Settlement Agreement. 983 F.2d at 21 (“[T]he [Settlement] Agreement will not become a part of the public record unless and until the district court may order the parties to comply with its terms.“).
The Newspapers further argue that the Settlement Agreement is a judicial record because the district court actually reviewed the Settlement Agreement before granting the Order of Confidentiality. In its June 5, 1992 order, the district court stated: “[T]he parties having informed the Court that the . . . matter is settled and the Court having reviewed the terms of settlement, this action is hereby discontinued. . . .” App. at 54 (emphasis added). By virtue of the fact that the district court reviewed the Settlement Agreement before granting its order, the Newspapers argue this converts the Settlement Agreement into a judicial record. In support of this position, the Newspapers cite the decision by the Court of Appeals for the First Circuit in FTC v. Standard Fin. Management Corp., 830 F.2d 404 (1st Cir.1987).
In Standard Financial, the court held that “relevant documents which are submitted to, and accepted by, a court of competent jurisdiction in the course of adjudicatory proceedings, become documents to which the presumption of public access applies.” Id. at 409. Even though the disputed documents were not part of the court file, id. at 405-407, 413, the Standard Financial court held that they were nevertheless accessible under the right of access doctrine because “[t]hey were duly submitted to the court“, id. at 410, and “were relevant and material to the matters sub judice“, id. The Newspapers argue that since the Settlement Agreement was duly submitted to the district court, and the district court based its June 5, 1992 Order partly in reliance on this submission, Standard Financial controls and the Settlement Agreement is accessible under the right of access doctrine.
The Court of Appeals for the First Circuit in Standard Financial has articulated a persuasive and perhaps desirable rule. Moreover, it may well be that during the life of a case, the issue of whether a document is a judicial record should turn on the use the court has made of it rather than on whether it has found its way into the clerk‘s file. However, when the “judicial record” issue arose in this case, final judgment had been entered and no possibility of an appeal remained. As a result, we find this case to be indistinguishable from Littlejohn and we are bound by the Internal Operating Procedures of this court to follow that decision. Internal Operating Procedures of the United States Court of Appeals for the Third Circuit 9.1 (July 1990). In Littlejohn, this court held that exhibits that have been admitted into evidence and relied upon by the court do not remain judicial records after the case is closed and they are returned to the parties. 851 F.2d at 683. We are therefore clearly not at liberty here to bestow judicial record status on the Settlement Agreement, which the court briefly perused and returned to the parties in a now closed case. But see Littlejohn, 851 F.2d at 688 (Scirica, J., dissenting) (A “district judge should be permitted to inquire whether the contested items are still available from any source.“). The Settlement Agreement is not a “judicial record,” and the district court correctly concluded that the Newspapers cannot obtain access to that document under the right of access doctrine.11
4. Challenging the Order of Confidentiality
The Newspapers also made a motion in the district court to reconsider, vacate or modify the Confidentiality Order, as a matter independent of the right of access doctrine. The district court denied the Newspapers’ motion. We review the grant or modification of a confidentiality order for abuse of discretion. See Republic of Philippines v. Westinghouse Elec. Corp., 949 F.2d 653, 664 (3d Cir.1991); Smith v. Bic Corp., 869 F.2d 194, 199 (3d Cir.1989). However, we exercise plenary review over the district court‘s interpretation and application of the legal standard
Even if the Settlement Agreement is not a judicial record, the Newspapers seek to modify or vacate the Order of Confidentiality controlling the Settlement Agreement. Their reason for doing so is that if the Newspapers are successful in vacating the Order of Confidentiality, they will then be able to seek access to the Settlement Agreement under the Pennsylvania Right to Know Act,
It is important to note the practical difference between the Newspapers’ failed attempt to obtain the Settlement Agreement under the right of access doctrine on the one hand, and on the other hand the Newspapers’ attempt only to modify or vacate the Order of Confidentiality. If the Newspapers had been successful in demonstrating that the Settlement Agreement was a judicial record for purposes of the right of access doctrine, the Settlement Agreement would have been made available by the district court itself, as a judicial record. In contrast, if the Newspapers are successful in vacating the Order of Confidentiality, as a matter independent of the right of access doctrine, the district court will not then automatically grant access to the Settlement Agreement. Rather, the Order of Confidentiality would merely be vacated, and the Newspapers would then be free to seek access to the Settlement Agreement through other legal channels, without interference by the Order of Confidentiality. In fact, the Newspapers have already commenced a suit in Pennsylvania state court, seeking the Settlement Agreement as a “public record” under the Pennsylvania Right to Know Act. The state court stayed that action pending the outcome of this federal action.
If the Order of Confidentiality is vacated, then it appears that the Settlement Agreement will be made available by order of the state court pursuant to the Pennsylvania Right to Know Act.12 If the Order of Confidentiality is not vacated, then the state court would be unable to order the document accessible. This is because even though the Settlement Agreement would likely be available under the Pennsylvania Right to Know Act, the state court would be obligated to respect the already-existing federal court Order of Confidentiality.13 From these observations, it is clear that the Newspapers have an interest in vacating the Order of Confidentiality even though we have rejected their attempt to obtain the Settlement Agreement under the right of access doctrine.
It is well-established that a district court retains the power to modify or lift confidentiality orders that it has entered. See, e.g., United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424, 1427 (10th Cir.1990), cert. denied, 498 U.S. 1073, 111 S.Ct. 799, 112 L.Ed.2d 860 (1991); In re “Agent Orange” Prod. Liab. Litig., 821 F.2d 139, 145 (2d Cir.), cert. denied, 484 U.S. 953, 108 S.Ct. 344, 98 L.Ed.2d 270 (1987); Palmieri v. New York, 779 F.2d 861, 864-65 (2d Cir.1985);
In favor of its position that the Order of Confidentiality should be vacated, the Newspapers argue that the district court lacked the power to enter an order of confidentiality over a document which is not in the court file nor incorporated into an order of the court. We reject this argument. Courts have inherent power to grant orders of confidentiality over materials not in the court file. In Seattle Times Co. v. Rhinehart, 467 U.S. 20, 104 S.Ct. 2199, 81 L.Ed.2d 17 (1984), the Supreme Court confirmed that courts have the power to grant confidentiality orders over material not on file with the court, id. at 33 n. 19, 104 S.Ct. at 2207 n. 19, holding that “we have no question as to the court‘s jurisdiction to [enter protective orders] under the inherent ‘equitable powers of courts of law over their own process, to prevent abuses, oppression, and injustices,‘” id. at 35, 104 S.Ct. at 2209 (quoting International Prods. Corp. v. Koons, 325 F.2d 403, 407-08 (2d Cir.1963)). See also, e.g., FDIC, 677 F.2d at 232 (“It is beyond question that a court may issue orders prohibiting disclosure of documents or information.“).
The Newspapers also challenge the validity of the Order of Confidentiality because the Order was not entered pursuant to a rule of civil procedure or any other court rule. The Order was entered over the Settlement Agreement, while the Federal Rules of Civil Procedure only address protective orders over materials exchanged during discovery,
Nevertheless, simply because courts have the power to grant orders of confidentiality does not mean that such orders may be granted arbitrarily. Disturbingly, some courts routinely sign orders which contain confidentiality clauses without considering the propriety of such orders, or the countervailing public interests which are sacrificed by the orders.14 Because defendants request orders of confidentiality as a condition of
In this case, the district court made no findings for the record when it initially granted the Order of Confidentiality, and apparently did not balance the competing public and privacy interests before entering the Order. In denying the Newspapers’ Motion to Reconsider, Vacate or Modify the Order, the district court did not explain why the need for confidentiality outweighed the Newspapers’ interest in obtaining access to the Settlement Agreement pursuant to the Pennsylvania Right to Know Act.15 We must determine whether the district court appropriately exercised its discretion in granting and maintaining the Order of Confidentiality.
In the context of discovery, it is well-established that a party wishing to obtain an order of protection over discovery material must demonstrate that “good cause” exists for the order of protection.
“Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity.” Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir.1984). “Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning,” do not support a good cause showing. Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3d Cir.1986), cert. denied, 484 U.S. 976, 108 S.Ct. 487, 98 L.Ed.2d 485 (1987). The bur
In considering whether good cause exists for a protective order, the federal courts have generally adopted a balancing process. Arthur R. Miller, Confidentiality, Protective Orders, and Public Access to the Courts, 105 Harv.L.Rev. 427, 432-33 (1991). The balancing conducted in the discovery context should be applied by courts when considering whether to grant confidentiality orders at any stage of litigation, including settlement:
[T]he court . . . must balance the requesting party‘s need for information against the injury that might result if uncontrolled disclosure is compelled. When the risk of harm to the owner of [a] trade secret or confidential information outweighs the need for discovery, disclosure [through discovery] cannot be compelled, but this is an infrequent result. Once the court determines that the discovery policies require that the materials be disclosed, the issue becomes whether they should “be disclosed only in a designated way,” as authorized by the last clause of Rule 26(c)(7). . . . Whether this disclosure will be limited depends on a judicial balancing of the harm to the party seeking protection (or third persons) and the importance of disclosure to the public. Courts also have a great deal of flexibility in crafting the contents of protective orders to minimize the negative consequences of disclosure and serve the public interest simultaneously.
Id. at 433-35 (footnotes omitted). “The most common kind of order allowing discovery on conditions is an order limiting the persons who are to have access to the information disclosed and the use to which these persons may put the information.” 8 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2043, at 305 (1970).
One interest which should be recognized in the balancing process is an interest in privacy. See Seattle Times Co. v. Rhinehart, 467 U.S. 20, 34-36, 104 S.Ct. 2199, 2208-09, 81 L.Ed.2d 17 (1984). It is appropriate for courts to order confidentiality to prevent the infliction of unnecessary or serious pain on parties who the court reasonably finds are entitled to such protection. In this vein, a factor to consider is whether the information is being sought for a legitimate purpose or for an improper purpose. However, privacy interests are diminished when the party seeking protection is a public person subject to legitimate public scrutiny. Cf. United States v. Smith, 776 F.2d 1104, 1114 (3d Cir.1985) (“[T]he public has a substantial interest in the integrity or lack of integrity of those who serve them in public office.“).18
While preventing embarrassment may be a factor satisfying the “good cause” standard, an applicant for a protective order whose chief concern is embarrassment must demonstrate that the embarrassment will be particularly serious. As embarrassment is usually thought of as a nonmonetizable harm to individuals, it may be especially difficult for a business enterprise, whose primary measure of well-being is presumably monetizable, to argue for a protective order on this ground. Cipollone, 785 F.2d at 1121. Circumstances weighing against confidentiality exist when confidentiality is being sought over information important to public health and safety, e.g., Miller, 105 Harv.L.Rev. at 478, and when the sharing of information among litigants would promote fairness and efficiency, e.g., id. at 490.
In this balancing process, the issue arises of how much weight should be assigned the interest in encouraging settlements. District courts should not rely on the general interest in encouraging settlement, and should require a particularized showing of the need for confidentiality in reaching a settlement. Cf. Bank of Am. Nat‘l Trust and Sav. Ass‘n v. Hotel Rittenhouse Assocs., 800 F.2d 339, 346 (3d Cir.1986) (requiring particularized showing of need for secrecy to further settlement in a right of access doctrine case). Even when a particularized need for confidentiality is put forth by the parties, the interest in furthering settlement should only be one factor in the district court‘s determination. This is because, as one court put it,
settlements will be entered into in most cases whether or not confidentiality can be maintained. The parties might prefer to have confidentiality, but this does not mean that they would not settle otherwise. For one thing, if the case goes to trial, even more is likely to be disclosed than if the public has access to pretrial matters.
United States v. Kentucky Utils. Co., 124 F.R.D. 146, 153 (E.D.Ky.1989), rev‘d, 927 F.2d 252 (6th Cir.1991).20
Moreover, if parties cannot demonstrate good cause for a court order of confidentiality over the terms of settlement, they have the option of agreeing privately to keep the information concerning settlement confidential, and may enforce such an agreement in a separate contract action.21 See, e.g., Marine Midland Realty Credit Corp. v. LLMD of Michigan, Inc., 821 F.Supp. 370, 371-74 (E.D.Pa.1993). Although it is more arduous to commence a new action to enforce a settle-
The factors discussed above are unavoidably vague and are of course not exhaustive. Although the balancing test discussed above may be criticized as being ambiguous and likely to lead to unpredictable results, we believe that such a balancing test is necessary to provide the district courts the flexibility needed to justly and properly consider the factors of each case.
Discretion should be left with the court to evaluate the competing considerations in light of the facts of individual cases. By focusing on the particular circumstances in the cases before them, courts are in the best position to prevent both the overly broad use of [confidentiality] orders and the unnecessary denial of confidentiality for information that deserves it. . . .
Miller, 105 Harv.L.Rev. at 492.
To facilitate effective appellate review of a district court decision of whether to grant or modify an order of protection or confidentiality, a district court should articulate on the record findings supporting its judgment.22 In appropriate cases, the district court may seal that portion of the record which contains its findings, for in some circumstances the court‘s articulation of its findings might destroy the very confidentiality being sought.
In determining whether to modify an already-existing confidentiality order, the parties’ reliance on the order is a relevant factor. E.g., Anne-Therese Bechamps, Note, Sealed Out of Court Settlements: When Does the Public Have a Right to Know?, 66 Notre Dame L.Rev. 117, 130 (1990); see also, e.g., City of Hartford v. Chase, 942 F.2d 130, 136 (2d Cir.1991).23 However, there is a split in authority on the weight to be accorded the reliance interest.
The Court of Appeals for the Second Circuit has announced a stringent standard for modification, holding that a confidentiality order can only be modified if an extraordinary circumstance or compelling need warrants the requested modification. City of Hartford, 942 F.2d at 135-36; Palmieri v. New York, 779 F.2d 861, 864-66 (2d Cir.1985); Federal Deposit Ins. Corp. v. Ernst & Ernst, 677 F.2d 230, 232 (2d Cir.1982).24
Other courts of appeals have rejected this stringent standard, have held that a more lenient test for modification applies, but have failed to articulate precisely what that standard is. E.g., Beckman Indus., Inc. v. International Ins. Co., 966 F.2d 470, 475-76 (9th Cir.), cert. denied, U.S. —, 113 S.Ct. 197, 121 L.Ed.2d 140 (1992); United Nuclear Corp. v. Cranford Ins. Co., 905 F.2d 1424, 1428 (10th Cir.1990), cert. denied, 498 U.S. 1073, 111 S.Ct. 799, 112 L.Ed.2d 860 (1991); Public Citizen v. Liggett Group, Inc., 858 F.2d 775, 791 (1st Cir.1988), cert. denied, 488 U.S. 1030, 109 S.Ct. 838, 102 L.Ed.2d 970 (1989); see Meyer Goldberg, Inc., of Lorain v. Fisher Foods, Inc., 823 F.2d 159, 163-64 (6th Cir.1987).
The extent to which a party can rely on a protective order should depend on the extent to which the order induced the party to allow discovery or to settle the case. For instance, reliance would be greater where a trade secret was involved, or where witnesses had testified pursuant to a protective order without invoking their Fifth Amendment privilege. . . . Reliance will be less with a blanket order, because it is by nature overinclusive. Beckman, 966 F.2d at 475-76 (citation omitted).26
“[R]eliance on [confidentiality] orders [will] not insulate those orders from subsequent modification or vacating if the orders were improvidently granted ab initio. . . . [N]o amount of official encouragement and reliance thereon could substantiate an unquestioning adherence to an order improvidently granted.” Palmieri, 779 F.2d at 865. “Improvidence in the granting of a protective order is [a] justification for lifting or modifying the order.” In re “Agent Orange” Prod. Liab. Litig., 821 F.2d 139, 148 (2d Cir.), cert. denied, 484 U.S. 953, 108 S.Ct. 344, 98 L.Ed. 270 (1987). It would be improper and unfair to afford an order presumptive correctness if it is apparent that the court did not engage in the proper balancing to initially determine whether the order should have been granted.27
The party seeking to modify the order of confidentiality must come forward with a reason to modify the order. Once that is done, the court should then balance the interests, including the reliance by the original parties to the order, to determine whether good cause still exists for the order.
If access to protected [material] can be granted without harm to legitimate secrecy interests, or if no such interests exist, continued judicial protection cannot be justified. In that case, access should be granted even if the need for the protected materials is minimal. When that is not the case, the court should require the party seeking modification to show why the secrecy interests deserve less protection than they did when the order was granted. Even then, however, the movant should not be saddled with a burden more onerous than explaining why his need for the materials outweighs existing privacy concerns. Note, Nonparty Access to Discovery Materials in the Federal Courts, 105 Harv.L.Rev. 1085, 1092 (1981), cited with approval in
This case presents another factor which must be considered in the good cause balancing test. The Settlement Agreement to which the Newspapers are seeking access would, but for the Confidentiality Order, likely be accessible under the Pennsylvania Right to Know Act,
where [a governmental entity] is a party to litigation, no protective, sealing or other confidentiality order shall be entered without consideration of its effect on disclosure of [government] records to the public under [state and federal freedom of information laws]. An order binding [governmental entities] shall be narrowly drawn to avoid interference with the rights of the public to obtain disclosure of [government] records and shall provide an explanation of the extent to which the order is intended to alter those rights.
Id. at 182.
To provide some measure of uniformity and predictability of outcome in this important area, we hold that where it is likely that information is accessible under a relevant freedom of information law, a strong presumption exists against granting or maintaining an order of confidentiality whose scope would prevent disclosure of that information pursuant to the relevant freedom of information law. In the good cause balancing test, this strong presumption tilts the scales heavily against entering or maintaining an order of confidentiality. To avoid complicated inquiries as to whether certain information would in fact be available under a freedom of information law, courts may choose to grant conditional orders. For example, a court could order that the order of confidentiality will become inoperative if the information it orders confidential is later determined to be available under a freedom of information law. Or a court could grant an order of confidentiality while specifying that the scope of the confidentiality order does not extend so as to prevent disclosure pursuant to any freedom of information law. Courts have discretion to fashion such orders according to the needs and circumstances of each case.
We acknowledge the important role that court-aided settlement plays in our overburdened court system, and we realize that a strong presumption against confidentiality
In the case before us, the district court made no findings for the record supporting its initial grant of the Order of Confidentiality. The district court apparently did not conduct any balancing test at all before signing the Order. The Order of Confidentiality was thus improvidently granted, and the reliance interest of the parties in the confidentiality of the Settlement Agreement must be considered weak in this case. Moreover, in denying the Newspapers’ Motion to Reconsider, Vacate or Modify the Order of Confidentiality, the district court again did not articulate any findings demonstrating good cause for the Order. The district court noted in passing that some information concerning the cost of the settlement to the Borough has been made public. But it never explained why the Newspapers’ interest in obtaining access to the Settlement Agreement itself under the Pennsylvania Right to Know Act was outweighed by the need for confidentiality. The entry of the Order of Confidentiality therefore did not reflect the proper exercise of discretion by the district court.31
Because we have provided guidance in a previously unchartered area, we will remand the case to the district court and provide it an opportunity to determine whether there are circumstances justifying an order of confidentiality over the Settlement Agreement. This case involves a governmental body, a public official, and a Settlement Agreement which is likely available under the Pennsylvania Right to Know Act. Given these facts, it would be unusual if on remand the district court were to find that circumstances exist which justify the Order of Confidentiality being maintained over the Settlement Agreement, but we do not foreclose that determination.32
We will reverse the district court‘s order denying intervention, dated May 13, 1993. We will remand the case to the district court with a direction that the Newspapers be permitted to intervene, and for further proceedings consistent with this opinion.