In re TRANSIT CASUALTY COMPANY in Receivership PULITZER PUBLISHING COMPANY, Appellant, v. TRANSIT CASUALTY COMPANY in Receivership, INTERVENING EMPLOYEES, Respondents.
No. SC 82520.
Supreme Court of Missouri, En Banc.
March 6, 2001.
Rehearing Denied April 24, 2001.
293
HOLSTEIN, Judge.
As Modified April 24, 2001.
Katherine S. Walsh, James C. Owen, Chesterfield, Michael L. Blumenthal, Kansas City, for respondents.
Jeremiah W. (Jay) Nixon, Atty. Gen., James R. Layton, State Solicitor, Diane Garber, Missouri Dept. of Ins., Jefferson City, for Amicus Curiae.
HOLSTEIN, Judge.
Pulitzer Publishing Company (Pulitzer) appeals from a judgment denying its motion to unseal court records relating to the compensation and bonuses paid to respondent Burleigh Arnold, the special deputy receiver (SDR) appointed to administer the Transit Casualty Company in Receivership (TCCR) liquidation. Pulitzer argues that TCCR failed to demonstrate compelling circumstances that justify the closure of open court records. TCCR responds that the receivership court in its discretion properly let the records remain sealed due to the real risk of damage to TCCR policyholders and creditors. After opinion by the Court of Appeals, Western District, this Court granted transfer.
I.
Transit Casualty Company was a Missouri-chartered property and casualty insurance company licensed to write policies nationwide. In December 1985, the Circuit Court of Cole County declared Transit Casualty insolvent and placed the company into receivership under
The director of the department of insurance (Director) is the statutory receiver of TCCR for the purposes of this liquidation.
Pulitzer is the publisher of the St. Louis Post-Dispatch, a newspaper of general circulation in Missouri that often publishes articles about proceedings in Missouri courts, including coverage of this insurance receivership. In 1998, the receivership court permitted Pulitzer to intervene in the TCCR proceedings for the limited purpose of seeking access to certain in camera records containing information about Mr. Arnold‘s compensation, bonus, and contract terms.2 These records and the records of other key TCCR employees are held in camera by the court, originally at the request of a former director. They are available to TCCR‘s creditors and policyholders, and the department of insurance, but not to the general public. As a precondition to disclosure, those with access to the records must agree not to disclose the information to others.
At the evidentiary hearing on the motion, Pulitzer called one witness, Mr. Steven Divine, chief financial examiner and director of the division of financial regulation at the department of insurance. Mr. Divine testified that in 1994, the department of insurance promulgated a regulation, 20 CSR sec. 200-15.100, requiring public disclosure of the compensation and bonuses paid to SDRs of insolvent insurance companies in Missouri. He also testified that TCCR was relieved from compliance by order of the receivership court in 1995, but that all other insurance company receiverships have satisfied the regulation. He added that it was his understanding that this public disclosure by the other receiverships had not resulted in financial harm to them. He further testified that in his opinion public disclosure of Mr. Arnold‘s compensation would also not damage TCCR.
TCCR then called five witnesses who testified, essentially, that public access to information of Mr. Arnold‘s compensation would cause financial harm to TCCR‘s policyholders and creditors. Mr. Arnold himself was one of these witnesses called by TCCR. TCCR‘s claim is that reinsurers will use the information as leverage against TCCR during negotiations, and as an affirmative defense to TCCR‘s lawsuits brought to recover on reinsurance contracts. TCCR witnesses also testified that the records contain confidential employment information and that disclosure would violate the employees’ privacy rights.
The receivership court ruled in favor of TCCR, finding “the evidence presented by Transit that the in camera orders were necessary to protect the Receivership‘s policy-holders, creditors and their assets to be credible and uncontradicted.”
II.
The right to appeal is purely statutory, and with certain exceptions this Court has jurisdiction of appeals by aggrieved parties from final judgments.
Whether the order in question is a final judgment is the more difficult question. A final judgment is normally defined as one that resolves “all issues in a case, leaving nothing for future determination.” Gibson v. Brewer, 952 S.W.2d 239, 244 (Mo. banc 1997). Its converse is an interlocutory judgment—one that is defined as “not final” and that generally decides some point or matter between the commencement and the end of a suit, but that is not a final decision of the whole controversy. Albright v. Kelley, 926 S.W.2d 207, 210 (Mo.App.1996). The order here would normally be an interlocutory judgment. The trial court is free at any time while it retains jurisdiction over the receivership to reconsider its decision and open some or all of the records. All parties agree that innumerable claims by and against Transit Casualty remain pending with numerous issues that still must be resolved with respect to numerous parties in interest.3
Ainsworth v. Dalton, 694 S.W.2d 833, 835 (Mo.App.1985),4 is cited by Pulitzer and the concurring opinion in support of the proposition that the judgment in this case is final even though the receivership proceedings are ongoing. In Ainsworth, the court of appeals recited the correct rule, noted above, when it found that an original initial order of compensation was not a final judgment:
A decree is final when it fully decides and disposes of the whole merits of the cause, and leaves no further questions therein for the future judgment of the court.... In order to be final the decree must be complete and certain ...; it must show intrinsically and distinctly, and not inferentially, that the matter has been adjudicated.
694 S.W.2d at 835, citing State ex rel. Wagner v. Ruddy, 582 S.W.2d 692, 694-95 (Mo. banc 1979). When it came to the order before it granting additional compensation, however, the Ainsworth court summarily and paradoxically declared this second order a final judgment, citing no authority other than
As a general matter, the proper course for an aggrieved party without a final judgment is ordinarily by extraordinary writ.
The rules and practices just noted apply generally; however, the case before us is not one governed by common law or general statutory rules. This is an insurance insolvency receivership proceeding, and the provisions of
Pulitzer‘s “final judgment” required for its right to appeal under
III.
It is undisputed in this case that there is a common law right of public access to court and other public records. On appeal, abuse of discretion is the correct standard of review as drawn from those courts that have previously recognized the presumption. See Siedle v. Putnam Invest., Inc., 147 F.3d 7, 9 (1st Cir. 1998); United States v. Mitchell, 551 F.2d 1252, 1260 (D.C.Cir.1976). Given the presumption in favor of open records, an abuse of discretion is present when trial court orders inexplicably seal court records, do not articulate specific reasons for closure, or do not otherwise demonstrate a recognition of the presumptive right of access.
In Missouri,
The public policy behind open records and the public right of access is well-established in Missouri. The rule has been mandated legislatively in numerous contexts. See, e.g.,
TCCR‘s most prominent argument is that creditors and policyholders, whose pecuniary interests are directly affected by the decisions of the receivership court, already have access to the SDR compensation information. TCCR claims that the public has no right to inspect the court records at issue because the public has no interest in the subject matter of these proceedings. Its interest in the subject matter of this litigation is irrelevant, however. The public‘s right to inspect court and other public records comes not from any personal interest in the subject matter of the records. Rather, the right stems from the public‘s presumed interest in the integrity and impartiality of its gov-
In accordance with this long-established legal tradition, this Court in 1998 adopted Court Operating Rule 2, (formerly Administrative Rule 2) which governs public access to the records of the judicial department. It also provides for exceptions to the general rule of openness. The general policy of Rule 2 is set out in Rule 2.02, which states in pertinent part:
Records of all courts are presumed to be open to any member of the public for purposes of inspection or copying during the regular business hours of the court having custody of the records. The policy does not apply to records that are confidential pursuant to statute, court rules or court order; judicial or judicial staff work product; memoranda or drafts; or appellate judicial assignments.
Although the rule imposes a presumption that records are open to the public, there is an express exception for records, like those in this case, that are confidential pursuant to court order. Nevertheless, the presumption of openness is intended to inform the decision of whether to seal the records in the first place, or to unseal the records if the justification for sealing the records abates. The policy supporting the presumption as reflected in the rule merits repeating: Justice is best served when it is done within full view of those to whom all courts are ultimately responsible—the public.
On the basis of that policy, and considering the substantial authority from other courts, see, e.g., San Jose Mercury News v. United States Dist. Ct., 187 F.3d 1096, 1102 (9th Cir.1999) (recognizing a strong presumption in favor of public access that can be overcome only by “compelling reasons and specific factual findings“); Pansy v. Borough of Stroudsburg, 23 F.3d 772, 781 (3d Cir.1994) (recognizing the “strong presumption of access“); In re Knoxville News-Sentinel Co., Inc., 723 F.2d 470 (6th Cir.1983) (discussing the “long-established legal tradition” of “the presumptive right of the public to inspect and copy judicial documents and files“); United States v. McVeigh, 119 F.3d 806, 811 (10th Cir.1997) (recognizing the presumption of public access); Boston Herald, Inc. v. Sharpe, 432 Mass. 593, 737 N.E.2d 859, 868 (2000) (explaining that “the presumption of public access facilitates [public scrutiny of] the workings of public agencies“); Hammock v. Hoffmann-LaRoche, Inc., 142 N.J. 356, 662 A.2d 546, 556 (1995) (discussing “the strong presumption of access“), this Court affirms, subject to the exceptions of Court Operating Rule 2, that there is a presumption in favor of the public‘s right of access to court records and that the presumption cannot be overcome absent a compelling justification that the records should be closed.
IV.
There are important exceptions that limit the presumption of open records when sufficiently important interests outweigh the public‘s right of access. Court Operating Rule 2 broadly provides for certain exceptions to the rule of open records. Where there are higher interests
In the case before us the trial court found it sufficient to state, without further elaboration, that TCCR‘s evidence was “credible and uncontradicted.” This summary treatment of the issues, along with other indicia, suggests to this Court that the trial court did not correctly apply the presumption in favor of open records. The court did not articulate any of the recognized exceptions in Rule 2.02 or any other sound justification for closed public records. There is no finding to suggest that disclosure of the SDR‘s compensation would require disclosure of any sensitive information; a nonexclusive list would include trade or business secrets, settlements of contested competing claims, defamatory or scandalous material, private psychiatric, medical or academic records of non-parties or other privileged communications. State ex rel. State Bd. of Pharmacy v. Otto, 866 S.W.2d 480, 485 (Mo.App.1993) (work product); State ex rel. Wright v. Campbell, 938 S.W.2d 640, 643 (Mo.App. 1997) (trade secret); Tuft v. City of St. Louis, 936 S.W.2d 113, 116 (Mo.App.1996) (settlement agreement). Also troubling is the sequence in which the parties presented the evidence—first Pulitzer, and then TCCR—suggesting that the trial court may have treated Pulitzer as the party with the burden of proof. Auto-Owners Ins. Co. v. McGaugh, 617 S.W.2d 436, 445 (Mo.App. 1981). The rule, of course, is quite to the contrary.
Further indicating that the trial court did not properly apply the presumption in favor of open records is the fact that TCCR‘s pleading did not allege specific factual circumstances that justify closure.5 We acknowledge that TCCR presented five witnesses who speculated about the possible damage to TCCR‘s policyholders and creditors were the compensation records to be disclosed. The trial court nevertheless should not have ignored the fact that TCCR‘s pleading is vague in the extreme. Missouri rules of civil procedure demand more than mere conclusions that the pleader alleges without supporting facts. Sofka v. Thal, 662 S.W.2d 502, 508 (Mo. banc 1983); Rule 55.05. In its one pleading before the court, TCCR never states the particular facts and circumstances of this case that justify closure of these records. Some explanation in one‘s pleading beyond vague assertions of harm is required. This is especially true where, as here, the trial court does not expressly
In its brief, TCCR argues that it is a private company in receivership, and, as such, is not subject to the general rules that apply to public entities. TCCR also argues in its brief that the broad grant of authority to the receivership court encompasses the unqualified power to seal records.
As to the privacy claim, TCCR confuses the private quality of certain entities with the inherently public nature of court records. It is clear that private entities that involve themselves in some way with the judicial system are, in most cases, open to public scrutiny. That is, for example, why there are privileges in place to protect certain sensitive information from discovery requests. See, e.g., Welsh v. Dean Witter Reynolds Organization, Inc., 657 S.W.2d 27, 30 (Mo.App.1983). Regardless, the receivership and the SDR himself are more than a mere private employer or employee. The SDR was appointed by a public official, the Director, and his employment was approved by the court.
Since the SDR is at the very least a quasi-public official, his rights of privacy are less than that of an average citizen. All public employees enter public service knowing that their names, positions, compensation, and terms of service will be accessible by any person.
TCCR also points to
V.
This Court holds that case records are presumptively open to public inspection
Even though the insurance insolvency code is a self-contained and exclusive statutory scheme, there is nothing in the code that mandates the closure of these records. Thus, courts must turn to the common law presumption that the records of courts are open to the public. The circuit court‘s judgment is reversed and the case is remanded for rehearing giving due regard to the presumption that the court records in question should be open to the public absent a compelling justification that the records remain closed.
WHITE and BENTON, JJ., and GARRISON, Sp. J., concur.
LIMBAUGH, J., concurs in separate opinion filed.
WOLFF, J., concurs in opinion of LIMBAUGH, J., PRICE, C.J., and LAURA DENVIR STITH, J., not participating.
LIMBAUGH, Judge, concurring.
I concur in the majority‘s analysis and conclusion on the merits of the case, but I write separately to suggest a different approach to the “final judgment” issue.
Before an aggrieved party with an enforceable right may bring an appeal, there must be a final judgment disposing of all issues and all parties in the case. Green v. City of St. Louis, 870 S.W.2d 794, 798 (Mo. banc 1994). The majority holds that the judgment in this case is only a final judgment by resort to
The majority also maintains that the judgment was not final because it was subject to change. By entry of the judgment, however, as opposed to a mere ruling on an issue in the case or an order pertaining to less than all the issues in the case, the trial court made clear that its decision in the case was not subject to change. Indeed, judgment was entered for the very reason that the decision was final, rather than interlocutory. Furthermore, as noted, the trial court‘s judgment resolved the only issue in the case and was conclusive as to all parties. That alone makes the judgment final.
A more fundamental problem with the majority‘s determination that suits of this sort are not final because the receivership/liquidation proceeding is ongoing and the judgment entered was interlocutory is that the majority overlooks the nature of Pulitzer‘s lawsuit. Although Pulitzer is an intervening party in the receivership, Pulitzer‘s lawsuit, which sets out a discrete cause of action, is independent of the receivership. Though the lawsuit is ancillary to the receivership, it is not part of the receivership proper. Therefore, it is irrelevant that the receivership itself is ongoing and that rulings regarding the receivership are subject to change. Once the receivership court enters judgment on Pulitzer‘s independent lawsuit, the judgment is final for purposes of appeal.
In any event, the majority‘s solution to the perceived final judgment problem is to provide Pulitzer a remedy by way of a writ of mandamus, or direct appeal under
The majority holds that an appeal lies only as a result of the peculiar appeal provisions in
In context,
If the finding be for the plaintiff, the court shall render such orders, decrees and judgments as are allowed by
sections 375.1150 to375.1246 [which comprise the Insurers Supervision, Rehabilitation and Liquidation Act]. Such decree or judgment shall, for all purposes of an appeal, be considered a final judgment, and the defendant may appeal from the same as in other civil cases....
I have one final complaint with the majority‘s analysis. The majority‘s assertion that no final judgment involving a receivership may be entered unless authorized under
In sum, I would hold that the judgment entered against Pulitzer was a final judgment for the sole reason that it disposed of the only issue in the case and was conclusive as to all parties.