Obtaining a Sealed Deposition Transcript

Is there a deposition transcript that you really want to obtain and use?  Was that deposition sealed?  Obtaining it could be a headache.

NML Capital Ltd. v. Republic of Arg. arose from Argentina’s 2001 sovereign debt crisis and one lender’s efforts to collect what it was owed.[1]  One part of the dispute came to Nevada based upon an allegation that Argentina had used shell corporations to launder money and evade execution.  This particular ruling concerned a deposition of the sole employee of a company based in Nevada who was used to form the purported shell corporation.  The employee was deposed and the transcript placed under seal.  An Argentinean reporter learned of the deposition and moved to unseal it.

The court started by noting there are three types of protective orders in federal court.  One type “protects parties from producing information in response to a discovery request.”  A second type, “called sealing orders, protects a person’s privacy interests by preventing the public from accessing court records.”  The third type “called umbrella or blanket orders, are negotiated agreements that generally require discovery to be conducted in a certain manner or be kept confidential.”  A district court has broad discretion to issue these orders, but “the decision to enter a sealing order must be balanced against the public’s right to access judicial records.”

When someone moves to unseal records, the resulting analysis is enough to make my head hurt.  This seems intentional given presumption in favor of public access.

Two inquiries must be made when a member of the public moves to unseal court records. First, the court must conduct an analysis under Rule 26(c) to determine if particularized harm will result from disclosure of information to the public.  This analysis begins with a strong presumption in favor of access to court records.  If the documents in controversy involve a non-dispositive motion, then the presumption can be rebutted by showing good cause.  If, however, the documents in controversy involve a dispositive motion, then the presumption can only be rebutted by showing compelling reasons.

Rebutting the presumption requires a particularized showing. Broad allegations of harm, unsubstantiated by specific examples or articulated reasoning, do not satisfy the Rule 26(c) test. To justify a protective order, one of Rule 26(c)(1)’s enumerated harms must be illustrated with a particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements.  Courts also consider whether the disclosing party reasonably relied on a protective order when producing discovery.

If a particularized showing is not made, then the court records must be distributed to the public pursuant to its presumptive right of access. Case closed.  If, however, a particularized showing is made, then the public’s right of access has been rebutted and the court must engage in a second inquiry: whether the party seeking disclosure presented sufficiently compelling reasons why the sealed discovery document should be released.

Here, the court balances public and private interests. Relevant factors include (1) whether disclosure will violate any privacy interests, (2) whether the information is being sought for a legitimate purpose or for an improper purpose, (3) whether disclosure of the information will cause a party embarrassment, (4) whether confidentiality is being sought over information important to public health and safety, (5) whether the sharing of information among litigants will promote fairness and efficiency, (6) whether a party benefiting from the order of confidentiality is a public entity or official, and (7) whether the case involves issues important to the public.

If, after engaging in these two inquiries, the court concludes that disclosure is inappropriate, the court must determine whether redacting portions of the discovery material will nevertheless allow disclosure.  The court’s final decision is discretionary.[2]

Applied to the employee, the court started with the particularized harm analysis.  “On the one hand, there is information that is inherently harmful anytime it is released, and on the other hand, there is information whose release is potentially harmful only if it has never been publicly disclosed.”[3] The employee asserted various forms of particularized harm, however the court dealt with most by either ordering redaction or concluding the information had been previously disclosed.

The one factor not resolved via this analysis concerned the trade secrets of the employee’s employer.  This particularized harm was sufficient to evaluate whether the reporter had presented sufficiently compelling reasons to unseal the transcript.  The court concluded these factors weighed in favor of disclosure.  The transcript was unsealed, as redacted.

[1] No. 2:14-cv-492, 2015 U.S. Dist. LEXIS 20722, 2015 WL 727924 (D. Nev. Feb. 19, 2015).
[2] Internal quotations and citations omitted.
[3] Internal citations omitted.