UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
al., APPELLANTS 1984.CDC.4
Opinion and Judgment Vacated March 15, 1984.
Appeal from the United States District Court for the District of Columbia. (D.C. Civil Action No. 80-3032).
Tamm and Wilkey, Circuit Judges, and MacKinnon, Senior Circuit Judge. Opinion for the court filed by Circuit Judge Tamm.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE TAMM
Mobil Oil Corporation (Mobil) seeks reversal of the portion of a June 21, 1983 district court order that unsealed 3800 pages of deposition transcripts and 425 accompanying exhibits. The depositions and exhibits were initially designated confidential by Mobil pursuant to a "blanket" protective order issued on November 5, 1981. Mobil does not contest disclosure of the small portion of these depositions and exhibits that was used at trial. *fn1 It vigorously contests, however, disclosure of those documents not used at trial. *fn2 Brief for Appellant at 2. Because we find constitutionally protected privacy interests in Mobil's confidential commercial information not used at trial and no overriding reason to disclose this information, we reverse the appealed portion of the district court's June 21, 1983 order. We remand with instructions to reinstate the seal on those depositions and exhibits designated confidential but never used at trial. *fn3 I. BACKGROUND
This dispute arises out of a libel action brought by Mr. William Tavoulareas, president of Mobil, and Mr. Peter Tavoulareas, his son, against The Washington Post Company (the Post). The libel claim was based on two articles published by the Post on November 30 and December 1, 1979. Each stated essentially that Peter Tavoulareas's ownership interest in Atlas Maritime Company and Mobil's extensive business transactions with Atlas were a result of nepotism. Record Excerpts at 531. *fn4 The Post served broad discovery requests on Mobil, initially a nonparty, while defending the lawsuit. *fn5
In response to the Post's discovery requests, Mobil moved for a protective order securing the confidentiality of commercial information sought by the Post. R.E. at 2, 10-13. Mobil filed an affidavit by Mr. Walter E. MacDonald, a vice president in charge of Mobil's international marine transportation activities, in support of its motion for the protective order. R.E. at 144. Mr. MacDonald attested that protection of the materials sought by the Post "is essential not only to avoid impairing the competitive position of Mobil and to afford it reasonable protection against disclosure of proprietary and confidential business information, but also to minimize the possibility of impairing Mobil's relationship with the Government of the Kingdom of Saudi Arabia. . . ." R.E. at 145.
More specifically, Mr. MacDonald described the business relationships among Mobil, a Saudi Arabian marine company called Samarco, and the London-based Atlas Marine Company. He explained that the negotiation and implementation of business arrangements among these three companies revealed Mobil's strategy in maintaining access to substantial volumes of crude oil from Saudi Arabia. R.E. at 147. Mr. MacDonald also stressed the importance of keeping confidential "a company's vessel operating costs and investment return, its internal decision-making and financial analysis procedures regarding the chartering
. . . of tankers, and its economic criteria applicable to decisions for the purchase or sale of vessels." R.E. at 148. Mr. MacDonald then gave specific examples of how public disclosure of the kind of documents requested would harm Mobil's competitive position. R.E. at 148-50.
On November 5, 1981, the district court issued Mobil's proposed protective order. *fn6 With regard to the harm disclosure could bring to Mobil's competitive position, the court noted:
Mobil has adequately specified the harm likely to result absent a protective order. As Mr. MacDonald attests, the public disclosure of many of these documents might undermine Mobil's relationship with the Kingdom of Saudi Arabia, hamper its ability to compete in the marine transportation business, and threaten its access to substantial volumes of crude oil from Saudi Arabia. Furthermore, many of the discovery requests appear likely to reveal confidential, internal Mobil documents dealing with strategy, negotiations, and long-range corporate planning. The conclusion is inescapable that public disclosure of these kind of sensitive corporate documents would cause Mobil competitive harm sufficient to warrant imposition of a protective order adequate in character and balanced to the needs of the parties.
Tavoulareas v. Piro, 93 F.R.D. 24, 29 (D.D.C. 1981). The protective order permitted Mobil to designate confidential those documents that contained sensitive commercial information. Id. at 33. If the Post wished to contest a confidential designation, it could apply to the court specifying the documents it wanted to disseminate, id. at 29, 30 n.4, and the reasons justifying dissemination. Id. at 35.
Pursuant to the November 5, 1981 protective order, Mobil forwarded thousands of documents to the Post. Mobil's corporate officials responded to questions in depositions revealing sensitive commercial information. All totaled, the Post took over 6000 pages of deposition transcript, 3800 of which were designated confidential by Mobil. After trial of the libel claim had been completed, Mobil moved on August 8, 1982 for the return of its confidential documents. On September 14, 1982, the Post moved to unseal all documents filed with the court, including the 3800 deposition pages here at issue. *fn7 The Post, however, did not identify which pages among the 3800 it wished to disseminate, or the specific reasons for objecting to Mobil's designation of the documents as confidential. R.E. at 255, 267-69. On May 18, 1983, the district court ordered Mobil to "more specifically inform the Court as to its justification for continuing to seal" the disputed depositions. R.E. at 202.
In response to the court's order, Mobil submitted on May 31, 1983 a second sworn statement of Walter E. MacDonald and several exhibits to demonstrate the continuing need for confidentiality of the depositions. R.E. at 203. Mr. MacDonald reaffirmed the confidential nature of Mobil's arrangements for transporting oil from Saudi Arabia. R.E. at 204. He again noted the impact that disclosing such information may have on Mobil's access to crude oil from Saudi Arabia. *fn8 R.E. at 204. He explained that Mobil's counsel "were instructed to designate as confidential any portion of a deposition where Mobil's confidential documents were used or where the subject of Mobil's proprietary business relations with its Saudi partners was brought up." R.E. at 208-09. Thus, while confidential designations were not assigned after a document-by-document examination, they were assigned according to a systematic method tailored to protect only sensitive material.
While Mr. MacDonald noted that he had been able to review only a few of the 3800 pages of depositions, he did attest that he was "generally familiar with the subject-matter of the documents . . . as well as [with] the underlying transactions and their importance to Mobil." R.E. at 211. Mr. MacDonald assured the court that
Mobil's documents and information relating to its involvement in Samarco and its other shipping business remain confidential today as internal, proprietary, competitive information. Mobil has taken considerable care to maintain this information as non-public, proprietary material. . . .
Because Mobil is involved with these same persons [referred to in the depositions] today . . . it is just as important that Mobil's internal deliberations and analyses (as well as its confidential communications with its partners) remain confidential and non-public. No business organization can function effectively in the business marketplace if its internal, competitive documents and information are made public.
R.E. at 211-12. Mobil attached to this affidavit an exhibit listing thirty-three depositions and the confidential and non-confidential portions of each deposition transcript. R.E. at 222-23.
On June 21, 1983, the district court unsealed all 3800 pages of depositions. Tavoulareas v. Washington Post Co., No. 80-3032 (D.D.C. June 21, 1983). While the court noted that Mobil would not "have had to conduct a page-by-page examination of the over 3800 pages of sealed deposition," it concluded that "it is sufficient merely to state that the justification Mobil has provided is not specific enough to warrant the continued sealing of these documents." R.E. at 231-32. On June 23, 1983, Mobil appealed this order. We have jurisdiction under 28 U.S.C. 1291 (1976).
After full consideration, we disagree with the district court's conclusion that Mobil's showing was insufficient to justify continued confidentiality of those depositions never used at trial. Our decision follows from a different view of the relevant statutory and constitutional interests from that of the district court. While we acknowledge that discovery is presumptively open under the Federal Rules of Civil Procedure, we believe that statutory, common law, and constitutional privacy interests require protecting the confidentiality of Mobil's sensitive commercial information. Public dissemination of confidential discovery materials not used at trial cannot be justified by a common law or constitutional right of access or by a first amendment right of free speech or free press. II. THE PRESUMPTION OF OPENNESS
A statutory presumption of openness for discovery materials, even those not used at trial, derives from the Federal Rules of Civil Procedure. The Federal Rules do not restrict the use of properly discovered materials. Rule 26(c) requires the proponent of confidentiality to show good cause to limit the amount, method, or use of discovery as well as the people who are present at the discovery proceedings. Fed. R. Civ. P. 26(c).
Rule 5(d) requires that all papers served upon a party after the complaint, including depositions, be filed with the court unless the court orders otherwise. Fed. R. Civ. P. 5(d). The Advisory Committee intended this filing requirement to apply even to documents not used in the proceedings. Fed. R. Civ. P. 5(d), advisory committee note ("it often happens that no use is made of the materials after they are filed").9 The Committee requires such a filing because these "materials are sometimes of interest to those who may have no access to them except by a requirement of filing, such as members of a class, litigants similarly situated, or the public generally." Fed. R. Civ. P. 5(d), advisory committee note.
Similarly, Rule 30(f)(1) requires that depositions be "promptly file[d] . . . with the court in which the action is pending" unless otherwise ordered by the court. Fed. R. Civ. P. 30(f)(1). This filing requirement was added to Rule 30 in 1980, and the advisory committee note refers to the note to Rule 5(d) as an explanation of the amended provision. Simply stated, the Federal Rules of Civil Procedure and the advisory committee notes indicate that discovery proceedings are presumptively open unless otherwise ordered by the court.10
This presumption of openness for discovery materials not used at trial is grounded only in the Federal Rules and does not derive either from a common law or first amendment right of access. The common law right of access to public records and documents, including judicial records and documents, allows public supervision of governmental proceedings. This right of access should extend only so far as necessary to serve its supervisory purpose.11 Judge Wisdom noted in Wilk v. American Medical Ass'n, 635 F.2d 1295 (7th Cir. 1980), that "if the purpose of the common law right of access is to check judicial abuses, then that right should only extend to materials upon which a judicial decision is based." Id. at 1299 n.7 (citations omitted). Depositions not used at trial cannot be the basis for a judicial decision. Though the lines delimiting the common law right of access are vague, Nixon v. Warner Communications, Inc., 435 U.S. 589, 598-99, 55 L. Ed. 2d 570, 98 S. Ct. 1306 (1978), we believe they do not include documents not used at trial.12
Similarly, there is no first amendment right of access13 to discovery material not used at trial. Though the Post argued the public has a constitutional right of access to judicial proceedings and materials, citing, inter alia, Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 65 L. Ed. 2d 973, 100 S. Ct. 2814 (1980) (plurality opinion) (Brief for Appellee at 55), we do not believe that such a right extends to the disputed depositions. In Richmond Newspapers, the Court held that the Constitution preserves a public right of access to criminal trials. At the same time, however, the Court explicitly distinguished Gannett Co. v. DePasquale, 443 U.S. 368, 61 L. Ed. 2d 608, 99 S. Ct. 2898 (1979), which held that the press and public could be constitutionally excluded from a pretrial suppression hearing.14 Id. at 394. In Richmond Newspapers, the Chief Justice began the plurality opinion by noting that right of access to criminal trials was an issue of first impression: "In Gannett Co. v. DePasquale, . . . the Court was not required to decide whether a right of access to trials, as distinguished from hearings on pretrial motions, was constitutionally guaranteed." 448 U.S. at 564. After recognizing the constitutional right of access to criminal trials, the Chief Justice again distinguished Gannett : "In contrast to the pretrial proceeding dealt with in Gannett, there exist in the context of the trial itself various tested alternatives to satisfy the constitutional demands of fairness." Id. at 581. Thus, even after Richmond Newspapers, there appears to be no constitutional right of access to criminal or civil pretrial proceedings.
More conclusively, in Nixon v. Warner Communications, Inc., 435 U.S. 589, 608-10, 55 L. Ed. 2d 570, 98 S. Ct. 1306 (1978), the Supreme Court held that no constitutional right of access inheres either in the first or sixth amendment to copy and disseminate judicial records or evidence used at trial. It follows a fortiori that no constitutional right of access exists with regard to discovery materials never used at trial. Accord, Zenith Radio Corp. v. Matsushita Electric Industrial Co., 529 F. Supp. 866, 913-14 (E.D. Pa. 1981).
In sum, the presumptive openness of discovery materials not used at trial derives only from the Federal Rules of Civil Procedure. No right of access to such materials lies either in the common law or the Constitution. III. ...