Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-04949/USCOURTS-cand-4_04-cv-04949-19/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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United States District Court

For the Northern District of California

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 The stipulation references “confidential and proprietary information; including, but not

limited to, ‘trade secrets and commercial or financial information obtained from a person and

privileged or confidential’ under 5 U.S.C. § 552(b)(4).” Title 5 U.S.C. § 552 is commonly known

as the Freedom of Information Act (FOIA). The parties do not explain the connection, if any,

between FOIA and the present action, in which the Secretary of Labor asserts violations of the

Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq.

United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ELAINE L. CHAO, Secretary of Labor,

United States Department of Labor,

Plaintiff, No. C 04-4949 PJH

v. ORDER DENYING DEFENDANTS’

MOTION TO FILE DOCUMENTS 

LAWRENCE J. MAZZOLA, et al., UNDER SEAL 

Defendants.

_______________________________/

Defendants seek an order permitting the filing of documents under seal in support of

their motion for summary judgment. Having considered defendants’ motion and the

relevant legal authority, the court hereby DENIES the motion. 

On October 20, 2005, the parties in the present action submitted a stipulation and

proposed protective order, under which they sought to limit access to certain discovery

materials designated as “protected information.” Such “protected information” included

“privileged” information and “confidential”1

 information. The stipulation provided further that

Case 4:04-cv-04949-PJH Document 209 Filed 01/19/07 Page 1 of 5
United States District Court

For the Northern District of California

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the “protected information” would be used “solely for purposes of this litigation; would not

be “published to the general public in any form;” would not be “used for any other legal or

business purpose, or in connection with any other litigation;” and would be disclosed only to

the parties, their counsel of record, independent experts and consultants, judicial officers

and court personnel, and stenographic reporters who were reporting deposition testimony

in this action. The proposed protective order included a reference to the procedure for filing

documents under seal, required by Civil Local Rule 79-5. The proposed order was signed

by the court on October 24, 2005. 

The provision in the Federal Rules that provides for the issuance of protective orders

appears in Federal Rule of Civil Procedure 26. Rule 26 explicitly imposes an affirmative

duty “to engage in pretrial discovery in a responsible manner that is consistent with the

spirit and purposes of Rules 26 through 37.” Fed. R. Civ. P. 26, Advisory Committee

Notes, 1983 Amendment, subdivision (g). Under Rule 26, which is entitled “General

Provisions Governing Discovery; Duty of Disclosure,” “[p]arties may obtain discovery

regarding any matter, not privileged, that is relevant to the claim or defense of any party.” 

Fed. R. Civ. P. 26(b)(a). However, the court may issue an order “which justice requires to

protect a party or person from annoyance, embarrassment, oppression, or undue burden or

expense,” limiting the scope of disclosure, or requiring that “a trade secret or other

confidential research, development, or commercial information not be revealed or be

revealed only in a designated way.” Fed. R. Civ. P. 26(c). 

On December 21, 2006, defendants in the present action filed a motion for summary

judgment, and three declarations in support of the motion. Also on December 21, 2006,

defendants filed an administrative motion for an order sealing, in their entirety, sixteen

documents attached as Exhibits 5, 11-13, 15, 17, 19, 20, 22-27, 33, and 35 to the

Declaration of Elaine Wallace. Defendants stated that “[t]he requested relief is necessary

and narrowly tailored to protect the confidentiality of documents designated under the

Protective Order.” 

Defendants articulated no justification for the sealing request, other than the fact that

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United States District Court

For the Northern District of California

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the documents had been designated “confidential” by plaintiff, the Secretary of Labor. 

Defendants simply indicated that, of the sixteen documents, thirteen (Exhibits 5, 11-13, 15,

17, 19, 20, 22-24, 33, and 35) had been “produced by Plaintiffs [sic] in this litigation,” two

(Exhibits 26 and 27) were exhibits to the deposition of Karl Spargur in this action, and one

(Exhibit 25) was a declaration of a paralegal specialist in the Office of the Chief Counsel for

the Internal Revenue Service. 

In accordance with Civil Local Rule 79-5, the Secretary filed a declaration by her

counsel Wayne R. Berry, purporting to “establish[ ] that the designated information is

sealable.” Civil L.R. 79-5(d). Of the sixteen documents, Mr. Berry asserts that Exhibits 11

and 33, and pages 13-91 of Exhibit 26 need not be filed under seal; that Exhibit 25 and

pages 10-12 of Exhibit 26 are documents produced by the Internal Revenue Service, not

the Department of Labor, as to which the Secretary does not seek a sealing order; and that

Exhibits 5, 12, 13, 15, 17, 19, 20, 22-24, 35, and pages 1 and 4-8 of Exhibit 26 should be

filed under seal in their entirety because they are “covered by the deliberative process and

investigative files privileges.” In addition, Mr. Berry asserts that Exhibit 24 and pages 2-8 of

Exhibit 26 are protected from public disclosure under Internal Revenue Code § 6103,

because they discuss tax return information. Mr. Berry also contends that page 9 and 10-

12 of Exhibit 26 are arguably also § 6103-covered taxpayer information, but that the IRS

should provide information relevant to whether the documents should be sealed. 

Courts have historically recognized a “general right to inspect and copy public

records and documents, including judicial records and documents.” Nixon v. Warner

Commc’ns, Inc., 435 U.S. 589, 597 & n.7 (1978), quoted in Kamakana v. City of Honolulu,

447 F.3d 1172, 1178 (9th Cir. 2006). While “restraints placed on discovered, but not yet

admitted, information are not a restriction on traditionally public sources of information,” a

presumption of access applies to discovery material once it is filed with the court. Foltz v.

State Farm Mutual Automobile Ins. Co., 331 F.3d 1122, 1134-35 (9th Cir. 2003) (quotation

and citation omitted). 

As emphasized in the undersigned judge’s “Standing Order for Cases Involving

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United States District Court

For the Northern District of California

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 As noted above, the Secretary does not seek to have Exhibits 11, 33, and pages 

13 -91 of Exhibit 26 filed under seal.

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Sealed or Confidential Documents,” documents designated as confidential that are

attached as exhibits to case-dispositive motions, or redacted portions of case-dispositive

briefs that contain confidential information, must meet the high “compelling reasons”

threshold. See Kamakana, 447 F.3d at 1178-79. A “good cause” showing, without more,

will not satisfy a “compelling reasons” test, but will suffice only to maintain the

confidentiality of documents attached to non-dispositive motions. Id. at 1179-80. The Ninth

Circuit has adopted this principle of disclosure “because the resolution of a dispute on the

merits, whether by trial or summary judgment, is at the heart of the interest in ensuring the

‘public’s understanding of the judicial process and of significant public events.’” Id. at 1179

(quoting Valley Broadcasting Co. v. U.S. Dist. Court, 798 F.2d 1289, 1294 (9th Cir. 1986)). 

The court finds that defendants have not established “compelling reasons” for the

sealing of the fourteen exhibits or portions of exhibits described in the Berry Declaration, as

to which defendants and the Secretary both seek a sealing order.2 With regard to the

documents that the Secretary claims are covered by the deliberative process and

investigative files privileges – Exhibits 5, 12, 13, 15, 17, 19, 20, 22-24, 35, and pages 1 and

4-8 of Exhibit 26 – the request is denied because the assertion of privilege, without more, is

effective only to justify the withholding of documents or other evidence in discovery. Once

the evidence has been produced to the opposing party or parties, the privilege has been

waived. See, e.g., Gomez v. Vernon, 255 F.3d 1118, 1131-32 (9th Cir. 2001). The fact

that the parties stipulated that “privileged” material would be maintained in this litigation as

“protected information” and not publicly disclosed is irrelevant if the party seeking to have

the material filed under seal cannot satisfy the “compelling reasons” test articulated in

Kamakana. 

With regard to the documents produced by the IRS, as to which the Secretary does

not seek a sealing order – Exhibits 25 and pages 10-12 of Exhibit 26 – the court finds that

no party has articulated any reason for a sealing order, let alone a “compelling reason.” 

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United States District Court

For the Northern District of California

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Nor, as Mr. Berry proposed, has the IRS filed a request seeking to have the documents

filed under seal.

Finally, with regard to the documents that the Secretary claims are protected from

public disclosure under IRC § 6103 – Exhibits 24, and pages 2-12 of Exhibit 26 – the

taxpayers whose returns are discussed in those documents appear to be U.A. Local 38

Health and Welfare Trust Fund, U.A. Local 38 Convalescent Trust Fund, and U.A. Local 38

Pension Trust Fund, all of whom are defendants in the present action. However,

defendants themselves have provided no justification for sealing these documents. 

Accordingly, the court finds that defendants’ motion to file Exhibits 5, 11-13, 15, 17,

19, 20, 22-27, 33, and 35 to the Wallace Declaration under seal must be DENIED. 

IT IS SO ORDERED.

Dated: January 19, 2007 ______________________________

PHYLLIS J. HAMILTON

United States District Judge

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