Opinion ID: 2806273
Heading Depth: 1
Heading Rank: 5

Heading: SBC’s Motion to Seal and Return

Text: Finally, we must address SBC’s outstanding motion before this court to seal and return to the district court several documents in the appellate record. Material in the appellate record is presumptively public. See Baxter Int’l, Inc. v. Abbott Labs., 297 F.3d 544, 545–46 (7th Cir. 2002). We recognize only No. 14‐2506 29 three classes of material subject to seal: trade secrets, informa‐ tion covered by a recognized privilege, and information required by statute to be maintained in confidence. Id. at 546. If the material in question falls into one of these three catego‐ ries, then the two competing interests to be weighed by the court are the moving party’s interest in privacy and the public’s interest in transparency. Goesel v. Boley Intern. (H.K.) Ltd., 738 F.3d 831, 833 (7th Cir. 2013). Our reasoning in Baxter and Goesel (and the general principles underlying qui tam policy) inform the conclusion that the public’s interest in the judicial record is especially acute where—as here—the govern‐ ment has subsidized the good or service underlying the litigation from the public fisc. Notwithstanding other applica‐ ble laws, a party that is subsidized by the public fisc and that seeks to seal portions of the record must satisfy a higher burden than a party that receives no government subsidy must satisfy in order to achieve the same result. Either way, the presumption in favor of disclosure can be rebutted. Goesel, 738 F.3d at 833. The parties agree that SBC’s motion is based on a claim of trade secrets—they disagree over whether SBC has provided sufficient detail about its claims to warrant continued relief. SBC asserts that Doc. 66 contains one exhibit, consisting of an internal memorandum setting forth and explaining changes to SBC’s internal grading policy; that Doc. 67 contains four exhibits, including copies of SBC’s annual bonus plans and other bonus‐related documents; and that Doc. 82 contains twenty‐five exhibits related to the internal operations of SBC. In short, SBC argues that because these documents discuss the reasons and strategies behind its decision to alter the grading 30 No. 14‐2506 scale, its decision‐making process relating to how it compen‐ sates its employees, and addresses other aspects of internal operations, then this information constitutes trade secrets in the field of for‐profit higher education, and therefore is entitled to be sealed. Nelson grounds his counterargument in a single authority—Baxter—for the proposition that SBC has not provided enough detail to support its claim that the documents are protected as trade secrets to overcome the presumption of openness. 297 F.3d at 547. So we must now decide whether SBC has described the documents it wishes to remain under seal in sufficient detail to pass muster under Baxter. In Baxter, a motions panel rejected a joint motion to seal commercial documents due to the motion’s perfunctory nature. 297 F.3d at 546. The parties then filed a renewed joint motion alleging that the parties’ agreement justified sealing the documents. Id. We rejected it, too, explaining that we would not seal documents in the appellate record simply because the parties had agreed to do so among themselves because that practice deprives the public of material information about the judicial process. Id. at 547–48. We recently reaffirmed this rationale in Goesel, 738 F.3d at 835 (confidentiality agreement alone was insufficient to grant parties’ motion to seal settle‐ ment agreement). Notwithstanding the pre‐Baxter confusion surrounding motions to seal, it concludes with clear instruc‐ tions: the court will, in the future deny outright any motion under Operating Procedure 10 that does not analyze in detail, document by document, No. 14‐2506 31 the propriety of secrecy, providing reasons and citations. Motions that represent serious efforts to apply the governing rules will be entertained favorably...[while m]otions that simply assert a conclusion without the required reasoning...[will] have no prospect of success. Baxter, 297 F.3d at 548. SBC’s motion concerning the four exhibits associated with Documents 66 and 67 sets forth the specific contents of the documents associated with each, explains why those docu‐ ments entail proprietary trade secrets, and provides justifica‐ tion for why they should remain sealed. Accordingly, SBC has satisfied its high burden, and we order that those documents remain sealed. However, we need not decide whether Baxter requires us to unseal the twenty‐five exhibits connected to Doc. 82 because these documents were sealed in the district court as the consequence of a motion for leave to file under seal filed by Nelson. See Doc. 78. That Nelson now seeks to unseal docu‐ ments that the district court sealed on his motion is noteworthy because “[b]y asking for the very condition the court subse‐ quently imposed, [Nelson] waived any argument against it.” United States v. Cary, 775 F.3d 919, 927 (7th Cir. 2015) (applying waiver where defendant sought mental health treatment in the district court and then contested the imposition of that request on appeal). SBC’s motion also seeks to return to the district court, or, in the alternative, to seal, district court docket entries 58, 105, and 106, which consist of confidential settlement reports that the 32 No. 14‐2506 district court required the parties to file so it could monitor the progress of the parties’ settlement negotiations. Nelson asserts in his response that he does not oppose SBC’s request. We have in the past ordered documents returned to the district court in order to prevent unwarranted disclosure of commercially sensitive information. Baxter, 297 F.3d at 548. None of the district court’s orders that are the subject of this appeal makes mention of, let alone relies on, any of the documents at issue in SBC’s motion, and “returning documents to the district court is appropriate when they are not among the materials that formed the basis of the parties’ dispute and the district court’s resolution.” KM Enters., Inc., v. Global Traffic Techs., Inc., 725 F.3d 718, 734 (7th Cir. 2013) (citation omitted). Because SBC’s request is reasonable, narrow, specific, and justified, we will grant it. The clerk is directed to return the documents compris‐ ing district court docket entries 58, 105, and 106 to the cham‐