Opinion ID: 2581037
Heading Depth: 1
Heading Rank: 6

Heading: nature of the slc motion to terminate and supportive documents

Text: First, there are good reasons to distinguish between dispositive motions and discovery. Mere discovery may be sealed for good cause shown. Civil Rule (CR) 26(c). [2] Much of the information that surfaces during pretrial discovery may be unrelated, or only tangentially related, to the underlying cause of action. Seattle Times Co. v. Rhinehart, 467 U.S. 20, 33, 104 S.Ct. 2199, 81 L.Ed.2d 17 (1984). As this information does not become part of the court's decision making process, article I, section 10 does not speak to its disclosure. However, the same cannot be said for materials attached to a summary judgment motion. Summary judgment effectively adjudicates the substantive rights of the parties, just like a full trial. Accordingly, when previously sealed discovery documents are attached in support of a summary judgment motion, they lose their character as the raw fruits of discovery. Such documents may not be kept from public view without some overriding interest requiring secrecy. Rushford v. New Yorker Magazine, Inc., 846 F.2d 249, 252 (4th Cir.1988). InfoSpace contends the character of a motion to terminate a derivative lawsuit is unique and should not be treated like a summary judgment motion. Instead, InfoSpace contends a motion to terminate is more like an internal corporate matter or a voluntary settlement agreement. It effectively asks us to apply standards underlying CR 26(c), which allows a court to limit discovery and its use. See also General Rule (GR)15(c)(2)(B). The Times argues that a motion to terminate is the functional equivalent to a summary judgment motion and that the trial court erred in not applying more stringent factors before sealing the documentation filed in support of the motion to terminate. [3] From the beginning, courts have recognized that the motion to terminate is not precisely a summary judgment motion. Zapata, 430 A.2d at 788-89. Instead, [i]t is perhaps best considered as a hybrid summary judgment motion for dismissal because the stockholder plaintiff's standing to maintain the suit has been lost.... There is some analogy to a settlement in that there is a request to terminate litigation without a judicial determination of the merits. Id. at 787; accord Kaplan v. Wyatt, 484 A.2d 501, 506-07 (Del.Ch.1984) (the motion is a hybrid one, derived by analogy to a motion to dismiss a derivative suit based upon a voluntary settlement [and a] unilateral[ ] ... voluntary dismissal....). But subsequent courts have increasingly treated a motion to terminate as if it were a summary judgment motion. E.g., Joy, 692 F.2d at 893; In re Cont'l Ill. Sec. Litig., 732 F.2d 1302, 1309 (7th Cir.1984); Kaplan, 484 A.2d at 507-09, 519; cf. In re Oracle Corp. Derivative Litig., 824 A.2d 917, 928-29 (Del.Ch.2003) (describing decision making process in terms substantially similar to summary judgment). InfoSpace argues that there is currently a split among the circuits. Compare Joy, 692 F.2d 880 with In re Perrigo Co., 128 F.3d 430, 438 (6th Cir.1997). We disagree. In Perrigo, the Sixth Circuit considered when a SLC report should be disclosed. Consistent with the holdings of the Second and Seventh Circuits, the Sixth Circuit found that the critical question was whether the report was part of the trial judge's record in adjudicating a potentially dispositive motion. Since it was not, the Sixth Circuit kept the report confidential. But [i]f and when the district court intends to rely on the Report in making a decision in this case, then at that time it should conduct a hearing regarding whether the Report or parts thereof should be disclosed to the public. Id. at 440. Similarly, most courts have treated a motion to terminate as the functional equivalent to a summary judgment motion and applied some sort of exacting scrutiny before allowing supporting documentation to be filed under seal. E.g., Joy, 692 F.2d at 893; [4] In re Cont' l Ill. Sec. Litig., 732 F.2d at 1309; Kaplan, 484 A.2d at 507-09, 519. We agree and hold that a motion to terminate a derivative lawsuit is functionally equivalent to a summary judgment or other motion on the merits. While we recognize that the special nature of this procedures bears on whether a motion to seal a particular document should be granted, we find no reason to treat the report as mere discovery when it is filed in support of a motion to terminate. [5] CR 26(c) applies primarily to unfiled discovery, not documents filed with the trial court in support of a motion that can potentially dispose of a case. Blanket protective orders are disfavored, especially once documents have been filed. Under Federal Rules of Civil Procedure (Fed.R.Civ.P.) 26(c), the Ninth Circuit has recently required that the proponent of closure show good cause for sealing each document. Foltz, 331 F.3d at 1130 (A party asserting good cause bears the burden, for each particular document it seeks to protect, of showing that specific prejudice or harm will result if no protective order is granted.). No individual assessment was made until after the Times intervened, and it is unclear what legal standard was applied at that time. Similarly, we conclude that GR 15 gives insufficient guidance to direct trial courts in this position. Nearly identical arguments were closely considered and rejected by the Seventh Circuit nearly 20 years ago. In re Cont'l Ill. Sec. Litig., 732 F.2d 1302. There, the court was explicitly asked the core question before this court; whether newspapers could have access to an SLC report. The Seventh Circuit concluded that [b]ecause the Report was admitted into evidence in connection with a motion pending before the district court and because the court expressly relied on the Report in reaching a tentative disposition, the trial court did not abuse its discretion in releasing the report. Id. at 1304. The Seventh Circuit also explicitly rejected the argument, made today by InfoSpace, that the Fed.R.Civ.P. 26(c) standard should be applied. Id. at 1309 ([the] motion was designed to (and did) result in the dismissal of claims against several defendants.... We hold, therefore, that the presumption of access applies to the hearings held and evidence introduced in connection with Continental's motion to terminate. (footnote and citation omitted)). The appropriate analytical approach was set forth in Ishikawa, 97 Wash.2d 30, 640 P.2d 716. There, newspapers sought access to a closed hearing and to records submitted in support of a defendant's motion to dismiss a murder prosecution. Ishikawa, 97 Wash.2d at 32-33, 640 P.2d 716. This court considered the claims in light of our constitutional requirement that [j]ustice in all cases shall be administered openly. CONST. art. I, § 10. This `separate, clear and specific provision entitles the public, and ... the press is part of that public, to openly administered justice.' Ishikawa, 97 Wash.2d at 36, 640 P.2d 716 (quoting Cohen, 85 Wash.2d at 388, 535 P.2d 801). However, this right is not absolute and may be limited to protect other interests, such as a defendant's right to a fair trial. Ishikawa, 97 Wash.2d at 36, 640 P.2d 716. To balance these potentially conflicting principles, this court laid out five factors: 1. The proponent of closure and/or sealing must make some showing of the need therefor. Kurtz, [94 Wash.2d] at 62, 615 P.2d 440. In demonstrating that need, the movant should state the interests or rights which give rise to that need as specifically as possible without endangering those interests. .... .... Because courts are presumptively open, the burden of justification should rest on the parties seeking to infringe the public's right. See Nebraska Press Ass'n v. Stuart, 427 U.S. 539, 558-59, 569-70, 96 S.Ct. 2791, 49 L.Ed.2d 683 (1976). From a practical standpoint, the proponents will often be in the best position to inform the court of the facts which give rise to the alleged need for closure or sealing..... 2.  Anyone present when the closure [and/or sealing] motion is made must be given an opportunity to object to the [suggested restriction] . Kurtz, [94 Wash.2d] at 62 [615 P.2d 440]. For this opportunity to have meaning, the proponent must have stated the grounds for the motion with reasonable specificity, consistent with the protection of the right sought to be protected. At a minimum, potential objectors should have sufficient information to be able to appreciate the damages which would result from free access to the proceeding and/or records. This knowledge would enable the potential objector to better evaluate whether or not to object and on what grounds to base its opposition. 3. The court, the proponents and the objectors should carefully analyze whether the requested method for curtailing access would be both the least restrictive means available and effective in protecting the interests threatened. See Kurtz, [94 Wash.2d] at 63-64 [615 P.2d 440]. If limitations on access are requested to protect the defendant's right to a fair trial, the objectors carry the burden of suggesting effective alternatives. If the endangered interests do not include the defendant's Sixth Amendment rights, that burden rests with the proponents. 4.  The court must weigh the competing interests of the [parties] and the public,  Kurtz, [94 Wash.2d] at 64 [615 P.2d 440], and consider the alternative methods suggested. Its consideration of these issues should be articulated in its findings and conclusions, which should be as specific as possible rather than conclusory. See People v. Jones, 47 N.Y.2d 409, 415, 391 N.E.2d 1335, 418 N.Y.S.2d 359 (1979). 5.  The order must be no broader in its application or duration than necessary to serve its purpose ...  Kurtz, [94 Wash.2d] at 64 [615 P.2d 440]. If the order involves sealing of records, it shall apply for a specific time period with a burden on the proponent to come before the court at a time specified to justify continued sealing. Ishikawa, 97 Wash.2d at 37-39, 640 P.2d 716 (emphasis added) (second and third alterations in original). This court has since explicitly extended Ishikawa to civil cases, albeit in dicta. Allied Daily Newspapers of Wash. v. Eikenberry, 121 Wash.2d 205, 848 P.2d 1258 (1993). There, we found unconstitutional a statute that without individual analysis prohibited disclosure of any information related to the identity of a child victim of sexual assault. Id. at 208, 848 P.2d 1258. Substantially relying on the state constitution, we ruled: We adhere to the constitutional principle that it is the right of the people to access open courts where they may freely observe the administration of civil and criminal justice. Openness of courts is essential to the courts' ability to maintain public confidence in the fairness and honesty of the judicial branch of government as being the ultimate protector of liberty, property, and constitutional integrity. This right of access is not absolute, however, and may be outweighed by some competing interest as determined by the trial court on a case-by-case basis according to the Ishikawa guidelines. Allied Daily Newspapers, 121 Wash.2d at 211, 848 P.2d 1258 (emphasis added); accord In re Cont'l Ill. Sec. Litig., 732 F.2d at 1308 (the policy reasons for granting public access to criminal proceedings apply to civil cases as well.... These policies relate to the public's right to monitor the functioning of our courts, thereby insuring quality, honesty and respect for our legal system. (citations omitted)); King County Local Rule 26(c); Foltz, 331 F.3d at 1135. We now explicitly hold that the same guidelines applied in Ishikawa must be applied to documents filed in support of dispositive motions, including motions to terminate. [6]