Court Opinion

ID: 769659
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:04:10+00
Date Added: 2024-06-11T11:53:08.993803
License: Public Domain

220 F.3d 562 (7th Cir. 2000)
Union Oil Company of California, Plaintiff-Appellee,v.Dan Leavell, et al., Defendants-Appellants.
No. 99-3084
In the  United States Court of Appeals  For the Seventh Circuit
Argued June 8, 2000
Decided July 18, 2000

Appeal from the United States District Court  for the Southern District of Illinois.  No. 98-4243-JLF--James L. Foreman, Judge.[Copyrighted Material Omitted]
Before Easterbrook, Kanne, and Williams, Circuit  Judges.
Easterbrook, Circuit Judge.

1
Members of the  Leavell family bought some equipment for their  recycling business in 1992. (A closely held  corporation was the purchaser. For simplicity we  use "the Leavells" to refer to the persons and  business entities involved.) Four years later the  Leavells demanded that Unocal, the seller, remove  the machinery and compensate them for  environmental harm that, they insisted, it had  caused. According to the Leavells, Unocal's  equipment led to the concentration of radium 226,  an element naturally present in soil, whose decay  produces radon gas, which plagues the basements  of many homes. With the aid of a district judge  the parties settled their differences Unocal  took back the equipment, paid the Leavells  $435,000, and deposited another $100,000 into an  escrow account that could be drawn on for  approved cleanup work. In exchange the Leavells  promised that they would fully clean up the site  and that the work shall be performed in full cooperation with and  to the complete satisfaction of the Illinois  Department of Nuclear Safety ('IDNS'). IDNS shall  monitor the remediation from inception to  conclusion and shall review and approve all  decommissioning plans or work plans prior to  remediation work beginning at the Property. The  Leavells shall remediate the Property and dispose  of any contaminated material in the manner set  out in the decommissioning plan or work plan  approved by IDNS. . . . All parties understand and  acknowledge that after remediation has taken  place, it is impossible to predict the time it  will take for the IDNS to provide information  concerning the Property's qualification for use,  but the Leavells agree to use their best, good  faith efforts to obtain an unrestricted use  classification for the Property.

2
Notwithstanding this promise, the Leavells began  the cleanup before submitting a plan or obtaining  approval, making it impossible for the IDNS to  "monitor the remediation from inception to  conclusion". The escrow agent (Don C. Staab, the  Leavells' original lawyer) was unfaithful,  disbursing all but $2,000 without assuring  compliance with the conditions. This litigation  under the diversity jurisdiction ensued. After  the suit was under way the Leavells at last  submitted a work plan to the IDNS, but by then the  Leavells had finished their planned work, which  led the IDNS to reject the application and require  the Leavells to start over, with the aid of  appropriate engineering expertise. Unocal asked  the district court to direct the Leavells to  submit a plan to the IDNS, obtain approval, and  follow the approved plan to the letter. The  Leavells, who believe that they have done enough  already, named the IDNS as a third-party  defendant, seeking $25 million in damages (and a  bar on future agency oversight) because the IDNS  refused to approve the Leavells' methods.

3
The district judge put the third-party claim on  the back burner while dealing with the dispute  between Unocal and the Leavells. After an  exasperating series of conferences and hearings  at which the Leavells revealed that they knew  little and cared less about their obligations  under the contract (or for that matter state  environmental law), the district court granted  summary judgment for Unocal and entered an order  of specific performance. The judge directed the  Leavells to carry out eight tasks. For example,  the first was to "[o]btain the services of a  qualified health physics consultant approved by  IDNS."

4
Although the Leavells did not seek a stay from  either the district court or this court, their  lawyer informed us at oral argument that they  have not performed any of these tasks and have no  intention of doing so now or in the future.  Surprisingly, the district judge has declined to  enforce the order, stating that the notice of  appeal deprives him of jurisdiction. This is not  so. A notice of appeal does not stay enforcement  of a district court's order. Thornton v. Wahl,  787 F.2d 1151 (7th Cir. 1986). A judge may--and  should--enforce an un-stayed injunction while an  appeal proceeds. Resolution Trust Corp. v. Smith,  53 F.3d 72, 76 (5th Cir. 1995); Chrysler Motors  Corp. v. Industrial Workers, 909 F.2d 248, 250  (7th Cir. 1990); Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 16 Federal Practice  and Procedure sec.3921.2 (2d ed. 1996). Otherwise  the judge deprives the prevailing parties of the  benefit of their judgment and rewards defiance.  A notice of appeal "divests the district court of  its control over those aspects of the case  involved in the appeal." Griggs v. Provident  Consumer Discount Co., 459 U.S. 56, 58 (1982)  (emphasis added), but whether the addressee of an  injunction has complied is not a subject  "involved in the appeal." Whether the judge  should have held a contempt hearing last year is  water under the bridge, however.

5
Because the third-party claim remains pending in  the district court, appellate jurisdiction is  questionable. Although the IDNS should have been  dismissed immediately--for the eleventh amendment  bars the claim to the extent it relies on state  law, see Pennhurst State School & Hospital v.  Halderman, 465 U.S. 89, 117 (1984), and the  federal law to which the Leavells allude does not  treat states and their agencies as "persons"  subject to suit, see Arizonans for Official  English v. Arizona, 520 U.S. 43, 69 (1997); Will  v. Michigan Department of State Police, 491 U.S.  58 (1989)--that did not occur, and the unresolved  third-party claim means that the decision in the  Unocal-Leavell portion of the case is not  "final." The parties contend that the district  court entered a partial final judgment under Fed.  R. Civ. P. 54(b), but the district judge did not  explain why the case should be cleaved in two--  especially not when it is so easy to resolve the  claim against the IDNS and produce a genuine final  judgment. Nor does the use of Rule 54(b) make  sense, given 28 U.S.C. sec.1292(a)(1), which  authorizes immediate appeal of interlocutory  injunctions. The district judge did not use the  magic word "injunction," but his order is  injunctive in nature, requiring the Leavells to  perform enumerated steps under threat of the  contempt power. If the district judge had entered  a money judgment--say, one requiring the Leavells  to refund what they have received from Unocal--an  appeal might well be premature while the claim  against the IDNS is unresolved. But as an appeal  from an injunction it is securely within our  jurisdiction.

6
On the merits, the Leavells' appeal is  frivolous. They did not produce affidavits or any  other evidence in response to Unocal's motion for  summary judgment, so the record is lopsided and  demonstrates that from the get-go the Leavells  ignored their undertakings. The Leavells' current  lawyer believes that denials in the answer to  Unocal's complaint block summary judgment, but  this misunderstands federal practice. See Fed. R.  Civ. P. 56(e). We attend only to the evidence of  record, which demonstrates that the Leavells  began cleanup work before seeking the IDNS's  approval, thus violating their promise that the  "IDNS shall monitor the remediation from inception  to conclusion and shall review and approve all  decommissioning plans or work plans prior to  remediation work beginning at the Property"  (emphasis added). Most of the Leavells' troubles  with the IDNS stem from their work-first-approval-  later approach, reversing the contractual  sequence. Breach is established.

7
Specific performance was an appropriate remedy.  Unocal bargained for a clean site, with a clean  bill of health from the IDNS, to avoid a risk of  liability to those who may purchase the land from  the Leavells or neighbors who may say that radon  gas has wafted from the Leavells' land to theirs.  Damages cannot produce that surety. And the  Leavells' argument that they should be relieved  of their promise because cleanup according to the  IDNS's rules is more costly than they anticipated  is a poor excuse, for contracts are designed to  allocate risks such as this; the Leavells  obtained a fixed payment, not an open purse. What  is more, a contract may be set aside on the basis  of mutual mistake (the doctrine closest to the  Leavells' position, to the extent we can decipher  it) only if it can be unwound. To obtain release  from their undertaking, the Leavells must offer  to return the $535,000 Unocal paid. Fleming v.  U.S. Postal Service, 27 F.3d 259 (7th Cir. 1994).  But the Leavells have so far tendered not a  penny; they want to keep the money and shirk  their obligations, an outcome no court could  tolerate.

8
No more need be said about the merits, but a  procedural matter requires attention. Almost  every document filed in this case, even the  district court's opinions, orders, and judgment,  bears the legend "FILED UNDER SEAL". As far as we  can tell, the district court has kept not only  the details but also the existence of this case  from public view. The briefs and other papers the  parties have filed in this court are similarly  designated "UNDER SEAL", and the parties  evidently anticipated that secrecy would  continue. But appellate proceedings may be sealed  only by order of this court (which neither side  sought), so we directed the parties to show cause  why the briefs and other papers should not be  placed in the public record. The Leavells asked  us to unseal everything. Unocal responded by  asking us not only to seal the briefs and record  but also to hold the oral argument in a courtroom  closed to the public and to use only pseudonyms  in any opinion. We denied the latter requests  before argument, see New York Times Co. v. United  States, 403 U.S. 944 (1971) (denying a motion to  close even a portion of the argument in the  Pentagon Papers case); Coe v. Cook County, 162  F.3d 491 (7th Cir. 1998) (discussing the  presumptive inappropriateness of anonymity in  litigation), but took under advisement the  request to seal the briefs and record.

9
The district judge did not explain his sealing  order. Unocal's proffered justification is that  the parties agreed to keep their settlement  confidential, and that "Unocal should not be  forced to sacrifice that benefit of the bargain  . . . simply because [the Leavells] have breached  other portions of the settlement agreement." If  indeed the Leavells' intransigence leads to  publicity, then Unocal may be entitled to damages  for any ensuing harm, but the parties'  confidentiality agreement can not require a court  to hide a whole case from view. Litigation about  trade secrets regularly is conducted in public;  the district court seals only the secrets (and  writes an opinion omitting secret details); no  one would dream of saying that every dispute  about trade secrets must be litigated in private.  Even disputes about claims of national security  are litigated in the open. Briefs in the Pentagon  Papers case, New York Times Co. v. United States,  403 U.S. 713 (1971), and the hydrogen bomb plans  case, United States v. Progressive, Inc., 467 F.  Supp. 990, rehearing denied, 486 F. Supp. 5 (W.D.  Wis.), appeal dismissed, 610 F.2d 819 (7th Cir.  1979), were available to the press, although  sealed appendices discussed in detail the  documents for which protection was sought. See  also In re United States, 872 F.2d 472 (D.C. Cir.  1989) (a national security case with public  briefs and opinions, although parts of one  opinion were redacted to protect confidences).

10
Calling a settlement confidential does not make  it a trade secret, any more than calling an  executive's salary confidential would require a  judge to close proceedings if a dispute erupted  about payment (or termination). Many a litigant  would prefer that the subject of the case--how  much it agreed to pay for the construction of a  pipeline, how many tons of coal its plant uses  per day, and so on--be kept from the curious  (including its business rivals and customers),  but the tradition that litigation is open to the  public is of very long standing. See Nixon v.  Warner Communications, Inc., 435 U.S. 589, 597-99  (1978); In re Reporters Committee for Freedom of  the Press, 773 F.2d 1325, 1331-33 (D.C. Cir.  1985) (Scalia, J.). People who want secrecy  should opt for arbitration. When they call on the  courts, they must accept the openness that goes  with subsidized dispute resolution by public (and  publicly accountable) officials. Judicial  proceedings are public rather than private  property, U.S. Bancorp Mortgage Co. v. Bonner  Mall Partnership, 513 U.S. 18, 27-29 (1994); In  re Memorial Hospital of Iowa County, Inc., 862  F.2d 1299, 1302-03 (7th Cir. 1988), and the  third-party effects that justify the subsidy of  the judicial system also justify making records  and decisions as open as possible. What happens  in the halls of government is presumptively  public business. Judges deliberate in private but  issue public decisions after public arguments  based on public records. The political branches  of government claim legitimacy by election,  judges by reason. Any step that withdraws an  element of the judicial process from public view  makes the ensuing decision look more like fiat,  which requires compelling justification.

11
This is not the first time we have encountered  requests to seal proceedings in order to  implement the parties' preference for seclusion.  The requests have been uniformly rejected. See,  e.g., United States v. Ladd, No. 99-2301 (7th  Cir. June 27, 2000); Citizens First National Bank  v. Cincinnati Insurance Co., 178 F.3d 943 (7th  Cir. 1999); Pepsico, Inc. v. Redmond, 46 F.3d 29  (7th Cir. 1995) (chambers opinion); Grove Fresh  Distributors, Inc. v. Everfresh Juice Co., 24  F.3d 893 (7th Cir. 1994); In re Krynicki, 983  F.2d 74 (7th Cir. 1992) (chambers opinion); In re  Continental Illinois Securities Litigation, 732  F.2d 1302 (7th Cir. 1984). Ever since Continental  Illinois, we have insisted that only genuine  trade secrets, or information within the scope of  a requirement such as Fed. R. Crim. P. 6(e)(2)  ("matters occurring before the grand jury"), may  be held in long-term confidence. Portions of  discovery may be conducted in private to expedite  disclosure. See Seattle Times Co. v. Rhinehart,  467 U.S. 20 (1984). Much of what passes between  the parties remains out of public sight because  discovery materials are not filed with the court.  But most portions of discovery that are filed and  form the basis of judicial action must eventually  be released, id. at 36-37--and it should go  without saying that the judge's opinions and  orders belong in the public domain. Both  litigants and judges may protect properly  confidential matters by using sealed appendices  to briefs and opinions.

12
At oral argument Unocal conceded that none of  the documents sealed in this case meets the  standards of Citizens First National Bank and its  predecessors. Accordingly, we direct the clerk of  this court to place all appellate papers in the  public record. On remand, the district court must  do the same, dissolving any confidentiality  orders entered in the case. After unsealing the  record, the district judge should dismiss the  third-party action and promptly determine whether  the Leavells are in contempt of court.

Affirmed and Remanded