Appeal from the United States District Court for the Eastern District of Pennsylvania, Civil No. 85-5952.
Hutchinson, Scirica, and Rosenn, Circuit Judges.
This appeal requires us to consider the application of the common law right of access to judicial records where materials which were initially discovered under the aegis of a protective order requiring confidentiality are later admitted into evidence at an open civil trial. We are presented with two disputes over access to trial transcripts and exhibits that arose after the final settlement of a products liability suit in the United States District Court for the Eastern District of Pennsylvania.
In the primary dispute, Philadelphia News, Inc. (PNI) intervened in the district court to secure access to certain trial exhibits that had been admitted into evidence.*fn1 Appellant BIC Corporation (BIC), the defendant in the original personal injury action, sought to prevent PNI's access to these exhibits because they were confidential corporate documents, the disclosure of which was assertedly prohibited by the terms of a protective order (PO). In a parallel dispute, BIC petitioned for an order of attempt against the original plaintiff's attorney, appellee Mel D. Kardos, contending that he had violated the protective order by refusing to return confidential BIC documents pursuant to its provisions. BIC also sought to enlarge the record through further discover.
The district court granted PNI access to the judicial record, including access to three contested documents, refused to hold Kardos in contempt, and denied BIC's petition to enlarge the record. BIC's appeal implicates both the substantive and temporal boundaries of the common law right of public access. We affirm in part, reverse in part, and remand the case for further proceedings consistent with this opinion.
BIC's attempts to retain control over the disclosure of its corporate documents are an outgrowth of a products liability action brought against it by plaintiff Cynthia Littlejohn. Littlejohn alleged that she had been seriously injured by a defectively designed BIC disposable lighter. After engaging in not uncommon disagreements over the scope of discovery, the parties stipulated to, and the district court entered, an "umbrella" protective order that was designed to protect BlC's "trade secrets and other confidential information" from public disclosure. See Fed. R. Civ. P. 26(c).
The PO restricted the distribution of any information or documents that BIC designated "confidential":*fn2
Counsel for any party other than the defendant shall use all product and information produced and disclosed by the defendant solely for the purposes of preparing for trial of this action. Under no circumstances shall material covered by this Protective Order be disclosed to anyone other than counsel in this action and experts retained by them. At the conclusion of the proceedings in this action, all documents and information subject to this Order, including any copies or extracts or summaries thereof, or documents containing information taken therefrom, shall be returned to counsel for the defendant.
Confidential materials obtained under the PO were to be maintained under seal by the court clerk and were to be made available only to the court and to counsel in the proceedings absent further court order. Violations of the PO were punishable as a contempt of court.
The district court bifurcated the trial of Littlejohn's action into liability and damages stages. Littlejohn's exhibits in the liability trial included confidential corporate documents that BIC had released under the PO. In particular, Littlejohn's expert witnesses testified that they had read and relied on two confidential internal BIC documents in formulating their opinions: a 1983 lighter audit (P-38) and intercompany memoranda detailing consumer complaints (P-39).*fn3 At the close of Littlejohn's case, the district court appeared to admit all of her exhibits into evidence. BIC failed to object to the admission of the now-contested exhibits.
The jury found BIC liable for the plaintiff's injuries. BIC then settled the case before the damages trial. The court rejected BIC's attempt to have the record sealed, and the settled action was dismissed shortly thereafter under Rule 23(b) of the Local Rules of Civil Procedure.
The disputes over BIC's confidential documents began after the final settlement of the underlying Littlejohn suit. The Philadelphia Inquirer, researching a story on BIC lighter litigation, discovered that the original exhibits and deposition transcripts introduced at trial had been returned to defense counsel after the settlement, in accordance with the court's administrative practice and in conformance with the PO. PNI filed a motion for intervention in the Littlejohn action and sought access to the trial record after BIC refused to make available any evidence designated confidential under the PO.*fn4
The parties' attorneys were also skirmishing over the scope of the PO. Relying on the PO, BIC sought the return of copies of documentary evidence and deposition testimony still in the hands of plaintiff's attorney, Kardos. Kardos resisted, contending that he was entitled to retain one copy of each trial exhibit and deposition transcript admitted into evidence because they were part of the judicial record and, as such, no longer subject to the PO. BIC's first petition for contempt against Kardos, filed in February 1987, was denied without prejudice. In August 1987, BIC renewed its petition for contempt, seeking enforcement of the PO and sanctions.*fn5 Thereafter, Kardos submitted the disputed papers under seal to the district court.
The court held a hearing on the contempt and PNI matters in September 1987. Following the hearing, the court permitted PNI to intervene and granted it access to the judicial record, which was held to include depositions and exhibits that had been admitted into evidence. The court also denied the contempt petition. In a supplementary order, the court found that the three disputed documents had been admitted into evidence and were therefore part of the public record. BIC's motion for reconsideration and its request to enlarge the record were denied a month later and this appeal followed.*fn6 We will discuss the PNI and Kardos disputes seriatim.
PNI's motions for intervention*fn7 and access were based, in part, on the public's common law right of access to judicial proceedings and records.*fn8 The existence of such a right "is beyond dispute." Publicker Industries, Inc. v. Cohen, 733 F.2d 1059, 1066 (3d Cir. 1984); see also Nixon v. Warner Communications, Inc., 435 U.S. 589, 597, 55 L. Ed. 2d 570, 98 S. Ct. 1306 (1978). Access means more than the ability to attend open court proceedings; it also encompasses the right of the public to inspect and to copy judicial records. United States v. Criden, 648 F.2d 814, 819 (3d Cir. 1981) (Criden I). The right, which antedates the Constitution, id. at 819, is based upon both "historical experience and societal utility," United States v. Smith, 776 F.2d 1104, 1114 (3d Cir. 1985) (Smith I). The public's exercise of its common law access right in civil cases promotes public confidence in the judicial system by enhancing testimonial trustworthiness and the quality of justice dispensed by the court. See 6 J. Wigmore, Evidence § 1834 (J. Chadbourne rev. 1976). As with other branches of government, the bright light cast upon the judicial process by public observation diminishes possibilities for injustice, incompetence, perjury, and fraud. Furthermore, the very openness of the process should provide the public with a more complete understanding of the judicial system and a better perception of its fairness. See, e.g., Bank of America Nat. Trust v. Hotel Rittenhouse, 800 F.2d 339, 345 (3d Cir. 1986) (Bank of America).
Although our courts recognize a general common law right to inspect and to copy judicial records and documents, the right is not absolute. Nixon, 435 U.S. at 598. "Every court has supervisory power over its own records and files, and access has been denied where court files might have become a vehicle for improper purposes." Id. The common law thus merely establishes a presumption of public access to court proceedings and court records. Id. at 602. In resolving claims of access to trial evidence, "the strong common law presumption of access must be balanced against the factors militating against access." Bank of America, 800 F.2d at 344. Despite the presumption, courts may deny access to judicial records, for example, where they are sources of business information that might harm a litigant's competitive standing. Nixon, 435 U.S. at 598.
BIC's challenges to the district court orders at issue here naturally circumscribe the scope of our discussion of the common law right. BIC essentially attempts to avoid the application of the common law access doctrine by arguing that (1) the three disputed documents were not admitted into evidence; (2) the confidential documents were protected from disclosure by the protective order, even when admitted to evidence; and (3) any public access right evaporated when the court, pursuant to administration practice returned the exhibits to counsel.*fn9
A. Evidence in the Record
This court has definitively held that "there is a strong presumption that material introduced into evidence at trial should be made" available for public access. Criden I, 648 F.2d at 823; see also United States v. Mitchell, 179 U.S. App. D.C. 293, 551 F.2d 1252, 1260-61 (D.C. Cir. 1976); rev'd on other grounds sub nom. Nixon v. Warner Communications, Inc., 435 U.S. 589, 55 L. Ed. 2d 570, 98 S. Ct. 1306 (1978). BIC attempts to avoid the force of this presumption by arguing that the district court erred in finding that the 1981 lighter audit (P-37), the 1983 lighter audit (P-38), and the intercompany memoranda (P-39) were admitted into evidence. ...