Stephan J. Weinberger v. Jeffrey M. Shaw et al. (2012)

MEMORANDUM OF DECISION RE MOTIONS TO SEAL # 106, 123

INTRODUCTION

On February 14, 2012, the Defendants, Jeffrey M. Shaw and Armstrong Shaw Associates, Inc. (“ASA”) filed a motion to seal the February 2, 2012 affidavit of Mr. Weinberger and more particularly exhibits C and E attached to his affidavit in support of an application for prejudgment remedy.   On March 28, 2012, the defendant re-filed the Weinberger affidavit with redacted exhibits and an amended motion to seal.   The documents which are at issue were not lodged with the court in accordance with the Practice Book § 7–4B. At the present time the exhibits are open to the public.¹  The Plaintiff submitted an Objection to the Motion to Seal dated February 23, 2012 and an amended objection dated April 2, 2012 addressing the amended motion to seal.   The defendant also submitted two replies to the objections dated February 24, 2012 and March 8, 2012.   The Motion to Seal was scheduled for a public hearing on April 9, 2012 and was posted on the Judicial Website as to the time and place of the hearing for the public pursuant to Practice Book § 11–20A(e) to afford the public an opportunity to be heard on the motion.²  On April 9, 2012 counsel argued the motion and the court noted for the record that no member of the public attended the hearing.

DISCUSSION

The Practice Book sets forth procedures for requests to seal records and for the sealing of records in civil matters.  Practice Book § 11–20A(a) provides that “[e]xcept as otherwise provided by law, there shall be a presumption that documents filed with the court shall be available to the public.”   According to Practice Book § 11–20A(b), “the judicial authority shall not order that any files, affidavits, documents, or other materials on file with the court or filed in connection with a court proceeding be sealed or their disclosure limited, “unless, pursuant to § 11–20A(c), “the judicial authority concludes that such order is necessary to preserve an interest which is determined to override the public's interest in viewing such materials.”

“The presumption of openness of court proceedings ․ is a fundamental principle of our judicial system ․ This policy of openness is not to be abridged lightly.   In fact, the legislature has provided for very few instances in which it has determined that, as a matter of course, certain privacy concern outweigh the public's interest to open judicial proceedings ․ The right to have documents sealed is not a right the parties have as against each other;  the court must determine the question as against the demands of the public interest.”  (Citation omitted;  internal quotation marks omitted.)  Bank of New York v. Bell, 120 Conn.App. 837, 846, 993 A.2d 1022, appeal dismissed, 298 Conn. 917 (2010).

“[Practice Book] § 11–20A codifies the common law presumption of public access to judicial documents, meaning any document filed with the court that the court reasonably could rely on in support of its adjudicatory function.”   Rosado v. Bridgeport Roman Catholic Diocesan Corp., 292 Conn. 1, 30, 970 A.2d 656, cert. denied sub. nom., Bridgeport Roman Catholic Diocesan Corp. v. New York Times Co., 130 S.Ct. 500 (2009).   In the present action, the defendant contends that the Exhibits which include the compensation to its employees should be sealed.

The court will consider this motion by following the requirements recognized by our courts, that is, 1) a determination that the sealing of the documents is necessary to preserve an interest which is determined to override the public's interest in viewing the material;  2) considering any alternatives to such an order;  3) entering an order that is no broader than necessary to protect the overriding interest;  and 4) articulating the overriding interest being protected and specifying the findings underlying the sealing order.

The defendants argue that the sealing order is necessary to preserve their financial interests.   More particularly, the defendants argue that the disclosure of the compensation of its employees will enable other similar businesses to solicit their employees at competitive salaries which would cause a financial detriment to the company.   The plaintiff contends that the documents are not protected by the law and cites C.G.S. § 31–128(f) which discusses the nondisclosure of information within a personnel file but specifically exempts from non-disclosure wage or salary.   The plaintiff argues that there is no legal basis to seal the exhibits.

When a company argues that the disclosure will impact its competitive standing it must specify how disclosure will inflict harm on the business and establish that the harm is sufficient to justify withholding court records from public examination.  Republic of Phillipines v. Westinghouse Elec. Corp., 949 F.2d 653 (C.A. 3 (N.J.) 1991).   Conclusory allegations that the court document contains confidential business information is insufficient to justify sealing the document.  H.B. Fuller Co. v. Doe, 151 Cal.App.4th 879, 895–96 (2007).  (Absent some substantive evidence that the disclosure of the rental terms or amount would be harmful, the defendant's concerns are no more than speculation.)

The plaintiff contends that the defendants have not demonstrated that Exhibits C and E are of a confidential nature which require a sealing order from the court.   In particular, the plaintiff argues that C.G.S. § 31–128f protects personnel files but exempts wages or salaries.   In considering whether the documents are to be sealed the court does not consider solely the protections provided by the statutes.   Instead, this court has viewed very closely the information already disclosed and the affidavit concerning the alleged impact of permitting the documents to remain as a public record.   The plaintiff loses sight of the requirements of the Practice Book that may allow a sealing order if there is an overriding demonstrated adverse impact to ASA as compared with the public right to access a result of the disclosure.

The defendants have relied upon actions which have resulted in some variation of sealing or a reasonable alternative in support of its position.   However, the cases that the defendants have relied upon contain different factual background and material which more aptly lends to a finding of confidentiality.   In both the Williams Trading, LLC v. Murphy, Superior Court, judicial district of Stamford/Norwalk at Stamford, Docket No. CV 11 6009668 (August 30, 2011, Jennings, J.T.R.) and Soroka v. Household Auto Fin. Corp., Superior Court, judicial district of New Haven at New Haven, Docket No. CV 04 40003000, (April 30, 2007, Silbert, J.) [43 Conn. L. Rptr. 481], the courts expressed concern about the identity theft issues if they were to make available information concerning identities of individual who were clients, or social security number, vehicle identification numbers, and account numbers.   The court in Williams Trading was confronted with the concern about protecting the names of the clients and the principals and employees of clients involved in the Asian Trading markets which is very specialized.   Neither of these actions involve the issue of what is normally disclosable information.   In Hartford Accident & Indemnity Co. v. Ace American Reinsurance Co., Superior Court, judicial district of Waterbury, Docket No. CV 03 017822 (March 1, 2006, Eveleigh, J.) 40 Conn. L. Rptr. the issue for sealing involved specific information of the insurance company in how they determined coverage positions, coverage information and certain trade secrets of the company in relation to the insurance coverage.   This is not similar to the argument in the instant action.   The defendants in the instant action have admitted through the affidavit of Ms. Grady that the employees themselves can disclose salary because it impacts them but in the actions cited the impact in some instances will be to outside individuals or sources or are of a nature that no one discusses the information.

The instant action involves a unique set of circumstances and concerns to the court in weighing the need to seal the documents to preserve an interest which is determined to override the public's interest in viewing the material;  and, if such an interest is demonstrated, are there any alternatives that would be appropriate to satisfy this need.  Practice Book § 11–20A.   The argument of counsel as well as the court docket entries at this time clearly show that the documents in question have been in the public arena for approximately nine weeks.   It is unusual that the parties (other than the occasional personal identifying information) have filed documents, allowed the public to view and then ask the court to seal.   In the normal course of the filing of documents which are believed to be confidential the party filing the document will lodge them with the court pursuant to 7–4B followed by the motion to seal.   In the instant action no request to lodge was filed with the court as to the exhibits.   Therefore, the documents have been available for the public for approximately nine weeks.   The defendant in its argument and submissions does not provide to the court any supporting evidence that as a result of this disclosure there have been solicitations or actions to recruit any of ASA's employees.   The defendants contend in the affidavit in support and as one significant basis of the motion to seal that, “ ․ firms routinely solicit and recruit employees, traders and marketing personnel, and firms routinely solicit and recruit employees working at competing firms ․ Were a competitor to obtain information regarding annual compensation to ASA's employees it would place us at a severe disadvantage.”  (Grady Affidavit ¶ 7.)   These statements by Ms. Grady although expressing a fear by the corporation are not supported by any specific instances of conduct that would demonstrate the negative impact of the disclosure.   In fact, the absence of any evidence of the great competitive disadvantage to the defendants is revealing.   In particular, this information has been in the public eye for over two months before argument and yet the defendants did not offer evidence of any rush to solicit and recruit their employees.   Of significance to the court is the fact that the material is dated.   The material is over three years old.   The exhibits provide salary and bonuses up until 2008.   There are no current documents that supply the salary or bonus for the last three years.   Thus, it is questionable whether any of the information contained in the Exhibits offers any basis with which to attempt to recruit one of the traders or employees of ASA. In this regard the defendant also fails to indicate that in the last three years, and more, that any of its employees have been recruited at all by another firm.³  This is significant in that the common knowledge of the market over the last three years has shown a significant change and thus the 2008 salary may have no relevance to the market in 2012.   Lastly, the defendants cite the possibility of discord among employees by the disclosure but this is nothing different than any other business where employees may be paid upon their work load, education, experience and production.   The handbook that is referred to by the defendants even if given to Mr. Weinberger does not explicitly define employee salaries but instead refers broadly to personnel files which according to Connecticut law does not prevent disclosure of salaries or wages.   Additionally, the affidavit of Ms. Grady states that “employees may elect to disclose such information to others employees generally do not want such protected information available on a firm wide basis or to the public at large.”   This statement contradicts the argument of the extreme importance of keeping confidential the wages and is contrary to argument that the handbook prohibits such disclosure.   It is inconsistent to allow employees to reveal salaries without specific criteria, to exempt salaries from requiring the consent of employees before disclosing under the state law, but to seal them because of some conclusory fear that they will be used to solicit or recruit, or will create discord.

Comparing the arguments of the defendants to the case law which has on very limited occasions permitted the sealing of documents in a judicial action, the court is not convinced that given the age of the records, and the minimal disclosure along with the ability of others to disclose their salaries that there is an overriding harm which would support the sealing of these records over the presumption of the public interest to access to judicial records.

Given these findings the court does not need to explore alternative reasonable methods of disclosure or the request for award of attorney fees and costs for the disclosure of the material or the redacted exhibits to the affidavit.

CONCLUSION

Based upon the above, the motion to seal is Denied and the motion for attorney fees and costs is Denied.

THE COURT

Barbara Brazzel–Massaro, J.

FOOTNOTES

FN1. The parties appeared before the Honorable Kevin Tierney on February 27, 2012 on the motion to seal filed by the defendants.   At that appearance Judge Tierney addressed the order of the documents and difficulty with coding the documents.   Judge Tierney stated:  “I'm expunging that filing, expunging it, expunging it because it is—leads the Court not to understand the legal issues that are before the Court and unfairly does not give the coder an opportunity to accurately reflect the documents and fails to give the opposite party an opportunity to attack the documents itself.”   The order for expungement did not cause the documents to be sealed but resulted in the defendants again applying to seal the documents..  FN1. The parties appeared before the Honorable Kevin Tierney on February 27, 2012 on the motion to seal filed by the defendants.   At that appearance Judge Tierney addressed the order of the documents and difficulty with coding the documents.   Judge Tierney stated:  “I'm expunging that filing, expunging it, expunging it because it is—leads the Court not to understand the legal issues that are before the Court and unfairly does not give the coder an opportunity to accurately reflect the documents and fails to give the opposite party an opportunity to attack the documents itself.”   The order for expungement did not cause the documents to be sealed but resulted in the defendants again applying to seal the documents.

FN2. The motion to seal had been posted on March 12, 2012 on the short calendar and was continued by Judge Tobin as a result of the matter being assigned to the complex litigation docket.   The posting of the hearing was repeated for the April 9, 2012 hearing date..  FN2. The motion to seal had been posted on March 12, 2012 on the short calendar and was continued by Judge Tobin as a result of the matter being assigned to the complex litigation docket.   The posting of the hearing was repeated for the April 9, 2012 hearing date.

FN3. The court inquired as to whether the employees listed in the 2008 salary and bonus documents are still employed by the defendant and was informed that 16 employees have remained with the company.   This is almost all employees listed.   This appears to be in conflict with the affidavit of Ms. Grady that indicates a great competition for employees and confirms the argument of plaintiff about the change in the financial position of most firms over the last three years..  FN3. The court inquired as to whether the employees listed in the 2008 salary and bonus documents are still employed by the defendant and was informed that 16 employees have remained with the company.   This is almost all employees listed.   This appears to be in conflict with the affidavit of Ms. Grady that indicates a great competition for employees and confirms the argument of plaintiff about the change in the financial position of most firms over the last three years.

Brazzel–Massaro, Barbara, J.