Contempt findings over sealed records reversed

From the Summer 2000 issue of The News Media & The Law, page 37.

The Court of Appeals in Richmond (4th Cir.) held that the Wilmington Morning Star and one of its reporters were not guilty of criminal and civil contempt of court for publishing information confirmed by a review of a court document that had been placed under seal.

“No citizen is responsible, upon pain of criminal and civil sanction, for ensuring that the internal procedures designed to protect the legitimate confidences of government are respected,” the court held.

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Conoco Inc. settled a lawsuit in 1997 brought against it in federal district court in Raleigh. The parties filed a joint motion with the court to file the settlement and related documents under seal, meaning that the presumptive right of the public to view records placed in a court file would be suspended for those documents. Without providing notice or an opportunity for objections, the district court granted the parties’ joint motion “for good cause shown” and signed the order directing that the settlement documents be placed under seal in the court file.

The parties then delivered the documents to the court in a closed white envelope. On the front of the envelope in boldface was the following warning: “CONFIDENTIAL SETTLEMENT AGREEMENT FILED UNDER SEAL TO BE OPENED ONLY BY THE COURT.” The warning had been affixed to the front of the envelope by a paralegal for Conoco’s counsel, not by the court, although the language had been suggested by a deputy clerk. The warning did not indicate that it was a judicial order.

The court opened the envelope, signed the two-page sealing order and the settlement agreement itself and then returned the agreement to the original envelope. The sealing order was attached to the front of the settlement agreement. The sealing order was entitled “Order Granting Joint Motion of Plaintiffs and Defendants to Approve Confidential Settlement Agreement, to Dismiss This Action as Settled Discontinued and Ended, and to Permit Filing and Maintenance of Confidential Settlement Documents under Seal.” The second page of the order stated that the settlement agreement and related documents were to “be filed and maintained confidentially under the seal of the Court.”

The trial court neither signed nor stamped the boldface language written by Conoco on the front of the envelope. The envelope was then delivered to the clerk’s office to be placed with other documents related to the case.

Less than a month later, Wilmington, N.C., Morning Star reporter Kirsten Mitchell was directed by her editor to go to the court clerk’s office and review documents in the Conoco case file that had been filed “since the settlement.” At the courthouse, Mitchell asked the court clerk to see “everything since the settlement” that was in the case file. In response, a deputy court clerk responsible for the case brought to the clerk’s office counter a number of documents, including the white envelope containing the sealing order and the confidential settlement agreement at issue.

The clerk removed a large brown envelope from the pile, telling Mitchell, “You can’t have this, this is a sealed document.” Mitchell responded, “That’s fine, I don’t need to see that.” The clerk then handed Mitchell the rest of the documents, including the white envelope containing the documents filed under seal.

Mitchell then took the documents over to a bench in the clerk’s office, and began skimming through them. When she came to the white envelope containing the settlement agreement, she saw “OPENED” in red and white letters through a cellophane window on the back of the envelope. Just adjacent to the flap appeared the following words in red: “Caution: The word ‘OPENED’ appears in the window panel to indicate that the envelope has been opened.”

The flap on the envelope was in the closed position. Mitchell reached inside the envelope and removed the settlement agreement. The trial court’s order sealing the documents was attached to the front of the agreement, although Mitchell contends that she did not read it. After reading the settlement agreement and learning the settlement amount, Mitchell returned the document to the white envelope and flipped it over into her pile of already-reviewed documents. She contends that she then saw for the first time the paralegal’s “WARNING” on the front of the envelope.

The Morning Star published a story the next day disclosing the terms of the settlement. Conoco then filed a motion requesting that the court find Mitchell, reporter Cory Reiss and the newspaper in civil contempt of court. (See related story, p. 13)

The U.S. Attorney also filed a motion requesting that the court find the reporters and newspaper in criminal contempt of court. The criminal contempt action was prosecuted by a court-appointed special prosecutor after U.S. Attorney General Janet Reno refused to authorize the prosecution.

After a hearing, the trial court found Mitchell and the Morning Star guilty of criminal and civil contempt and fined them more than $600,000.

Mitchell and the Morning Star appealed to the U.S. Court of Appeals in Richmond (4th Cir.).

In July 2000, a three-judge panel of the court reversed the trial court, holding that Mitchell and the newspaper were not guilty of contempt of court. The court addressed the questions of criminal and civil contempt separately.

It noted that to establish the offense of criminal contempt, the government must prove beyond a reasonable doubt that the defendant violated “a decree” that was “definite, clear, specific, and left no doubt or uncertainty in the minds of those to whom it was addressed,” and that, in doing so, the defendant acted “willfully, contumaciously, intentionally, [and] with a wrongful state of mind.”

The court held that despite the argument of the special prosecutor and Conoco on appeal, the special prosecutor had argued at the lower court and the trial court had found that Mitchell had violated not the two-page sealing order, but the language affixed to the white envelope by one of Conoco’s paralegals.

“Given that Conoco’s paralegal was not vested with any authority over court personnel, the warning cannot even be characterized as ‘a directive to court personnel and clerk’s office employees,'” the appellate court stated.

As additional grounds to strike the contempt finding, the court explained that substantial evidence does not exist to support a conclusion that the warning “TO BE OPENED ONLY BY THE COURT” is “definite, clear, [and] specific,” much less so clear as to “leave no doubt or uncertainty in the minds of those to whom it was addressed,” and that there was insufficient evidence to support the conclusion that Mitchell “acted willfully, contumaciously, intentionally and with a wrongful state of mind.”

Having overturned the criminal contempt finding, the court next addressed the civil contempt penalties. To establish civil contempt, the accused must have had knowledge of a valid decree of the court and knowingly violated it. The court agreed with Mitchell and the Morning Star‘s contention that the order was not a valid decree because the trial court did not follow the proper Fourth Circuit procedures for entering a sealing order.

“Despite the Morning Star’s demonstrated interest in the case, no public notice of the parties’ joint motion to seal the settlement agreement was given; no opportunity for interested parties to object was provided; there is no indication that the district court considered less drastic alternatives to sealing the agreement; and the court’s sealing order did not identify any specific reasons or recite any factual findings justifying the court’s decision to override the public’s right of access to the settlement documents,” the court held.

In conclusion, the court explained the scope of its decision reversing all penalties against Mitchell and the Morning Star. “A citizen who requests public documents from an officer of the court, who herself evidences diligence in safeguarding the confidences of the court, and is given an envelope that once was sealed but has been previously opened and is at the time open and denominated as such, is entitled to presume that that envelope and its contents are publicly available material, at least absent proof of knowledge otherwise,” the court concluded. “No citizen is responsible, upon pain of criminal and civil sanction, for ensuring that the internal procedures designed to protect the legitimate confidences of government are respected.”