(CN) - Chrysler must provide compelling reasons why documents related to a putative class action over purported vehicle defects should be kept under seal, a divided Ninth Circuit ruled Monday.
In a federal complaint filed in 2013, lead plaintiff Peter Velasco claims the 2008 Chrysler 300 and 2011-2012 Jeep Grand Cherokee, Dodge Durango and Dodge Grand Caravan have defective Integrated Power Modules that cause the vehicles not to start and the engines to stall while driving.
Velasco and his fellow class members moved for injunction relief in 2014, asking that Chrysler be required to notify them of the known risks associated with its vehicles. Both sides attached confidential discovery documents filed to support and oppose the injunction, which was eventually denied by the district court.
The Center for Auto Safety - a Washington, D.C.-based lobbying group - intervened in the case and filed a motion to unseal the documents, arguing that only "compelling reasons" could keep the documents under seal.
On Monday, two of the three members of a Ninth Circuit panel agreed with the Center for Auto Safety and overturned U.S. District Judge Dean Pregerson's ruling that Chrysler only needed to show "good cause" to keep the documents under seal.
Under normal circumstances, a party seeking to seal a judicial record must provide compelling reasons for the confidentiality. The Ninth Circuit, however, has carved out an exception for sealed materials attached to a discovery motion unrelated to the merits of a case.
When documents are attached to such "non-dispositive" motions, the party seeking to seal is only required to show "good cause" for the confidentiality.
Writing for the panel majority, U.S. Circuit Judge John Owens, said Pregerson misinterpreted case law to limit the "compelling reasons" test to only those situations in which the motion is literally dispositive and brings about a final determination.
These include motions to dismiss, for summary judgment, and for judgment on the pleadings.
Under this literal interpretation, the public would not be presumed to have regular access to much of the litigation that occurs in federal court since most of it falls outside of the narrow category of "dispositive," Owens wrote.
"Although the apparent simplicity of the district court's binary approach is appealing, we do not read our case law to support such a limited reading of public access. Most litigation in a case is not literally 'dispositive,' but nevertheless involves important issues and information to which our case law demands the public should have access," Owens said.
Rather, precedent presumes that the compelling reasons standard should apply to most judicial records, which ensures the public's understanding of the judicial process and of significant public events, according to Owens.
Plenty of technically nondispositive motions - including the preliminary injunction in this case - require the court to address the merits of the case, often include the presentation of substantial evidence, and sometimes may even determine the outcome of a case, Owens said.
In this case, "(i)f plaintiffs had succeeded in their motion for preliminary injunction, they would have won a portion of the injunctive relief they requested in the underlying complaint, and that portion of their claim would have been resolved," Owens wrote.
Therefore, because the motion should have been considered dispositive, Chrysler must demonstrate compelling reasons, rather than good cause, to keep the documents under seal, Owens said.
In a dissenting opinion, U.S. Circuit Judge Sandra Ikuta said that the majority "invents a new rule, namely that a party cannot keep records under seal if they are attached to any motion that is 'more than tangentially related to the merits of the case,' unless the party can meet the 'stringent standard' of showing that compelling reasons support secrecy." (Emphasis in original.)
There is nothing ambiguous about the circuit's bright line rule that calls for the presumption of the public's right of access to be rebutted when a party attaches a sealed document to a nondispositive motion.
The majority's theory "that we are not bound by the literal meaning of the words in our opinions would, of course, deprive our precedent of any binding force. Such a theory erodes the concept that law can be applied as written, whether by the legislature or judges, and 'undermines the basic principle that language provides a meaningful constraint on public and private conduct,'" Ikuta wrote.
With the majority's ruling, "it is clear that no future litigant can rely on a protective order and will have to chart its course through discovery cautiously and belligerently, to the detriment of the legal system," Ikuta added.
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