Newsline v. Garlock Sealing Techs. LLC

Newsline v. Garlock Sealing Techs. LLC

Opinion

 [*360]  MEMORANDUM OF DECISION and ORDER

THIS MATTER is before the court on a number of motions and appeals from the  [*361]  Bankruptcy Court for the Western District of North Carolina, Honorable Judge George R. Hodges, Senior  [**6] United States Bankruptcy Judge Presiding.

FINDINGS and CONCLUSIONS

I. Group I: Appeals Related to Access to Court Proceedings and Filings

For a number of years, Judge Hodges has presided over the bankruptcy of Garlock Sealing Technologies LLC ("Garlock") and last year, in performance of those duties, conducted an estimation trial or hearing The purpose of that hearing was to make a reasonable and reliable aggregate estimate of Garlock's liability for present and future mesothelioma claims. A central issue in the trial was whether consideration of Garlock's past mesothelioma settlements constituted a reliable method for estimating Garlock's present and future liability.

In the run up to making such determination, allegations surfaced that national counsel for mesothelioma victims had engaged in fraud, deceit, and other activities prohibited by the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, in settling their clients' claims with Garlock. While claims of fraud and violations of RICO are common in federal civil litigation and seldom garner any attention from the public, the allegations in Garlock were of interest to the public, the press, and other  [**7] still solvent enterprises that were subject to asbestos related claims and had dealings with these attorneys.

As a corollary to its appeal, Legal Newsline asks this court to determine the source of the right of access, be it the common-law presumption which favors access to all judicial proceedings and filings or the First Amendment guarantee of access. The public right of access has two components: first, the right of access protects the public's ability to oversee and monitor the workings of the federal courts, Columbus—Am. Discovery Grp. v. Atl. Mut. Ins. Co., 203 F.3d 291, 303 (4th Cir.2000) (finding that "[p]ublicity of such records, of course, is necessary in the long run so that the public can judge the product of the courts in a given case."); and second, public access promotes the institutional integrity of the judiciary. United States v. Cianfrani, 573 F.2d 835, 851 (3d Cir.1978) (holding that "[p]ublic confidence [in the judiciary] cannot long be maintained where important judicial decisions are made behind closed doors ...."). The Court of Appeals for the Fourth Circuit has long held that "the rights of the news media ... are coextensive with and do not exceed those rights  [**8] of members of the public in general." In re Greensboro News Co., 727 F.2d 1320, 1322 (4th Cir.1984). Indeed, anyone, be they a reporter or a member of the general public, who "seek[s] and is denied access to judicial records sustains an injury." Doe v. Public Citizen, 749 F.3d 246, 263 (4th Cir. 2014). However, Legal Newsline's request that this court make such determination as to the source of the right of access in the first instance would require fact finding that is not appropriate and perhaps not possible on appellate review. Indeed, it appears that the Fourth Circuit routinely remands that issue to the trial court for determination. Stone v. University of Maryland Medical System Corp., 855 F.2d 178, 181 (4th Cir. 1988) (holding that "[o]n remand, it [the district court] must determine the source of the right of access with respect to each document sealed. Only then can it accurately weigh the competing interests at stake.").

Prior to the estimation trial, Legal Newsline filed its Emergency motion to keep the Estimation Trial open to the public, which Judge Hodges denied July 31,  [*362]  2013. Legal Newsline filed that motion in response to the bankruptcy court's earlier decision to close  [**9] the courtroom to the media and the public during a witness's testimony. Such denial of the first motion resulted in Legal Newsline's "first appeal," 3:13cv464, which asks whether the bankruptcy court's closure of the courtroom and denial of tis motion violated the substantive and procedural protections associated with the First Amendment right to attend court proceedings. As discussed below, the court agrees with Legal Newsline that such proceedings were improperly closed, will reverse the closure and the denial of Legal Newsline's motion, and remand the Order appealed from to Judge Hodges for further consideration in light of prevailing law, in the manner discussed below.

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