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    15374cv

    Bernsteinv.BernsteinLitowitzBerger&GrossmannLLP,etal.

    1

    In the2

    United States Court of Appeals3

    For the Second Circuit4________5

    6

    AUGUSTTERM,20157

    8

    SUBMITTED:OCTOBER23,20159

    DECIDED:FEBRUARY24,201610

    11

    No.150374cv12

    13

    BRUCEBERNSTEIN,14

    Plaintiff,15

    16

    v.17

    18

    BERNSTEINLITOWITZBERGER&GROSSMANNLLP,MAXBERGER,19

    STEVEN

    SINGER,

    SALVATORE

    GRAZIANO,

    EDWARD

    GROSSMANN

    AND20

    GERALDSILK,21

    DefendantsAppellants.*22

    ________23

    24

    AppealfromtheUnitedStatesDistrictCourt25

    fortheSouthernDistrictofNewYork.26

    No.14Civ.6867(VEC)ValerieE.Caproni,Judge.27

    ________28

    29

    Before: KEARSE,WALKER,andCABRANES,CircuitJudges.30

    ________31

    * TheClerkofCourt isrespectfullydirected toamend thecaption to

    conformtotheabove.

    Case 15-374, Document 66-1, 02/24/2016, 1711688, Page1 of 27

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    2 No.15374cv

    AttorneyBruceBernsteinsuedhisformerlawfirm,Bernstein1

    Litowitz Berger & Grossmann LLP (BLB&G), and five of its2

    partners,allegingthathehadbeenforcedtoresignafterblowingthe3

    whistleonwhathe considered tobe the firmsunethical litigation4

    conduct. Thefirmarguedthattherelevantfactswereconfidential5

    client information that could notbe disclosedby Bernstein in a6

    complaintraisingclaimsof, interalia,retaliatorybreachofcontract.7

    Bernstein sought and obtained permission from theUnited States8

    District Court for the Southern District of New York (Kevin P.9

    Castel, Judge) to file a complaint under seal, with the sealing to10

    automatically expire fourteen days after service of process on11

    defendants,unless extendedby the court. Thirteendays after the12

    complaint was filed, the parties settled the suit on confidential13

    terms. Thepartiesthensoughtanorderdirectingtheclerkofcourt14

    toclosethefilewhileleavingitpermanentlysealed.15

    TheUnitedStatesDistrictCourt for theSouthernDistrictof16

    NewYork (Valerie E.Caproni,Judge) denied the parties request.17

    The district court concluded that the complaint is a judicial18

    documentsubjecttoapresumptionofpublicaccessundertheFirst19

    Amendmentandthecommonlaw. Thedistrictcourtalsoheldthat20

    keeping the complaint secret was not necessary to protect21

    confidential client communications. Finally, applying the22

    balancing test for thecommonlaw rightofaccess, thecourt found23

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    3 No.15374cv

    that the weak private interests at stake did not rebut the1

    presumption of access, which is supportedby substantial public2

    interests. WeagreewiththedistrictcourtandAFFIRM.3

    ________4

    5

    GregoryP.Joseph,PamelaJarvis, andCourtney6

    A. Solomon, on the brief,JosephHageAaronson7

    LLC,NewYork,NY,forDefendantsAppellants.8

    ________9

    10

    JOHN

    M.

    WALKER,

    JR.,

    Circuit

    Judge:11

    AttorneyBruceBernsteinsuedhisformerlawfirm,Bernstein12

    Litowitz Berger & Grossmann LLP (BLB&G), and five of its13

    partners,allegingthathehadbeenforcedtoresignafterblowingthe14

    whistleonwhathe considered tobe the firmsunethical litigation15

    conduct. Thefirmarguedthattherelevantfactswereconfidential16

    client information that could notbe disclosedby Bernstein in a17

    complaintraisingclaimsof, interalia,retaliatorybreachofcontract.18

    Bernstein sought and obtained permission from theUnited States19

    District Court for the Southern District of New York (Kevin P.20

    Castel, Judge) to file a complaint under seal, with the sealing to21

    automaticallyexpire

    fourteen

    days

    after

    service

    of

    process

    on

    22

    defendants,unless extendedby the court. Thirteendays after the23

    complaint was filed, the parties settled the suit on confidential24

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    4 No.15374cv

    terms. Thepartiesthensoughtanorderdirectingtheclerkofcourt1

    toclosethefilewhileleavingitpermanentlysealed.2

    TheUnitedStatesDistrictCourt for theSouthernDistrictof3

    NewYork (Valerie E.Caproni,Judge) denied the parties request.4

    The court concluded that the complaint is a judicial document5

    subject to a presumption of public access under the First6

    Amendmentandthecommonlaw. Thedistrictcourtalsoheldthat7

    keeping the complaint secret was not necessary to protect8

    confidential client communications. Finally, applying the9

    balancing test for thecommonlaw rightofaccess, thecourt found10

    that the weak private interests at stake did not rebut the11

    presumption of access, which is supportedby substantial public12

    interests. WeagreewiththedistrictcourtandAFFIRM.13

    BACKGROUND14

    Werecitethefactsallegedinthecomplaintthatarenecessary15

    to understand the substantial public interest in the complaints16

    disclosure, as the complaint in a case discloses the nature of the17

    proceeding. We emphasize, however, that at this point in the18

    proceedingthefactsallegedareexactlythatsimplyallegations,the19

    truthofwhichhasnotbeenproven.20

    BernsteinbecameofcounselwithBLB&Gin2008. Atthefirm,21

    he worked on In re Satyam Computer Services, Ltd., Securities22

    Litigation, a class action which arose from a massive financial23

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    5 No.15374cv

    scandalinvolving...SatyamComputerServices,Ltd.(Satyam),one1

    of Indias largest information technology and outsourcing2

    companies. 609 F.Supp.2d 1375, 1375 (J.P.M.L. 2009). Suits3

    brought by various investors against Satyam and others were4

    consolidated in the SouthernDistrict ofNewYorkby theJudicial5

    PanelonMultidistrictLitigation. Id. InMay2009, theMississippi6

    PublicEmployeesRetirementSystem(MPERS)wasappointedas7

    oneof four leadplaintiffs in thecase. In reSatyamComput.Servs.,8

    Ltd.,Sec.

    Litig.,1:09md02027BSJ[Doc.No.8](May12,2009). The9

    Office of the Mississippi Attorney General (AGs Office) was10

    insidecounselforMPERS. BLB&Gwasoutsidecounsel.11

    In September 2010, BLB&G partner Steven Singer informed12

    Bernstein that a solo practitioner based in Jackson, Mississippi,13

    Vaterria Martin, would act as local counsel and occasionally14

    checkonthestatusofthecaseforMPERS,eventhoughBLB&Gwas15

    alreadyproviding this informationdirectly to theAGsOffice. In16

    December2010,theleadplaintiffsintheSatyamclassactionreached17

    anagreementinprincipletosettlewithSatyamfor$125million. On18

    February 16, 2011, Satyam and the lead plaintiffs executed a19

    stipulationsettingforththetermsoftheagreement.120

    1 On March 8, 2011, the lead plaintiffs reached an agreement in

    principle to settle with Satyams codefendantsvarious

    PricewaterhouseCoopers entities thatwere Satyams auditorsfor $25.5

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    6 No.15374cv

    On March 1, 2011after the agreement in principle with1

    Satyamhadbeenreachedand thestipulationhadbeenexecuted2

    another BLB&G partner, Max Berger, assigned two unnecessary3

    legal research projects to Martin. Bernstein protested the4

    assignment,but his concernswere dismissed,with Singer saying,5

    Do you everwant us toworkwithMississippi again? Martin6

    ultimately produced an eighteenpagememorandum onApril 26,7

    2011, severalweeksafter the casewas settled inprinciple. Singer8

    andBergeragreedwithBernsteinthatthememorandumaddressed9

    thewrongpleading,containednomeaningfulanalysis,andwas10

    ridiculous. Martinreportedatotalof207hoursworkonthecase,11

    primarilyspentproducingtheuselessmemorandum.12

    After the settlement became final, Bernstein learned from13

    BLB&Gs comptroller that the firmhadpaidMartin$112,500 from14

    theproceedsoftheSatyamclasssettlement. BLB&Gdidnotdisclose15

    the payment to the court in its August 1, 2011 fee petition.216

    million. The district court entered amended preliminary settlement

    approval orders on March 21, 2011 and May 12, 2011. In re Satyam

    Comput.Servs.,Ltd.,Sec.Litig.,1:09md02027BSJ [Docs.No.259&319].

    ThefinaljudgmentandorderastoSatyamissuedonSeptember13,2011.

    Id.[Doc.No.363].2 Formerly,the localcivilrulesoftheSouthernDistrictofNewYork

    requiredthatallfeeapplicants inderivativeandclassactionsdiscloseto

    the court any fee sharing agreements with anyone. By a rule

    amendmenteffectiveJuly11,2011threeweeksbeforeBLB&Gsubmitted

    its fee petitionthe automaticdisclosure provision was repealed as to

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    7 No.15374cv

    Concerned with the ethical and legal implications of the1

    arrangement, Bernstein inquired further. He learned thatMartin2

    hadbeenadmittedtothebaronlyfiveyearsbeforeSatyamwasfiled,3

    andwasmarried toDeshunT.Martin,a specialassistantattorney4

    generalintheAGsOffice.5

    Bernsteinallegedlyraisedhisethicalconcernsagaininseveral6

    contentiousmeetingswithpartners. ThefirmsleadershipBerger,7

    SalvatoreGraziano,andEdwardGrossmanndismissedBernsteins8

    misgivings. GrazianoandBergerinformedBernsteinthattherewas9

    localpressureontheMississippiAGtouselocalfirms,toldhim10

    you need to drop this, andmade a veiled threat to blackball11

    Bernsteinifhebecameawhistleblower.12

    InDecember2011,BernsteinreportedhisconcernstotheU.S.13

    Attorneys Office for the Southern District of New York. Soon14

    afterward,Bernsteinbecame concernedaboutBLB&Gs conduct in15

    anotherclassaction,inwhichthefirmallocatedworktoMississippi16

    firmsthatlackedrelevantexperience.17

    classactions. SeeS.D.N.Y.LocalCivilRule23.1(repealedeffectiveJuly11,

    2011);S.D.N.Y.LocalCivilRule23.1.1. AccordingtotheJointCommittee

    on Local Rules note, the committee recommended that the automatic

    disclosure rule as applied to class actions be deleted because it is

    redundant [with] ... Fed.R.Civ.P.23(h). FederalRule23(h), inturn,

    doesnotmandateautomaticdisclosureofallfeesharingarrangementsin

    classactions.

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    8 No.15374cv

    Bernsteinclaimsthattheissuetookitstollonhisrelationship1

    with the firms leadership. InOctober2012,afterrealizingthathis2

    terminationwas inevitable, he resigned from the firm. Bernstein3

    alleges that after his departure, BLB&G interfered with his4

    relationshipwitha leadplaintiff inone case,andBLB&Gpartners5

    made various threats toward himbefore attempting to buy [his]6

    silencebyofferinghim compensation froma future settlement in7

    an unrelated case on the condition that he keep the Mississippi8

    counselarrangementsecret. Bernsteindeclined.9

    At two mediation sessions heldbefore Bernstein filed suit,10

    BLB&G expressed itsbelief thatBernsteins claimswerebased on11

    facts learned in the course of representation of a client and thus12

    couldnotbedisclosedunder theNewYorkRules ofProfessional13

    Conduct. Bernstein, by contrast, maintained that the facts14

    underlyinghisclaimswereneitherprivilegednorconfidentialand15

    thathewasfreetodisclosethemincourtfilings.16

    Notwithstanding Bernsteins position that he was free to17

    disclosethe factsat issue,Bernstein filedamotionwith thedistrict18

    courtpriortofilingthecomplaintrequestingoutofanabundance19

    ofcautiontheentryofanordersealingallmaterialsfiledinthis20

    caseuntiltheCourtresolvestheseissuesofconfidentiality.21

    JudgeKevinCastel, sitting inPart I,granted themotion on22

    July24,2014,before thesuitwas filed. Noting thatit isdoubtful23

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    9 No.15374cv

    thatsealingisappropriate,thedistrictcourtneverthelessoutofan1

    abundance of caution ordered that [t]he action may be filed2

    under sealand thesealingshall expirewithin14daysofserviceof3

    process on defendants unless extendedby order of thejudge to4

    whomthecaseisassigned.5

    OnAugust22,2014,Bernstein filedthecomplaintunderseal6

    againstBLB&GandfiveindividualBLB&Gpartners:Berger,Singer,7

    Graziano,Grossmann, andGerald Silk. He alleged, in substance,8

    thatdefendants(1)engagedinakickbackschemeinviolationofthe9

    Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.10

    1962(c),1964(c),and(2)breachedtheircontractwithBernsteinin11

    retaliationforreportinganethicalbreach.12

    After filing the sealed complaint, theparties returned to the13

    negotiating table. AsJudgeCaproni, towhom the casehadbeen14

    assigned,wrote:Armednowwiththetickingtimebombprovided15

    by the Courts order, Bernstein was able to accomplish what he16

    could not without the assistance of a filing in this Court: he17

    negotiated a mutually acceptable settlement. The settlement18

    agreement includes a provision that voids the settlement if [the]19

    actionisunsealedorotherwisebecomespublic.20

    On September 4, 2014one day short of the automatic21

    unsealingprovidedforbythecourtsJuly24orderBernsteinfiled22

    anoticeofdismissalpursuanttothesettlement. Thefollowingday,23

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    10 No.15374cv

    thepartiesjointlymovedforanorderdirectingtheclerkofcourtto1

    close the file without ordering the file unsealed. The parties2

    apparentlybelievedthatobtainingastipulateddismissalbeforethe3

    expirationof the sealingorderwouldensure that the [c]omplaint4

    wouldneverseethelightofday.5

    OnJanuary12,2015,followingahearingandmultiplerounds6

    ofbriefing, the district court issued its opinion and order. After7

    determining that ithadjurisdiction, thedistrictcourtheld that the8

    complaintisajudicialdocumentsubjecttoapresumptionofpublic9

    accessunderboththeFirstAmendmentandthecommonlaw. Next,10

    the district court held that the complaint does not contain11

    confidential client communications or information and therefore12

    publicaccesstothecomplaintwouldnotplausiblyimplicatevalues13

    higher thanFirstAmendmentvalues. Finally, thedistrict court14

    held thateven if theFirstAmendmentpresumptiondidnotapply,15

    the commonlaw presumption of access to judicial documents16

    wouldrequirethecomplainttobepublicbecausetheconsiderable17

    public interest indisclosureoutweighstheweakprivate interests18

    favoringsecrecy. accordingly, thedistrictcourtdenied theparties19

    requesttocontinuethesealingorderanddirectedtheclerkofcourt20

    tounsealthecasethirtydaysfromtheissuanceofitsorder,withthe21

    thirtydayperiodtobetolledduringthependencyofanyappeal.22

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    Defendants timelyappealed. Bernsteinhasnot filedabrief.1

    Although he continues to contest defendants claim that the2

    complaint contains confidential client information, he supports3

    BLB&Gsposition that the case should remain sealed so as not to4

    riskunwindingthesettlement.5

    DISCUSSION6

    Thesoleissueiswhetherthedistrictcourtcorrectlydeniedthe7

    partiesrequesttocontinuethesealingorder. Inreviewingadistrict8

    courts order to seal or unseal, we examine the courts factual9

    findings for clear error, its legal determinations de novo, and its10

    ultimatedecisiontosealorunsealforabuseofdiscretion. SeeUnited11

    Statesv.Doe,63F.3d121,125(2dCir.1995);UnitedStatesv.Amodeo,12

    44F.3d141,146(2dCir.1995)(AmodeoI).13

    I. Pleadingsasjudicialrecords.14

    Wefirstconsiderwhetheracomplaint isajudicialdocument15

    subject to a presumption of access and easily conclude that a16

    complaint issuchadocument. Ajudicialdocumentorjudicial17

    record is a filed item that is relevant to the performance of the18

    judicial function and useful in the judicial process. Lugosch v.19

    PyramidCo.

    of

    Onondaga, 435F.3d 110, 119 (2dCir. 2006) (internal20

    quotation marks omitted). Such documents are presumptively21

    publicsothatthefederalcourtshaveameasureofaccountability22

    andsothatthepublicmayhaveconfidenceintheadministrationof23

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    12 No.15374cv

    justice. UnitedStatesv.Amodeo,71F.3d1044,1048 (2dCir.1995)1

    (AmodeoII). Indeterminingwhetheradocumentisajudicialrecord,2

    weevaluatetherelevanceofthedocumentsspecificcontentstothe3

    nature of theproceeding and thedegree towhich access to the4

    [document]wouldmateriallyassistthepublicinunderstandingthe5

    issues before the ... court, and in evaluating the fairness and6

    integrityofthecourtsproceedings. NewsdayLLCv.Cty.ofNassau,7

    730F.3d156,16667(2dCir.2013).38

    Pleadingsplainlymeet theNewsday test for reasons that are9

    readily apparent. A complaint, which initiates judicial10

    proceedings,isthecornerstoneofeverycase,theveryarchitectureof11

    the lawsuit,andaccesstothecomplaintisalmostalwaysnecessary12

    ifthepublicistounderstandacourtsdecision. Fed.TradeCommn13

    v.AbbVieProds.LLC,713F.3d54,62(11thCir.2013). Moreover, in14

    commencinganactionandthusinvokingthecourtsjurisdiction,the15

    parties substantive legal rights and duties maybe affected. For16

    example, a large number of lawsuits ... are disposed of at the17

    motiontodismiss stage, where a court determines solely on the18

    3 Whilethemerefilingofapaperordocumentwiththecourtis

    insufficienttorenderthatpaperajudicialdocumentsubjecttotherightof

    publicaccess,Lugosch,435F.3dat119(internalquotationmarksomitted),

    adocumentisjudicialnotonlyifthejudgeactuallyrelieduponit,butalso

    ifthejudgeshouldhaveconsideredorreliedupon[it],butdidnot. Id.at

    123 (internal quotation marks omitted). Such documents are just as

    deserving of disclosure as those that actually entered into thejudges

    decision. Id.(internalquotationmarksomitted).

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    13 No.15374cv

    basis of the complaint whether the plaintiff has made sufficient1

    factualallegations to statea claim. Id. The filingofa complaint2

    triggers other legal consequences aswell. E.g.,Kronisch v.United3

    States, 150 F.3d 112, 126 (2d Cir. 1998) (obligation to preserve4

    evidence);Mattel,Inc.v.LouisMarx&Co.,353F.2d421,424(2dCir.5

    1965) (when duplicative actions are commenced, the firstfiled6

    complaint normally determines the district of adjudication). For7

    these reasons, the modern trend in federal cases is to classify8

    pleadings in civil litigation (other than discovery motions and9

    accompanyingexhibits)asjudicialrecords. IDTCorp.v.eBay,70910

    F.3d 1220, 1223 (8th Cir. 2013); accord AbbVie, 713 F.3d at 626311

    (collectingcases);UnitedStatesv.Martin,746F.2d964,968 (3dCir.12

    1984).13

    Thefactthatasuitisultimatelysettledwithoutajudgmenton14

    themeritsdoesnotimpairthejudicialrecordstatusofpleadings.15

    It is true that settlement of a case precludes the judicial16

    determinationof thepleadingsveracityand legalsufficiency. But17

    attorneysandothers submittingpleadingsareunderanobligation18

    toensure,whensubmittingpleadings,thatthefactualcontentions19

    [made]haveevidentiarysupportor,ifspecificallysoidentified,will20

    likelyhave evidentiary support after a reasonable opportunity for21

    further investigation or discovery. Fed. R. Civ. P. 11(b)(3).22

    Inanyevent,thefactoffilingacomplaint,whateveritsveracity,isa23

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    14 No.15374cv

    significant matter of record. Even in the settlement context, the1

    inspection of pleadings allows the public [to] discern the2

    prevalence of certain types of cases, the nature of the parties to3

    particularkindsofactions,informationaboutthesettlementratesin4

    differentareasoflaw,andthetypesofmaterialsthatarelikelytobe5

    sealed. HartfordCourantCo.v.Pellegrino,380F.3d83,96 (2dCir.6

    2004). Thus,pleadingsareconsideredjudicialrecordsevenwhen7

    thecaseispendingbeforejudgmentorresolvedbysettlement. IDT8

    Corp.,709F.3dat1223(citationsomitted);accordStonev.

    Univ.

    of

    Md.

    9

    Med.Sys.Corp., 855F.2d 178, 180n.* (4thCir. 1988);LaurieDor,10

    SecrecybyConsent:TheUseandLimitsofConfidentialityinthePursuit11

    ofSettlement,74NOTREDAMEL.REV.283,378(1999).12

    We thereforehold thatpleadingseven insettledcasesare13

    judicialrecordssubjecttoapresumptionofpublicaccess.14

    II. Presumptiverightofaccesstothecomplaint.15

    A[f]indingthatadocumentisajudicialdocumenttriggers16

    a presumption of public access, and requires a court to make17

    specific,rigorousfindingsbeforesealingthedocumentorotherwise18

    denying public access. Newsday, 730 F.3d at 167 n.15. The19

    presumption of access to judicial records is secured by two20

    independent sources: the FirstAmendment and the common law.21

    Lugosch, 435 F.3d at 121. The analysis with respect to each is22

    somewhatdifferent.23

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    15 No.15374cv

    A.

    TheFirstAmendmentpresumptiverightofaccess.1

    Defendants argue that the First Amendment presumption2

    doesnotapplyhere. Wedisagree.3

    We have articulated two different approaches for4

    determiningwhether thepublicand thepressshouldreceiveFirst5

    Amendment protection in their attempts to access certainjudicial6

    documents. Id.at120(internalquotationmarksomitted). Thefirst7

    approach considers experience and logic: that is, whether the8

    documents have historicallybeen open to the press and general9

    publicandwhetherpublicaccessplaysasignificantpositiverolein10

    the functioningof theparticularprocess inquestion. Id. (internal11

    quotation marks omitted). The second approach considers the12

    extent towhich thejudicial documents are derived from or are a13

    necessary corollary of the capacity to attend the relevant14

    proceedings. Id.(alterationsandinternalquotationmarksomitted).15

    Acomplaintespecially inacase that isultimatelysettled16

    is best evaluated under the experience and logic approach,17

    because the alternative approach is relevant only after court18

    proceedingshave commenced. Experienceand logicboth support19

    accesshere. Complaintshavehistoricallybeenpublicly accessible20

    bydefault,evenwhen theycontainarguablysensitive information.21

    Cf.SealedPlaintiff v.SealedDefendant, 537F.3d 185, 18990 (2dCir.22

    2008). Defendants acknowledge that since the adoption of the23

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    16 No.15374cv

    FederalRulesofCivilProcedurein1938,federallawsuitshavebeen1

    commencedby the filingof the complaint. Fed.R.Civ.P.3. But2

    they argue that since many federal courts did not require3

    complaints tobe filed unless and untiljudicial intervention was4

    soughtbefore1938,thereisnostronghistoricaltraditionofpublic5

    accesstocomplaints. Thisargumentisunpersuasive. Itignoresthe6

    historyofthelasteightdecadesundertheFederalRules. Moreover,7

    the fact thatpre1938 lawmayhaveallowedactions to commence8

    without the filing of a complaint says nothing aboutwhether the9

    publicat that timehadaccess todocuments thatwerepermittedor10

    requiredtobefiled.11

    Logical considerations also support apresumption ofpublic12

    access. Publicaccesstocomplaintsallowsthepublictounderstand13

    the activity of the federal courts, enhances the court systems14

    accountabilityand legitimacy,and informs thepublicofmattersof15

    public concern. Conversely, a sealed complaint leaves the public16

    unawarethataclaimhasbeenleveledandthatstatepowerhasbeen17

    invokedand public resources spentin an effort to resolve the18

    dispute. These considerations indicate that public access to the19

    complaint and other pleadings has a significant positive role,20

    Lugosch,435F.3dat120 (internalquotationmarksomitted), in the21

    functioningofthejudicialprocess.22

    23

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    17 No.15374cv

    B.

    Thecommonlawpresumptionofaccess.1

    The district court concluded that in addition to the First2

    Amendmentpresumptionofaccess, the commonlawpresumption3

    of access attached. Defendants contend that the commonlaw4

    presumptionlacksweighthereand thatunsealing thecomplaint5

    constitutedanabuseofdiscretion.6

    Thecourtshavelongrecognizedthegeneralrighttoinspect7

    andcopypublicrecordsanddocuments, includingjudicialrecords8

    anddocuments. Nixonv.

    Warner

    Commcns,

    Inc.,435U.S.589,5979

    (1978) (footnote omitted). This right is said to predate the10

    Constitution.AmodeoI,44F.3dat145.11

    The right to inspect and copy judicial records is not12

    absolute, however, and a court may exercise its supervisory13

    powerover itsownrecordsand files todenyaccesswherecourt14

    filesmighthavebecomeavehicle for improperpurposes. Nixon,15

    435U.S.at598(internalquotationmarksomitted). Oncethecourt16

    hasdeterminedthatthedocumentsarejudicialdocumentsandthat17

    therefore a common law presumption of access attaches, it must18

    determinetheweightofthatpresumption. Lugosch,435F.3dat119.19

    Theweightofthepresumptionisafunctionof(1)theroleof20

    thematerialatissueintheexerciseofArticleIIIjudicialpowerand21

    (2)theresultantvalueofsuchinformationtothosemonitoringthe22

    federal courts,balanced against competing considerations such23

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    astheprivacyinterestsofthoseresistingdisclosure. Lugosch,4351

    F.3dat11920(internalquotationmarksomitted);seealsoAmodeoII,2

    71F.3dat104951. Wetakeeachfactorinturn.3

    Where a documents role in the performance ofArticle III4

    duties is negligible ..., theweight of thepresumption is low.5

    AmodeoII,71F.3dat1050. Conversely,wheredocumentsdirectly6

    affectanadjudication,id.at1049,orareusedtodeterminelitigants7

    substantive legal rights, thepresumption of access is at its zenith,8

    Lugosch, 435 F.3d at 121, and thus can be overcome only by9

    extraordinary circumstances,Amodeo II,71F.3dat1048 (internal10

    quotationmarksomitted). The locusof the inquiry is, in essence,11

    whether the document is presented to the court to invoke its12

    powersoraffectitsdecisions. Id.at1050.13

    Applying this standard, we have determined that a report14

    submitted to a court in connection with a summaryjudgment15

    motion isentitled toa strongpresumptionofaccess. Joyv.North,16

    692F.2d880,894(2dCir.1982). Sincesuchadocumentisthebasis17

    for theadjudication,only themostcompelling reasonscanjustify18

    sealing. Id. Bycontrast,documentssuchasthosepassedbetween19

    theparties indiscoveryoftenplaynorole in theperformanceof20

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    19 No.15374cv

    Article III functions and so the presumption of access to these1

    recordsislow.AmodeoII,71F.3dat1050.42

    Under the twofactorLugoschapproach,weeasilydetermine3

    that theweightof thepresumptionhere isstrong. Pleadings,such4

    as thecomplainthere,arehighlyrelevant to theexerciseofArticle5

    IIIjudicialpower. Ofalltherecordsthatmaycomebeforeajudge,a6

    complaintisamongthemostlikelytoaffectjudicialproceedings. It7

    is the complaint that invokes the powers of the court, states the8

    causesofaction,andpraysforrelief. Wehavealreadydiscussedthe9

    secondbasissupportingtheweightofthepresumption:theutilityof10

    thecomplainttothosewhomonitortheworkofthefederalcourts.11

    Wenowmove to the cruxof theweightofthepresumption12

    analysis: balancing the value of public disclosure and13

    countervailing factors such as (i)the danger of impairing law14

    enforcement orjudicial efficiency and (ii)the privacy interests of15

    thoseresistingdisclosure. Id.;seealsoAmodeoI,44F.3dat14647.16

    In striking thisbalance,we agreewith the district courts careful17

    opinion that the value of public disclosure is substantial and the18

    privacyinterestsatstakeareminimal.19

    4 Cf.UnitedStatesv.GlensFallsNewspapers, Inc.,160F.3d853,857

    (2dCir.1998)(settlementnegotiationsanddraftagreementsdonotcarry

    a presumption of public accessbecause [t]hejudge cannot act upon

    thesediscussionsordocumentsuntiltheyarefinal,andthejudgemaynot

    beprivytoallofthem).

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    20 No.15374cv

    As the district court noted, the complaint alleges that1

    defendants,ascounselforastateemployeespensionfundthatwas2

    aleadplaintiffinamajorsecuritiesclassaction,regularlyengagein3

    akickbackschemewiththeMississippiAttorneyGeneralsOffice,a4

    public entity whose constituents might otherwisebe in the dark5

    aboutthearrangement. Whethertrueornot,thisallegationwould6

    naturallybeoflegitimateinteresttothepublic(especiallythosewho7

    contribute to and receive payments from MPERS) and to federal8

    courtsinthefuture(e.g.,thoseconsideringwhethertonameBLB&G9

    as lead class counsel or find MPERS to be an adequate class10

    representativeinfutureclassactions). Moreover,thecomplaintalso11

    didnot come within [the] courtspurview solely to [e]nsure [its]12

    irrelevance. Lugosch, 435 F.3d at 119 (internal quotation marks13

    omitted). Although the speedy settlementof the claimmeant that14

    thecourtdidnotadjudicatethemeritsofthecase,thedistrictcourts15

    routinely engage in adjudicatory duties even in connection with16

    complaintsthataredismissedorsettled.17

    In the circumstances here presented, the interests favoring18

    secrecy,meanwhile,areweak. Thisisnotacaseinwhichdisclosure19

    would reveal details of an ongoing investigation, pose a risk to20

    witnesses, endanger national security, or reveal trade secrets. See21

    AmodeoI,44F.3dat147. Moreover,aswewillshow,thecasedoes22

    not implicate the duty to protect either privileged attorneyclient23

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    21 No.15374cv

    materialorconfidentialclientinformation. Oncetheserationalesfall1

    away,onlyinsubstantialargumentsremain.2

    Onappeal,defendantsspendmuchoftheirbriefarguingthat3

    thecomplaintisunreliableandcontestingthetruthoftheallegations4

    inthecomplaint. Theyarguethatunsealingthecomplaintassumes5

    the truthof theallegationswithin it. Butunsealingdoesnosuch6

    thing. Asthedistrictcourtnoted:7

    Complaints canand frequently do8

    contain allegations that range from9

    exaggerated towholly fabricated. That is10

    the nature of judicial proceedingsnot11

    everything alleged by one party can or12

    shouldbetakenasground truth. Still, the13

    pleadings can and do properly frame the14

    proceeding and provide outerboundaries15

    ontheclaimsadvanced...andtheredress16

    sought.17

    18

    (Internal citation omitted). Following defendants logic to its19

    conclusion,moreover,wouldcreateanuntenableresultthesealing20

    ofall complaints inactions inwhich theplaintiffdoesnotprevail,21

    andallindictmentsinacriminalprosecutioninwhichthedefendant22

    isacquitted.23

    In sum, the district court engaged in a thoughtful and24

    extendedanalysisof the competing interestsat stake. Thedistrict25

    court concluded that (1)theweight of the presumption of public26

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    accessaccordedtothecomplaintwashighbecause(a)thedocument1

    washighlyrelevanttotheexerciseofArticleIIIjudicialpowerand2

    (b)thepublicinterestindisclosurewassubstantial,whiletheprivate3

    interests in secrecy areweak; and (2)BLB&G did not come forth4

    withasufficientrationaletorebutthisstrongpresumptionofaccess.5

    These conclusionswereamply supported,and there isnobasis to6

    disturbthem.7

    III. Sealingofthecomplaintisnotjustifiedinorderto8

    protectconfidential

    client

    information.9

    Onappeal,BLB&Grenewsitsargumentthataneedtoprotect10

    confidential client information justifies or requires continued11

    sealingofthecomplaint. Werejectthisclaim.12

    After Bernstein left BLB&G, George W. Nevillea special13

    assistantattorneygeneral inthecivil litigationdivisionoftheAGs14

    OfficeexchangedseveralletterswithBernsteinsattorney. Inthese15

    letters,NevilleorderedBernsteintokeeptheexistenceofthealleged16

    kickback scheme private, writing: As counsel for the State of17

    Mississippi ... and onbehalf of the State of Mississippi and its18

    agency MPERS, I am directing [Bernstein] not to disclose any19

    confidentialinformationhelearnedascounseltoMississippiandits20

    agencyMPERS.21

    Relying in part on these letters, defendants argued to the22

    district court that all or virtually all of the facts alleged in the23

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    23 No.15374cv

    complaint are confidential under the New York Rules of1

    ProfessionalConductandthuspermanentsealingisrequired.5 The2

    districtcourtrejectedthisclaim. Onappeal,defendantsrenewthis3

    confidentialityargument. Wereachthesameconclusionasdidthe4

    districtcourt.5

    Asa thresholdmatter,wenote thatdefendants rely in large6

    part on the conclusions of their legalethics expert made in a7

    declarationfiledinthedistrictcourt. Wedonotconsiderarguments8

    based on this declaration because of our longstanding rule that9

    experttestimonyon issuesofdomestic law isnottobeconsidered.10

    SeeAmnestyIntlUSAv.Clapper,638F.3d118,128n.12(2dCir.2011)11

    (holdingthatthecourtwasnotcompelledtoacceptalegalethics12

    experts declaration regarding whether an ethical duty hadbeen13

    triggered,becausethequestionwasforthecourttodecide),revdon14

    othergrounds,133S.Ct.1138(2013);seealsoHyghv.Jacobs,961F.2d15

    5 Rule 1.6 provides: A lawyer shall not knowingly reveal

    confidentialinformation,...orusesuchinformationtothedisadvantage

    ofaclientorfortheadvantageofthelawyerorathirdpersonunlessan

    exceptionapplies.N.Y.R.ProflConduct1.6(a)(3). Onesuchexceptionis

    whenpermittedorrequiredundertheseRulesor tocomplywithother

    law or court order. Id. at 1.6(b)(6). Confidential information is

    informationgainedduringor relating to the representationof a client,

    whatever itssource, that is (a)protectedby theattorneyclientprivilege,

    (b)likelytobeembarrassingordetrimentaltotheclientifdisclosed,or(c)

    informationthattheclienthasrequestedbekeptconfidential. Id.at1.6.

    Rule 1.9(c)provides that a lawyer shallnot use or reveal a former

    clientsconfidentialinformation,exceptastheRulespermitorrequire.

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    359,363(2dCir.1992);Marx&Co.v.TheDinersClub,Inc.,550F.2d1

    505,50911(2dCir.1977).62

    We now turn to the merits. To overcome the First3

    Amendment right of access, the proponent of sealing must4

    demonstrat[e] that closure is essential to preserve higher values5

    andisnarrowlytailoredtoservethatinterest. InreN.Y.TimesCo.,6

    828F.2d110,116(2dCir.1987) (internalquotationmarksomitted).7

    Broad and general findings and conclusory assertion[s] are8

    insufficient tojustifydeprivationofpublicaccess to the record, id.9

    (internal quotation marks omitted); specific, ontherecord10

    findingsarerequired. UnitedStatesv.ErieCnty.,763F.3d235,24311

    (2dCir.2014)(internalquotationmarksomitted).12

    Here,defendantsargue thatprotectionofconfidentialclient13

    communicationisahighervalue. Thisassertionraisesthequestion14

    ofwhetheranyconfidentialclientinformationisactuallyimplicated15

    inthiscase. Puttingthatasideforamoment,however,theassertion16

    itselfisquestionable. Wehaveimpliedbutneverexpresslyheld17

    that protection of the attorneyclient privilege is a higher value18

    under the First Amendment that may rebut the presumption of19

    access. E.g., id.; Lugosch, 435 F.3d at 125. Defendants go further,20

    6 To the extent that expert interpretations of the ethical rules are

    useful,theyarebetterpresentedinanamicusbrieforthepartiescitations

    totreatises,ratherthanadeclarationoraffidavit.

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    however, arguing that the protection of confidential client1

    information isahighervaluesupersedingtheFirstAmendment2

    rightofaccessandshouldhaveequalstatustotheattorneyclient3

    privilege.4

    The attorneyclientprivilege and theduty topreserve client5

    confidencesand secretsarenot coextensive,however. Doev.A6

    Corp.,330F.Supp.1352,1355(S.D.N.Y.1971),adoptedsubnom.Hallv.7

    A. Corp., 453 F.2d 1375, 1376 (2d Cir. 1972) (per curiam). The8

    broaderethicaldutytopreserveaclientsconfidences ...[,]unlike9

    the evidentiary privilege, exists without regard to the nature or10

    sourceof informationor the fact thatothersshare theknowledge.11

    Brennans, Inc. v.BrennansRestaurants, Inc., 590 F.2d 168, 172 (5th12

    Cir.1979)(internalquotationmarksomitted). Wesharethedistrict13

    courtsskepticismofBLB&Gsclaimthatthisbroaderethicalduty14

    shouldbetreatedidenticallyto...thenarrowerandmorevenerable15

    attorneyclientprivilege.16

    Inany event, even ifwewere toacceptdefendantshigher17

    valueargument,thecomplaintheredoesnotcontainconfidential18

    clientinformation.19

    First, the complaint does not include information that is20

    likelytobeembarrassingordetrimentaltotheclientifdisclosed.21

    N.Y. R. Profl Conduct 1.6. Of course, the information may be22

    seriouslyembarrassingtocounsel(BLB&GandtheAGsOffice),but23

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    not to the client,MPERS. Indeed, it is counterintuitive to suggest1

    thatMPERSwassomehowcomplicitinanallegedkickbackscheme2

    thatcaused it topay legal fees forunnecessarywork. Ifanything,3

    MPERSwouldappeartobenefitfromdisclosure;theworstthatcan4

    be saidabout it is that itwasunlucky in its choiceof counsel. In5

    sum, BLB&Gs claim about possible harm to MPERS is a mere6

    nakedconclusorystatementthatpublication...willinjureit. Joy,7

    692F.2dat894. Suchastatementfallswoefullyshortofthekindof8

    showingwhichraisesevenanarguableissueastowhetheritmaybe9

    keptunderseal. Id.10

    Moreover, the fact of representation is generally neither11

    privilegednorconfidential. SeeInreGrandJurySubpoenas,803F.2d12

    493, 496 (9th Cir. 1986). The complaints allegation that BLB&G13

    routinely assigns work to unqualified local counsel at the AGs14

    Offices direction relates to a business practice, not to a client15

    confidence.16

    Finally,as thedistrictcourtnoted,[t]herequest tokeep the17

    allegedkickback scheme confidentialwasmadeby thememberof18

    the Attorney Generals Office whose conduct is discussed in the19

    Complaint. Insofarasthisrequest(andperhapseventheunderlying20

    scheme)wasadverse to the interestsofMPERS, for thepurposeof21

    applying the ethical rule, the Court does not presume that the22

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    27 No.15374cv

    attorneys request for confidentiality signifies the clients desire1

    (citationomitted).2

    CONCLUSION3

    Forthereasonsstatedabove,weAFFIRMthejudgmentofthe4

    districtcourt.5

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