Wal-Mart Class Action Defense Case-Savaglio v. Wal-Mart: Records Filed With Court In Labor Law Class Action Were Not Properly Sealed Thus Entitling News Agency To Access To Records Filed “Conditionally Under Seal” In Class Action California Court Holds

May 1, 2007 | By: Michael J. Hassen

California Appellate Court Holds Wal-Mart Defense Attorneys Failed to Properly Move to Seal Records Filed with Court During Litigation of Labor Law Class Action, Reversing Trial Court Order Sealing Class Action Records

In February 2001, a class action was filed against Wal-Mart in California state court alleging violations of various labor laws; defense and plaintiff attorneys stipulatedd to a confidentiality and protective order governing documents filed with the court during the class action litigation, and the trial court entered a Protective Order in February 2002. Savaglio v. Wal-Mart Stores, Inc., ___ Cal.App.4th ___ (Cal.App. April 9, 2007) [Slip Opn., at 2]. The Protective Order provided that certain documents filed in the class action would be “conditionally sealed” pending a motion for an order permanently sealing the records, id. The class action was vigorously fought, and Wal-Mart filed petitions with the California Court of Appeal for writ relief following the trial court order certifying the lawsuit as a class action and following the trial court order denying Wal-Mart’s motion for summary adjudication. Id., at 3. Defense attorneys did not seal any of the records filed with appellate court, id., at 1, 4, and did not file a motion in the trial court to permanently seal the records filed with the court, id., at 1, 5. A newspaper sought to review the documents filed in the class action, and Wal-Mart responded with a motion to permanently seal the records. Id., at 1. The trial court granted the defense motion in part, ordering that certain documents filed during the class action litigation be permanently sealed; the appellate court reversed.

The newspaper first sought the records filed in the class action litigation. Savalgio, at 3-4. The newspaper then sought access to the appellate records, and were advised by the clerk that the records of the Court of Appeal were not sealed, id., at 4. In response, Wal-Mart sent a letter to clerk representing that the records had been sealed by the trial court and thus should be deemed sealed on appeal; the appellate court agreed to conditionally seal the records pending a determination by the trial court of whether the records it were in fact sealed, id. at 5. The trial court denied the newspaper’s motion to unseal the records, and wal-Mart filed a motion with the trial court to permanently seal the records. Id. Ultimately, the trial court ordered a “small portion” of the records permanently sealed, id. The newspaper moved for attorney fees under California Code of Civil Procedure section 1021.5, but the trial court denied the motion. Id., at 6. The newspaper appealed both rulings.

In ruling in favor of the newspaper on the access to records question, the appellate court noted that the Protective Order set forth a procedure to be followed for filing documents under seal, but the parties failed to comply with that procedure. Savalgio, at 2-3. Rather, defense and plaintiff attorneys believed that the trial court had stated a separate motion need not be filed whenever a party wished to file documents under seal; rather, the parties could “file documents ‘conditionally under seal’ pursuant to the Protective Order and, unless an objection was made, the documents were deemed filed under seal.” Id., at 3. The trial court did not recall making any such statement, which would have authorized a procedure not allowed under California law, but found persuasive the fact that both sides operated under the same misapprehension, id. The appellate court was unimpressed. The Court of Appeal examined the history of Proposition 59, which amended the state’s Constitution to provide for the public’s right of access to certain information, id., at 6-8, and held that Wal-Mart waived its right to seek an order sealing the records, id., at 8-11. Central to this holding was the court’s view that “Proposition 59 requires us to broadly construe a statute or court rule ‘if it furthers the people’s right of access’ and to narrowly construe the same ‘if it limits the right of access.’” Id., at 10 (citation omitted, italics in original). The appellate court further held that the trial court lacked authority to grant the belated motion to seal the records, id., at 11-12.

With respect to the attorney fees issue, however, the Court of Appeal affirmed the trial court. First the appellate court held that the newspaper could not be a “successful party” because it was not a party to the Wal-Mart lawsuit; rather than seeking leave to intervene in the action, the newspaper used the statutory procedure allowed under California law that permits a non-party member of the public to file a motion to unseal records. Savaglio, at 13-14. Moreover, the Court held that prevailing on a motion to unseal records does not entitle one to attorney fees under section 1021.5 because “[t]he motion to unseal [is] entirely unrelated to the objective of the lawsuit,” id., at 14.

NOTE: Several courts have expressed hostility towards the practice of sealing records, particularly as part of a settlement. These courts view such acts as the equivalent of “purchasing silence” — hiding facts from the public not because the details are subject to any legitimate basis for confidentiality but, rather, to deprive others of the benefits of discovery obtained during the course of the litigation. The author is uncertain whether this attitude played any part in the California appellate court’s decision, but attorneys are well advised to consider the fact that a trial court may not rubber-stamp a request to seal records; and even if the trial court seals the records, an appellate court may order the records unsealed.

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