Reputation.com, Inc. v. Mullarkey

Background

Reputation.com, Inc. filed an administrative motion asking to file under seal portions of its complaint and an attached exhibit. The materials included a merger agreement and excerpts quoted in the complaint.

Legal standard

Because the materials were connected to the complaint, the court applied the “compelling reasons” standard. That standard starts with a strong presumption that judicial records should be available to the public. The party seeking secrecy must identify specific reasons that outweigh the public’s interest in access. Confidential business information, including financial terms and business strategies, can qualify.

Court’s analysis

The court noted that it had not relied on the documents because the parties resolved the action without the court’s intervention. The parties stipulated to dismiss the case about three months after it was filed. As a result, the documents were unrelated to the public’s understanding of the court’s proceedings, and the public interest in disclosure was minimal.

The court also found that the documents contained confidential business and financial information about the acquisition. It concluded that publicly disclosing the agreement’s terms could be used against Reputation.com in future negotiations by potential acquirees or competitors seeking similar opportunities. These considerations supplied compelling reasons to seal the documents.

Disposition

Judge Haywood S. Gilliam, Jr. granted the motion. Under Civil Local Rule 79-5(g)(1), the documents covered by the granted sealing motion will remain under seal.