Morgan Art Foundation Limited v. McKenzie d/b/a American Image Art

Background

The court considered requests to restrict public access to the Estate of Robert Indiana's Second Amended Answer and Counterclaims. In an earlier order, the court allowed James W. Brannan, acting as personal representative of the Estate, to file that pleading against Morgan Art Foundation Limited, Simon Salama-Caro, Shearbrook (US) LLC, Figure 5 Art LLC, and RI Catalogue Raisonné LLC.

The Estate filed the pleading under seal along with a letter explaining that it did not believe sealing was justified, although the counterclaim defendants had requested redactions. The counterclaim defendants later sought permission to redact alleged sensitive business information, including artwork sale prices, royalty amounts, joint venture fees, insurance costs, and other financial figures. They asserted that disclosure would cause competitive harm but did not explain specifically how.

The counterclaims allege that the counterclaim defendants breached agreements concerning Robert Indiana's artwork. The alleged conduct included selling artwork without paying royalties, underpaying royalties through improper revenue calculations or expenses, making below-market sales followed by resales at higher prices, and bidding on artwork at auction in ways that allegedly inflated acquisition costs.

Analysis

The court treated pleadings, including counterclaims, as judicial documents subject to a strong presumption of public access under the First Amendment and common law. To overcome that presumption, the party seeking a sealing order had to show that redaction was essential to protect a higher value and narrowly tailored to that need.

Judge Moses found that the counterclaim defendants had not made that showing. Their general claims that the information was sensitive and that disclosure would cause competitive harm were insufficient. The court also noted that the financial figures were central to the litigation and important to the public's understanding of the dispute and the court's rulings. The information concerned the Indiana artworks at issue and did not disclose the counterclaim defendants' internal financial information, business strategies, or similar material. The Estate did not share the counterclaim defendants' concerns, apart from the need to protect bank-account numbers under the federal filing rules.

Disposition

The court denied the sealing motions at Docket Nos. 225 and 237. It directed the clerk to unseal Docket No. 226 and remove all restrictions from that filing.