Valassis Communications, Incorporated v. News Corporation

Background

Valassis Communications, Inc. alleged that News Corporation and other defendants harmed it through anticompetitive conduct in the in-store promotions market. The period at issue ran from Valassis’s entry into that market in 2010 until its exit in 2016. This opinion addressed motions to seal or redact documents filed in connection with pretrial motions and Valassis’s motion to supplement and amend its expert and pretrial disclosures.

On November 12, 2019, Valassis and News each moved to seal documents that had been temporarily filed under seal. Valassis’s motion covered 39 exhibits and sought redactions protecting confidential business information, including financial metrics and employee compensation and bonuses. News’s motion covered 96 exhibits and sought redactions protecting financial information about its business units and personal identification information. News also asked to keep six third-party exhibits temporarily sealed so the third parties could decide whether to seek sealing.

On February 28, 2020, News separately sought redactions in Valassis’s brief and supporting exhibits filed with Valassis’s motion to supplement and amend its disclosures. News argued that the proposed redactions protected confidential financial information concerning its business.

Legal standard

The Court explained that court documents generally carry a common-law and First Amendment right of public access. A document is a “judicial document” when it is relevant to the court’s work and useful in the judicial process, including when it could reasonably influence a ruling on a motion. Documents filed with non-dispositive motions—motions that do not resolve the case—receive a substantial, though lower, presumption of public access than materials used at trial or with dispositive motions.

A party seeking sealing must show that a countervailing interest or higher value outweighs public access and that sealing or redaction is narrowly tailored. The Court identified legitimate countervailing interests including legal privilege, business secrecy, and personal privacy. It also emphasized that redaction is generally preferable to sealing an entire document.

Rulings on Valassis’s motion

The Court found that all documents submitted in support of the parties’ pretrial motions were judicial documents and therefore were subject to a presumption of public access. It held that Valassis’s interest in protecting financial metrics from its now-closed in-store promotions business did not outweigh public access. Valassis had not shown how disclosure of five- to ten-year-old financial information from a closed business unit would advantage competitors in a currently competitive market. The Court therefore denied Valassis’s proposed redactions of those financial metrics.

The Court reached a different conclusion for financial information concerning Valassis’s active business units, including its Free Standing Inserts division. It found that disclosure of pricing, costs, revenue, and profit information could significantly harm Valassis while providing little value to public oversight of the courts. The Court also found that business-secrecy and employee-privacy interests justified protecting compensation and bonus information concerning individual Valassis employees.

Valassis’s Motion to Seal, Document 339, was granted in part and denied in part. Appendix A identified which individual redactions or sealing requests were approved or denied. The Court approved the proposed sealing of Exhibit 24 and approved specified redactions in other exhibits, while denying other proposed redactions, including redactions concerning the former in-store promotions business’s financial metrics.

Rulings on News’s motions

Because News continued to participate in both the in-store promotions and Free Standing Inserts markets, the Court found that its interest in protecting information about its ongoing businesses outweighed public access at this stage. The protected information included financial metrics such as pricing, costs, revenue, and profits, as well as specific contract terms and similar information. The Court also found that the privacy interests of third parties justified redacting personal cell phone numbers, home addresses, and other personal identification information.

News’s Motion to Seal, Document 345, was granted, with the individual proposed redactions approved as described in Appendix B. The Court separately denied News’s request to seal Exhibits 12, 44, 88, 89, 91, and 94 because no third party had intervened or otherwise asked for sealing. That denial did not affect redactions that the Court had otherwise specifically approved.

The Court also found that the three exhibits supporting Valassis’s motion to supplement and amend its disclosures were judicial documents subject to a substantial presumption of public access. It concluded that News’s confidential-business-information interest outweighed that presumption for the proposed redactions concerning financial metrics of News’s continuing in-store promotions business. News’s motion to redact Exhibits 1 through 3 to its February 28 declaration, Document 376, was granted.

Effect of the order

Judge P. Kevin Castel directed the Clerk to terminate the listed motions. To the extent the parties’ motions had been denied, the parties were directed to confer and publicly file versions of the relevant documents consistent with the Order within 14 days. The Court also stated that any party seeking to use a currently redacted or sealed document at trial had to explain, 14 days before the resumption of the Final Pretrial Conference, why confidentiality protections should continue in light of the stronger public-access presumption for information introduced at trial.