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MetLife, Inc. v. Financial Stability Oversight Council

United States Court of Appeals, District of Columbia Circuit

August 1, 2017

MetLife, Inc., Appellee
Financial Stability Oversight Council, Appellee Better Markets, Inc., Appellant

          Argued January 18, 2017

         Appeal from the United States District Court for the District of Columbia (No. 1:15-cv-00045)

          Stephen W. Hall argued the cause for appellant Better Markets, Inc. With him on the briefs were Dennis M. Kelleher and Austin W. King.

          Anne L. Weismann was on the brief for amici curiae Campaign for Accountability, et al. in support of intervenor-appellant.

          Amir C. Tayrani argued the cause for appellee MetLife, Inc. With him on the brief was Eugene Scalia. Ashley S. Boizelle and Indraneel Sur entered appearances.

          Nicolas Riley, Attorney, U.S. Department of Justice, argued the cause for federal appellee. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and Mark B. Stern and Daniel Tenny, Attorneys.

          Before: Garland, Chief Judge, and Kavanaugh and Srinivasan, Circuit Judges.



         The underlying question in this case is whether the Dodd-Frank Act abrogates the common-law right of public access to judicial records. The appellees maintain that it does. In their view, the Act categorically requires courts to seal parts of briefs and appendices containing information that a nonbank financial company has submitted to the Financial Stability Oversight Council for its use in deciding whether to designate the company for enhanced supervision by the Federal Reserve.

         We disagree. The right of public access is a fundamental element of the rule of law, important to maintaining the integrity and legitimacy of an independent Judicial Branch. Although the right is not absolute, there is a strong presumption in its favor, which courts must weigh against any competing interests. There is nothing in the language of Dodd-Frank to suggest that Congress intended to displace the long-standing balancing test that courts apply when ruling on motions to seal or unseal judicial records. Accordingly, because the district court did not apply that test to the motion to unseal the records at issue here, but instead ruled that they were categorically exempt from disclosure, we vacate its judgment and remand the case for further proceedings.


         Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010), to mitigate the risks that certain financial institutions could pose to the stability of the national financial system. S. Rep. No. 111-176, at 2 (2010). The Act tasks the Financial Stability Oversight Council (FSOC) with carrying out that objective. Among other powers, FSOC may designate a "nonbank financial company" for enhanced supervision by the Federal Reserve System's Board of Governors if the Council determines that "material financial distress" at the company "could pose a threat to the financial stability of the United States." 12 U.S.C. § 5323(a)(1). To assist it in making designation decisions, FSOC may require nonbank financial companies to submit financial data and information to the Council. Id. § 5322(d)(3)(A). FSOC must "maintain the confidentiality of any data, information, and reports" that a company submits. Id. § 5322(d)(5)(A).

         In July 2013, FSOC notified MetLife, Inc. that it was considering the company for designation. Over the course of the next year, MetLife voluntarily submitted over 21, 000 pages of documents to FSOC to help it reach a determination. In December 2014, FSOC determined that "material financial distress" at MetLife "could pose a threat to the financial stability of the United States, " id. § 5323(a)(1), and therefore designated MetLife for supervision.

         Pursuant to 12 U.S.C. § 5323(h), MetLife challenged FSOC's designation determination in district court. That section authorizes a nonbank financial company to seek judicial review of a final determination by the Council. The court's review is "limited to whether the final determination . . . was arbitrary and capricious." Id.

         During the ensuing summary-judgment briefing, MetLife and FSOC worked together to prepare redacted and unredacted versions of their briefs and 16-volume joint appendix. Some redactions were of portions of FSOC's final determination designating MetLife; others were of data and information that MetLife had voluntarily submitted to FSOC. Both parties sought leave to file their unredacted briefs and unredacted joint appendix under seal. The district court granted their requests. Thereafter, the parties filed the unredacted documents under seal and made the redacted versions publicly available. Before the district court issued its ruling on the merits, MetLife filed new versions of its briefs and the joint appendix with fewer redactions.

         MetLife redacted a total of approximately 22 lines from the final, public versions of its opening and reply briefs. See J.A. 73-80; MetLife Br. 9, 23. FSOC redacted approximately the same number of lines from the public versions of its briefs. See J.A. 59-72. Those public briefs contained 90 citations to sealed portions of the joint appendix. Better Markets Br. 5. All together, over 1, 900 pages of the joint appendix -- more than two-thirds of the total -- were redacted from the public version. Id. at 4.

         Better Markets, Inc. is a "nonpartisan, nonprofit, public-interest organization" focused on the United States financial system. Better Markets Br. at iii. Pursuant to Federal Rule of Civil Procedure 24(b), the organization moved to intervene in the district court litigation and to unseal the briefs and joint appendix. Before ruling on those motions, the court granted MetLife's summary-judgment motion and rescinded FSOC's designation of MetLife on the ground that it was arbitrary and capricious. See MetLife, Inc. v. Fin. Stability Oversight Council, 177 F.Supp.3d 219, 242 (D.D.C. 2016).[1] The court initially entered its opinion under seal and allowed the parties to suggest redactions. After neither party requested any, the court unsealed the opinion in its entirety.

         The district court next ruled on Better Markets' motions. Although the court permitted Better Markets to intervene, it denied the motion to unseal. See MetLife, Inc. v. Fin. Stability Oversight Council, 2016 WL 3024015, No. 15-0045 (D.D.C. May 25, 2016). The court concluded that Dodd-Frank's confidentiality provision, 12 U.S.C. § 5322(d)(5)(A), required that the relevant portions of the briefs and joint appendix remain sealed because they included data, information, and reports MetLife submitted to FSOC. MetLife, 2016 WL 3024015, at *6. Dodd-Frank, the court said, "supersedes the multi-factor inquiry prescribed by the D.C. Circuit" for ruling on motions to seal or unseal judicial records. Id. at *5 (referencing United States v. Hubbard, 650 F.2d 293 (D.C. Cir. 1980)). The court further suggested that the briefs and appendix may not qualify as "judicial records" in any event. See id. at *6-7.

         Better Markets now appeals the denial of its motion to unseal.[2]


         Almost 40 years ago, the Supreme Court said it was "clear that the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents." Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597 (1978) (internal citation omitted). Two years later, in United States v. Hubbard, our court likewise "recogniz[ed] this country's common law tradition of public access to records of a judicial proceeding, " noting that "[a]ccess to records serves the important functions of ensuring the integrity of judicial proceedings in particular and of the law enforcement process more generally." 650 F.2d at 314-15. "This common law right, " we explained, "is fundamental to a democratic state":

As James Madison warned, "A popular Government without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy: or perhaps both. . . . A people who mean to be their own Governors, must arm themselves with the power which knowledge gives." Like the First Amendment, then, the right of inspection serves to produce "an informed and enlightened public opinion." Like the public trial guarantee of the Sixth Amendment, the right serves to "safeguard against any attempt to employ our courts as instruments of persecution, " to promote the search for truth, and to assure "confidence in . . . judicial remedies."

Id. at 315 n.79 (quoting United States v. Mitchell, 551 F.2d 1252, 1258 (D.C. Cir. 1976), rev'd on other grounds sub nom. Nixon, 435 U.S. 589).[3]

         In light of these considerations, there is a "strong presumption in favor of public access to judicial proceedings." Hubbard, 650 F.2d at 317; see Hardaway v. D.C. Housing Auth., 843 F.3d 973, 980 (D.C. Cir. 2016). That presumption may be outweighed in certain cases by competing interests. In Hubbard, we crafted a six-factor test to balance the interests presented by a given case. See 650 F.2d at 317-22. Specifically, when a court is presented with a motion to seal or unseal, it should weigh: "(1) the need for public access to the documents at issue; (2) the extent of previous public access to the documents; (3) the fact that someone has objected to disclosure, and the identity of that person; (4) the strength of any property and privacy interests asserted; (5) the possibility of prejudice to those opposing disclosure; and (6) the purposes for which the documents were introduced during the judicial proceedings." EEOC v. Nat'l Children's Ctr., Inc., 98 F.3d 1406, 1409 (D.C. Cir. 1996) (citing Hubbard, 650 F.2d at 317-22). A seal may be maintained only "if the district court, after considering the relevant facts and circumstances of the particular case, and after weighing the interests advanced by the parties in light of the public interest and the duty of the courts, concludes that justice so requires." In re Nat'l Broad. Co., 653 F.2d 609, 613 (D.C. Cir. 1981) (internal quotation marks and citations omitted).

         In subsequent cases involving motions to seal or unseal judicial records, the Hubbard test has consistently served as our lodestar because it ensures that we fully account for the various public and private interests at stake. See, e.g., Hardaway, 843 F.3d at 980; Primas v. District of Columbia, 719 F.3d 693, 698-99 (D.C. Cir. 2013); Nat'l Children's Ctr., 98 F.3d at 1409-11; Johnson v. Greater Se. Cmty. Hosp. Corp., 951 F.2d 1268, 1277 & n.14 (D.C. Cir. 1991).

         Relying on the common-law right of public access to judicial records, Better Markets contends that the district court improperly sealed parts of the summary-judgment briefs and joint appendix because it did so without applying the Hubbard test.[4] MetLife and FSOC respond with two principal contentions: (1) those documents do not qualify as judicial records subject to the common-law right; and (2) even if they do, the Dodd-Frank Act supersedes that right. We address these contentions in the following two Parts of this opinion. Both are subject to de novo review. See Ctr. for Nat'l Sec. Studies v. DOJ, 331 F.3d 918, 920, 936-37 (D.C. Cir. 2003); United States v. El-Sayegh, 131 F.3d 158, 160 (D.C. Cir. 1997).


         We begin with common ground. "[N]ot all documents filed with courts are judicial records." SEC v. Am. Int'l Grp., 712 F.3d 1, 3 (D.C. Cir. 2013). Rather, "whether something is a judicial record depends on 'the role it plays in the adjudicatory ...

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