Enprotech Corp. v. Renda

Citations: 983 F.2d 17; 1992 WL 389347Docket: No. 92-5179

Court: Court of Appeals for the Third Circuit; January 4, 1993; Federal Appellate Court

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The court, led by Circuit Judge Roth, addresses the concept of finality in federal appellate procedure, emphasizing that it is not enough for a party to claim an order is final; the court must independently assess this. The key issue is whether a district court order denying a pretrial motion to compel the production of a confidential settlement agreement is appealable. Appellants Fukoku Kogyo Co. Ltd. and Hachiro Sato (referred to as "Fukoku") argue the order is appealable based on the common law right of access to judicial records, citing a precedent case. In contrast, appellees Enprotech Corp. and C. Itoh Co. America, Inc. (collectively "Enprotech") contend the order is not final under 28 U.S.C. 1291, thus not appealable. The court concludes the order is not final, leading to the dismissal of the appeal. The background involves a 1987 action by Enprotech against Fukoku and others for commercial misconduct, culminating in a confidential settlement agreement executed in 1991. The district court retained jurisdiction over the agreement's terms until March 31, 1996, but the settlement was never filed with the court. Following a discovery request from Fukoku for the settlement documents, Enprotech asserted confidentiality, prompting Fukoku to file a motion to compel, which was denied by a magistrate judge and later affirmed by the district court. Fukoku's subsequent appeal to the circuit court is based on the denial of this motion.

Jurisdiction for this case is established under 28 U.S.C. § 1332, with the appellants asserting that the appeal falls under 28 U.S.C. § 1291. The court must decide if the district court’s affirmation of the magistrate judge’s denial of public access to the Settlement Agreement constitutes a final, appealable decision under § 1291. According to the Supreme Court, a final decision must resolve the litigation's merits, leaving no further action for the court except execution of the judgment. Generally, pretrial discovery orders do not qualify as final decisions. 

Fukoku argues for jurisdiction based on the common law right to access judicial records, as recognized in *Bank of America Nat’l Trust v. Hotel Rittenhouse Associates*, where public access to settlement approvals and motions was emphasized. This right predates the U.S. Constitution, reinforcing a presumption favoring access to judicial records. When a settlement is filed with a court, it becomes part of the public record, especially when judicial interpretation or enforcement is sought.

Fukoku cites a footnote in *Bank of America* suggesting that orders regarding access to sealed records can be appealable. While Fukoku acknowledges that Enprotech's Settlement Agreement was not filed with the district court, it claims that the court's incorporation of the Agreement's terms into a stipulation order makes it a judicial document deserving disclosure. However, the court finds Fukoku's reliance on *Bank of America* to be misplaced, noting that the settlement in *Bank of America* was filed under seal and actively involved court interpretation, unlike Enprotech's Settlement Agreement, which has remained confidential and unfiled.

The excerpt addresses the appealability of a district court's order related to a Settlement Agreement involving Enprotech and Fukoku. It references prior cases where access to various judicial records was sought, emphasizing that Enprotech’s Settlement Agreement has not been formally filed, sealed, or enforced by the district court. Therefore, Fukoku's claims based on those cases are deemed incorrect. The court clarifies that the district court's order merely acknowledged the stipulation of dismissal, not compliance with the Settlement Agreement, meaning the Agreement is not part of the public record subject to disclosure.

Fukoku argues that it has a substantial interest in the settlement documents, particularly regarding potential admissions of liability by defendants. However, the court notes that the district court's order has not resolved the dispute with Enprotech and is not a final order under 28 U.S.C. § 1291. Furthermore, while the district court retained jurisdiction over the Settlement Agreement, Fukoku's assertion of potential contempt proceedings is premature since no enforcement actions have been initiated. The court concludes that the order is an interlocutory nondispositive pretrial discovery order, making it non-appealable, and thus dismisses the appeal to prevent unnecessary litigation delays.

Appellants' argument regarding "access to public records" is unsuccessful, leading to the classification of the district court’s order as an interlocutory discovery order. The parties did not present grounds for collateral or interlocutory review, and the court does not find it necessary to consider such grounds under 28 U.S.C. § 1291 or § 1292. The applicability of the public access doctrine is not established, and the court refrains from deciding whether a pretrial denial of public access is appealable as a final or collateral order. The court did not evaluate the merits of the pretrial discovery issue. Regarding concurrent appeals from two cases involving Bank of America, the court only addressed the appeal for one suit, dismissing the other due to a lack of merit determination. During a hearing on Fukoku's Motion to Compel Production of the Settlement Agreement, the magistrate judge indicated uncertainty regarding the existence of any public access rights to private documents not filed with the court, emphasizing that neither the district judge nor the magistrate had reviewed such documents. The court has not assessed the appropriateness of the magistrate judge’s ruling on this discovery matter.