Judge: Steven A. Ellis, Case: 21STCV10298, Date: 2024-03-07 Tentative Ruling
Case Number: 21STCV10298 Hearing Date: March 12, 2024 Dept: 29
Motion to File Under Seal filed by Defendants Brian
Williams, Ronald Williams, and Cash Money Records, Inc.
Motion for Determination of Good Faith Settlement filed by Defendants Brian
Williams, Ronald Williams, and Cash Money Records, Inc.
Tentative
The motion to seal is denied.
The motion for determination of good faith
settlement is continued.
Background
This matter arises out of an alleged altercation on
December 29, 2019, between Plaintiffs Kenneth Lawson and Monique
Jourdain-Lawson (“Plaintiffs”) and Defendant Cash McElroy Jones (“Jones”). Plaintiffs filed their complaint in this
action on March 16, 2021, and their First Amended Complaint (the “FAC”) on
September 1, 2021. In the FAC,
Plaintiffs assert a variety of causes of action against Jones and numerous
other defendants.
On November 23, 2023, three of the Defendants – Brian
Williams, Ronald Williams, and Cash Money Records, Inc. (the “Settling
Defendants”) – reached a settlement agreement.
On January 10, 2024, the Settling Defendants filed the two motions that
are before the Court: (1) a motion for a sealing order and (2) a motion for a
determination of good faith settlement.
No opposition to either motion has been filed.
The Motion to Seal
Legal Standard
“[T]he First Amendment provides a right
of [public] access to ordinary civil trials and proceedings.” (NBC Subsidiary (KNBC-TV), Inc. v. Super.
Ct. (1999) 20 Cal.4th 1178, 1212.) “[C]onstitutional standards governing
closure of trial proceedings apply in the civil setting.” (Ibid.) Those standards are embodied in California
Rules of Court, rules 2.550 and 2.551.
“Unless confidentiality is required by
law, court records are presumed to be open.”
(Cal. Rules of Court, rule 2.550(c).
“A record must not be filed under seal without a court order.” (Cal. Rules of Court, rule 2.551(a).) “The court must not permit a record to be
filed under seal based solely on the agreement or stipulation of the
parties.” (Ibid.)
California Rules of Court, rule
2.550(d) sets forth the basic standard for an order permitting the filing of
documents under seal:
“The court may order that a record be
filed under seal only if it expressly finds facts that establish:
(1) There exists an overriding interest
that overcomes the right of public access to the record;
(2) The overriding interest supports
sealing the record;
(3) A substantial probability exists
that the overriding interest will be prejudiced if the record is not
sealed;
(4) The proposed sealing is narrowly
tailored; and
(5) No less restrictive means exist to
achieve the overriding interest.”
(Cal.
Rules of Court, rule 2.550(d).)
“An order sealing the record must: (A)
Specifically state the facts that support the findings; and (B) Direct the
sealing of only those documents and pages, or, if reasonably practicable,
portions of those documents and pages, that contain the material that needs to
be placed under seal. All other portions
of each document or page must be included in the public file.”
(Cal. Rules of Court, rule 2.550(e)(1).
A motion or application to file under
seal must be accompanied by a memorandum and a declaration containing facts
sufficient to justify the sealing. (Cal. Rules of Court, rule
2.551(b)(1).) “A request to seal a document must be filed publicly and
separately from the object of the request. It must be supported by a
factual declaration or affidavit explaining the particular needs of the case.”
(In re Marriage of Lechowick (1998) 65 Cal.App.4th 1406, 1416.) “[A]t a
minimum that the party seeking to seal documents, or maintain them under seal,
must come forward with a specific enumeration of the facts sought to be
withheld and specific reasons for withholding them.” (H.B. Fuller Co.
v. Doe (2007) 151 Cal.App.4th 879, 894.)
Discussion
In the motion to seal, the Settling Defendants seek an
order sealing the “the terms of the Settlement Agreement.” (Motion, at 2:6.) As a threshold matter, it is unclear to the
Court precisely what materials the Settling Defendants seek to seal. In the public file, the memorandum supporting
Settling Defendants’ motion for a determination of good faith settlement has
one redaction, on page 4, line 20, of
the amount of the settlement. In the
motion, however, Settling Defendants state that they seek to seal “the terms of
the Settlement Agreement,” and it is unclear whether that refers to the one
redaction in the good faith motion or something more. Moreover, the motion to seal also refers to
“lodged records,” in the plural. And the
declaration of counsel in support of the motion to seal refers to sealing “both
the Application and attached Settlement Agreement.” (Nizam Decl., ¶ 3.)
For this reason alone, the Court must deny
the motion to seal. The Court cannot
grant a motion to seal, and make the specific and detailed orders required by
the Rules of Court, when it is unclear to the Court what record or records, or
what portions of a record or records, the Settling Defendants seek to seal.
Turning to the merits, a motion to seal must
be supported by (among other things) “an overriding interest that overcomes the
right of public access to the record.”
(Cal. Rules of Court, rule 2.550(d)(1).)
Here, counsel’s declaration (the only supporting declaration submitted
in support of the motion to seal) does not set forth any evidence that would
allow the Court to make a finding of such an overriding interest. At most, it states that the good faith
settlement motion (described as an application) “contains a confidentiality
provision.” (Nizam Decl., ¶ 2.) It appears that counsel is stating that the settlement
agreement entered into by the Plaintiffs and the Settling Defendants itself contains
a confidentiality provision of some sort. (Memo. at 4:17-20, 5:18-20.) But it remains unclear what it is that the
Settling Defendants contend is confidential (for example, the entire settlement
agreement, only the amount to be paid, or other portions of the agreement).
Even assuming the most narrow request to seal
only the amount to be paid as a part of the settlement, the Court finds on this
record that the Settling Defendants have not made the required showing. It appears that Settling Defendants are
contending that the parties to civil litigation may agree to a confidential
settlement and then, in a good faith motion regarding that settlement, seek an
order sealing the financial terms of the agreement. If that is what the Settling Defendants are
arguing, it is in tension (to say the least) with California
Rules of Court, rule 2.551(a), which as noted above, states expressly, “The
court must not permit a record to be filed under seal based solely on the
agreement or stipulation of the parties.”
The Court is not aware of any precedent that would allow
sealing under these circumstances. The
cases cited by Settling Defendants, and at least one additional case that the
Court has considered, do recognize (in dicta) that in some circumstances protecting
a contractual confidentiality provision might constitute an “overriding
interest” under Rule 2.550(d)(1). (E.g.,
NBC Subsidiary, supra, 20 Cal.4th at p.1222, fn. 46; Huffy Corp. v.
Super. Ct. (2003) 112 Cal.App.4th 97, 106; Universal City Studios v. Super.
Ct. (2003) 110 Cal.App.4th 1273, 1281-1283.) But in each of those cases, the courts were
referring to a pre-existing contract to keep something, such as a trade secret,
confidential. None involves a contract entered
into during litigation to settle the very case that is the subject of this
public proceeding. Permitting a sealing
order in this context gives rise to a risk of “boot strapping” that is not
supported by any case law and would seem to run contrary to the command of Rule
2.551(a).
The other arguments of the Settling
Defendants also fail to establish an overriding interest sufficient to support
a sealing order. In the declaration, counsel
refers to the “potential” that “the publicly available information” could “be
misused against the Settling Defendants.” (Nizam Decl., ¶ 3; see also Mem. at 4:22-24). That statement is far too vague and
speculative to support the findings required by Rule 2.550(d). The memorandum invokes the constitutional
right of the Settling Defendants to financial privacy, which of course is
substantial and can support a sealing order, but it is unclear why the terms of
a settlement of one civil matter (as opposed to, for example, financial
statements or documents reflecting income or assets or expenses) would
substantially prejudice the Settling Defendants’ right to financial
privacy. (See Mem. at 5:4-17.) Similarly, the Settling Defendants’ “public
and celebrity persona” and the possibility that unnamed “others” could “bring
claims against them in the hopes of obtaining any kind of settlement” is
unsupported and too amorphous to support the requested sealing order. (See Mem. at 4:20-22, 5:19-21.)
Accordingly, on this record, the motion to file under
seal is DENIED.
The Motion for a Good
Faith Settlement Determination
Legal Standard
In a case
involving two or more alleged joint tortfeasors, a party may seek a court order
under Code of Civil Procedure section 877.6 determining that a settlement
between the plaintiff and one or more of the alleged tortfeasors is in good
faith. A judicial determination of good faith bars other joint tortfeasors who
received notice of the motion “from any further claims against the settling
tortfeasor … for equitable comparative contribution, or partial or comparative
indemnity, based on comparative negligence or comparative fault.” (Code Civ.
Proc., § 877.6, subd. (c).)
In
evaluating whether a settlement has been made in good faith, courts consider
the following factors, as set forth by the California Supreme Court in the
landmark case Tech-Bilt, Inc. v.
Woodward-Clyde & Associates (1985) 38 Cal.3d 488:
1)
“a rough approximation of plaintiffs’ total recovery”;
2)
“the settlor’s proportionate liability”;
3) “the amount paid in
settlement”;
4)
“the allocation of the settlement proceeds among plaintiffs”;
5) “a recognition that a
settlor should pay less in settlement than he would if he were found liable
after a trial”;
6)
the settling party's “financial conditions and insurance policy limits”;
7) any evidence of
“collusion, fraud, or tortious conduct aimed to injure the interests of
nonsettling defendants.”
(Id.
at 499.) “Practical considerations obviously require that the evaluation be
made on the basis of information available at the time of settlement.” (Ibid.)
The “good
faith” concept in Code of Civil Procedure section 877.6 is a flexible principle
imposing on reviewing courts the obligation to guard against the numerous ways
in which the interests of nonsettling defendants may be unfairly prejudiced. (Rankin
v. Curtis (1986) 183 Cal. App. 3d 939, 945.) Accordingly, under Tech-Bilt, the party asserting the lack
of “good faith” may meet this burden by demonstrating that the settlement is so
far "out of the ballpark" as to be inconsistent with the equitable
objectives of the statute. (Tech-Bilt, supra, 38 Cal.3d at 499-500.)
Such a demonstration would establish that the proposed settlement was not a
“settlement made in good faith” within the terms of section 877.6. (Ibid.)
The Supreme
Court explained that Code of Civil Procedure section 877.6 is designed to
further two equitable policies:
1) encouragement of settlements; and
2) equitable allocation of costs among joint tortfeasors.
(Ibid.)
Those
policies would not be served by an approach which emphasizes one to the virtual
exclusion of the other. (Ibid.) Accordingly, a settlement will not be
found in good faith unless the amount is reasonable in light of the settling
tortfeasor's proportionate share of liability. (Std. Pac. of San Diego v. A.
A. Baxter Corp. (1986) 176 Cal. App. 3d 577, 589.) Or, as the California
Supreme Court has stated, a “defendant’s settlement figure must not be grossly
disproportionate to what a reasonable person, at the time of the settlement,
would estimate the settling defendant’s liability to be.” (Tech-Bilt, supra,
38 Cal.3d at 499.)
When a
motion seeking a determination under Code of Civil Procedure section 877.6 is
not opposed, the burden on the moving parties to show that the settlement was
made in good faith is slight. (City of Grand Terrace v. Superior Court
(1987) 192 Cal.App.3d 1251, 1261 [holding that a “barebones motion” including a
declaration setting forth “a brief background of the case is sufficient”].)
When a good
faith motion is contested, however, the moving parties have the initial burden
of producing evidence in support of the requested good faith determination. (Id.
at pp. 1261-1262.) “Section 877.6 and Tech-Bilt require an evidentiary showing,
through expert declarations or other means, that the proposed settlement is
within the reasonable range permitted by the criterion of good faith.” (Mattco
Forge v. Arthur Young & Co. (1995) 38 Cal.App.4th 1337, 1351.)
“Substantial evidence” is required. (Id. at p. 1352.) A declaration from
a settling defendant’s attorney that states, in conclusory fashion, that the
client has little, or no share of the liability may not be sufficient. (Greshko
v. County of Los Angeles (1987) 194 Cal.App.3d 822, 834-35; see also 3 Weil
& Brown, California Practice Guide: Civil Procedure Before Trial (The
Rutter Group 2023) ¶¶ 12:774, 12:872-873.)
The
ultimate burden of persuasion is on the party opposing the good faith
determination. The “party asserting a
lack of good faith shall have the burden of proof on that issue.” (Code Civ. Proc. § 877.6(d); see also 3 Weil
& Brown, supra, at ¶ 12:875.)
Discussion
As a
threshold matter, it is less than clear to the Court whether Settling
Defendants have served an unredacted version of the motion on the other parties
to this litigation. If not, the hearing
will need to be continued until after such service is effected, so that the
other parties have adequate information to determine whether they wish to
challenge the good faith of the settlement.
The
Court has received a lodged copy of an unredacted version of the motion, which discloses
the settlement amount. As indicated
above, however, the Court’s tentative ruling is to deny the motion to
seal. Under these circumstances, the Court
will continue the hearing so that the Settling Defendants can decide whether
they wish to proceed with the motion (and include the settlement amount in a
public filing) or withdraw the motion.
Finally,
even when a motion for a good faith settlement determination is unopposed, some
showing in support of the motion is required.
Here, however, Settling Defendants have not provided even a conclusory
assertion regarding the first Tech-Bilt factor, the rough approximation
of Plaintiffs’ total recovery. Without
disclosing the amount of the settlement, the Court notes that its determination
of whether a settlement of $X is in good faith could well be influenced by
whether Plaintiffs’ total recovery is $100 versus $100 million. (The Court uses these figures for illustration
purposes only and assumes that neither extreme is even remotely close to an
actual, even though rough, approximation of Plaintiffs’ total recovery.) But here, the Court has been provided with no
such information.
Conclusion
The Court DENIES Settling Defendants’ motion to file
under seal.
This denial does
not preclude Settling Defendants from filing a subsequent motion to seal, with additional
clarity regarding what they seek to file under seal and evidence to support
each of the required findings. In that
respect, the motion is denied without prejudice.
The Judicial
Assistant is directed to return the lodged records to the moving parties,
unless moving parties notify the Court within 10 days that the lodged record is
to be filed unsealed. (Cal. Rules of
Court, rule 2.551(b)(6).)
The Court CONTINUES
Settling Defendants’ motion for a good faith settlement determination.
Moving parties are ordered to give notice.