A California appeals court ruled in late June that sealing documents in civil lawsuits "requires more than a mere agreement of the parties." The decision in Universal City Studios, Inc. v. Superior Court of Los Angeles County, 2 Cal.Rptr.3d 484 (Cal. App. 2d Dist. 2003)), involved disclosure of the terms of a settlement agreement between two movie companies, Universal City Studios and Unity Pictures Corp., in litigation brought by Unity Pictures to rescind an allegedly fraudulent clause in the settlement.
Under California law, substantive courtroom proceedings may not be closed and transcripts may not be sealed unless the court finds that an overriding interest exists supporting closure and/or sealing, and that failing to close the proceedings or seal documents would create a substantial likelihood of prejudice against the party claiming the interest. The court must also find that the closure or sealing directly serves the interest of the party seeking to seal the records, and that it could not protect the claimed interest while keeping the court proceedings open. (See "U.S. Court Rulings Affecting Access to Information: South Carolina District Court Bans Secret Settlements" in the Fall 2002 issue of the Silha Bulletin.)
In an opinion written by Presiding Judge Paul Turner, the court held that Universal's interest in keeping the settlement terms secret did not outweigh the public interest in having court proceedings open. In the absence of such an overriding interest, the court said, contractual language calling for secrecy was not enough to compel sealing of court documents.