Apple, Samsung Daubert Docs Should Have Been Sealed, Federal Circuit Rules
ExpertServices periodically sends out e-mails that highlight recent key court cases that can significantly affect
the effectiveness of expert testimony, both for the plaintiff and for the defendant. You probably remember
seeing headlines last year for "The Trial of the Century" involving Apple and Samsung. It turns out in
the aftermath that the judge ordered public disclosure of financial records from both parties - against
the protestations of both. A superior court ruled, after the damage had been done of course, that the
judge overstepped her authority. It happens way too often from the benches of all levels. My question is
whether the wronged parties are able to sue the judge and/or governing body for incompetence? Do the
judges enjoy self-awarded unconstitutional protection against retribution? Attorney Robert Ambrogi weighs in on the situation.
Reprinted with permission.
Daubert Docs Should Have Been Sealed, Federal Circuit Rules
Robert Ambrogi on 2013/09/17
The media dubbed it, “The Patent Trial of the Century.” In 2011, Apple sued Samsung, claiming
its smartphones and tablets infringed patents for the iPhone and iPad. Samsung countersued, alleging that Apple’s
products violated its patents. On Aug. 24, 2012, the jury returned a verdict awarding Apple more than $1 billion
Bob Ambrogi is the only person to hold the top editorial positions at both the National Law Journal and
Lawyers Weekly USA. In addition, he formerly served as director of the Litigation Services division at American
Lawyer Media. He is an experienced attorney, ADR professional, writer and legal technologist.
With extraordinary media interest in the case, the trial judge vowed at the outset to give the media
broad access. “The whole trial is going to be open to the public,” U.S. District Judge Lucy H. Koh, who sits in
San Jose, Calif., told the parties. In keeping with this promise, Judge Koh ordered the parties to provide the press
with electronic copies of every exhibit used at trial. In addition, she unsealed most exhibits attached to pre-trial
and post-trial motions.
But in denying the parties’ requests to seal certain exhibits – most of which pertained
to motions to exclude or strike expert witness testimony – the trial judge went too far, the U.S. Court of Appeals
for the Federal Circuit ruled in a decision issued Aug. 23. The documents contained detailed financial information
that Apple and Samsung legitimately sought to keep private, the court said, and the potential public interest in
the documents was not sufficient to require their disclosure.
“Considering the parties’ strong interest in keeping
their detailed financial information sealed and the public’s relatively minimal interest in this particular information,
we conclude that the district court abused its discretion in ordering the information unsealed,” the Federal Circuit
held, in an opinion written by Circuit Judge Sharon Prost and joined by Circuit Judges William C. Bryson and Kathleen
Media Sought Access to Documents
The appeal was unusual in that both parties argued the same
position, jointly challenging the judge’s unsealing orders and limiting their challenge to only a tiny subset of
the documents unsealed – 26 exhibits attached to pretrial and post-trial motions filed by the parties. Their appeal
was opposed by a bevy of print and broadcast media organizations.
Of the 26 documents at issue in the appeal,
the majority – 11 of Apple’s and six of Samsung’s – related to Daubert motions to exclude expert testimony or motions
to strike expert opinions. Several were exhibits in support of or in opposition to Samsung’s Daubert motions to
exclude the opinions of certain of Apple’s experts. Another was a report from Samsung’s damages expert, which Samsung
filed in support of its own motion to strike Apple’s expert opinions.
Further, the parties did not seek to seal
the documents in their entirety. Rather, they asked to redact portions of the documents that contained detailed,
product-specific financial information pertaining to costs, sales, profits and profit margins.
Wrong Legal Standard
The trial judge, in denying Apple’s and Samsung’s requests to seal these documents, ruled
that they had failed to articulate “compelling reasons” to seal their financial information. She rejected the parties’
arguments that providing their competitors with access to profit and cost information would allow them to undercut
the parties on pricing. At the same time, the judge ruled that the public had a “substantial interest in full disclosure”
of the documents because they were “essential to each party’s damages calculations.”
But in reaching this conclusion,
the Federal Circuit ruled on appeal, the judge applied the wrong legal standard. Although the general rule is that
a party must demonstrate a compelling interest to overcome the presumption of public access to court records, the
9th Circuit (where the trial was held) recognizes an exception for documents attached to non-dispositive motions.
For documents of this type, only a showing of “good cause” is required to keep them out of the public eye.
Demonstrated Strong Privacy Interest
Although the judge was wrong to apply the stricter legal standard, even
under that standard she erred in refusing to seal the documents, the Federal Circuit held. Both Apple and Samsung
demonstrated a strong interest in keeping their detailed, product-specific financial information secret because
they could suffer competitive harm if the information was to be made public, the court reasoned.
it seems clear that if Apple’s and Samsung’s suppliers have access to their profit, cost, and margin data, it could
give the suppliers an advantage in contract negotiations, which they could use to extract price increases for components,”
the opinion explained. “This would put Apple and Samsung at a competitive disadvantage compared to their current
position. Significantly, although the district court recognized this part of the parties’ argument, it failed to
discuss the argument in its analysis.”
Turning to the question of whether the public had an overriding interest
in the parties’ financial information, the court concluded that it did not. The court noted that the parties were
asking to redact only limited portions of what they considered to be their most confidential financial information.
Further, none of these documents were introduced into evidence at trial, because the parties had agreed to rely
on less-detailed financial information to prove their damages.
“The financial information at issue was not considered
by the jury and is not essential to the public’s understanding of the jury’s damages award,” the court explained.
“Nor is there any indication that this information was essential to the district court’s rulings on any of the parties’
For these reasons, the court said, the information at issue in this appeal was not necessary
to the public’s understanding of the case and was therefore of minimal public interest.
“Considering the parties’
strong interest in keeping their detailed financial information sealed and the public’s relatively minimal interest
in this particular information, we conclude that the district court abused its discretion in ordering the information
unsealed,” the court concluded.
The case is
Apple Inc. v. Samsung Electronics
Co., Docket Numbers 2012-1600, 2012-1606, 2013-1146 (Fed. Cir. Aug. 23, 2013).
Given the high public interest
in this case, do you agree with the Federal Circuit – that the trial court erred in its decision to deny the parties’
requests to seal the documents?
This article was
originally published in BullsEye,
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Posted September 22, 2013