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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.
Apple, Samsung Daubert Docs Should Have Been Sealed, Federal Circuit Rules
Posted by
Robert Ambrogi
on 2013/09/17 ---
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Robert J. Ambrogi is a Massachusetts lawyer who represents clients at the intersection
of law, media and technology. A news media veteran, he is the only person ever to hold the
top editorial positions at the two leading national U.S. legal newspapers, the National
Law Journal and Lawyers Weekly USA. He is also internationally known for his writing
and blogging about the Internet and technology. |
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 in damages.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 M. O'Malley. 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. Judge Applied 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.
Parties 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.
"In particular, 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' pre-trial motions."
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?
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Posted September 22, 2013 |
