NOT PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT
                ________________

                       No. 16-1755
                    ________________


     FAIR LABORATORY PRACTICES ASSOCIATES;
NPT ASSOCIATES; QUEST DIAGNOSTICS INTERNATIONAL

                             v.

    CHRIS RIEDEL; HUNTER LABORATORIES, LLC.

                          Quest Diagnostics International,
                                      Appellant

                   ________________

        Appeal from the United States District Court
                for the District of New Jersey
          (D.C. Civil Action No. 2-14-cv-02581)
        District Judge: Honorable William J. Martini
                     ________________

        Submitted Under Third Circuit LAR 34.1(a)
                   November 17, 2016

 Before: AMBRO, SHWARTZ, and FUENTES, Circuit Judges

            (Opinion filed: December 7, 2016)
                                    ________________

                                        OPINION*
                                    ________________

AMBRO, Circuit Judge

       Intervenor-Appellant Quest Diagnostics challenges the District Court’s decision to

seal the filed settlement agreement among Appellees (plaintiffs and defendants). They

reached a settlement after the Court already had entered judgment in favor of the

plaintiffs. As a result, the District Court vacated its judgment, but only after the Court

requested that the Appellees file their settlement. Once filed, the Court sealed the

settlement agreement over Quest’s objection primarily because the agreement was filed at

the Court’s request. Because the public has a presumptive right to access judicial

records, and that right is not simply outweighed by a court’s request to file a document,

we vacate the District Court’s Order and remand for further proceedings.

I.     Background

       Although Quest is not a party, its interactions with plaintiffs and defendants lead

to this dispute. Plaintiffs Fair Laboratory Practices Associates and NPT Associates

(collectively, “FLPA”) and defendants Chris Riedel and Hunter Laboratories

(collectively, “Hunter”) have brought numerous qui tam lawsuits against Quest and other

laboratories. FLPA and Hunter share the proceeds from these qui tam lawsuits per their

profit sharing agreement.


*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
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       In 2011 Quest settled with Hunter a qui tam lawsuit brought in California state

court. That same year Quest prevailed in a qui tam lawsuit that FLPA brought in the

Southern District of New York. That Court dismissed the lawsuit because FLPA had

engaged in unethical conduct—using and disclosing Quest’s privileged information in

violation of the New York’s Rules of Professional Conduct. U.S. ex rel. Fair Lab.

Practices Assoc’s v. Quest Diagnostics Inc., No. 05 CIV. 5393 RPP, 

(S.D.N.Y. Apr. 5, 2011), aff’d sub nom. United States v. Quest Diagnostics Inc., 

(2d Cir. 2013). Although FLPA lost, it asked Hunter to share the proceeds Hunter

received from the settlement in the California lawsuit pursuant to the qui tam profit-

sharing agreement.

       Hunter refused to pay FLPA, arguing that the Southern District of New York

Court’s dismissal of FLPA’s lawsuit precluded enforcement of the profit-sharing

agreement. FLPA then sued Hunter in the District of New Jersey alleging that Hunter

owed it 15% of the California settlement. Quest moved for leave to appear as amicus

curiae, arguing that neither party should have these funds. Instead, it urged the Court to

donate the money to charity because of FLPA’s ethical misconduct. The District Court

granted summary judgment in FLPA’s favor, holding that Hunter was still bound by the

profit-sharing agreement notwithstanding the decision in the Southern District of New

York. The Court also denied Quest’s motion to appear as an amicus and rejected a

charitable donation. Having entered final judgment, the District Court closed the case.




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       Almost two months after the Court entered final judgment, FLPA and Hunter filed

a joint stipulation announcing that they had reached a settlement whereby Hunter

confessed to judgment in the amount of damages the Court had already awarded. FLPA

and Hunter stipulated that the Court should vacate its judgment “in furtherance of their

future relationship under the Sharing Agreement.” J.A. 72.

       Before approving this course, the Court requested that FLPA and Hunter file their

settlement agreement. They filed it along with a motion to seal. Quest moved to

intervene and asked the Court to deny sealing. It granted Quest’s motion to intervene,

but nonetheless sealed the settlement, reasoning that the agreement would never have

“seen the light of day had this Court not instructed the parties to submit it on the docket”

and that the FLPA and Hunter parties had filed the settlement “assum[ing] that [it] would

remain confidential.” J.A. 115.

II.    Jurisdiction and Standard of Review

       The District Court had jurisdiction under 28 U.S.C. § 1332. We have jurisdiction

over this post-judgment order because it fully resolves the issue between the interested

parties—whether the agreement should remain sealed. 28 U.S.C § 1291; see Ohntrup v.

Firearms Ctr., Inc., 

, 678 (3d Cir. 1986).

       We review a district court’s denial of a motion to unseal a judicial record for an

abuse of discretion. LEAP Sys., Inc. v. MoneyTrax, Inc., 

, 220 (3d Cir.

2011); Pansy v. Borough of Stroudsburg, 

, 783 (3d Cir. 1994). This exercise

of discretion, however, “is not generally accorded the narrow review reserved for


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discretionary decisions based on first-hand observations.” In re Cendant Corp., 

, 197 (3d Cir. 2001) (citations omitted)).

III.    Analysis

       A strong presumption in favor of public accessibility attaches to judicial records

(here the filed settlement agreement). LEAP 

. The presumption of

public access is a common law doctrine that predates the Constitution. It is designed to

“promote[ ] public confidence in the judicial system.” Litteljohn v. Bic Corp, 

, 678 (3d Cir. 1998). The presumption is not absolute, however, and a party may

“show that the interest in secrecy outweighs” public access. Cendant 

(citations omitted). To do so, the party carries the burden to demonstrate that

“disclosure will work a clearly defined and serious injury.” LEAP 

.

“Broad allegations of harm, bereft of specific examples or articulated reasoning, are

insufficient.” 

court may not “‘rely on the general interest in encouraging settlement’ to

justify the sealing of an agreement.” 

); 

(“District courts should not rely on the general interest in encouraging

settlement, and should require a particularized showing of the need for confidentiality in

reaching a settlement.”). Settlement confidentiality may outweigh the public’s right of

access, however, if: 1) disclosure would cause harm, such as revealing proprietary

information; and 2) the court “specifically f[inds] that [the parties] would not have




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entered into the settlement agreements but for the Court’s assurance of confidentiality.”

LEAP 

(emphasis in original).

       Here, the District Court found that the presumption of public access was

outweighed by its request that FLPA and Hunter file their settlement agreement and

FLPA’s and Hunter’s assumption that this filing would remain confidential. This does

not overcome the presumption, however. For here the Court did not give a reason why

disclosure would result in a particularized harm, and it does not mention whether it ever

assured confidentiality in order to facilitate settlement. Notably, FLPA and Hunter

reached the settlement agreement two months after the Court entered final judgment; any

assurance of confidentiality was not the “but for” cause of settlement. Cf. 

and Hunter may have assumed that their settlement would remain confidential

once filed—a questionable assumption given Quest’s involvement and interest in this

case—FLPA and Hunter must still show that “disclosure will work a clearly defined and

serious injury.” Cendant 

.

       In addition, the District Court too quickly discounted the public’s interest. See

J.A. 115 (“Quest does not make any strong arguments for why the Settlement Agreement

contains information relevant to the public.”). Regardless of Quest’s interest in the terms

of a settlement agreement between two of its adversaries that, as the adversaries stated,

“further[s] their future relationship” to share profits from qui tam lawsuits against Quest

and others, the public also has an interest in this settlement: it has an interest in

understanding why a judge would vacate a final judgment in favor of a settlement that


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purportedly just confirms the judgment. See LEAP 

(“[T]he public

has an interest in knowing what terms of settlement a federal judge would approve.”); see

also Bank of Am. Nat’l Trust and Sav. Ass’n v. Hotel Rittenhouse Assocs., 

,

345 (3d Cir. 1986) (“We cannot permit the expediency of the moment to overturn

centuries of tradition of open access to court documents and orders.”). We therefore

remand to the District Court to balance the public and private interests in this case.

                                      *   *   *   *   *

       We vacate the order of the District Court and remand the case to it for further

proceedings consistent with this opinion. On remand, the Court should also consider

whether there is a less restrictive option to sealing the entire agreement that could protect

privacy interests (such as redacting confidential information).




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