Antitrust Law Daily Wrap Up, TOP STORY—8thCir: Complete Sealing of Antitrust Suit Involving eBay, Skype Vacated for Insufficient Explanation, (Feb 12, 2013)

By E. Darius Sturmer, J.D.

The U.S. Court of Appeals in St. Louis overturned a federal court’s decision that an antitrust complaint filed by IDP Corp. and Net2Phone, Inc. against eBay, Inc., Skype, Inc., and Skype Technologies S.A. could remain under seal (IDT Corp. v. eBay, February 11, 2013, Colloton, S.). While the federal appellate court could “discern no abuse of discretion in the district court’s decision to seal sensitive business information included in the complaint,” it nevertheless vacated the order and remanded the matter for the district court either to explain why sealing of the entire pleading was warranted or to unseal a redacted version of the complaint.

The suit was filed under seal in the midst of an ongoing patent infringement litigation between the same companies, on the ground that the complaint referred to information that was produced subject to protective orders in the patent actions. It alleged a conspiracy to monopolize, monopolization, and attempted monopolization.

The parties reached a settlement as to all of their legal disputes several weeks later, and filed a joint stipulation dismissal in the antitrust case. The motion to unseal the antitrust complaint was raised by an intervenor in the suit, Arkansas Public Law Center, but denied on the basis that “the parties’ interests in protecting their confidential information outweighed any general interest of public access.”

The appellate court noted at the outset that a common-law right of access applied to judicial records in civil proceedings, and that the antitrust complaint at issue constituted the sort of judicial record to which such a right of access attached. More significant to the dispute at issue, though, the parties did not offer sufficient reason to override this common law right of access and to justify the district court’s order sealing the entire antitrust complaint.

The district court’s in camera review of the complaint was a sufficient procedure in these circumstances to determine whether it contained information subject to the protective orders. Further, the court properly treated as minimal the public’s interest in access to the document, given that the court never adjudicated any aspect of the claims on their merits and only considered the documents at all to make a determination as to whether to seal them.

However, the appellate court stated, it was unclear “why the court concluded that the entire document should remain under seal.” Portions of the complaint could be amenable to public access without jeopardizing the confidentiality of sensitive information exchanged in the patent infringement litigation, the court added. Overall, there was not a sufficient explanation from the district court for a fair evaluation of whether redaction was a reasonable alternative to sealing the entire complaint, the court concluded.

The case is No. 11-3009.

Companies: IDT Corp.; Net2Phone, Inc.; eBay, Inc.; Skype, Inc.; Skype Technologies, S.A.

Attorneys: Howard B. Miller (Girardi & Keese) for IDT Corp. Geoffrey P. Culbertson (Patton & Tidwell) for eBay, Inc.

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