At the outset of the settlement negotiations the defense made plain their interest in restricting my right to practice law (§XXII-A through D, below).  They did not immediately disclose a second, related objective—to permanently remove the 90c5009 records from the courthouse. I first learned about this objective in March 1993.  (§XXIII-R-1, below.) By then, Judge Zagel and Rivkin Radler & Kremer had already agreed to let the defendants remove those records. 

Section A, below, identifies the records that the defense had a special interest in removing from the courthouse.  Section B explains why any agreement to remove those records had to be implemented before the records were entered on the docket. 

A. The 90c5009 records that the defense had a special interest in removing from the courthouse

1. Records that would expose Labatt and its lawyers to prosecution under 18 U.S.C. §1001.

The 90c5009 file included motions, briefs, and exhibits that would implicate Labatt in the false statements and material omission described above in §§III-A.

2. Records that would serve as roadmaps for litigation by other plaintiffs who had claims against the defendants, such as consumers and other competitors. 

The 90c5009 case filed included four sets of documents that consumers and other competitors could draw on to allege and prove RICO claims against Labatt, Everfresh, Holiday Juice, Home Juice, and Flavor Fresh: (1) the amended complaint; (2) the appendices of exhibits to the amended complaint; and (3 & 4) the two briefs filed in support of Grove Fresh’s Motion to Overrule Objections to Time Period.[1]

3. Records that could be used against the defendants under the doctrine of offensive collateral estoppel.

Under the rule of preclusion known as offensive collateral estoppel, a litigant who was not a party to a prior judgment may nevertheless use that judgment “offensively” to prevent a defendant from relitigating issues resolved in the earlier proceeding.  In Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979), the Supreme Court ruled that offensive collateral estoppel does not offend due process or the right to a jury trial. 

If consumers and other competitors sued the defendants in complaints that tracked the allegations in the amended complaint in 90c5009, they could invoke the doctrine of offensive collateral estoppel to defeat any motion to dismiss their complaints. 

B. The impediments to removing judicial records that have been entered on the docket. 

Two Seventh Circuit precedents were impediments to the agreement to remove the 90c5009 records:

  • Smith v. U.S. District Court, 956 F. 2d 647, 650 (7th Cir. 1992).
  • Matter of Memorial Hospital of Iowa County, Inc., 862 F.2d 1299, 1302 (1988).

Smith holds that the federal common law right of access to judicial records includes “materials on which a court relies in determining the litigants’ substantive rights.”

Memorial Hospital of Iowa County holds that settlements cannot be conditioned on the vacatur of district court rulings, which are “the “public act[s] of a public official [and] not the parties’ property.”  District court precedents have “social value,” because they are “created at cost to the public and other litigants [and cannot] be a bargaining chip in the process of settlement.” Id

If Memorial Hospital of Iowa County bars settlements conditioned on the vacatur of district court decisions, then, with one possible exception, Smith bars settlements conditioned on the removal from the courthouse of any papers reviewed by a court on its way to rendering a decision that has been entered on a docket, since removal would vitiate the public’s right of access to those papers. 

The one possible exception is this:  If a party can establish a right to permanently seal a paper, then removing that paper wouldn’t vitiate any public rights. 

Memorial Hospital of Iowa County only applies to orders that have been docketed.  If a case is settled before any orders are entered on the docket, Memorial Hospital of Iowa County does not come into play.

[1] See §XIX-B, H, above.