When an amended complaint renders the arguments of a motion to dismiss moot, what effect does it have on the public’s ability to view the parties’ filings on the motion? In Karriker v. Harpoon Holdings, L.P., 2023 NCBC 67, the issue was teed up when plaintiff’s opposition to the motion included the public filing of various exhibits and documents which Harpoon argued disclosed “highly confidential” information. After provisional sealing, the Business Court considered Harpoon’s arguments to strike, or at least seal, the materials.

The dispute focused on Harpoon’s claims regarding public filing by plaintiff of a draft version of its partnership agreement. Judge Conrad observed that Harpoon’s moon-shot argument was that it sought “to remove all trace of it from the Court’s file.”  Terming that “an extraordinary request,” the Business Court noted that because of transparency and integrity concerns about the record, “the Court does not purge filed documents in all but the rarest of circumstances.” Id., ¶ 8.

Harpoon’s motion to strike the draft agreement also missed the mark. The Court noted that a motion under Rule 12(f) does allow a court to “strike from any pleading any insufficient defense or any redundant, irrelevant, immaterial, impertinent, or scandalous matter.” Carpenter v. Carpenter, 189 N.C. App. 755, 759 (2008). But the Court found the rule “simply does not apply” because Harpoon wasn’t seeking to strike material from a pleading, but instead from “an exhibit submitted in opposition to a motion to dismiss.” Id. ¶ 6.

The Court also resisted using discretionary authority that would allow it to strike irrelevant or inadmissible evidence tendered with a dispositive motion. Judge Conrad held that because the amended complaint short-circuited any consideration by the Court of the motion to dismiss (Id. ¶ 7),

“It would be pointless to strike an exhibit that the Court never considered. The better practice is to deny a motion to strike as moot.”

In deciding Harpoon’s alternate request to seal the draft agreement, the Court noted the presumption in North Carolina “that court filings are public records.” Doe v. Doe, 263 N.C. App. 68, 79-81 (2018). Defeating that presumption rests with the sealing advocate because the General Assembly deems such records as “open to inspection of the public,” unless otherwise provided by law. N.C.G.S. § 7A-109(a). The Business Court’s sealing jurisprudence is consistently exacting. To justify sealing, “[c]ryptic or conclusory claims of confidentiality won’t do.” A movant must show that disclosure of the challenged material “would cause serious harm to [the] parties or third parties to justify sealing.” Karriker, ¶ 11.

The Court accepted Harpoon’s sealing rationale that the draft agreement “contain[ed] sensitive information about employment and ownership incentives, investor rights, and internal corporate governance.” It found the contention “plausible and sufficient . . . in this unique context.” Id. ¶ 13. Judge Conrad found the public’s interest in the information to be negligible given that it appeared the draft agreement would “have no bearing on any disputed issue” in the case. However, the Court cautioned that even “similar or related documents” might fall short of the sealing standard later in the case “when the public’s interest may be stronger.” Id.

Takeaways

• The Court’s critical examination of a motion to strike a publicly filed document, and measured approach to an alternate request to seal, is consistent with its exacting standards for sealing in BCR 5. Indeed, in Rule 5.1(c), the Court reminds filers that, “A person who appears before the Court should strive to file documents that are open to public inspection and should file a motion to seal a document only if necessary.”

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