Zorro is understood for his stealth. He wears a masks, dons an all-black costume, sneaks round, and pops out of nowhere on his unsuspecting, soon-to-be-swashbuckling foes. Because the grievance places it, “[t]he character of ZORRO is one of the earliest examples of a fictional masked hero with a double identity.” See Cplt., at ¶ 7 (Dckt. No. 1); see additionally Zorro, Wikipedia (describing Zorro as a “master of escape and camouflage”); id. (figuring out The Curse of Capistrano, a Zorro e book, as “one of the best-selling books of all time,” with greater than 50 million copies offered); watch typically The Masks of Zorro (1920) (starring Douglas Fairbanks). He strikes with out warning, lurking within the shadows and utilizing the aspect of shock to his tactical benefit.
In that spirit, the homeowners of the Zorro logos now search to take a web page out of his e book, and strike with stealth of their very own. The homeowners of Zorro filed a grievance in opposition to lots of of would-be counterfeiters, looking for damages for ripping off their mental property by promoting faux Zorro items. The record consists of faux Zorro lighters, socks, masks, t-shirts, hoodies, onesies, leggings, mugs, hats, greeting playing cards, and throw pillows. And within the meantime, they ask for a brief restraining order.
However they do not make that request out within the open. As a substitute, they request an ex parte TRO, they usually filed a movement to seal, too. They wish to seal the so-called “Schedule A” to the grievance, which is a listing of 310 defendants and their web sites. Additionally they ask to seal the screenshots of the infringing web sites connected to a declaration in help of the TRO.
In essence, the homeowners wish to sneak up on the defendants and strike a blow to their counterfeiting operation, and accomplish that below the duvet of darkness. They need reduction with out giving defendants an opportunity to see what hit them – similar to Zorro himself.
Judges, too, put on black. However by and enormous, the judiciary does its work out within the open. The doorway to the courthouse is open to the general public every single day, and so are the doorways to every courtroom. The docket is publicly accessible, too. Anybody can see what the judiciary is as much as, together with who’s asking the courtroom for what, and the way the judiciary responds.
From starting to finish, the general public will get an opportunity to see what is occurring – earlier than, throughout, and after a ruling. Motions sometimes seem on the general public docket, and hearings often are posted prematurely. Hearings happen in public. And after the very fact, the general public can see how the courtroom dominated. Transparency builds confidence, promotes accountability, and results in honest outcomes for the events.
The custom of openness is deeply woven into the material of the judiciary. “Secrecy in judicial proceedings … is disfavored.” “Documents that affect the disposition of federal litigation are presumptively open to public view, even if the litigants strongly prefer secrecy, unless a statute, rule, or privilege justifies confidentiality.” Paperwork that “influence or underpin the judicial decision are open to public inspection unless they meet the definition of trade secrets or other categories of bona fide long-term confidentiality.”
“The reason for this right of public access to the judicial record is to enable interested members of the public, including lawyers, journalists, and government officials, to know who’s using the courts, to understand judicial decisions, and to monitor the judiciary’s performance of its duties.” “Information that affects the disposition of litigation belongs in the public record unless a statute or privilege justifies nondisclosure.”
A celebration who desires to depart from that longstanding custom, and litigate in secret, should carry a heavy burden. And on this file, the homeowners of Zorro are combating a shedding battle.
Plaintiff’s clarification for the request for secrecy is slightly terse. “Sealing this portion of the file is necessary to prevent the Defendants from learning of these proceedings prior to the execution of the temporary restraining order. If Defendants were to learn of these proceedings prematurely, the likely result would be the destruction of relevant documentary evidence and the hiding or transferring of assets to foreign jurisdictions, which would frustrate the purpose of the underlying law and would interfere with this Court’s power to grant relief.”
Anybody aware of the torrent of filings in Schedule-A-Land will acknowledge that lingo. The Zorro case is not distinctive. The truth is, the Zorro lawsuit is considered one of lots of of “Schedule A” instances which have rained down on this district. Annually, the Schedule A bar information lots of of counterfeiting instances on this district in opposition to overseas sellers, who peddle faux items on the web. “It has become the Northern District of Illinois vs. The Internet.”
For no matter cause, the Schedule A bar has settled on the pleasant confines of the Northern District of Illinois as floor zero for lawsuits about overseas counterfeiters. The amount of Schedule A instances on this district is extraordinary. As an illustration, one regulation agency alone information greater than 300 Schedule A lawsuits in Chicago every year.
The factories churning out faux items are rivaled by the factories of regulation corporations churning out Schedule A case after Schedule A case. By and enormous, the Schedule A bar makes use of the identical template in every case, treating the filings like a manufacturing facility mildew. They modify a couple of names, tinker right here and there, after which kick out a brand new grievance for a brand new consumer. It is a cut-and-paste mass meeting operation that will make Henry Ford himself really feel proud. And the Northern District of Illinois has become an meeting line for TROs.
The draft language within the proposed TRO displays that actuality. The homeowners of Zorro supply the identical cut-and-paste boilerplate that’s pressed into service in numerous Schedule A instances, usually phrase for phrase.
The truth is, this Court docket lately resolved motions to seal in additional than 20 Schedule A instances, all of which used the very same lingo. Three completely different regulation corporations filed these three Schedule A instances, and all three regulation corporations used an identical language of their motions to seal.
Right here, the homeowners of Zorro give no concrete cause to assume that the sellers of pretend Zorro items would destroy paperwork on this specific case. As a sensible matter, defendants sometimes do not produce paperwork in Schedule A instances anyway. Virtually all of them fail to take part within the swimsuit and ultimately get tagged with a default judgment.
The easy actuality is that defendants in Schedule A instances are typically overseas sellers who don’t produce paperwork in any respect. Sealing a case to guard paperwork is prone to be a moot level. Additionally, the opportunity of doc destruction isn’t a lot of a foundation for sealing paperwork within the quick time period, as a result of Plaintiff apparently plans to maneuver to unseal the paperwork after serving the TRO.
The truth that Plaintiff desires a brief restraining order to ban counterfeiting is not a lot of a cause for a stealthy request, both. Plaintiff desires Defendants to cease promoting counterfeit items. The homeowners of Zorro need the overseas sellers to knock it off in relation to promoting knock-offs. An order prohibiting counterfeiting will not do a lot good except Defendants are informed to cease counterfeiting. An order to cease counterfeiting requires publicity, not secrecy.
The final cause for secrecy is the request for an asset freeze. However the opportunity of transferring belongings offshore is not a lot of a cause to proceed in secret in a Schedule A case.
Submitting an ex parte movement for an asset freeze does make sense in sure kinds of instances. For instance, the SEC usually seeks a TRO to lock down belongings that don’t rightfully belong to the defendants (e.g., by suing a fraudster who holds buyers’ cash).
In these instances, the SEC sometimes information a movement for an asset freeze and a TRO below seal, and rightly so. Making the request below seal is sensible in these instances, as a result of the alleged fraudster might dissipate the buyers’ belongings if the fraudster learns concerning the lawsuit. Locking down the belongings – with out giving the fraudster a heads-up – helps to guard buyers and protect the opportunity of acquiring significant equitable reduction on the finish of the case. Potential equitable reduction protects the opportunity of retrospective equitable reduction. Fairness now preserves fairness later.
A movement to seal usually is sensible when the plaintiff seeks an asset freeze to safe the potential restoration of future equitable financial reduction. Secrecy is typically essential to protect the opportunity of acquiring equitable reduction down the highway. The truth is easy: seal it and seize it, or say goodbye.
However in Schedule A instances, the plaintiffs’ bar sometimes seeks cures at regulation – reminiscent of statutory damages – not equitable financial reduction. The request for a treatment at regulation, not a treatment in fairness, impacts the calculus in relation to an asset freeze.
The Supreme Court docket has made clear that courts lack the ability to difficulty an asset freeze in the beginning of a case, except that social gathering is looking for equitable financial reduction…. The Supreme Court docket strengthened the long-standing rule that “a judgment establishing the debt was necessary before a court of equity would interfere with the debtor’s use of his property.” “[A]s a general matter [ ] prejudgment asset restraints are not proper simply to establish a fund from which a later award of money damages can be satisfied.”
An equitable restraint on day one may be doable if a plaintiff requested and acquired equitable financial reduction on the finish of the case, like restitution or disgorgement of ill-gotten features. However as a sensible matter, in Schedule A instances, that restoration nearly by no means occurs. Schedule A plaintiffs sometimes do not request and obtain equitable financial reduction.
As a substitute, Schedule A plaintiffs rush into courtroom, request and obtain an asset freeze, and procure a default judgment. After which, the Schedule A plaintiffs ask district courts to unfreeze the cash and award statutory damages, not equitable reduction. In that state of affairs, it’s not clear to this Court docket that it could be applicable to make use of any frozen funds for any restoration of statutory damages, as a result of statutory damages are a treatment at regulation, not a treatment in fairness.
Fact be informed, the Schedule A plaintiffs’ bar asks courts on this district to lock down belongings via an asset freeze on day considered one of a case, and accomplish that below seal. After which, on the finish of the case, Schedule A plaintiffs merely ask the Court docket to bless an order requiring third events at hand over the entire frozen funds. The Schedule A plaintiffs obtain a treatment at regulation, not a treatment in fairness, which signifies that there was no justification for an asset freeze within the first place.
Placing all of it collectively, this Court docket may entertain a request to file below seal if the homeowners of Zorro had been looking for an asset freeze that this Court docket might grant, that means an asset freeze for the restricted objective of permitting equitable reduction down the highway. However within the case at hand, Plaintiff has not made a exhibiting that it’ll search equitable financial reduction on the finish of the case, so there isn’t a foundation for an asset freeze now.
If there isn’t a foundation for an asset freeze now, then there isn’t a cause to proceed below seal now. If you cannot freeze it, you possibly can’t seal it.
In the long run, the homeowners of Zorro might wish to litigate below the duvet of darkness, and use stealth to their benefit in opposition to their adversaries. However the custom for the judiciary is sunshine, not darkness. And on this file, the request for emergency reduction must see the sunshine of day. The movement to seal is hereby denied.