Case: 12-30085 Document: 00511906097 Page: 1 Date Filed: 06/29/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 29, 2012
No. 12-30085 Lyle W. Cayce
Summary Calendar Clerk
DE ROME A. SEALS,
Plaintiff–Appellant,
v.
HERZING INCORPORATED - NEW ORLEANS,
Defendant–Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:10-CV-2848
Before DENNIS, CLEMENT, and OWEN, Circuit Judges.
PER CURIAM:*
DeRome Seals appeals the district court’s decision to enforce as a
settlement agreement the Confidential Consent Award he entered into with
Herzing Incorporated - New Orleans (Herzing) along with the district court’s
rulings on several other motions. We affirm.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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No. 12-30085
I
Herzing, a private corporation, operates Herzing University in New
Orleans, Louisiana. Following Seals’s dismissal from the university’s paralegal
program and its return of his Federal Pell Grant to the United States
Department of Education, Seals filed suit against Herzing. Herzing responded
by filing a Motion to Dismiss and Compel Arbitration, which relied upon an
arbitration agreement that Seals signed in connection with his enrollment at the
university. The district court granted the motion to compel arbitration and
ordered the federal action stayed and administratively closed pending
completion of arbitration. The parties then submitted their dispute to the
American Arbitration Association. While arbitration was pending, Herzing filed
a counterclaim seeking $4,930 owed for tuition, and Seals answered and denied
the counterclaim.
A two-day arbitration hearing was scheduled. Seals proceeded pro se
prior to the hearing, but he retained counsel for the hearing itself. On the
hearing’s second day, the parties agreed to settlement terms. The terms were
read on the record at the arbitration hearing, and Seals was permitted to ask
questions concerning them. After receiving clarification, Seals agreed that he
was comfortable with the agreement. A Confidential Consent Award was then
prepared, which reduced the terms of the agreement to writing, and it was
signed by the parties, their attorneys, and the arbitrator. The Confidential
Consent Award was then read on the record at the arbitration hearing, and
Seals again stated that he was comfortable with the agreement.
Within days of signing the Confidential Consent Award, Seals filed a
Motion and Order to Suppress Confidential Consent Award (Motion to Suppress)
in the district court. He claimed that he had accepted Herzing’s offer at the
arbitration hearing only because his attorney had made a misrepresentation and
had pressured him to do so. Seals attached a copy of the Confidential Consent
2
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Award to the motion. In response, Herzing filed a Motion to Enforce Settlement
Agreement, to Deposit Settlement Funds into Registry of the Court and to
Award Attorneys’ Fees and Costs (Motion to Enforce), a Motion to Place Exhibits
Under Seal (Motion to Seal), and its opposition to Seals’s Motion to Suppress.
Herzing also moved for expedited consideration of its Motion to Seal. Seals then
filed a motion in opposition to Herzing’s Motion to Enforce, a Motion and Order
for Leave of Court to File Amendment to the Complaint (Motion to Amend), and
a Motion in Opposition to the Defendant/Respondent’s Motion for an Expedited
Placement of Exhibits “A” and “B” Under Seal. Subsequently, Herzing filed its
opposition to Seals’s Motion to Amend.
The district court granted expedited review of Herzing’s Motion to Seal.
The court recognized Seals’s motion opposing expedited review, but noted that
it did not advance any argument concerning expediting review; instead, it
seemed to address the merits of Herzing’s Motion to Seal. Later, the court
issued orders addressing the remaining motions. First, the court granted
Herzing’s Motion to Seal and ordered that the exhibits relating to the parties’
confidential settlement agreement be placed under seal. Next, the court denied
Seals’s Motion to Suppress and granted Herzing’s motion to enforce the
settlement agreement on the grounds that: (1) “it [was] undisputed that Seals
and Herzing entered into a valid written compromise,” (2) the record did not
support Seals’s suggestion that his lawyer pressured him into settling his claims,
and (3) “there [was] no evidence showing that the compromise [was] invalid.”
The court determined that the request to deposits funds into the court’s registry
was premature. Finally, the court “agree[d] that [Seals’s] motion [was]
unsupportable and that Herzing [was], therefore, entitled to a reasonable award
of attorney’s fees and costs associated with opposing [Seals’s] motion to suppress
and pursuing its own motion to enforce the settlement.” The court denied Seals’s
Motion to Amend because “the settlement agreement [was] valid and
3
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enforceable,” and “[a] valid compromise precludes the parties from litigating the
matter that was compromised.”
Seals filed a Notice of Appeal following the district court’s rulings on the
various motions. He seeks review of the district court’s orders (1) denying his
Motion to Suppress and granting Herzing’s motion to enforce the settlement
agreement, (2) granting Herzing’s Motion to Seal, (3) granting Herzing’s request
for attorneys’ fees, and (4) denying his Motion to Amend.
II
We have jurisdiction to consider this appeal pursuant to 28 U.S.C. § 1291
because the district court’s orders dispose of the entire controversy.1 This is
unaffected by the fact that the exact amount of attorneys’ fees and costs to be
awarded to Herzing remains to be determined.2
We first address Seals’s argument that the district court erred in denying
his Motion to Suppress and granting Herzing’s motion to enforce the settlement
agreement. On appeal, Seals contends that the Confidential Consent Award
cannot be enforced as a settlement agreement because the two documents—the
Confidential Consent Award and a settlement agreement—are distinct. Before
the district court, however, he argued that the Confidential Consent Award
should not be enforced because he “was under duress” as a result of his attorney
making a misrepresentation and pressuring him to settle. He only alluded to the
argument he now presses on appeal in two lines at the beginning of his motion
in opposition to Herzing’s Motion to Enforce. Because this argument was only
1
See Nat’l Ass’n of Gov’t Emps. v. City Pub. Serv. Bd. of San Antonio, Tex., 40 F.3d 698,
705 (5th Cir. 1994) (“A decision is ‘final’ when it ‘dispose[s] of the entire controversy and
leave[s] nothing further for the court to do in the cause.’” (alteration in original) (quoting
Anastasiadis v. S.S. Little John, 339 F.2d 538, 539 (5th Cir. 1964)); see also Mass. Cas. Ins.
Co. v. Forman, 469 F.2d 259, 260 (5th Cir. 1972) (per curiam).
2
Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202-03 (1988).
4
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presented to the district court in a cursory manner, it has not been preserved for
appeal, and we will not consider it.3
Next, we consider Seals’s argument that the district court erred in
granting Herzing’s Motion to Seal. “[W]e review the district court’s decision to
seal the settlement agreement for abuse of discretion.”4 Seals first argues that
sealing his Exhibit 1 (Confidential Consent Award) and Herzing’s Exhibits A
(Confidential Consent Award) and B (arbitration transcript) was against public
policy because “transparency is in order.” “It is clear that the courts of this
country recognize a general right to inspect and copy public records and
documents, including judicial records and documents.”5 However, “the right to
inspect and copy judicial records is not absolute,” and “[e]very court has
supervisory power over its own records and files.”6 Here, paragraph six of the
Confidential Consent Award states, “All parties to the litigation and arbitration
and their attorneys agree to keep the amounts and terms of the settlement
confidential. Claimant understands and agrees that this confidentiality and
non-disclosure agreement was a material inducement for Herzing to enter into
this Agreement, and that it has value to Herzing.” In light of the parties’
agreement to maintain confidentiality, the express statement that
confidentiality was a material inducement for Herzing to settle, the fact that
“public policy favors voluntary settlements,”7 and the limitation of the district
3
See Maverick Recording Co. v. Harper, 598 F.3d 193, 197-98 (5th Cir. 2010) (“Harper,
however, waived her constitutional challenge by failing to raise it below in a manner that
would allow the district court to rule on it.”); St. Paul Fire & Marine Ins. Co. v. Convalescent
Servs., Inc., 193 F.3d 340, 346 (5th Cir. 1999) (“We refuse to consider claims that were not
properly raised in the district court.”).
4
SEC v. Van Waeyenberghe, 990 F.2d 845, 848 (5th Cir. 1993).
5
Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978).
6
Id. at 598.
7
Bass v. Phoenix Seadrill/78, Ltd., 749 F.2d 1154, 1164 (5th Cir. 1985).
5
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court’s order to these three exhibits, we conclude that the district court did not
abuse its discretion in ordering these exhibits sealed.
Seals also argues that sealing the exhibits was improper because he
disputed the authenticity of Exhibits A and B, but the district court ordered
them sealed before he had an opportunity to view them. This argument is
without merit because the district court’s order sealing the exhibits in no way
affected Seals’s access to the documents as a party to the matter or his ability to
challenge their authenticity.
Seals next challenges the district court’s award of attorneys’ fees and costs
to Herzing, and Herzing defends the award by asserting that the district court
acted in accordance with its inherent power. “We review a court’s imposition of
sanctions under its inherent power for abuse of discretion.”8 Pursuant to its
inherent power, “a court may assess attorney’s fees when a party has ‘acted in
bad faith, vexatiously, wantonly, or for oppressive reasons.’”9 The district court
awarded Herzing its attorneys’ fees and costs associated with opposing Seals’s
Motion to Suppress and pursuing its motion to enforce the settlement agreement
because Seals’s Motion to Suppress was “unsupportable.” In its order, the
district court stated that “Seals’ unsupported suggestion that his lawyer
somehow forced him to settle his claims is not only unfounded in the record, it
falls well short of establishing duress. And dangerously borders on frivolous.”
Seals has failed to demonstrate that the district court abused its discretion.
Nothing in Seals’s appellate brief or the record leads us to question the district
court’s conclusion that Seals’s Motion to Suppress was without justification, and
in the analogous context of an arbitral award (as opposed to a settlement
agreement entered into in the course of an arbitration), we have held that a
8
Chambers v. NASCO, Inc., 501 U.S. 32, 55 (1991).
9
Id. at 45-46 (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 258-
59 (1975)) (internal quotation marks omitted).
6
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party’s refusal to abide by the award “without justification” qualifies as
vexatious behavior that can support the award of attorneys’ fees by a federal
court.10
Finally, Seals challenges the denial of his Motion to Amend. We review
the district court’s denial of Seals’s Motion to Amend for abuse of discretion.11
The district court denied Seals’s motion based on Article 3080 of the Louisiana
Civil Code, having determined that Seals entered into a valid and enforceable
settlement agreement with Herzing that resolved his claims.12 The district court
explained that Seals could not, by amending his complaint, “resurrect claims
that he agreed to release.” Seals challenges the denial of his motion on the
ground that his claims against Herzing were not litigated, but his argument is
without merit because the settlement agreement he entered into with Herzing
resolved his claims in lieu of litigation, and in the settlement agreement Seals
expressly agreed to “execute a complete release of all claims against Herzing”
and that “[t]here [would] be no reservation of any nature against Herzing.”
Accordingly, the district court did not abuse its discretion in denying Seals’s
Motion to Amend.
* * *
AFFIRMED.
10
Specialty Healthcare Mgmt., Inc. v. St. Mary Parish Hosp., 220 F.3d 650, 658 (5th
Cir. 2000) (citing Chambers, 501 U.S. at 45-46; Int’l Ass’n of Machinists & Aerospace Workers,
Dist. 776 v. Tex. Steel Co., 639 F.2d 279, 283 (5th Cir. Unit A Mar. 1981)).
11
Luera v. M/V Alberta, 635 F.3d 181, 186 (5th Cir. 2011) (citing Ayanbadejo v.
Chertoff, 517 F.3d 273, 276 (5th Cir. 2008) (per curiam)).
12
See LA. CIV. CODE ANN. art. 3080 (“A compromise precludes the parties from bringing
a subsequent action based upon the matter that was compromised.”).
7