The Fourth Circuit recently imposed limitations on the ability of consumer product manufacturers to litigate against the Government under seal. In 2011, the Consumer Product Safety Commission (CPSC) intended to post a report on its database linking an ErgoBaby baby carrier to the death of a small child. ErgoBaby— believing that the report was “materially inaccurate” and thus exempt from posting on the database, and that such a report would be disastrous to its business—filed a preemptive suit to enjoin the agency from publishing the report. In order to protect its reputation while the suit was pending, however, ErgoBaby filed under the pseudonym “Company Doe” and moved to have the entire case sealed, including most of the public docket. Over the objections of consumer advocacy group intervenors, the district court allowed the case to proceed entirely under seal, thereby giving ErgoBaby the chance to contest the proposed posting without being subject to the public scrutiny normally attendant such litigation.

The district court granted summary judgment on ErgoBaby’s behalf, concluding that CPSC cannot publish a report when the odds of a connection between a product and the harm are no more likely than that of a “coin flip.” The court also stated that, to be “related” to a product, an event must be “connected with” or “associated with” the product. And, the court found unconvincing CPSC’s efforts to “establish the necessary nexus” between the report and the product. That portion of the district court’s decision was not appealed and remains intact.

Consumer groups appealed the district court’s decision to seal the majority of the case file, and prevailed. Company Doe v. Public Citizen, No 12-2209 (4th Cir. Apr. 16, 2014). The Fourth Circuit held that “when a party seeks to litigate under a pseudonym, a district court has an independent obligation to ensure that extraordinary circumstances support such a request by balancing the party’s stated interest in anonymity against the public’s interest in openness and any prejudice that anonymity would pose to the opposing party.” And, in this case, the Fourth Circuit found that the ErgoBaby failed to meet that burden. The Court also more broadly noted that, “[w]hen parties call on the courts, they must accept the openness that goes with subsidized dispute resolution by public (and publically accountable) officials.”

Consumer product companies continue to be free to sue CPSC in federal court to prevent CPSC from publishing reports on the website that contain inaccurate information. However, filing a suit against CPSC could bring more attention to the company and the misleading report—and therefore inflict more reputational damage—than letting the report be published on the database. On the other hand, some companies might feel compelled to head to court to discredit an inaccurate consumer report that CPSC intends to publish regardless of the public nature of the case. Only time will tell whether consumer product companies will be willing to pursue such a strategy.