June 26, 2015
Ex parte Brian Barze
James S. Holbrook, Jr., and Sterne Agee Group, Inc. In re: Brian Barze
Opinion is subject to formal revision before publication in
the advanced sheet of the Southern Reporter.
(Jefferson Circuit Court, CV-13-900763).
Justice. Stuart, Bolin, Parker, Murdock, Shaw, Main, and
Bryan, JJ., concur. Moore, C.J., concurs in the result.
FOR WRIT OF MANDAMUS
Barze, the plaintiff below, filed a petition for a writ of
mandamus requesting that this Court direct the Jefferson
Circuit Court to set aside its July 23, 2014, order sealing a
motion to stay filed by James S. Holbrook, Jr., one of the
defendants below. We grant the petition and issue the writ.
Facts and Procedural History
March 1, 2013, Barze filed in the Jefferson Circuit Court an
action against Sterne Agee Group, Inc., and Holbrook, the
then CEO of Sterne Agee. Barze included claims of promissory
fraud and fraudulent inducement, breach of contract,
conversion, and defamation. In his complaint, Barze alleged
that, in spring 2009, Sterne Agee had approached him about
leaving his old company and becoming the chief financial
officer (" CFO" ) of Sterne Agee and that Holbrook
had told him that, if he joined Sterne Agee, Sterne Agee
would pay him severance pay of at least one year's salary
and bonus if the job with Sterne Agee did not work out. Barze
alleged that he relied on Holbrook's promises and
representations when he agreed to accept the job at Sterne
Agee and when he left his former employer and gave up his
opportunities there. Barze asserted that, after he started
working with Sterne Agee, he was presented with an employment
agreement to sign; that Holbrook assured him that the
employment agreement was signed by all employees; that
Holbrook assured him that Holbrook could and would take care
of Barze and honor their oral agreement regarding the
severance pay of at least one year's salary and bonus;
and that Holbrook told Barze that he was committed to Barze
as the long-term CFO of Sterne Agee. Barze asserted that, in
reliance on Holbrook's assertions, he signed the
asserted that Holbrook's primary instructions for him as
CFO were " to protect Sterne Agee's bottom line
profitability by reducing wasteful and abusive
spending." However, he alleged that he later learned
that " Holbrook use[d] Sterne Agee and its resources and
corporate toys for Holbrook's own personal pleasure,
thereby contributing enormously to the wasteful and abusive
spending at Sterne Agee that detracts from its
profitability." Barze further asserted that he learned
that Holbrook used Sterne Agee funds to invest in business
ventures without the approval of or disclosure to the Sterne
Agee Board. He also alleged that Holbrook frequently "
individually invested in the same ventures, receiving stock
in connection with those investments" and that "
Holbrook benefitted personally from Sterne Agee corporate
investments that often resulted in losses for Sterne
Agee." Barze asserted that he discussed with Holbrook
the issue of Holbrook's wasteful personal use of Sterne
Agee assets, but Holbrook told him the issue was none of
Barze's concern. He also asserted that Holbrook had
threatened that, " if any employee in Barze's
accounting department ever had access to Holbrook's
Sterne Agee holding company expenditures, that person would
be 'fired.'" Finally, Barze asserted that, on
August 21, 2012, the interim human-resources director for
Sterne Agee came to his office and told him that he was
" 'let go effective immediately'" and that
he was not given any reason for the termination of his
employment with Sterne Agee.
complaint, Barze asserted that, after his employment was
terminated, Sterne Agee refused to pay him the severance pay
Holbrook had promised him. He also asserted that he
repeatedly requested return of the shares of Sterne Agee
stock, or the bonds to which they had been converted, and
other stocks he had purchased during his employment at Sterne
Agee but that Holbrook and Sterne Agee refused to return that
property to him. Barze further asserted that it appeared that
Sterne Agee and Holbrook " have somehow unlawfully
substituted the stock shares that Barze purchased with zero
coupon bonds." Finally, he alleged that he had been
defamed by Holbrook on numerous occasions.
July 18, 2014, Holbrook filed a motion for leave to file
under seal a motion to stay Barze's action pending the
conclusion of a criminal investigation and proceedings.
Holbrook asserted that the matters addressed in his motion to
stay involved information that would promote defamation and
that would pose potential harm for third parties who were not
parties to the litigation. On July 21, 2014, Barze filed an
objection and response to Holbrook's motion for leave to
file his motion to stay under seal. On July 23, 2014, the
trial court entered an order granting Holbrook's motion
for leave to file his motion to stay under seal and ordering
the circuit clerk to seal Holbrook's motion to stay.
Subsequently, Holbrook filed his motion to stay the
underlying civil action pending a criminal investigation and
proceedings, which the trial court granted.
September 3, 2014, Barze filed in this Court a petition for a
writ of mandamus directing the trial court to vacate its
order sealing Holbrook's motion to stay and directing the
trial court to vacate its order staying the proceedings in
the trial court pending the completion of the criminal
investigation and proceedings. This Court denied the petition
by order issued October 30, 2014, as to the trial court's
order staying the proceedings but ordered answers and briefs
as to the trial court's order sealing Holbrook's
motion to stay.
" 'Mandamus is an extraordinary remedy and will be
granted only where there is " (1) a clear legal right in
the petitioner to the order sought; (2) an imperative duty
upon the respondent to perform, accompanied by a refusal to
do so; (3) the lack of another adequate remedy; and (4)
properly invoked jurisdiction of the court." '
Ex parte Ocwen Federal Bank, FSB, 872 So.2d 810, 813
(Ala. 2003)(quoting Ex parte Alfab, Inc., 586 So.2d 889, 891
Ex parte Gadsden Reg'l Med. Ctr., 904 So.2d 234,
235 (Ala. 2004).
" Review of a trial court's sealing of the record or
documents is clearly subject to review for abuse of
discretion. Holland v. Eads, 614 So.2d
1012, 1014 (Ala. 1993); In re Application and Affidavit
for a Search Warrant, 923 F.2d 324, 326 (4th Cir.),
cert. denied, 500 U.S. 944, 111 S.Ct. 2243, 114 L.Ed.2d 484
(1991). See also Wilson v. American Motors Corp.,
759 F.2d 1568, 1571 (11th Cir. 1985)( where parties presented
'no legally sufficient reasons for the closure of the
record[,] ... the sealing of the record was an abuse of
" It is well settled that '[i]n cases involving the
exercise of discretion by a lower court, a writ of mandamus
may issue to compel the exercise of that discretion; however,
it may not issue to control the exercise of discretion except
in a case of abuse.' Ex parte Ben-Acadia, Ltd., 566 So.2d
486, 488 (Ala. 1990)."
Ex parte Birmingham News Co., 624 So.2d 1117, 1126
argues that the trial court exceeded its discretion when it
granted Holbrook's motion for leave to file his motion to
stay under seal and then sealed
Holbrook's motion to stay because it did not first comply
with the procedural requirements set forth in Holland v.
Eads, 614 So.2d 1012 (Ala. 1993). In Holland, this Court
" In light of the public policy in favor of public
access and the prevailing analysis of this presumption in
most American courts, we hold that if a motion to seal is
filed, then the trial court shall conduct a hearing. The
trial court shall not seal court records except upon a
written finding that the moving party has proved by clear and
convincing evidence that the information contained in the
document sought to be sealed:
" (1) constitutes a trade secret or other confidential
commercial research or information; see Brown &
Williamson Tobacco Corp.[v. F.T.C., 710 F.2d 1165,] 1179
[(6th Cir. 1983)]; or
" (2) is a matter of national security; see Barron
[v. Florida Freedom Newspapers, Inc., 531 So.2d 113,]
118 [(Fla. 1988)]; or
" (3) promotes scandal or defamation; or
" (4) pertains to wholly private family matters, such as
divorce, child custody, or adoption; see [Nixon v.]
Warner[ Commc'ns, Inc., 435 U.S. 589, 98 S.Ct. 1306,
55 L.Ed.2d 570 (1978)]; [Ex parte] Balogun,
[516 So.2d 606 (Ala. 1987)]; Holcombe v. State ex rel.
Chandler, 240 Ala. 590, 200 So. 739 (1941); or
" (5) poses a serious threat of harassment,
exploitation, physical intrusion, or other particularized
harm to the parties to the action; or
" (6) poses the potential for harm to third persons not
parties to the litigation.
" If any one of the above criteria is satisfied, then
the trial court may seal the record, or any part of the
record, before trial, during trial, or even after a verdict
has been reached.
" This approach limits, but does not abolish, the range
of judicial discretion. There is a presumption in favor of
openness, which can be overcome only by clear and convincing
evidence that an individual's privacy interest (as set
out above) rises above the public interest in access."
614 So.2d at 1016.
case, the trial court had a duty to conduct a hearing on
Holbrook's motion for leave to file his motion to stay
under seal, but it did not do so. Additionally, before
sealing the motion, the trial court had a duty to make
written findings that Holbrook had proved by clear and
convincing evidence that the information contained in his
motion to stay fell within one of the six categories set
forth in Holland. However, it did not do so. In fact, in its
order granting the motion, the trial court merely stated:
" The Defendant, James S. Holbrook, Jr.'s Motion for
Leave to file Under Seal is GRANTED. The Clerk is Directed to
SEAL the Defendant, James S. Holbrook, Jr.'s Motion to
Stay Civil Action Pending Conclusion of Criminal
Investigation and Proceeding."
the trial court did not comply with any of the procedural
requirements set forth in Holland before it sealed
Holbrook's motion to stay.
the trial court did not comply with the procedure set forth
in Holland, it exceeded its discretion when it granted
Holbrook's motion and directed the circuit clerk to seal
Holbrook's motion to stay the underlying civil action.
Accordingly, we grant the petition for the writ of mandamus
and direct the trial court to vacate its
July 23, 2014, order granting Holbrook's motion for leave
to file his motion to stay under seal and sealing
Holbrook's motion to stay. In reaching our decision, we
do not address the merits of whether the motion for leave to
file the motion to stay under seal was due to be granted in
this case. Therefore, we direct the trial court to consider
Holbrook's motion for leave to file the motion to stay
under seal in accordance with the procedure set forth in
GRANTED; WRIT ISSUED.
Bolin, Parker, Murdock, Shaw, Main, and Bryan, JJ., concur.
C.J., concurs in the result.
This Court has stated:
" We now phrase the question formerly framed in
terms of whether a trial court 'abused' its
discretion in terms of whether the trial court
'exceeded' its discretion. E.g., Vesta Fire
Ins. Corp. v. Milam & Co. Constr., Inc., 901 So.2d 84
(Ala. 2004); Johnson v. Willis, 893 So.2d 1138
(Ala. 2004); and Zaden v. Elkus, 881 So.2d 993
Ex parte Family Dollar Stores of Alabama,
Inc., 906 So.2d 892, 899 (Ala. 2005).