Public has a right to see sealed court documents

Confounding chain of events has hidden documents that were once considered public.

newsroom@islandpacket.comJune 22, 2014 

At first glance, it seems like your average case with limited public interest.

More than 20 timeshare owners are claiming they were duped by a Hilton Head Island timeshare company, Coral Resorts. One couple claims that they were promised things like a unit by the pool, waived maintenance fees, an available timeshare every Thanksgiving ... but the company didn't make good on its promises, they say.

Coral Resorts' attorney has denied the owners' claims.

Sounds like a pretty vanilla lawsuit, right? But here's where it gets interesting -- and why the public should take more than a passing notice of the case. For confounding reasons, documents associated with the lawsuits that were once public have been made secret, thanks to efforts by Coral Resorts' attorneys and rulings by judges.

In fact, at every level, a new layer of secrecy has been added to prevent the documents -- once deemed just fine for the public to see -- to be kept under cover. That includes a transcript from a January 2013 Real Estate Commission hearing during which a Coral Resorts lawyer is said to have acknowledged that the company had not paid fees to renew its state registration to sell timeshares since at least 2008.

If that is indeed true (and we don't know because we haven't seen a copy of the transcript), it could be the smoking gun timeshare owners are seeking. It might nullify the contracts they signed.

Coral Resorts is denying that any lapse of registration occurred and won't comment on what the attorney supposedly said.

We're not in a position to know just what happened or weigh in on which side should prevail in court. But as advocates for transparency and accountability, we're troubled by the fact that no one can inspect or discuss the transcript and other documents associated with the cases. No one can see them because, at the end of the hearing, commission members allowed Coral Resorts to pay past-due fees -- and declared that although the hearing had been public, its decision was private. It's not clear why the commission, a public body, would made such a strange decision with no legal basis.

And indeed, when the ruling was appealed, the state's Administrative Law Court chief judge, Ralph K. Anderson III, called the commission's actions "bewildering," and criticized it for making "parts of the proceeding public and parts of it private."

Then Anderson made a ruling that compounded the problem, deciding that the discussion that took place during the commission's hearing should also be private along with the transcript and any other related documents.

And in a separate but parallel case involving Coral Resorts, another judge -- 14th Circuit Judge Carmen Mullen -- also ruled to seal the transcript and other documents at the request of Coral Resorts.

Company officials have said the documents need to be sealed because they include trade secrets and proprietary information about the company. We counter that that does not mean all documents in the case should be sealed. In fact, it's common practice to release documents under the Freedom of Information Act and simply redact portions that legitimately need to be kept secret.

A blanket approach to sealing court documents undermines the judicial system. Judges' default setting should be to keep records open except in extraordinary circumstances. A transcript from a meeting of a public entity that is accountable to the people of this state would not appear to meet that standard.

We are also mindful of the fact that this secrecy is not just a worry for a couple of dozen timeshare owners. Who's to say what records in what trial might next be sealed?

Mullen's ruling that sealed Coral Resorts' records has been appealed. The Island Packet and The Beaufort Gazette have moved to intervene in the appeal. We believe the sealed documents should remain public records -- available for the public to view.

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