by Will Van Sant will.vansant@newsday.com
Published: Thursday, Sept. 29, 2016
When investment adviser William Landberg appeared on Fox Business’ “Bulls & Bears” in 2009, he warned viewers against big gambles and described the careful approach of his firm, West End Financial Advisors.
“What we are looking at for our clients is to be only in spaces where our investors have a very high probability of getting not only a return of their capital,” he said, “but a return on their capital.”
Hidden in a Suffolk County records room was a
lawsuit that strongly disputed Landberg’s claims of probity, charging him with being a deadbeat and fraud.
The lawsuit could have served as a warning to those who had entrusted their money to Landberg, many of whom would lose their life savings, but a judge’s faulty order sealed the case, preventing investors and the public from seeing the records.
The Landberg case is one of more than 300 identified by Newsday that Long Island judges sealed — often without justification — despite government agencies, hospitals and other entities key to the public’s welfare being parties.
Some cases involved matters more troubling than Landberg’s financial crimes, which landed him in federal prison and cost his investors $66 million.
Judges have sealed cases involving sexual abuse at a taxpayer-funded program for disadvantaged kids; a doctor alleged to have serially molested a mentally disabled woman at his medical office; a toddler who died at an unlicensed day care center; and nursing homes that evicted residents unable to pay for their beds.
Cases that involved allegations of misconduct by prominent local figures in finance, politics and law have also been sealed.
Read Part 2
Other names known beyond the region who have been party to sealed cases include the late John R. “Bunky” Hearst Jr., an heir to the Hearst fortune, and James H. Simons, a pioneering hedge fund investor and Long Island’s richest man. One recently sealed case is Fox News host Bill O’Reilly’s lawsuit seeking $10 million from his ex-wife, who he says had an affair with a Nassau County police detective.
In contrast to the Landberg case, judges’ sealing orders in most of these court actions led to concealment of all salient information — what was alleged, who may have been at fault, and whether case records involve matters of public significance. Details of the Landberg case emerged only because a Manhattan judge, ruling in a companion legal action, refused to go along with the investment adviser’s request for secrecy, unlike the judge in Suffolk.
Parties agreeing to seal the record presumably only take their own interests into consideration, and do not consider the interests of the public.
– Judge Paul G. Feinman
In his ruling, the Manhattan judge, Paul G. Feinman, repeatedly cited provisions of the state court rule governing sealing, which requires that judges consider the public’s right to know in making their determinations. He stressed that the power to seal a lawsuit belongs only to the judge, even in cases like Landberg’s where the collection agency had no objection to the investment adviser’s sealing request.
“Parties agreeing to seal the record presumably only take their own interests into consideration,” Feinman wrote, “and do not consider the interests of the public.”
Roots of the rule
Feinman was enforcing a state court rule that was established 25 years ago in part due to worries that a sealing order had hidden information on industrial contamination that threatened a community outside Rochester. The case heightened concern among state court leaders that confidentiality deals were warping case outcomes and that judges, eager to support areas of agreement and keep cases moving, were too often going along when both sides wanted a lawsuit hidden.
The rule bars judges from sealing cases “except upon a written finding of good cause, which shall specify the grounds thereof.” The same language was incorporated in the state’s mental health law, where it applies in cases involving whether a person is unable to care for him or herself and in need of a court-appointed guardian.
Court decisions have interpreted the rule to require that judges do two things: determine whether a party has a legitimate reason to seal a case, then weigh that party’s interest in confidentiality against the public’s interest in disclosure. Also, courts have found that when secrecy is justified, less is best: Judges should not shroud an entire case file when sealing a single record or redacting a name does the job.
Newsday’s examination of more than a decade’s worth of sealing orders found that Long Island judges routinely sealed cases with little or no regard for the rule or case law. Judges neglected to explain their decisions at all or offered boilerplate justifications, citing, for instance, the presence of “confidential and privileged information” in a case file. They also frequently sealed entire files when a more targeted approach would suffice.
For this story, Newsday identified 311 sealed cases that originated in Nassau and Suffolk state Supreme Courts over comparable 10-year periods. Two-thirds involved guardianships, the remainder a range of other civil actions.
Newsday got copies of sealing orders in 261 of the 311 cases and found that:
- Orders in half the cases that did not involve a guardianship simply declared a case sealed or cited the rule without providing any grounds for confidentiality. In these cases, some naming public agencies, financial firms and major health care providers as parties, judges’ orders clearly fell short of what the sealing rule demands.
- In 200 orders, judges relied on generic phrases that were duplicated from one order to another. Most involved guardianships in Suffolk and used language lifted verbatim from the relevant law without reference to the cases at hand.
- In only 14 instances — 5 percent of the 261 orders — did the judge make specific findings substantially tailored to the ca
