Merkey v. Does [1]

Jeff Merkey, a former employee of Novell, sued the operators of several websites with ties to the open source community, including legal news site groklaw.com [2], technology news site slashdot.org [3], and intellectual property site ip-wars.net [4], on claims including defamation, intentional infliction of emotional distress, tortious interference, and invasion of privacy, after the various websites reported on Novell's trade secrets lawsuit against Merkey. Merkey alleged that the defendants worked in concert to damage his reputation and repeatedly threatened to terrorize and murder him and his family.

When Merkey's complaint [5] was originally filed, it included an unredacted copy of the confidential settlement between Merkey and Novell as Exhibit 2.  The court subsequently ordered [6] that Exhibit 2 be redacted from the publicly available record. Then, over the [7] course of [8] several [9] motions [10], Merkey withdrew his claims against all of the defendants.

Before the court redacted Exhibit 2, Al Petrofsky, a third party not named in the original case, posted a copy of the complaint, including Exhibit 2, to scofacts.org [11].  Exhibit 2 was also posted to Wikipedia.org [12] before redaction.  Merkey filed a motion for an order to show cause [13] why Petrofsky should not be sanctioned for violating the court's order sealing Exhibit 2. Merkey also sent a notice [14] to Wikipedia alerting it to the court's order.  Merkey then moved to reopen the case [15] for enforcement of the redaction against Petrofsky, which the court granted [16]. Merkey then filed a second amended complaint and served Petrofsky.

After a month without a response from Petrofsky, Merkey moved for entry of a default judgment [17] against him.  The magistrate judge filed a report [18] on Merkey's motions to the court, recommending that the entry of default judgment be granted, Petrofsky be ordered to remove Exhibit 2 from scofacts.org, and Merkey be allowed to amend his complaint against Petrofsky to include damages.  In response, Petrofsky filed an objection [19], challenging the court's jurisdiction over him because Merkey's prior claims against him had been dismissed. 

The court rejected [20] Petrofsky's argument, saying that it still retained jurisdiction over the existing issue.  The court also granted Merkey's motion for default judgment and ordered that Exhibit 2 be removed from scofacts.org.  But the court noted that while Petrofsky should not make Exhibit 2 available on the website, he was not bound by the previous court order, as "the issue of whether the sealing order applies to third parties has not been addressed on the merits."  As a result, the court ruled that Petrofsky should not be held liable for any damages that resulted, and if Petrofsky did not remove Exhibit 2, Merkey would have to file a new case and claim in order to seek damages.  Thus, the court closed the case, and ordered each party to pay its own attorney's fees and costs.

Petrofsky removed Exhibit 2 from scofacts.org in response to the court's order.