Sealed Mulvaney case shows rules for sealing court documents

Published February 2020

Eric Robinson
By Eric P. Robinson, USC School of Journalism and Mass Communications

On the surface, a legal case with an appeal currently pending before the South Carolina Court of Appeals looks like a technical business case resulting from a real estate deal. But as originally reported by the Washington Post, the case involves White House acting chief of staff John Michael (“Mick”) Mulvaney.

This is not obvious from the name of the case, Indian Land Ventures, LLC v. Lancaster Collins Road, LLC. But what makes it even harder to discern Mulvaney’s involvement is that all of the documents in the trial are sealed.

Details of the case come from the Post, a post on the Credit Slips blog by Georgetown University law professor Adam Levitin and another blog post by UCLA law professor Eugene Volokh, who credited Levitin and wrote about the case on his own Volokh Conspiracy blog.

In 2007, Mulvaney formed a company to develop a strip mall in Indian Land, S.C. The company borrowed money to fund the development from a bank and from a company controlled by local businessman Charles Fonville, Sr. After the development plan failed, a new company—according to Fonville, also controlled by Mulvaney—was created which bought the mortgage from the bank, then moved to foreclose on that mortgage. The new company would then sell the property at foreclosure, leaving no assets to pay Fonville’s secondary mortgage.

Fonville’s company sued in the South Carolina Circuit Court in Lancaster County, alleging that the maneuvers were “fraudulent acts” made with the ­“intent to deceive,” and that they constituted a “breach of contract.”

The documents in virtually all cases in the state are available through the state courts’ online docket system. But while Fonville’s case is visible, none of the documents in the case are accessible: the case has apparently been sealed by the trial court. However, documents in the pending appeal are available, including some documents from the trial court proceedings.

From this partial record, it can be discerned that the trial court granted summary judgment to the new company on Nov. 12, 2019. Two days later, the company filed a notice of the lawsuit with the county clerk, as required for all actions effecting property ownership. On Nov. 22, Fonville filed a motion for the court to reconsider its ruling, which was denied on Nov. 26. Then, on Dec. 30, Fonville filed his appeal.

While the court’s order granting summary judgment is available through the case record in the appeals court’s online docket system, it is not available from the trial court. Levitin criticized this in his blog post, writing that “I’ve never seen an order deciding a foreclosure action that is under seal. It’s frankly ridiculous. This is a dodgy land deal, not a state secret.”

The United States Supreme Court has ruled that the First Amendment requires that criminal court proceedings must be open to the public except when absolutely necessary, and only if the closure is limited to what is absolutely necessary to further that interest. Many state and lower federal courts have extended this openness requirement to most civil cases.

In South Carolina, the state Supreme Court has ruled that openness of criminal and civil court proceedings is also required under the South Carolina Constitution, which provides that “[a]ll courts shall be public.” The South Carolina Supreme Court has also held that closing judicial records is subject to the same standard as closure of court proceedings: they can be closed only where “countervailing interests outweigh the public interests in access.”

Is it unclear whether the trial court hearing the Mulvaney land case made such a finding, since the order sealing the case is among the documents that are sealed. But it is troubling that a trial court would entirely seal a relatively routine case when a high-profile person is involved in that case.

Eric P. Robinson is an assistant professor at the USC School of Journalism and Mass Communication and is Of Counsel to Fenno Law in Charleston / Mount Pleasant, although any opinions are his own. He has worked in media law for more than 18 years and is admitted to legal practice in New York and New Jersey and before the U.S. Supreme Court. This column is for educational purposes only; it does not constitute legal advice.

Other recent columns