How ‘Company Doe’ – now revealed as ErgoBaby – triggered 1st Amendment case

By Alison Frankel
May 8, 2014

In September 2011, ErgoBaby — a small California-based maker of baby products – received potentially ruinous news. The Consumer Product Safety Commission intended to post a report on its public database of an incident in which a month-old baby in Maryland died while he was in an ErgoBaby carrier. The baby’s mom had been strawberry picking in hot weather with her infant strapped to the front of her body. The carrier’s coverlet was up, and, according to the initial autopsy report, “rebreathing in a hot environmental condition could have contributed to death.”

ErgoBaby brought in lawyers from Gibson, Dunn & Crutcher, who quickly protested that the CPSC’s proposed report contained materially inaccurate information. There was simply no link, ErgoBaby argued, between its carrier and the baby’s death because the autopsy’s note about rebreathing was sheer speculation. The CPSC revised the incident report twice, eventually removing a reference to the possibility that the baby’s death was related to recirculated hot air and stating that the cause of death was undetermined.

ErgoBaby believed that even the revised report would have a devastating impact on its business — and, moreover, according to CEO Margaret Hardin, that the CPSC public database was not intended to include such vague and unsubstantiated reports. In October 2011, the company’s lawyers filed a suit in federal court in Greenbelt, Maryland, to block the CPSC from publishing the stripped-down incident report. But ErgoBaby didn’t sue in its own name. That would have defeated the whole purpose of the litigation by exposing ErgoBaby’s fight with the CPSC over the incident report — exactly what the company was trying to avoid. So, in what Gibson partner Baruch Fellner called “an historic first,” ErgoBaby was identified in the complaint only as “Company Doe.” It asked the court to allow it to proceed under that pseudonym and to seal the entire docket of the case.

Over the next 10 months of litigation with the CPSC — in which it established that the baby in Maryland had choked on an unidentified object — ErgoBaby managed to keep its identity secret. The litigation went so well for the company that even the CPSC’s main expert ended up agreeing that the direct cause of the infant’s death was choking. In a 74-page ruling in July 2012, Judge Alexander Williams enjoined the CPSC from publishing the incident report. He also kept the case records under seal, agreeing with ErgoBaby that its victory over the CPSC would be hollow if its identity were revealed.

ErgoBaby and Gibson Dunn appeared to have blazed a new path for corporate defendants: They could litigate anonymously to clear their names, even in a matter of great public interest, so long as they could persuade the court of the dire consequences of their exposure.

But then the ErgoBaby litigation took a course the company never anticipated when it filed the suit. ErgoBaby, still known only as Company Doe, became the accidental defender of corporate anonymity in a fight at the 4th U.S. Circuit Court of Appeals with public interest groups that opposed the sealing of court records. Last month, Company Doe lost the fight; the 4th Circuit held — in what I’ve called an unwavering endorsement of open access to federal courts — that the First Amendment precludes companies from litigating under a pseudonym and sealing case records if their only interest is protecting their reputations. The appeals court ordered Company Doe and the records of its litigation with the CPSC, including an unredacted version of Judge Williams’ 2012 opinion, to be exposed.

On Thursday, ErgoBaby disclosed for the first time that it is Company Doe. Before that disclosure, I was offered (and eagerly accepted) a chance to interview CEO Hardin and outside lawyer Fellner about the case, pseudonymous corporate litigation and the implications of the 4th Circuit’s emphatic affirmation of open access. ErgoBaby, according to both its CEO and its lawyer, never meant to shoulder the cause of a corporation’s right to seal nor to be seen as an opponent of the First Amendment and open access to court records. (“That would be a bad thing,” Hardin said.) Nevertheless, Hardin told me that even if ErgoBaby had known in 2011 how the Company Doe litigation would turn out, “we’d go down the same path.”

ErgoBaby’s goal was to establish that companies can challenge CPSC publishing determinations, Hardin and Fellner told me. The law establishing the consumer product safety database does not provide any administrative procedure for such challenges, Fellner said, and he and ErgoBaby couldn’t understand why the CPSC remained adamant about posting the incident report on the Maryland baby’s death after it had agreed to remove any suggestion that the death was linked to the baby carrier.

The first months of discovery in the trial court, Fellner and Hardin said, revealed that a different arm of the CPSC had conducted a forensic investigation of the baby’s death at about the same time that the commission was negotiating publication of the incident report with ErgoBaby. The two branches apparently did not communicate with one another. ErgoBaby, and later Judge Williams, believed that the CPSC’s own investigation report, which ErgoBaby obtained in the litigation, exonerated the company. It included records from the emergency medical technicians who first responded to the mother’s call for help. They found a foreign object in the baby’s airway. According to expert reports from ErgoBaby’s litigation with the CSPC, the autopsy didn’t take note of the object because EMTs pushed it out of the infant’s trachea during resuscitation attempts.

Judge Williams’ decision to enjoin the CPSC from publishing the incident was all that ErgoBaby had hoped for, according to Fellner and Hardin. His analysis of the commission’s rights and responsibilities, which remains untouched by the 4th Circuit because the CPSC dropped its appeal of the injunction, should be a boon to other companies concerned about what the commission published on its database, they said.

“Having gone through this process,” Fellner said, “I think the CPSC may be more concerned with getting it right.” Hardin said she felt vindicated that the trial judge agreed the CPSC incident report unfairly linked its carrier to the baby’s death. “We proved our case in the district court,” she said. “We have that third party, the court, validating our position.”

But the next company that wants to sue the government, at least in the 4th Circuit, won’t have ErgoBaby’s luxury of suing anonymously: ErgoBaby said Thursday that it will not pursue additional appeals of the court’s ruling from last month.

I’ve previously recounted the procedural history behind the public interest challenge to Company Doe and its sealed record, but what I wanted to know from Fellner and Hardin was whether ErgoBaby ever looked for a way to wriggle out of the appeal after CPSC dropped out of the case. The company did challenge the standing of the public interest groups to pursue the appeal. But once the 4th Circuit ignored that argument, ErgoBaby willingly assumed the responsibility and cost of defending corporate anonymity.(Fellner and Hardin declined to say whether Gibson Dunn cut its fees once the case veered off course.) The principle, they said, was important: Litigation to stop the government from unjustly damaging a corporation’s reputation is futile if the company has to expose itself publicly in the process. Without anonymity, they suggested, the government is unaccountable.

The 4th Circuit didn’t buy that argument, though Hardin said she was gratified that Judge Clyde Hamilton, in his concurrence, emphasized the challenge of getting accurate information to the public. “I’m not anti the First Amendment,” she said. “I think the 4th Circuit had to balance two questions: Does the public deserve all information or accurate information?”

“What we were sunk by is the presumption — it runs very deep in America — of an open society,” said Fellner. That presumption, though, is not without its own costs, he said. Knowing that it cannot proceed under seal or pseudonym, Fellner said, the next Company Doe may well decide to forgo litigation when it believes the government is about to publish false or misleading information about it, calculating that news of its suit will worsen the damage to its reputation. Fellner said it’s notable that no company before or since ErgoBaby has gone to court to challenge publication of a CPSC incident report.

The reaction to ErgoBaby’s unmasking will be an interesting test of whether the public can distinguish between allegations and court findings. The company is not traded publicly under its own name but is a portfolio company of Compass Diversified Holdings. Compass reported strong growth at ErgoBaby in its May 7 announcement of first-quarter results. Its share price was down about 90 cents on Thursday afternoon, but it seems unlikely that ErgoBaby’s exposure as Company Doe is responsible since the announcement didn’t generate much news. Hardin said ErgoBaby’s call staff has been prepped to answer questions; the company is emphasizing that the district court litigation showed that the baby’s death was not attributable to the ErgoBaby carrier.

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2 comments

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This is the best analysis of the unfortunate incident I’ve read, thank you.

One detail I don’t see reported anywhere: who exactly reported this to the CPSC? In the ordinary course of events, it doesn’t strike me as obvious that an incident like would make its way to the CPSC unaided.

Posted by WilliamCowie | Report as abusive

This is the best analysis of the unfortunate incident I’ve read, thank you.

One detail I don’t see reported anywhere: who exactly reported this to the CPSC? In the ordinary course of events, it doesn’t strike me as obvious that an incident like would make its way to the CPSC unaided.

Posted by WilliamCowie | Report as abusive