In Braden v. Foremost Insurance Co., No. 4:15-cv-4114, 2016 WL 1417849 (W.D. Ark. April 8, 2016), a Federal Judge in Arkansas essentially rewrote Federal Rule of Civil Procedure 26 with the agreement of the counsel of record in that particular case, and with the agreement of the parties if the parties knew about it.
Rule 26 provides that materials in a court file may be sealed if they are "a trade secret or other confidential research, development, or commercial information." The Rule has been interpreted pretty consistently since it was written to require proof before a court can enter an order sealing materials from public view.
In the Braden v. Foremost Insurance Co. case, as in many cases in contrast, the secrecy order was simply signed by a Federal Judge based on an agreement written by the lawyers "[t]o protect the confidentiality of materials which may contain confidential, proprietary, commercially sensitive, trade secret, or personal information of Foremost's insureds …." Braden v. Foremost Insurance Co., No. 4:15-cv-4114, 2016 WL 1417849, at *1 (W.D. Ark. April 8, 2016).
Protecting personal information of insureds is something all reasonable people can agree is deserving of protection. So, let's get beyond that. In fact, the parties submitted a separate stipulation on that, and the Judge signed that one, too.
However, Rule 26 does not contemplate a blanket order entered in advance of any discovery protecting whatever a lawyer in the case prefers to keep under wraps wholesale.
The experience of Rule 26 shows clearly that secrecy was meant for individualized determinations. Lawyers' secrecy stipulations demean that experience by surrounding whole swaths of testimony and documentation in blanket secrecy, if permitted by judges. Rule 26 depends instead on a determination by a court after adversary proceedings on particular materials or groups of materials for the most part. This way of reaching secrecy determinations is consistent with most other aspects of a judicial system that has been built on the belief that adversary proceedings are the best available engine of determining facts in litigation.
Rule 26 also does not authorize the concealment of testimony and documentation simply because someone thinks it should be kept "confidential, proprietary, [or] commercially sensitive ...." Before the advent of secrecy stipulations and blanket confidentiality orders approving secrecy stipulations without the need for any evidence at all, the party seeking secrecy has always had to prove a need for secrecy.
Perhaps nothing could illustrate this better than the fact that the secrecy order filed on April 8, 2016 in Braden v. Foremost Insurance Co. does not mention Rule 26 even once. Without the Rule, what could possibly be the source of authority to make anything in that case confidential or secret or hidden from public view? There being no such authority cited, the inescapable conclusion is naturally that there is no such legitimate authority at all.
Further, the particular secrecy stipulation offered and accepted in the Arkansas case is an expanded version of what has been a fairly uniform proposed secrecy stipulation used throughout the United States, in many kinds of cases. As noted, however, this one is an expanded version, 20 paragraphs long. The Court's Order approving it occupies 5 printed pages from Westlaw.
It is incredible to accept that these stipulations are a result of intellectual horse trading, or the product of a debate over ideas. The interests of the plaintiffs and of the defendants, particularly in these large cases, are widely separated into one side of the litigation which generally thrives on disclosure in all things including discovery, and another side of the litigation which covets secrecy. Since when do secrecy orders require all those words if they are legitimate?
What was this particular case about anyway? It is telling that there is not a word about the nature of the case in any of the 20 paragraphs or 5 pages. I had to go to PACER ("Public Access to [Federal] Court Electronic Records") to find out. It is about insurance coverage, not state secrets or anything of that kind.
The Class Action Complaint contains allegations that Foremost routinely depreciated labor in calculating the value of repairs.
There are not even any allegations of first-party insurer bad faith to take this case out of the routine and ordinary class and into the sphere of silence and secrecy.
The overuse and over-approval of secrecy stipulations is stifling the founding idea of access to court in the United States. Silent as fog, baseless secrecy orders are enabling the willful elevation of short-term fees over long-term survival of a democracy. Future articles will address this unwelcome step toward rewriting Rule 26 when the lawyers and the judges, and perhaps the parties in particular cases, want to seal the evidence from public view.
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of "Insurance Claims and Issues" (forthcoming Thomson Reuters 2016). All rights reserved.