The decision in First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.) came in the course of ...
... an insurance coverage dispute in which the Plaintiffs seek coverage from the defendant insurers for a $212.5 million dollar settlement with DOJ and HUD of a claim of violation of the False Claims Act relating to errors and omissions in underwriting and origination of HUD mortgage loans. In defense, the Defendants contend, inter alia, that the claim is “interrelated” to an earlier claim made by First Tennessee and thus barred under a later policy and that First Tennessee failed to timely notify the Defendants of the claim.
First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268, at *1 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).
In this decision, the Court dealt with many issues. One of the more unusual issues illustrates the judicial prerogative over secrecy in litigation.
The plaintiffs, a bank and its parent, withheld many documents on the ground that a federal agency, HUD and specifically the "HUD Office of the Inspector General," placed a "General Confidentiality Restriction" on production of what in the end turned out to be three documents that the plaintiffs withheld on this ground. "The Plaintiffs do not claim that these documents are privileged and do not dispute the relevancy of these documents." First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268, at *11 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).
The plaintiffs also apparently did not say why HUD supposedly declared the withheld documents to be "confidential," saying only that HUD had done so.
This was not good enough for the Chief U.S. Magistrate Judge here. "'[C]onfidentiality is not a recognized basis for withholding discovery,' even when such a confidentiality restriction is imposed by a U.S. agency," she ruled. Further, the Court had already entered a protective order in this case and that ended the matters of what to designate and how to declare it "confidential" in the litigation. "[A]ny confidentiality concerns are adequately addressed by a protective order, which is already in place in this litigation." Therefore, ruled the Court, since the documents in question are relevant and not otherwise privileged, "the Plaintiffs must produce these documents." First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268, at *11 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).
The protective order in question is Document No. 129, filed on January 7, 2016. I found it through PACER. On the first page, the protective order recites that the parties submitted their own proposed protective order but the Court in this case rewrote it.
On the last page, the protective order entered by the Court recognizes a presumption that is recommended to all other U.S. District Courts and State Courts to recognize as well:
- As there is a presumption in favor of open and public judicial proceedings in the federal courts, this Order shall be strictly construed in favor of public disclosure and open proceedings wherever possible. The Order is also subject to the Local Rules of this District and the Federal Rules of Civil Procedure on matters of procedure and calculation of time periods. To the extent that there is any conflict between the terms of this Order and rules of the Court, the rules of the Court will govern. Nothing in this Protective Order shall be deemed to be a decision by the Court as to how documents and other material will be handled at the trial of this matter. Nothing in this Protective Order shall be construed to prevent this Court from disclosing any facts relied upon by it in making or rendering any finding, ruling, order, judgment, or decree of whatever description.
These rulings expand beyond the insurance coverage case in which they were made, of course. These rulings conclusively demonstrate that all questions of confidentiality concerning discovery in litigation are always questions which must be resolved by Courts and by no-one and nothing else.
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