Confidentiality

Subscribe to Confidentiality via RSS

The Commercial Division of the Supreme Court of the State of New York recently adopted a new form of confidentiality order that eliminates the option to e-file documents redacted for confidentiality without a motion to seal. The new confidentiality form, which became effective on July 1, 2016, requires the “Producing Party” who originally designated the documents as confidential to file a motion to seal promptly after any party files redacted copies of the documents. This puts an end to the option of avoiding filing a motion to seal – an alternative that many attorneys had found convenient when confidential information was submitted to the court on a motion or at trial. The effect of the new rule will likely be to expose more confidential information used in litigation to public scrutiny, or to drive up the cost of avoiding such public exposure, or both.

Non-disclosure and confidentiality provisions can be an important aspect of resolving a case through settlement. But when one of the parties is a purported class, and the allegation is an antitrust violation, settlement and secrecy may be like water and oil.

This tension came to a head in Shane Group v. Blue Cross Blue Shield of Michigan, in which the Sixth Circuit vacated a $30 million settlement between the defendant and a class of Michigan citizens and corporations, settling allegations of health insurance price fixing. The reason: the district court refused to unseal the parties’ substantive filings – including the Amended Complaint, the motion for class certification, and the expert report on which the settlement was based. When a group of class members moved to intervene to unseal parts of the record and adjourn Rule 23 fairness hearings until they could review the settlement, the district court denied their motion to intervene. In the district court’s own view, the settlement was “fair, reasonable, and adequate,” and thus, class members had no further need for information about the case.