We wrote here previously regarding the Sixth Circuit’s decision in Shane Group v. Blue Cross Blue Shield of Michigan vacating a class action settlement because the district court improperly refused to unseal the parties’ substantive filings. In revisiting the district court’s sealing orders, the Court of Appeals found that the parties’ cursory justifications for their sealing requests were “patently inadequate.” And based on this failure to elucidate reasons for sealing, the Sixth Circuit vacated every one of the district court’s sealing orders. Since its decision in June, the Sixth Circuit had occasion to interpret and apply Shane Group, and in doing so, offered key learnings for litigants seeking to toe the line for compliance with the Sixth Circuit’s newly-pronounced standard.
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.