This article continues from the article posted here on Sunday, September 21, 2014.
The Order granting the bank executives' motion for summary judgment against the FDIC first addressed the parties' respective and unopposed motions for secrecy, in Federal Deposit Insurance Corp. as Receiver for Cooperative Bank v. Willetts III, et al (United States District Court for the Eastern District of North Carolina Case No. 7:11-cv-00165-BO). Here is a copy of the Order, signed on September 10, 2014 and filed on the electronic docket the next day: Download September 10 2014 Order granting D SJ M FDIC v Willetts III (E.D.N.C. 7.11.165). The paragraph devoted by the Court to the parties' unopposed motions to seal appears on page 3.
The Court in this case based its Order granting the requested secrecy -- aside from the fact that the parties refused to oppose each other's motions to seal -- on "the May 21, 2013 Amended Stipulated Protective Order and Non-Waiver Agreement [DE 71]." [Bracketed material in original. Here is a copy of the Amended Stipulated Protective Order and Non-Waiver Agreement of May 21, 2013 in that case: Download May 20 2013 Amended Stipulated Protective Order And Non-Waiver Agreement FDIC v. Willetts III (E.D.N.C. 7.11.165).)
It is remarkable that the protective sealing Order in this case does not refer to Federal Rule of Civil Procedure 26 which governs the procedure for requesting a protective order including to seal disclosure of things filed, or about to be filed, in the public records of a Federal Court file. However, the amended stipulation from May of 2013 does refer to Rule 26 (and to Rule 29, which is not pertinent to the present discussion of secrecy orders).
Rule 26, then, was invoked by the parties to the FDIC v. Willletts III case, just as Rule 26 has been invoked in many secrecy stipulations filed in many Federal District Court actions in recent years. In their amended stipulation for secrecy in this case, however, the parties agreed that "confidential information" which deserved protection from public view included "Loan Information," "FDIC-C Information," and other things yet to be made specific ("shall specifically include, but not be limited to") "Personal Information". This they wrote on page 2 of their amended stipulation, DE 71.
Rule 26, however, contains no provision for parties to a lawsuit to alter its requirements by agreement. Rule 26 provides that a protective order may be granted by a Federal District Court only "for good cause ... to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense". Rule 26 just does not provide that a party or person will be annoyed, embarrassed, oppressed, or burdened by discovery or disclosure in a Federal District Court action just because the party or person says so. They have to prove it. That is their burden. It is not a burden which can be side-stepped by all parties agreeing that they just do not have to meet this burden in a particular lawsuit, that it would not be convenient for them to follow the rules that apply to other parties in other lawsuits, and that were written to apply to all parties in all lawsuits in Federal District Courts.
See, in addition to the clear language of Rule 26, the Advisory Committee Notes to the 1970 Amendment which enacted present Rule 26(c): "The new reference to trade secrets and other confidential commercial information reflects existing law. The courts have not given trade secrets automatic and complete immunity against disclosure, but have in each case weighed their claim to privacy against the need for disclosure."
If lawyers or Judges are too overwhelmed by the Rules governing litgation to follow the Rules, then perhaps a change is in order but it is not a change in the Rules that is called for in that event.
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