Another stipulated secrecy order has been approved. Probably not the latest iteration of the stipulation process, but a recent one at this time: Crews v. American Gen. Life Ins. Co., No. 2:16-cv-02095-RGK-RAO, 2016 WL 4033954 (C.D. Cal. July 26, 2016) (Oliver, U.S.M.J.).
The Crews case is a dispute over life insurance policy proceeds. The primary beneficiary of the life insurance policy is the only plaintiff in the case. He stipulated with the only defendant in the case, the life insurance company.
Together, they stipulated to what should be kept secret, not only by themselves but by all others who might be retained or whose testimony or documents might appear in the Court file. In particular, they stipulated that "discovery regarding potentially confidential manuals, guidelines, and internal procedures" of the life insurance company are all secrets. Note that "discovery regarding" the life insurance carrier's manuals, guidelines, and procedures is a complete secret according to these two parties and not just the manuals, guidelines, and procedures themselves.
In particular, the two Crews parties stipulated for themselves and for others that the CONFIDENTIAL information they want to keep secret includes the evidence that will be produced in discovery in support of the plaintiff's claims for breach of contract and insurance bad faith:
Plaintiff anticipates seeking discovery regarding potentially confidential manuals, guidelines, and internal procedures of American General that includes confidential and proprietary information of American General, production of which may violate confidentiality agreements between American General and third parties.
Crews v. American Gen. Life Ins. Co., No. 2:16-cv-02095-RGK-RAO, 2016 WL 4033954, at *1 (C.D. Cal. July 26, 2016) (stipulated paragraph numbered 1.2, "GOOD CAUSE STATEMENT," approved by Oliver, U.S.M.J.).
No individualized determinations of discoverability if these parties can help it.
Using words not found in any applicable Rules of Civil Procedure, they stipulated to keep secret "private information for which special protection from public disclosure and from use for any purpose other than prosecuting this litigation may be warranted." Crews v. American Gen. Life Ins. Co., No. 2:16-cv-02095-RGK-RAO, 2016 WL 4033954, at *1 (C.D. Cal. July 26, 2016) (stipulated paragraph number 1.1, approved by Oliver, U.S.M.J.) (emphasis added).
What exactly is "private information" in the eyes of the plaintiff primary beneficiary? If this is intended to mean personally identifiable information like Social Security numbers, then that kind of information is already protected by statute from disclosure and a stipulation is not necessary. So, to say again, what does "private information" mean here? We do not know. The plaintiff primary beneficiary and the defendant life insurance company in this case did not say.
Neither did the Court which approved their stipulation.
The standard for trade secret protection, as well as for protection of other information and items to be kept confidential by Courts presiding over litigation, has never been that secrecy "may be warranted." The standard most often applied is "for good cause shown." Since when do Courts enter orders allowing parties to keep testimony and documentation secret because secrecy "may be warranted" instead of requiring the parties to produce evidence showing why?
The Crews parties securitized their secrecy, as it were: They made an agreement to keep the testimony and documents in their case secret in other cases as well, not just to keep the discovery and evidence secret in their own litigation. The sole plaintiff and the only defendant in Crews also stipulated that their secrets should be kept even if another Court in another case ordered that they disclose "any information or items designated in this Action as 'CONFIDENTIAL'." If another Court enters such a disclosure order in another case, or if a subpoena issues from that other case for any information that either the plaintiff primary beneficiary or the defendant life insurance company designates CONFIDENTIAL in Crews, then the primary beneficiary and the life insurance carrier in Crews will "cooperate" unless they "timely seek a protective order," in which case they "shall not produce any information [that either of them] designated as 'CONFIDENTIAL'" in Crews, "before a determination by the court from which the subpoena or order issued, unless the Party has obtained the Designating Party's permission." Crews v. American Gen. Life Ins. Co., No. 2:16-cv-02095-RGK-RAO, 2016 WL 4033954, at *5 (C.D. Cal. July 26, 2016) (stipulated paragraph number 8[c] approved by Oliver, U.S.M.J.).
The stipulation does not provide for how a Court in another lawsuit is supposed to determine whether the information designated CONFIDENTIAL by either party in Crews should be disclosed in another case, or kept secret. Good luck to anyone attempting to pursue that course, and good luck in getting permission from the primary beneficiary or from the life insurance carrier to disclose for example the practices at issue in the Crews litigation.
One final thought and that is how these parties have obtained enforcement powers over their stipulation. The secrecy stipulation being a "court order" now, "[a]ny willful violation of this Order may be punished by civil or criminal contempt proceedings, financial or evidentiary sanctions, reference to disciplinary authorities, or other appropriate action at the discretion of the Court." Crews v. American Gen. Life Ins. Co., No. 2:16-cv-02095-RGK-RAO, 2016 WL 4033954, at *7 (C.D. Cal. July 26, 2016) (stipulated paragraph numbered 14 approved by Oliver, U.S.M.J.). So that is how the secrecy stipulation will now be enforced, and by whom: The United States District Court for the Central District of California.
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