There is a strong presumption of public access to Court files. The origins of the presumption are both the common law and the First Amendment to the United States Constitution.[1] The Constitutional presumption of public access to Court files is independent of the common law.[2] This presumption is or should be at work in catastsrophe claims in particular, but nowhere does it face greater challenges.
Both presumptions of public access to Court files, whether based upon the common law or upon the First Amendment, apply with particular strength in the case of judicial records. For example, the presumption is very strong that judicial records relating to summary judgment should remain open and accessible to the public. This is because these proceedings adjudicate the relative rights of the parties and, in the case of summary judgment proceedings in particular, often serve as substitutes for trials.[3]
The idea that the public pays for judicial proceedings is central to both presumptions of public access to the records of judicial proceedings. "The parties are hereby advised that '[a]s an undertaking funded by the people of the United States, [this court's] decision will be publicly published to decide both the matter at hand, and also guide other entities on the law.'"[4] To put it another way:
The court is aware of the cost to the parties and in some ways the cost to the truth-finding process that comes with proceeding in an open forum. But the public nature of [the] forum in which the parties have chosen to air their dispute and the manner of operation needed for the forum to maintain its legitimacy and integrity extract certain costs from the litigants that come before it. But for very limited circumstances, the publicity of an adjudication is one of those costs. The parties have not met the heavy burdens needed to permit this court to operate in secret.[5]
Whether based on the common law or on the First Amendment, the presumption of public access to Court files is not absolute.[6] "The presumption of public access may be rebutted."[7]
Properly rebutting the presumption of public access may depend largely on whether a given case involves issues important to the public. An example is a case presenting "information bearing on defects and safety concerns with products."[8] Cases involving claims for damages allegedly caused by catastrophes and disasters, whether the disasters are natural or man-made, clearly contain within them issues important to the public.
So do cases involving insurance coverage for natural and man-made disasters, because it has been held that many issues present in ordinary insurance cases, while not perhaps "garden-variety," involve "claims-handling" practices and often involve claims of insurance bad faith as well. "Public importance" has effectively been equated with "the potential to impact concretely the legal rights of other carriers and/or insureds not before the court."[9]
This is the overall standard that one court has applied to an insurance case to determine whether that case contains issues of such importance to the public, that the public should be allowed to know them and the documents, testimony, and information that relate to those issues. The insurance carrier sought to seal and to keep a seal on its files and deposition testimony of its representatives. The insured involved in the case manufactured and sold clothing that protected coal miners including their ability to breathe. The insured sued its umbrella commercial CGL carrier in that case for alleged wrongful denial of coverage and bad-faith claims handling practices, among other things.
The District Court denied the insurance company's motion to seal, holding under the circumstances of that case as follows:
Finally, the information plaintiff seeks to maintain under seal is of public importance to defendant, its fellow carriers, the underlying claimants with unresolved claims and future claimants. The parties' dispute encompasses numerous issues of public importance, including plaintiff's claims-handling role, what constitutes proper exhaustion, the burden of proving the judgments or settled claims fall within the grant of coverage, the trigger of coverage for each type of dust/substance exposure involved, whether general administrative expenses in coordinating a national defense may be apportioned and proportionally allocated as a form of ultimate net loss covered under the policy and so forth. Other carriers and all current and future claimants have a significant interest in knowing (1) the types of litigation and settlement practices that will be deemed to be acceptable and give rise to indemnification under the standard terms in the policy and (2) the range and type of evidence and information as well as the legal arguments and precedents that a court will consider and find important in resolving these disputes. These entities and individuals are members of the public and have the potential to have their rights affected by the resolution of the issues forming the parties' dispute. That interest cannot be summarily discounted in the name of protecting the plaintiff's ability to minimize its financial exposure from the debacle created by its past products.[10]
The burden is on the party seeking to overcome the presumption of access to show the interests in secrecy at stake that arguably outweigh the presumption. It has been held that showing "a clearly defined and serious injury" equals the showing of "good cause" needed to overcome the presumption.[11] The burden is to show that disclosure will cause "a clearly defined and serious injury" and to show it with specificity. The showing cannot succeed, it has been held, if it is "bereft of specific examples."[12]
In general terms, the presumption of access is not ordinarily overcome regarding "information that is used by a party to shelter itself from additional liability and litigation[.]"[13] In other words, the possibility or even likelihood that documents, testimony, and information revealed in one lawsuit may be shared with lawyers and parties in other lawsuits is not a good reason to conceal them from the public:
With increasing frequency, defendants, as well as other insurers, are finding themselves embroiled in litigation over whether there is coverage for property damage as a result of environmental harm. The courts have emphatically held that a protective order cannot be issued simply because it may be detrimental to the movant in other lawsuits.[14]
[1] E.g., Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1066, 1070 (3d Cir. 1984); Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 559 (W.D. Pa. 2014).
[2] E.g., In re Cendant Corp. (Goldstein v. Forbes), 260 F.3d 183, 198 n.13 (3d Cir. 2001); Republic of Philippines v. Westinghouse Elec. Corp., 949 F.2d 653, 659 (3d Cir. 1991) (dicta; Third Circuit's analysis in this case was expressly confined to the common law).
[3] E.g., Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135-36 (9th Cir. 2003); Rushford v. New Yorker Mag., 846 F.2d 249, 252 (4th Cir. 1998).
[4] Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., No. 09-290, 2013 WL 1336204, at *11 (W.D. Pa. March 29, 2013). Accord, Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 587 (W.D. Pa. 2014). Cf. Newman v. Graddick, 696 F.2d 796, 801 (11th Cir. 1986) ("In addition, open proceedings may be imperative if the public is to learn about the crucial legal issues that help shape modern society. Informed public opinion is critical to effective self-governance.").
[5] Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 587 (W.D. Pa. 2014).
[6] E.g., Bank of America Nat'l Trust & Sav's Ass'n v. Hotel Rittenhouse Assoc's, 800 F.2d 339, 344 (3d Cir. 1986); Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 560 (W.D. Pa. 2014).
[7] In re Cendant (Goldstein v. Forbes), 260 F.3d 183, 194 (3d Cir. 2001).
[8] Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 561 (W.D. Pa. 2014).
[9] Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 566-67 (W.D. Pa. 2014) (emphasis added).
[10] Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 581 (W.D. Pa. 2014).
[11] E.g., Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir. 1984) (emphasis added); Mine Safety Appliances Co. v. North River Ins. Co., 73 F. Supp. 3d 544, 560 (W.D. Pa. 2014).
[12] In re Cendant (Goldstein v. Forbes), 260 F.3d 183, 194 (3d Cir. 2001).
[13] Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1137 (9th Cir. 2003). To the same effect, e.g. : Wauchop v. Domino's Pizza, Inc., 138 F.R.D. 539, 547 (N.D. Ind. 1991) ("The risk—or in this case, the certainty—that the party receiving the discovery will share it with others does not alone constitute good cause for a protective order."); Nestle Foods Corp. v. Aetna Cas. & Sur. Co., 129 F.R.D. 483, 486 (D.N.J. 1990) (stating that "if the basis for defendants' motion is to prevent information from being disseminated to other potential litigants, then defendants' application [for a Rule 26(c) protective order] must fail").
[14] Nestle Foods Corp. v. Aetna Cas. & Sur. Co., 129 F.R.D. 483, 486 (D.N.J. 1990).
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