A pro se Fair Labor Standards Act case may have some lessons for keeping settlement offers secret in insurance bad faith cases.
In Chenault v. Randstad USA Mfg. & Logistics,[1] Mr. Chenault, representing himself without a lawyer, filed a "Motion to Facilitate Settlement." He attached "the settlement offer" or, alternatively, "the settlement letter" that he got from the defendants, using the judge's descriptions of the letter.
The defendants asked the judge to seal the letter and so keep the public from viewing the letter in the Court file.
The reason that the judge gave for sealing the "settlement letter" in this case reveals a lot about how the law treats the secrecy of settlement negotiations. She ruled:
Because “[t]here exists a strong public interest in favor of secrecy of matters discussed by parties during settlement negotiations,” the Court will Order the Clerk of the Court to place the settlement letter under seal in order to preserve the record. Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 980 (6th Cir. 2003). The Court will not consider the settlement letter for any purpose.[2]
Substitute an insurance company accused of bad faith in the place of the defendants in this case, and the lessons of secret settlement negotiations is clear: Settlement negotiations of the case at bar are a secret. Period.
The author is currently at work on 2019 Supplements to both volumes of his Book, Litigation and Prevention of Insurer Bad Faith (Third Edition, Thomson Reuters West), including sections on secrecy and settlements.
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[1] Chenault v. Randstad USA Mfg. & Logistics, No. 5:18-CV-276-KKC, 2018 WL 3964811 (E.D. Ky. August 17, 2018).
[2] Chenault v. Randstad USA Mfg. & Logistics, No. 5:18-CV-276-KKC, 2018 WL 3964811, at *2 (E.D. Ky. August 17, 2018) (emphasis added).
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