Continuing from articles posted here last Friday, September 29, 2023, "GOT COMPLAINTS? YOU CAN KEEP THEM SECRET FROM THE PUBLIC," and on Monday of this week, October 2, 2023, POSTSCRIPT TO "GOT COMPLAINTS? YOU CAN KEEP THEM SECRET FROM THE PUBLIC," I want to redirect our attention, yours and mine, back to insurer bad faith litigation in particular.
I am not sure how this will all fall out in any given case, but suppose with me that a policyholder possesses information – documents, transcripts of testimony, other evidence – but for whatever reason expects that the insurance company that will be a defendant in the case will fight to keep the information a secret.
Or perhaps to limit the use of the evidence to this case alone.
Or perhaps even to pressure the policyholder and her lawyers to agree to keep the information confidential.
In such cases, a policyholder-plaintiff might be sorely tempted to follow the path that the Federal Trade Commission seems to be blazing. Witness the two complaints filed less than a week apart in late September, 2023 in which key allegations and claims were blacked out, or what lawyers euphemistically call "redacted."
Take the FTC's explanation in its case against Amazon, for example, reported here on Friday, September 29, 2023:
The FTC blames Amazon for its redactions. Plaintiff's Motion for Leave to Temporarily Seal Portions of the Complaint, DE 2 at 2, 3-4, filed Sept. 26, 2023 (W.D. Wash. No. 2:23-cv-01495-JHC). Download Federal Trade Commission v. Amazon.com Inc. Motion for Leave to Temporarily Seal Portions of the Complaint DE 2 filed Sept. 26 2023 (W.D. Wash. No. 2.23-cv-01495).
What if our imagined policyholder-plaintiff similarly blamed the defendant carrier for the policyholder's redactions? And what if the policyholder-plaintiff made it clear in her motion to temporarily seal the blacked out parts of her complaint, that she did not think they were confidential, just as the FTC has done in the Amazon case, again, for example:
The FTC said this: "The FTC makes this request to comply with its regulations governing treatment of confidential information submitted to the FTC during its pre-complaint investigation and to give affected parties an opportunity to ask the Court to seal portions of the Complaint on a permanent basis. The FTC is not claiming confidentiality with respect to any information that is the subject of this Motion." Id. at 1-2. [Emphasis added.] The FTC also wrote that its request to seal was based on a "federal statute and FTC rules." Id. at 3-4. [Emphasis added.]
Our policyholder might allege that her request was made to comply with orders or rulings or an agreement with the carrier concerning the exchange of information before her instant lawsuit was filed or because of a presuit contention by the carrier that certain information should be confidential. She might perhaps be as vague as the FTC, which did not identify any of the supposed regulations, statutes or rules on which the FTC was basing its request. She might add, again following the tack taken by the FTC, that she is not claiming confidentiality with respect to any information that is the subject of this Motion.
If the Court allows that approach, then that would put the onus on the carrier to explain to the Court why such evidence should be kept from public view right at the beginning of the lawsuit. This seems to be the approach now being tested in Court by the FTC. As the FTC wrote in its Reply to the author in regard to blacked out allegations and claims in its recent complaints:
Specifically, the Reply written by an FTC spokesperson, here:
In both cases, the companies and defendants who provided the information will have to provide legitimate justification for preventing redacted information from being revealed.
Victoria Graham, FTC spokesperson.
E-mail from Victoria Graham, Spokesperson, Federal Trade Commission, to the author (Sept. 29, 2023, 12:32 PM ET)(on file with author).
Should policyholder counsel wish to pursue such a tack themselves, particularly in insurer bad faith cases, they should watch the results of the FTC's cases very closely – and so should counsel for carriers defending their clients in bad faith cases.
Please read the disclaimer. ©2023 Dennis J. Wall. All rights reserved.
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