Including, in this case, public access to evidence discovered during insurance bad faith litigation.
In Wright v. State Farm Fire & Cas. Co., No. 2:23-cv-179, 2024 WL 4979849 (W.D. Wash. Dec. 4, 2024), the policyholders filed two motions to seal. Both were unopposed. By rights, you might think that granting two unopposed motions would be automatic. If you thought that, you would be wrong.
In this case, the policyholders’ motions to seal related to “several documents cited in their briefing [that] are covered by the parties’ stipulated protective order and should therefore be filed under seal.” The Local Rules of the Western District of Washington where this action is pending, incorporate the “strong presumption of public access to the court’s files.” To overcome this strong presumption, “a party seeking to file a document under seal must provide ‘[a] specific statement of the applicable legal standard and the reasons for keeping a document under seal, including an explanation of’ specific factors. LCR 5(g)(3)(B).” Wright, 2024 WL 4979849, at *4.
In the Wright case, the policyholders, the Wrights, were of course the parties “seeking to file a document under seal,” but they only provided a statement that State Farm had designated the documents in question “confidential” under a Stipulated Protective Order.
By rights, then, the Wrights’ motions to seal should simply have been denied because they did not provide the required specific statement in order to seal the documents. But that is not what the Court in this case did. Instead, this Court shifted the burden of proof entirely to the party claiming confidentiality, in this case, State Farm:
The Court does not reach the question of whether the presumption of public access has been overcome here. The Wrights seek to file the documents at issue under seal because State Farm “has designated [them] as confidential during discovery.” See LCR 5(g)(1)(A). Thus, to the extent State Farm wishes to maintain the confidentiality of these documents, it bears the burden of satisfying LCR 5(g)(3)(B).
Wright, 2024 WL 4979849, at *4 (emphasis added).
This was exactly the approach taken by the Federal Trade Commission in recent litigation, such as in Fed. Trade Comm’n v. Amazon.com Inc. (W.D. Wash. No. 2:23-cv-01495-JHC, which of course is the same Court as the Court in which the Wright decision was issued, and such as in Fed. Trade Comm’n v. U.S. Anesthesia Ptrs., Inc. (S.D. Tex. No. 4:23-cv-03560). The FTC v. Amazon.com Inc. case is discussed in 1 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 3:107.50 (Thomson Reuters West Publishing Co. & 2024 Supplements), and in 2 id. § 9:28.50, while the FTC v. U.S. Anesthesia Partners case is discussed in 2 id. §§ 9:28.50 and 9:30. The discussion of both cases was accompanied by a prediction that perhaps litigants in insurer bad faith cases would take the position that a given document should be sealed only because another party (usually the defendant insurance company in such cases) designated the item “confidential” under a stipulation, leaving the burden of proof to rest where it should rest: with the party that designated the item “confidential.”
That seems to be exactly what has now happened in the Wright case, for example.
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