AND DISCRETION REGARDING REFUSAL TO COMPEL DISCLOSURE OF DISCOVERY TO STRANGERS TO THE LITIGATION.
In Good v. Farmers Ins. Co., ___ P.3d ___, 2023 WL 5951464 (Okla. Ct. Civ. App., Div. 3, Decided Feb. 15, 2023 & Mandate Issued Sept. 13, 2023), the issue was public access to materials in a closed insurance bad faith lawsuit.
The underlying, closed bad faith lawsuit arose out of the defendant carrier's denial of a homeowner's insurance claim for damage allegedly due to an earthquake. As a part of that claim in litigation, the homeowners-plaintiffs alleged that the carrier "wrongfully engaged in a pattern and practice of denying earthquake damage claims." Good, 2023 WL 5951464, ¶ 2, at *1.
There were two kinds of materials at issue. One kind consisted of "three hundred and fifty-two filings in the [underlying] case up to the date of the filing of the dismissal with prejudice." Good, 2023 WL 5951464, ¶ 4, at *2. The other set of publicly undisclosed materials consisted of more than "ten million pages of documents and multiple depositions of [the insurance carrier's] officers and executives[.]" Good, 2023 WL 5951464, ¶ 5 n.5, at *2 n.5.
The plaintiffs in the second lawsuit, Cole and Teri Newby, were also homeowners with an earthquake claim for coverage under a policy issued by the same carrier. They filed a motion to intervene in the underlying case for the purpose of accessing both the sealed documents in the court file and the voluminous materials produced by the carrier in the underlying case. Their motion was denied.
On appeal, the Oklahoma Court of Civil Appeals first held in this case that the trial court had erred regarding its denial of access to the Newbys regarding the sealed documents in the court file of the underlying case. The Oklahoma appellate court ruled that the nonparty Newbys had standing to intervene for the purpose of asserting the right of public access to all these documents and materials, the documents undisclosed and sealed, and the undisclosed discovery materials as well. Good, 2023 WL 5951464, ¶ 8, at *3.
This ruling that nonparties to an insurance bad faith lawsuit have standing to assert public access to materials involved in that lawsuit is potentially important to other insurance bad faith lawsuits in other jurisdictions in which trial courts have entered protective orders barring disclosure of such materials in similar cases.
Further, as the Newbys contended, the Oklahoma appellate court ruled that the trial court failed to follow Oklahoma law when the trial court entered its Protective Order allowing documents in the court file to be sealed. Good, 2023 WL 5951464, ¶¶ 9-12, at *4-*5. However, the trial court's failure to follow Oklahoma law favoring public access did not necessarily mean that the trial court's failure made the documents subject to public access.
Rather, or so the appellate court ruled in this case, although the trial court's Protective Order necessarily had to be reversed, still the matter would be remanded to the trial court to review the merits of the Newbys' request that the documents be made publicly accessible. See Good, 2023 WL 5951464, ¶12, at *5.
As to the materials made available by the carrier during discovery in the underlying case, the Oklahoma appellate court ruled that the Oklahoma trial court had the discretion to enter a Protective Order making them publicly accessible, or not accessible at all. Good, 2023 WL 5951464, ¶¶ 13-14, at *5-*6. In the precise context of this specific case, "the trial court did not abuse its discretion when it denied the Newbys' request for production of all unfiled discovery documents." Good, 2023 WL 5951464, ¶ 17, at *7.
Like the Newbys, nonparties to bad faith litigation in other jurisdictions may win the battle but lose the war of public access, so to speak -- but the potential exists for public access to documents filed in public court files in every case, and so it existed here. Most importantly for other litigation, nonparties have standing to sue to require public access in insurance bad faith litigation if this decision is followed elsewhere in that regard.
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Confidentiality and concealment of materials in first-party bad faith insurance cases like Good are discussed throughout §§ 9:28-9:28.100 in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (3d Edition West Publishing Company, 2023 Supplements in process). The same issues in the context of third-party bad faith cases are discussed in 1 id., §§ 3:107-3:107.100.