The presumption of openness as practiced by judges and parties (Part 2 of 2)

February 19, 2015

Insurance LawSometimes the proposed stipulated secrecy goes even farther and attempts to reach out to other cases.  In one of several such proposed secrecy stipulations, the parties filed a “Joint Motion for Stipulated Protective Order” in the lender force-placed insurance case of Fladell v. Wells Fargo Bank, N.A., Dkt. No. 84 filed Oct. 23, 2013 (S.D. Fla. Case No. 13-60721-Civ-Moreno/Otazo-Reyes).  They attached a proposed stipulated protective order to their stipulated motion.

On the same date that the secrecy stipulation was filed with its proposed order — October 23, 2013 — a United States Magistrate Judge signed the parties’ proposed secrecy order without making any changes to it.  Dkt. No. 85, filed October 23, 2013, in the Fladell Court file.

Another stipulated protective order attempting to reach out to protect materials already discovered in another case, and signed by the U.S. Magistrate Judge on April 22, 2013 in that case, came in McKenzie v. Wells Fargo Bank, N.A., Dkt. No. 121 (parties’ proposed stipulated protective order signed by the U.S. Magistrate Judge) filed April 22, 2013 (N.D. Cal. Case No. 3:11-cv-04965-JCS).

The stipulated protective order filed in Fladell in this regard is representative of the genre.  The parties provided that even though items had been declared open to the public in two previous cases, those same items could still be kept secret in the Fladell case:

  1. Discovery items that were marked “CONFIDENTIAL” in Kunzelmann or Williams shall be treated as designated “CONFIDENTIAL” in this action and shall be subject to the terms of this SPO [Stipulated Protective Order]. (Nothing in this paragraph, however, shall be deemed to be any waiver of any kind of objection to production in this case, including but not limited to attorney-client privilege or attorney work product, even if such objection was not made in Kunzelmann or Williams or any discovery in Kunzelmann or Williams was inadvertently produced….)

Dkt. Nos. 84 and 85, ¶ 11.  [Emphasis added.]

The success of this attempt in Fladell is unclear.  That case settled before the issue could be addressed.   The Fladell settlement agreement is clearly the product of negotiation.  See Fladell v. Wells Fargo Bank, N.A., Dkt. No. 168 filed March 17, 2014, Order Granting Motion for Settlement (S.D. Fla. No. 13-cv-60721).  Not everyone agrees with the results of the negotiation, however.  The settlement agreement recited among other things that the defendants could use the settlement as a res judicata bar against other claims in other cases, while the defendants would not object to an attorney’s fee award of up to $19 Million.  Certain members of the class defined in the settlement agreement objected to the amounts payable to the class and to the attorney’s fee award, among other things, and all their objections were overruled by the District Court.  Those rulings are currently on appeal to the Eleventh Circuit Court of Appeals in Atlanta, Georgia.

Parenthetically, the above-quoted stipulation proposed by the Fladell defendants identifies the two cases which caused the defendants’ attorneys the most concern in Fladell, namely, the lender force-placed insurance cases of Kunzelmann v. Wells Fargo Bank, N.A. (S.D. Fla. No. 9:11-cv-81373-DMM)  and Williams v. Wells Fargo Bank N.A. (S.D. Fla. No. 11-21233-CIV).

In contrast, in a decision from the same District as Fladell, the Chief United States Magistrate Judge of that District rejected the argument that material is secret simply because the parties have designated it “CONFIDENTIAL”.  In a class action against Government Employees Insurance Company and Bell, LLC for alleged violations of the Telephone Consumer Protection Act, the defendant Bell objected to discovery because the information requested was a trade secret.  Bell chose to make no showing that the material was a trade secret apparently, but seemingly was content that just an assertion of “trade secret” made it a secret.  In that case, the parties had entered their own secrecy stipulation which was written along the lines of every secrecy stipulation discussed above.

The Chief U.S. Magistrate Judge of the Southern District of Florida overruled these objections because they were not supported by a showing, by proof that the material in question was a protected trade secret.  The Court called them mere “summary statements” and they were legally insufficient to keep the materials under seal, away from public view.  See Cabrera v. Government Employees Insurance Co., 2014 WL 2999206, *9 (S.D. Fla. July 3, 2014)(Seltzer, Chief U.S.M.J.).

Which ruling is likely in a given case – secrecy or openness – may depend on the Judge who decides the particular issue, rather than the legal presumption that Court records should be kept open to the public and that the parties must show why the things they want to keep out of the public eye should be sealed.