In several blog posts I have discussed efforts to seal arbitration awards and arbitration materials in court proceedings to confirm or vacate an arbitration award. But that is not the only circumstance where a party will ask the court to seal purportedly confidential or proprietary documents. In motion practice, particularly motions for summary judgment, information and exhibits may be filed under seal because of alleged confidentiality or because the documents contain allegedly sensitive business information that could put the party at a competitive disadvantage.
In a recent case, a party moving for summary judgment sought to seal documents in a variety of categories, including reinsurance-related documents. Given the court’s hesitancy to seal documents from the public, can you guess the outcome?
In Burnett v. CNO Financial Group, Inc., No. 1:18-cv-00200-JPH-KMB (S.D. IN. Jun. 24, 2024), plaintiffs brought a class action against a life insurer and related companies for breach of contract. Following a motion for summary judgment, plaintiffs moved to maintain certain documents under seal. The documents were filed by defendants, who supported the motion to maintain 13 of the exhibits under seal.
The documents sought to remain sealed were communications with state regulators, actuarial memoranda, expert reports and communications regarding reinsurance agreements. The court denied the motion to keep these documents under seal. In denying the motion, the court concluded as follows:
There is a strong presumption in favor of open proceedings because the courts belong to the public. Sometimes exhibits must be sealed to protect the privacy interests of parties or other interested persons, and the party seeking to shield information from the public bears the burden of showing that its own privacy interests outweigh the public’s interest in open proceedings. The … Defendants … have not met that burden with respect to any of the filings they seek to seal in the pending motion. Their broad assertions of trade secret are not sufficient to show that any of the information contained in these exhibits—all of which are more than a decade old— should be kept sealed and out of the public’s view.
In denying the motion to keep the documents under seal the court made the following determinations. As to the communications with state regulatory officials, the court held that the defendants have neither shown that the exhibits fell within the scope of an Indiana insurance statute mandating confidentiality nor that making these exhibits public would harm their business competitiveness. As to the actuarial memos, the court held that defendants did not explain how the actuarial memos from 2007 and 2008 could harm their business competitiveness today. As to the expert reports, the court found that the briefing did not explain how unsealing the three expert reports at issue would harm their business competitiveness, nor did it address the argument that much of the allegedly confidential information in the expert reports was already publicly available on the SEC’s website. Finally, as to the reinsurance communications, the court held that defendants had not explained how any of the reinsurance information would be harmful to their business competitiveness or would otherwise prejudice them if it were to be made public. Instead, said the court, they summarily argued that reinsurance agreements generally contain sensitive information without discussing why the information in these specific emails should be sealed.
Focusing on the reinsurance information, the holding of the court makes it clear that just saying that reinsurance agreements and communications contain sensitive business information without specifying why the information, if disclosed, would harm the company may not fly with the courts. In other words, if you want to protect confidential or proprietary information from public view, the argument has to be very specific and not generic.
