Thursday, May 14, 2020

Standards for Sealing Judicial Record Reviewed

In the case of Moses Taylor Foundation v. Coverys, No. 19-CV-7423 (C.P. Lacka. Co. May 8, 2020 Nealon, J.), the court addressed a Plaintiff’s request to seal an insurance bad faith liability case. 

The Plaintiffs in this matter are a hospital and its self-insurance trust. The Plaintiff filed a breach of contract and bad faith liability case against the hospital’s excess liability carrier and its underwriter. The Plaintiff hospital and its self-insurance trust assert bad faith conduct on the part of the Defendant carriers in refusing to resolve a malpractice case pursuant at the request of the hospital and the trust which allegedly caused the avoidable depletion of the excess coverage funds, thereby resulting in less aggregate excess coverage being available for the hospital to cover other malpractice cases against it. 

With respect to this particular motion before the court, the hospital and the trust were seeking to seal its Complaint and the entire record in this litigation on the basis that such a sealing of the record was necessary to preserve the confidentiality of its settlement negotiations, evaluation methods, and payments in the medical malpractice case as well as other issues. 

The Defendant carriers opposed the motion by arguing that the hospital and trust had not identified a clearly defined serious injury that any of the parties will suffer from public access to the record in this litigation. The Defendants described the matter as nothing more than a run-of-the-mill action alleging a breach of contract and bad faith conduct on the part of a carrier, which does to warrant the sealing of a record. 

Overall, the court noted that, in order to warrant the closure of an entire judicial record, a moving party must establish that their interest in secrecy outweighs the longstanding common law presumption in favor of public access to the records of the taxpayer-subsidized judicial system. 

The court noted that many of the topics that the Plaintiff wanted protected from public disclosure were already matters of public record in the underlying malpractice action. It was also noted that the settlement discussions, evaluation methods, and claims handling practices that the hospital and trust were attempting to have remain confidential are the types of information that are routinely disclosed in courts of law involving bad faith claims against insurance companies. 

In the end, the court found that the secrecy interests cited by the hospital and the trust do not supersede the presumption in favor of open access to the judicial records so as to justify a court-sanctioned closure of the record.

As such, the Motion to Seal the Records in the case was denied. 

Anyone wishing to review a copy of this decision may click this LINK.

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