In a variety of cases that end in settlement, the parties often agree to make the settlement agreement confidential. When the parties agree separately that the terms of the settlement remain confidential, it’s a different story than the one in which the court is required or asked to seal the settlement agreement.
In the case of Goesel v. Boley International, there were two court-sealed settlement agreements that were the subject of an appeal to the 7th Circuit U.S. Court of Appeals in Chicago. The appeal asked to keep the settlement agreements sealed. Judge Richard A. Posner ruled that a confidential agreement between the parties was an insufficient basis for the settlement documents to be sealed.
The Goesel case was a personal-injury lawsuit brought on behalf of a minor. Because of the status of the plaintiff, that being a minor, the plaintiff was required to obtain a district judge’s approval of the settlement. The trial judge reduced a portion of the settlement proceeds that were payable to the plaintiff’s law firm for attorney fees and costs and approved the settlement as then revised. The appeal in this case is by the law firm that challenged the judge’s modification of the settlement terms, which included attorney fees.
In bringing this appeal to the U.S. Court of Appeals, the parties requested that the district court judge seal the settlement, and the judge obliged. The appeal that Judge Posner considered was the law firm’s motion to maintain, under seal, documents that disclosed the amount of the settlement and the amount of the lawyers’ costs and fees.
Judge Posner, referring to Justice Oliver Wendell Holmes, explained:
“’Documents that affect the disposition of federal litigation are presumptively open to public view.’ . . . The reason for this right of public access to the judicial record is to enable interested members of the public to understand judicial decisions, and to monitor the judiciary’s performance of its duties. In re Specht, 622 F.3d 697 (7th Cir. 2010); Nixon v. Warner Communications, Inc., supra, 435 U.S. at 597-98, 98 S.Ct. 1306. . .”
Although Judge Posner’s opinion generally states that the right of public access to the judicial record is most important, he set out some of the several exceptions to that rule.
Judge Posner’s comments on this case made it clear that the size of settlements including the attorneys’ fees and costs may be information the public would be encouraged to know and consider. Judge Posner stated:
“If parties know that the size of their settlement will become public their settlement negotiations are likely to become more complicated . . . The defendant will fear that if the amount is large, making it public will invite more suits against him, while the plaintiff’s lawyer will fear that if the amount is small, he will find settlement negotiations in his next case more difficult.”
In the Goesel case, the court concluded that the parties presented no compelling reason to seal the settlement agreements that were made a part of the filings in the court of appeals. In other words, Judge Posner stated that the parties had not offered any convincing reason for secrecy except that they have a confidentiality agreement. That was found to be insufficient because there is potential public value to disclosing settlement terms, including the amount, and parties have to give a judge a reason for not disclosing these facts. Judge Posner found that sealing the settlement terms was unwarranted. Most striking to the court of appeals was the fact that the parties included a redacted copy of the settlement agreement in the appendix to their brief on appeal, which is a public document. That move by the parties made the idea of sealing a moot point.
Accordingly, the appeal to seal the confidential settlement agreements was denied.
Goesel v. Boley International (H.K.), Ltd., 738 F.3d 831 (7th Cir. 2013).
Kreisman Law Offices has been handling personal injury litigation, medical negligence cases, hospital negligent cases and nursing home abuse cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Chicago (Albany Park, Irving Park, Lincoln Square, Clybourn Corridor, Lincoln Park, Lakeview, Bronzeville, Pilsen, Greek Town, Ukrainian Village, wicker Park, Humboldt Park, Logan Square, Chinatown, Washington Park, Burnside, Pullman, Lake Calumet, East Side, South Shore, Jackson Park), Burbank, Oak Lawn, Calumet City, Chicago Heights, Palos Park, Midlothian, Waukegan, Joliet, Elgin and Geneva, Ill.
Related blog posts:
When an Omission to a Written or Final Judgment was Inconsequential, It Did Not Invalidate the Final Judgment’s Correction
U.S. Court of Appeals for the 7th Circuit Has Affirmed Dismissal of Third Party Counterclaim Involved in an Electrocution Case
U.S. Court of Appeals Sends Federal Case Back to State Court in a Case Involving Both the Second and Seventh Circuit U.S. Courts of Appeals