There is obvious tension between the court’s role to be a public institutions that is transparent, and the desire of litigants to keep the terms of their settlements private.

Efficacy leads some judges to fairly routinely accept confidential settlements, and the media rarely is there to object.  But, recent developments in the 7th Circuit are worth following.

The National Law Journal reports:

The U.S. Court of Appeals for the Seventh Circuit has refused to allow the sealing of settlement agreements in two civil actions, citing the “presumption of public access to judicial records.”

Regarding one of the cases, Judge Richard Posner wrote, the information is important to future negotiations over attorneys’ fees in cases in which the plaintiff is a minor. “[N]o good reason—in fact no reason at all—has been given for thinking that concealment of the information would serve some social purpose,” he wrote.

The court issued the joint ruling on Thursday denying a motion to seal in Goesel v. Boley International (H.K.) Ltd. and dismissing a similar motion in Massuda v. Panda Express Inc.

Goesel involves Chicago firm Williams, Bax & Saltzman’s motion to keep the personal injury settlement and information about the lawyers’ costs and fees under seal pending an appeal of U.S. District Judge Milton Shadur’s June 2013 order cutting Williams Bax’s fee.

In Massuda, U.S. District Judge Ronald Guzmán in July 2013 dismissed most claims in a breach of fiduciary duty case, holding that those claims were derived from the parties’ previously settled case.

Posner began by acknowledging that “there will rarely be a good reason” to disclose the terms of settlements made without court action, even if they’re filed in court as part of the process of closing a case. Posner contrasted that with situations when the court does take action.

 

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