THOMAS MARJERISON ESQ NORMAN HANSON & DETROY LLC.
MICHELLE ALLOTT, ESQ FARRIS LAW.
Thomas D. Warren Justice, Superior Court.
The parties have submitted letters enumerating a number of discovery disputes and have raised certain privilege issues. To the extent that either plaintiffs or defendants wish to supplement the letters previously filed with transcripts, discovery materials, and legal authorities, they shall do so by August 17, 2012.
In the meantime, counsel shall confer on any discovery issues as to which no Rule 26(g) conference has been held and counsel for plaintiff shall advise the clerk whether plaintiff objects to the proposed amended scheduling order submitted by counsel for defendants with her July 26, 2012 letter.
A Rule 26(g) discovery hearing shall thereafter be scheduled.
The entry shall be:
Discovery order entered. The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a).
The court has reviewed the submissions of non-parties Wayne Dodwell and Down East Community Hospital in response to its July 5, 2012 order to show cause. It has also reviewed the authorities cited by Down East Community Hospital to the extent that those authorities are available to the court.
None of the authorities that the court has reviewed speak to the circumstances of this case - where a plaintiff law firm which is not subject to any confidentiality agreement (although in possession of the information contended to be confidential) seeks to collect fees from defendants who are subject to confidentiality provisions contained in a settlement agreement with non-parties but who allege that no fees are owed and that the law firm committed malpractice in connection with the (contractually confidential) terms of the settlement agreement.
The cited case which may be closest on its facts to the instant case is Young v. State Farm Mutual Automobile Insurance Co., 169 F.R.D. 72 (S.D.W.Va. 1996), in which a law firm sought to collect fees it claimed were owed based on a confidential settlement. The court in Young was faced with a threshold question of whether the defendants could resist discovery as to the settlement amount because of the contractual confidentiality provision. The court concluded that notwithstanding the confidentiality provision, the information sought was discoverable. Although it granted the requested discovery subject to a protective order, the opinion leaves very little doubt that the settlement amount would also be admissible at trial.
The court in Young did not have to reach the issue presented here - whether the contractual confidentiality provision would require the court to seal its file and hold any trial in a closed courtroom. Under circumstances of this case, the principle that court proceedings and records are public cannot be reconciled with the non-parties' request that crucial terms of the settlement agreement continue to receive confidential treatment.
As far as the court can tell, absent some kind of star chamber proceeding closed to the public, it would be impossible for the parties to litigate this case without disclosing the information claimed to be confidential. By way of example, if the plaintiff law firm offers evidence at trial of its contingent fee agreement and the amount received by defendants in the settlement - evidence required to justify a damage award if the law firm were to prevail at trial - this will necessarily result in disclosure of information that is confidential under the settlement agreement.
The principle that court proceedings are open to the public is a fundamental tenet of our judicial system. See, e.g., Publicker Industries Inc. v. Cohen, 733 F.2d 1059 (3d Cir. 1984). The court is unwilling to engage in the kind of star chamber proceeding that would be necessary to allow the parties to litigate the merits while maintaining the confidentiality sought by the non-parties.
In addition, the non-parties have fallen far short of demonstrating a sufficiently compelling interest in confidentiality. Counsel for Dodwell asserts only that it is "highly unlikely" that he would have settled absent a confidentiality provision. Down East Community Hospital has submitted an affidavit from its CEO similarly indicating that the hospital would not have settled without a confidentiality provision and expressing concern that the disclosure of certain terms of the settlement "could send the wrong message to the public, . . . reflect negatively on [the hospital], . . . open up old wounds, . . . could be disruptive to the [hospital] community and/or derail the significant progress [the hospital] has made." These are speculative concerns that do not constitute the land of "clearly defined and serious injury" or "overriding interest" that could possibly justify keeping court proceedings confidential. See Publicker Industries, 733 F.2d at 1071, 1073.
The court understands that confidentiality provisions are often necessary for settlement, and to the extent possible it would enforce such provisions if it could do so without the necessity of (1) sealing any dispositive motions that are filed, (2) closing the courtroom during any litigation of the merits, and (3) issuing a secret decision at the conclusion of the case.
As the court has previously stated, however, this does not mean that the entire record will be unsealed at this time. Counsel for Down East has informed the court that it is only seeking confidential treatment with respect to certain specified terms in the Term Sheet and Settlement Agreement and with respect to certain pleadings that have been filed. None of the parties have filed dispositive motions, the case has not been reached for trial, and defendants are currently seeking an extension of the discovery deadline. As far as the court can tell, moreover, this case has not yet gone to mediation, and it may never be necessary to litigate the merits. In the interim, therefore, confidential treatment can be maintained to a limited extent.
Accordingly, the court orders as follows:
1.The court file is unsealed effective immediately except as specified below.
2. Paragraphs 3 and 4 of the Term Sheet and Paragraphs 5(A), 5(D), 8 and 12 of the Settlement Agreement shall remain under seal pending further order of the court. Within 14 days of the date of this order, counsel for Down East Community Hospital and/or counsel for Dodwell and/or counsel for defendants shall submit copies of the Term Sheet and the Settlement Agreement with those paragraphs redacted so that redacted copies may be placed in the open court file and unredacted copies maintained under seal.
3. Any specific portions of plaintiff's complaint, defendants' answer and counterclaims, and plaintiff's reply to counterclaims that disclose information as to the specified paragraphs of the Term Sheet and Settlement shall remain under seal pending further order of the court. Within 14 days of the date of this order, counsel for Down East Community Hospital and/or counsel for Dodwell and/or counsel for defendants shall submit redacted copies of those pleadings so that the redacted copies may be placed in the open court file and unredacted copies maintained under seal.
4. If redacted copies are not received by the court within 14 days as specified above in paragraphs 2 and 3, the court will unseal all of the documents and pleadings for which redacted copies have not been submitted.
5. For the reasons set forth above, if any dispositive motions are filed or if the case goes to trial, the court will unseal Paragraphs 3 and 4 of the Term Sheet and Paragraphs 5(A), 5(D), 8 and 12 of the Settlement Agreement to the extent that it is necessary to do so to allow the merits of the case to be litigated consistent with the right of public access to court proceedings.
6.Any documents or other evidence obtained by the parties during the course of discovery shall be the subject of a protective order providing that the parties and their attorneys shall not disclose information obtained in discovery relating to the terms of the settlement except as necessary to prepare the case for trial, to participate in mediation, and to litigate the case at trial.
The entry shall be:
With the exceptions specified above, the court file shall be unsealed effective immediately. Procedural order entered as to the continued confidentiality of certain specified information. The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a).
Before the court is a motion for summary judgment by plaintiff Law Offices of Peter Thompson and Associates P.A. and by third party defendants Peter Thompson and Chad Hansen.
The Thompson Law Office initiated this action to collect a contingent fee allegedly owed by two former clients, defendants Lowell Gerber, M.D., and Nurse Practitioner Danielle Duval, based on a settlement of Gerber's and Duval's claims against Down East Community Hospital (DECH) and certain individuals affiliated with DECH (collectively, the DECH parties).
Dr. Gerber and Ms. Duval have denied that any contingent fee is owed and have asserted counterclaims against the Thompson Law Office, against Attorney Peter Thompson individually, and against Chad Hansen, another attorney in the Thompson Law Office, for breach of contract, legal malpractice, and disgorgement. The disgorgement claim has since been ...