The Judicial Conference of the United States’ Advisory Committee on Civil Rules asked the Federal Judicial Center to conduct research on sealed settlement agreements filed in federal district court. Although the practice of confidential settlement agreements is common, the question is how often and under what circumstances such agreements are filed under seal.
Many civil cases settle before trial, and defendants commonly seek confidentiality agreements concerning the terms of settlement. Usually such agreements are not filed. A high proportion of civil cases settle,1 but a sealed settlement agreement is filed in less than one-half of one percent of civil cases. In 97% of these cases, the complaint is not sealed.
The Law of Sealing
“It is clear that the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents.” Nixon v. Warner Communications Inc., 435 U.S. 589, 597 (1978) (footnotes omitted). “It is uncontested, however, that the right to inspect and copy judicial records is not absolute. Every court has supervisory power over its own records and files, and access has been denied where court files might have become a vehicle for improper purposes.” Id. at 598. Accountability is a principal reason for public access. Joy v. North, 692 F.2d 880, 893 (2d Cir. 1982) (“An adjudication is a formal act of government, the basis of which should, absent exceptional circumstances, be subject to public scrutiny.”); Jessup v. Luther, 277 F.3d 926, 928 (7th Cir. 2002) (“the public cannot monitor judicial performance adequately if the records of judicial proceedings are secret”); id. at 929 (“The public has an interest in knowing what terms of settlement a federal judge would approve and perhaps therefore nudge the parties to agree to.”); Union Oil Co. of California v. Leavell, 220 F.3d 562, 568 (7th Cir. 2000) (“The political branches of government claim legitimacy by election, judges by reason. Any step that withdraws an element of the judicial process from public view makes the ensuing decision look more like fiat, which requires compelling justification.”).
C-42 - Pappas v. Hartford Life Insurance Co. (IL-N 1:99-cv05612 filed 08/27/1999). Insurance action concerning the defendants’ sales practices in marketing and selling whole life and universal life policies. The case settled. The settlement transcripts were sealed.