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District Court on Sealing Settlement Awards


From Judge Paul A. Engelmayer's decision two weeks ago in TIG Insurance Co. v. National Union Fire Insurance Co.:

Pursuant to [a Reinsurance] Agreement, respondents submitted the dispute to arbitration …. The panel ruled in favor of petitioner and concluded that the disputed policies were outside the scope of the Contract. Petitioner was ordered to pay respondents any unpaid balance, minus any amount owed under the disputed policies. Respondents, in their correspondence to the Court, state that the award has since been fully satisfied….

On November 4, 2019, petitioners filed their Petition to confirm the Award. Petition. Petitioners seek "an Order of Judgment in favor of [Petitioner] and against Respondents on the Final Award." … [R]espondents do not oppose the petition….

The court confirmed the award, but rejected the parties' request "to file the Award under seal, and to file the Petition itself in redacted form":

In determining whether the parties have overcome the presumption of public filing, the Court applies … Lugosch v. Pyramid Co. of Onondaga (2d Cir. 2006). First, the Court must determine whether the documents at issue—here, the arbitral Award and the Petition to confirm it—are "judicial documents" to which the common law presumption of public access attaches. It is "plain as day" that these documents "are judicial documents…. [These] documents 'initiated judicial proceedings, are the cornerstone of the case, the very architecture of the lawsuit, and access to' them is undoubtedly 'necessary if the public is to understand this court's decision.'"

Second, having "determined that the documents are judicial documents and … a common law presumption of access attaches, [the Court] must determine the weight of that presumption." … [S]uch weight "will fall somewhere on a continuum from matters that directly affect an adjudication to matters that come within a court's purview solely to insure their irrelevance." Here, there is no question that the documents the parties seek to seal or redact—the arbitral Award and the Petition to confirm it—are front and center in this case. Indeed, they are the documents on which the Court has relied to resolve the Petition. Therefore, the Court concludes that the weight of the presumption in favor of public access in this case is at its "zenith."

Finally, the Court must balance competing considerations against public access, including but not limited to "the danger of impairing law enforcement or judicial efficiency and the privacy interests of those resisting disclosure." Here, the parties have not argued that the information contained in the Award or in the Petition, which quotes the Award, is proprietary or that its presence in the public domain will somehow cause harm to either party. Nor is it apparent from the plain text that such could be the case.

Rather, the sole competing interest identified by the parties is the existence of the confidentiality agreement that governed the underlying arbitration. That agreement does not bind the Court and is, without more, insufficient to overcome the public's countervailing interest in access to the courts. "The common law right of public access to judicial documents is firmly rooted in our nation's history." The presumption of access is based on the need for federal courts "to have a measure of accountability and for the public to have confidence in the administration of justice." Monitoring by the public "both provides judges with critical views of their work and deters arbitrary judicial behavior." The Court concludes that the fundamental importance of access to the courts is not outweighed by the parties' desire to extend their confidentiality agreement….

The parties have asked for the imprimatur of the federal judiciary on their arbitral award. The Court is happy to grant that request. However, by availing themselves of the judicial process, the parties must also contend with the values of transparency and public access which undergird its legitimacy.