Doctor Can't Sue Insurance Company for Libel with Libel Sealed

From today's decision by Judge Jorge Alonso in Orrington v. Humanadental Ins. Co.(N.D. Ill.):

Plaintiffs would like to file an amended complaint under seal, because it would be  embarrassing to them to detail the allegations that support plaintiffs' claim for defamation. That is not sufficient grounds for filing a document under seal.

Litigation in federal courts is presumptively public, and people who "call on the courts … must accept the openness that goes with subsidized dispute resolution." Union Oil Co. of Cal. v. Leavell (7th Cir. 2000) ("Many a litigant would prefer that the subject of the case—how much it agreed to pay for the construction of a pipeline, how many tons of coal its plant uses per day, and so on—be kept from the curious (including its business rivals and customers), but the tradition that litigation is open to the public is of very long standing."). "[O]nly trade secrets, information covered by a recognized privilege (such as the attorney-client privilege), and information required by statute to be maintained in confidence … is entitled to be kept secret." Baxter Int'l v. Abbott Labs. (7th Cir. 2002)…. [P]laintiffs have not shown that the standards of Baxter and Union Oil are met, so their motion for leave to file under seal is denied.

I agree with the court, for reasons laid out in Parson v. Farley (N.D. Okla. 2018) and Manhattan Telecommunications Corp v. Granite Telecommunications, LLC (Del. Ch. 2020):

If the information currently redacted remains so, the public will have no means to understand the dispute [plaintiff] has asked the Court to adjudicate. This conflicts with the public's right to "monitor the proceedings and result[s]"—a right, again, that "has been characterized as fundamental to a democratic state." In other words, when "the supposedly-confidential information represents the nature of the dispute itself—the interest of the public in accessing this information outweighs the economic harm to the parties that disclosure may cause." That is the case here.

Here's the plaintiffs' argument that the court rejected:

The primary factual basis for this action is a baseless complaint that Defendants filed with the Illinois Department of Professional and Financial Regulation concerning Orrington. The limited text in the Amended Complaint that Orrington wishes to file under seal concerns the nature of Defendants' defamatory allegations. Revealing the specific nature of Defendants' defamatory allegations will likely further spread those baseless allegations that Defendants have unjustifiably asserted against Orrington….

Orrington respectfully submits that good cause exists for maintaining this material
under seal because further publishing Defendants' defamatory allegations would result in annoyance, embarrassment, oppression, and undue burden or expense to Orrington. See Fed.R.Civ.P. 26(c); Mimms v. CVS Pharmacy, Inc., 1:15-cv-00970-TWP-MJD, 2016 WL 11547243, at *2 (S.D. Ind. Jul. 14, 2016) (granting motion to seal appendix to summary judgment brief where said appendix contained a chart setting forth alleged defamatory statements made by the defendant about the plaintiff).

Note also that the supposedly redacted Complaint was actually misredacted in a way that allowed people to see the redacted material by just copying it and pasting it into a separate document; but that's moot now that the unredacted amended Complaint has been filed, in accordance with the court order denying the motion to seal.

Comments

[DaivdBehar]

Was the doctor libeled to a licensing board? Are reports to a licensing board legally immune no matter how frivolous or untrue?

If that is the rule in Illinois, it means one thing. The doctor has no hope of prevailing due to legal immunity. That leaves beating the asses of those insurance officials as the sole recourse.

[DaivdBehar]

If the false allegations resulted in some damage, the doctor should include the causes of the damage in his claim, such as employers, spouses, clubs, churches, the police.

[DaivdBehar]

Legal immunity justifies violent remedies in formal logic. That has more certainty than the laws of physics. Courts must stop denying reality by making formal logic supreme over all other legal doctrines. Most of legal doctrines are delusional, bogus, and ridiculous.

[Publius_2020]

It's interesting that the court quotes the high-minded "openness" rule, but then just casually notes that "trade secrets" are an exception. As any litigator knows, the definition of a "trade secret" for purposes of sealing or protective order status is pretty squishy.

The result is that a plaintiff suing a rival or former employee can usually shield from public eye the information that is really at issue (e.g., why Google cares that this particular employee went to work somewhere else), but a defamation or privacy plaintiff is forced to publish the very information that the law deems to be harmful. What is the legal justification for treating those two types of information differently? In both cases, the law recognizes that publication of the information will damage the plaintiff, and in both cases, the law provides a remedy for that damage. But in one of the cases, the plaintiff is required to broadcast the damaging information in order to seek recovery.

[Michael P]

One relevant difference is that a trade secret must be something that its purported owner tried to keep secret, but defamation is -- by definition -- intentionally communicated to a wider audience.

Another is that when litigating misappropriation of a trade secret, the handling of the information is typically the question, rather than its content. But defamation is all about the meaning of the communication.

[Archibald Tuttle]

There are so many of these sealing motions cited here on VC.

Don't their attorneys understand the rules for sealing? That should be covered in law school.
or
Do clients bully their attorneys to file bogus motions to seal knowing that they should fail?

[John F. Carr]

There is a species of lawyer that specializes in reputation management. Some have been known to forge documents to suppress information. Filing a weak motion is nothing to them.

[Eugene Volokh]

I doubt that sealing rules are taught in law school. They certainly weren't in my first-year civ pro class. There are lots of things to cover; law school won't cover all of them.

[David Brayton]

Now I can hardly wait to find out what these libelous statements were all about!