The Charter Oak Fire Insurance Company et al v. American Capital, Ltd. et al

Filing 492

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 3/17/2015. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
CHARTER OAK FIRE INSURANCE
COMPANY, et al.

:

v.

:

Civil Action No. DKC 09-0100

:
AMERICAN CAPITAL, LTD., et al.
:
MEMORANDUM OPINION
I.

Background
The parties have filed multiple motions and requests to

seal and supplements to prior motions to seal.
2014,

the

granting

undersigned

Defendants’

counterclaims

and

issued

motion

denying

a

for

in

the

leave

three

connection with that motion.
explained

memorandum

September

to

motions

On September 2,

opinion
file

to

and

third

seal

order

amended

filings

(See ECF Nos. 378 & 379).
2,

2014

memorandum

opinion,

in
As
the

parties’ motions to seal, (ECF Nos. 286, 308, 322), were overly
broad, as they essentially attempted to seal the documents in
their entirety, with minimal, if any, redactions.
were

given

identified

fourteen
in

their

(14)
three

days

to

motions

cure
to

the

seal

The parties
deficiencies

and

to

propose

necessary redactions to the court’s memorandum opinion.
After receiving extensions of time, the parties submitted
directly

to

chambers

letters,

dated

September

23,

2014,

and

exhibits with proposed redacted filings; curiously, the parties
did not file their letters and proposed redacted exhibits on the
court

electronic

filing

system

as

necessary.

After

being

informed about this omission, on March 16, 2015, the parties
filed on the court electronic filing system their submission of
September 23, 2014, accompanied by two motions to seal.

(ECF

Nos. 481 & 489).
Per the court’s instruction in the September 2, 2014 order,
the

third

seal.

amended

(ECF

No.

counterclaims
380).

On

were

temporarily

September

26,

filed

2014,

under

Plaintiffs

answered the third amended counterclaims, (ECF No. 388), and
moved to seal their answer (ECF No. 389).
seal

their

brief

Plaintiffs’

motion

joining
to

seal

in

part

their

and

answer.

Defendants moved to
opposing
(ECF

in
No.

part
394).

Finally, Plaintiffs moved to seal portions of their brief in
further support of their motion to seal the answer.

(ECF No.

403).
Defendants filed a motion for sanctions, and the parties
moved to seal their respective filings in connection with that
motion.

(ECF Nos. 333, 344, & 373).

2

II.

Analysis
A.
Motions to Seal Filings in Connection with Defendants’
Motion for Leave to File Third Amended Counterclaims
The September 2, 2014 memorandum opinion noted that the

three motions to seal filings in connection with Defendants’
motion for leave to file third amended counterclaims did not
comply with the procedural requirements because they did not
include

“proposed

representations
alternatives
protection.”

to
to

reasons
justify
sealing

supported
sealing,”
would

by
or

not

(ECF No. 378, at 30).

specific

“an

factual

explanation

provide

why

sufficient

In their previous motions

to seal, the parties largely redacted the filings and exhibits
in

their

entirety,

and

proposed

sealing

in

full

Defendants’

third amended counterclaims.
In the September 23, 2014 letter, Plaintiffs indicate that
Defendants disagree with their proposed redactions.

Plaintiffs

attach new proposed redactions with justifications for redacting
certain

material.

Specifically,

Plaintiffs

argue

that

the

redacted material is confidential because it falls into one or
more of the following categories:
a. Insurance claim records and testimony
relating to insurance coverage for a body
of personal injury cases that remains
pending and unresolved;
b. Insurance claim records and testimony
relating
to
internal
Travelers’
deliberations regarding insurance coverage
3

for these claims, including confidential
attorney-client communications;
c. Records and testimony regarding Travelers’
internal
underwriting
processes,
procedures, and decisions;
d. Records
and
testimony
constituting
attorney
work
product
and
materials
prepared in anticipation of the litigation
of this dispute; and
e. Materials previously accepted by the Court
for filing under seal.
Next to each proposed redaction, Plaintiffs indicate one or
more of the above categories which they believe justify the
redaction.

In their September 23, 2014 letter, Plaintiffs argue

that no First Amendment concern is present because the materials
at issue relate to an amendment to counterclaims, rather than to
a “request that the [c]ourt make any decision on a claim based
on the merits of the claim.”

(ECF No. 488, at 2).

Plaintiffs

acknowledge the concern for public access to judicial materials,
but

submit

access

that

interest

their
here

privacy

because

interests

the

outweigh

materials

filed

the

public

under

seal

reflect Plaintiffs’ internal business policies and procedures
and

insurance

claim

deliberations,

and

disclosure

of

such

information in its entirety could be harmful to Plaintiffs.
By letter dated September 23, 2014, Defendants object to
Plaintiffs’

proposed

redactions

and

suggest

that

all

of

the

filings made in connection with their motion for leave to file
third

amended

counterclaims

should
4

be

published

in

full.

Defendants

explain

that

they

previously

moved

to

seal

their

opening and reply briefs only because those filings referenced
documents

that

Plaintiffs

had

designated

as

pursuant to the Stipulated Protective Order.

“confidential”

(ECF No. 112-1).

Defendants emphasize that under the protective order the burden
of proving the confidential nature of the material under seal
resides

with

the

“confidential.”

party

Defendants

that
contend

designated
that

the

material

Plaintiffs

have

not

demonstrated that underwriting and claims handling materials are
confidential

or

proprietary

to

justify

their

redaction.

Defendants believe that:
[t]o
make
a
sufficient
factual
representation to warrant sealing of such
documents, Travelers would need to show (1)
that it claimed privilege on the documents
and included them on a privilege log; (2)
that it was compelled by the court to
produce the documents; (3) that it did not
waive its privilege claim (by voluntarily
providing deposition testimony or producing
other documents on the same subject); and
(4) that it held no current intention to
waive its privilege claim by relying on the
documents in its Answer or in support of its
affirmative defenses.
(ECF No. 484, at 2-3).

Defendants contend that Plaintiffs’

redactions are selective, and focus on “keeping what Travelers
consider[] to be the ‘bad’ facts under seal but publishing what
Travelers consider[] to be ‘helpful’ allegations.”

5

(Id. at 3).

The United States Court of Appeals for the Fourth Circuit
“has extended the application of the First Amendment test to
‘dispositive’

civil

motions,

such

as

a

motion

for

judgment that is successful either in full or part.”

summary
Allstate

Ins. Co. v. Warns, 2012 WL 681792, at *17 (D.Md. Feb. 29, 2012);
Rushford,

846

F.2d

at

252.1

The

Fourth

Circuit

has

not

determined whether documents related to a “non-dispositive civil
motion” should be protected by the First Amendment, but has
noted that civil proceedings are ‘traditionally open’ and that
‘in some civil cases the public interest in access . . . may be
as strong as, or stronger than, in most criminal cases.”

Va.

Dep’t of State Police, 386 F.3d at 580.
As Plaintiffs point out, the redacted filings relate to a
non-dispositive
counterclaims
Plaintiffs

have

motion
and

requesting

proposed

redacted

leave

third

information

to

amended
that

add

two

new

counterclaims.

pertains

to

their

business processes, underwriting decisions, communications with
attorneys,

and

attorney

impressions.

The

fact

that

claims

handling and underwriting documents (and deposition testimony or
emails discussing such documents) were previously produced to
Defendants

during

discovery

and

1

that

the

court

previously

The Fourth Circuit recently held in Doe v. Public Citizen,
749 F.3d 246, 268 (4th Cir. 2014), that “the First Amendment
right of access extends not only to the parties’ summary
judgment motions and accompanying materials but also to a
judicial decision adjudicating a summary judgment motion.”
6

determined
claims

that

handling

Plaintiffs
functions

could

not

performed

assert
by

privilege

attorneys

does

over
not

necessarily dictate that such information must be published in
full.
The

court

finds

based

on

an

independent

review

that

Plaintiffs have demonstrated that the proposed redactions to the
respective
September

briefs,
2,

2014

third

amended

memorandum
are

counterclaims,

opinion

modest,

leaving

are

and

justified.

much

of

the

the
The

proposed

redactions

content

intact.

Plaintiffs do not object to the full release on the

public docket of all but two of the fifteen exhibits filed in
connection with their opposition to Defendants’ motion for leave
to file third amended counterclaims.2

Plaintiffs state in their

letter that they propose to redact two exhibits – ECF Nos. 307-8
(declaration of defense counsel) and 307-9 (an email exchange
between

Travelers’

versions.
passed.

personnel)

–

but

do

not

provide

redacted

The time for filing such proposed redactions has long

Those exhibits will be unsealed.

The parties were also asked jointly to propose redactions
to the September 2, 2014 memorandum opinion and to the third
amended

counterclaims.

Plaintiffs’

reasonable and will be accepted.

2

proposed

redactions

are

Unfortunately, Plaintiffs have

Plaintiffs also do not object to full publication of an
exhibit to Defendants’ reply brief.
7

not

filed

version

of

on

the

the

counterclaims.

court

electronic

memorandum

filing

opinion

and

system
the

a

third

redacted
amended

Instead, Plaintiffs filed (in a single document

under seal) the proposed redacted documents, highlighting the
proposed redactions, without filing on the public docket the
redacted documents.

Going forward, every motion to seal must

include: (a) a sealed unredacted version of the document; and
(b) a redacted version filed on the public docket.

The parties

also must separate the different exhibits (instead of filing
them in bulk in a single document), and label the exhibits to
correspond to the appropriate docket entry.

Failure to adhere

to this procedure will result in a denial of any motion to seal.
Plaintiffs did not adhere to this procedure here; they must
file on the public docket promptly the redacted version of the
September 2 memorandum opinion (contained at ECF No. 488, at
232-253), and the third amended counterclaims (contained at ECF
No. 488, at 20-120).
B. Motions to Seal Filings in Connection with Defendants’
Motion for Sanctions
Defendants’

motion

for

separate memorandum opinion.

sanctions

is

being

resolved

by

Plaintiffs have also supplemented

the motion to seal Defendants’ reply brief in further support of
the motion for sanctions.

(ECF No. 373).

Although the initial

motion to seal the reply memorandum and accompanying exhibits

8

hardly proposed any redactions, Plaintiffs now suggest narrow
redactions

related

to

claims

handling

documents, and attorney impressions.

and

underwriting

Plaintiffs do not object

to the full release on the docket of two of the three exhibits
to the reply brief.

Plaintiffs seek to seal in its entirety a

one page excerpt from a deposition of Tracey Seitz, Travelers’
in-house counsel.

They provide no justifications for why the

page

sealed

needs

to

confidential

be

information

publication.

and

it

is

would

not

be

apparent

that

any

by

its

jeopardized

Accordingly, the clerk will be directed to unseal

ECF Nos. 372-1, 372-2, and 372-3.

The motion to seal the reply

brief will be granted in part and Plaintiffs promptly must file
on the public docket the redacted reply memorandum (contained at
ECF No. 488, at 152-198).
The parties have not supplemented their motions to seal
Defendants’
memorandum.

motions

for

sanctions

and

Plaintiffs’

opposition

Both motions were filed prior to the decision of

September 2, 2014, setting forth the necessary standards for
sealing

papers

in

the

court

file.

The

only

document

that

reflects a genuine attempt at redacting confidential information
is

Defendants’

sanctions.
memorandum

memorandum

(See
in

ECF

support

No.
of

in

support

331).
sanctions

Thus,
will

of

the

motion

Defendants’
remain

for

opening

under

seal.

Neither party has provided any justification for keeping under
9

seal the thirty-three (33) exhibits to the motion for sanctions.
Accordingly, the clerk will be directed to unseal ECF Nos. 332-1
through 332-33.
The opposition filed by Plaintiffs essentially is redacted
in full, leaving unredacted, if anything, the introductions and
conclusions.
filed

(See ECF Nos. 345).

under

seal

without

The exhibits have also been

sufficient

justification.

supplement was filed in the intervening time.

No

Thus, Plaintiffs’

motion to seal their opposition and accompanying exhibits will
be denied.

Accordingly, ECF No. 343 and all of the accompanying

exhibits (ECF Nos. 343-1 through 343-41) will be unsealed.
C.
Motions to Seal Answer to Defendants’ Third Amended
Counterclaims (ECF No. 389)
Plaintiffs have moved to seal portions of their answer to
the third amended counterclaims.

(ECF No. 389).

Plaintiffs

provide proposed redactions to their answer and advance multiple
arguments

in

favor

of

adopting

the

proposed

redactions.

Plaintiffs argue the material they redacted is covered by the
parties’ Stipulated Protective Order.

As explained many times,

this reason alone does not justify sealing.
point

out,

however,

confidentiality
litigation

of

that

they

testimony

preparation

and

“seek

concerning

underwriting

the

Plaintiffs also
to

maintain

claims

materials

the

handling,

which

have

been redacted, because they reflect Travelers’ internal business

10

policies

and

procedures

and

claim

deliberations,

and

the

disclosure of this information could be harmful to Travelers.”
(Id. ¶ 8).

They also explain that “the claims handling and

litigation preparation materials at issue in large part reflect
Travelers[’]

internal

attorneys.”

(Id.

¶

categories

and

(discussed

9).

specific

paragraphs

communications

Plaintiffs

above)

redacted material fall.
that

external

within

identify

which

the

they

(See ECF No. 389 ¶ 11).
(or

paragraph

with

excerpts)

its

specific

believe

the

They argue
from

their

answer fall within one or more of the following categories:
a. Insurance claim records and testimony
relating to insurance coverage for a body
of personal injury cases that remains
pending and unresolved;
b. Insurance claim records and testimony
relating
to
internal
Travelers’
deliberations regarding insurance coverage
for these claims, including confidential
attorney-client communications;
c. Records and testimony regarding Travelers’
internal
underwriting
processes,
procedures and decisions;
d. Records
and
testimony
constituting
attorney
work
product
and
materials
prepared in anticipation of the litigation
of this dispute.
(Id.).
Defendants filed a memorandum joining in part and opposing
in part Plaintiffs’ motion to seal portions of the answer.
No.

393).

Defendants

join

Plaintiffs’

11

motion

insofar

(ECF
as

Plaintiffs redact information that Defendants believe pertains
to settlement discussions or statements that should not be made
public

pursuant

“[t]he

expectation

treatment

shall

to

Fed.R.Evid.
that

not

408.

discussions

be

used

Defendants
designated

against

a

state

for

that

Rule

participant

408

in

the

litigation and, at minimum kept confidential from third parties,
are

public

policy

cornerstones.”

(Id.

at

4).

Defendants

believe that the remaining redactions Plaintiffs propose are not
justified, however.

Many of the arguments made in Defendants’

memorandum (and Plaintiffs’ reply for that matter) exceed the
scope of the motion to seal.

Defendants appear to argue that

Plaintiffs have put attorney impressions at issue by raising
“advice of counsel” as a defense to the bad faith and fraud
counterclaims.

Defendants

argue

that

by

placing

attorney

impressions at issue in this case, they cannot seek to redact
from their answer information pertaining to attorney impressions
or work product.
In

their

references

to

(Id. at 5-7).3
reply

memorandum,

settlement

discussions

Plaintiffs
should

be

concede
redacted,

that
but

“strongly dispute[] that such evidence will not be available to

3

Defendants’ memorandum also suggests that they perceive
Plaintiffs’ redactions as a strategic litigation tactic to
preserve privilege on appeal.
The court need not examine
purported ulterior motives in determining whether the proposed
redactions to the answer are justified.
12

Travelers to defend itself against Defendants’ claims at trial,
including their claims that Travelers acted with a

lack of good

faith or that Travelers’ actions cause[d] them to enter the
Baxter Settlement and Cost Sharing Agreement.”
4).

(ECF No. 402, at

The court need not resolve the admissibility of evidence at

trial at this stage, and certainly not on a motion to seal.4
Plaintiffs also contend that communications between Travelers
and its counsel during the claims-handling process are properly
redacted independent of any privilege.

(ECF No. 402, at 3).

They point to Rule 1.6 of the Maryland Professional Code to
support this contention.

See, e.g., Newman v. Maryland, 384 Md.

4

In a footnote to their reply memorandum, Plaintiffs
acknowledge that the court need not resolve evidentiary issues
in resolving the motion to seal, but explain that nevertheless,
they felt compelled to respond to Defendants’ assertions. As a
general observation, it is disconcerting that both parties
cannot even agree on motions to seal. Much of the briefing on
both sides is devoted to disputes over the factual and legal
issues at the core of this insurance case and conjecture
regarding purportedly underhanded strategies employed by each
party, rather than focusing on the motions at hand.
This
approach is not a good use of the parties’ or the court’s
resources.
Going forward, the court expects the parties to
conduct themselves in a cooperative fashion, rather than viewing
every dispute as an opportunity to spar. See Bethesda Software
LLC v. Interplay Entertainment Corp., Civ. Action No. DKC 092357, 2011 WL 1559308, at *6 (D.Md. Apr. 25, 2011) (“Hopefully,
with a little collaboration, the lawyers are spared the
embarrassment of making clearly erroneous arguments . . . [and]
[t]he clients are spared needless expense incurred in the
litigation of discovery disputes and the attendant delay.”
(internal quotation marks omitted) (quoting Higginbotham v. KCS
Int’l, Inc., 202 F.R.D. 444, 453 (D.Md. 2001)).
The parties
would also be well-advised to keep their briefs focused on the
respective issues at hand and avoid extraneous arguments.
13

285,

302

(2004)

(“Whereas

the

attorney-client

privilege

addresses compelled disclosure of client secrets during judicial
proceedings,

client

Professional

Code

maintain

the

confidentiality

relates

to

confidentiality

the
of

under

Rule

attorney’s
all

1.6

general

aspects

of

a

of

the

duty

to

client’s

representation”).
Based on an independent review, the court finds that the
redactions to Plaintiffs’ answer are justified.
materials

constitute

(regarding
references

Plaintiffs’

insurance
to

internal

underwriting

settlement

The redacted

business

and

discussions

claims

with

a

seek

constitute
this

stage

to

redact

the

confidential
of

the

answer

information

litigation.

wholesale;
which

handling),

third-party,

communications with in-house and outside counsel.
not

practices

may

Defendants

and

Plaintiffs do
the

be

redactions
redacted

focus

on

at
the

materials’ potential evidentiary use at trial (or at the summary
judgment stage), but these arguments are immaterial for purposes
of a sealing motion.

Plaintiffs have filed on the docket a

sealed and redacted version of their answer.
390).

(ECF Nos. 388 &

For the foregoing reasons, Plaintiffs’ motion to seal

their answer to the third amended counterclaims will be granted.
D. Additional Motions to Seal
Defendants move to seal their brief joining in part and
opposing in part Plaintiffs’ motion to seal their answer.
14

(ECF

No. 394).

Defendants essentially seek to seal the brief in its

entirety,

in

exhibits.

In their motion to seal, Defendants argue that these

addition

to

sealing

fully

four

accompanying

documents “discuss in detail certain confidential material that
Defendants contend should be sealed (for the reasons stated in
the Joinder brief).”

(ECF No. 394 ¶ 5).

Defendants also point

to the Stipulated Protective Order as further justifying the
sealing.
Interestingly,
redactions,

yet

Defendants

they

scold

themselves

Plaintiffs

make

no

for

attempt

to

improper
redact

portions of their joinder brief, instead effectively sealing the
document

in

exhibits.

its

entirety

along

with

(See ECF Nos. 392 & 393).

the

four

accompanying

Defendants believe that

these documents should be sealed for the reasons explained in
their

brief,

settlement
answer

and

but

the

discussions
why

the

brief

contains

should

be

proposed

arguments

redacted

redactions

from

should

(arguing that Plaintiffs waived privilege).
clear

why

sections

of

the

brief

as

to

why

Plaintiffs’
be

rejected

It’s not at all

referencing

settlement

discussions cannot be redacted, allowing the remaining sections
to

be

published.

justifications
full.

for

Defendants
sealing

Accordingly,

also

do

not

the

four

accompanying

Defendants

will

have

15

seven

offer

any

exhibits

in

(7)

days

to

submit a newly redacted version of the brief and exhibits as
noted herein.
Plaintiffs move to seal portions of their reply memorandum
in support of their motion to seal the answer to the third
amended counterclaims.

(ECF No. 403).

minimal redactions are justified.
references

to

communications.

settlement

Plaintiffs’ proposed

The redacted portions include
discussions

and

attorney

Accordingly, Plaintiffs’ motion to seal will be

granted.
Finally, both parties have moved to seal their September
23, 2014 letters to the court.
letters

need

not

remain

under

(ECF Nos. 485 & 489).
seal,

and

the

clerk

will

The
be

directed to unseal ECF No. 484 and ECF No. 488, at 1-5.
IV.

Conclusion
A separate Order will follow that reflects the foregoing

rulings.
/s/
DEBORAH K. CHASANOW
United States District Judge

16