MINE SAFETY APPLIANCES COMPANY v. THE NORTH RIVER INSURANCE COMPANY et al

Filing 687

OPINION resolving 652 plaintiff's motion for leave to file documents under seal and 654 defendant's motion for leave to file documents under seal in conjunction with an adjudication on the merits. Signed by Judge David S. Cercone on 3/31/14. (mwm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
MINE SAFETY APPLIANCES
COMPANY,
Plaintiff,
vs.
THE NORTH RIVER INSURANCE
COMPANY and RIVERSTONE
CLAIMS MANAGEMENT LLC,
Defendants.

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2:09cv348
Electronic Filing

OPINION
Plaintiff commenced this action seeking redress for defendant North River Insurance
Company's ("defendant") failure to pay proceeds under an umbrella commercial general liability
policy for tendered losses arising out of underlying lawsuits advancing personal injury and
wrongful death claims against plaintiff. Presently before the court are motions to file documents
under seal and to redact privileged and/or confidential information from briefs and/or statements
of material fact to be submitted in conjunction with each party's contemplated motion for summary
judgment. For the reasons set forth below, plaintiff's motion will be denied and defendant's
motion will be granted in part and denied in part.
Plaintiff's averments place the parties' dispute in the following context. "This is [an
insurance coverage action] for breach of contract and statutory bad faith arising out of the failure
and refusal of [defendant North River Insurance Company] (as the issuer of an umbrella liability
insurance policy to [plaintiff]) . . . to honor the contractual and legal obligations [owed to plaintiff]
in connection with asbestos, silica, and coal workers' pneumoconiosis ("CWP") bodily injury

(including death resulting therefrom) lawsuits in which [plaintiff] has been named as a defendant."
Amended Complaint at ¶ 1. The applicable umbrella liability insurance policy ("the policy")
allegedly obligates defendant to pay for defense costs and to indemnify plaintiff for amounts paid
in settlement and satisfaction of judgment in those bodily injury lawsuits. Id. at ¶ 2. The policy
follows the form of a Hartford policy. Id. at ¶ 13. Defense costs assertedly are "in addition to the
applicable limit of liability of" the policy.

Id. at ¶ 19.

"Since at least the 1980s, [plaintiff] has been sued in numerous bodily injury lawsuits in
jurisdictions across the country, the majority of which involve respiratory protection and/or
protective clothing products allegedly manufactured and sold by [plaintiff] (the "Underlying
Claims")." Id. at ¶ 20. Plaintiff began to tender numerous settled underlying claims to defendant
for indemnification in 2007 and continued to do so in 2008. Id. at ¶¶ 24-26. Plaintiff reiterated
its demand for payment in February of 2009 and informed defendant that pursuant to J. H. France
Refractories Co. v. Allstate Insurance Co., 626 A.2d 502 (Pa. 1993), it was selecting defendant "to
assume responsibility pursuant to the Policy for the indemnity and defense costs associated with
other settled Underlying Claims" which encompassed the settlement of lawsuits involving claims
by approximately 400 claimants. Id. at ¶ 28. Plaintiff seeks to establish that defendant is in
breach for failure to abide by the policy provisions governing indemnity for covered losses for
bodily injury claims in the amount of $20,274,186.00 and defense costs of $1,107,375.00. Id. at
¶¶17-19, 29, 39-43. Although claims exhausting the aggregate policy limit have been tendered to
defendant, plaintiff continues to incur defense costs on the underlying claims. Id. at ¶ 32.
In addition, plaintiff has designated defendant "to assume responsibility for the defense
costs associated with certain open Underlying Claims and certain closed-but-not-settled
2

Underlying Claims, as well as certain general expenses billed by [plaintiff's] national coordinating
counsel and local defense counsel" as well as certain "non-settled Underlying Claims brought by
another approximately 400 claimants." Id. at ¶ 30. The defense costs for these claims and the
general expenses are in excess of $8,900,000.00. Id. at ¶ 31.
Defendant assertedly has failed and refused to comply with its obligations under the policy.
Id. at ¶ 34. It has not paid anything toward the amounts claimed by plaintiff. Id. at ¶ 34.
Instead, it has responded with "a carefully and deliberately orchestrated effort to delay and/or
avoid payment of proceeds due under the Policy, with the ultimate goal of leveraging [plaintiff]
into accepting far less than that to which it is entitled under the Policy (and under other excess
liability policies that [defendant] issued to [plaintiff]." Id. at ¶ 35. This effort has included:
(a) raising spurious questions regarding exhaustion of the Hartford policy; (b) raising
spurious questions regarding the integrity of certain of [plaintiff's] local counsel, when
that same local counsel had been relied on for years by other of [plaintiff's] insurers; (c)
positing that the Policy does not obligate it to pay defense costs in addition to limits, when
the Policy could not state [defendant's] obligation to do so more clearly; (d) positing, after
the fact, that [plaintiff] was required to obtain jury research to substantiate the
reasonableness of amounts that it paid to settle certain claims, while never suggesting
before the fact that such research was important to [defendant] or offering to pay for such
research; (e) positing that [plaintiff's] claims experience in certain jurisdictions is
irrelevant to the amounts that plaintiff has paid to settle Underlying Claims that have been
presented for reimbursement under the Policy; (t) demanding that [plaintiff] provide
reams of historical claims data that is wholly irrelevant to the Underlying Claims for
which [plaintiff] has demanded payment under the Policy, and refusing to make such
payments until [plaintiff] does so (and, even where [plaintiff] does so, still avoiding
payment by simply issuing a new set of irrelevant and burdensome information requests);
(g) refusing [plaintiff's] invitations to discuss directly with [plaintiff's] local and national
counsel the basis for settlement recommendations that [plaintiff's] local counsel has
made; (h) withholding from [plaintiff] information that [defendant] has learned in
connection with other of its insureds who, like [plaintiff], are facing thousands of toxic
tort claims in jurisdictions that are widely regarded as "plaintiff friendly," and otherwise
refusing to share its own expertise (on matters such as jury awards and settlement
amounts that occur in various jurisdictions throughout the United States) with [plaintiff];
(i) eschewing its fiduciary obligation to work in a collaborative fashion with [plaintiff] to
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successfully defend and resolve Underlying Claims in favor of an inexplicably hostile
and adversarial approach to [plaintiff]; and G) refusing to pay any Underlying Claims
until [plaintiff] has provided claims information that goes far beyond what the Policy, the
law, and even [plaintiff's] other insurers, require.
Id. at ¶ 36. Defendant's orchestrated effort constitutes both a breach of its duties under the policy
and bad faith insurance practices in violation of 42 Pa. C. S. § 8371. Id. at ¶¶ 37-38.1
Plaintiff further explains in its brief that it seeks to establish that defendant owes coverage
for 729 underlying claims. Declaration of William J. Berner (Doc. No. 653-5) at ¶ 5; Plaintiff's
Brief in Support of Motion for Leave to File Documents under Seal and to Redact (Doc. No. 653)
at 11. Sixty-six of those claims were still pending when plaintiff filed the instant motion. Id.
Plaintiff also is defending more than 9,100 additional personal injury cases relating to the same or
similar products. Id.
The parties have filed their respective motions to seal in conjunction with their respective
contemplated motions for summary judgment. These motions can only be understood to be
1

Plaintiff more specifically contends that defendant acted in bad faith by:
(a) failing and refusing to honor [plaintiff's] demand for reimbursement under the
Policy without any adequate basis under the Policy or at law, (b) failing to pay
proceeds under the Policy that are due and owing, (c) concocting various excuses,
none of which have any merit under the Policy or at law, for delaying, and/or refusing
to make, payment of amounts that are due and owing to [plaintiff] under the Policy;
(d) engaging in improper claims-handling tactics, (e) using improper claims-handling
tactics in an effort to pressure [plaintiff] into accepting less than that which it is owed
under the Policy; (f) raising spurious questions regarding exhaustion of underlying
insurance, and the integrity of [plaintiff's] defense counsel, without any reasonable or
good faith basis to do so; (g) refusing to share with [plaintiff] its own expertise or
knowledge such that [plaintiff] may defend itself against the Underlying Claims more
effectively; and (h) dealing with [plaintiff] in an adversarial manner, and not in a
cooperative manner or as a fiduciary.
Id. at ¶ 48.
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complex and voluminous: approximately one year ago the parties filed 10 separate motions on
summary judgment seeking an adjudication on an issue-by-issue basis. At that time they also
sought to file under seal separate briefs on each issue and numerous related documents, including
briefs, concise statements of material fact and appendices in support. All of these filings were
struck from the record for failure to comply with the controlling authority governing the
submission of materials under seal in support of relief on the merits and as otherwise moot. See
Order of March 12, 2013 (Doc. No. 645) (striking Doc. No.s 595, 596, 600, 604, 606, 607, 611,
612, 616, 617, 618, 623, 624, 628, 631, 633, 635, and 637 and directing the Clerk to remove the
documents from public view; denying 599, 603, 605, 610, 615, 622, and 630 for failure to comply
with the controlling authority governing the submission of materials under seal in support of
affirmative relief on the merits and otherwise denying as moot; and denying 594 as moot). A
concomitant order was issued setting the schedule and procedures for re-filing motions for
summary judgment and the submissions in conjunction therewith. See Order of March 12, 2013
(Doc. No. 646). The instant motions were filed pursuant to this scheduling order.
Extensive discovery was conducted pursuant to a protective order permitting the parties to
designate documents and information as confidential. See Protective Order of January 4, 2011
(Doc. No. 69). This order authorized any party to make such a designation on the basis that the
material being produced by the party or a third party contained "confidential, personal, trade
secret, and/or commercial information, as those terms are defined under Federal law, not generally
available in the public domain." Id. at ¶ 8. Discovery was coordinated with a companion case
captioned as The North River Insurance Company v. Mine Safety Appliances Company, Allstate
Insurance Company, et al., GD No. 10-7432, and filed in the Court of Common Pleas of Allegheny
5

County, Pennsylvania. An identical protective order was entered in the state-court action. The
parties elected to coordinate discovery and utilize a discovery master in both actions. See Order
of February 3, 2011, Appointing the Honorable Alan S. Penkower (Ret.) as Special Master For All
Fact and Expert Discovery Disputes. The parties thereafter filed extensive discovery motions,
many of which were filed under seal with redacted versions being disclosed to the public.
The parties' March 2013 filings sought to honor and/or maintain the confidential
designations previously made by the parties in discovery for the purpose of adjudicating the
parties' cross motions for summary judgment. As authority for maintaining portions of the
supporting briefs and exhibits under seal the parties merely referenced the designations made
under the protective order and/or the designations of third parties pursuant to the identical
protective order entered in the companion state-court coverage litigation. See e.g. Plaintiff's
Motion to File Documents Under Seal re: Trigger of Coverage for Coal-Mine-Dust-Related
Claims (Doc. No.s 610, 643). The scheduling order of March 12, 2013, informed the parties that
any motion to submit filings under seal must demonstrate that the "relief is authorized by and in
full compliance with the principles governing the court's use of seal in conjunction with the right of
access that attaches to matters that are submitted for an adjudication on the merits[,] . . . the parties
will be required to meet their respective burdens in maintaining secrecy [and] [r]eliance on the
confidentiality order entered in the instant case will be given minimal weight because of the
over-inclusive nature of the protective order governing the parties' discovery productions and
disputes." Order of March 12, 2013 (Doc. No. 646) at ¶ 5 (citations omitted).
A prevalent practice has developed in this district wherein litigants in civil cases seek to
file materials under seal pursuant to little more than a designation of confidentiality by one or more
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of the parties pursuant to a broad protective order entered during the discovery phase of the case.
The practice has long been employed during the discovery phase. It increasingly is being
employed in the adjudicatory phase of the case without distinction between the two or
acknowledgement of the differing standards that ultimately bear on the court's use of its authority
to seal. But there is an important difference between the showing required to obtain a protective
order authorizing confidentiality during the course of discovery and the one needed to maintain
documents and information under seal that are part of the judicial record of an adjudication. In re
Cendant Corp., 260 F.3d 183, 192 (3d Cir. 2001). And the parties' motions seek to satisfy the
later.
A common practice also has developed to permit the requested filings to be made without a
thorough review where they are submitted without objection and then to examine them more
closely only when a subsequent challenge is made to the ongoing necessity of keeping the
documents under seal. See Leucadia, Inc. v. Applied Extrusion Technologies, Inc., 998 F.2d 157,
166 (3d Cir. 1993) (emphasizing the important difference between the scope and nature of the
review undertaken where the parties seek without meaningful objection to maintain confidentiality
over judicial records based on the showing needed for a protective order and the review undertaken
pursuant to a dispute grounded in the public right of access doctrine). The parties have not raised
such a dispute or requested such a review.
Nevertheless, the court has an inherent obligation to review and supervise the files being
placed on its docket and a concomitant obligation to assure that the use of its authority to keep
matters from public scrutiny properly is being employed. Id. ("We must rely in the first instance
on the district courts to protect the legitimate public interest in filed materials from overly broad
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and unjustifiable protective orders agreed to by the parties for their self-interests.") (citing United
States v. Corbitt, 879 F.2d 224, 228 (7th Cir. 1989) ("[T]he public's right to inspect judicial records
may not be evaded by a wholesale sealing of court papers. Instead, the district court must be
sensitive to the rights of the public in determining whether any particular document, or class of
documents, is appropriately filed under seal."). Further, we believe that the parties are better
served if their proposed filings initially are reviewed under the standards that will govern any
challenge to the use of this court's seal and they are able to make informed decisions about such
filings and the course of the litigation in accordance with that initial assessment.2 We turn to that
undertaking as it relates to the parties' pending motions to seal.
The public right of access to judicial proceedings and records is integral and essential to the
integrity of the judiciary. The common law right of access predates the Constitution. Bank of
America National Trust and Savings Ass'n v. Hotel Rittenhouse Associates, 800 F.2d 339, 343 (3d
Cir. 1986) ("The right of the public to inspect and copy judicial records antedates the
Constitution.") (citing United States v. Criden, 648 F.2d 814, 819 (3d Cir. 1981)). The existence
of the right is beyond dispute. Pansy v. Borough of Stroudsburg, 23 F.3d 772, 780-781 (3d Cir.
1994) (citing Littlejohn v. Bic Corp., 851 F.2d 673, 677–78 (3d Cir.1988) (the public's interest in
access is “beyond dispute”) (internal quotation marks and citation omitted)); accord United States
v. Martin, 746 F.2d 964, 968 (3d Cir. 1984) (same).
The right is pervasive. In re Cendant, 260 F.3d at 192. It applies to all aspects of the
2

Of course, this initial assessment is not intended to foreclose any challenge by a third party to any
filings that ultimately are placed under seal. To do so would in effect be issuing an advisory
opinion and an attempt to determine the rights of third-parties without affording them appropriate
due process.
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judicial process where substantive determinations are made. Bank of America, 800 F.2d at 343
(presumption of right of access applicable to various pretrial hearings encompassing substantive
rulings); United States v. Smith, 776 F.2d 1104, 1111-12 (3d Cir. 1985) ("Although [the Supreme
Court's cases] concerned access to judicial proceedings, no reason occurs to us why their analysis
does not apply as well to judicial documents, as we previously so applied it in Martin, 746 F.2d at
968.") (citing Associated Press v. United States District Court, 705 F.2d 1143, 1145 (9th Cir.
1983)). It likewise attaches to documents filed with the court in conjunction with a request for
adjudicatory relief. Bank of America, 800 F.2d at 343; accord Nixon v. Warner Communications,
Inc., 435 U.S. 589, 597 (1978) (The common law right of access gives rise to a presumption in
favor of access to “public records and documents, including judicial records and documents.”).
The "presumption that the public has a right to inspect and copy judicial records serves
numerous salutary functions." Leucadia, Inc. v. Applied Extrusion Technologies, Inc., 998 F.2d
157, 161 (3d Cir. 1993). The right of access "in civil cases promotes public confidence in the
judicial system." Id. (quoting Republic of the Philippines v. Westinghouse Elec. Corp., 949 F.2d
653, 660 (3d Cir.1991)). "As with other branches of government, the bright light cast upon the
judicial process by public observation diminishes the possibilities for injustice, incompetence,
perjury, and fraud. Furthermore, the very openness of the process should provide the public with
a more complete understanding of the judicial system and a better perception of its fairness." Id.
It attempts to assure the public gains "a more complete understanding of the judicial system and a
better perception of its fairness." Id. "In addition, access to civil proceedings and records
promotes 'public respect for the judicial process' and helps to assure that judges perform their
duties in an honest and informed manner." Id. (citation omitted) (quoting Globe Newspaper Co.
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v. Superior Court, 457 U.S. 596, 606 (1982)); accord Publicker Industries, 733 F.2d at 1070
("From these authorities we conclude that public access to civil trials 'enhances the quality and
safeguards the integrity of the factfinding process.' Id. It 'fosters an appearance of fairness,' id.,
and heightens 'public respect for the judicial process.' Id. It 'permits the public to participate in
and serve as a check upon the judicial process -- an essential component in our structure of
self-government.' Id. Public access to civil trials, no less than criminal trials, plays an important
role in the participation and the free discussion of governmental affairs.") (quoting Globe
Newspapers, 457 U.S. at 606)).
The "strong presumption" of openness does not permit the routine closing of judicial
proceedings. Miller v. Indiana Hosp., 16 F.3d 549, 551 (3d Cir. 1994). The United States Court
of Appeals for the Third Circuit expressly has "applied the presumption of public access to a
variety of civil hearings and records, including the transcript of a civil trial and exhibits admitted at
trial, Littlejohn, 851 F.2d 673; settlement documents filed with the district court as well as
post-settlement motions, Bank of America, 800 F.2d 339; and a civil hearing for a preliminary
injunction and transcripts of that hearing, Publicker Industries, 733 F.2d 1059." Republic of the
Philippines, 949 F.2d at 660. It also has applied it in a case where the claims have been
adjudicated and no further recourse is available. Miller, 16 F.3d at 551.
"Access means more than the ability to attend open court proceedings; it also encompasses
the right of the public to inspect and to copy judicial records." Littlejohn, 851 F.2d at 678 (citing
Criden, 648 F.2d at 819). This is because documents filed with a court in the course of
adjudicatory proceedings generally must be presumed to have entered into the public domain.
Leucadia, 998 F.2d at 161-62. The presumption thus extends to all "pretrial motions of a
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nondiscovery nature." Leucadia, 998 F.2d at 164.
In contrast, conducting discovery is not undertaken as part of the public component of civil
adjudication and the presumption does not attach to discovery motions merely seeking shelter
from overly aggressive demands or to compel more adequate responses. Id. This historical
understanding is buttressed by the mechanisms embodied in Federal Rules of Civil Procedure 5(d)
and 26(c) which provide normative rules governing public access to discovery and a mechanism
for a court to lift or modify a protective order that is precluding a party from making public unfiled
discovery materials. Id. (citing Public Citizen v. Liggett Group, Inc., 858 F.2d 775, 789–90 (1st
Cir. 1988), cert. denied, 488 U.S. 1030 (1989)).
The right of access applies to documents and evidentiary materials submitted in support of
summary judgment. Republic of the Philippines, 949 F.2d at 660-61. The disposition of such a
motion does not affect the presumption that applies to such submissions. Id. at 660. This is
because the need for public scrutiny is at its zenith when the motion is dispositive and is of a
comparable level when the motion is denied because the ruling tends to shape the scope and
substance of the litigation as the parties proceed to trial. Id.; accord Foltz v. State Farm Mut.
Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003) (the strong presumption in favor of public
access applies with particular force to judicial records relating to summary judgment because those
proceedings adjudicate the substantive rights of parties and often serve as a substitute for trial);
Carnegie Mellon University v. Marvel Technology Group, Ltd., 2013 WL 1336204, *10-11 (W.D.
Pa. March 29, 2013) (documents filed with the court and incorporated or integrated into the court's
adjudicatory proceedings are subject to the heightened standards mandated by the common law
presumption of public access).
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The same panoply of rights also are protected by the First Amendment. Publicker
Industries, Inc. v. Cohen, 733 F.2d 1059, 1066-67 (3d Cir 1984). This protection applies to both
civil and criminal proceedings. Id. at 1070 ("A presumption of openness inheres in civil trials as
in criminal trials."). "However, the parameters of the First Amendment right of access to civil
proceedings are undefined. There remain significant constitutional questions about what
documents are subject to its reach." In re Cendant, 260 F.3d at 198 n. 13 (citing Littlejohn, 851
F.2d at 680 n. 14); but see Delaware Coalition for Open Government, Inc. v. Strine, 733 F.3d 510,
513-20 (3d Cir. 2013) (Sloviter, J.) (outlining with clarity the principles governing application of
the First Amendment right of access to state-sponsored arbitration proceedings involving members
of the Delaware judiciary).
"Just as the right of access is firmly entrenched, so also is the correlative principle that the
right of access, whether grounded on the common law or the First Amendment, is not absolute."
Bank of America, 800 F.2d at 344. "Every court has supervisory power over its own records and
files, and access [appropriately] has been denied where court files might have become a vehicle for
improper purposes." Littlejohn, 851 F.2d at 678 (quoting Nixon, 435 U.S. at 598). "The
common law thus merely establishes a presumption of public access to court proceedings and
court records." Id. (quoting Nixon, 435 U.S. at 602).3
"[T]he strong common law presumption of access must be balanced against the factors
militating against access." Id. "The party seeking to seal any part of a judicial record bears the
3

The First Amendment right of access likewise is not absolute and may be overcome provided the
process employed affords "the due process protection that other fundamental rights enjoy."
Publicker Industries, 733 F.2d at 1070. Under the First Amendment "the party opposing access
[must] show 'an overriding interest based on findings that closure is narrowly tailored to serve that
interest.'" Bank of America, 800 F.2d at 344 (quoting Publicker Industries, 733 F.2d at 1073).
12

heavy burden of showing that 'the material is the kind of information that courts will protect' and
that 'disclosure will work a clearly defined and serious injury to the party seeking closure.'"
Miller, 16 F.3d at 551 (citing Publicker Industries, 733 F.2d at 1071)); accord Leucadia, 998 F.2d
at 165 ("The burden is on the party who seeks to overcome the presumption of access to show that
the interest in secrecy outweighs the presumption.") (citing Bank of America, 800 F.2d at 344).
Such an injury must be shown with specificity. Publicker Industries, 733 F.2d at 1071. "Broad
allegations of harm, bereft of specific examples or articulated reasoning, are insufficient." In re
Cendant Corp., 260 F.3d 194.
"Documents containing trade secrets or other confidential business information may be
protected from disclosure." Leucadia, 998 F.2d at 166 (citing Nixon, 435 U.S. at 598) ("courts
have refused to permit their files to serve as . . . sources of business information that might harm a
litigant's competitive standing.")). In Westinghouse, the Third Circuit recognized that "'[t]he
potential effects of the disclosure of business information that might harm the litigant's
competitive standing may in some cases meet the burden [needed to keep] the judicial record under
seal." Westinghouse, 949 F.2d at 663 (quoting district court); accord Leucadia, 998 F.2d at 166
(same) and Littlejohn, 851 F.2d at 685 (same).
The traditional form of confidential commercial information that militates against
disclosure is the existence of trade secrets where disclosure would create a sufficient threat of
irreparable harm. Publicker Industries, 733 F.2d at 1071 (citing Stamicarbon, N.V. v. American
Cyanamid Co., 506 F.2d 532, 539-42 (2d Cir. 1974)). Documents do not contain trade secrets
merely because a party has deemed them to be confidential. Littlejohn, 851 F.2d at 685. To the
contrary, trade secrets generally have independent status under the substantive law. Id. (citing
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Restatement of Torts § 757 comment b (1939) (definition of a trade secret)); O.D. Anderson, Inc.
v. Cricks, 815 A.2d 1063, 1070 (Pa. Super. Ct. 2003) ("The courts of this Commonwealth have
generally accepted Section 757 of the Restatement of Torts as the basic outline for our trade secrets
law."); 12 Pa. C. S. § 5301.
In contrast, "non-trade secret but confidential business information is not entitled to the
same level of protection from disclosure as trade secret information." Littlejohn, 851 F.2d at 685;
Westinghouse, 949 F.2d at 663 (business information alleged to be confidential is not entitled to
the weight accorded to trade secrets). An interest in preserving the corporation's reputation from
the commercial effects of embarrassment has not been given significant weight. Littlejohn, 851
F.2d at 685 (citing Brown & Williamson Tobacco Corp. v. F.T.C., 710 F.2d 1165, 1180 (6th Cir.
1983) (harm to corporate reputation not sufficient to overcome common law presumption of
access), cert. denied, 465 U.S. 1100 (1984)). Similarly, disclosures that merely carry a potential
to affect adversely sales and/or a potential loss in capital stock value fall short of warranting
secrecy. Id. ("The injury that BIC describes is an adverse effect on its disposable lighter sales by
competitive use of the information and a potential loss in its capital stock value. However, as we
stated in Publicker, '[t]he presumption of openness plus the policy interest in protecting
unsuspecting people from investing in Publicker in light of its bad business practices are not
overcome by the proprietary interest of present stockholders in not losing stock value or the
interests of upper-level management in escaping embarrassment.'"). This includes information
bearing on defects and safety concerns with products. Id. Sheltering such matters does not
advance an important public interest or show with specificity how disclosure will work a clearly
defined and serious injury to protectable business interests. Id. at 684 ("[E]scaping disclosure of
14

problems with [a company's] products which have injured consumers does not outweigh the
presumption of openness plus the public interest in disseminating information about consumer
goods that cause personal injury.").
In ordinary civil litigation, precluding access to the entire judicial record is a very unusual
step. Miller, 16 F.3d at 551. Cases upholding such measures by the Third Circuit have been the
exception. Id. These include: Capital Cities Media, Inc. v. Chester, 797 F.2d 1164 (3d Cir.
1986) (in banc) (internal documents of administrative agencies); First Amendment Coalition v.
Judicial Inquiry & Review Bd., 784 F.2d 467 (3d Cir. 1986) (in banc) (state judicial discipline
proceedings); Publicker, 733 F.2d at 1073 (trade secrets); United States v. Criden, 681 F.2d 919,
921 (3d Cir. 1982) (Criden III ) (material explicitly determined to be impermissibly injurious to
third parties); and Criden I, 648 F.2d at 829 (same); accord Criden I, 648 F.2d at 830 (Weis, J.
concurring and dissenting) ("Counseling against access would be such matters as improper use,
including publication of scandalous, libelous, pornographic, or trade secret material; infringement
of fair trial rights of the defendants or third persons; and residual privacy rights."). The moving
party must articulate "compelling countervailing interests to be protected" before such a measure
can be employed. Miller, 16 F.3d at 551.
The "compelling countervailing interests" showing also applies where the civil litigation
has a component of heightened public interest such as a class action where members of the public
are also class members.

In re Cendant, 260 F.3d at 194. The potential of the litigation to affect

the rights of such members of the public gives rise to a heightened need for judicial transparency
and warrants particular strictness in the test for overriding the right of access. Id. In such
circumstances the heightened showing is required for sealing any process or hearing that is
15

important to the administration of the case. Id.
Whether the material or information has been produced pursuant to a confidentiality
order governing discovery is another factor that must be taken into account. Pansy, 23 F.3d at
790. The entry of a confidentiality order governing documents and information produced during
discovery does not convert such materials into judicial records. Id. at 782 ("Simply because a
court has entered a confidentiality order over documents does not automatically convert those
documents into 'judicial records' accessible under the right of access doctrine. For example, when
a court enters an order of protection over documents exchanged during discovery, and these
documents have not been filed with the court, such documents are not, by reason of the protective
order alone, deemed judicial records to which the right of access attaches.") (citing Seattle Times
Co. v. Rhinehart, 467 U.S. 20, 30–37 (1984); Leucadia, 998 F.2d at 163 & n. 9; and Cipollone v.
Liggett Group, Inc., 785 F.2d 1108, 1119–20 (3d Cir. 1986), cert. denied, 484 U.S. 976 (1987)).
But as previously alluded to, a protective order entered under Federal Rule of Civil
Procedure 26(c) does not assure that information initially designated as confidential and thereafter
filed under seal will continue to remain secret. Leucadia, 998 F.2d at 166. The advisory
committee notes long ago cautioned that "courts have not given trade secrets automatic and
complete immunity against disclosure, but have in each case weighed their claim to privacy
against the need for disclosure." Id. (citing Fed. R. Civ. P. 26(c) advisory committee's note to
1970 amendment). Upon challenge, filings made pursuant to a protective order are to be
reviewed on a "document-by-document" basis to assure that the party seeking to maintain secrecy
can make the "'particularized showing of the need for continued secrecy' if the documents are to
remain under seal." Id. (citing Bank of America, 800 F.2d at 346 (Settlement agreement filed
16

under seal ordered accessible because the parties were "no longer entitled to invoke the
confidentiality ordinarily accorded settlement agreements.") and In re “Agent Orange” Prod.
Liab. Litig., 821 F.2d 139, 148 (2d Cir. 1987) (Where parties stipulated to umbrella protective
order, district court acted within its discretion by vacating order and permitting access by
intervenor to filed discovery materials “subject to a showing, on an individualized basis, of good
cause for continued protection.”). Any order of "continued sealing must be based on 'current
evidence to show how public dissemination of the pertinent materials [will continue to] cause the
competitive harm [claimed]." Id. (quoting Westinghouse, 949 F.2d at 663); accord Jackson v.
Delaware River and Bay Authority, 224 F. Supp.2d 834 (D. N.J. 2002) (parties' expectations
warranted treating the record as if a confidentiality order had been entered and finding that the
reasons initially advanced for confidentiality "no longer provid[ed] support for restricting access
to the judicial record.").
The difference in the treatment of material designated as confidential under a protective
order and material submitted as a judicial record flows in part from the showings needed to
maintain secrecy in these respective realms. In contrast to the standards applicable to maintaining
judicial records under seal, a party seeking an order of protection over discovery material pursuant
to Rule 26 must demonstrate that “good cause” exists for that protection. Fed. R. Civ. P. 26(c);
Smith v. Bic Corp., 869 F.2d 194, 199 (3d Cir. 1989). The burden of establishing good cause is on
the party seeking the protective order. Cipollone, 785 F.2d at 1121.
Good cause is “established on a showing that disclosure will work a clearly defined and
serious injury to the party seeking closure. The injury must be shown with specificity.”
Publicker Industries, 733 F.2d at 1071. “Broad allegations of harm, unsubstantiated by specific
17

examples or articulated reasoning” will not suffice. Cipollone, 785 F.2d at 1121; Pansy, 23 F.3d
786. Factors that should be considered in the balancing test used to determine whether to enter a
confidentiality order include whether the parties have an interest in privacy, whether there is a
threat of particularly serious embarrassment to the party, whether the information is important to
public health and safety, whether sharing of information among litigants will promote fairness and
efficiency, whether the party benefiting from the confidentiality order is a public entity or official
and whether the case involves issues important to public. Pansy, 23 F.3d at 787-788.
Where the parties have entered into an umbrella protective order that permits either party
in the first instance to designate materials exchanged in discovery as confidential, the court may
proceed by finding good cause for the various categories of information likely to be within the
exchange of raw information. Leucadia, 998 F.2d at 166. A familiarity with those categories
and a general understanding of what is anticipated can supply the foundation for a finding of good
cause under Rule 26. Id. But as noted above, the filing of documents in support of adjudicatory
action stands on different footing. Closer scrutiny is required in order "to protect the legitimate
public interest in filed materials from overly broad and unjustifiable protective orders agreed to by
the parties for their self-interests." Id. (citing United States v. Corbitt, 879 F.2d at 228; accord
Pansy, 23 F.3d at 790 n. 26 (noting that while “blanket protective orders may be useful in
expediting the flow of pretrial discovery materials, they are by nature overinclusive and are,
therefore, peculiarly subject to later modification”) (internal quotation marks and citation
omitted).
Whether the parties have been given the expectation that their submission(s) will be treated
as confidential also is a factor that must be taken into account. LEAP Systems Inc. v. MoneyTrax,
18

Inc., 638 F.3d 216, 222 (3d Cir. 2011). A party's reliance on an order sealing a judicial document
cannot be lightly brushed aside where the order has induced that party to settle a case or comply
with a discovery request. Id. (citing Pansy, 23 F.3d at 790).
With the above principles in mind, we turn to the parties' specific requests to file materials
under seal in support of their respective motions for summary judgment. Plaintiff moves to
submit five different categories of information and defendant moves to submit a separate category,
all of which they expect will be taken into account in making dispositive rulings in their dispute.
Such filings are judicial records under the controlling precedent.
Meeting the good cause standard of Rule 26(c) cannot in itself provide the showing needed
to seal the submission of judicial records to be utilized in a formal adjudication of central issues in
a lawsuit. Carnegie Mellon University, 2013 WL 1336204 at * 4; Littlejohn, 851 F.2d 678, 684;
accord Poliquin v. Garden Way, Inc., 989 F.2d 527, 533 (1st Cir. 1993) ("the ordinary showing of
good cause which is adequate to protect discovery material from disclosure cannot alone justify
protecting such material after it has been introduced at trial. This dividing line may in some
measure be an arbitrary one, but it accords with long-settled practice in this country separating the
presumptively private phase of litigation from the presumptively public.") (citing Cowley v.
Pulsifer, 137 Mass. 392 (1884) (Holmes, J.)). A higher standard and a heavier burden comes into
play once the materials are submitted for an adjudication on the merits. Carnegie Mellon
University, 2013 WL 1336204 at * 4. At the very least, at this juncture "the party seeking the
closure of a hearing or the sealing of part of the judicial record 'bears the burden of showing that
the material is the kind of information that courts will protect' and that 'disclosure will work a
clearly defined and serious injury to the party seeking closure.'" In re Cendant, 260 F.3d at 194
19

(quoting Miller, 16 F.3d at 551).4
Further, this case raises numerous issues of public importance and has the potential to
affect the rights of numerous carriers, insureds and claimants that/who are not directly before the
court. Several aspects of the parties' dispute support this assessment.
First, the parties' dispute arises under an occurrence-based insurance policy that utilizes to
a significant degree what typically is referred to as standard form language and/or provisions. See
Amended Complaint at ¶¶ 11-19. For example, the policy provides:
"COVERAGE"
4

As Judge Fischer observed pursuant to a motion to reconsider the application of this standard to
materials submitted in conjunction with summary judgment and/or trial, the First, Second, Sixth,
Ninth, Eleventh, Federal and DC Circuits all have held that meeting the standard for sealing
materials submitted as part of an adjudication on the merits is well-above the "good cause"
standard required for a confidentiality order and to seal non-dispositive motions that are only
incidental or ancillary to the court's resolution of the parties' dispute. Carnegie Mellon University
v. Marvell Technology Group, Ltd., 2013 WL 1674190, *2 & n.4 (W.D. Pa. April 17, 2013) ("the
Court remains of the opinion that consideration of Marvell's present motion under the “compelling
interest” standard is warranted.") (citing Poliquin, 989 F.2d at 533 (“only the most compelling
showing can justify post-trial restriction on disclosure of testimony or documents actually
introduced at trial”); United States v. Amodeo, 71 F.3d 1044, 1049 (2d Cir. 1995) (“we have also
consistently held that the public has an especially strong right of access to evidence introduced in
trials”); In re Knoxville News–Sentinel Co., Inc., 723 F.2d 470, 476 (6th Cir. 1983) (“Only the
most compelling reasons can justify non-disclosure of judicial records.”); Foltz, 331 F.3d at 1135
(the right of access to all court records can only be overridden for “sufficiently compelling
reasons”); Wilson v. Am. Motors Corp., 759 F.2d 1568, 1571 (11th Cir. 1985) (a heightened
standard exists since “absent some exceptional circumstances, trials are public proceedings” and
so before denial of public access to trials, other Court proceedings and associated records, it must
be shown that such closure “is necessitated by a compelling governmental interest, and is narrowly
tailored to that interest”); In re Violation of Rule 28(D), 635 F.3d 1352, 1358 (Fed. Cir. 2011)
(“where the party seeks to limit the disclosure of information actually introduced at trial, an even
stronger showing of prejudice or harm may be required to warrant limitations on disclosure”); In re
Nat. Broad. Co., Inc., 653 F.2d 609, 614 (D.C. Cir. 1981) (holding that the “fact that the tapes were
admitted into evidence and played to the jury weighs heavily” as first, “trial is a public event, and
what transpires in the court room is public property. Second, the tapes had been seen and heard
by those members of the press and public who attended the trial. Our cases have recognized that
such previous access is a factor which lends support to subsequent access.”).
20



[Defendant] will pay on behalf of [plaintiff] ultimate net loss in excess of the total
applicable limit ... of underlying insurance or the amount of the self-insured retention when
no underlying insurance applies, because of bodily injury ... to which this insurance
applies, caused by an occurrence.



The term "bodily injury" is defined in the Hartford policy as follows: "bodily injury" means
bodily injury, sickness or disease sustained by any person which occurs during the policy
period[.]



The term "ultimate net loss" is defined in the Hartford policy as follows: "ultimate net loss"
means all sums which [plaintiff] and his or her insurers shall become legally obligated to
pay as damages, whether by final adjudication or settlement with [Hartford]'s written
consent, after making proper deduction for all recoveries and salvages collectible[.]



The term "damages" is defined in the Hartford policy as follows: "damages" do not include
fines or penalties or damages for which insurance is prohibited by the law applicable to the
construction of this policy. Subject to the foregoing, "damages" include damages for any
of the following which result at any time from bodily injury to which this policy applies:
death, mental anguish, shock, disability or care and loss of services or consortium[.]

Amended Complaint at ¶¶ 14-17. Thus, rulings on the parties' basic duties and obligations under
the policy (by this court and potentially the United States Court of Appeals for the Third Circuit)
will in all likelihood have precedential influence well beyond the resolution of this case.
Second, the parties' dispute arises in an area where the contractual relationship between the
parties is regulated significantly by the judiciary. See e.g. 401 Fourth Street, Inc. v. Investors Ins.
Group, 879 A.2d 166, 171-72 (Pa. 2005) (setting forth the well-established principles that govern
the interpretation of an insurance contract and surveying "the fast-emerging consensus of
jurisdictions regarding the nature and scope of the policy language" at issue in determining
whether the policy provided coverage under the circumstances); accord Reliance Ins. Co. v.
Moessner, 121 F.3d 895, 900-07 (3d Cir. 1997) (applying well-established principles that govern
the interpretation of an insurance contract in determining that pollution exclusion barred coverage
21

but holding that material issues of fact nevertheless existed under the reasonable expectations
doctrine even though insured was a sophisticated insured); American and Foreign Ins. Co. v.
Jerry's Sport Center, Inc., 2 A.3d 526 (Pa. 2010) (setting forth established principles governing a
carrier's duty to defend under Pennsylvania law and surveying divergent lines of cases in resolving
an insurer's ability to limit its liability where the ultimate duty to indemnify is uncertain); J. H.
France Refractories, 626 A.2d at 507 (surveying "abundant authority" in adopting
"multiple-trigger approach" for bodily injury claims based on exposure to asbestos). In other
words, whether standard insurance provisions provide a duty to defend and/or a duty to indemnify
for personal injury and wrongful death claims under any particular circumstances involve
determinations that are informed by the public policy of the Commonwealth of Pennsylvania.
That public policy often is derived from the multi-jurisdictional precedent on CGL policy
insurance coverage.
Third, the parties dispute whether plaintiff has exhausted the underlying insurance,
whether the availability of "other insurance" precludes coverage under the umbrella policy, the
degree to which plaintiff had knowledge regarding the dangers of the substances that caused injury
to the underlying claimants and the ability of plaintiff's products to protect against those dangers.
See e.g. Report and Recommendation of Special Discovery Master re North River Company's
Motion to Compel (Doc. 207) at 2; Report and Recommendation of Special Discovery Master
Granting North River's Motion for Reconsideration (Doc. 438) at 3-4 (Noting that "North River
contends that the requested information is relevant to determining the applicability of North
River's policies because North River's policies do not provide coverage if other insurance covers
the same claim and/or [general] expenses" and granting defendant's motion to compel because its
22

"disputed interrogatories and document request are quite relevant at this stage of the
proceedings."). The issues raised by defendant also have implicated plaintiff's claims-handling
and settlement practices. Rulings and/or determinations in these areas have the potential to
impact concretely the legal rights of third parties.
Fourth, the parties' advance differing theories about the appropriate trigger of coverage.
This disputed issue was raised repeatedly during discovery and at this juncture it "is a matter for
determination at summary judgment or other stage of the proceedings." Report and
Recommendation of Special Discovery Master Granting North River's Motion for
Reconsideration (Doc. 438) at 4. Rulings and/or determinations in this area have the potential to
impact concretely the legal rights of third parties.
Fifth, plaintiff has at times utilized the practice of assigning the right to collect a portion of
settlement proceeds directly from one of its umbrella or excess carriers. See Defendant's
Response in Opposition (Doc. No. 671) at 15 (Outlining settlement between plaintiff and injured
parties in action wherein plaintiff settled the case and paid part of the proceeds to those parties and
assigned to them the right under another of defendant's umbrella policies covering plaintiff " to
collect directly from North River the remaining amount of the settlement."). The court's
resolution of the parties' dispute will have the potential to affect the rights of all other claimants
who have entered to similarly structured settlement agreements where those settlement agreements
have not been definitively resolved. See e.g. id. at 17 ('the [claimants] stand in the shoes of
[plaintiff]").
Sixth, plaintiff has challenged various aspects of defendant's claims-handling, including
the formulation of its position on the availability of coverage under the policy, and accused it of
23

orchestrating a scheme to "squeeze" plaintiff into accepting less than it is entitled to in violation of
Pennsylvania's bad faith insurance practices statute. Whether defendant engaged in an
inappropriate course of claims-handling and/or made decisions regarding the availability of
coverage that may subject it to liability under the statute are governed by the law as it has evolved.
See e.g. Polselli Nationwide Mutual Ins. Co., 23 F.3d 747, 751-52 (3d Cir. 1994) (ascertaining
applicable standard of proof, nature of prohibited conduct, and required state-of-mind from
existing precedent); Klinger v. State Farm Mutual Automobile Insurance Co., 115 F.3d 230, 233
(3d Cir. 1997) (Although the term "bad faith" on the part of an insurer is construed as
encompassing "any frivolous or unfounded refusal to pay proceeds of a policy" and ordinarily
imports "a dishonest purpose and means a breach of a known duty (i.e., good faith and fair
dealing), through some motive of self-interest or ill-will[,]" the statue does not require a plaintiff to
prove that the insurer consciously acted pursuant to such a motive or interest; it is enough if the
insurer recklessly disregarded the lack of a reasonable basis in denying benefits.) (quoting
Terletsky v. Prudential Property and Casualty Insurance Co., 649 A.2d 680, 688 (Pa. Super.
1994). These assessments are matters of public importance. Rulings and/or determinations in
this area have the potential to impact concretely the legal rights of other carriers and/or insureds
not before the court.
In short, the parties' dispute arises under standard form provisions commonly used in the
insurance industry. The resolution of the issues to be raised has the potential to impact (1) the
duties and obligations of other carriers from which plaintiff has sought or will seek coverage, (2)
the availability of insurance coverage for a great number of third-party claimants who have
brought personal injury and wrongful death against plaintiff, and (3) other insureds, claimants and
24

carriers that have been or are presented with similar underlying claims. The parties disagree
about core concepts under the policy and related law, such as whether proper exhaustion has
occurred; whether defendant has rights of contribution from other carriers; the limits of the policy;
whether defense costs are in addition to the limits on indemnification; whether plaintiff can avail
itself of the procedures in J. H. France Refractories and designate defendant as the carrier to
respond to the tendered claims; the appropriate trigger of coverage for asbestos, silica,
coal-mine-dust and similarly related claims; whether defendant properly has fulfilled its
claims-handling responsibility; whether defendant's chosen course of conduct can give rise to
liability under Pennsylvania's bad faith insurance practices statute; whether plaintiff's
claims-handling and settlement practices satisfy the requirements and obligations under the policy
and so forth.
It is readily apparent that the parties' dispute is not a garden-variety personal injury or
breach of contract claim and its resolution has the potential to affect the rights and remedies of
other carriers, insureds and third-party claimants. In other words, the parties' dispute involves
issues of public importance that have the ability to affect directly and indirectly the rights of others
not before the court. Consequently, the test for overriding the right of access must be applied with
recognition of these potential consequences.
Plaintiff has identified the following category of documents:
(i)

documents discussing or demonstrating how MSA defends, values, or settles the bodily
injury lawsuits filed against it in which the plaintiffs allege, inter alia, that MSA’s
respiratory protection equipment failed to properly filter out certain irritants, thus
contributing to plaintiffs’ alleged respiratory injuries (the “Underlying Claims” or
“Underlying Litigation”) and/or reflecting attorney-client communications or the work
product of MSA’s defense counsel in the Underlying Litigation;
25

(ii)

documents evidencing or revealing the value of the settlements between MSA and the
plaintiffs in the Underlying Litigation;

(iii)

documents containing information that has not been the subject of discovery with
respect to all of the Underlying Claims;

(iv)

documents setting forth certain opinions and testimony of the medical expert witnesses
in the instant coverage litigation; and

(v)

documents produced by, or deposition testimony taken of, entities other than MSA or
North River in the parallel state court litigation (North River Insurance Company v.
Mine Safety Appliances Company, et al., Court of Common Pleas of Allegheny
County, Pennsylvania, Docket No. G.D. 10-00432 (the “State Court Action”)) which
have been designated as “Confidential” subject to the Protective Order issued in the
State Court Action, and which designation has not been withdrawn by that entity.

Plaintiff's Brief in Support (Doc. No. 653) at 4-5. Plaintiff notes that the documents and
testimony sought to be filed are subject to protective orders in this and the related state court
action. They also contain information from the underlying litigation that is subject to the
attorney-client privilege and/or the attorney work product doctrine, which privileges have been
preserved during discovery in this litigation by entry of the following protective order:
It is further ORDERED that any disclosure made in the course of the instant litigation
by (i) MSA; (ii) any designated representative of MSA; or (iii) counsel defending MSA in
any of the Underlying Claims, including but not limited to Karen K. Maston, Esquire, of
information or documents containing information subject to the attorney-client privilege
and/or the attorney work product doctrine, which relate to the Underlying Claims or to the
litigation of the Underlying Claims, shall not result in a waiver of such privilege or
protection by MSA. This Order shall apply to any such disclosures previously made in
the course of the instant litigation.
Id. at 8-9; Order of July 27, 2011 (Doc. No. 81).
The documents and information referenced in plaintiff's designated categories (i) and (ii)
are similar in nature and give rise to consideration of many of the same interests. More
specifically, plaintiff identifies the documents within category (i) as consisting of (a)
26

correspondence (including e-mail) between plaintiff's defense counsel in the underlying litigation,
plaintiff, and plaintiff's insurers regarding litigation and/or settlement strategy; (b) e-mail
exchanges between plaintiff's defense counsel in the underlying litigation and plaintiff regarding
litigation and/or settlement strategy in the underlying litigation; (c) an e-mail exchange between
plaintiff's local defense counsel and plaintiff's counsel in the instant litigation regarding local
defense counsel’s practices in handling the underlying litigation; (d) a report summarizing a
specific underlying case in advance of a mediation; (e) deposition testimony taken in the instant
action of plaintiff's director: litigation and risk management regarding defense and settlement
strategy in the underlying litigation; (f) an e-mail from plaintiff's insurer to plaintiff's counsel in
the instant litigation regarding litigation and settlement strategy with respect to underlying claims;
and (g) a summary chart prepared by plaintiff's defense counsel in the underlying litigation
reflecting attorney work product concerning the underlying claimants. Plaintiff's Brief at 5-6.
Plaintiff identifies the documents within category (ii) as consisting of (a) a chart produced by it in
the instant litigation which contains, among other things, the settlement amount for each of the 394
underlying claims for which plaintiff seeks indemnification; (b) correspondence (including e-mail)
between plaintiff (or its counsel) and its insurer(s) that includes the value of the settlement of one
or more of the underlying claims; (c) loss runs prepared by plaintiff's insurers setting forth, among
other things, the value of the settlement of multiple underlying claims and/or the percentage of
such settlement paid by the insurer; and (d) correspondence between or among plaintiff, plaintiff's
defense counsel, and/or plaintiff's insurers regarding the settlement of underlying claims and
including information regarding the allocated payment obligations of the insurers to those
settlements. Id. at 6-7.
27

Plaintiff argues that public revelation of this information will result in the disclosure of its
"playbook" for defending, trying and settling the underlying claims which in turn will result in
severe economic harm by inhibiting its ability to resolve pending and future underlying claims
through litigation and settlement.5 It will result in substantial harm due in part to the detrimental
effect disclosure will have on plaintiff's ability to defend and settle the additional 9,100 underlying
claims it is facing across the nation "relating to the same and similar products." Plaintiff's Brief at
11. From its perspective public dissemination of such information could be taken out of context
and/or used strategically to plaintiff's significant economic detriment. It essentially would place
its own strategic insights into the hands of its adversaries and provide them with information that
they would not have the right to receive, thereby giving them an unfair advantage in the underlying
litigation. Plaintiff further explains that disclosures of this nature would disseminate information
plaintiff conveyed to its defense counsel in reliance on the attorney-client privilege; and disclosure
of information reflecting its or its insurers' settlement strategy would result in the dissemination of
information protected by attorney work product.
Plaintiff's invocation of the attorney client and work product privileges as support for use
of this court's authority to seal must be evaluated in accordance with the context in which it arises.
The record fails to contain any basis that would permit disclosure of the referenced documents and
information to defendant in a manner consistent with maintaining the privileges. In other words,
in the absence of the protective order of July 27, 2011, plaintiff would have been faced with the
difficult choice of either (a) invoking the privileges to preclude disclosure of the documents and
5

Of course, such disclosure likewise would affect defendant and its fellow carriers to the extent
they are obligated to pay indemnification and/or defense costs for such pending and future claims.
28

information to defendant or (b) waive them due to the need or strategic decision to use the
information affirmatively to (1) establish its claims or (2) counter positions anticipated from
defendant. A review of the basic tenants of the privileges demonstrates the accuracy of this
assessment.
The work-product doctrine is codified in Federal Rule of Civil Procedure 26(b), which
provides that “a party may not discover documents and tangible things that are prepared in
anticipation of litigation or for trial” unless otherwise discoverable or the party shows substantial
need for the material. Fed. R. Civ. Proc. 26(b)(3). In the seminal case of Hickman v. Taylor, 329
U.S. 495 (1947), the Supreme Court first recognized the doctrine pursuant to the principle that
permitting attorneys to prepare their cases without fear that their work product would be used
against their clients advances the adversarial system. Id. at 510-11. In United States v. Nobles,
422 U.S. 225, 238 (1975), the Supreme Court further opined that the doctrine “shelters the mental
processes of the attorney, providing a privileged area within which he can analyze and prepare his
client's case.” Included within this category are trial preparation documents that reflect the fruits
of the attorney’s endeavors, any compendium of evidence prepared by the attorney and any of the
attorney’s mental impressions, opinions or theories. Id. at 236-39. Also protected are those
materials prepared by an attorney’s agent. Id. at 238-39.
The party seeking the protection has the burden of proving the doctrine applies. Conoco,
Inc. v. U.S. Dep't of Justice, 687 F.2d 724, 730 (3d Cir.1982). Once that burden has been met,
protected work product is “afforded near absolute protection from discovery.” In re Cendant
Corp. Sec. Litig., 343 F.3d 658, 663 (3d Cir. 2003). A limited exception exists where the party
seeking disclosure can demonstrate a substantial need for the material and the inability without
29

undue hardship to obtain the substantial equivalent of it by other means. Fed. R. Civ. P. 26(b)(3).
Disclosure of work product to a third party does not necessarily negate the ability to claim
the evidentiary privilege that attaches to work product. Under federal law, a party may continue
to assert the protections of the work-product doctrine only when the disclosure to a third party
furthers the doctrine's underlying goal. Westinghouse Elec. Corp. v. Republic of Philippines, 951
F.2d 1414, 1429 (3d Cir. 1991).
Plaintiff's disclosure of privileged work product with a carrier that has denied all tendered
claims and has not sought to assist plaintiff in any manner in defending against the tendered or
other underlying claims is not an action designed to further the work-product doctrine's underlying
goals. It is the equivalent of releasing such information to an adversary in order to resolve a legal
dispute, which is inimical to protecting and preserving the work product in order to maintain
secrecy over the information, strategies and insight it provides. Compare Westinghouse Elec.
Corp., 951 F.2d at 1429 (Declining to endorse a selective waiver approach and holding that the
disclosure of work product to government agencies that were potential adversaries in order to
convince them to take no action or a more lenient course of action waived the privilege "as against
all other adversaries."); accord In re Chrysler Motors Corp. v. Overnight Evaluation Program
Litigation, 860 F.2d 844, 846 (1st Cir. 1988) ("Disclosure to an adversary waives the work product
protection as to items actually disclosed, even where disclosure occurs in settlement.") (quoting
Grumman Aerospace Corp. v. Titanium Metals Corp. of America, 91 F. R. D. 84, 90 (E.D. N.Y.
1981) and citing Chubb Integrated Systems Ltd. v. National Bank, 103 F. R. D. 52, 67
(D.D.C.1984)); United States v. Massachusetts Institute of Technology, 129 F.3d 681, 687 (1st
Cir. 1997) (disclosure to a potential adversary in an effort to defuse a potential controversy
30

constitutes a waiver of the work product privilege); Jones v. Nationwide Mut. Fire Ins. Co., 2010
WL 181753, * 2 (M.D. Pa. Jan 12, 2010) (same). Consequently, in the absence of the protective
order a waiver of the work product privilege has occurred.
A federal court sitting in diversity must look to state law for the applicable legal principles
on issues of privilege. See Fed. R. Evid. 501; United Coal Co. v. Powell Constr. Co., 839 F.2d
958, 965 (3d Cir. 1988). The Pennsylvania rule on attorney-client privilege has been codified
since 1887. Nationwide Mutual Ins. Co. v. Fleming, 992 A.2d 65, 68 (Pa. 2010) (Justice Eakin)
(affirming Superior Court by equally divided Court); accord Upjohn v. United States, 449 U.S.
383, 389 (1981) (The attorney-client privilege is "one of the oldest of the privileges for
confidential communications known to the common law."). The statute in its current form
provides:
In a civil matter counsel shall not be competent or permitted to testify to confidential
communications made to him by his client, nor shall the client be compelled to disclose
the same, unless in either case this privilege is waived upon the trial by the client.
42 Pa. C. S. § 5928. "[T]he attorney-client privilege operates in a two-way fashion to protect
confidential client-to-attorney or attorney-to-client communications made for the purpose of
obtaining or providing professional legal advice." Gillard v. AIG Insurance Co., 15 A.3d 44, 59
(Pa. 2011).
The showing necessary to establish the attorney-client privilege is settled:
(1) (When) legal advice of any kind is sought (2) from a professional legal
adviser in his capacity as such, (3) the communications relating to that
purpose, (4) made in confidence (5) by the client, (6) are at his insistence
permanently protected (7) from disclosure by himself or by the legal adviser,
(8) except the protection be waived.
31

In re Grand Jury, 603 F.2d 469, 474 (3d Cir. 1979) (citing J. Wigmore, EVIDENCE § 2292 at 554
(1961)); see also In re Impounded, 241 F.3d 308, 316 n. 6 (3d Cir. 2001). “The burden of proving
that the (attorney-client) privilege applies is placed upon the party asserting the privilege.” In re
Grand Jury, 603 F.2d at 474 (citing among other cases United States v. Landof, 591 F.2d 36, 38
(9th Cir. 1978)).
The attorney-client privilege serves laudable purposes and thus is “[w]orthy of maximum
protection.” Haines v. Liggett Group Inc., 975 F.2d 81, 90 (3d Cir. 1992). Nevertheless, the
privilege obstructs the truth-finding process and is to be construed narrowly. Westinghouse Elec.
Corp., 951 F.2d at 1423. The privilege “protects only those disclosures – necessary to obtain
informed legal advice – which might not have been made absent the privilege.” Id. (citing Fisher
v. United States, 425 U.S. 391, 403 (1976)).
"In Pennsylvania, the attorney-client privilege is an absolute privilege; it is not a limited
privilege that is inapplicable whenever a court determines that the case cannot be fairly decided if
the privilege is invoked." Mueller v. Nationwide Mutual Ins. Co., 31 Pa. D. & C.4th 23, 1996 WL
910155, *31 (Ct. of Com. Pleas of Allegheny County, May 22, 1996) (Wettick, J.). Nevertheless,
"[p]rotection under attorney-client privilege is subject to limits, exceptions, and waiver."
Nationwide Mut. Ins. Co. v. Fleming, 924 A.2d 1259, 1265 (Pa. Super. Ct. 2007).
A client can waive the attorney-client privilege in a number of ways. One is by disclosing
a protected communication to a third party. Id. (citing Loutzenhiser v. Doddo, 260 A.2d 745,
748 (Pa. 1970); Joe v. Prison Health Services, Inc., 782 A.2d 24, 31 (Pa. Commw. Ct. 2001)).
Such a disclosure "has long been considered inconsistent with an assertion of the privilege."
Westinghouse Elec. Corp., 951 F.2d at 1424 (citing United States v. AT & T, 642 F.2d 1285, 1299
32

(D.C. Cir. 1980)). An exception to this rule is recognized where the disclosure to the third party is
necessary to receive informed legal advice. Id. at 1423. Accordingly, the "courts have held that
the client may allow disclosure to an 'agent' assisting the attorney in giving legal advice to the
client without waiving the privilege." Westinghouse, 951 F.2d at 1423; accord United States v.
Kovel, 296 F.2d 918, 921 (2d Cir. 1961) (because "the complexities of modern existence prevent
attorneys from effectively handling clients' affairs without the help of others," the attorney-client
"'privilege must include all the persons who act as the attorney's agents.'" Id. at 921 (quoting 8
Wigmore, EVIDENCE, § 2301).
A party also can waive the attorney-client privilege by asserting claims or defenses that
place privileged communications at issue. Rhone-Poulenc, 32 F.3d at 864. The privilege is not
waived merely because the nature of the claims place the state-of-mind of one of the parties at
issue. Mueller, WL 910155 at *35-39 (rejecting assertion of implied waiver of attorney-client
privilege in bad faith insurance practices setting premised on state-of-mind being at issue: "While
[the] plaintiffs suggest that any implied waiver doctrine can be confined to bad faith claims against
insurance companies, [the] plaintiffs' justification for this exception to the attorney-client privilege
(the Hearn [v. Rhay, 68 F.R.D. 574 (E.D. Wash. 1975)] justification that a court should not decide
a factual issue regarding the state of mind of a party without consideration of all relevant evidence)
would justify the loss of the privilege in a wide variety of cases because of the ability of a creative
party to make the state of mind of another party an issue in the case."); accord Rhone-Poulenc, 32
F.3d at 864 ("A party does not lose the privilege to protect attorney client communications from
disclosure in discovery when his or her state of mind is put in issue in the action."). Although an
attorney's advice may well be relevant to a party's state of mind, "the privilege applies as the
33

interests it is intended to protect are still served by confidentiality." Rhone-Poulenc, 32 F.3d at
864 (applying Pennsylvania law).
In contrast, a waiver will be recognized where a party intends to use the advice of counsel
to support an asserted claim or defense in the litigation. Rhone-Poulenc, 32 F.3d at 863. For
example, using the advice of counsel to support a claim for affirmative relief, such as a
professional malpractice claim, or to (1) advance an essential element to a defense, (2) prove an
affirmative defense, or (3) negate a showing required by the adverse party will work a waiver of
the privilege. Id. "In these cases, the client has made the decision and taken the affirmative step
in the litigation to place the advice of the attorney in issue. Courts have found that by placing the
advice in issue, the client has opened to examination facts relating to that advice." Id. at 863;
accord Mueller, 1996 WL 910155 at *36, *42 (Under Pennsylvania law "a party waives the
privilege if it intends to rely on portions of the privileged communications in establishing a claim
or defense.").
Where the privilege has been waiver through such actions, the privilege is waived for all
communications on the same subject. Nationwide Mutual Ins. Co. v. Fleming, 924 A.2d 1259,
1265 (Pa. Super. 2007) ("A litigant attempting to use attorney-client privilege as an offensive
weapon by selective disclosure of favorable privileged communications has misused the privilege;
waiver of the privilege for all communications on the same subject has been deemed the
appropriate response to such misuse.") (citing Murray v. Gemplus International, S.A., 217 F.R.D.
362, 367 (E.D. Pa.2003)), aff'd, 992 A.2d 65 (2010). In other words, "the disclosure of any
meaningful part of a purportedly privileged communication 'waives the privilege as to the whole.'"
United States v. Rockwell International, 897 F.2d 1255, 1265 (3d Cir. 1990) (quoting United
34

States v. El Paso Co., 682 F.2d 530, 538 (5th Cir. 1982)).
A waiver of the attorney client privilege operates to vitiate the privilege as to all and for all
purposes and time. Genentech, Inc. v. United States Intern. Trade Com'n, 122 F.3d 1409, 1417
(Fed. Cir. 1997) ("Once the attorney-client privilege has been waived, the privilege is generally
lost for all purposes and in all forums."). As the Genentech court explained:
When the attorney-client privilege has been waived, whatever the subject matter of
the waiver, the privilege is gone. The client, therefore, may no longer use the
privilege to prevent access to the communications in question by either the party
who successfully challenged the privilege claim or by anyone else in the present or
future litigation. Having had the opportunity to assert and address the privilege
claim in a judicial proceeding, the privilege holder is thereafter barred, under the
doctrine of res judicata and collateral estoppel, from relitigating the resolved claim.
Id. (quoting Paul R. Rice, Attorney–Client Privilege in the United States § 9:85, at 9–295
(1993) and citing 8 John H. Wigmore, Evidence in Trials at Common Law § 2328(1), at 639
(1961) ("[W]aiver at a first trial should suffice as a waiver for a later trial since there is no
longer any reason for preserving secrecy.") and Edna S. Epstein & Michael M. Martin, The
Attorney–Client Privilege and the Work–Product Doctrine, 76 (2d ed. 1988) ("Once an express
or implicit waiver has occurred, the privilege is generally treated as relinquished for all
purposes and in all circumstances thereafter."). And the majority of courts consistently have
rejected the concept of a selective or limited waiver because such a rule would be inconsistent
with the underpinnings of the privilege. Id. at 1418; Westinghouse Elec. Corp., 951 F.2d at
1424-25 (rejecting the selective waiver concept adopted in Diversified Industries, Inc. v.
Meredith, 572 F.2d 596 (8th Cir.1978) (en banc) and following Permian Corp. v. United States,
665 F.2d 1214 (D.C. Cir. 1981) because the selective waiver doctrine adopted in Diversified
Industries has little to do with "the privilege's purpose - protecting the confidentiality of
35

attorney-client communications in order to encourage clients to obtain informed legal
assistance" or improving the attorney-client relationship.).
There are two caveats to the attorney-client privilege that occasionally arise in settings
underlying insurance coverage disputes: the "common interest" (also known as "community of
interest") and the "co-client" doctrines. Camico Mutual Insurance Co. v. Heffler, Radetich &
Saitta, LLP, 2013 WL 315716, *1 (E.D. Pa. 2013).6 When applicable, these doctrines permit a
limited or selective disclosure of privileged communications among all co-client or
common-interest parties. The doctrines are often invoked by one party to gain access to
information being withheld as privileged by another when co-client or common-interest clients sue
each another. See e.g., id. The principles and boundaries of these doctrines remain unsettled
under Pennsylvania law. Id.
The United States Court of Appeals for the Third Circuit examined these doctrines in In re
Teleglobe Communications Corp., 493 F.3d 345 (3d Cir. 2007).

There, the court undertook a

"contemplative analysis" of the doctrines in a case predicated on Delaware law. Camico, 2013
WL 315716 at *1. In re Teleglobe has become a leading opinion in these areas and provides
persuasive authority as to Pennsylvania law. Id.
The "common interest" exception can arise where separate clients retain different attorneys
who then share information with each other pursuant to a common legal interest. Id. at *2. This
often arises where co-defendants are required to retain separate counsel to avoid potential conflicts
over contingent or subsidiary issues that might arise in the case. Id. Where the information is
shared pursuant to this common interest "it is not privileged as between those clients." Id. (citing
6

These doctrines can arise in other setting as well.
36

Teleglobe, 493 F.3d at 365-66). It does remain privileged as to all others. Teleglobe, 493 F.3d at
364. The consent of all clients generally is required to waive privileged communications
generated from the shared attorney-client communications. Id.
"Pennsylvania state courts have held that under the 'common interest' exception, separate
counsel for different clients is required." Camico, 2013 WL 315716 at *2 (citing In re
Condemnation by City of Philadelphia in 16.2626 Acre Area, 981 A.2d 391, 397–98 (Pa. Commw.
Ct. 2009)). The clients must be parties to litigation or involved in similar or related legal
proceedings that implicate essentially the same interest against a common adversary. In re
Condemnation by City of Philadelphia in 16.2626 Acre Area, 981 A.2d at 397. "[A] shared
common business interest or an interest that is solely commercial is insufficient to warrant
application of the privilege." Id. at 398 (citing Katz v. AT & T Corp., 191 F. R. D. 433 (E.D. Pa.
2000) and Executive Risk Indemnity, Inc. v. Cigna Corporation, 81 Pa. D & C 4th 410 (2006)).
The "co-client" exception to the attorney-client privilege comes into play when two or
more clients utilize the same attorney. Camico, 2013 WL 315716 at *2. When this exception
applies, the default rule is that all communications in the course of the joint representation are
discoverable by each client in the event of litigation between them but otherwise remain privileged
as against third parties. Id. (citing Teleglobe, 493 F.3d at 366 and Tracy v. Tracy, 105 A.2d 122
(Pa. 1954) (attorney-client privilege does not "apply if the attorney represented both parties to the
transaction, in which case no communications in relation to the common business are privileged in
favor or against either, but only against a common adversary."). A caveat "is that a client may
unilaterally waive the privilege as to its own communications with a joint attorney, so long as
those communications concern only the waiving client; it may not, however, unilaterally waive the
37

privilege as to any of the other joint clients' communications or as to any of its communications
that relate to other joint clients." Teleglobe, 493 F.3d at 363.
Courts considering whether the co-client exception applies under Pennsylvania law where
a carrier hires an attorney for its insured have answered the inquiry differently. Id. Some federal
courts have interpreted Pennsylvania law to encompass an absolute rule whereby the insured and
insurer are always considered to be co-clients when the carrier pays for the defense. Id. at *3
(citing among other cases Northwood Nursing & Convalescent Home, Inc. v. Cont'l Ins. Co., 161
F. R. D. 293, 295 (E.D. Pa. 1995) (where insurer agreed to defend underlying action, the insured
“ha[d] no reasonable expectation of privilege” as against the insurer). Others have rejected this
notion. Id. (citing Ingersoll–Rand Equip. Corp. v. Transp. Ins. Co., 963 F. Supp. 452, 454 (M.D.
Pa.1997) (“When an insurer retains an attorney to represent an insured, pursuant to the insurer's
duty to defend, that attorney's client is the insured, not the insurer.”) and Point Pleasant Canoe
Rental, Inc. v. Tinicum Twp., 110 F. R. D. 166, 170 (E.D. Pa. 1986) (same)).
The appellate courts of Pennsylvania have opined that "a co-client relationship does not
exist simply by virtue of the insurer-insured relationship." Id. In Eckman v. Erie Ins. Exchange,
21 A.3d 1203, 1209 (Pa. Super. Ct. 2011), the Superior Court rejected an absolute rule that a
co-client relationship arises when the insurer funds the defense of the insured. Id. Instead, a
court must look to the surrounding circumstances to determine whether the parties had the intent to
create a joint-client relationship, including "how the parties interact[ed] with the joint attorneys
and with each other." Id. at *4 (quoting Teleglobe, 493 F.3d at 363).
Moreover, co-client undertakings "must . . . be distinguished from situations in which a
lawyer represents a single client, but another person with allied interests cooperates with the client
38

and the client's lawyer." Id. (quoting Teleglobe, 493 F.3d at 362 (quoting Restatement (Third)
of the Law Governing Lawyers § 75 cmt. c)). The co-client exception "simply doesn't apply if the
attorney never represented the party seeking the allegedly privileged materials." Remington Arms
Co. v. Liberty Mut. Ins. Co., 142 F. R. D. 408, 418 (D. Del. 1992). Similarly, a shared interest
between a carrier and an insured in minimizing the insured's exposure to liability does not in itself
create a co-client relationship. Camico, 2013 WL 315716 at *6.
Here, plaintiff's pleadings and the record belie the existence of any common interest or
co-client exception that would permit plaintiff to share the documents with defendant and avoid a
waiver of the attorney-client privilege. First, plaintiff has averred that it began to tender
numerous settled underlying claims to defendant for indemnification in 2007 and continued to do
so in 2008. First Amended Complaint at ¶¶ 24-26. Plaintiff reiterated its demand for payment in
February of 2009 and informed defendant that pursuant to J. H. France Refractories it was
selecting defendant "to assume responsibility pursuant to the Policy for the indemnity and defense
costs associated with other settled Underlying Claims" which encompassed the settlement of
lawsuits involving claims by approximately 400 claimants. First Amended Complaint at ¶ 28.
Defendant assertedly has failed and refused to comply with its obligations under the policy. Id. at
¶ 34. It has not paid anything toward the amounts claimed by plaintiff. Id. at ¶ 34. Instead, it
has responded with "a carefully and deliberately orchestrated effort to delay and/or avoid payment
of proceeds due under the Policy, with the ultimate goal of leveraging [plaintiff] into accepting far
less than that to which it is entitled under the Policy (and under other excess liability policies that
[defendant] issued to [plaintiff])." Id. at ¶ 35. Thus, the allegations of the complaint indicate
defendant was not involved in providing a defense or in establishing an ongoing relationship
39

involving the defense of the underlying claims tendered for indemnification and/or the coverage of
defense costs.
Similarly, the record fails to document any scenario where plaintiff and defendant hired
separate counsel and then directed their counsel to engage in a joint defense against a common
adversary. Nor does it contain any factual basis to support the notion that plaintiff and defendant
had the intent to utilize a lawyer for common representation and thereby create a co-client
relationship.
Neither the common interest nor the co-client exceptions to the attorney-client relationship
apply. Consequently, the doctrines that could permit a selective waiver of the attorney client
privilege in the instant setting are unavailable and the record does not provide any independent
legal justification for plaintiff to disclose attorney-client communications to defendant and
thereafter retain the right to assert the privilege as to third parties.
Moreover, the record demonstrates that plaintiff has vehemently sought to protect the
privileges where it has grounds for doing so. See e.g. Report and Recommendation of Special
Discovery Master re North River's Motion to Compel Production of Documents Withheld on the
Basis of Privilege (Doc. 472-1) (noting among other things that plaintiff withheld 1,867
documents reflected in its privilege log; defendant sought to compel 900 of these, and the parties
employed an ongoing process to narrow the issues before the Special Discovery Master and
resolve their disputes as to materials withheld on the basis of privilege); see also Report and
Recommendation of Special Discovery Master re Mine Safety Appliances Company’s Motion For
Reconsideration of Report and Recommendation of Special Discovery Master re North River’s
Motion To Compel Production of Documents Withheld on the Basis of Privilege (Doc. No. 482-1)
40

and Clarification of Report and Recommendation of Special Discovery Master re North River’s
Motion To Compel Production of Documents Withheld on the Grounds of Privilege (Doc. No.
483) and Amendment Thereto (Doc. No. 484). Areas in dispute have included the boundaries
between plaintiff's counsel's role in claims-handling and as coverage counsel as well as those
involving the role of Gleason & Associates - plaintiff's litigation and claims consultant. See
Report and Recommendation of Special Discovery Master re North River's Motion to Compel
Production of Documents Withheld on the Basis of Privilege (Doc. 472-1) at 7. These also were
areas in contention with regard to plaintiff's redacted documents. See Report and
Recommendation re North River’s Motion to Compel Production of Documents Redacted on the
Grounds of Privilege (Doc. No. 486) (resolving defendant's challenge to virtually all 225
documents on plaintiff's redaction log and attaching [486-1] state court Report and
Recommendation resolving challenge to 842 of over 1,500 documents listed on plaintiff's several
privilege logs); Report and Recommendation re North River’s Motion to Compel Production of
Documents Relating to MSA Consultant’s Claims Handling Role Withheld on the Basis of
Privilege (Doc. No. 487) and attaching [487-1] state court Report and Recommendation of Special
Discovery Master re North River’s Motion to Compel Production of Documents Relating to MSA
Consultant’s Claims Handling Role Withheld on the Basis of Privilege (resolving defendant's
objections to 535 of 592 documents withheld); Report and Recommendation of Special Discovery
Master re North River’s Motion to Compel Production of Documents Relating to MSA
Consultant’s Claims Handling Role Redacted on the Basis of Privilege (Doc. No.s 494, 494-1)
(resolving defendant's federal and state court challenge to 629 of over 1,400 redacted documents
involving communications between plaintiff and Gleason & Associates). Plaintiff also
41

unsuccessfully has sought to claw back privileged documents after they have been produced. See
Report and Recommendation of Special Discovery Master re North River’s Objections to MSA’s
Request That Certain Documents Be Returned Based on Alleged Privilege (Doc. No. 592)
(denying plaintiff's request for relief in accordance with Report and Recommendation entered in
the state case).
It follows that plaintiff has preserved its rights to withhold documents on the basis of
attorney-client privilege and work-product wherever it had grounds to do so. Thus, thousands of
documents have not been examined by defendant and cannot become part of the record because of
these privileges.
It further follows that in the absence of the protective order, any privilege attaching to the
materials and testimony that have been produced has been waived. Waiver of the attorney-client
privilege has occurred for at least two basic reasons: (1) disclosure to a third party and/or (2) being
placed at issue in relation to plaintiff's breach of contract and bad faith claims and its defense
against defendant's position on exhaustion and meeting the prerequisites to the grant of coverage.
Defendant has become a third-party to the underlying communications between (a) plaintiff and its
underlying defense counsel; (b) plaintiff, its underlying defense counsel and its insurers; and (c)
plaintiff's insurer and its coverage counsel. The disclosures were not for the purpose of obtaining
legal advice.
Furthermore, much if not all these disclosures are "at issue." A central component of the
parties' dispute is whether a number of the underlying settlements fall within the grant of coverage
or were handled and resolved in a manner that places them within it. Significant aspects of this
are whether certain of the settled or otherwise resolved claims properly were attributed to the
42

underlying insurance and thus are to be credited in satisfying the exhaustion requirement and
whether certain of the settled or otherwise resolved claims involved claimants who had claimed (a)
exposure to a harmful substance as a result of using one of plaintiff's products and (b) that the
exposure occurred while or before the policy was in effect. Much of the dispute underlying these
central matters is grounded in the way plaintiff approached and settled the underlying claims,
including the nature and type of information used by plaintiff in making decisions to settle,
whether appropriate diligence was employed by plaintiff's underlying counsel to assure that the
claimant's asserted claims were grounded in facts that brought the claims within the grant of
coverage (i.e., that exposure allegedly occurred at a time that can be attributed to the policy period
and from the use of one of plaintiff's products), whether significant value was gained for both
parties from the resolution of the underlying claims and so forth. It also involves plaintiff's and
the Hartford's treatment and allocation of several of those underlying claims.
It is clear that plaintiff intends to rely on the communications within categories (i) and (ii)
to establish one or both of its claims or to otherwise counter positions advanced by defendant.
These communications and information thus fall within the scope of the "at issue" doctrine. The
relinquishment of the privileges under these circumstances waives the ability to claim them as
against the world.
It is against this backdrop that plaintiff's invocation of the court's authority to seal on the
basis of the attorney-client and work product privileges must be evaluated. And it follows that
when evaluated in the instant setting the principles underlying the use of such privileges do not
provide a forceful basis to place such information under seal.
The documents in categories (i) and (ii) are not the type of material the courts will protect
43

through the use of the seal in the absent of the ability to invoke and preserve the privileges in the
first instance. Plaintiff has failed to advance a single case where a court has permitted the use of
its authority to seal to substitute for the loss of the attorney-client privilege and/or the work product
privilege. The court's extensive research likewise has failed to find anything to support the a
priori reasoning plaintiff has advanced as to these categories. While the direct loss of the ability
to preclude examination and use of privileged material under a straightforward application of
attorney-client and work product privilege law is not conclusive as to the inquiry and balancing
regarding the use of the seal, the proposition that ongoing protection from such disclosure is
warranted because of the deleterious effect disclosure will have in dealing with third parties is
significantly undercut. If the law of privilege does not directly protect a party from the
consequences of revealing such materials in the public record pursuant to an adjudication with
one's adversary because the disclosure neither is consistent with nor advances the purposes to be
served by the privileges, then the ability to shelter the same disclosures from third parties through
some alternative method likewise cannot be said to be consistent with or advance the purposes to
be served by the privileges. In other words, it follow a fortiori that the interests in protecting the
privileges from being disclosed to third parties is not of paramount concern and ought not to be an
object or policy to be furthered at significant cost to the bright light designed to maintain the
public's trust in judicial integrity.
The fact that plaintiff sought to shelter these documents under the protective order does not
provide significant support for recognizing the materials in categories (i) and (ii) as being within
the type of materials that the courts will protect from disclosure. Plaintiff's unilateral
designations under the protective order did not change the nature of the documents and
44

communications. The protective order was entered to govern the exchange of raw information
during discovery and does not even purport to control the court's use of its seal in the adjudicatory
process. While plaintiff had the right to place some reliance on the protective order's prohibition
against further dissemination of the information produced, the protective order did not contain any
provision that enhanced either party's ability to control disclosure to third parties beyond the legal
basis that the party actually possessed for claiming the underlying information to be confidential in
the absence of the protective order.
A privilege that has been waived through voluntary disclosure to a third-party in a manner
inconsistent with the privilege or striped because of a party's strategic use of the information
and/or communication does not in itself provide a sound basis for protecting the revealed
information from disclosure to third parties. It falls short of constituting the type of materials that
courts will protect through the use of the seal.
Plaintiff also has failed to show that "disclosure will work a clearly defined and serious
injury to" it. The proposition that it has and will continue to proceed in resolving the 9,100
pending claims in a ridged, formulaic manner is divorced from the reality that personal injury
cases and the settlement of them are based on their individual circumstances, the existing strengths
and weakness therein, the personalities involved and a host of legal, social, business and practical
considerations. The applicable codes of professional conduct demand that the lawyers approach
settlement of such cases with full recognition of these considerations. Given this constellation of
variables, the assertion that the revelation of past settlement approaches and resolutions in
particular cases will prejudice the ability to negotiate future settlements in different cases is the
type of generalized harm that falls short of presenting a clearly defined serious injury that is
45

concrete and particularized.
Moreover, the interest in promoting settlement consistently has been held to fall short of
the showing needed to maintain judicial documents under seal. Judge Sloviter, who has authored
numerous opinions in this area, analyzed the competing interests between fostering settlement of
litigation and public access to judicial documents:
We acknowledge the strong public interest in encouraging settlement of private
litigation. Settlements save the parties the substantial cost of litigation and conserve the
limited resources of the judiciary. In order to encourage the compromise and settlement of
disputes, evidence of settlements or offers of settlement are ordinarily not admissible in
federal proceedings. See Fed. R. Evid. 408 and advisory committee note thereto; Fed. R.
Civ. P. 68. Thus, it is likely that had HRA and the Bank chosen to settle and file a voluntary
stipulation of dismissal, as provided in Rule 41(a)(1) of the Federal Rules of Civil
Procedure, they would have been able to prevent public, and even FAB III's, access to these
papers. That is not the course the parties chose.
Instead, HRA and the Bank filed their settlement agreement in the district court,
because, as they frankly concede, they anticipated that they would disagree on the terms, and
would want recourse to the court. That, of course, is precisely what occurred.
Judge Garth has written an interesting and vigorous essay about the importance of
settlement to the overburdened court systems of this country. Since the proposition is
self-evident, it is intended to, and undoubtedly will, touch a sympathetic chord in the hearts
of all judges who, after all, bear much of the burden of the litigation explosion to which
Judge Garth refers.
Noteworthy, however, is the fact that Judge Garth practically ignores the relevant
posture of the case before us. This is not like FDIC v. Ernst & Ernst, 677 F.2d 230 (2d Cir.
1982), which he relies on, where there was an effort to unseal a settlement agreement made
two years earlier. Here, there were motions filed and orders entered that were kept secret,
in direct contravention of the open access to judicial records that the common law protects.
FAB III began its efforts to unseal the court papers almost immediately after these court
documents were filed and sealed.
In the name of encouraging settlements, Judge Garth would have us countenance what
are essentially secret judicial proceedings. We cannot permit the expediency of the
moment to overturn centuries of tradition of open access to court documents and orders.
Having undertaken to utilize the judicial process to interpret the settlement and to
enforce it, the parties are no longer entitled to invoke the confidentiality ordinarily accorded
settlement agreements. Once a settlement is filed in the district court, it becomes a judicial
record, and subject to the access accorded such records.
Bank of America, 800 F.3d at 344-35. Thus, "the generalized interest in encouraging
46

settlements does not rise to the level of interests that [the Third Circuit has] recognized may
outweigh the public's common law right of access." Id. at 836; accord LEAP Systems, Inc.,
638 F.3d at 222 ("Nor can a district court 'rely on the general interest in encouraging settlement'
to justify the sealing of an agreement which the parties mistakenly believed would remain
confidential.").
Admittedly, plaintiff's articulates more than a generalized interest in encouraging
settlements; it seeks to protect its settlement strategy from public disclosure in order to assure
its effectiveness in future settlements of the thousands of personal injury and wrongful death
claims it must continue to face and litigate to resolution. But the information it seeks to seal is
not a trade secret or proprietary commercial information that traditionally has received
significant protection from public disclosure. And the interest plaintiff seeks to protect is
different in kind from the harm to competitive market activity deemed to be worthy of
protection in Nixon and subsequently referenced in Rule 26(c)(1)(G). See Leucadia, 998 F.2d
at 166 (the presence of trade secrets or other business information that can be used to harm a
litigant's "competitive standing" in the marketplace weighs against the right of access) (citing
Nixon, 435 U.S. at 598 ("courts have refused to permit their files to serve as . . . sources of
business information that might harm a litigant's competitive standing."); Westinghouse, 949
F.2d at 663 ("[t]he potential effects of the disclosure of business information that might harm
the litigant's competitive standing may in some cases meet the burden [needed to warrant
keeping] the judicial record under seal"); Cf. Apple Inc. v. Samsung Electronics Co., Ltd., 727
F.3d 1214, 1225, 1228 (Fed. Cir. 2013) (Parties' respective profit, cost and margin data that
could be used by their suppliers in contract negotiations to extract price increases for
47

component parts and Apple's market research reports derived from consumer survey data that
could be used by its competitors to predict Apple's future product releases and marketing
campaigns constituted the type of information that could be used to the parties' competitive
disadvantage.); Joint Stock Soc. v. UDV North America, Inc., 104 F. Supp.2d 390, 405 (D. Del.
2000) (disclosure of distiller’s consumer research studies, strategic plans and marketing
information that if disclosed would give competitors new insights into how its product is
advertised, distributed and marketed had the potential to subject the distiller to serious
competitive injury).
Indeed, the information plaintiff seeks to maintain under seal is admittedly used by it to
further the company's financial wellbeing in the face of claims premised on allegedly defective
and failing products distributed throughout its niche market. Information that is not a trade
secret or proprietary business information used in maintaining competitive market standing but
nevertheless might injure a company's commercial standing through its disclosure because it
relates to defective products, poor or embarrassing business practices or similar commercial
shortcomings has not been given significant weight where the information is used in a formal
adjudication. See Littlejohn, 851 F.2d at 685 (upholding district court's determination that
"defendant's interest in escaping disclosure of problems with its products which have injured
consumers does not outweigh the presumption of openness plus the public interest in
disseminating information about consumer goods that cause personal injuries" on grounds that
(1) the information was not a trade secret, (2) an otherwise private interest in confidentiality has
not been given significant weight where the information has been used at trial and (3) the desire
to preserve company reputation and avoid adverse consequences to capital stock value are not
48

the forms of competitive injury that will outweigh the public right of access); Republic of
Philippines v. Westinghouse Electric Corp., 139 F.R.D. 50, 62 (D. N.J. 1991) ("'proprietary
business information' including: confidential information relating to Westinghouse's analysis
and evaluation of the [nuclear power plant] contract and the positions taken and strategies
employed by Westinghouse in negotiating that contract, that, if available to potential
Westinghouse customers, would severely restrict Westinghouse's ability to negotiate future
contracts, and if available to Westinghouse's competitors, would result in their gaining an
invaluable competitive advantage; confidential information relating to Westinghouse's
agreements with its Special Sales Representatives (“SSRs”), that, if disclosed, would damage
Westinghouse's ability to negotiate such contracts with future SSRs, would encourage present
SSRs to take advantage of the terms they consider to be more advantageous than those in their
own agreements, and would provide Westinghouse's competitors with a substantial advantage
in similar negotiations; and confidential information relating to Westinghouse's candid internal
evaluations and assessments of customers, competitors, subcontractors, government officials,
and other entities, disclosure of which would give an advantage to Westinghouse's competitors
and would damage Westinghouse's business relationships with the subjects of those evaluations
and assessments" all were aimed at protecting the company's reputation and thus failed to
identify the type of injury that can overcome the strong presumption of access that attaches to
filings for summary judgment), stay denied, Republic of Philippines v. Westinghouse Electric
Corp., 949 F.2d 653, 663 (3d Cir. 1991) (perceived financial consequences that might flow
from injury to a company's public image do not identify a competitive disadvantage that will
supply the particularized showing needed for continued secrecy).
49

In other words, the financial injury plaintiff claims will be imminent upon disclosure is
not a form of competitive injury that courts will utilize their authority to minimize or eliminate.
To the contrary, the United States Court of Appeals for the Ninth Circuit has directly held that
information that is used by a party to shelter itself from additional liability and litigation is not
the type of harm from which a court should provide protection. See Foltz, 331 F.3d at 1137
("This disclosure might harm State Farm by exposing it to additional liability and litigation, as
noted above, but a litigant is not entitled to the court's protection from this type of harm.").
Other courts have reached the same conclusion. See Nestle Foods Corp. v. Aetna Cas. and
Sur. Co., 129 F.R.D. 483, 486 (D. N.J. 1990) ("if the basis for defendants' motion is to prevent
information from being disseminated to other potential litigants, then defendants' application
[for a Rule 26(c) protective order] must fail. . . .

The courts have emphatically held that a

protective order cannot be issued simply because it may be detrimental to the movant in other
lawsuits.") (collecting cases); Wauchop v. Domino's Pizza, Inc., 138 F.R.D. 539, 546–47 (N.D.
Ind. 1991) ("That the shared information might be detrimental to Domino's in other litigation
does not transform the concern into good cause . . . .") (citing United States v. Hooker
Chemicals & Plastics Corp., 90 F.R.D. 421, 426 (W.D. N.Y. 1981) ("Hooker also argues that
the disclosure of information garnered through discovery will be detrimental to its position in
parallel lawsuits. This is unquestionably true. However, this is not a reason for a court to
impose a protective order.")); Culinary Foods, Inc. v. Raychem Corp., 151 F.R.D. 297, 301
(N.D. Ill. 1993) (declining to issue a protective order over information that was detrimental to
the defendant's legal interests in parallel or subsequent litigation but indicating that relief may
be available where the information reflects only a trade secret that could give rise to a
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competitive injury).
Finally, the information plaintiff seeks to maintain under seal is of public importance to
defendant, its fellow carriers, the underlying claimants with unresolved claims and future
claimants. The parties' dispute encompasses numerous issues of public importance, including
plaintiff's claims-handling role, what constitutes proper exhaustion, the burden of proving the
judgments or settled claims fall within the grant of coverage, the trigger of coverage for each
type of dust/substance exposure involved, whether general administrative expenses in
coordinating a national defense may be apportioned and proportionally allocated as a form of
ultimate net loss covered under the policy and so forth. Other carriers and all current and
future claimants have a significant interest in knowing (1) the types of litigation and settlement
practices that will be deemed to be acceptable and give rise to indemnification under the
standard terms in the policy and (2) the range and type of evidence and information as well as
the legal arguments and precedents that a court will consider and find important in resolving
these disputes. These entities and individuals are members of the public and have the potential
to have their rights affected by the resolution of the issues forming the parties' dispute. That
interest cannot be summarily discounted in the name of protecting the plaintiff's ability to
minimize its financial exposure from the debacle created by its past products.
Plaintiff has failed to carry its burden of establishing that the materials in categories (i)
and (ii) consist of the kind of information that courts will protect and that disclosure of it will
work a clearly defined and serious injury to plaintiff. Thus, the record and controlling law do
not support plaintiff's invocation of the court's authority to seal to shelter it from public
dissemination.
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Plaintiff's reliance on the protective order must be considered. The July 17, 2011,
protective order was proffered by plaintiff and did not proclaim to govern the public use of any
material produced thereunder in an adjudication on the merits. It merely declared that the
"information or documents containing information subject to the attorney-client privilege and/or
the attorney work product doctrine, which relate to the Underlying Claims or to the litigation of the
Underlying Claims, shall not result in a waiver of such privilege or protection by MSA." Order of
July 17, 2011.
Although the record contained a basis for a finding of good cause under Rule 26 at the time
the order was entered, the order cannot reasonably be understood to (1) have made binding
determinations about the rights of third parties not before the court or (2) govern the proceedings
inviolate and notwithstanding the subsequent development of the record. The order did not even
purport to address such matters. Further, the settled law regarding reformation of such orders in
conjunction with the public right of access precluded the reasonableness of such an understanding.
In context, the July 17, 2011, order protected plaintiff's ability to maintain the privileges as
between the parties and it provided plaintiff with the ability to avoid the difficult choice of having
to elect between disclosing such information to defendant without a complete understanding of the
issues as they would exist at the time of adjudication and waiving the protections in an effort to (1)
resolve or narrow the parties' dispute or (2) otherwise present its best or preferred case. Having
afforded plaintiff the ability to forego this election does not overcome the strong presumption of
public access that attaches to the filings the parties are contemplating. Nevertheless, plaintiff's
reliance on the protective order cannot be ignored on the basis that presentation of the record as
advocated cannot be sanctioned and further development of the record will be inconvenient and
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consume additional resources.
In light of the above, plaintiff will be permitted to assert the attorney client and/or work
product privileges as to any information and documents that are protected under the July 17, 2011,
protective order where the applicable privilege has not been waived (or will not be) by the material
(1) being placed at issue or (2) falling within the scope of the waiver resulting from the documents
and communications being placed at issue.7 Defendant will be permitted to challenge any such
asserted privilege pursuant to the principles set forth in this opinion. To the extent plaintiff can
successfully maintain the privileges, the information will be barred from being used in the public
record and plaintiff will gain the benefit of preserving the privilege as to all third parties, including
the underlying claimants and their counsel. To the extent the matters are conceded or otherwise
determined to have been waived by being placed at issue (or for any other reason other than the
mere disclosure of the information to defendant), then the matters may be used by either party in
making their election to file judicial documents into the public record in support of an adjudication
on the merits.
The above procedure will avoid any undue prejudice from plaintiff's reliance on the July
17, 2011, protective order. Plaintiff will be able to preserve the right to shelter from further
disclosure any information or documents that were produced solely in reliance on the order. The
procedure also strikes the proper balance between preserving such privileged material and the
public disclosure that will ensue from the strategic use of privileged information and
communications and the whole of certain documents and communications being placed at issue.
7

Of course, plaintiff's introduction of such privileged information into the record for summary
judgment or at trial will be deemed to be placing it at issue.
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The remaining categories of information similarly fall short of the showing needed to
maintain judicial documents under seal. The parties each intend to use material from each of the
remaining categories in support of their respective motions for summary judgment.
Category (iii) consists of documents and information generated in this litigation that has
not been made available to the underlying claimants. Specifically within this category is the
testimony of one of plaintiff's consulting experts utilized in the underlying litigation and the
testimony of plaintiff's director of litigation and risk management. The testimony of these
witnesses were generated by deposition in this action.
Category (iv) consists of documents containing information that has not been the subject of
discovery with respect to all of the underlying claims. Within this category are documents setting
forth certain opinions of the medical expert witnesses in the instant coverage litigation consisting
of (a) the expert reports of plaintiff's designated medical experts; (b) the expert reports of three of
defendant's designated medical experts; (c) excerpts from the deposition testimony of two of
plaintiff's designated medical experts; and (d) excerpts from the deposition testimony of two of
defendant's designated medical experts.
Plaintiff emphasizes that the material in category (iii) has not been the subject of discovery
"with respect to all the Underlying Claims." The information is "not necessarily an appropriate
subject of discovery with respect to all of the Underlying Claims as the testimony is privileged and
protected from disclosure." Its disclosure will lead to litigation costs because the underlying
claimants will seek to obtain the full depositions and demands for similar testimony and/or
information. The material in category (iv) consists of excerpts from expert testimony produced
for the instant litigation wherein the experts opine and offer conclusions about whether there has
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been "personal injury" as defined in the relevant insurance policies as opposed to whether there has
been a "compensable injury" within the meaning of the tort law that governs liability in the
underlying cases. Revelation of these select excerpts will present the opportunity for the
underlying claimants to take the information out of context and in turn "make it substantially more
difficult to reach a negotiated resolution of cases and lead to increased defense costs associated
with defending the Underlying Claims." Thus, from plaintiff's perspective all these materials
need to be filed under seal and the sections of the summary judgment briefs and concise statements
and counter statements filed with corresponding redactions.
These categories of information consist mainly of expert opinion testimony that the parties
intend to use to resolve their disputes regarding (1) whether the conditions of the grant of coverage
are satisfied and (2) the trigger of coverage for each of the distinct types of substances and
resulting personal injury alleged in the underlying claims. The information clearly will be "at
issue." The ability of such information to impact and affect the rights of third parties not before
the court virtually is self-evident.
The information within each of these categories is not the type that courts will protect for
many of the same reasons that place the previously addressed categories beyond the availability of
that protection. Plaintiff's reliance on "privilege" is undercut sufficiently for the reasons set forth
above: the testimony is being placed at issue and the court's authority to seal is not a proper
substitute for the consequences of that strategic decision; and protecting a litigant from further
exposure in other litigation through the sharing of information is not a proper function of the
court's authority.
At its base the expert medical testimony is the type of information that each party uses to
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enhance its litigation position. Various opinions on the progression and manifestation of diseases
produced by exposure to air borne toxins or irritants and the impact of those opinions in the setting
of public policy regarding the availability of insurance coverage do not occupy a special status
within the information to be considered in resolving such matters. To the contrary, such expert
testimony is both run-of-the-mill from a litigation tactic and yet very important to the resolution of
the questions of public policy underlying this area of the parties' dispute. That such information
would not necessarily be discoverable and/or might be subject to misinterpretation by counsel in
the underlying litigation does not cloak it with the attributes needed to place it in the category of
information akin to trade secrets or matters that jeopardize the personal safety of government
witnesses and members of his or her family. The information identified in these categories
simply does not constitute the type of materials that courts will protect.
Furthermore, the disclosure of the information in these categories is essential to
understanding the bases for the rulings that will emerge from the court's disposition of the parties'
summary judgment motions. Thus, the need for disclosure is only more compelling. See Mosaid
Technologies Inc. v. LSI Corp, 878 F. Supp.2d 503, 512 (D. Del. 2012) (permitting the parties to
seal information about pricing, finances and patent valuation that was peripheral to the parties'
dispute and could be used by competitors and other licensing agents to undercut future licensing
negotiations but requiring the disclosure of the parties' interpretations of their patent license
agreements because they were central to their dispute and neither the fact that such disclosure
might lead to future litigation nor the detriment to the parties' negotiation strategies in entering into
new licensing agreements was "the sort of competitive disadvantage" needed to "outweigh the
strong presumption in favor of public access.").
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The court's inability to analyze and discuss publically the record advanced for legal rulings
on undisputed facts would subject its rulings to uncertainty and render its opinion meaningless
with regard to precedential valve. Such an approach is unworkable under our centuries-old
system of stare decisis. Cf. Carnegie Mellon University, 2013 WL 1336204, * 11 n. 29 ("This
Court's opinion will document any evidence it feels necessary to explain its determination,
regardless of the parties' positions on confidentiality. The Court does not issue “lettres de cachet”
or proceed as a Star Chamber or other prerogative courts. See In re Oliver, 333 U.S. 257, 268 . . .
(1948). This Court is a function of our collective federal government, sworn to adjudicate cases
both for the parties and for the good of the public."); Mosaid Technologies Inc., 878 F. Supp.2d at
510 ("The parties have sought relief in a public forum" and the court's resolution cannot be based
on a discussion that obscures the nature of the parties' dispute or otherwise turns the court into
something less than "a transparent forum.") (quoting In re Eastman Kodak Company's
Application, 2010 WL 2490982, at *1–2 (S.D. N.Y. June 15, 2010)).
The fact that either party sought to shelter these documents under the protective order does
not provide significant support for submitting such information under seal. The parties' unilateral
designations under the protective order did not change the nature of the testimony or provide carte
blanc authority to control the court's use of its seal in the adjudicatory process. While plaintiff
had the right to place some reliance on the protective order's prohibition against further
dissemination of the testimony and any related documents produced, the protective order did not
contain any provision that enhanced either party's ability to control disclosure to third parties
beyond the legal basis that the party actually possessed for claiming the underlying information to
be confidential. Those bases clearly fall short of identifying the type of material that justifies the
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relief sought given the developed record.
Moreover, the record fails to demonstrate that either party will suffer a clearly defined and
serious injury from its disclosure. It is clear that each party runs the risk of losing pieces in its war
chest as to future litigation or having the risk of any testimony misused or taken out of context in
similar or related litigation; but as explained above, such a claimed injury is a generalized harm
that does to rise to the level of the concrete and palpable injury needed and is not the type of
specific financial harm that a court may protect against through the use of its authority to seal. It
would be improper for the court to partner with either of the parties in an effort to assure their
future litigation positions are not vulnerable by information properly revealed in the resolution of
the pending litigation.
It likewise cannot be overlooked that in combination categories (i) through (iv) would
inject material under seal virtually into all of the main issues for resolution in the litigation. Like
the parties contemplated motions and supporting materials, the court's resolution would be riddled
with redactions correlating to materials under seal. This would have the effect of causing the
court either to issue an opinion that is so redacted that its meaning could not be understood or to
place the opinion and concomitant order under seal. In either event, the entire disposition
virtually would be removed from public review. This would remove from public disclosure most
if not all of the court's resolution of the parties' dispute. That resolution has the potential to affect
the rights of other insurers and insureds as well as third-party claimants, all of whom are not before
the court. Compelling countervailing interests are needed for such action. Miller, 16 F.3d at
551. The parties have not presented such interests.
The materials in category (v) likewise fall short of the mark. This category consists of
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documents or deposition testimony produced in the parallel state court litigation by entities other
than the parties which has been designated as "confidential” under the protective order issued in
the state court action, and which designation has not been withdrawn by that entity. Specifically,
these include documents produced by Harbor Insurance Company and testimony given by an
employee of Allstate Insurance Company.
It has long been settled that a party's unilateral designation of material as confidential under
a broad protective order does not in itself supply a sufficient basis to file judicial documents under
seal. Leucadia, 998 F.2d at 166; Pansey, 23 F.3d at 789-90 & n. 26. The party seeking to file a
judicial document under seal has the burden of establishing that the grounds for secrecy are
present.
Plaintiff's reference to other parties' designations of confidentiality in another case does to
supply the showing needed to overcome the presumption of public access. There are a number of
ways plaintiff could have proceeded. It could have obtained and presented supplemental
information from Harbor and Allstate that meets the heightened standards for filing documents
under seal. It could have sought permission in the state court for modification of its protective
order so that the information could be filed into the instant record. It could have entered into an
agreement with Allstate and/or Harbor that permitted it to use the information or a modified
version of it in the judicial filings in this record. To the extent it has failed to either reduce the
information to a form that can be filed into the public record or obtained information to warrant the
filing of such information under seal independent of the initial designation, it has failed to meet its
burden and it would be disingenuous for this court to place the imputer of it seal over information
that is subject to the public right of access.
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Finally, defendant has presented a motion to seal (1) personal identification information
contained in the health records of the underlying claimants and (2) documents produced and
designated as confidential by Continental Insurance Company and The Hartford. As to the first
category, defendant seeks to redact the personal identification information within the meaning of
the Health Insurance Portability and Accountability Act that is contained in the records of the
underlying claimants. As to the second, defendant seeks to file under seal insurer loss runs,
discussions of a "cost-sharing" agreement between some of plaintiff's insurers, a letter to an
insurance carrier discussing a settlement proposal, medical records from four claimants, another
insurer's payment of a settlement amount and a chart listing a settlement payment by various
insurers.
Defendant requests that it be permitted to redact all of the above from its "brief, statement
of material facts, and exhibits filed in support of its motion for summary judgment." Defendant's
Motion to File Documents Under Seal (Doc. No. 654) at ¶ 27. It would file un-redacted versions
for this court's consideration "that would not be made available to the public for the Court's
consideration in ruling on North River's Motion." Id. at ¶ 28.
Defendant's motion will be granted to the extent it seeks to redact the personal
identification information of the underlying claimants in the exhibits submitted in support of its
motion. The removal of such information is authorized or within the spirit of Federal Rule of
Civil Procedure 5.2(a) and Local Rule 5.2. In addition, it does not appear at this juncture that the
redaction of such information in the actual exhibits will inhibit this court's consideration, analysis
and discussion of the parties' contemplated motions.
Defendant will be required to file all briefs and statements or counter statements of
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material facts into the public record. It shall devise a method of presentation that will permit
plaintiff and this court to analyze and discuss the claimant files in an intelligent and
straightforward manner.
The balance of defendant's motion will be denied. The specific information within the
insurer loss runs, "cost-sharing" agreement, letter discussing a settlement proposal, medical
records from four claimants, payment of a settlement and chart listing a settlement payment by
various insurers cannot be filed under seal for the same reasons plaintiff cannot file similar
material under seal.
The parties are hereby advised that "[a]s an undertaking funded by the people of the United
States, [this court's] decision will be publicly published to decide both the matter at hand, and also
guide other entities on the law." Carnegie Mellon University, 2013 WL 1336204, * 11 (citing
Newman v. Graddick, 696 F.2d 796, 801 (11th Cir. 1983) ("[O]pen proceedings may be imperative
if the public is to learn about the crucial legal issues that help shape modern society. Informed
public opinion is critical to effective self-governance.")). To the extent the parties desire to have
their dispute resolve in private by a body that is bound to secrecy, they are free to employ the
forum that readily offers such benefits: arbitration. See Delaware Coalition for Open
Government, 733 F.3d at 516-17 (noting the development of modern arbitration practice, the
numerous associations and groups that provide such services and the parties' ability to make such
forums and the resolutions therein "distinctly private"); Mosaid Technologies Inc., 878 F. Supp.2d
at 512 ("The parties have sought relief in a public forum, and yet their proposed redactions would
obscure any discussion of the actual nature of the parties' dispute. There are other forums - such
as arbitration - available if parties wish to protect all of this type of information from public view.")
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(citing Global Reinsurance Corp. - U.S. Branch v. Argonaut Ins. Co., 2008 WL 1805459, at *1
(S.D. N.Y. Apr. 24, 2008) (noting that one of the “princip[al] advantages of arbitration” is
“confidentiality”)). They are also free to resolve their dispute through mediation, which would
likewise shelter the sensitive information in question from public disclosure.
The court is aware of the cost to the parties and in some ways the cost to the truth-finding
process that comes with proceeding in an open forum. But the public nature of forum in which
the parties have chosen to air their dispute and the manner of operation needed for the forum to
maintain its legitimacy and integrity extract certain costs from the litigants that come before it.
But for very limited circumstances, the publicity of an adjudication is one of those costs. The
parties have not met the heavy burdens needed to permit this court to operate in secret. Compare
id. ("Yet if the Court were to grant Defendants' application to seal all portions of the transcript that
make any reference to the terms of the underlying agreements, it would effectively convert itself
into an arbitral tribunal, where the presumption is that all materials will be kept confidential and
not be disclosed to the public. It is therefore unsurprising that no party to this litigation has cited
a single instance where a judge in this District has redacted a civil judicial transcript in the manner
requested here."). Consequently, their respective motions to seal will be denied in all material
aspects.
For the reasons set forth above, the parties respective motions to seal will be denied in all
material aspects (with the minor exception of being permitted to redact personal identification

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information in the exhibits containing the underlying claimant's health records). An appropriate
order will follow.
Date: March 31, 2014
s/David Stewart Cercone
David Stewart Cercone
United States District Judge

cc:

Brian T. Himmel, Esquire
George L. Stewart, II, Esquire
Michael H. Sampson, Esquire
Alan S. Miller, Esquire
Bridget M. Gillespie, Esquire
Dennis O. Brown, Esquire
Henry M. Sneath, Esquire
Robert A. Nicholas, Esquire
(Via CM/ECF Electronic Mail)

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