Eagle Star Insurance Company Ltd. v. Arrowood Indemn. Co., Ltd.
Issue Discussed: Confidentiality
Submitted by Robert A. Kole
Date Promulgated: September 23, 2013
Issues Decided: Whether confidential arbitration information can remain sealed when submitted to a federal court, as part of a petition to confirm an arbitral award.
Eagle Star Insurance Company and Home and Overseas Insurance Company (Eagle) sought to confirm an award resulting from an arbitration with Arrowood Indemnity Company (Arrowood). Eagle’s petition to confirm, and Arrowood’s subsequent motion to dismiss, contained information deemed by the parties to be confidential arbitration information (Arbitration Information), in accordance with the confidentiality agreement governing their dispute (the Confidentiality Agreement). As a result, the parties sought to file their briefs and supporting evidence under seal, which the Court initially allowed, via three different sealing orders.
Before the Court issued a substantive decision, the parties reached a settlement and filed a joint stipulation of dismissal, thereby obviating the need for the Court to address the merits of their dispute. Subsequently, five insurance companies (the Movants) that were involved in separate, on-going arbitrations with Arrowood sought to intervene, and to unseal any records that had been filed in the case, asserting both a common law and First Amendment right to access judicial documents.
The Court concluded that the confidential arbitration information should be unsealed. After addressing certain procedural arguments, the Court conducted a three-step analysis.
First, the Court analyzed whether the documents sought by Movants qualified as “judicial documents,” for which a presumption of access applied. Id. at *5. The Court concluded that they did, because they were “relevant to performance of the judicial function and useful in the judicial process” – a relatively low burden. Id. (citations omitted).
Second, the Court considered the weight that should be given to the presumption of access, by looking to “the role of the material at issue in the exercise of Article III judicial power and the resultant value of such information to those monitoring the federal courts.” Id. at *7 (citations omitted). Because the Confidential Information sought by Movants was at “the heart of what the Court [was] asked to act upon,” the Court concluded that the “weight of the presumption of access … is correspondingly high.” Id.
Third, the Court sought to balance the high presumption of access against any competing considerations supporting continued confidentiality. The primary considerations identified by Arrowood were its expectation of confidentiality (due to the Confidentiality Agreement and the Court’s prior sealing orders), and the possibility that disclosure would “compromise its position with respect to the separate arbitrations in which it is engaged with Movants.”Id. at *9. The Court concluded that those considerations failed to trump the presumption of public access, and unsealed the documents filed by the parties. Id.
* Robert A. Kole is the co-chair of the Insurance/Reinsurance Practice Group of Choate, Hall & Stewart LLP, as well as the co-chair of the ARIAS Law Committee.