Federal Bar Update: Confidentiality not always enforceable

Back to TopCommentsE-mailPrintBookmark and Share

Federal Bar UpdateAmendments

In Dugdale Communications v. Alcatel-Lucent USA, No. 1:09-CV-960 (S.D. Ind. Feb. 11, 2011), the court addressed defendant’s motion to amend its answer. Magistrate Judge Tim Baker denied the motion, starting the court’s opinion by writing, “Leave to amend pleadings is freely granted when justice requires. But when, as in this case, a party waits until significant deadlines have passed to seek leave to make amendments that could have been made earlier, and which would unduly prejudice the opposing party, justice requires denial of leave to amend.”

As with most discretionary amendment issues, the opinion turns on its unique facts, but one of the desired amendments – to add a statute of frauds defense – was denied due to undue delay. The court explained, “While Dugdale’s discovery responses may not have been entirely consistent, Alcatel waited to depose Witham until the day before the discovery deadline. As a result of this and other circumstances, Alcatel cannot in fairness claim that it now should be allowed to add a claim based on something it should (or easily could) have known long ago. The court has already enlarged CMP deadlines twice and recently declined to further delay progress in this case. Accordingly, the court denies Alcatel’s motion for leave to add a statute of frauds defense.”

Enforcing confidential settlement agreements

As federal practitioners know, the 7th Circuit is particularly strict about protecting public access to federal court filings. Trial judges within the 7th Circuit are thus equally strict in ensuring that sealed record requests meet the 7th Circuit standards. So can a confidential settlement agreement be enforced in federal court while preserving confidentiality?

This issue was addressed by the court in Gant v. Carrier Corp., No. 1:09-CV-1193 (S.D. Ind. Jan. 25, 2011). The defendant sought to enforce a confidential settlement agreement. The court set the matter for a court conference to try to informally resolve the matter, kept the agreement under seal until that conference, but expressed that it “has serious reservations about the propriety of maintaining the purported settlement agreement and related documents under seal given that the Court is now being asked to enforce this purported agreement.”

The court explained, “In Cincinnati Insurance, the Seventh Circuit noted that ‘[t]he parties to a lawsuit are not the only people who have a legitimate interest in the record compiled in a legal proceeding.’ Id. at 944. The public’s interest in a transparent and predictable legal system extends to the Court’s enforcement of settlement agreements. Many cases never reach the courtroom and others end without even a written opinion. As the Seventh Circuit stated in Jessup v. Luther, 277 F.3d 926, 929 (7th Cir. 2002), ‘[t]he public has an interest in knowing what terms of a settlement a federal judge would approve and perhaps therefore nudge the parties to agree to.’ The Seventh Circuit has further stated that ‘[p]eople who want secrecy should opt for arbitration. When they call on the courts, they must accept the openness that goes with subsidized dispute resolution by public (and publicly accountable) officials.’ Union Oil Co. of Cal. v. Leavell, 220 F.3d 562, 568 (7th Cir. 2000).”

The court continued, “In the case at bar, Carrier has provided no reasons why its desire for sealing overcomes the public’s legitimate interest in the record compiled by this legal proceeding. The purported settlement agreement contains a confidentiality clause, which presumably is at the heart of this sealing request. But the parties’ (or one party’s) desire for confidentiality does not override the public’s interest in open proceedings when disputes require the Court’s intervention. Certainly Carrier’s motion contains no authority supporting such an outcome.”

Thus, parties seeking to enforce confidential settlement agreements should be on notice that confidentiality cannot be assured in federal court. If confidentiality is vital, consideration should be given to possibly including enforcement mechanisms through arbitration or a simple state-law, state-court breach of contract action.

Mark your calendars

The annual Federal Civil Practice Seminar will be held Friday, Dec. 16, in Indianapolis.•


John Maley,, is a partner with Barnes & Thornburg, LLP, practicing federal and state litigation, employment matters, and appeals. The opinions expressed in this column are the author’s.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
Subscribe to Indiana Lawyer
  1. I commend Joe for standing up to this tyrant attorney! You ask why? Well I’m one of David Steele victims. I was in desperate need of legal help to protect my child, David saw an opportunity, and he demanded I pay him $3000. Cash. As I received motions and orders from court he did nothing! After weeks of emails asking him to address the legal issues, he responded by saying he was “on vacation “and I should be so lucky to have “my attorney” reply. Finally after lie on top of lie I asked for a full refund, which he refused. He then sent me “bills” for things he never did, such as, his appearance in the case and later claimed he withdrew. He never filed one document / motion for my case! When I finally demanded he refund my money he then turn to threats which scared my family for our lives. It seem unreal we couldn’t believe this guy. I am now over $100,000 in debt digging out of the legal mess he caused my family. Later I was finally able to hire another law office. I met Joe and we worked diligently on my case. I soon learn Joe had a passion for helping people. As anyone who has been through a legal battle it is exhausting. Joe was always more than happy to help or address an issue. Joe was knowledgeable about all my concerns at the same time he was able to reduce the stress and anxieties of my case. He would stay late and come in early, he always went the extra mile to help in any way he could. I can only imagine what Joe and his family has been through, my prayers go out to him and all the victims.

  2. Steele did more than what is listed too. He purposely sought out to ruin me, calling potential employers and then lied about me alleging all kinds of things including kidnapping. None of his allegations were true. If you are in need of an ethical and very knowledgeable family law paralegal, perhaps someone could post their contact information. Ethics cannot be purchased, either your paralegal has them or they do not.

  3. This is ridiculous. Most JDs not practicing law don't know squat to justify calling themselves a lawyer. Maybe they should try visiting the inside of a courtroom before they go around calling themselves lawyers. This kind of promotional BS just increases the volume of people with JDs that are underqualified thereby dragging all the rest of us down likewise.

  4. I think it is safe to say that those Hoosier's with the most confidence in the Indiana judicial system are those Hoosier's who have never had the displeasure of dealing with the Hoosier court system.

  5. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise