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. This new language about a warning has not been discussed at previous meetings. It's not available online. Since it must be made public knowledge before the vote, does anyone know exactly what it says? Further, this proposal was held up for 5 weeks because members Carol and Lucy insisted that all terms used be defined. So now, definitions are unnecessary and have not been inserted? Beyond these requirements, what is the logic behind giving one free pass to discriminators? Is that how laws work - break it once and that's ok? Just don't do it again? Three members of Carmel's council have done just about everything they can think of to prohibit an anti-discrimination ordinance in Carmel, much to Brainard's consternation, I'm told. These three 'want to be so careful' that they have failed to do what at least 13 other communities, including Martinsville, have already done. It's not being careful. It's standing in the way of what 60% of Carmel residents want. It's hurting CArmel in thT businesses have refused to locate because the council has not gotten with the program. And now they want to give discriminatory one free shot to do so. Unacceptable. Once three members leave the council because they lost their races, the Carmel council will have unanimous approval of the ordinance as originally drafted, not with a one free shot to discriminate freebie. That happens in January 2016. Why give a freebie when all we have to do is wait 3 months and get an ordinance with teeth from Day 1? If nothing else, can you please get s copy from Carmel and post it so we can see what else has changed in the proposal?

  2. Here is an interesting 2012 law review article for any who wish to dive deeper into this subject matter: Excerpt: "Judicial interpretation of the ADA has extended public entity liability to licensing agencies in the licensure and certification of attorneys.49 State bar examiners have the authority to conduct fitness investigations for the purpose of determining whether an applicant is a direct threat to the public.50 A “direct threat” is defined as “a significant risk to the health or safety of others that cannot be eliminated by a modification of policies, practices or procedures, or by the provision of auxiliary aids or services as provided by § 35.139.”51 However, bar examiners may not utilize generalizations or stereotypes about the applicant’s disability in concluding that an applicant is a direct threat.52"

  3. We have been on the waiting list since 2009, i was notified almost 4 months ago that we were going to start receiving payments and we still have received nothing. Every time I call I'm told I just have to wait it's in the lawyers hands. Is everyone else still waiting?

  4. I hope you dont mind but to answer my question. What amendment does this case pretain to?

  5. Research by William J Federer Chief Justice John Marshall commented May 9, 1833, on the pamphlet The Relation of Christianity to Civil Government in the United States written by Rev. Jasper Adams, President of the College of Charleston, South Carolina (The Papers of John Marshall, ed. Charles Hobson, Chapel Hill: Univ. of North Carolina Press, 2006, p, 278): "Reverend Sir, I am much indebted to you for the copy of your valuable sermon on the relation of Christianity to civil government preached before the convention of the Protestant Episcopal Church in Charleston, on the 13th of February last. I have read it with great attention and advantage. The documents annexed to the sermon certainly go far in sustaining the proposition which it is your purpose to establish. One great object of the colonial charters was avowedly the propagation of the Christian faith. Means have been employed to accomplish this object, and those means have been used by government..." John Marshall continued: "No person, I believe, questions the importance of religion to the happiness of man even during his existence in this world. It has at all times employed his most serious meditation, and had a decided influence on his conduct. The American population is entirely Christian, and with us, Christianity and Religion are identified. It would be strange, indeed, if with such a people, our institutions did not presuppose Christianity, and did not often refer to it, and exhibit relations with it. Legislation on the subject is admitted to require great delicacy, because freedom of conscience and respect for our religion both claim our most serious regard. You have allowed their full influence to both. With very great respect, I am Sir, your Obedt., J. Marshall."