Court Updates Procedures for Seeking Confidential Treatment for Court Filings

On November 5, 2012, the Court of Chancery announced that it was replacing Rule 5(g) which for the past 20+ years has governed the designation of information as confidential or “under seal” with a new Rule 5.1 starting on January 1, 2013.  New Rule 5.1 is intended to reinforce the general rule that there is a public right of access to all Court filings including pleadings, motions, briefs, letters, affidavits, exhibits, discovery responses and hearing transcripts.  

This post provides some of the highlights of the new rule.  A copy of the new Rule 5.1 is [here] and a copy of the Court’s Memorandum explaining Rule 5.1 is [here].

Issues With Old Rule 5(g)

Rule 5(g) was enacted in 1992 as an attempt to balance the public’s right of access to information about judicial proceedings with the litigating parties need to keep some material confidential.  Over the past 20 years, the Court reports that it has seen increasing problems with respect to the designation of information as confidential which included, among other things:

(i)         confusion about what constituted “good cause”;

(ii)        over-designation of information for confidential treatment;

(iii)       parties not timely filing “public versions” of documents filed under seal;

(iv)       the absence of a simple procedure for filing a complaint under seal; and

(v)        the need for a simple process to challenge a designation of “confidentiality.”

New Rule 5.1

Rule 5.1 will streamline the procedures and at the same time make it more difficult to designate information for confidential treatment.  Rule 5.1 does not alter or limit the ability of the parties to enter into confidentiality agreements to govern discovery or the parties ability to designate information as confidential in discovery.  Indeed, with the significant increase in the volume of electronically stored information that is collected, reviewed and produced by parties in litigation, confidentiality agreements and orders will play a critical role in protecting the disclosure of confidential information, including privileged information, from public dissemination.  Rule 5.1 also reduces the categories of information that are entitled to protection and it clarifies the procedures that a party must follow when designating information confidential.  The penalty for not following the new procedures is severe – if the parties fail to timely file a public version of a document filed under seal, then the document automatically loses it confidential status.  

The Register in Chancery will maintain a docket system for civil actions that permits a CF to be viewed only by the Court, the party who filed the CF and the parties in that action who were served with the CF.  However, the title of the document, the identity of the party filing the CF and the identities of the parties who were served will be available to the public.

Timing Critical — Three Days Extra for Service by E-mail — Gone

 Another important change is shorter time periods, and note that Rule 5.1 contains a provision expressly excepting all time periods in Rule 5.1 from the additional time for responses provided for in Rule 6(e) if a pleading is served by mail or electronic service.  There is some confusion as to exactly what the Court means in the rules, which refer to “days” in some instances and “business days” in others.  It is presumed that all the days referenced in the rule are business days but that would be a good question to ask at the seminar that the Court is planning to hold sometime soon – probably in early December. 

Definition of “Good Cause”

While a party requesting confidential treatment of any document had to show “good cause,” Rule 5.1 expressly defines “good cause” to exist “only if the public interest in access to Court proceedings is outweighed by the harm that public disclosures of sensitive information would cause.”  The rule then provides some very helpful examples of confidential information – trade secrets, sensitive proprietary information, sensitive financial information, business or personal information such as medical records, financial records or information such as social security information, financial account information or the names of children. 

Procedures for Filing Confidential Documents

 

Old Rule 5(g)

 

New Rule 5.1

  • Referred to as “Under Seal”

 

  • Needed prior Court Order to file under seal

 

  • File public version only for letters and briefs filed under seal

 

  • Party has three days to file public version of document filed under seal

 

  • Now called “Confidential Filing” (“CF”) or “Confidential Treatment” (“CT”); no longer “under seal”
  • Still need prior Court Order to make CF

 

  • File public version for every CF filing unless exempted by rule (e.g., exhibits and deposition transcripts)

 

  • Not later than 3:00 p.m. on next business day after CF made, filing party must give notice of CF to all other parties who assert that CF contains confidential information with proposed public version attached
  • Parties asserting confidentiality have until 3:00 p.m. on the 5th [business?] day after CF made to tell filing party what additional information should be redacted
  • At end of five [business?] day period, filing party must file public version
  • If no public version filed within five [business?] day period, original CF released for public viewing

 Procedures for CT for Complaints

1)         File the complaint and any supporting documents as a CF with a cover letter to the Register in Chancery certifying compliance with Rule 5.1.

2)         Rule 3(a)(2) Cover Sheet with a summary of the claims asserted in complaint must be filed publicly.

3)         Counsel for the plaintiff must use “best efforts” to give actual notice to anyone who might have a legitimate interest in keeping information confidential along with proposed public version of CF.

4)         Notice must include a copy of Rule 5.1 and a proposed public version of the complaint and any related documents redacting only the information the plaintiff believes is confidential.

5)         If no one designates any additional information as confidential, public version must be filed by 3:00 pm on the third [business] day after initial complaint filed.    

Simplified Procedures for Challenging Confidential Designations

To challenge the designation of CT, the challenger must simply file a notice with the Register in Chancery.  The challenger need not provide any reasons.  The burden then falls to the designating party to show “good cause.”  If the notice challenges a document for which a public version exists, the designating party must file a motion to maintain CT within five [business?] days. The challenger then has five [business?] days to file an opposition.  If no motion is filed, the original version will be released to the public.  After an opposition is filed, the Court will determine whether CT is warranted or whether additional proceedings are warranted. 

Termination of Confidential Treatment

CF will expire three years after final disposition of the case.  The Register will give the parties 90 days notice of the end of the period and within 30 days of that notice, a party who wants to continue the CT must file a motion with supporting brief and affidavits identifying on a document by document basis the reason for the continued CT.