Chancery Interprets New Confidentiality Rule to Require Disclosure of Documents Filed with Court

Horres v. Chick-fil-A, Inc., C.A. No. 5530-VCL (Del. Ch. Mar. 27, 2013).

Why this case is noteworthy. This letter ruling is the first decision that interprets the new Court of Chancery Rule 5.1 that became effective on Jan. 1, 2013 and governs those documents that the Court will maintain as confidential and those that the court will require to be disclosed to the public. A post describing the relatively new rule is available here. The rule requires disclosure 3 years after a case is closed unless good cause is shown as defined in the rule.

This case was closed in June 2010. It involved a termination of a franchise agreement based in part on allegations of sexual harassment. The franchisor sought to maintain the confidentiality of an affidavit with exhibits that was filed in that suit and that included the names of alleged victims and witnesses. In sum, the court found that the only data in the affidavit that warranted continued confidential treatment was the names of the alleged victims and witnesses. However embarrassing to the other parties to the agreement the allegations may be, many of which had been reported in the press at the time of the suit’s filing, the contents did not meet the prerequisites of the rule that must be satisfied to prevent their disclosure.