This article discusses two recent developments. The first is the Goesel ruling which decided motions addressed to the federal appellate court to seal the settlement agreements reached in two separate lawsuits. One request was by plaintiffs’ counsel and one on behalf of defendants. The court consolidated the motions, and its opinion informs readers about potential traps for the unwary who seek confidentiality of their settlements. The second ruling is by New York’s Appellate Division, First Department, in the Malouf case affirming harsh spoliation penalties against a defendant who failed to preserve a treadmill used by a plaintiff who was injured.
Assume that adverse litigants in a federal court personal injury case both decide to settle on a confidential basis. For example, they want the settlement amount not to be disclosed. And the plaintiff’s lawyer doesn’t want his fee publicized. These objectives should not be a problem. Right? Not so fast! A lot depends on whether and to what extent the settlement proceedings are to be reflected in the federal court’s records. A mutual desire for private treatment can be thwarted by a practical necessity to effectuate the settlement via court approval as, for example, in the case of an infant compromise. At that point, the settling litigants may have to move to seal the record. Do they have to give good reasons? Maybe.
