Travelers Indem. Co. v. Excalibur Reinsurance Corp.

• Decision Date: 05 August 2013
• Docket Number: 3:11 - CV- 1209 (CSH)
• Citation: Travelers Indem. Co. v. Excalibur Reinsurance Corp., 3:11 - CV- 1209 (CSH) (D. Conn. Aug 05, 2013)
• Court: U.S. District Court — District of Connecticut
• Parties: THE TRAVELERS INDEMNITY COMPANY as successor in interest to GULF INSURANCE COMPANY, Plaintiff, v. EXCALIBUR REINSURANCE CORPORATION f/k/a CAPITAL INSURANCE COMPANY, Defendant.

THE TRAVELERS INDEMNITY COMPANY as successor in interest to GULF INSURANCE COMPANY, Plaintiff, v.EXCALIBUR REINSURANCE CORPORATION f/k/a CAPITAL INSURANCE COMPANY, Defendant.

3:11 - CV- 1209 (CSH)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT

AUGUST 5, 2013

RULING ON MOTIONS TO SEAL AND MOTIONS TO DESIGNATE CONFIDENTIAL

DISCOVERY MATERIALS

HAIGHT, Senior District Judge:

I.BACKGROUND

Plaintiff, the Travelers Indemnity Company("Travelers") brings this contract action as successor in interest to Gulf Insurance Company, which entered into a reinsurance contract with defendantExcalibur Reinsurance Corporation("Excalibur"), formerly known as PMA Capital Insurance Company.This reinsurance case arises out of several "errors and omissions" policies Travelers issued to an insurance and reinsurance broker.The polices had annual periods extending from 1997 to 2001.A number of the broker's insurance company clients brought claims against the broker for losses allegedly sustained due to "reinsurance spirals."¹The broker sought coverage forthe clients' claims from Travelers, from certain Travelers' insurance company affiliates (the "Affiliates"), and from unaffiliated insurance companies (the "Underwriters").In so doing, the broker shared confidential documents with Travelers, including privileged communications with its legal counsel as well as details of settlement negotiations with its clients.Moreover, the Affiliates and Underwriters shared confidential documents with Travelers, including communications with their own attorneys, Mayer, Brown, Rowe and Maw ("Mayer Brown").²

In February 2010 Travelers and the Affiliates reached a confidential settlement with the broker.Because the Underwriters did not settle at that time, Travelers represents that it does not know whether the broker's coverage claims against the Underwriters remain active.In any event, Travelers sought to recover a portion of its share of the settlement from one of its reinsurers, defendant Excalibur.In response to Excalibur's failure to pay the bulk of Travelers' claims, Travelers filed the present action with this Court on August 1, 2011.Specifically, Travelers has alleged that "Excalibur has failed and refused to pay $1,573,189.58 worth of valid reinsurance claims under thecontract, thereby breaching it."Doc. 1, p. 1.

On February 29, 2012, the parties jointly requested the Court's approval of a proffered "Stipulated Protective Order"(herein "SPO").Doc. 24-1.The Court reviewed, approved, and entered the parties' protective order, as written, on March 1, 2012.Doc. 25.Under that order, "Confidential Discovery Material" is defined as material that "a party believes, in good faith, includes personal information or confidential, commercial, proprietary business information or non-public financial data, or implicates the commercial, proprietary or reputational interests of third parties."Doc. 24-1, ¶ 1.If a party decides to file "Confidential Discovery Material" with the Court, pursuant to the protective order, that party shall make the filing "under seal in accordance with the procedure set forth in the District of Connecticut LocalRule 5(e) and accompanied by a motion to seal from the requesting party."Id., ¶ 11.

On March 6, 2012, Travelers applied for a prejudgment remedy [Doc. 26].³Excalibur opposed that application, including with its opposition papers several documents that named the broker, contained legal advice obtained by the broker, and described details of settlement discussions between Travelers and the broker.As the case record reflects, Travelers moved to seal such documents [Doc. 40] and the Court granted the motion, denying it only to the extent that the Court required further specific redactions of particular documents [Doc. 48, p. 21-23].

On July 9, 2012, Travelers moved for leave to amend its complaint [Doc. 56].In opposing Travelers' motion, Excalibur submitted opposition papers which included a declaration from Angela Aloisio[Doc. 59], an employee of Armour Risk Management, Inc.,"the entity that manages the business of Excalibur."⁴Doc. 59, ¶ 1.Attached to Aloisio's declaration were four documents that Travelers designated as "Confidential Discovery Material" pursuant to the terms of the SPO[Doc. 24-1].Travelers contends that the "four documents invoke the same concerns as the earlier set of documents, and accordingly the Court should seal them" as well.Doc. 62, p. 3.

II.PENDING MOTIONS

Pending before the Court are eight motions to seal and two motions to designate discovery materials as "confidential."The motions to seal include the following: Doc. 45(Travelers' Motion to Seal Portions of Excalibur's Motion to Compel[Doc. 42 & 43] and supporting exhibits [Doc. 44]);Doc. 52(Travelers' Motion to Seal Portions of Exhibit 1 to Travelers' Opposition to Excalibur's Motion to Compel[Doc. 51-1]);Doc. 58(Excalibur's Motion to Seal Exhibits 1, 3, 4, & 7 to Declaration of Angela Aloisio);Doc. 61(Travelers' Motion to Seal Exhibits 1, 3, 4 & 7 to Declaration of Angela Aloisio);Doc. 77(Travelers' Motion to Seal Portions of Excalibur's Memorandum in Support of its Motion to Compel[Doc. 75] and exhibits attached to Declaration of Raymond S. Mastrangelo);Doc. 84(Travelers' Motion to Seal Unredacted Memorandum of Law in Support of Motion for Pre-Pleading Security and Exhibit 1 to that Memorandum, an excerpt from Diane Ferro's deposition);Doc. 91(Travelers' Motion to Seal Unredacted Memorandum of Law inOpposition to Excalibur's Motion to Designate Discovery Material as Confidential and Exhibits 1 & 2 to that Memorandum);andDoc. 101(Travelers' Motion to Seal Portions of February 26, 2013 Hearing Transcript).

Each party has also filed a motion to designate various discovery materials as "confidential" pursuant to the Court-approved SPO[Doc. 24-1 & 25].SeeDoc. 74 & 80(motions re confidential discovery materials filed by Excalibur and Travelers, respectively).

For the reasons set forth below, all of the foregoing motions to seal and motions to designate discovery materials as confidential will be granted.

III.DISCUSSION

A.Motions to Seal

1.Sealing in General

In two previous Rulings on the parties' motions to seal in this case, the Court has set forth the relevant law with respect to sealing.SeeDoc. 38 & 48(Rulings re: sealing, filed 4/13/2012 & 5/10/2012).The Supreme Court and the Second Circuit have recognized the public's right to access court records and proceedings, which is rooted in both the common law and the First Amendment.Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 597-98(1978);Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119-120(2d Cir.2006).⁵Consequently, there is a strong presumption against sealing court records from public inspection.

The public's right to access court documents is not, however, absolute in that it may besurmounted by a party's showing that sealing will further other substantial interests, for example, a criminal defendant's right to a fair trial or a third party's privacy interests.Matter of New York Times Co., 828 F.2d 110, 114-16(2d Cir.1987), cert. denied, 485 U.S. 977(1988).Thus, in limited circumstances and upon a showing of compelling need, the court may order certain records to be sealed.Lugosch, 435 F.3d at 123;Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 95-96(2d Cir.2004);Suntoke v. PSEG Power Connecticut, LLC., No. 3:06-CV-01520 (JCH), 2007 WL 1455847, at *1(D. Conn.May 16, 2007).

To be precise, court documents may be sealed if "specific, on the record findings are made demonstrating that 'closure is essential to preserve higher values and is narrowly tailored to serve that interest.'"Press-Enterprise Co. v. Superior Court, 478 U.S. 1, 13-14(1986)("Press Enterprise II")(quotingPress-Enterprise Co. v. Superior Court, 464 U.S. 501, 510(1984)("Press-Enterprise I")).AccordNew York Times Co., 828 F.2d at 116;Hartford Courant Co., 380 F.3d at 95-96(judicial records may be sealed only when and to the extent necessary to preserve higher values).⁶It thus follows that "a judge must carefully and skeptically review sealing requests to insure that there really is an extraordinary circumstance or compelling need."Video Software Dealers Assoc. v. Orion Pictures, Corp.(In re Orion Pictures Corp.), 21 F.3d 24, 27(2d Cir.1994).See alsoSec. & Exch. Comm'n v. The Street.com, 273 F.3d 222, 232(2d Cir.2001).

In this District, the Local Rules expressly dictate that the Court may seal a judicial documentonly by an order which "shall include particularized findings demonstrating that sealing is supported by clear and compelling reasons and is narrowly tailored to serve those reasons."D.Conn. L. Civ. R. 5(e)(3).⁷"No document shall be sealed merely by stipulation of the parties."Id.Furthermore, the blanket sealing of an entire case is disfavored both under rule and case precedent.See id. 5(e)(2)("Except as permitted or required by federal law, no civil case shall be sealed in its entirety.").See alsoCrossman v. Astrue, 714 F.Supp.2d 284, 290(D. Conn.2009)(denying plaintiff's request for "blanket order allowing [him] to file every document under seal").

With respect to documents, blanket sealing of entire documents or all documents within a case is generally disfavored.See, e.g., Jadwalean Int'l Co. For Operations & Mgmt v. United Tech Corp., 3:09-CV-00018(JCH), 2009 WL 1064495, at *1(D. Conn.April 17, 2009)(rejecting blanket sealing request because "a court must make that determination [of whether to seal] on the basis of a careful, document-by-document review of the particular portions of the document that a partywishes to be kept under seal and after considering whether the requested order is no broader than necessary to serve the interests that require protection.")(emphasis added);Doctor's Assoc. Inc. v. QIP Holders LLC, No. 3:06-CV-1710 (VLB), 2007 WL 2782516, at *1(D. Conn.Sept. 24, 2007)(...