Situations arise where a party files privileged communications to support a dispositive motion. But filing privileged documents raises waiver concerns, so the filing party seeks to seal those documents to prevent third-party access. The question arises whether policies underlying the attorneyâclient privilege overcome citizensâ common-law and First Amendment rights of access to publicly filed documents.
In Utica Mut. Ins. Co. v. Munich Reinsurance Am., Inc., 2017 WL 1653608 (NDNY Apr. 26, 2017), available here, the USDC NDNY indicated that the privilege is a âhigher valueâ that may rebut the common-law and FA presumption of access. So, the court sealed the privileged communications, right?
Wrong. The party seeking to seal the communications, here Utica, failed the threshold inquiryâthat the attorneyâclient privilege protected an in-house counselâs emails and handwritten notes in the first instance. The court made this findingâand refused to seal the documentsâdespite the in-house lawyerâs sworn declaration that the documents âreflected legal advice.â
Burden of Proof to Seal Documents
The Utica case involved breach-of-contract claims between an insurer and reinsurer over payments of underlying asbestos claims. Â The two companies shared privileged communicationsâpresumably under a common-interest arrangementâregarding insurance coverage for the underlying asbestos claims. These privileged communications later became central to the insurersâ breach-of-contract claims against each other.
Utica used privileged communications, including emails between its in-house counsel and employees and its in-house counselâs handwritten notes, to support its MSJ, and moved separately to seal the documents.
The public has a common-law rightâwhich predates the Constitutionâto access court documents. And the FA âalso protects the publicâs right to have access to judicial documents.â MSJ exhibits are judicial documents and should not remain under seal âabsent the most compelling reasons.â The attorneyâclient privilege is compelling, however, and âprotection of the attorneyâclient privilege is a âhigher valueâ under the FA that may rebut the presumption of access.â
In-House Counselâs Declaration
To show that the privilege trumps the publicâs access rights, a party must, as a threshold matter, prove that the documents sought to be sealed are, in fact, privileged. Here, Uticaâs in-house counsel submitted a sworn declaration generally attesting that the emails and notes âreflect legal advice.â You may read the declaration here.
Ruling
The court found the in-house lawyerâs conclusory declaration unpersuasive and insufficient. It was unable to ascertain whether Utica was claiming privilege or work-product protections over each document. And it could not determine whether the email recipients were attorneys, employees, or outsiders. And the declaration failed to prove that the putatively privileged emails were âintended to be, and in fact [were], kept confidentialââan essential element of the attorneyâclient privilege.
Consequently, even though the court noted that the privilege may protect each MSJ exhibit, âwithout more informationâ the court could not âmake the specific, on-the-record findings required to seal judicial documents.â
POP Analysis
Two issues deserve consideration. First, parties seeking to prove that the attorneyâclient privilege applies to a document must submit evidence of the foundational elements: (1) a communication that was (2) confidential when made and remained confidential, and (3) created for purposes of rendering legal advice.  And the proof must be specificâconclusory statements are typically inadequate. See this post, and this one, for discussions about the necessary level of proof.
Second, by losing the request to seal what are quite likely privileged communications, Utica must face the prospect that its privileged communications are part of the public record, thereby resulting in privilege waiver to any third parties seeking these communicationsâor related communicationsâin the future.
Should parties obtain a seal ruling before filing putatively privileged communications in the court record? A pre-filing ruling may allow parties to understand the waiver consequences and make a more informed decision whether to file the privileged documents.