DTCI: Sealing confidential terms of compromise

Recently, a colleague and I were faced with the following issue in a wrongful death action after resolving all claims at mediation: Is an Indiana trial court permitted to seal and/or prevent public access to records required to be filed with the court related to the compromise of a plaintiff’s claim that include or otherwise identify confidential terms of the resolution?

At first, the trial court did not believe it had the ability to seal such information based on the rules governing access to public records – the Access to Public Records Act and Indiana Administrative Rule 9. After voicing concern, we were permitted to file a joint motion to exclude the documents from public record, wherein we had to convince the court that it was well within the court’s power to prevent public access to records filed related to compromising plaintiff’s claim. For the reasons below, the court upheld confidentiality and prevented public access based on a mandatory exception to the general rule of public access. Now, because courts are becoming increasingly reluctant to prevent public access, it is appropriate to share the roadmap we used in navigating this delicate issue.

Initially, one must appreciate that Indiana courts have the power to order sealed and prevent public access to records required to be filed because every court has supervisory power over its own records and files. In general, before a court can exclude public access to court records, it must follow certain procedures such as hold a public hearing and balance competing interests. However, if the documents sought to be protected fall within mandatory exceptions, a court can exclude those records without any hearing.

With this background, my colleague and I began our journey to prohibit public access to confidential compromise records by first observing how courts balance competing interests, followed by how we were able to invoke a mandatory exception to avoid judicial discretion. In Indiana, the general rule is that information submitted to state governmental entities – including courts – can be accessed by the public. To promote such accessibility, the General Assembly enacted APRA, which guarantees that all persons are entitled to full and complete information regarding the affairs of their government. Likewise, the Indiana Supreme Court adopted AR9 to secure the public’s access to court records.

Balanced against this general rule, however, are public policy interests that are not always fully compatible with unrestricted access. AR9 commentary provides that “unrestricted access to certain information could result in an unwarranted invasion of personal privacy or unduly increase the risk of injury to individuals and businesses.” Moreover, it is well established that Indiana has a strong public policy favoring private settlement of disputes because when parties are able to resolve claims privately it allows courts to operate more efficiently and provides the parties freedom to fashion the resolution of their disputes by mutual agreement.

Notwithstanding this balancing test, both APRA and AR9 set forth certain mandatory exceptions to public access. One such mandatory exception is for case records declared confidential by Indiana statute or other court rule. By engaging in and resolving our case through mediation, we were able to establish this mandatory exception, thus permitting the court to prevent public access without any hearing or balancing of competing interests.

The Rules of Alternate Dispute Resolution have been adopted by the Indiana Supreme Court. In sum, the rules declare the compromise processes and resolution agreements resulting from mediation as confidential and may not be filed with the court absent consent of the parties. By agreeing that the resolution terms are to remain confidential, the parties are agreeing that they consent to filing records for the compromise only if the terms are excluded from public access. Any other finding would void the agreement. To further support this, the rules dictate that mediation sessions are closed to the public and that mediation shall be regarded as settlement negotiations, governed by Rule 408 of the Rules of Evidence. Rule 408 mandates that evidence of conduct or statements made in compromise negotiations are inadmissible and that offers of compromise or acceptance thereof are likewise generally inadmissible. The mere happenstance of an estate being a party to a lawsuit will not override public policy and precedential authority mandating that compromise negotiations and mediation agreements are confidential.

As a result, we were able to establish that the records filed with the court fell within a mandatory exception to the general rule permitting public access – records declared confidential by statute or court rule – and the court was able to properly seal the records without first conducting a public hearing. Note, however, if mediation had not been first conducted, we would have been required to participate in a public hearing where the court would then balance the various competing interests.•

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Mr. Akers is an associate in the Indianapolis office of Kightlinger & Gray and is a member of the Defense Trial Counsel of Indiana. The opinions expressed in this article are those of the author.