New California Court Rule 11-00

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New California Court Rule 11-00 Client Advisory November 2000 New California Court Rule Expands Public Access to Court Records In a vote that expands public access to court records, the California Judicial Council on October 27 adopted new rules to govern how California courts must handle requests to seal trial and appellate court records. The new rules, which will amend the California Rules of Court applicable to all state courts, will become effective on January 1, 2001. Strict Showing Required The new rules state: Unless confidentiality is required by law, trial court records are presumed to be open. State court judges no longer will be permitted to seal court records simply because both sides in a lawsuit agree to it. Once the rule becomes effective, a trial court will have to make the following specific findings before sealing records: l There exists an overriding interest that overcomes the right of public access to the record; l The overriding interest supports sealing the record; l A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; l The proposed sealing is narrowly tailored; and l No less restrictive means exist to achieve the overriding interest. The Judicial Council considered the issue of public access to court files at the request of the California Supreme Court, following its 1999 decision in NBC Subsidiary (KNBC-TV), Inc. v. Superior Court, 20 Cal.4th 1178 (1999). In that highly publicized court battle, Sondra Locke sued Clint Eastwood for fraud, breach of fiduciary duty and other claims arising from his alleged promise to assist Locke in the development of motion picture projects. At the commencement of the trial, the court issued orders excluding the public and the press from all courtroom proceedings held outside the presence of the jury and sealing the transcripts of those proceedings. The California Supreme Court held that the right of public access to trials applies to civil as well as criminal proceedings. It concluded that civil trials are presumptively open and laid out the narrow circumstances that might warrant the closure of a court proceeding. The court noted that [n]umerous reviewing courts likewise have found a First Amendment right of access to civil litigation documents filed in court as a basis of adjudication. At the same time, however, the Supreme Court also observed that [b]y contrast, decisions have held that the First Amendment does not compel public access to discovery materials that are neither used at trial nor submitted as a basis for adjudication. The new rules virtually mirror the Supreme Courts opinion. Consistent with the Supreme Courts ruling in NBC Subsidiary, the new rules expressly do not apply to discovery motions and records filed in connection with such motions. But it appears from the new rules that a formal sealing order will be required in connection with most other court proceedings, including motions for preliminary injunction and summary judgment. The Supreme Court decision identified a number of interests that have historically overridden the publics right of access, including the protection of trade secrets and the enforcement of binding contractual obligations not to disclose. These interests might continue to support the closure of proceedings and the sealing of records even under the new rules. At a minimum, corporate litigants should assume For the time being, the new that blanket protection for documents produced rules will not affect during litigation will become increasingly difficult confidential settlements to obtain . reached out of court or documents obtained by litigants during discovery but not introduced during a trial. But the enactment of the rules may make California judges more reluctant to issue protective orders based upon the agreement of the litigants, even if such stipulations do not attempt to restrict public access to documents filed in court. Moreover, the Judicial Council is conducting an ongoing examination of its authority to issue rules that would affect such settlements and discovery, which it plans to complete in the next few weeks. Steps to Consider In light of the impending new rules and the Judicial Councils consideration of additional rules governing the confidentiality of out-of-court settlements and information exchanged during civil discovery, businesses should consider taking immediate measures in pending litigation to maximize their ability to protect sensitive documents and information. Among other things, corporate litigants may want to negotiate and seek court approval of protective orders governing the use of discovery before the new rules go into effect, even if there is no present need for such protection. It also may be advisable to make clear in any stipulated protective orderwhether negotiated now or after the new rules are implementedthat it is intended to affect documents and information exchanged during discovery only and does not restrict in any way the use or disclosure of discovery during trial or other court proceedings. In addition, a stipulation for entry of a protective order should make clear that the parties intend to be bound by it and comply with all of its provisions whether or not a court approves it. At a minimum, corporate litigants should assume that blanket protection for documents produced during litigation will become increasingly difficult to obtain and should begin to distinguish circumstances in which the confidentiality of documents is truly essential from those in which such protection is merely desirable. 2 Businesses that anticipate future litigation in California ought to give some thought to incorporating confidentiality provisions into their agreements whenever possible. It is conceivable that such provisions will be upheld if they were a material part of the parties bargain at the time a deal was made and not simply an after-the-fact concession made to facilitate litigation discovery. Finally, corporations may want to take steps to imbue sensitive financial, strategic planning and Finally, corporations may other records with the attributes of trade want to take steps to secrets. imbue sensitive financial, strategic planning and other records with the attributes of trade secrets. Although trade secrets are more commonly associated with secret recipes and customer lists, the Uniform Trade Secrets Act (adopted in California as a portion of the Civil Code) actually defines a trade secret more broadly to include information, including a formula, pattern, compilation, program, device, method, technique or process that derives independent economic value . from not being generally known to the public and that is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. A great deal of the information generated by a corporation, while not a formula, technique or process, may derive economic value from not being known to competitors. Summary The California Supreme Court and the Judicial Council have made it substantially more difficult to close court proceeding and to shield portions of the court record from public scrutiny. They have not yet established rules affecting confidential out-of-court settlements or confidential documents exchanged during litigation discovery, but it seems likely that such rules will be considered in the not-too-distant future. It would be wise for businesses to prepare for that possibility now. 3 Los Angeles Litigation Practice Stuart H. Baggish, Partner Jeremy J. F. Gray, Partner Zia F. Modabber, Co-Chair 310 788 4736 310 788 4592 310 788 4627 [email protected] [email protected] [email protected] Bryan G. Castro, Associate David Halberstadter, Partner Nayssan L. Parandeh, Associate 310 788 4541 310 788 4408 310 788 4645 [email protected] [email protected] [email protected] Steve Cochran, Partner Kristin L. Holland, Associate Stuart M. Richter, Co-Chair 310 788 4455 310 788 4647 310 788 4582 [email protected] [email protected] [email protected] Laurie A. Yoo, Associate Brian D. Huben, Associate Laurence G. Solov, Associate 310 788 4782 310 788 4771 310 788 4679 [email protected] [email protected] [email protected] Patricia Task Craigie, Associate Rania Khamis, Associate Karen L. Stephenson, Associate 310 788 4704 310 788 4509 310 788 4474 [email protected] [email protected] [email protected] Charles M. Stern, Partner Alan D. Croll, Partner Gregory Korman, Associate 310 788 4570 310 788 4440 310 788 4421 [email protected] [email protected] [email protected] Gail Migdal Title, Harrison J. Dossick, Partner Ryan Larsen, Associate Los Angeles Office Managing Partner 310 788 4565 310 788 4544 310 788 4727 [email protected] [email protected] [email protected] Steven S. Fleischman, Partner Thomas J. Leanse, Partner Cheryl L. Van Steenwyk, Partner 310 788 4656 310 788 4475 310 788 4487 [email protected] [email protected] [email protected] Samantha Freedman, Associate Matthew G. Matzkin, Associate Joel R. Weiner, Partner 310 788 4709 310 788 4546 310 788 4522 [email protected] [email protected] [email protected] Allan B. Goldman, Partner Stacey McKee Knight, Associate 310 788 4520 310 788 4406 [email protected] [email protected] Published for clients as a source of information about current developments in the law. The material contained herein is not to be construed as legal advice or opinion. © 2002 Katten Muchin Zavis Rosenman. All rights
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