Trials & Litigation

Need a court's OK to settle? That means terms may be public, 7th Circuit judge says

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When a judge must rule on the terms of a settlement, those settlement terms become public, a federal appellate opinion suggests.

In a Dec. 26 opinion (PDF), Judge Richard Posner of the 7th U.S. Circuit Court of Appeals rejects two requests to seal settlements that came before him during a week’s stint as motions judge.

In one, the movant had undermined its request by attaching a copy of the document at issue as an appendix to a publicly filed appellate brief. However, the other involved a personal injury case that required a federal district judge to rule on the settlement because the injured party–hurt by a toy sword–is a minor. The judge increased the amount of the settlement to the child and decreased attorney’s fees.

While settlement terms ordinarily are kept confidential, that happens because the parties don’t tell the court and the judge doesn’t need to know to make rulings, Posner points out.

In the child’s case, “An outsider to the litigation could not evaluate the dispute over the district judge’s modification of the settlement without knowing the amount of the settlement (including fees and costs) before and after the modification,” Posner writes. “That is information important to future negotiations over attorneys’ fees in cases in which the plaintiff is a minor; and no good reason—in fact no reason at all—has been given for thinking that concealment of the information would serve some social purpose.”

The National Law Journal (sub. req.) and the Wall Street Journal Law Blog (sub. req.) have stories.

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