December 07, 2017 Articles

Dark Settlements: An Ethical Constraint on Secrecy?

Be wary if your opponent not only tries to kill the litigation but also to bury it, along with the public record, as deeply as possible.

By Nicholas D. Stellakis – December 7, 2017

You congratulate your partner. She has won a hard-fought battle on summary judgment. After years of toil, she is elated. Her spirits are further lifted when she comes to you, the firm’s appellate practitioner, for your take on the case after the opponent files the expected notice of appeal. To your practiced appellate eye, the trial judge’s decision contains no glaring deficiencies. It is lengthy and analytical and reflects careful review of the considerable summary judgment record. True, the decision centers around a thorny—and novel—question of law. You counsel your partner that an appellate court could take a very different view of the law; and given the dearth of authority on the issue in your jurisdiction and across the country, you cannot predict the result. However, based on your knowledge of the state judicial culture and experience with the appellate courts, you think that the respected trial judge’s persuasive opinion will be difficult to overturn. In short, the client is in a very strong position.

The opposing side evidently knows this, too, because, after years of bravado, it now urgently wants to talk settlement. Because the settlement talks will focus on the merits of your opponent’s appeal, and because appellate strategy and procedure are your forte, you take the lead on behalf of the client. Settlement talks are difficult, but you have a near-final draft of the written settlement agreement.

You have one hesitation, though. Your opponent is insisting on a confidentiality provision that goes beyond the standard agreement that the terms of the settlement are confidential. Your opponent wants even the fact of settlement to be confidential. Further, your opponent insists that the parties to the litigation and their attorneys agree not to disclose any of the details of the litigation, including facts stated and arguments made in the publicly filed trial court record.

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