Opinion ID: 4677424
Heading Depth: 2
Heading Rank: 2

Heading: Ability to Impose Confidentiality Agreement

Text: Wild Meadows also argues the Superior Court erred in holding that Weidman had statutory authority to impose a confidentiality agreement that Wild Meadows contested. Specifically, Wild Meadows complains that: Petitioner is a privately-held business, and engages in its business in a highly competitive market which today, in Delaware, is dominated by large competitors. If Petitioner’s internal financial information were made available generally or disclosed publicly, Petitioner would face incalculable irreparable harm. Petitioner’s competitors would gain an enormous tactical and strategic advantage, to the permanent detriment of Petitioner and of the value of its investment in Wild Meadows. Thus, an “attorney’s eyes-only level of protection was included in Petitioner’s proposed confidentiality stipulation .... .... The Confidentiality Stipulation did not and could not have “reasonably protected” Petitioner’s private, competitively sensitive and highly confidential financial documents without an attorney’s eyes-only provision. If the arbitrator is imbued with the authority to compel discovery, a confidentiality agreement protecting the highly confidential documents of parties with an attorney’s eyes-only tier must be offered and made available to the parties in the arbitration.64 We disagree. The Authority, under 25 Del. C. § 7011(c)(1), has promulgated 1 Del. Admin. C. § 202-7.17. Under 1 Del. Admin. C. § 202-7.17: Any party may request that the arbitrator accord confidential treatment to some or all of the information contained in a document. If the claim of confidentiality is 64 Opening Br. 16, 43. 16 challenged by any party, then the party claiming confidential treatment must demonstrate to the arbitrator that the designated information is confidential as recognized by state law. Notwithstanding any claim of confidentiality, any party to the proceeding shall be allowed to inspect a copy of the confidential document upon the signing of a confidentiality agreement in a form approved by the arbitrator.65 Further, this Court has emphasized that “legitimate confidentiality and proprietary concerns should be addressed by the arbitrator through the imposition of use restrictions.”66 Thus, the arbitrator possessed the authority to impose a confidentiality agreement on the parties. Wild Meadows contends that a confidentiality agreement without an attorney-eyes only provision insufficiently protected its interests and exposed it to “irreparable harm.”67 Yet Weidman recognized, and addressed, the need for confidentiality when dealing with Wild Meadows’ business records. After taking input from both parties, Weidman crafted a confidentiality agreement in which he balanced the legitimate business interests of Wild Meadows against the HOA’s interest in “fairly testing” Wild Meadows’ justifications. Section 5 of the contested agreement limits who may access confidential information: 5. Confidential Discovery Material may be disclosed, summarized, described, characterized, or otherwise communicated or made available in whole or in part only to the following persons: A. The Parties, and the directors, officers, or Board members of the Association who are attending the Arbitration and assisting counsel with decisions 65 1 Del. Admin. C. § 202-7.17. 66 Sandhill Acres, 210 A.3d at 731; see also Donovan Smith, 2018 WL 3360585, at  (citing Super. Ct. Civ. R. 26(c)(7); 1 Del. Admin. C. § 202-7.17). 67 A129. 17 concerning the Litigation, to the extent deemed reasonably necessary by counsel of record for the purpose of assisting in the prosecution or defense of the Arbitration for use in accordance with this Stipulation, only if and after such directors, officers, or Board members of the Association execute Exhibit A attached hereto; B. Counsel who represent Parties in this Arbitration (including in-house counsel), and the partners, associates, paralegals, secretaries, clerical, regular and temporary employees, and service vendors of such counsel (including outside copying and Arbitration support services) who are assisting with the Arbitration for use in accordance with this Stipulation;