Court Opinion

ID: 9959075
Source: CourtListenerOpinion
Date Created: 2024-04-10 16:17:40.553209+00
Date Added: 2024-06-11T08:18:25.541573
License: Public Domain

Vermont Superior Court
                                                                                                                     Filed 10/23 23
                                                                                                                   Chittenden nit

VERMONT SUPERIOR COURT                                  5E?     '52                          CIVIL DIVISION
Chittenden Unit                                                                           Case N0. 22-CV—01058
175 Main Street, PO BOX 187
Burlington VT 05402
802-863-3467                                              gﬁ
WWW.vermontjudiciary.org

WWSAF Special Partners Group, LLC (Series D), et a1 v. Costello, Valente & Gentry,
                                 P.C., et al

                                ENTRY REGARDING MOTION
Title:           Motion to Reconsider Ruling on Motion 17 (Motion: 18)
Filer:           Jerome F. O'Neill
Filed Date:      July 21, 2023

         Plaintiffs seek reconsidering of an earlier ruling denying a motion to compel the

production of a conﬁdential settlement agreement from a related case. It would have

been helpful if the initial motion had provided some legal authority for Plaintiff’s

position, and the court could deny this motion on that basis. It provided none. The

motion to reconsider provides a bit more. It cites cases addressing statutory

conﬁdentiality provisions, but not settlement agreements. In re Powell, 227 B.R. 61, 65

(Bankr. D. Vt. 1998); In re F.E.F., 156 Vt. 503, 514 (1991), overruled on other grounds by

In re. S.D., 2022 VT 44. Those cases, however, do support the general proposition that

conﬁdentiality does not equate to a privilege against discovery. More to the point, the

court’s research discloses that many other jurisdictions have addressed the precise issue

here.

        While on the face of it a “conﬁdential” settlement agreement would seem to be a

document that can be Withheld both from the public and from litigants in other lawsuits,

the case law does not support such a conclusion. Despite “the interests third parties

Entry Regarding Motion                                                                                 Page 1 of 4
22-CV—01058 W WSAF Special Partners Group, LLC (Series D), et al v. Costello, Valente & Gentry, P.C., et al
have in the confidentiality of settlement agreements, . . . litigants cannot shield

settlement agreements from discovery solely based on confidentiality if the agreement is

relevant to the action, or likely to lead to relevant evidence.” Silver Streak Trailer Co.,

LLC v. Thor Industries, Inc., No. 18-14126-CIV, 2018 WL 8367073, at *6 (S.D. Fla. Nov.

15, 2018). “Confidentiality agreements, which are commonplace in settlement

agreements, do not create a privilege exempting otherwise discoverable documents and

information from disclosure.” Culley v. W. Bolivar Consol. Sch. Dist., No. 4:20-CV-190-

MPM-DAS, 2022 WL 17585259, at *1 (N.D. Miss. Dec. 12, 2022). “Courts have . . .

repeatedly noted that concerns about production of confidential settlement agreements

can be met by an appropriate protective order.” Wheel Pros, LLC v. Rhino Tire USA,

LLC, No. 223CV00650GMNVCF, 2023 WL 4868478, at *3 (D. Nev. July 28, 2023).

        Thus, “[c]ourts routinely order production of confidential settlement agreements

under Rule 26 when they are relevant to the allegations at issue in a particular action.

Discoverable information may not be shielded from disclosure merely by agreeing to

maintain its confidentiality.” Cooley v. Curves Int'l, Inc., No. A-08-MC-108 LY, 2008

WL 11333881, at *4 (W.D. Tex. May 19, 2008)(citations omitted); see also, In re Enron

Corp. Sec., Derivative & ERISA Litig., 623 F. Supp. 2d 798, 838 (S.D. Tex. 2009)

(“Confidentiality clauses in private settlement agreements cannot preclude a court-

ordered disclosure pursuant to a valid discovery request”). Defendants offer no

authority to the contrarty.

        However, some courts require a heightened relevance standard to overcome a

confidentiality agreement. See, e.g., Peters v. Equifax Info. Servs. LLC, No. EDCV 12-

1837-TJH (OPx), 2013 WL 12169355, at *2 (C.D. Cal. Dec. 13, 2013) (“some courts have

Entry Regarding Motion                                                                                Page 2 of 4
22-CV-01058 WWSAF Special Partners Group, LLC (Series D), et al v. Costello, Valente & Gentry, P.C., et al
specifically held in the settlement context that the burden is on the requester to make a

particularized or heightened showing that the settlement information sought is relevant

and likely to lead to admissible evidence.”); Close v. Acct. Resol. Servs., 557 F. Supp. 3d

247, 250 (D. Mass. 2021)(“some courts have required a party seeking discovery of a

confidential settlement agreement to make a particularized and/or heightened showing

that the settlement information sought is relevant and likely to lead to admissible

evidence. Other courts, including several judges in this Circuit, have not required such a

heightened showing.”) (citations omitted). Those courts that impose a higher burden do

so because a “strong public policy favoring settlement of disputed claims dictates that

confidentiality agreements regarding such settlements not be lightly abrogated.”

Thomasian v. Wells Fargo Bank, N.A., No. 03:12-cv-01435-HU, 2013 WL 4498667, at *2

(D. Or. Aug. 22, 2013) (citation omitted). It appears that the majority view is that the

usual discovery standard applies. Small v. Nobel Biocare USA, LLC, 808 F. Supp. 2d

584, 587 (S.D.N.Y. 2011) (“Though district courts in this Circuit have in the past

disagreed as to whether discovery of settlement agreements requires a heightened

showing of relevance, the majority view is now that no such heightened showing is

required.”).

        Here, regardless of which burden applies, the court concludes that Plaintiffs have

met it. Their claim is based on the allegation that the settlement was improperly entered

into without their knowledge. It is directly relevant to their claims, and the information

is not available elsewhere. However, production shall be subject to a protective order

limiting its disclosure beyond this lawsuit.

Entry Regarding Motion                                                                                Page 3 of 4
22-CV-01058 WWSAF Special Partners Group, LLC (Series D), et al v. Costello, Valente & Gentry, P.C., et al
                                                      Order

        The motion is granted. Defendants shall produce the settlement agreement

within 14 days, but it shall be stamped as, and treated as, confidential. Absent a further

court order, it may not be disclosed to anyone other than parties and counsel in this

lawsuit, their staff, the court, and any expert witnesses involved in this case. If it is filed

with the court as an exhibit to a motion, it shall be filed under seal.

        Plaintiffs’ opposition to the pending motion for summary judgment shall be filed

by December 1.

Electronically signed on October 20, 2023 pursuant to V.R.E.F. 9(d).

Entry Regarding Motion                                                                                Page 4 of 4
22-CV-01058 WWSAF Special Partners Group, LLC (Series D), et al v. Costello, Valente & Gentry, P.C., et al