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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Chancery Unseals Confidential Complaint for Failure to Comply With Court Rules
The Delaware courts have long tried to balance the public’s right of access to information about judicial proceedings with the legitimate needs of litigants to keep certain information confidential. Rule 5.1 is the Court of Chancery’s codification of the standards and procedures for obtaining, maintaining, and challenging confidential treatment of court filings. Its overarching purpose is to protect the public’s right of access.
When it comes to confidential treatment for complaints, Rule 5.1 requires, among other things, the filing of (i) a cover sheet which sufficiently summarizes the asserted claims in enough detail to inform the public of the nature of the dispute, and (ii) a redacted complaint within three days of the confidential filing. In this case, the Court of Chancery held that the parties failed to comply with Rule 5.1(e) because they filed a completely redacted version of the complaint, which was rejected by the register’s office on that basis. The Court deferred unsealing the complaint to give the parties the opportunity to seek an interlocutory appeal. The Defendants proceeded to seek interlocutory certification under Supreme Court Rule 42.
In two separate letter opinions, the Court addressed Defendants’ Application for Certification and Plaintiff’s response, which was filed as Plaintiff’s Motion for Confidential Treatment. The Court first found that the Plaintiff’s motion was itself deficient under Rule 5.1 because it did not specify a proper purpose for seeking confidentiality or what specific portions of the complaint should continue to be afforded confidential treatment. The Court also held that certification was not appropriate, as the matter did not merit appellate review considering Rule 42’s relevant factors. While the issue of whether the existence of a contractual confidentiality provision justified continued confidentiality of a complaint despite non-compliance with Rule 5.1 was a question of first impression, the other factors did not support an interlocutory appeal.