IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
GKC STRATEGIC VALUE MASTER ) FUND, LP F/K/A GKC APPRAISAL ) RIGHTS MASTER FUND, LP AND ) WALLEYE TRADING LLC, ) ) Petitioners, ) ) v. ) C.A. No. 2017-0769-SG ) BAKER HUGHES INCORPORATED, ) ) Respondent. )
MEMORANDUM OPINION
Date Submitted: March 20, 2019 Date Decided: June 25, 2019
Ned Weinberger and Thomas Curry, of LABATON SUCHAROW LLP, Wilmington, Delaware; OF COUNSEL: Eric J. Belfi, Ira A. Schochet, and David J. Schwartz, of LABATON SUCHAROW LLP, New York, New York, Attorneys for Petitioners.
Kevin M. Coen and Sabrina M. Hendershot, of MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; OF COUNSEL: Arthur F. Golden, Andrew Ditchfield, and Andrew S. Gehring, of DAVIS POLK & WARDWELL LLP, New York, New York, Attorneys for Respondent.
John D. Hendershot and Susan M. Hannigan, of RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; OF COUNSEL: Paula Anderson and Alan Goudiss, of SHEARMAN & STERLING LLP, New York, New York, Attorneys for Third-Party General Electric Company.
Mark Lebovitch, of BERNSTEIN LITOWITZ BERGER & GROSSMAN LLP, New York, New York, Attorney for Non-Party Tri-State Joint Fund.
GLASSCOCK, Vice Chancellor I have noted in a past decision 1 the disturbingly convincing frequency fallacy
known rather jocularly as the Baader-Meinhof phenomenon. That fallacy represents
the perception that, once something first comes to our attention, references to that
thing appear with surprising regularity thereafter. The fallacy, of course, results not
from increased frequency of the references, but from our newly-created aptitude,
once aware, to pick those references out of the background noise of life. One should,
therefore, not ascribe much significance to the phenomenon. Nonetheless, when as
a judge I am called on to deliver multiple opinions on a formerly-dormant issue in a
short period of time, I find it hard not to conclude that issue is generally of increasing
relevance outside of my own docket.
Such an issue is presented in this Memorandum Opinion. The matter is before
me on a challenge to the confidential treatment of pleadings and exhibits to those
pleadings, filed in a settled-and-closed—now reopened—appraisal action. The
exhibits, as is permitted by rule, 2 were filed confidentiality. The challenge, also by
rule, 3 resulted in a duty on the original filer of the exhibits to submit, within ten days,
a public version of the documents, redacting only those parts that the original filer
and interested parties believe in good faith are subject to the narrow exception to the
1 Fotta v. Morgan, 2016 WL 775032, at *1 n.1 (Del. Ch. Feb. 29, 2016). 2 Ct. Ch. R. 5.1(d)(2). 3 Ct. Ch. R. 5.1(f). rule that proceedings in this Court are open to public scrutiny. 4 Here, the parties
seeking continued confidentiality—Baker Hughes, a GE Company LLC (“BHGE”)
and Third-Party General Electric Company (“GE”) (together, the Respondents)—
filed what amounts to a parody of public versions of the exhibits; documents that are
pied displays of blackened rectangles against a white background, entirely
unintelligible to the “reader.”
The Respondents argue that, because Non-Party Tri-State Joint Fund (“Tri-
State Fund” or the “Challenger”) has a litigation purpose instead of a “public
interest”—whatever that may be—in the documents, Rule 5.1 is essentially
inapplicable. Therefore, they have forgone the opportunity to file public versions
containing good faith redactions under the Rule. This is a litigation tactic that the
Respondents have chosen to pursue. I am sure, and nothing in this Memorandum
Opinion should be read to the contrary, that the Respondents pursued this tactic in
good faith; however, the choice of such a tactic has consequences. Because I
determine that, under Rule 5.1, the particular reason for the challenge is irrelevant
to the Respondents’ duty to produce a public version, it is clear to me that the
Respondents are not in compliance with Rule 5.1.
4 Ct. Ch. R. 5.1(b)(1) (“A Document shall receive Confidential Treatment only if and to the extent that it contains Confidential Information.”).
2 I note that the Respondents propose that, if (as is the case) I find Rule 5.1
applicable, they should be given a second chance to file public versions of the
documents containing only good faith redactions. Rule 5.1, however, requires that
precise thing to have been done within ten days. The Respondents could have—but
did not—seek relief from the time requirement, citing, for instance, the amount of
material subject to review. Instead, the Respondents chose to attempt to keep the
documents entirely from public view, despite the prior submission of the documents
to the Court for review in connection with a request for judicial action. That, I find,
is not contemplated by Rule 5.1. Having chosen the litigation road by which they
hoped to preserve complete confidentiality, the Respondents cannot turn back; they
have passed the fork that led to compliant redacted public versions of the documents
at issue.
Rule 5.1 was created to accommodate a minor exception to a truism, that in a
free and democratic society courts must conduct their business in the open, subject
always to scrutiny by the public that these courts serve.5 In very limited situations,
pleadings and exhibits thereto contain information so personal to a party, and of such
tangential public interest, that the information should be withheld in the interest of
5 Ct. Ch. R. 5.1(a) (“General principle of public access. -- Except as otherwise provided in this Rule, proceedings in a civil action are a matter of public record. All pleadings and other materials of any sort, including motions, briefs, letters, affidavits, exhibits, deposition transcripts, answers to interrogatories, answers to requests for admissions, and hearing transcripts, that are filed with the Register in Chancery, provided to the Court, or otherwise part of the record in a civil action (‘Documents’) shall be available for public access.”).
3 justice. In such a situation, it would be a denial of justice to put the party to the
Morton’s Fork of withholding confidential material from the Court—thereby
forgoing justice upon a complete record—or ceding their legitimate privacy interests
via a public filing. Rule 5.1 accommodates those rare instances by setting forth a
procedure whereby the party interested in confidentiality may designate such
matters, in which case this Court conducts a balance of the public and private
interests, with a tie going to disclosure. Where litigants fail to comply with the
strictures of Rule 5.1, the default—litigation in the public view—obtains.
The Respondents have failed to comply with Rule 5.1. As a result, the exhibits
in contention here shall be made available to the public. This renders the issue of
the continued redactions in the motions at issue moot, since they preserve only the
confidentiality of information available in the exhibits. Therefore, unredacted
versions of those pleadings shall be made available to the public as well. To the
extent the exhibits contain privileged, as opposed to allegedly confidential,
information, the confidential versions originally filed with the Court already contain
appropriate redactions, and those shall continue in the public versions. To the extent
the Respondents’ concern is that the information disclosed may lead—as the
Challenger hopes—to a viable plenary action against the Respondents, avoidance of
that consequence is not a legitimate aim of the confidentiality regime set out in Rule
5.1.
4 Finally, I note that the Respondents argue that allowing exhibits to pleadings
to be subject to the challenge sought here will lead to the wholesale conversion of
Rule 5.1 into a discovery tool, in contravention of what they characterize as its
narrow purpose: promotion of public access. Worse, according to Respondents, is
the fact that they are the victims here of a growing pernicious practice of plaintiffs
filing sensitive but non-pertinent exhibits, with the idea that they may later be made
public. Respondents note that it was the Petitioners in the appraisal action, and not
the Respondents, who filed the exhibits. They maintain that these exhibits were of
peripheral relevance to three motions, only one of which was decided by the Court
before settlement, and thus are of little interest to the public overseeing proceedings
in this forum.
In my view, the Respondents understanding of the purpose of Rule 5.1 is
misplaced: the purpose of Rule 5.1 is not to provide public access; it is to allow a
limited exception to universal public access. 6 I agree that the documents here are of
relatively low public interest, at least insofar as that interest relates to monitoring of
the judicial function. That would be an appropriate matter for the weighing of
interests with which the Court is charged under Rule 5.1, in which any
6 After Oral Argument, I withheld decision from the bench and allowed supplemental memoranda concerning proper purpose and Rule 5.1. I did, however, indicate strongly in the transcript that I leaned toward the Respondents’ view of the proper scope of the Rule. Mar. 31, 2019 Oral Arg. Tr. 21:1–22:20. Reflection, together with a close reading of Rule 5.1 itself, has caused me to change my view, as set forth in this Memorandum Opinion.
5 gamesmanship anticipated by the Respondents can be taken into the balance. I do
not, however, address this weighing here because of the Respondents’ failure to
comply with the predicate duty under Rule 5.1 to file a public version upon
challenge, redacting only material judged in good faith to require confidentiality.
My reasoning follows.
I. BACKGROUND
A. The Challenge to Confidential Treatment
On November 21, 2018, this Court received a letter from Tri-State Fund,
through its New York counsel, challenging the confidential treatment of filings and
exhibits in this case. 7 This case had been closed months earlier after I granted the
parties’ Stipulation and Proposed Order of Dismissal on July 20, 2018.8 The
underlying litigation involved an appraisal action, which followed the business
combination of Baker Hughes Incorporated (“BHI”) with General Electric
Company’s Oil & Gas Business (“GE O&G”). 9 BHI was subsequently converted
into a new Delaware limited liability company, BHGE. 10 The appraisal action ended
in a settlement between the appraisal Petitioners (the “Petitioners”) and BHI.11 Tri-
State Fund was purportedly a stockholder of BHI at the time of BHI’s business
7 D.I. 65. 8 D.I. 64. 9 Verified Pet. for Appraisal of Stock, ¶ 6. 10 Id. 11 D.I. 64.
6 combination. 12 By its own admission, Tri-State Fund seeks to investigate, through
its challenge to the confidential treatment of filings and exhibits here, that business
combination for potential fraud.13
B. Court of Chancery Rule 5.1 and the Response to the Challenge
In response to Tri-State Fund’s November 21, 2019 challenge to confidential
treatment, BHGE, as the successor to BHI, and Third-Party GE have filed Motions
for Continued Confidential Treatment of all the redacted filings and of all the
exhibits filed under seal.14 BHGE and GE contend that Tri-State Fund’s private
purpose to enhance its litigation interest is improper and therefore fatal to Tri-State
Fund’s success on a Court of Chancery Rule 5.1(f) challenge to confidential
treatment. 15 The sealed information for which GE and BHGE wish to preserve
confidentiality falls into two categories, each governed by a different subsection of
Rule 5.1(f).
Rule 5.1(f)(1) governs confidential filings for which Rule 5.1(d) did not
require the filing of a public version,16 such as (and pertinent here) exhibits. 17 Once
12 D.I. 65. 13 See D.I. 84, ¶ 2. 14 See D.I. 66; D.I. 68; D.I. 71; D.I. 72. 15 See, e.g., D.I. 68, ¶ 2 (“The stockholder’s reason for filing this challenge has nothing to do with the purpose of Rule 5.1 . . . . [BHGE] respectfully submits that the Court should reject this improper use of Rule 5.1 and grant [BHGE’s] motion for continued confidential treatment of the redacted and sealed information.”). 16 Ct. Ch. R. 5.1(f)(1). 17 Ct. Ch. R. 5.1(d)(2).
7 challenged, the original filer of the confidential filing, after providing notice and
opportunity for others to designate information as confidential, must file a public
version of the confidential filing within ten days of the filing of the challenger’s
notice. 18 Once the public filing is available, the confidential treatment of
information within the public filing may be challenged. 19 On December 6, 2018,
GE and BHGE both filed Motions for the Continued Confidential Treatment of the
following exhibits (which constitute all the exhibits filed under seal in this case)
previously filed under seal (the “Sealed Exhibits”): 20 (1) Exhibits 11, 13, and 14 to
Petitioners’ April 13, 2018 Reply in Further Support of Their Motion to Compel
Production of Documents and Responses to Interrogatories; 21 (2) Exhibits B, C, D,
G, H, I, and J to Petitioners’ May 1, 2018 Letter Memorandum in Support of Motion
to Compel; 22 (3) Exhibits 1–4 to Petitioners’ May 7, 2018 Reply Letter
18 Ct. Ch. R. 5.1(f)(1). The original filer must provide notice to “each attorney who has entered an appearance for each person who designated Confidential Information in the Confidential Filing.” Id. “If no one has designated additional Confidential Information within 10 days of the filing of the challenger’s notice, then the filer shall file the filer’s public version; otherwise the filer shall file a public version that redacts the filer’s Confidential Information and any Confidential Information designated in response to the filer’s notice.” Id. Here, the Respondents not only designated confidential material, they undertook the filings as well. 19 Ct. Ch. R. 5.1(f)(1). 20 See D.I. 71; D.I. 72. For simplicity, I have combined GE and BHGE’s lists of exhibits filed under seal for which they seek continued confidential treatment. 21 D.I. 27. 22 D.I. 34. The Petitioners’ May 1, 2018 Letter Memorandum in Support of Motion to Compel was filed confidentially on May 1, 2018, and a public unredacted version was filed on May 8, 2018. See D.I. 34; D.I. 39.
8 Memorandum in Support of Motion to Compel; 23 and (4) Exhibits A–G to
Petitioners’ July 6, 2018 Motion to Enforce the Court’s May 8, 2018 Order
Compelling Production of Documents.24 In response to the Challenger’s notice,
BHGE and GE filed purported “public” versions of the Sealed Exhibits within the
time required by Rule 5.1(f)(1), on December 6, 2018. 25 These public versions are
entirely obscured.26
Rule 5.1(f)(2) governs confidential filings for which a public version is
already accessible.27 In that case, “any person may seek continued Confidential
Treatment of the Confidential Information redacted from the public version by filing
a motion within five days after the filing of a challenger’s notice.” 28 The filing of a
motion for continued confidential treatment “constitutes a certification that the
signer of the motion personally reviewed the Confidential Filing and that continued
Confidential Treatment is appropriate.” 29 On November 29, 2018, GE and BHGE
separately filed for the continued confidential treatment of the redactions made to
23 D.I. 37. The Petitioners’ May 7, 2018 Reply Letter Memorandum in Support of Motion to Compel was filed confidentially on May 7, 2018, and a public redacted version was filed on May 14, 2018. See D.I. 37; D.I. 41. 24 D.I. 56. The Petitioners’ Motion to Enforce the Court’s May 8, 2018 Order Compelling Production of Documents was filed confidentially on July 6, 2018, and a public redacted version was filed on July 13, 2018. See D.I. 56; D.I. 62. 25 See D.I. 73–80. 26 See D.I. 73–80. 27 Ct. Ch. R. 5.1(f)(2). 28 Id. 29 Id.
9 public versions of three confidentially filed documents (the “Redacted Filings”):30
(1) Petitioners’ April 13, 2018 Reply in Further Support of Their Motion to Compel
Production of Documents and Responses to Interrogatories; 31 (2) BHI’s May 4, 2018
Letter Memorandum in Response to Petitioners’ Motion to Compel; 32 and (3)
Petitioners’ July 6, 2018 Motion to Enforce the Court’s May 8, 2019 Order
Compelling Production of Documents.33
The Redacted Filings and the Sealed Exhibits relate to one of three motions,
all filed by the Petitioners in the appraisal action. On March 8, 2018, the Petitioners
filed a Motion to Compel Production of Documents and Responses to Interrogatories
(the “Motion to Compel”). 34 The Motion to Compel was fully briefed, and I heard
Oral Argument by telephone on March 18, 2018. I did not, however, decide the
Motion to Compel at that point; instead, the parties engaged in a meet-and-confer
after the Oral Argument and resolved the majority, but not all, of their disputes.35
On May 1, 2018, the Petitioners then submitted a Letter Memorandum in Support of
the Motion to Compel which addressed the disputes detailed in the Motion to
30 For simplicity, I have combined GE and BHGE’s lists of documents with redactions for which they seek continued confidential treatment. See D.I. 66; D.I. 68. The three documents listed encompass all the pleadings which were filed confidentially and for which a public version was filed with redactions. Several other pleadings were filed confidentially, but the public versions contained no redactions. See D.I. 39; D.I. 41. 31 D.I. 27 (confidential version); D.I. 30 (publicly filed version). 32 D.I. 36 (confidential version); D.I. 43 (publicly filed version). 33 D.I. 56 (confidential version); D.I. 62 (publicly filed version). 34 D.I. 19. 35 D.I. 31.
10 Compel that had not been resolved during the meet-and-confer (the “Further Motion
to Compel”).36 BHI replied by letter memorandum37 and the Petitioners submitted
a letter memorandum in further support. 38 I heard Oral Argument by telephone on
May 8, 2018. In a Bench Decision, I largely ordered production with respect to the
documents at issue, with certain caveats. 39 On July 6, 2019, the Petitioners filed a
Motion to Enforce the Court’s May 8, 2018 Order Compelling Production of
Documents (the “Motion to Enforce”).40 On the same day, the Petitioners filed a
Notice of Challenge to Confidential Treatment of the exhibits they had filed
confidentially in conjunction with their Motion to Enforce. 41 On July 13, 2018, the
Petitioners withdrew their Motion to Enforce and their Notice of Challenge—
presumably in light of settlement negotiations. 42 As a result, I did not decide the
Motion to Enforce or the Challenge to Confidential Treatment. On July 18, 2018,
as mentioned, the parties submitted a Stipulation and Proposed Order of Dismissal,
which I granted.
Pursuant to Rule 5.1(f), Tri-State Fund filed oppositions to GE’s and BHGE’s
Motions for Continued Confidential Treatment.43 I heard Oral Argument on the
36 D.I. 34 (confidential version); D.I. 39 (publicly filed version, with no redactions). 37 D.I. 36 (confidential version); D.I. 43 (publicly filed version, with redactions). 38 D.I. 37 (confidential version); D.I. 41 (publicly filed version, with no redactions). 39 May 8, 2018 Oral Arg. Tr. 3:23–9:23. 40 D.I. 56 (confidential version); D.I. 62 (publicly filed version, with redactions). 41 D.I. 57. 42 D.I. 61. 43 D.I. 83; D.I. 86.
11 Motions by telephone on February 28, 2019. I also received supplemental letters on
March 15, 2019 and March 20, 2019,44 after which I considered the matter submitted
for decision.
II. ANALYSIS
Tri-State Fund has been forthcoming with regard to its private purpose for
challenging confidential treatment. Nonetheless, its motivation is irrelevant to
whether Rule 5.1 applies. Court of Chancery Rule 5.1(f) is clear, “[a]ny person may
challenge the Confidential Treatment of a Confidential Filing . . . .” 45 After such
challenge, information designated confidential may be maintained as confidential
where “good cause” exists.46 Good cause “shall exist only if the public interest in
access to Court proceedings is outweighed by the harm that public disclosure of
sensitive, non-public information would cause.”47 Rule 5.1 therefore requires a
balancing test between the public interest in disclosure and the private harm caused
by disclosing that small of amount of information designated confidential. 48 The
private interest, if any, of the particular party challenging the confidential treatment
44 D.I. 91; D.I. 92. 45 Ct. Ch. R. 5.1(f). 46 Ct. Ch. R. 5.1(b)(1). 47 Ct. Ch. R. 5.1(b)(2). 48 I say small amount of information because the type of information that can receive confidential treatment is limited. Court of Chancery Rule 5.1 provides an illustrative list of information that may qualify as confidential information; that list includes “trade secrets; sensitive proprietary information; sensitive financial, business, or personnel information; sensitive personal information such as medical records; and personally identifying information such as social security numbers, financial account numbers, and the names of minor children.” Ct. Ch. R. 5.1(b)(2).
12 of information may, perhaps, have some weight in the court’s ultimate balance, but
elucidation by the challenger of a “proper” or ”public” purpose is not a predicate to
the operation of Rule 5.1.
Open litigation is the default in the Court of Chancery. 49 Confidentiality is
the exception, and not the rule. To come under that exception, the parties must
punctiliously and faithfully comply with Rule 5.1.50
Rule 5.1 did not require the parties to file public versions of the Sealed
Exhibits at the time of original filing—that is, at the time the three motions
referenced above were briefed with attached exhibits. 51 Once confidential treatment
of the Sealed Exhibits was challenged, however, the original filer had an obligation
to file public versions, which also incorporate the designation, if any, of confidential
information by the other parties to the action who had previously designated
confidential information in the confidential filing. 52 As an initial matter, all the
Sealed Exhibits were originally filed by the Petitioners in the underlying appraisal
action, and therefore those Petitioners had the obligation to file public versions.53
The Petitioners also had the obligation to provide notice and opportunity to designate
49 See Ct. Ch. R. 5.1(a). 50 See Ct. Ch. R. 5.1(d) (providing that the failure to timely file a public version of a confidential filing results in the public release of the confidential filing). 51 See Ct. Ch. R. 5.1(d)(2) (“For administrative convenience, the filer need not file a public version of documentary exhibits or deposition transcripts.”). 52 Ct. Ch. R. 5.1(f)(1). 53 Id.
13 confidential information to “each attorney who has entered an appearance for each
person who designated Confidential Information in the Confidential Filing;”54 here,
that would be attorneys representing BHGE. 55 Instead, it was BHGE itself (and
Third-Party GE) that filed the purported public versions of the Sealed Exhibits.
In any event, the public versions of the Sealed Exhibits submitted by GE and
BHGE on December 6, 2019 suffer from a fundamental flaw. The public versions
do not contain redactions of material that the Respondents consider, in good faith,
to be subject to continued treatment as confidential under Rule 5.1. Instead, the
exhibits are entirely blacked out; not a single word is legible. Such redaction is
presumptively not in good faith compliance with Rule 5.1. GE and BHGE
acknowledged that they filed public versions that “have been redacted in their
entirety.” 56 According to BHGE, it did so because Tri-State Fund’s purpose was
“self-serving, private, and unrelated to the function served by Rule 5.1.” 57 GE and
BHGE further requested an “opportunity to promptly file alternative public versions
of the exhibits with redactions targeted at sensitive, non-public information,” if I
denied their Motions for Continued Confidential Treatment of the Sealed Exhibits.58
54 Id. 55 BHGE is the successor to the original designee, BHI. 56 D.I. 71, ¶ 2; D.I. 72, ¶ 8. 57 D.I. 71, ¶ 2. 58 D.I. 71, ¶ 2; D.I. 72, ¶ 8.
14 As I mentioned above, Tri-State Fund’s motivation is immaterial to BHGE’s
duty to designate confidential information under Rule 5.1, and to ensure that the
redacted public document reflects only these confidentiality interests. Accordingly,
I do not reach the balancing test prescribed by Rule 5.1 because BHGE (and GE)
have failed to comply with the predicate requirements. As Rule 5.1 states, “the
designation of material as Confidential Information constitutes a certification that
the designating lawyer, party or person has reviewed the Document and believes that
good cause exists for Confidential Treatment.”59 Not only are wholesale redactions
facially suspect in this regard, but by GE’s and BHGE’s own admissions the entirely
redacted public versions are not in compliance with Rule 5.1 because they have not
redacted only “sensitive, non-public information,” 60 but rather concealed everything.
I note that a cursory review of the documents satisfies me that much of the material
therein—which the Respondents have kept from the public—is in no way eligible
for confidentiality under Rule 5.1. Therefore, I find, GE and BHGE have failed to
timely file public versions of the Sealed Exhibits as required by Rule 5.1(f)(1). As
a result, the Sealed Exhibits shall be made public in their entirety, as they were filed
confidentially. 61 I note that the Sealed Exhibits, in their confidential form as
59 Ct. Ch. R. 5.1(b)(3). 60 D.I. 71, ¶ 2; D.I. 72, ¶ 8. 61 See generally Ct. Ch. R. 5.1(d) (“Filing a public version. -- Except as otherwise provided in this Rule, the filer of a Confidential Filing shall file a public version within five days after making the Confidential Filing. In the absence of timely compliance with this Rule, the Confidential Filing shall become part of the public record, and the Register in Chancery shall make the Confidential
15 submitted to the Court, contain presumptively appropriate redactions for privilege
and relevance, among other things; those redactions should persist, as they were
never part of the record presented for Court review.
The unsealing of the Sealed Exhibits moots the continued confidential
treatment of the redactions in the public versions of the motions at issue, because
those redactions only served to keep information drawn from the Sealed Exhibits
confidential. As a result, the confidential versions of the Redacted Filings should
also be made public.
A further point is worth addressing here. GE and BHGE raise the concern
that, if Tri State Fund is permitted to challenge confidentiality given its litigation
interest, Rule 5.1 will be converted into a discovery tool for prospective litigants.
Here Tri-State Fund previously submitted a Section 220 Demand to BGHE, which
was rejected. 62 Tri-State Fund then brought a challenge to confidential treatment in
this action to obtain documents pertinent to its investigation, and did so in lieu of
perfecting its Section 220 rights. According to BHGE, the Petitioners in the
underlying action gratuitously attached exhibits to their pleadings. Those exhibits
were documents produced in discovery in the appraisal action according to a
confidentiality stipulation; therefore, per the Respondent, they would have remained
Filing available for public access on the docket system to the same extent as any other public filing.”). 62 See D.I. 68, ¶ 9.
16 non-public and off the record had they not been gratuitously attached to the motions
(or, had the matter not settled, been submitted at trial). As I have explained above,
these exhibits will now be made public because the Respondents have not complied
with Rule 5.1 in opposing the challenge. I note, however, if followed, Rule 5.1
adequately equips the court to keep truly confidential information non-public,
regardless of any gamesmanship by parties. 63
A litigant’s concern that opposing counsel is filing extraneous confidential
documents, in the hopes that such will be made public at a later date, would be
considered when balancing the interests, as required by Rule 5.1. If the confidential
documents are truly extraneous to the issue for which they were submitted, then there
will be little to no public interest in reviewing them. Therefore, a showing of harm
from disclosure of truly confidential information would suffice to keep such
information confidential. While I never reached that balancing function, I note that
the use of the documents as exhibits does not appear to have been gratuitous in
connection with the motions in question. For example, the appraisal Petitioners
attached to their Motion to Compel, as sealed exhibits, various board minutes
produced by BHI, which had been produced, subject to a confidentiality agreement,
to the Petitioners with redactions for privilege and relevancy. In their Motion to
63 Furthermore, to the extent a party believes that an opposing party has acted in bad faith or with improper purpose, it may avail itself of other means of relief, such as a motion to strike or resort to Court of Chancery Rule 11.
17 Compel, the Petitioners challenged the extent of the redactions to those board
minutes. It cannot be said that the filing of the redacted board minutes was
extraneous, when they were the subject of the matter before the Court. Furthermore,
after confidentially filing its Motion to Enforce, along with confidentially filed
exhibits, the Petitioners moved to challenge the confidential treatment of the
accompanying exhibits. While the Petitioners withdrew its Challenge and the
Motion to Enforce when it entered into settlement with the BHI, absent the parties’
agreement the Court would have had the opportunity to test both the public interest
in, and the nature of, the exhibits’ confidentiality. At that time, BHI would have had
the opportunity to raise the prospect of gamesmanship when arguing against the
public utility of disclosure, after complying in good faith with the strictures of Rule
5.1. The Respondents had the same opportunity in this proceeding.
III. CONCLUSION
In sum, the Challenger filed a challenge to continued confidential treatment
of documents filed in pleadings before the Court, the Respondents moved for
continued confidential treatment, but no party filed a timely and compliant public
version as required by Rule 5.1, and accordingly, the documents in question must be
made available to the public. The parties should provide an appropriate form of
order.