Richard Posell, Esq.

Richard Posell, Esq., is a JAMS panelist in Santa Monica, Calif. He resolves high-profile, complex commercial disputes and has experience in entertainment, trade secrets, trademarks, trade dress, class actions, executive employment disputes and general business disputes.

The problem of access to and maintenance of the secrecy of contracts or contract terms that are “confidential” by agreement is a common one in litigation.

The recent pronouncements of the California Supreme Court in NBC Subsidiary v Superior Court and Universal Studios v Superior Court manifest a hostile public policy against such secrecy in public trials. An agreement to keep a document secret or confidential is insufficient to seal it; there must be an “overriding interest” supporting sealing or court closure, which has been interpreted to mean “a specific showing of serious injury.” Whether purely commercial interests (other than trade secrets) are sufficient is unclear. Given a choice, the party wishing to keep the document secret may decide that the risk of an unsealed filing may not justify public litigation.

While arbitration is often a better solution, it isn’t fool-proof because judicial supervision and enforcement of arbitration is common and would be subject to the NBC-Universal requirements of overriding interest and serious injury.

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