Bad News/Good News: The Courts Don’t Care About Your SecretsIt used to be fairly simply to share a secret with a federal court in Tennessee by filing a sensitive document “under seal.” It isn’t anymore. The courts don’t care about keeping your secrets, at least not as much as they care about preserving public access to the courts.

Before a recent trio of Sixth Circuit opinions, a motion to file sensitive business information “under seal” might only involve a single page or even a single sentence citing an agreement between the parties. When used in moderation (and even when not used in moderation), those perfunctory motions were routinely granted by the courts. As a result, many cases went forward with significant documents that were available to the parties and the court, but not the public. From the perspective of litigants and trial courts, it was easy and efficient. But according to the Sixth Circuit, it was wrong.

Last summer, starting with Shane Group, Inc. v. Blue Cross Blue Shield of Michigan, the Sixth Circuit reminded the lower courts that only a few narrow categories of information—true trade secrets, information covered by a recognized privilege, and information protected by statute (e.g., taxpayer IDs and protected health information)—are entitled to a judicial seal. Otherwise, the public courts are just that: public. The substantive standards in Shane Group are nothing new—they come directly from a 1983 decision, Brown & Williamson Tobacco Corp. v. FTC —but the renewed emphasis still represents a fundamental change to the practice of Tennessee’s federal courts.

The Sixth Circuit added new procedural requirements to reinforce the old substantive standard, and they’re working. Any order sealing records must explain how the document in question satisfies Shane Group. So, moving forward, any litigant seeking a seal must do that legal and factual work for the district court. And, looking backward, every generic, one-page order is vulnerable. The Sixth Circuit has vacated those orders on its own when it encounters them on appeal, and district courts have been issuing “show cause” orders requiring parties to justify pre-Shane Group seals as a part of routine case management.

The bad news for litigants is this: The courts don’t care about protecting your run-of-the-mill secrets. So, if you have documents under seal in federal courts in Tennessee (or elsewhere in the Sixth Circuit), don’t expect them to stay that way.

The good news is the same: The courts don’t care about revealing your secrets either. Accordingly, now that they cannot promise to keep your secrets, district judges and magistrate judges seem open to working with litigants to keep unnecessary secrets out of the courts’ records to begin with. Generally, the courts are happy to help the parties find ways to document the relevant facts while leaving voluminous, largely irrelevant, and commercially sensitive documents to the side.

Everyone has secrets. If yours are under seal in the federal courts, you should be preparing a Shane Group strategy now. Your show cause order is coming. If your secrets aren’t under seal yet, you need to have a Shane Group strategy for discovery and motion practice. We’ll address both of those topics in future posts.

Sixth Circuit Puts Brakes on Pleading RequirementsUnless you have been under a rock for the past couple of years—or just actively avoid federal court—you are well aware of the impact of Iqbal and Twombly on pleading a cause of action in federal court. Depending on which side of a case you find yourself, you may believe that those decisions ask too much from plaintiffs at the beginning of the case, just the right amount, or even possibly too little. Regardless of where you find yourself in that debate, there is no doubt that those decisions raised the bar for pleading. Thus, we all stop and take notice when an appellate court warns that a district court has demanded too much from a plaintiff. That is exactly what happened in a recent decision by the Sixth Circuit.

In Jackson v. Ford Motor Co., the plaintiff and her husband were traveling down U.S. Highway 70 when the couple lost control of their 2012 Ford Focus. The wife survived the crash, but the husband did not. The plaintiff brought suit against Ford, alleging a defect in the vehicle’s “Electronic Power Assisted Steering” (“EPAS”) system. Ford ultimately moved to dismiss, and the district court granted Ford’s motion.

The issue before the Sixth Circuit was simple: Did the plaintiff allege sufficient facts to establish proximate cause? In short, a unanimous panel found that the plaintiff did. The crux of the decision fell on two of the three factors required for establishing proximate cause in a products liability case—namely, was the alleged defect a substantial factor in causing the accident and was the accident reasonably foreseeable. What is particularly interesting is that plaintiff satisfied the substantial-factor element based on the “apparent litany of other accidents identified by [the plaintiff] where the EPAS system allegedly failed” and the alleged “dart[ing] [of the vehicle] left across the center line into oncoming traffic.” The court, likewise, found very few allegations necessary to satisfy the second foreseeability prong, relying mostly on allegations concerning potentially defective components of the EPAS system.

This decision could be dismissed as a niche matter involving causation for products liability cases in Tennessee, or part of the line of cases specific to EPAS system litigation. However, I submit that such a narrow view would be a mistake.  Indeed, the court noted early on that it had “followed the standard set forth in Iqbal and Twombly in other products liability cases.” Rather, I think that the court made its intention quite clear that “causal weaknesses will more often be fodder for a summary-judgment motion” than a motion to dismiss.

The takeaway from Jackson probably will not be clear for a while. However, I think it is a fair assumption that Jackson might start appearing in responses to motions to dismiss, especially in products liability cases. The real question is whether this decision will have broader implications in terms of pleading causation. Needless to say, Jackson is a case to watch.

Tennessee Supreme Court Lowers the Bar on Collateral EstoppelIn Bowen ex rel. John Doe v. Arnold, the Tennessee Supreme Court abandoned the traditional mutuality requirement for both offensive and defensive collateral estoppel, removing one traditional hurdle for parties seeking to assert the doctrine.

The plaintiff brought the lawsuit on behalf of her young son after he was molested while participating in a mentorship program sponsored by the Boys and Girls Club of Middle Tennessee in partnership with Big Brothers Big Sisters of Tennessee. A jury convicted the child’s mentor, William Arnold, of three counts of rape of a child. The plaintiff brought a civil suit against Mr. Arnold and the sponsoring organizations.

Following Mr. Arnold’s criminal conviction, the plaintiff filed a motion for partial summary judgment against Mr. Arnold asserting that he was collaterally estopped from relitigating in the civil suit “whether he raped and sexually battered” the child. Mr. Arnold argued, among other things, that he should not be estopped from relitigating that issue because plaintiff had not satisfied the strict mutuality requirement of collateral estoppel. Under this requirement, a party can only assert collateral estoppel if they were a party to the first action or in privity with the party in the first action. Mr. Arnold argued that because the plaintiff was not a party to the criminal suit and was not in privity with the state of Tennessee, the strict mutuality requirement prevented the application of collateral estoppel in this case.

The trial court disagreed with Mr. Arnold. The trial court granted the plaintiff’s motion for partial summary judgment and concluded that the plaintiff was in privity with the state of Tennessee. The trial court also granted Mr. Arnold permission to seek an interlocutory appeal. The Court of Appeals, however, declined his application. Mr. Arnold subsequently filed an application to appeal to the Tennessee Supreme Court. The court granted the application in order to “determine whether the mutuality requirement should be abolished or modified in Tennessee.”

After examining the history of the doctrine as well as decisions from other jurisdictions, including two United States Supreme Court cases rejecting the mutuality requirement for both offensive and defensive collateral estoppel, the court joined the majority of jurisdictions in rejecting the strict mutuality requirement because “the traditional mutuality requirement has outlived its usefulness and should be abandoned.”

Going forward, the court concluded that when considering whether to apply offensive or defense collateral estoppel in a particular case, Tennessee judges should follow the general approach adopted by section 29 of the Restatement (Second) of Judgments. Section 29 generally precludes parties from relitigating previously decided issues as long as the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the first action or some other circumstance justifies providing the party with a second opportunity to relitigate the issue. Applying these factors to the case at bar, the court held that Mr. Arnold should be collaterally estopped from relitigating the underlying criminal conduct.

By abolishing the mutuality requirement, the court made it significantly easier for parties seeking to assert collateral estoppel against other parties. Under the flexible restatement approach that is now the law in Tennessee, courts will have considerable discretion in determining whether non-mutual collateral estoppel should apply in a particular case. Parties seeking to assert collateral estoppel against another will now only have to show that the party had a full and fair opportunity to litigate the issue in a prior proceeding.