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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies


ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit or contact the clerk of the relevant court.

Case Number: 
1:14-cv-10062 Search Pacer
ACE Group party(s): 
Opposing Party: 
Certain Underwriters at Lloyd's of London
Court Type: 
US District Court: 
Southern District of New York
Date Filed: 
Dec 22 2014

Petitioner, Century Indemnity Company, as successor to CCI Insurance Company, as
successor to Insurance Company of North America ("Century"), hereby submits this
Memorandum of Law in Support of its Joinder in Petitioner's, Certain Underwriters at Lloyd's of
London's ("Lloyd's") Motion to Seal: (1) certain portions of Petitioner's Petition for an Order
Confirming Arbitration Award and Entering Judgment and Memorandum in Support of Petition
to Confirm Arbitration Award ("Petition to Confirm"); (2) the Final Award dated December 23,
2011, Exhibit 2 to Petitioner's Petition for an Order Confirming Arbitration Award and Entering
Judgment ("Final Award").

Accompanying Lloyd's Petition to Confirm - which Century will not oppose - was a
Motion to Seal that did not elaborate on why it is important to seal certain portions of the Petition
to Confirm and the Final Award. Accordingly, Century feels compelled to join in the Motion to
Seal to explain why sealing is necessary and appropriate in this context. The fact that Lloyd's
waited until the day before the limitations period ran for filing its Petition to Confirm and did not
explain the basis of its motion to seal raises a question about whether Lloyd's has an ulterior
* • 2
motive in seeking to confirm the Final Award and hoping that it becomes public. Where, as
here, there is no opposition to the confirmation and no public interest in the Final Award, the
motion to seal should be granted.
 The Motion to Seal was provisionally granted by the Honorable Vernon S. Broderick on
December 22, 2014, pending further action by this Court.
 After nearly three years of silence, Lloyd's advised Century on December 19, 2014 - a Friday
at 4:00 PM - that it intended to file its Petition to Confirm the following Monday, December 22,
the day before the three year limitation period set forth in the Federal Arbitration Act ("FAA")
would expire.

The underlying arbitration concluded by final award on December 23, 2011. Since that
time, the parties have acted in conformance with the Final Award and there is no indication that
the parties will act in any other way in the future. In fact, Century does not oppose the Petition
to Confirm.
The arbitration was conducted pursuant to a Confidentiality Agreement, executed by the
parties on April 14, 2011. Importantly, the three members of the arbitration panel also signed the
Confidentiality Agreement. That agreement provides that all information and documents
generated or produced in the arbitration be kept confidential. The Confidentiality Agreement
continues to be in effect. A copy of the Confidentiality Agreement is attached hereto as Exhibit
1. The Agreement requires that the parties keep confidential, inter alia, "Arbitration
Information," including the Award and any interim decisions, subject to certain exceptions. See
Id. at § 2. One such exception is that an award may be disclosed "in connection with court
proceedings relating to any aspect of the arbitration, including but not limited to motions to
confirm, modify or vacate an arbitration award . . . ." Id. at § 3(b). However, the Agreement
also states, in connection with such disclosures, "the parties agree, subject to court approval, that
all submissions of Arbitration Information to a court shall be sealed." Id. at § 3.

Although there is a common law right of public access to judicial documents, that right is
not absolute. See Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006). The
Second Circuit has articulated a three-step process for determining whether documents should be
placed under seal. First, the court must determine whether the documents are judicial documents
such that the presumption of access attaches. Id. A "judicial document" is an "item . . . relevant
to the performance of the judicial function and useful in the judicial process." Id. (quoting
United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995)). Second, once the court determines
that the item to be sealed is a judicial document, the court must then determine the weight of the
presumption of access. Id. "[T]he weight to be given the presumption of access must be
governed by the role of the material at issue in the exercise of Article III judicial power and the
resultant value of such information to those monitoring the federal courts [i.e., the public]." Id.
(quotation omitted). "Generally, the information will fall somewhere on a continuum from
matters that directly affect an adjudication to matters that come within a court's purview solely to
insure their irrelevance." Id. (quotation omitted). "Finally, after determining the weight of the
presumption of access, the court must 'balance competing considerations against it.'" Id. at 120.
(quotation omitted). "Such countervailing factors include . . . 'the privacy interests of those
resisting disclosure.'" Id. (quotation omitted).
The Arbitration Award does not concern public health or safety, nor does it involve a
public entity or official. Any interest that the public would have in the award is accordingly
minimal. On the other side of the scale, in contrast, the parties' legitimate interest in keeping the
Arbitration Information contained in the award private is significant. By entering into private
arbitration, and then into a Confidentiality Agreement, the parties made clear at the outset their
desire for confidentiality.
About a year ago, in another case involving Lloyd's and an affiliate of Century's, the
Honorable Andrew Carter, Jr. of this Court granted Century's motion to seal filed in conjunction
with a motion to confirm. ACE Property & Casually Co. v. Certain Underwriters at Lloyd's,
Civil Action No. 13-CV-6569 (Nov. 6, 2013) (handwritten order accepting joint redaction
proposal) (attached as Exh. 2). Century's motion followed an arbitration that was conducted
pursuant to a Confidentiality Agreement virtually identical to the one at issue in this matter. The
Court ordered the parties to file a redacted version of the Memorandum of Law removing the
Arbitration Information protected by the Confidentiality Agreement. The unredacted version
was filed under seal. The same outcome is warranted here.
In another factually analogous matter, DiRussa v. Dean Witter Reynolds Inc., 121 F.3d
818 (2d Cir. 1997), cert. den. 118 S. Ct. 695 (1998), the Second Circuit upheld a similar
confidentiality agreement. In that case, the parties had agreed in the underlying arbitration that:
(1) the documents produced in the arbitration would only be used in the context of that
arbitration; and (2) in the event any such produced documents were filed with a court, they
would be filed under seal to protect their confidentiality. Id. at 826. When one party filed a
petition to modify the arbitration award, and included throughout its papers and copies of and
references to documents that were the subject of the confidentiality agreement, the district court
placed the entire file, except for the court's opinions and orders, under seal. Id. at 820-21, 826.
The district court noted the general principle that good cause must be shown for denying public
access to judicial files, and concluded that the burden was met under such circumstances. Id. at
827. On appeal of that ruling, the Second Circuit affirmed, finding that the district court did not
abuse its discretion given the facts before it. Id. at 827-28.
As in the ACE v. Lloyd's and DiRussa matters, this case calls for a sealing of the Final
Award and documents discussing it. Century and Lloyd's entered into a Confidentiality
Agreement in which they expressly agreed that any Arbitration Information would be kept
confidential (subject to particular exceptions set forth therein). The ensuing arbitration was
conducted privately, with the expectation that the agreed confidentiality would be maintained by
both parties (subject again to the exceptions set forth in the Confidentiality Agreement)
regardless of the outcome. Thus, the parties have a legitimate interest in maintaining the
confidentiality of those proceedings.
Moreover, private, confidential arbitration proceedings are common in the reinsurance
industry, and the confidentiality of such proceedings are in fact encouraged by industry
organizations like ARIAS-U.S. and the Reinsurance Association of America. See ARIAS-U.S
Practical Guide to Reinsurance Arbitration Procedure § 3.8, Comment C, attached hereto as
Exhibit 3 ("It is generally agreed throughout the industry that reinsurance arbitrations are and
should be confidential in most circumstances, even absent the parties' complete agreement");
Insurance and Reinsurance Dispute Resolution Task Force, Procedures for the Resolution of U.S.
Insurance and Reinsurance Disputes, §§ 7.1, 7.2, attached hereto as Exhibit 4 ("All meetings and
hearings of the Panel are private and confidential to the Parties. . . . The Panel and the Parties
shall use their best efforts to maintain the confidential nature of the arbitration proceedings and
any Decision .. . ."). Undoing the parties' agreement to keep Arbitration Information
confidential by not sealing it would undermine the arbitration process in the reinsurance industry,
where such proceedings are typically confidential.
Lloyd's failure to vigorously advocate for the sealing of the Arbitration Award and
certain portions of its Petition to Confirm should not minimize the importance of the need to seal
these documents. In satisfaction of the recognized competing interests, and consistent with the
 The circumstances surrounding the Petition to Confirm and Motion to Seal raise a serious
question about the bona fides of Lloyd's motions. First, there is no reason to have the
Arbitration Award confirmed because the parties have been acting in conformance with it for
three years. Second, Lloyd's chose to file its Petition in this District notwithstanding the fact that
the arbitration itself took place in Philadelphia — custom would have dictated that this petition
be filed in the Eastern District of Pennsylvania, where motions to seal are more freely granted.
If, as it appears, Lloyd's is hoping to have the Final Award become public for its own purposes
(and not to benefit the public), that is inappropriate and the motion to seal should be granted.
Where, as here, the arbitration award is solely based on the facts presented in that arbitration,
there is no public interest in it.
Confidentiality Agreement, Century respectfully requests that the Final Award and documents
discussing same be sealed.
As an alternative, the parties could simply submit a stipulated order of confirmation to be
signed by the Court. In that case, the Final Award and discussion of it in the Petition to Confirm
could be withdrawn because there would be no need for the Court to consider those documents
before confirming the Final Award and entering judgment on it.

For all of the foregoing reasons, Century requests that this Court seal the Final Award
and those portions of the Petition to Confirm discussing it.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.