Lance Armstrong And A Sure Fire Way To Avoid A Deposition--Settle.  What About The Confidentiality Of His Settlement Agreement?

In the wake of admitting to doping and being stripped of his Tour de France titles, among other things, Lance Armstrong is now a defendant in multiple lawsuits.  Hardly a surprise.  One such lawsuit filed by Acceptance Insurance in Texas just settled.  Acceptance Insurance was seeking to recover $3.0 million paid to Armstrong in connection with some of his Tour de France "triumphs."  Details about the settlement agreement were not disclosed.  The terms of the agreement and information exchanged during the lawsuit may be (and probably are) subject to a confidentiality agreement.  The case settled one day before Armstrong was scheduled to be deposed.  Needless to say Armstrong and his lawyers concluded that testifying under oath and confessing to Oprah are two very different things.

The confidentiality of private settlement agreements raises some interesting issues.   In any civil case both sides may have good reasons for not wanting the terms of a settlement or information exchanged during discovery disclosed to third parties.  The use of confidentiality provisions in settlement agreements is common.  Public policy strongly favors encouraging settlement of civil cases.  If keeping the terms of a deal a secret helps settle a case, and it often does, then there is a solid basis for a court to respect the litigants desire for privacy.

Which brings us back to Armstrong.  Can someone in his position, i.e., involved in multiple lawsuits and whose reasons for wanting confidentiality may not be compelling, keep information about the Acceptance Insurance case from other litigants who are suing him and in so doing potentially impede the progress of those litigants' lawsuits?  In some jurisdictions, like Texas where Acceptance Insurance filed its lawsuit, the answer is no even if he had a good reason for wanting privacy.  See Newby v. Enron Corp., 623 F.Supp.2d 798 (U.S. Dist. Ct. Tex. 2009).   In other jurisdictions a balancing test is applied to resolve the issue. See Hinshaw v. Winkler, Draa, Marsh & Still v. Superior Court, 51 Cal.App.4th 233 (1996).  In those jurisdictions the answer is maybe.   The confidentiality of information about the settlement and lawsuit would turn on the needs of the party seeking disclosure, the relevance and sensitivity of the information, and the settling parties' privacy rights.  In Armstrong's case we suspect that a court using a balancing test is not going to do him any favors.

For more information about the Acceptance Insurance lawsuit, go to USATODAY.com: http://usat.ly/188GTLH  

Todd A. Picker, Senior Counsel.