How often and under what circumstances are civil settlement agreements filed under seal in federal courts? At the request of the Judicial Conference Advisory Committee on Civil Rules, the Federal Judicial Center looked into this question. Its research found that sealed agreements occur in less than one-half of one percent of civil cases. And in 97 percent of these cases, the amount of settlement was sealed but the complaint itself was not.

The study examined 288,846 civil cases filed in a sample of 52 districts. Of those cases, 1,270 had sealed settlement agreements, approximately one in 227 cases. More than half the cases with sealed settlement agreements were either personal injury cases (30 percent) or employment cases (27 percent), 11 percent were contract cases, and 10 percent were civil rights cases. Intellectual property cases—trademark, patent and copyright—accounted for 11 percent of all civil cases with sealed settlement agreements.

Although the complaint is sealed in only three percent of the cases, if the complaint is sealed, usually the entire record is sealed. In 13 percent of the sealed settlements, the agreement was not a sealed document filed with the court but part of a sealed or partially sealed proceeding or transcript.

What types of cases with sealed settlements might be of special public interest? Of the cases examined in the study, 40 percent involved one or more matters that might be of special public interest. Twenty-six percent dealt with death or serious permanent disability, 20 percent concerned product liability, 12 percent concerned a public party defendant, 3 percent involved professional malpractice, 2 percent were related to sexual abuse, and 1 percent involved environmental issues.

The FJC limited its study to sealed settlements filed with the courts; the study does not cover private or unfiled confidentiality agreements commonly entered into between parties concerning the terms of civil settlements. According to the study, sealed settlement agreements appear to be filed typically to facilitate their enforcement.

Only two federal district courts have local rules on sealed settlement agreements. The District of South Carolina proscribes them, and the Eastern District of Michigan limits how long they may remain sealed. Forty-nine districts have local rules on sealed documents generally. Fourteen districts have rules covering only administrative mechanics, for example, how sealed documents are marked, and 12 districts have rules explicitly requiring "good cause" to seal a document.

Case law recognizes the public's general right to inspect and copy public records and documents, including judicial records and documents. Some cases have stated explicitly that if a settlement agreement is filed with the court for the court's approval or interpretation, then denying the public access to the agreement requires special circumstances. In addition, many appellate opinions have stressed the importance of the court's stating specific reasons for sealing a filed document.