Al Jazeera America, LLC v. AT&T Services, Inc., C.A. No. 8823-VCG (Del. Ch. Oct. 14, 2013) (Glasscock, V.C.)
October 14, 2013
In this letter opinion, the Court of Chancery ordered plaintiff Al Jazeera America, LLC (“Al Jazeera”) to file a revised public copy of its complaint, removing a majority of the redactions contained in the public copy it had previously filed. In so ruling, the Court held that neither Al Jazeera nor defendant AT&T Services, Inc. (“AT&T”) had shown “good cause” under Court of Chancery Rule 5.1 to maintain as confidential the bulk of the information they had redacted, including information revealing the nature of the dispute, the parties’ contractual relationship, and inter-party negotiations.
The litigation arose following Al Jazeera Media Network’s entry into the United States cable market through its acquisition of Current TV. According to the complaint, AT&T wrongfully terminated its contract with Current TV, now “Al Jazeera America,” by refusing to carry and distribute the Al Jazeera signal to local media affiliates. In accordance with Court of Chancery Rule 5.1, Al Jazeera filed the complaint under seal and promptly provided AT&T with a proposed public version redacting information it believed to be confidential to the parties. AT&T added its own redactions, and the parties filed a publicly available but heavily redacted complaint several days later. Multiple news organizations objected to the redactions, and Al Jazeera and AT&T filed motions to maintain the complaint’s confidential treatment.
Under Rule 5.1, if any person challenges the confidential treatment of a court filing, the party wishing to maintain its confidentiality bears the burden of persuading the Court that “good cause” exists to maintain its confidentiality—i.e., that the public interest in full access to Court proceedings is outweighed by the harm that disclosure of sensitive non-public information would cause. Information protected under Rule 5.1 is typically of the nature of trade secrets, competitively sensitive financial information, or sensitive personal information such as medical records, social security numbers, and financial account numbers. Boilerplate confidentiality provisions in commercial agreements will not, in and of themselves, suffice to show good cause under Rule 5.1.
In seeking to protect their redactions, Al Jazeera and AT&T emphasized the competitive harm that could befall them if details of their negotiations and contractual terms were disclosed to others in their industry. Largely unmoved, the Court held that only a very limited amount of information could be kept confidential, namely, per-subscriber fee information and similar, proprietary information. The Court rejected the parties’ arguments that the disclosure of other information, including details regarding the nature of the parties’ dispute, would cause them the type of harm Rule 5.1 was meant to prevent. The Court stated that Rule 5.1 is not designed to keep information confidential merely because its disclosure might cause collateral economic consequences. If the information directly affects the public’s basic knowledge of the proceedings, then the public’s interest in accessing that information will generally outweigh any need to protect the parties from the economic harm its disclosure might cause. Any other determination would, in the Court’s words, convert the Court from a public forum into something more akin to a private arbitrator. According to the Court, only “discrete information” that poses significant risk to the litigants if disclosed but is of low interest to the public will be protected under Rule 5.1. The Court held that the majority of the information Al Jazeera and AT&T sought to redact did not fit within this description and, on this basis, ordered Al Jazeera to re-file the public copy of its complaint with only the limited redactions the Court had approved.