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Confidential Settlement Agreement – California

Author: LegalEase Solutions


  1. In California, can private parties to litigation maintain confidentiality of the terms and existence of a settlement?
  1. What grounds exist to seal settlement documents, if settlements can be maintained confidentially?


  1. In California, confidentiality of terms and existence of a settlement can be maintained. Generally, there is a presumption of allowing public access to court records. But in certain cases, such documents can be sealed. The court may order sealing of a document if there is an overriding interest that outweighs the right of public access. In case of settlements outside court, the settlement agreements can be sealed as mediation confidentiality applies. However, it is important to note that any document filed with the court becomes a court record and the legal standard set by the court has to be met for sealing the document.
  1. Settlement agreements do not constitute a judicial record unless filed with the court. Any document filed with the court naturally becomes a court document or judicial record which is a public record. In order to seal a judicial record, the legal standard under Cal. Rules of Court 2.550 has to be followed.


  1. In California, can private parties to litigation maintain confidentiality of the terms and existence of a settlement?

Under Cal. Rules of Court, Rule 2.550, a ‘court record’ is defined as “all or a portion of any document, paper, exhibit, transcript, or other thing filed or lodged with the court.”  Rule 2.550 (b) (1). A ‘sealed record’ is ‘a record that by court order is not open to inspection by the public.’ Unless it is essential to maintain confidentiality of a court record as required by law, court records are generally presumed to be open. Rule 2.550 (c).

Court records are open to the public in civil and criminal cases. Parties to a proceeding may request the sealing of documents. California Local Rule 141 (b) specifically deals with the sealing of documents. The said Rule states as follows: “[i]f a party seeks to seal documents, the party shall submit, in the manner prescribed . . . a ‘Notice of Request to Seal Documents,’ a ‘Request to Seal Documents,’ a proposed order, and all documents covered by the request.” Cal. L.R. 141 (b).

Documents may be sealed only by written order of the Court, upon the showing required by applicable law. To ensure that documents are properly sealed, specific requests to seal must be made even if an existing protective order, statute, or rule requires or permits the sealing of the document. Notice that a request to seal has been made will typically be filed in the publicly available case file. Unless the Court orders otherwise, court orders sealing documents will also be filed in the publicly available case file and will not reveal the sealed information. Access to all documents filed under seal will be restricted to the Court and authorized court personnel.
Cal. L.R. 141 (a).

Unless confidentiality is required by law, court records in both criminal and general civil cases are presumed to be open to the public for inspection. For all records filed where confidentiality is required by law, the document caption or title shall state “CONFIDENTIAL” with an accompanying citation to the applicable law requiring such confidentiality. An agreement or stipulation between the parties for confidentiality or sealing of a document filed with the court is legally insufficient. The law requires court findings prior to sealing any records.


Court approved settlements:

Courts have recognized a “general right to inspect and copy public records and documents, including judicial records and documents.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589 (1978). “This right extends to pretrial documents filed in civil cases.” Estate of Migliaccio v. Allianz Life Ins. Co. (citing In re Midlan Nat’l Life Ins. Co. Annuity Sales Practices Lit., 686 F.3d 1115, 1119 (9th Cir. 2012)). “This right is justified by the interest of citizens in ‘keeping a watchful eye on the workings of public agencies.’” Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1178-79 (9th Cir. 2006) (quoting Nixon, 435 U.S. 589 (1978)).

“Nonetheless, access to judicial records is not absolute. A narrow range of documents is not subject to the right of public access at all because the records have ‘traditionally been kept secret for important policy reasons.’” Id. (quoting Times Mirror Co. v. United States, 873 F.2d 1210, 1219 (9th Cir. 1989)).

“Unless a particular court record is one ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir. 2003). “In order to overcome this strong presumption, a party seeking to seal a judicial record must articulate justifications for sealing that outweigh the historical right of access and the public policies favoring disclosure.” Kamakana, 447 F.3d 1178-79 (9th Cir. 2006). The court must “conscientiously balance[] the competing interests” of the public and the party who seeks to keep certain judicial records secret. (quoting Foltz, 331 F.3d at 1135). After considering these interests, if the court decides to seal certain judicial records, it must “base its decision on a compelling reason and articulate the factual basis for its ruling, without relying on hypothesis or conjecture.” Kamakana, 447 F.3d 1178-79 (9th Cir. 2006) (quoting Hagestad, 49 F.3d at 1434) (citing Valley Broad. Co. v. United States Dist. Court, 798 F.2d 1289, 1295 (9th Cir. 1986)).

Settlements outside court:

Parties who resort to settlements outside the court usually do not wish to make the terms of the settlement public. Jessup v. Luther (7th Cir. 2002) 277 F.3d 926, 928. “Ordinarily, though, settlement agreements, like most arbitration awards and discovery materials, are private documents, (citing Union Oil Co. v. Leavell, (7th Cir.2000) 220 F.3d 568), not judicial records, and so the issue of balancing the interest in promoting settlements by preserving secrecy against the interest in making public materials upon which judicial decisions are based does not arise—there is no judicial decision.” Id.

“Even if the parties reach settlement after suit has been filed, the settlement agreement will not be a judicial record, (citing B.H. v. McDonald, (7th Cir. 1995) 49 F.3d 300), because the parties will file a stipulation of dismissal pursuant to which the suit will be dismissed without further ado or court action, Fed.R.Civ.P. 41(a) (1) (ii), and the settlement agreement that motivated the stipulation of dismissal will then have the identical status as any other private contract.” Id. (citing Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 380–81, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); Professional Service Network, Inc. v. American Alliance Holding Co., 238 F.3d 897 (7th Cir.2001); Montgomery v. Aetna Plywood, Inc., 231 F.3d 399 (7th Cir.2000); Carr v. Runyan, 89 F.3d 327, 331 (7th Cir.1996); McAlpin v. Lexington 76 Auto Truck Stop, Inc., 229 F.3d 491, 501–04 (6th Cir.2000); Langley v. Jackson State University, 14 F.3d 1070, 1072–75 (5th Cir.1994)).

“[T]he mediation confidentiality provisions of the Evidence Code were enacted to encourage mediation by permitting the parties to frankly exchange views, without fear that disclosures might be used against them in later proceedings.” (citing Rojas v. Superior Court (2004) 33 Cal.4th 407, 415–416, 15 Cal.Rptr.3d 643, 93 P.3d 260; Foxgate Homeowners’ Assn. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, 14, 108 Cal.Rptr.2d 642, 25 P.3d 1117.) Fair v. Bakhtiari (2006) 40 Cal.4th 189, 194 [51 Cal.Rptr.3d 871, 875, 147 P.3d 653, 656].

  1. Grounds for sealing settlement agreements

The California Rules of Court provide the legal standard for sealing of records:

The court may order that a record be filed under seal only if it expressly finds facts that establish:

(1) There exists an overriding interest that overcomes the right of public access to the record;

(2) The overriding interest supports sealing the record;

(3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed;

(4) The proposed sealing is narrowly tailored; and

(5) No less restrictive means exist to achieve the overriding interest.

Cal. Rules of Court 2.550 (d).

“[T]he California Supreme Court identified the constitutional requirements applicable to a request to seal court records as follows: “[B]efore substantive courtroom proceedings are closed or transcripts are ordered sealed, a trial court must hold a hearing and expressly find that (i) there exists an overriding interest supporting closure and/or sealing; (ii) there is a substantial probability that the interest will be prejudiced absent closure and/or sealing; (iii) the proposed closure and/or sealing is narrowly tailored to serve the overriding interest; and (iv) there is no less restrictive means of achieving the overriding interest.”

Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1279 [2 Cal.Rptr.3d 484, 490].

Accordingly, it is clear that in order to seal a court record, the constitutional requirements should be satisfied.


To conclude, court records are open for public inspection unless confidentiality is required. There is a general presumption of public access in case of court records. However, documents may be sealed if the legal standard for the same is satisfied and the court finds that there is an overriding interest that outweighs the public interest in leaving the documents open for inspection. In case of mediation or other forms of settlements outside court, sealing of documents is possible applying the principle of mediation confidentiality. However, once a settlement agreement becomes a court document, the general rule applies. The courts have also held that a settlement document is not a judicial record.