Gen. Re Life Corp. v. Am. Gen. Life Ins. Co.

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GENERAL RE LIFE CORPORATION, Petitioner, v. AMERICAN GENERAL LIFE INSURANCE COMPANY, Respondent.

No. 23-cv-05219 (ALC)

United States District Court, S.D. New York

March 28, 2024

ORDER

ANDREW L. CARTER, JR., UNITED STATES DISTRICT JUDGE

Pending before the Court are two matters: Petitioner's Petition to Confirm a Final Arbitration Award as well as four Motions to Seal documents filed by Petitioner and Respondent. See ECF Nos. 1, 5, 12, 16, 24. For the following reasons, the Parties' motions to seal are DENIED and the Petition is GRANTED.

BACKGROUND

I. Underlying Controversy

Between 1991 and 2002, the Parties entered into six separate reinsurance agreements under which General Re Life Corporation (“Petitioner” or “Gen Re”) agreed to reinsure some of American General Life Insurance Company's (“Respondent” or “American General”) policyholders. ECF No. 1 Compl. at ¶ 6; see also ECF Nos. 1-2, 1-3, 1-4 1-5, 1-6, 1-7. Gen Re compensated American General under the agreements for a certain share of each insurance policy it reinsured and, in exchange, charged American General a reinsurance premium for each policy reinsured. Id. at ¶ 7.

On April 30, 2020, Petitioner decided to increase the reinsurance premiums it would charge Respondents under three of the six executed reinsurance agreements. Id. Respondent refused to implement the desired increases and the Parties underwent arbitration to resolve the dispute.

II. The Arbitration

Initially, several individual arbitration claims were raised under each of the controlling reinsurance agreements. Id. at ¶ 8. Over time though, the actions were consolidated before a single Arbitration Panel. Id. On January 26, 2021, prior to the actions' consolidation, as reflected in transcripts of the meeting, the Parties orally stipulated to a written confidentiality agreement and protective order which mandated that they keep the contents of arbitration proceedings confidential from all “third parties.” ECF No. 33-2 at 8. The written confidentiality agreement does, by its own terms, permit disclosure of arbitration information “as is necessary in connection with court proceedings relating to any aspect of the arbitration, including . . . motions to confirm . . . an award.” ECF No. 35-1 at 3.

Prior to and following their consolidation, Petitioners argued throughout the arbitration proceedings that they had the power, under the terms of each of the respective reinsurance agreements, to increase the reinsurance premiums that they charged Respondent. Id. at ¶¶ 9-10. ECF No. 1, Compl ¶ 10. Ultimately, Petitioners were successful as a majority of the consolidated Arbitration Panel ruled in their favor. Id. at ¶ 11. Specifically, the Arbitration Panel found that the reinsurance agreements “provide Gen Re the unilateral right to increase rates” and that “Gen Re's rate increases complied with [contractual] terms.” ECF No. 7-3 at 4.

The Panel then ordered Respondents to either: (1) “implement the rate increases noticed by Gen Re and pay to Gen Re” the rate increases plus 3% pre-judgment interest, or (2) recapture all six of the reinsurance treaties within 15 days of the granting of the final award. Id. at 5-6. Respondents subsequently elected to recapture the six reinsurance agreements in accordance with the Panel's order.

III. Procedural History

On June 20, 2023, General Re Life Corporation (“Gen Re” or “Petitioner”) filed its Petition to Confirm the Panel's Final Arbitration Award before this Court. See ECF No. 1. In its filing, Petitioner stated that jurisdiction before this Court was proper “pursuant to 28 U.S.C. 1332(a) as Gen Re and AGL are citizens of different states and the amount in controversy exceeds $75,000.” Id. at ¶ 3. Petitioner also appended three arbitration documents-two of the Parties' Position Statements as well as the Panel's Final Award-to the Petition. Alongside its Petition, Gen Re also submitted a motion to file the three arbitration documents under seal. ECF Nos. 5, 6. Petitioner sought to file the exhibits under seal because (1) they were under a duty to “maintain the confidentiality of the Exhibits pursuant to a confidentiality agreement entered into between” the Parties, (2) the exhibits “contain sensitive and proprietary information that if disclosed could potentially impact the parties in future competitive business negotiation,” and (3) “any public interest in the contents of the arbitration information is nonexistent (or minimal at best). ECF No. 6 at 1-2; Thomas Decl. at ¶¶ 4-7. On July 6, 2023, Petitioner filed another Motion to Seal certain portions of the body text of its Petition that referred to the three arbitration documents for the same reasons as stated in its prior Motion at ECF No. 5. ECF Nos. 12, 13.

Respondent filed its Answer to the Petition on July 17, 2023 stating that while it “would not oppose [this Court's] confirmation” of the arbitration award, it believed that this Court lacks subjectmatter jurisdiction to decide the case. ECF No. 15. Respondent argued that no justiciable controversy exists in this case because they elected to “recapture” the reinsurance contracts at issue in the Arbitration resulting in there being “nothing for either party to enforce by means of a judgment of this Court.” Id. Alongside their Answer, American General also filed a motion to seal certain arbitration exhibits appended to their Answer as well as certain portions of the body of their Answer that referenced those exhibits. ECF Nos. 16, 17. Respondents also filed a motion to join Petitioner's earlier similar motions to seal in which it stated that sealing was warranted for the reasons Petitioner raised in its submission and also because the documents “could potentially prejudice the parties in a separate arbitration currently pending between them.” ECF No. 19 at 2.

On July 20, 2023, Petitioners filed a Reply brief in support of their Petition. ECF No. 23. There, Petitioner argued that this Court has subject-matter jurisdiction over this case because (1) the rate increases awarded to Petitioner in the arbitration had a valuation of over $250 million, (2) Respondent's independent election to recapture all six of the reinsurance contracts in lieu of paying the rate increases, as it was granted leave to do by the Arbitration Panel, did not destroy the underlying amount in controversy, and (3) Respondent's compliance with the arbitration award does not render this Court without subject-matter jurisdiction to confirm the award. Id.

The following day, Respondent filed a supplemental motion to seal and redact certain portions of Petitioner's Reply as well as paragraph 11 of the Petition. ECF Nos. 24-25. Respondent claimed that sealing the relevant documents and Petition text was necessary because they were themselves confidential arbitration documents or referenced such. ECF Nos. 24-25. Petitioner opposed this motion to seal and argued that the relief was unwarranted because: (1) Respondent placed elements of the Final Award squarely at issue by claiming that its election to recapture left this Court without jurisdiction to confirm the arbitration award, (2) Respondent provided no specific provision of the unwritten arbitration confidentiality agreement that covers the relevant portions of the filings, and (3) that Respondent has not met its legal burden on its motion to seal. ECF Nos. 29, 30. Respondent stated in a subsequent filing that Petitioner's arguments could not be reconciled with the Parties' prior motions in favor of sealing and that that their unsealed references to their recapture of the reinsurance contracts did not place the contents of the Award at issue because the “fact of the recapture was already publicly available.”. ECF No. 32 at 4 (emphasis omitted).

LEGAL STANDARD

I. Motion to Seal

There is a “long-established general presumption in favor of public access to judicial documents.” Moore v. Experian & TransUnion, 2023 U.S. Dist. LEXIS 203912, at *2 (S.D.N.Y. Nov. 9, 2023) (citing Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006)). This presumption is based upon two “related but distinct” rationales: “a strong form rooted in the First Amendment and a slightly weaker form based in federal common law.” Newsday LLC v. Cty. Of Nassau, 730 F.3d 156, 163 (2d Cir. 2013). The presumption of access applies to all “judicial document[s],” which are those “item[s] . . . relevant to the performance of the judicial function and useful in the judicial process.” Lusgoch, 435 F.3d at 119. To determine the weight to be given to the presumption of access to judicial documents, a reviewing court must assess “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. United States v. Amodeo, 71 F.3d 1044, 1049 (2d Cir. 1995) (stating that the weight of the presumption lies on a continuum between “matters that directly affect an adjudication to matters that come within a court's purview solely to insure their irrelevance”). Finally, after determining the weight of the presumption of access, the court must “balance competing considerations against it” which may “include but are not limited to the danger of impairing law enforcement or judicial efficiency and the privacy interests of those resisting disclosure.” Lusgoch, 435 F.3d at 119.

Where the submissions “directly affect” the court's adjudication of the case, there is “a strong presumption of access.” See Mut. Marine Office, 2009 WL 1025965, at *5. In order to rebut such a presumption, the moving party “must offer specific facts ‘demonstrating that closure is essential to preserve higher values and is narrowly tailored to serve that interest.'” Id. (quoting Lugosch 435 F.3d at...