Documents revealing Allstate claims handling procedures that were evidence in a trial over Hurricane Katrina-related flood damage cannot be kept from the public, according to a federal judge.

U.S. District Court Judge Sarah S. Vance in New Orleans denied a motion by the insurer to either return or place under seal documents in the case of a New Orleans couple who won a $2.8 million award against the company after it refused their hurricane-related claim.

Allstate said it would not appeal the ruling.

In denying the motion, Judge Vance ruled that any documents that had been presented by plaintiffs as evidence without objection from Allstate's attorneys should not be sealed. "It is undisputed that Allstate failed to object, either before or during trial, to the admission of those exhibits into the judicial record," she noted.

On the broader issue of sealing the records of the case entirely, Judge Vance noted the issue was not as clear.

"To determine whether to disclose or seal a judicial record," she said, "the court must balance the public's common law right of access against the interests favoring nondisclosure."

However, in seeking to seal the record, the burden of showing a need to do so fell on Allstate's shoulders, she noted. "Although countervailing interests can outweigh the right of public access, the party who seeks to overcome the presumption of access bears the burden to show that the interest in secrecy outweighs the presumption," she explained.

Allstate's attorneys argued the documents should be kept sealed because other courts had found similar documents to be confidential in nature and the materials would be prejudicial in other cases if other plaintiffs had access to them outside of the normal disclosure and discovery process.

Those arguments proved unconvincing, however, and the judge ruled that "neither interest is sufficient to overcome the right of public access" in this case.

Specifically, she concluded the documents in question were not terribly secretive in nature.

"It is not apparent that these documents contain sensitive material of any kind," she said in the ruling. "Absent elucidation from Allstate as to the specific information in these exhibits that should remain confidential, the court refuses to seal them in their entirety based on a general request to do so."

The perceived lack of sensitive material also damaged Allstate's argument that the information could be prejudicial in other cases, Judge Vance concluded. Courts routinely allow information from one case to be used elsewhere, she noted.

Allstate's manual for handling claims and an operational guide for subcontractors engaged to work on Katrina-related damage were among the documents.

"The court therefore does not find it appropriate to seal exhibits that have already been introduced into the public record simply because Allstate would like to prevent other Katrina plaintiffs from obtaining them in a more efficient, less expensive way," she said.

"Moreover, simply because plaintiffs may have access to these documents before they otherwise would have obtained them through discovery is hardly prejudicial to Allstate in light of its failure to specifically demonstrate what, if anything, is sensitive or confidential about these documents."

Consumer rights advocates lauded the ruling.

"Allstate clearly did not want to disclose the internal procedures by which it handled the claims of Katrina survivors, but the public and policymakers have a right to know why and how insurance companies make decisions to pay or not to pay in the wake of disasters," said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights. "This ruling will prevent Allstate from using the court system as a cloak of secrecy."

Allstate's request to seal the records was contested by plaintiff attorneys and several trial lawyer groups.

Mike Siemienas, an Allstate spokesman, said the company "respectfully disagrees with the court's ruling and continues to believe that the documents are proprietary and should be returned."

He added that Allstate "continues to have confidence in it's adjusting process, and certainly nothing in the court's opinion suggests otherwise." Going forward, Mr. Siemienas said that. "After reviewing the matter, Allstate has decided not to appeal the court's decision."

This article updated Aug.22, 9:29 a.m.

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Allstate Can't Keep Claim Manuals Secret

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