Out of the frying pan and into the fire: the emergence of depublication in the wake of vacatur.

• Author: Anderson, Eugene R.

1. INTRODUCTION AND HISTORICAL CONTEXT

   A little more than ten years ago, members of our firm, which specializes in representing policyholders against insurance companies, discovered that a significant number of the pro-policyholder judicial decisions were being wiped off the law books by the insurance industry. During the early 1990s, the manipulation of the judicial system, probably our most precious heritage, garnered much attention. (1)

   It became clear that insurance companies are different types of litigants than policyholders. The overwhelming majority of insurance policyholders are one-time insurance coverage litigants; to a policyholder, a favorable settlement is far more significant than a resounding pro-policyholder opinion. Insurance companies, on the other hand, are repeat litigants that face the same exact issues over and over again in courts across the country. Insurance companies, therefore, have a higher interest in the body of caselaw that is developing. Through vacatur, insurance companies can eradicate or reduce the number of pro-policyholder decisions and then argue that the weight of authority is in their favor. (2) This is also true of other repeat litigants, such as governmental entities and intellectual property holders.

   As an example, a classic "sale" of pro-policyholder caselaw occurred in 1981 when Hartford Accident and Indemnity paid $200,000 to expunge from the case books a decision of United States District Court Judge Morris Lasker of the Southern District of New York. (3)

   In Bankers Trust, Judge Lasker held that Bankers Trust Company was entitled to coverage from Hartford Accident and Indemnity Company for certain cleanup costs incurred by Bankers Trust in removing oil from its property. (4) Nearly four months later, Judge Lasker signed an order vacating his earlier decision in favor of Bankers Trust. Judge Lasker indicated that he took this action so as to allow Hartford to submit additional materials to the court, after which Judge Lasker would "determine Bankers' motion for summary judgment de novo." (5) Apparently, Hartford would pay Bankers Trust $2.3 million--about $200,000 more than the amount the court had awarded Bankers Trust in its original decision--with the provision that Judge Lasker would vacate his earlier opinion. (6)

   There have even been cases in which the insurance company agreed to settle and pay the policyholder after the insurance company obtained a favorable decision because the insurance company feared that the decisions would be reversed on reconsideration:

   [W]hen [the policyholder's] counsel became aware of two superior court cases that had addressed the same issue before the court, they moved for reconsideration of the damages ruling on the basis of these decisions. Judge Bryan then wrote counsel for additional briefing on whether these superior court decisions were binding or if they required certification to the State Supreme Court. Soon thereafter, the insurers settled with Ross Electric. Thus the Ross opinion was decided without the benefit of the reasoning of the only Washington court to have addressed the issue. (7) By paying the policyholder even after obtaining a ruling that would have negated or limited coverage, the insurance company was able to keep a pro-insurance company decision on the books and avoid reconsideration.

   The benefit to the repeat litigant of the skillful use of vacatur is clear: If successful in gaining vacatur, the litigant can, in part, control the content of the relevant caselaw without doing more than ask that the courts rely upon what remains in the case reporters. (8) The insurance industry supports its coverage positions in legal briefs and memoranda by representing to courts what "the vast majority of cases hold." For example, in a brief filed by American Casualty Company of Reading, PA ("ACCO"), ACCO stated that a "majority" of courts have interpreted the "sudden and accidental" pollution exclusion as having a temporal meaning:

   By this Supplemental Opposition, ACCO does not concede that the Broadwell decision correctly interprets the "sudden and accidental" phrase. Instead, ACCO opposes application of the Broadwell interpretation, relying instead on the majority view in [sic] throughout the country that "sudden and accidental" has a temporal element, and means "immediate and unexpected." (9) In response to this growing trend, when our from first began publishing a website in April 26, 1996, we created the Vacatur Center, "to help preserve court decisions that have been wiped off the books by losing litigants." (10) From the beginning, the most important part of the Vacatur Center was the text of vacated and depublished decisions. In many instances, the only publicly available text of these vacated cases was in the Vacatur Center maintained by our firm. Recently, the continuing efforts of other parties, including Westlaw and LEXIS, and the willingness of many courts to publish many of their vacated decisions on the World Wide Web, has shifted the role of the Vacatur Center from less of an archive to more of a general information clearinghouse.

   The remainder of this article discusses the development of the modern rules governing vacatur and the impact these generally more restrictive rules have had on a party's ability to use the tool of vacatur to control precedent. The article then discusses depublication, which presents the same dangers as vacatur and has increased significantly while the use of vacatur has decreased. The article concludes with a discussion of the trend, growing through private efforts and the willingness of courts to publish on the World Wide Web, to make vacated and depublished decisions generally available."

2. THE COURTS' EFFORTS TO RESTRICT VACATUR

   Since 1996, when the Supreme Court announced in U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership (12) a narrow approach to vacatur after a settlement between the parties moots the case on appeal, the formerly widespread use of motions to vacate in the federal circuits has been discouraged.

   A. Bonner Mall and Its Federal Progeny

   The leading United States Supreme Court decision on vacatur holds that "mootness by reason of settlement does not justify vacatur of a judgment under review." (13) Vacatur may be granted only after a showing of "exceptional circumstances" that establish "equitable entitlement to the extraordinary remedy of vacatur." (14)

   Essential policy considerations supporting our legal system underlie the decision. "Some litigants, at least, may think it worthwhile to roll the dice rather than settle in the district court, or in the court of appeals, if, but only if, an unfavorable outcome can be washed away by a settlement-related vacatur." (15) The court recognized, however, that

   "[j]udicial precedents are presumptively correct and valuable to the legal community as a whole. They are not merely the property of private litigants and should stand unless a court concludes that the public interest would be served by a vacatur." ... To allow a party ... to employ the secondary remedy of vacatur as a refined form of collateral attack on the judgment would--quite apart from any considerations of fairness to the parties--disturb the orderly operation of the federal judicial system. (16) The reasoning of Bonner Mall was not novel, (17) but it established a consistent approach for federal courts. Indeed, although Bonner Mall dealt solely with appellate vacatur, federal district courts have echoed the Supreme Court's policy concerns that in heavily litigated areas (e.g., employment discrimination) the development of decisional law provides guidance to both private parties and appellate courts. (18) The Fourth Circuit, holding that vacatur in the district court was equally limited, expressly relied upon the equitable considerations in Bonner Mall, and noted that it "could discern no reason why ... the general presumption against vacatur, which arises by virtue of the extraordinary nature of that relief, should be different for the district court than for the appellate court," (19) The Fourth Circuit found that "[o]nly the Ninth Circuit--and it only arguably--has rejected the view that the standards set forth in [Bonner Mall] should also be relevant to a district court's vacatur decision under Rule 60(b)(6)." (20)

   B. State Court Decisions after Bonner Mall

   New York, almost immediately after Bonner Mall was decided, adopted the reasoning of that decision, and its courts generally refuse to vacate decisions made moot by settlement, absent some overriding consideration mitigating in favor of vacatur. (21) Oregon also recognized the reasoning of Bonner Mall shortly after it was rendered. (22) However, more recent decisions from that state leave the state of the law somewhat unclear. (23) Similarly, Connecticut has recognized the presumptive validity of judgments and used the burden created by Bonner Mall as a standard. (24) Even though the standard has not been consistently applied in Connecticut to refuse to vacate after a settlement, (25) the ideal that a party should not be permitted to wipe a case out of the law by settling is supported. (26)

   The Court of Appeals for the District of Columbia also has adopted the reasoning of Bonner Mall, stating that "if the parties have settled the case [on appeal] the proper course of action is to dismiss the appeal as moot." (27) Similarly, Illinois appellate courts have refused to grant vacatur where parties have not pursued there statutory remedies to decisions or even challenged the correctness of the decision sought to be vacated. (28) Missouri courts have used permissive language to describe a court's ability to vacate, but they have restricted that ability in situations where a party seeks vacatur after seeking settlement. (29) Other states have adopted positions similar to that taken in Bonner Mall. (30)

   The decisions of the California and Texas state courts represent the minority view...