## Facts

- An automobile-accident passenger (Pritchard) obtained a jury verdict against the driver, but insurance limits were insufficient to satisfy the verdict.
- Pritchard and others later pursued bad-faith/unfair-practices claims against the insurer (State Farm) and resolved that litigation through a confidential settlement.
- Several attorneys who worked on the underlying matters alleged an oral contingent-fee arrangement and claimed they were owed fees tied to the recovery obtained from the insurer settlement.
- The attorneys sued for breach of contract and quantum meruit and sought to enforce an attorney’s charging lien against Pritchard, State Farm, and trial counsel.
- In discovery, the attorneys moved to compel production of the settlement’s terms and amount, the attorneys’ fees paid from the settlement, and the identity of a decisionmaker related to the lien issue.
- State Farm resisted disclosure, arguing the information was irrelevant and protected by the settlement’s confidentiality provision.

## Issues

1. Whether the settlement’s terms and amount and the attorneys’ fees paid from the settlement were relevant and discoverable under Federal Rule of Civil Procedure 26(b)(1) in a fee and lien dispute.
2. Whether a contractual confidentiality clause, by itself, bars discovery of otherwise relevant settlement information.

## Decision

- The court granted the attorneys’ motion to compel, subject to appropriate confidentiality protections.
- The court held the settlement terms/amount and fee-allocation information were relevant to the contract, quantum meruit, and charging-lien claims.
- The court held that a settlement confidentiality clause does not create a privilege and does not, standing alone, preclude discovery.
- The court indicated that any legitimate confidentiality interests should be addressed through Rule 26(c) protective measures rather than categorical nondisclosure.

## Legal Principles

- Discovery under Rule 26(b)(1) is broad; information is discoverable if it is nonprivileged and relevant to claims or defenses and may lead to admissible evidence.
- Settlement terms and amounts may be discoverable when they bear directly on valuation and proof of attorney-fee claims, quantum meruit, or charging-lien enforcement.
- A confidentiality provision in a settlement agreement does not itself create a discovery privilege or immunity.
- Courts may protect confidential settlement information through Rule 26(c) orders (e.g., limiting use to the litigation, restricting access, or sealing filings) while permitting necessary discovery.

## Conclusion

The court compelled disclosure of a confidential settlement’s terms and related fee information because it was relevant to attorneys’ fee and lien claims, holding that confidentiality clauses do not bar discovery but may warrant tailored protective orders.


Young v. State Farm Mut. Auto. Ins. Co., 169 F.R.D. 72 (S.D.W. Va. 1996)