Judge rejects Highmark's attempt to seal records

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In an ongoing civil case over whether Highmark Health's profits are excessive, a judge has ruled against Highmark's request for a protective order sealing "confidential information" and preventing proprietary figures from being discussed during oral arguments.

On Tuesday, Commonwealth Court Judge Robert Simpson sided with the two primary appellant plaintiffs -- and the Pittsburgh Post-Gazette, which later intervened in the case -- in ruling that the issue of Highmark's profits has "statewide importance," and that old financial data has "diminishing value" that doesn't require blanket redaction.

The case dates to 2011, when the state's largest health insurer was sued by Philadelphians Herman Wooden and Thomas Logan, both former nonvoting "lay" members of a since-disbanded Highmark advisory committee serving the company's board of directors.

Last year, Philadelphia Court of Common Pleas Judge Patricia McInerney ruled that Highmark has not accumulated "excess profits" in violation of state law, and tossed the case.

The plaintiffs -- who argued that the $1.2 billion in profits that Pittsburgh-based Highmark had earned from 2005 to 2009 was excessive -- appealed to Commonwealth Court, at which point Highmark applied to seal the record on appeal.

Commonwealth Court granted that appeal on Oct. 31, at which point the Post-Gazette intervened. In December, the court later noted that, while the appeals record was sealed, oral arguments going forward "shall be public, unless that status is changed by further order of the court, upon cause shown."

Highmark, in seeking to show cause, argued that court documents and related testimony may be "confidential, proprietary in nature, and of independent economic value to Highmark, as well as its competitors."

The Post-Gazette argued that the public has a right to access courtroom proceedings, and noted that arguments at the Philadelphia trial court level were not closed to the public, suggesting that the appellate hearings shouldn't be closed, either.

In his ruling, Judge Simpson wrote that the chances of damaging information being revealed during a 15-minute oral argument were remote and don't "outweigh the public's interest in the case ... the court encourages counsel to use their best efforts to minimize or avoid discussion of sensitive or confidential material at argument."

Mr. Wooden and Mr. Logan said that Highmark is in violation of a provision of the state nonprofit law that says "a nonprofit [may] make an incidental profit [that] in no case shall be divided or distributed in any manner whatsoever among the members."

Billions in profits, they argued, are more than "incidental," but the Philadelphia court said that "incidental" should not be confused with "insubstantial," and noted that Highmark's executive salaries were in line with similar organizations.

Highmark could not be reached for comment Tuesday.

Bill Toland: btoland@post-gazette.com or 412-263-2625.

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