Discovery Disclosure and Deterrence

Courts, practitioners, and scholars have recently expressed concern over the ex post costs of discovery in civil litigation. In this Article, we develop a game theoretic model of litigant behavior to study an overlooked phenomenon-the ex ante effects of discovery on a defendant's incentive to engage in unlawful conduct. We focus on motions to seal, which limit the disclosure of discovered information to the public, but permit disclosure to the court and parties. Specifically, we examine the effect different rules regarding such motions have in deterring defendants from engaging in unlawful behavior.

We show that as a rule becomes more permissible in granting motions to seal, a potential defendant has greater incentive to engage in unlawful actions that would result in reputational loss. The welfare effect of this result, however, is ambiguous because protecting a defendant from such reputational losses may be welfare enhancing. After setting forth the model, we discuss extensions and provide some thoughts on further directions for research.