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Courts are allowing corporations to keep their “dirty secrets” secret – and consumers are paying the price with their lives. Despite potentially deadly consequences, courts are allowing vital information revealed during lawsuits to be kept under lock and key and out of public view. Secrecy agreements are reached by the parties, and approved by the courts, which protect corporations and other defendants from facing public scrutiny after settling lawsuits involving deadly and dangerous products, incompetent doctors or bad prescription drugs. Often, defendants agree to settle only if a secrecy agreement is negotiated – leaving injured consumers and their attorneys little alternative but to go along – sealing forever information that could be life-saving for consumers.
There is a movement within the judicial system to open more court records, however corporate and other defendants continue to find judges that will grant them the right to hide information that consumers have the right to see.
These documents – which secrecy agreements make confidential – might tell the public that they are using dangerous products or that they are being defrauded by a company’s practices. At the request of corporate attorneys, many courts grant blanket protective orders relating to large number of documents and other information, despite the fact that companies asking for these orders “[bear] the burden, for each particular document it seeks to protect, of showing that specific prejudice or harm will result if no protective order is granted.” [i]
In a news story in the Newark, New Jersey Star Ledger, Richard Zitrin, director of the Center for Applied Legal Ethics at the University of San Francisco Law School, blames secret settlements for concealing from the public defects that exist in tires, heart valves, intrauterine devices, prescription drugs, and automobile gas tanks that explode in traffic accidents. [ii] As one consumer advocate noted, “Confidentiality kills, and maims and ruins people’s lives.” [iii]
Plaintiffs’ attorneys and legal experts say that both lawyers and judges agree to confidentiality agreements because of the pressure to settle cases and reduce the burden on courts. Corporate attorneys and conservative legal advocacy groups, such as the Washington Legal Foundation, not surprisingly argue in support of limiting public access to documents involved in court cases or settlements. But as Louisville, Kentucky’s The Courier-Journal noted, “[s]ecret justice is a contradiction in terms.” [iv]
In July of 1997, a GM Suburban carrying six Air Force officers flipped over when the tread on one of its tires separated. The vehicle rolled over, killing three passengers and injuring the remaining three officers. Four years ago the families of two of the officers who were killed accepted a $4.7 million settlement. The families had claimed that a defect in the tires caused the rollover. But the settlement agreement is sealed and any information Goodyear disclosed in the case is being kept secret. The company has not admitted any wrongdoing.
Goodyear manufactured the “Load Range E” tires from 1991 to 1999. The tires have been the cause of 87 reported crashes involving tread separation, leading to 158 injuries and 18 fatalities. The National Highway Traffic Safety Administration began an investigation of the tires in November 2000 and closed it two years later, just as Goodyear had decided to recall some – not all – of these tires (specifically, all Load Range E tires that were mounted on ambulances and 15-person vehicles); meanwhile, NHTSA explicitly stated that its closure should not be interpreted as a no-defect finding.
While federal safety officials could have been more diligent, at least one consumer advocacy organization has gone to court to force Goodyear to tell the public all it knows about these dangerous tires. Consumers for Auto Reliability and Safety (CARS) has intervened in the case of the two families of the Air Force officers who were killed, battling to unseal evidence in the case which may affect public safety for drivers using Load Range E tires. CARS, represented by the Trial Lawyers for Public Justice, argued against the blanket protective order in this case [Frankl v. Goodyear Tire & Rubber Company]:
In light of the multiple injuries involving tread separation of Goodyear tires and the possibility of many more incidents as yet unknown, there is a strong public interest in access to the pleadings and key discovery documents in this case. Unless the protective order entered in this case is vacated or modified and public access is granted, the public and the government will be hindered in their efforts to determine whether the tires in this case pose a serious danger to drivers and passengers throughout the nation and the world. [v]
While the trial court determined that the blanket protective order issued by another judge was too sweeping, it did allow many documents to remain sealed. CARS appealed that portion of the decision which allowed documents to remain sealed, while Goodyear appealed the decision to allow the public to see any documents. Goodyear claims these documents contain trade secrets – a common argument raised by corporate defendants. In its ruling the trial judge highlighted the extreme position of Goodyear:
Such blanket orders, drafted by imaginative counsel on boilerplate forms with sweeping terminology, have the capacity to envelop virtually every bit of information that turns up in a case with a veil of secrecy. [vi]
The judge further found that Goodyear only provided “vague and non-specific” reasons for wanting to maintain secrecy. On appeal, the Superior Court’s Appellate Division ruled in favor of Goodyear. The Appellate Court’s decision again underscores the dilemma facing the public as it seeks to hold corporate and other defendants accountable for their actions. According to the appellate court,
the public never has the right to challenge protective orders that govern discovery, even in cases involving public health and safety, and even when there is no good cause for secrecy. [vii]
The New Jersey Supreme Court granted review of this decision and heard oral arguments on April 27, 2004. A decision is pending.
State legislatures and the courts have begun to take action on this issue, seeking ways to curb corporate abuse of secrecy agreements and protective court orders. Currently 20 states either ban or limit secrecy orders. Florida for example, has implemented a “Sunshine in Litigation” law that severely limits the ability of parties to conceal information that affects public health and safety. In Michigan, a court rule requires that secret settlements be unsealed two years after they are approved.
Other states that have taken action include: Arizona, Arkansas, California, Connecticut, Delaware, Georgia, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Nevada, North Carolina, New Jersey, Oregon, Texas, Virginia, and Washington.
In 2002, the United States District Court for the District of South Carolina unanimously agreed to implement a new rule that prohibits the filing of any sealed settlement agreements.
[i] Foltz v. State Farm, Opinion of U.S. Court of Appeals for the Ninth Circuit, June 18,2003
[ii] “The Dilemma of Secret Settlements”, October 19th, 2003
[iii] Rosemary Shahan, founder of Consumers for Auto Reliability and Safety, quoted in The Star Ledger, October 19, 2003
[iv] Editorial, “Courtroom Cover-Ups,” September 8, 2002.
[v] Brief of Consumers for Auto Reliability And Safety In Support of Motion to Intervene, Vacate Or Modify Protective Order, And Seek Public Access to Documents
[vi] Quoted in The Star Ledger, October 19, 2003
[vii] Trial Lawyers for Public Justice, Spring/Summer 2004 newsletter at p. 14. View the whole newsletter at: http://www.tlpj.org/publications/sum04publicjustice.pdf
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