Members of the Committee, it is my honor and privilege to present my views on the “Sunshine in Litigation Act of 2008” and confidentiality in litigation. Having been a practicing attorney for the past 24 years, I have had extensive experience in litigations involving protective orders and confidential settlements.
As a member of The Lanier Law Firm, we were at the forefront of the Vioxx litigation, having tried 3 of the 5 successful verdicts against Merck Pharmaceuticals. Our firm is also integrally involved in the Heparin, Avandia, Digitek, Trasylol, Bextra, Renu, Ortho Evra, and Zicam litigations. Additionally, we are involved in an action against Fannie Mae where the entire case is under seal. I present my testimony on behalf of myself and The Lanier Law Firm.
Secret settlement agreements that conceal a public hazard, or any information that would identify a public hazard, are both dangerous and unethical because they allow for the continuation of practices and circumstances that unnecessarily place members of the public at risk, usually to save a corporation from economic loss. They impair and frustrate civil justice, and throw a veil over the court system that is both corrosive and discrediting. While some may argue that secrecy agreements are sometimes necessary to encourage wrongdoers to settle with injured plaintiffs, it is bad public policy to allow those who are causing injury to hide their defective products and their dangerous practices from the public and government regulators.
How Secrecy Agreements Are Used
Secrecy agreements are used in a wide variety of civil actions for personal injury and wrongful death compensation. Among these are claims for compensation for injury resulting from defective consumer products, sexual abuse, toxic contamination, employment discrimination and medical malpractice.
Parties to a lawsuit can enter into a secrecy agreement at almost any point during
• During the pre-trial discovery phase, a judge may be asked to issue a protective order which forbids the plaintiff from sharing information disclosed during the case with anyone, even government regulators.
• At the conclusion of a trial, a defendant can request the plaintiff to agree to an order to seal all records in a case, including all exhibits and transcripts. Sealing orders can go so far as to remove all trace that a lawsuit even existed.
• After a trial, a defendant can ask for a confidentiality agreement that prohibits victims from saying or revealing anything publicly about the case. A confidentiality agreement can prohibit a victim from cooperating with government safety regulators and even law enforcement agencies.
The Negative Effects of Secrecy Agreements on Public SafetyLitigation secrecy has kept information hidden from the public that could have prevented injuries and deaths to thousands of people. Tires, over-the-counter children’s cough syrup, Playskool Travel-Lite baby cribs – defects in these and innumerable other products were known yet kept killing and injuring people because secrecy agreements kept the public and regulators from learning about their dangers.
Many lives could have been saved in the late 1990s when information about the dangerous combination of Ford vehicles and Firestone tires uncovered during litigation were kept hidden from the public through secret settlements and overbroad protective orders. By 2001, the National High Traffic Safety Administration (NHTSA) “determined that Firestone shredding tires had caused at least 271 fatalities, most of which involved cases settled secretly.” 1
16-month-old Danny Keysar was strangled to death when his Playskool Travel-Lite baby crib collapsed in 1998. Danny’s parents later learned that three prior lawsuits involving the same defect had already been settled secretly. The crib’s manufacturers, Kolcraft and Hasbro even offered them a settlement with a secrecy provision but – in a rare instance – Danny’s parents fought successfully to deny the manufacturer’s request for secrecy. A total of 16 children have been killed by these cribs. 2
Hours after taking an over-the-counter children’s cough syrup, Mrs. X’s 7-year-old son experienced a hemorrhagic stroke, fell into a permanent coma, and died after being on life support for three years. The stroke was induced by phenylopropanolamine, an ingredient that was later banned by the FDA. Similar lawsuits had already been filed against the drug manufacturer, but these lawsuits were settled secretly. Since her son died in a jurisdiction that significantly capped damages, Mrs. X’s limited financial position forced her to accept a secret settlement in 2005. The secrecy provision in her settlement is so broad that she cannot disclose any details related to her suit, including her identity.
More recently, in my home state of New York, Consolidated Edison admitted that it had secretly settled 11 legal claims involving stray voltage, a fact that came to light only after 30-year-old Jodie Lane was killed in the East Village in January, 2004 after she stepped on an electrified service box cover while walking her dogs. The tragedy of this incident and the corporate cynicism that allowed it to happen is further emphasized by the fact that it was only after Jodie’s death that Con Ed announced a comprehensive investigation of its service boxes.
Secrecy agreements can also help a manufacturer of a defective drug, medical device, auto, or other consumer product to “hide” information from a federal regulator with the authority to ban or recall the product. Federal laws like the Food and Drug Act, Motor Vehicle Safety Act, and the Consumer Product Safety Act require a company to report to the relevant federal regulatory agency a known or suspected product hazard. In essence, secrecy agreements facilitate evasion of laws designed to protect consumers.
The Need for the Sunshine in Litigation ActThe Sunshine in Litigation Act would enable journalists, lawyers and government investigators to learn promptly about public hazards that are revealed during litigation. Knowledge of such hazards could then be widely disseminated, possibly leading to government action that removes a defective product from the market. When hazards are reported in the media, the public can be warned not to use or purchase a defective product. Fear of adverse publicity and legal liability can also be a powerful motivator for manufacturers to design and test their products properly. The Sunshine in Litigation Act would also:
• Help ensure that truthful and complete testimony is given in court.
• Advance justice by allowing parties and their counsel to pool information about a defective product and level the playing field between large corporations (who already have this advantage) and the injured party being represented by a small law practice
• Save taxpayers money by eliminating duplicative discovery and motions practice that may clog the judicial system
Help regulatory agencies save precious time and resources trying to overturn secrecy orders when vital health and safety information has been sealed.