- The Washington Times - Monday, October 14, 2002

Federal courts are moving to end the practice of sealing deals in lawsuits that involve dangers to public health or safety.
South Carolina federal judges voted unanimously to forbid secret settlements, and the busy South Florida district is considering adopting a similar rule to open the files of civil lawsuits settled out of court. The U.S. Judicial Conference Rules Committee twice rejected the idea but now is doing a study on which it will act in the spring.
"Rarely do we, as judges, have the opportunity to enact a rule change that might prevent injury or even death," South Carolina Chief District Judge Joseph F. Anderson Jr. told 12 fellow judges, blaming secrecy for some of the 101 deaths and 250 injuries attributed to Firestone tires.
"Some of those people may have avoided death or injury if the judges in the early Firestone tire cases had not agreed to seal the record," Judge Anderson wrote to his colleagues.
Firestone spokeswoman Chris Karbowiak called that a false premise.
"None of the records ever were sealed in a Firestone case. The only thing that has ever been sealed or confidential in the Firestone tire cases has been the dollar number attributed to the settlement," Miss Karbowiak said. "Plaintiffs like that. Folks don't want to get hit up by friends, neighbors, or charities for a share of the settlement."
That was disputed by James E. Frasier, the Tulsa, Okla., lawyer who won several confidential settlements from General Motors for what he calls "rolling firebombs," millions of C/K-model pickup trucks whose saddlebag fuel tanks were implicated in fire-related deaths.
"My clients don't want the deals kept secret. That is driven by the defendants who have the money that is needed by the victim. They often pay extra to keep it secret," Mr. Frasier said.
Defendant companies or physicians in malpractice cases often make settlements contingent on secrecy to keep other claimants from learning their vulnerability, assessing the value of another claim, or easily obtaining documents exchanged before settlement.
Joyce E. Kraeger, a lawyer for the Alliance of American Insurers, said her industry also is concerned primarily with not revealing amounts, which she said encourage copycat lawsuits and drive up business costs.
"If there is a valid threat to public safety, we're not saying those things should be concealed from the public. We're not trying to hide the outcome," Mrs. Kraeger said.
The dispute may center on whether a transaction under court auspices is truly private.
"If the two private parties decide that for whatever reason the solution shouldn't be public, should a court say 'we can't honor that?' Why should the court take a stand, and inject itself? That kind of policy should be up to Congress," Judge Paul V. Niemeyer of the 4th U.S. Circuit Court of Appeals said in an interview.
Judge Niemeyer is a former member of the Judicial Conference, which twice rejected versions of a national rule, leaving the question to individual judges.
"This is not public litigation, but concern for a private practice established historically to provide an alternative to duels. I think it's dangerous to the whole system of dispute resolution that every private dispute has to be assessed for its public significance," Judge Niemeyer said.
Fairfax lawyer Gilbert K. Davis disagrees with Judge Niemeyer, saying that litigants are "asking the court to put its imprimatur on a settlement."
Another federal judge who asked that he not be identified echoed Mr. Davis, saying, "I don't think it's private. When I sign the order accepting a settlement it carries the power of the federal government."
South Carolina's Judge Anderson ridicules claims that physicians charged with malpractice or companies would rather go to public trial than settle, and said the very fact that courts will allow a case to be sealed is used to coerce settlements with plaintiffs, and acceptance of those settlements by judges who otherwise would forbid a secret deal.
"If we take the secrecy agreement off the table as a bargaining chip, individual judges would avoid this quandary," Judge Anderson said. "Here is a rare opportunity for our court to do the right thing and take the lead nationally when the Arthur Andersen/Enron/Catholic priest controversies are undermining public confidence and causing a growing suspicion of things that are kept in secret by public bodies."
Thomas K. Byerley, who oversees ethical issues for the Michigan bar, agreed with that and said lawyers often are caught in a cross fire when such conditions are proposed.
"My sense of the trend is that courts are being a lot more reluctant to seal a file," said Mr. Byerley, who has long supported that result.
Mr. Byerley said a typical settlement offer, made contingent on secrecy, would not concern a client but his lawyer might not want to agree to some of terms, including return of documents and agreeing not to file cases for other clients on the same issue.
Congress rejected two efforts to legislate a similar rule. Sen. Herb Kohl, Wisconsin Democrat, first moved for a Sunshine in Litigation Act in 1990 and plans to try again by the end of this year. His 1994 effort lost 51-49 on the Senate floor.
"From defective heart valves to hazardous playground equipment to unsafe automobiles, these secret settlements allow vital information to be kept from consumers and from the public officials we have appointed to ensure our safety, and our courts are helping hide this vital information," Mr. Kohl told The Washington Times.
Companies subject to Consumer Product Safety Commission regulations must report such settlements to the CPSC if they have three or more in any 24-month period. Fifty companies have reported under that law since 1991 and those reports also are secret, commission spokesman Scott Wolfson said.


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