March 10, 2008

Kohl moves against court confidentiality agreements

It happens far too often: Somebody gets hurt by a defective product and sues the manufacturer. Eventually, he or she settles for a pot of cash. In return, the manufacturer obtains a confidentiality agreement keeping details of the settlement secret. Everybody wins.

Everybody but you and me.

The legal landscape is littered with examples of product safety settlements that hid really serious problems for years -- problems which injured, and sometimes killed, many more people before they finally came to public attention.

The most famous case involved Bridgestone/Firestone tires: From 1992 to 2000, tread separations caused many accidents. The company quietly settled dozens of lawsuits, most of which included secrecy agreements. It was not until 1999, when a Houston public television station broke the story, that the company recalled 6.5 million tires. By then, it was too late for the more than 250 people who had died and 800 more who were injured in accidents related to the defective tires.

Last week, Congress began to act on the problem. The Senate Judiciary Committee approved legislation by Sen. Herb Kohl, D-WI, to prohibit courts from shielding important health and safety information from the public as part of legal settlement agreements.

Kohl’s bipartisan Sunshine in Litigation Act will require judges to consider public health and safety before granting a protective order or sealing court records and settlements. They have the discretion to grant or deny secrecy based on a balancing test that weighs the public’s interest in a potential public health and safety hazard and legitimate interests in secrecy. The Act is co-sponsored by Sen. Lindsey Graham, R-SC, and Senate Judiciary Committee Chairman Patrick Leahy, D-VT.

“Far too often, our courts permit vital information that is discovered in litigation -- which bears directly on public health and safety -- to be covered up,” Kohl said. “This legislation simply says that while litigants may want total confidentiality when resolving their disputes in court, information about public health and safety dangers does not deserve court-endorsed protection. This bill creates the appropriate balance between secrecy and openness in cases involving public health and safety.”

Besides the Bridgestone/Firestone tires case, other examples of recent court-endorsed secrecy agreements include:

Over-the-Counter Children’s Medicine: In 1996, a seven year old boy in Washington state suffered a sudden stroke and fell into a coma hours after taking an over-the-counter medicine used to treat an ear infection. After three years in a coma, he died. The child’s mother sued the manufacturer of the medicine alleging that the stroke was induced by PPA, an ingredient with deadly risks which was later banned by the FDA. Unknown to the boy’s mother, the public, and perhaps even to the FDA, many similar lawsuits in state and federal courts had previously been filed against the drug manufacturer, but were settled secretly, with the lawyers and plaintiffs subject to restrictive confidentiality orders.

Defective Baby Cribs: In May 1998, 16-month-old Danny Keysar was strangled to death at his licensed childcare facility when a Playskool “Travel-Lite” portable crib collapsed, trapping his neck in the “V” of its folded rails. Danny’s parents sued the crib manufacturers, Kolcraft. During discovery, they learned that three prior lawsuits involving the same product defect had been settled secretly. Kolcraft offered Danny’s parents a settlement, but only on the condition that they agree to a secrecy provision. The parents would not accept a settlement that mandated their silence. Despite intense pressure to agree to a secret settlement, on the eve of trial, the parties reached a non-secret $3 million settlement agreement.

Zyprexa: In 2005, the drug company Eli Lilly settled 8,000 cases related to Zyprexa, a drug used to treat schizophrenia and bipolar disorder. These cases alleged that Eli Lilly did not disclose known harmful side-effects of Zyprexa, such as inordinate weight gain and dangerously high blood sugar levels that sometimes resulted in diabetes. Eli Lilly was also accused of promoting off-label use of the drug by urging doctors to prescribe it to elderly patients with dementia. All of the settlements required plaintiffs to agree “not to communicate, publish or cause to be published…any statement…concerning the specific events, facts or circumstances giving rise to [their] claims.” The public did not learn about these settlements or Zyprexa’s dangerous side effects until two years later, in 2006, when The New York Times leaked documents from the case that were subject to a protective order.

Cooper Tires: In 2002, Johnny Bradley’s wife was killed, and he and his son were injured, in a Ford Explorer rollover accident. The accident was allegedly caused by tread separation in the SUV’s Cooper Tires. While litigating the case, Mr. Bradley’s attorney uncovered Cooper Tire documents that showed Cooper tires were prone to tread separation because of design defects. These documents had been kept secret through protective orders in numerous cases prior to the Bradley’s car accident. In Bradley’s case against Ford and Cooper Tire, the jury found that Ford was not liable for the accident. Before the trial proceeded to the claims against Cooper, Cooper settled with Mr. Bradley on the condition that almost all litigation documents be kept confidential under a broad protective order. Mr. Bradley and his lawyer, familiar with the documents and unable to speak about the details due to protective orders, believe that if the documents were made public Cooper Tire would be forced to fix the tread separation problem.

Earlier examples of court secrecy agreements that resulted in injuries or fatalities include:
· Defective heart valves
· Dangerous playground equipment
· Side-saddle gas tanks prone to causing deadly car fires
· Complications from silicone breast implants
· “Park to reverse” problems in pick-up trucks
· Dangerous birth control devices

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