Judge Refuses to Impound PI Settlement Documents
Finds ‘Legitimate Expectation Of Privacy’
By Lisa Healy
A Superior Court judge has rejected an assented-to motion of an auto manufacturer defendant to impound all documents relating to a wrongful death and products liability settlement.
After earlier refusing to approve a confidentiality provision as part of the settlement, Judge Thomas E. Connolly ruled that impounding the records was improper because the defendant’s privacy rights were outweighed by the public’s right to know about a potentially dangerous product.
The defendant had requested approval of the confidentiality agreement that the judge determined was “was so broad in scope that it could include every piece of paper in the case that any party deemed ‘confidential.’”
The plaintiff had agreed to the confidentiality provision, and assented to the motion to impound, in exchange for $400,000 from the defendant, and $80,000 from other defendants.
But Connolly denied the motion to impound, finding that “such an … order would serve as a secrecy mechanism that conceals information of harmful products or practices from the public and function[s] as a claim avoidance and claim management tool.”
The seven-page decision is Gleba, et al. v. Daimler Chrysler Corporation, et al., Lawyers Weekly No. 12-272-01.
‘An Important Distinction’
Counsel for the plaintiff, Lisa G. Arrowood of Boston, said “the decision makes an important distinction that lawyers have to recognize — that the parties may privately agree to confidentiality, but that doesn’t mean that the court has to agree to impoundment.”
Arrowood noted that although she and other plaintiffs’ attorneys do not favor secrecy agreements, her duty is to her clients, who often want to settle.
“Defendants’ attorneys often make the confidentiality of the settlement — often the entire dispute — a condition of settling,” Arrowood said.
“While that makes most plaintiffs’ lawyers cringe, you are representing one person with one lawsuit, and that person wants to settle that suit and usually they are willing to agree to confidentiality,” she remarked. “But that does not bind a court in terms of agreeing to impoundment, which is a high standard.”
Boston attorney Douglas K. Sheff, the immediate past president of the Massachusetts Academy of Trial Attorneys, observed that “the use of secrecy agreements as a claims management tool is inappropriate, and I applaud Judge Connolly for his well-reasoned and balanced approach.”
Responding to the argument that defendants forced to keep settlement agreement terms public are less likely to settle, Sheff said “not only are they likely to settle and fix their product, they are likely to settle the case earlier. If you were to know that everything in litigation is going to be made public and can’t be kept a secret, if you are a defendant with a legitimately defective product you will want to settle early.”
Sheff was significantly involved with MATA’s support of Senate Bill No. 862, which Connolly referred to in the decision.
The bill proposes substantial regulation of confidentiality and settlement agreements, and would make conditioning settlement of a products liability case on confidentiality of the settlement agreement a violation of G.L.c. 176D.
“Secrecy makes it that much harder for legitimately, catastrophically injured people and their attorneys to gather existing information sufficient to prosecute a successful and legitimate products liability claim,” said Sheff.
He added that in design defect cases, where every product is defective (as opposed to a manufacturing defect, for example), it is especially important that case information remain available.
“Eight years ago, Firestone settled their first serious injury or death case, and secured a secrecy agreement, and then they waited until someone else died, and then they got another secrecy agreement,” said Sheff.
“The only way the products liability field can protect people is to pass these ‘Sunshine in Litigation’ or anti-secrecy laws,” he emphasized.
Arrowood agreed that “this is a matter that can best by addressed by the Legislature or courts if this is an area in which the Legislature and courts feel that changes need to be made. It is common practice in Massachusetts for confidentiality of terms of settlement to be an absolute condition of settling, and in order to settle the case you are stuck with it.”
Boston attorneys Thomas A. Pursley and Peter M. Durney, counsel for the defendant, were unavailable for comment prior to deadline.
Confidentiality Agreement
On Nov. 20, 1996, Denise Ann Leslie was traveling south on Interstate 495 when she was involved in a multi-car accident.
Leslie was ejected from the vehicle she was driving, a 1988 Dodge Aries, through the right passenger door. She was struck and killed by the left tires of a tractor trailer.
Negligence suits were subsequently filed by the plaintiff, Henry F. Gleba, administrator of Leslie’s estate, against several defendants, including Conn West Freight Systems (employer of the driver of the truck that allegedly killed Leslie), Kenneth W. Fultz (driver of the truck) and Chrysler Corporation (manufacturer of the Dodge Aries).
A second claim was also filed against defendant Chrysler Corporation alleging that it had breached its warranty in the manufacture or sale of the 1988 Dodge Aries automobile, and in particular, that the front passenger door latch was defective.
After extensive discovery, the parties reached a settlement agreement. Defendant Chrysler Corporation agreed to pay $400,000, and the remaining defendants agreed to pay $80,000 to the plaintiff, who in turn agreed to sign a confidentiality agreement.
In March 1999 the parties proposed that the court approve a five-page “Confidentiality Agreement and Order.”
On March 19, 1999 Connolly declined to approve the agreement, stating that “[t]he parties are free to, and evidently have, reached an agreement. However, to ask this Court to approve this agreement and hence be required to enforce this overly broad and all-inclusive agreement by contempt or sanctions is another matter entirely.”
The judge added that “how any matter, which is the subject of this litigation, including documents concerning the ‘defectively designed and/or manufactured’ front passenger door latch, in an 11-year-old Dodge Aries could be the subject of a confidentiality ‘trade secrets’ agreement is beyond the court’s comprehension.”
The defendant (then known as Daimler Chrysler) moved to impound the approved settlement petition.
Principle Of Publicity
Connolly noted that “[t]here is a long-standing practice concerning the open conduct of judicial proceedings and the availability of judicial court papers to the public.”
He added that “[i]n determining whether impoundment is warranted, the court must balance privacy issues against the ‘general principle of publicity’ and consider whether ‘good cause’ exists for justifying the impoundment.”
The defendant argued that good cause for impoundment existed because without it there could be “disclosure of particulars regarding the settlement that the parties have agreed to treat as confidential.”
The judge noted that under Rule 7 of the Uniform Rules of Impoundment Procedure, agreement of all parties in favor of impoundment does not in itself constitute good cause.
Connolly found that “in this case, there is no ‘legitimate expectation of privacy’” and that there was nothing “intensively personal” about the nature of the information sought to be impounded.
The judge noted that the reasons asserted by the defendant for good cause were that “Daimler Chrysler did not want people to know what amount of money [it] was paying out on this case and that said knowledge might encourage other lawyers to bring further lawsuits on the claimed defect” and that “Daimler Chrysler might not settle lawsuits brought against it in the manner that it presently does” if impoundment was not granted.
“Basically, Daimler Chrysler brings its motion to impound for its own financial self interests. It does not want the public to know that Daimler Chrysler paid $400,000 to settle this case for the claim of a defective front passenger door latch,” Connolly wrote.
“Private defendants, especially manufacturers, frequently insist upon the use of confidentiality agreements and protective orders as a means of preventing dissemination of such important information, information which reveals the hidden dangers to other potentially affected members of the public,” he continued.
“Without question, the ‘general principle of publicity’ here outweighs any proferred ‘privacy’ reasons. The public has the right to learn of particularly harmful products or practice,” the judge found.
Connolly also noted that the issue of secrecy orders in product liability cases has prompted several states to take action to protect the public interest.
He noted that a pending bill in Massachusetts, S-862, seeks to regulate confidentiality and settlement agreements and protective orders in “cases of environmental hazard, financial fraud or defective products.”
