Confidential Settlements Could Yield to Public Safety

Published: 1:00 am Mon, May 21, 2001

By JASON M. SCALLY Massachusetts Lawyers Weekly

A state agency’s interest in identifying an allegedly negligent ambulance company protected under a confidential settlement agreement has triggered the question of whether such contracts can be “unsealed” by regulatory bodies.In an exclusive story, Lawyers Weekly on May 7 reported a $10.2 million personal injury settlement involving an unidentified ambulance company, the name of which was kept under wraps in the settlement agreement (see “ Discovery Of Altered Record Leads To $10.2M PI Settlement“).The story prompted the Department of Public Health to look into discovering the identity of the defendant company.“Our mandate and our mission is to prevent errors from occurring on board ambulances,” said Roseanne Pawelec, spokeswoman for the DPH. “We feel cheated in the ability to do our jobs and meet our responsibilities.”Pawelec noted that it would be difficult to obtain the information, and even more difficult to do anything with the name of the company if and when it becomes available because of a law that allows ambulance companies to dispose of records after three years.Nonetheless, she remarked that “the legal department [of the DPH] hasn’t closed the door on this.”The agency’s probe has plaintiffs’ and defense lawyers assessing whether the state can or should uncover information protected under confidentiality agreements.Douglas K. Sheff, president of the Massachusetts Academy of Trial Attorneys and leading proponent of limiting the reach of secret settlement agreements, said the state’s regulatory interest and the interest of private parties to reach agreements must be balanced.But “can anyone argue that a state or federal agency is not entitled to information regarding a public settlement in the event that the rest of the public is at risk of some harm or death?” Sheff asked.He that MATA has sponsored a bill to ban confidentiality agreements in cases involving public safety issues, except in limited circumstances.Ralph F. Sbrogna, a Worcester plaintiffs’ attorney, said that although it is common knowledge that attorneys cannot enter confidentiality agreements in medical malpractice cases, “it’s interesting that in the case of another medical provider that they could get away with that.”Sbrogna said that when public safety is at issue, the regulatory body charged with running investigations when an incident is reported should be able to “find out what happened.”But Boston defense attorney James B. Peloquin of Boston countered: “It’s a private agreement and parties expect it to be honored. Confidentiality shouldn’t undercut the authority of that agency, but I don’t think that agency should have superior rights over anyone else.”John P. Noyes of Boston, another defense attorney, said that “once it’s a done deal, I don’t know if the government ought to be able to go in on every instance, carte blanche, to get that information.”Even though he supports the use of confidentiality agreements, Noyes said “perhaps there should be a standard for the piercing of confidentiality agreements” when courts have to weigh the public interest against the private interests of parties in maintaining secrecy.

Incident Unreported

The case leading to the $10.2 million settlement involved an infant suffering from febrile seizures who was allegedly injured severely after paramedics arrived late to the home of the infants and forgot the key to the medicine cabinet on the ambulance.According to Marc L. Breakstone of Boston, the plaintiffs’ attorney, the paramedics’ alleged negligent delay in treating the infant led to prolonged oxygen debt and resulted in the child becoming a spastic quadriplegic.Because the individual paramedics were protected by statute, a lawsuit was brought against the ambulance company.Although most information pertaining to the case remained hidden under a confidentiality provision in the settlement agreement, Breakstone was permitted to disclose basic facts and the settlement amount to Lawyers Weekly.It is believed that no one, including the child’s parents, reported the incident to the DPH or any other reporting agency.Unlike physicians, emergency medical providers are not required to report incidents to a regulatory body, although a bill that would beef up regulation of them is currently in its “infant stage” according to Pawelec, the DPH spokeswoman.

No Secret Filings

Richard P. Campbell of Boston, a defense attorney who has handled products liability cases, pointed out that “the litigation itself can never be confidential … unless there is a court order sealing these pleadings.”He acknowledged that an agency such as the DPH – which issues licenses to ambulance companies – may have some standing to discover the identity of the ambulance company procedurally.“I don’t know how they could do that without going into court,” Campbell observed.Noyes agreed.“Courts always have the ability to delve into matters in the interest of public safety,” he said. “They have a balancing interest.”In his practice, Campbell said he never runs into a situation where a government entity is interested in finding out the names of the parties.“Many of the companies we represent are very heavily regulated,” Campbell said. “We don’t see government agencies calling us up to see what happened. It just doesn’t happen because they do it on their own.”He noted that the situation involving the confidentiality of the ambulance company’s name is different because it’s not the typical case where a party is seeking to protect trade secrets, blueprints, marketing reports or settlement amounts.Noyes drew the distinction between criminal cases where the courts have been reluctant to seal public records and civil cases where the records are private agreements between the parties.“A private agreement is different and unless there is good cause shown, the courts should honor agreements between the parties,” the Boston attorney asserted.