Sunshine in the Courtroom (Makes Us Happy)

Currently pending in the Senate is the latest version of the Sunshine in Litigation Act (S. 623), a bill that would make it more difficult for courts to prevent the disclosure of settlement agreements and other civil litigation documents in cases relevant to public health and safety. Bill sponsor Sen. Herb Kohl (D-WI) has been trying to pass similar legislation since 1993.

The bill would require judges to consider public health and safety before granting a protective order or sealing court records and settlement agreements. The decision to grant or deny a secrecy request would be based on a balancing test weighing the public’s interest in disclosing a potential public health and safety hazard against a legitimate privacy interest. It would only apply, proactively, to cases relevant to public health and safety, and it includes protections for national security and personal information. Despite these limitations, the business community strongly opposes this bill, as does the American Bar Association.

According to the Senate Judiciary Committee report accompanying the bill, there are concerns that “the courts have not adequately considered the importance of transparency,” particularly in product liability cases. Civil lawsuits are often the only way the public can learn about unsafe products. The report lists instances when court orders restricting disclosure left the public in the dark about serious health and safety dangers, such as the hazards posed by silicone breast implants, the unreported side-effects of prescription drugs, defective heart valves, and unsafe automobiles.

These cases typically involve one or a few individuals suing a formidable corporate opponent. Facing mounting medical and/or legal bills, plaintiffs often have no choice but to settle the lawsuit. In exchange for a financial settlement, plaintiffs are generally bound by provisions that prohibit them from revealing information discovered during the case, including critical health and safety information potentially affecting the public at large. The quick settlement of cases is near and dear to the hearts of judges always looking for ways to cut down their case loads.

In particular, the Judiciary Committee report cites the case of Zyprexa, an antipsychotic drug sold by Eli Lilly. In December 2006, The New York Times wrote a devastating series based on leaked documents showing that, for over a decade, Eli Lilly downplayed Zyprexa’s harmful side-effects, including inordinate weight gain and diabetes. The documents came to light in a lawsuit in which the judge allowed the documents to remain under seal. After excoriating The New York Times and punishing the leakers, the judge eventually unsealed the documents—almost two years later.

POGO is well aware of how common confidential settlements are, because they account for a sizable portion of the instances in our Federal Contractor Misconduct Database. Roughly half of the 1,000-plus instances in the FCMD are civil settlements. If you do a search of instances with an “undisclosed/unknown” dollar amount, you will find dozens of instances since 1995 in which the terms of the settlement agreement–at least the amount of money the company had to pay–are kept confidential. These instances cover nearly every kind of misconduct: government contract fraud; poor contract performance; environmental, labor, human rights and ethics violations; and antitrust. Products liability cases are in there, too. Of course, the Sunshine in Litigation Act would only apply to a small subset of these cases (convincing a judge that overcharging on a federal contract somehow implicates “public health or safety” might be a bit of a stretch).

Sometimes we forget there are three branches of government. The Sunshine in Litigation Act reminds us that we need transparency in the courts just as much as we need it in the White House and executive departments and in the halls of Congress.