Commentary - June 3rd, 2014
9:59 am
Thu June 5, 2014

Court Secrecy Kills, Again

Al Smith, Montana Trial Lawyers Association.

In April I spoke about GM, its problem ignition switches and the lax federal regulatory system. GM hid dangerous defects from the public and federal regulators, and as a result Americans have needlessly died. Last month, federal regulators fined GM and further investigations are underway.

I also noted that GM's latest problems followed a familiar pattern. GM knew of the defect and kept it secret, they made a financial decision to not correct the defect, they got sued by the families of victims killed by the defect, they settled cases in secret to further hide the problem.

I have spoken many times over the years about how dangerous and defective products injure and kill unsuspecting Americans. Our lives, or those of our families or friends can be quickly and severely altered, or taken away, by a defective product. It's a dirty little secret that corporations hide dangerous product defects that injure or kill Americans - and they do it using our court system.

The mechanisms for hiding deadly products are called "protective orders" or "confidentiality agreements." But whatever the name, orders that seal litigation documents amount to secrecy that can conceal lethal defects in a wide range of consumer products. "Protective Orders" prohibit parties who receive information in a case from distributing it to others. "Confidentiality Agreements" require that certain matters, once discussed or agreed to by the parties, remain confidential. A confidentiality agreement, for example, may prohibit disclosure of the cause of injury, the terms of settlement, or even the fact that a claim was ever filed.

Secrecy in our state and federal courts undermines the right to know of every American citizen. Secrecy orders keep vital health and safety information out of the public realm. And, it leads to even more needless injuries and deaths caused by defective products.

It is deplorable when the manufacturer of a product knowingly markets a product with a dangerous defect, especially when it has a safer alternative design for the product. It is unconscionable when a manufacturer then chooses to hide from the public the unnecessary risk the product poses, and uses our court system to do it.

Our civil justice system provides the means for individual consumers to influence a corporation or government agency to remove a dangerous product from the market. But that can't be done nearly as effectively so long as corporations can use our court system to hide knowledge of dangerous products.

So how does this apply to GM? Some of its cars had faulty switches, and those faulty switches made cars accelerate suddenly. The faulty switches had one more problem – they also deactivated the safety airbags in these runaway cars. As the New York Times reported last month, the company kept the danger hidden from regulators, and from the public, by entering secrecy agreements with the victims or their families. GM would pay over large amounts of cash for the harm their defective switches caused, but victims and their families had to shut up – no talking or writing about the defect and anything GM knew about it.

This isn't the first time GM has used secrecy agreements to hide deadly product defects. For years GM secretly settled cases involving exploding side-mounted gas tanks, all the while denying any safety concerns with the gas tanks. Even with its history, it's not fair to pick on just GM. Many other corporations have used secrecy agreements to hide dangerous defects that kill. I've spoken before of Firestone's use of secrecy agreements to hide information about defective tires, and of Remington's use of such agreements to hide defects with their rifles.

The GM debacle has prompted a long overdue federal response. Senators Lindsey Graham and Richard Blumenthal, a Republican and Democrat respectively, have introduced a bill that would make it harder for companies to hide dangerous product defects behind secrecy orders in federal courts. The Sunshine in Litigation Act of 2014, would require federal judges to consider the public's interest in transparency before sealing court records in civil actions, or approving secret settlement agreements in cases affecting public health and safety. The act prohibits a federal court from entering a secrecy order unless the court has made independent findings of fact that the order would not restrict the disclosure of information which is relevant to the protection of public health or safety. A secrecy order could also be issued if the court finds the public interest in disclosure of potential health or safety hazards is outweighed by a specific and substantial interest in maintaining the confidentiality of the information.

Why is federal legislation needed? Well, Montana has legislation from 2005, the Gus Barber Anti-Secrecy Act prompted by defective Remington rifles, that prevents Montana courts from using secrecy agreements to hide dangerous, defective products. Several other states have similar laws. Unfortunately, a lot, if not most, of the lawsuits involving defective products are heard in the federal courts and these state anti-secrecy laws do not apply in the federal courts. Graham has cosponsored similar legislation in the past, but corporate concerns have so far prevented passage of federal anti-secrecy legislation. It is past time for Congress to step up and protect people not corporations.

If you haven't voted yet today, there's still time to get out and vote – please do!

This is Al Smith for the Montana Trial Lawyers Association.

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