24 Jun Settlement Agreements and Protective Orders No Longer Confidential?
The California legislature is poised to pass Public Right to Know Act of 2022
(Senate Bill 1149). If
this bill becomes law, it will have a significant impact on settlement agreements and protective
orders in product liability and toxic tort cases because it will essentially prohibit the use of
confidentiality to restrict the disclosure of case-related information.
The Public Right to Know Act of 2022 (the “Proposed Act”) would apply to all civil actions involving “a defective product or environmental hazard that poses a danger to public health or safety.” More specifically, it applies to all defective products and environmental hazards that have “caused, or [are] likely to cause, significant or substantial bodily injury or illness, or death.” As such, the Proposed Act would encompass—at a minimum—all California product liability and toxic tort cases.
In addition, the Proposed Act bars any attempt to restrict the disclosure of discoverable information related to a covered action. A defendant therefore cannot use a confidential settlement agreement or protective order to prevent the disclosure of (1) admissible evidence and (2) information that appears reasonably calculated to lead to the discovery of admissible evidence.
But there are a few exceptions. For example, settlement amounts can remain confidential. So can information related to trade secrets. There is also a balancing catchall exception. But this exception only applies if, for example, the defendant can show that the “disclosure is clearly outweighed by a specific and substantial overriding confidentiality interest.”
Given the prevalent use of confidentiality provisions in settlement agreements as well as the use of protective orders to govern and limit disclosure of confidential information and documents, the Public Right to Know Act of 2022 will have a profound impact on California product liability and toxic tort cases if it passes.
The Public Right to Know Act of 2022 (the “Proposed Act”) would apply to all civil actions involving “a defective product or environmental hazard that poses a danger to public health or safety.” More specifically, it applies to all defective products and environmental hazards that have “caused, or [are] likely to cause, significant or substantial bodily injury or illness, or death.” As such, the Proposed Act would encompass—at a minimum—all California product liability and toxic tort cases.
In addition, the Proposed Act bars any attempt to restrict the disclosure of discoverable information related to a covered action. A defendant therefore cannot use a confidential settlement agreement or protective order to prevent the disclosure of (1) admissible evidence and (2) information that appears reasonably calculated to lead to the discovery of admissible evidence.
But there are a few exceptions. For example, settlement amounts can remain confidential. So can information related to trade secrets. There is also a balancing catchall exception. But this exception only applies if, for example, the defendant can show that the “disclosure is clearly outweighed by a specific and substantial overriding confidentiality interest.”
Given the prevalent use of confidentiality provisions in settlement agreements as well as the use of protective orders to govern and limit disclosure of confidential information and documents, the Public Right to Know Act of 2022 will have a profound impact on California product liability and toxic tort cases if it passes.
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