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The Recorder

Like thousands of others, this settlement would be secret, the opposing attorneys agreed.

So a private school in La Jolla confidentially paid the parents of a 9-year- old black girl $7,500; in return, the parents dropped their claim that the school’s admissions department had discriminated against her.

But in a striking departure from what usually goes on in California, San Diego Superior Court Judge Richard Strauss earlier this month overrode the wishes of the parties and unsealed the agreement at the request of a newspaper. He ruled that under California case law and local court rules, a mere “agreement between the parties doesn’t suffice” to seal a record and, absent a showing of a compelling reason for secrecy, the public has a right to see the compromise.

San Diego County has been a pioneer in adopting local court rules that disfavor the sealing of records. By extension and especially if there’s an experienced First Amendment attorney on hand, as in the La Jolla case, the rule can be interpreted as applying to anything that comes before a judge, including some out-of-court settlements and even discovery. Now, a proposal is pending that would effectively apply San Diego’s rule in courtrooms statewide, and it’s drawing heavy lobbying from the plaintiffs bar and consumer groups on one hand and insurance and manufacturing interests on the other.

“Usually, the interest in proposed civil court administrative rules is, well, limited,” says Patrick O’Donnell, the lawyer to the committee that has drafted the rule change for the state Judicial Council to consider.

When the draft proposal discouraging sealing went out for comment this summer, O’Donnell says the council found itself hearing from “the sort of major players who usually concentrate on the Legislature.”

Supporters of the proposal include the Consumer Attorneys of California, a number of local bar associations, the California First Amendment Coalition, and the Foundation for Taxpayers and Consumer Rights. Among those who want it dropped or amended so that it explicitly does not apply to settlements or discovery are the Civil Justice Association (previously the California Tort Reform Association), the California Chamber of Commerce, and the National Association of Independent Insurers.

The Consumer Attorneys of California, which characterized the proposal as “a good first step,” has, along with its national counterparts at the Association of Trial Lawyers of America, opposed confidential settlements for a decade. While individual attorneys may be forced to agree to a confidential settlement to cut the best possible deal for their clients, the associations contend the practice allows wealthy defendants, including the manufacturers of dangerous products, to buy silence.

“What has been coming out in the last couple of weeks about Firestone tires is an example of why sealing in individual lawsuits compromises the broader public interest,” says CAOC’s counsel, Nancy Peverini.

Tort reformers, however, dismiss the attorneys as wanting to foster more litigation by having settlement-minded defendants publicly identified and information that is uncovered in discovery widely distributed. The courts should not be turned into an investigative arm of government, says John Sullivan, counsel for the Civil Justice Association. “And besides,” he adds, ” judges currently have the power to make public any material in a confidential settlement deemed important to the public health and safety.”

In 1991, the trial lawyers backed anti-secrecy legislation sponsored by Attorney General Bill Lockyer, then a state senator, that passed the Legislature only to be vetoed by then-Gov. Pete Wilson. This term, Sen. Adam Schiff, D-Burbank, carried a similar bill for CAOC that explicitly barred the sealing of any court-approved settlement in product defect, environmental hazard and financial fraud suits.

The bill passed the Senate and the Assembly Judiciary Committee, only to have Schiff defer to the Judicial Council’s effort (which as currently drafted says nothing explicitly about settlements but does apply to all civil cases). The draft and the comments about it are on the discussion calendar for the council’s Oct. 27 meeting.

Among those who expect it to pass without further ado is Terry Francke, executive director of the First Amendment Coalition. While anything can happen, he noted, typically the council shows “great deference” for its committees’ recommendations.

The proposal as drafted does not explicitly refer to settlements or discovery per se, and O’Donnell says the bulk of the 64 comments that came in — from those favoring the status quo as well as those seeking more openness — urged that any ambiguity be resolved in favor of their position.

But O’Donnell says the Judicial Council’s committee didn’t intend anything revolutionary. He points out that the draft states it is merely stepping into a gray area to codify last year’s state Supreme Court opinion in NBC Subsidiary Inc. v. Superior Court, 20 Cal.4th 1178.

That was a celebrity case that found a trial court violated the public’s First Amendment right to attend a civil proceeding when it closed the courtroom during the hearing of a breach of contract suit actress Sondra Locke brought against Clint Eastwood. The lengthy and unanimous opinion written by Chief Justice Ronald George stated that to close a proceeding, there must be a showing that something, say, the right to privacy or to preserve trade secrets, outweighs the public’s right to know. It was George who asked the council to develop a rule for the application of the court’s opinion statewide.

How that applies to settlements and discovery depends on who is doing the analyzing.

Guylyn Cummins is the Gray Cary Ware & Freidenrich attorney who represented the San Diego Union-Tribune and persuaded Judge Strauss to unseal the La Jolla school settlement. She calls NBC Subsidiary the latest opinion in a ” sweeping movement over the last 20 years toward more and more access.”

The right to keep settlements open has been there all along, she continues, and it has just taken a while for courts to see that settlements fit into the same category as voir dire, preliminary hearings, and other adjuncts to the trial itself.

Judge Strauss agrees, insisting that San Diego’s decision to shift the burden to attorneys to prove settlements should be sealed doesn’t go beyond NBC Subsidiary and its predecessors, including a 1998 appellate case that Cummins won, Copley Press Inc. v. Superior Court, 63 Cal.App.4th 367. Better known as the Poway case, after the school district involved, it stated that a juvenile assault victim’s right of privacy did not outweigh the news media’s right of access to a settlement reached by a government entity.

On the other side, tort reformer Sullivan says he considers NBC Subsidiary to be sound and the Judicial Council’s effort to promulgate it a good thing — provided everyone understands it does not apply to settlements and, especially, to discovery. “I see nothing there that shifts the burden to the stipulating attorneys,” he says.

The La Jolla decision by Strauss “went too far,” Sullivan continues.

“If that’s the standard, it’s unworkable. It’ll discourage settlements and clog the courts.”

Whether a statewide rule disfavoring sealed records will clog the courts is unclear at best, however. While Los Angeles, San Francisco and Santa Clara counties followed San Diego in adopting such local rules, attorneys — among them John Collins, who represented the La Jolla private school — suggest that enforcement ultimately depends on whether there is a newspaper reporter with an attorney on the scene.

Consumer Watchdog
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