[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                   SUNSHINE IN LITIGATION ACT OF 2008

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                                   ON

                               H.R. 5884

                               __________

                             JULY 31, 2008

                               __________

                           Serial No. 110-202

                               __________

         Printed for the use of the Committee on the Judiciary

      Available via the World Wide Web: http://judiciary.house.gov



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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

           Subcommittee on Commercial and Administrative Law

                LINDA T. SANCHEZ, California, Chairwoman

JOHN CONYERS, Jr., Michigan          CHRIS CANNON, Utah
HANK JOHNSON, Georgia                JIM JORDAN, Ohio
ZOE LOFGREN, California              RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts   TOM FEENEY, Florida
MELVIN L. WATT, North Carolina       TRENT FRANKS, Arizona
STEVE COHEN, Tennessee

                     Michone Johnson, Chief Counsel

                    Daniel Flores, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             JULY 31, 2008

                                                                   Page

                                THE BILL

H.R. 5884, the ``Sunshine in Litigation Act of 2008''............     3

                           OPENING STATEMENTS

The Honorable Linda T. Sanchez, a Representative in Congress from 
  the State of California, and Chairwoman, Subcommittee on 
  Commercial and Administrative Law..............................     1
The Honorable Chris Cannon, a Representative in Congress from the 
  State of Utah, and Ranking Member, Subcommittee on Commercial 
  and Administrative Law.........................................     8

                               WITNESSES

Mr. Richard D. Meadow, the Lanier Law Firm, PLLC
  Oral Testimony.................................................    53
  Prepared Statement.............................................    56
Mr. John P. Freeman, Distinguished Professor Emeritus, University 
  of South Carolina Law School
  Oral Testimony.................................................    65
  Prepared Statement.............................................    67
The Honorable Mark R. Kravitz, Judge, U.S. District Court for the 
  District of Connecticut
  Oral Testimony.................................................    74
  Prepared Statement.............................................    76
The Honorable Joseph F. Anderson, Jr., Judge, U.S. District Court 
  for the District of South Carolina
  Oral Testimony.................................................    89
  Prepared Statement.............................................    91

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Material submitted by the Honorable Chris Cannon, a 
  Representative in Congress from the State of Utah, and Ranking 
  Member, Subcommittee on Commercial and Administrative Law:
    Letter from the Judicial Conference of the United States.....     9
    Letter from the American Bar Association (ABA)...............    17
    Letter from the U.S. Department of Justice...................    20
    Letter from Arthur R. Miller, Professor, New York University 
      School of Law..............................................    36
    Prepared Statement of Stephen G. Morrison, Esquire...........    44
Prepared Statement of the Honorable Herb Kohl, a U.S. Senator 
  from the State of Wisconsin, submitted by the Honorable Linda 
  T. Sanchez, a Representative in Congress from the State of 
  California, and Chairwoman, Subcommittee on Commercial and 
  Administrative Law.............................................    51

                                APPENDIX
               Material Submitted for the Hearing Record

Attachments to the Prepared Statement of the Honorable Mark R. 
  Kravitz, Judge, U.S. District Court for the District of 
  Connecticut....................................................   108
Answers to Post-Hearing Questions from Richard D. Meadow, The 
  Lanier Law Firm, PLLC..........................................   321
Answers to Post-Hearing Questions from John P. Freeman, 
  Distinguished Professor Emeritus, University of South Carolina 
  Law School.....................................................   323
Answers to Post-Hearing Questions from the Honorable Mark R. 
  Kravitz, Judge, U.S. District Court for the District of 
  Connecticut....................................................   324
Answers to Post-Hearing Questions from the Honorable Joseph F. 
  Anderson, Jr., Judge, U.S. District Court for the District of 
  South Carolina.................................................   327


                   SUNSHINE IN LITIGATION ACT OF 2008
                              ----------                              


                        THURSDAY, JULY 31, 2008

              House of Representatives,    
                     Subcommittee on Commercial    
                            and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:40 a.m., in 
room 2237, Rayburn House Office Building, the Honorable Linda 
Sanchez (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Sanchez, Cannon, and Jordan.
    Staff present: Matthew Wiener, Majority Counsel; Daniel 
Flores, Minority Counsel; Andres Jimenez, Majority Professional 
Staff Member; and Megan Crowley, Minority Clerk.
    Ms. Sanchez. This hearing of the Committee on the 
Judiciary, Subcommittee on Commercial and Administrative Law 
will now come to order.
    I will now recognize myself for a short statement.
    Serious concerns have been raised as to whether court 
secrecy orders may endanger public safety and health. There are 
several examples of court secrecy orders that have concealed 
from the public and governmental regulatory agencies 
information about dangerous products and other potential harms.
    None is more well known, perhaps, than the secrecy orders 
involving Firestone tires. Defective Firestone tires resulted 
in more than 250 deaths and many more serious injuries 
throughout the 1990's. Although Firestone knew of the defects 
by the early 1990's, it concealed the information from the 
public by settling numerous lawsuits under the cover of court 
secrecy orders. Those orders prohibited plaintiffs from sharing 
information with the public about the defects uncovered during 
litigation.
    Not until 2000, when Firestone issued a recall, did the 
public finally learn of them. By then it was too late for those 
who were already victims and for their families. This is just 
one notable example. We expect to hear about others during this 
morning's testimony.
    The fundamental question before us is whether Congress 
should leave the issue of court secrecy in the hands of Federal 
judges or, instead, address the issue itself. Should we choose 
the latter, we have H.R. 5884, the ``Sunshine in Litigation Act 
of 2008.'' H.R. 5884 mirrors a bill pending before the Senate 
that has been favorably reported by a bipartisan majority of 
the Senate Committee on the Judiciary.
    H.R. 5884 is modest in its scope. Its key provision would 
require courts to do what some Federal judges already do: 
consider the public's interest in health and safety before 
entering certain confidentiality orders that would conceal 
information from the public uncovered during discovery.
    H.R. 5884 would not prohibit a court from ordering the 
confidentiality of discovery materials when confidentiality is 
due, such as when protecting a trade secret, other proprietary 
commercial information, or personal information of a private 
nature.
    It would simply require a court, before entering a 
nondisclosure order, to find that the asserted interest in 
confidentiality outweighs the public interest in open access. 
And it would require that the nondisclosure order be no broader 
than necessary to protect the privacy interest that justifies 
its issuance.
    To help us evaluate whether these and related restrictions 
on court secrecy orders should be legislatively mandated, we 
will hear from four witnesses. They are: Richard Meadow, a 
partner in the Lanier Law firm in New York; Professor John 
Freeman, Distinguished Professor Emeritus of Law at the 
University of South Carolina School of Law; the Honorable Mark 
Kravitz, a judge on the United States District Court for the 
District of Connecticut, who is testifying on behalf of the 
Judicial Conference of the United States; and the Honorable 
Joseph Anderson, Jr., a judge on the United States District 
Court for the District of South Carolina. Accordingly, I look 
forward to hearing today's testimony from our witnesses.
    [The bill, H.R. 5884, follows:]

    
    
    
    
    
    
    
    
    
    
    Ms. Sanchez. And at this time, I would now recognize my 
colleague Mr. Cannon, the distinguished Ranking Member of the 
Subcommittee, for his opening remarks.
    Mr. Cannon. Thank you, Madam Chair.
    Just as a matter of curiosity, which I should probably 
frame as a parliamentary inquiry, I would think this normally 
would come under the jurisdiction of the Intellectual Property 
and Courts Subcommittee. Is there a reason why we are doing it 
here?
    Ms. Sanchez. I would expect that, perhaps, for issues 
involving trade secrets that might be the case. But we are 
talking about issues of public health and welfare. So I believe 
the jurisdiction is properly in this Subcommittee.
    Mr. Cannon. As the Chair knows, I am always anxious to 
expand the jurisdiction of this Committee. And so I think we 
should go forward. But my sense is that since we are dealing 
with the rules, or the way we make the rules, that this 
probably would fit--what we probably ought to do is get courts 
in this Committee, because IP has plenty of other things to do.
    I want to thank the witnesses for their testimony today 
regarding H.R. 5884, the ``Sunshine in Litigation Act of 
2008.'' Oftentimes we hold hearings on legislation in this 
Subcommittee which is supported or opposed by partisan groups 
on opposite sides of the issue. That is not the case with the 
bill we are considering today.
    Rather, the Sunshine in Litigation Act is opposed not just 
by what would generally be perceived as conservative or pro-
business groups but by non-partisan groups such as the Judicial 
Conference of the United States and the American Bar 
Association. The bill is also opposed by the Department of 
Justice.
    I ask unanimous consent that opposition letters from the 
Judicial Conference, the ABA and the Department of Justice be 
entered into the record.
    Ms. Sanchez. Without objection, so ordered.
    [The information referred to follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                                






                                






























    Mr. Cannon. And why are these groups opposed to 5884?
    First, they are opposed that the bill circumvents the 
regular order for promulgating changes to the Federal Rules of 
Civil Procedure established in the Rules Enabling Act. The 
Rules Enabling Act was passed by Congress so that before a 
Federal rule is adopted or modified, it is thoroughly vetted 
and studied by the Judicial Conference, the public, and the 
Supreme Court before being presented to Congress.
    There is no reason to abandon that process for the rules 
changes proposed in H.R. 5884.
    Second, they are opposed because the bill is not only 
unnecessary but would increase the burden and cost of 
litigation. This bill is unnecessary because discovery 
protective orders are rare. An extensive empirical study 
conducted by the Judicial Conference revealed that in the 
Federal judicial districts surveyed, protective orders were 
requested in only 6 percent of all civil cases.
    This bill will increase the burden and cost of litigation 
because if confidentiality and privacy are not protected, 
litigants will be forced to oppose any document request that an 
opposing party makes for information which may be sensitive or 
confidential.
    It will also force judges to make findings of fact every 
time a protective order is requested. As Judge Kravitz wrote in 
his testimony, requiring courts to review discovery information 
to make public health and safety determinations in every 
request for a protective order, no matter how irrelevant to 
public health or safety, will burden judges and further delay 
pretrial discovery--which already, by the way, takes way too 
long. I think we have a consensus on that.
    For these reasons, the Judicial Conference has consistently 
concluded that provisions affecting Rule 26(c)--similar to 
those sought in H.R. 5884--were not warranted and would 
adversely affect the administration of justice.
    In short, this bill is a bad idea, and it is a bad idea 
made worse by skipping the process that Congress set forth in 
the Rules Enabling Act. Hopefully, after this hearing we can 
lay this bill to rest.
    Madam Chair, the size of this panel did not allow us to 
call some additional witnesses to testify in person. However, 
these witnesses have graciously provided us with their written 
views on the bill. I ask unanimous consent that written views 
of Professor Arthur Miller, a professor at New York University 
School of Law and one of the foremost experts on this area of 
the law, be entered into the record.
    Ms. Sanchez. Without objection, so ordered.
    [The information referred to follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Cannon. As well as the written views of Stephen 
Morrison, a partner at Nelson Mullins, who has tried more than 
240 cases to a jury verdict and has argued more than 60 appeals 
in the nation's highest courts, including the Supreme Court of 
the United States.
    Ms. Sanchez. Also without objection, so ordered.
    [The information referred to follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Cannon. I thank you, Madam Chair. I yield back.
    Ms. Sanchez. I thank the gentleman for his statement.
    I would also ask unanimous consent to enter into the record 
a statement of Senator Kohl, who has introduced substantially 
this legislation in successive cycles. Without objection, his 
testimony will be entered into the record.
    [The prepared statement of Senator Kohl follows:]
Prepared Statement of the Honorable Herb Kohl, a U.S. Senator from the 
                           State of Wisconsin
    Thank you, Chairwpman Sanchez, for holding a hearing H.R. 5884, the 
Sunshine in Litigation Act of 2008, and the use of secrecy agreements 
and sealed settlements. I would also like to thank Congressman Wexler 
for introducing this legislation; legislation that I have been working 
on for many years and which recently passed the Senate Judiciary 
Committee with bipartisan support. I am pleased to see the bill 
advancing here in the House and I look forward to working with 
Congresswoman Sanchez and Congressman Wexler on this important issue.
    Far too often, court approved secrecy agreements and sealed 
settlements hide vital public health and safety information from the 
American public--putting lives at stake. We are all familiar with well-
known cases where protective orders and secret settlements prevented 
the public from learning about the dangers of silicone breast implants, 
IUDs, a prescription pain killer, side-saddle gas tanks, and defective 
heart valves and tires. This critical health and safety information did 
not deserve court endorsed protection.
    The Sunshine in Litigation Act is a narrowly targeted measure that 
will make sure court-endorsed secrecy does not keep the public from 
learning about health and safety dangers. Under the bill, judges must 
consider public health and safety before granting a protective order or 
sealing court records and settlement agreements. They have the 
discretion to grant or deny the secrecy based on a balancing test that 
weighs the public's interest in a potential public health and safety 
hazard and legitimate interests in secrecy. The bill does not place an 
undue burden on our courts. It simply states that in a limited number 
of cases, judges must a closer look at requests for secrecy.
    Last December, at a hearing in the Senate Judiciary Subcommittee on 
Antitrust, Competition Policy and Consumer Rights, we learned that 
while some judges may be more aware of the issue, this problem 
continues and we have examples to prove it. Johnny Bradley told us the 
chilling details of a car accident caused by tire tread separation that 
killed his wife and left him and his son severely injured. During his 
lawsuit against Cooper Tire, he learned that information about similar 
accidents had been kept secret for years through court orders and 
secret settlements. Today, details about this tire defect remain 
protected by court orders while Cooper Tire continues to aggressively 
fight attempts to make them public.
    We also learned about the case of Zyprexa, a drug used to treat 
schizophrenia and bipolar disorder. In 2005, the drug company Eli Lilly 
settled 8,000 cases related to Zyprexa. The cases alleged that Eli 
Lilly did not disclose known harmful side-effects of Zyprexa, such as 
inordinate weight gain and dangerously high blood sugar levels that 
sometimes resulted in diabetes. Documents exchanged during discovery 
showed that Eli Lilly knew of the harmful side effects but did not 
inform prescribing doctors or the FDA. However, all of the settlements 
required plaintiffs to agree ``not to communicate, publish or cause to 
be published . . . any statement . . . concerning the specific events, 
facts or circumstances giving rise to [their] claims.'' As a result, 
the public did not learn about these settlements or Zyprexa's dangerous 
side effects until two years later when The New York Times leaked 
documents from the case that were covered by a protective order.
    Finally, we heard from Judge Joe Anderson, a federal district court 
judge in South Carolina. We are pleased that the Subcommittee will hear 
from him today. Judge Anderson expressed his support for the Sunshine 
in Litigation Act as a balanced approach to address ``a discernable and 
troubling trend'' for litigants to ask for secrecy in cases where 
public health and safety might be adversely affected. He told us about 
a local rule in South Carolina, one that goes even further than our 
bill, and how it has been a great success. Despite concerns for the 
increased burden such a measure would put on South Carolina's federal 
courts, the number of trials has not increased and cases continue to 
settle even though secrecy is no longer an option.
    In response to concerns about national security and personally 
identifiable information, we included language to ensure that this 
information is protected. We have also heard concerns about protecting 
trade secrets. I would like to make it very clear that our bill 
protects trade secrets. We are confident that judges, as they are 
already required to do, will give ample consideration to them as part 
of the balancing test. However, we will not permit trade secrets that 
pose a threat to public health and safety--such a defective tire 
design--to justify secrecy.
    We take great pride in our court system and its tradition of 
fairness for plaintiffs and defendants alike. However, the courts are 
public institutions meant to sometimes go beyond simply resolving cases 
between private parties; they also serve the greater goods of law, 
order and justice. We must not allow court endorsed secrecy to 
jeopardize public health and safety or undermine the public's 
confidence in our judicial system.
    Again, I thank Chairwoman Sanchez and Congressman Wexler for their 
attention to this important issue and I look forward to working with 
them to enact the Sunshine in Litigation Act.

    Ms. Sanchez. Without objection, the Chair will be 
authorized to declare a recess of the hearing at any point.
    And at this point, I am now pleased to introduce the 
witnesses for our hearing. Our first witness is Richard Meadow. 
Mr. Meadow has successfully tried over 25 cases to verdict. 
Since joining the Lanier Law Firm, Mr. Meadow was part of the 
trial team that obtained plaintiff verdicts in the Vioxx 
litigation in excess of $300 million. An active participant in 
New York and national bar associations, Mr. Meadow currently 
serves on the board of directors of the New York State Trial 
Lawyers Association. Mr. Meadow has lectured at numerous legal 
conferences and has been appointed to many committees that 
explore issues germane to the medical and legal communities. I 
want to welcome you to today's panel.
    Our second witness is John Freeman. Professor Freeman 
joined the University of South Carolina Law Faculty in 1973. 
Prior to that, Professor Freeman started law practice in 1970 
with the Jones Day law firm and subsequently worked for the 
Securities and Exchange Commission, where he served as special 
counsel analyzing mutual fund issues. He has taught corporate 
and securities law and legal ethics for over 30 years, and has 
testified as an expert witness or served as trial counsel in 
various legal malpractice lawsuits, ethics proceedings, and 
investment-related cases.
    Professor Freeman has written and lectured extensively on 
ethics, malpractice and business-related matters, and writes a 
regular column on professionalism topics for the South Carolina 
Lawyer. Most recently, Professor Freeman has been addressing as 
a writer and commentator certain problems with the way mutual 
fund sponsors conduct their businesses. Professor Freeman 
retired from the faculty in 2008. He has received various 
service awards and serves as one of the four public members on 
South Carolina's Judicial Merit Selection Commission. We want 
to welcome you to today's panel.
    Our third witness is Mark Kravitz. Judge Kravitz was 
appointed in 2003 by President George W. Bush to the U.S. 
District Court for the District of Connecticut. Previously, 
Judge Kravitz was a partner at the law firm of Wiggin & Dana, 
LLP, where he worked for nearly 27 years, most recently as the 
chair of the firm's Appellate Practice Group. Before joining 
Wiggin & Dana, Judge Kravitz served as a law clerk to Circuit 
Judge James Hunter, III, of the U.S. Court of Appeals for the 
Third Circuit, and then to Justice William H. Rehnquist of the 
United States Supreme Court.
    From 2001 to 2007, Judge Kravitz served as a member of the 
Standing Committee on the Rules of Practice and Procedure in 
the United States Courts, the body that oversees the rules of 
procedure and evidence that apply in all Federal courts. During 
that period, he also served as liaison member of the Advisory 
Committee on Criminal Rules. In June of 2007, Chief Justice 
John Roberts, Jr., appointed Judge Kravitz to chair the 
Advisory Committee on Civil Rules, the body that oversees the 
Federal Rules of Civil Procedure.
    From 1999-2003, Judge Kravitz was a regular columnist and 
commentator for the National Law Journal on appellate law. He 
has also authored numerous articles on a variety of topics. 
Judge Kravitz served as an adjunct professor at the University 
of Connecticut School of Law from January 1995 to 2001 and a 
lecturer in law at the Yale University Law School in 2000. 
Welcome to today's panel.
    Our final witness is Joseph Anderson, Jr. After clerking 
for the Fourth Circuit's chief judge, Clement Haynsworth, Judge 
Anderson entered private practice with his family law firm. In 
1980, he was elected to the South Carolina House of 
Representatives, where he served until his appointment to the 
Federal bench. Judge Anderson was also active in political 
campaigns other than his own, twice serving as county chair for 
Senator Strom Thurmond's reelection efforts and once for 
Congressman William Jennings Bryan Dorn's bid for governor.
    Judge Anderson has been very active in the community as a 
member, board member and president of various organizations, 
including the Lions Club, United Way and the Boy Scouts. As a 
practicing lawyer and judge, he has published a variety of 
articles on substantive topics in trial advocacy.
    I want to thank you all for your willingness to participate 
in today's hearing.
    Without objection, your written statements that you have 
provided will be placed into the record in their entirety.
    And we are going to ask that you please limit your oral 
testimony to 5 minutes. We do have a lighting system that we 
sometimes remember to employ here. You will get a green light 
when your time begins. When the light switches from green to 
yellow, that is a warning that you have about a minute to 
conclude your testimony. And then when you receive the red 
light, that will let you know that your time has expired. Of 
course, if you are mid-sentence or mid-thought when you get the 
red light, we will allow you to complete your final thought 
before moving on to the next witness.
    With that, at the conclusion of your testimony, we will 
then allow Members to ask questions subject to the 5-minute 
limit.
    If everybody understands the rules and everybody is ready 
to proceed, I would invite Mr. Meadow to please begin his 
testimony.

                TESTIMONY OF RICHARD D. MEADOW, 
                   THE LANIER LAW FIRM, PLLC

    Mr. Meadow. [Off mike.]
    Ms. Sanchez. Rarely do we have a witness that keeps it to 
less than 5 minutes.
    Mr. Meadow. I am pleased to appear before the Committee 
today to testify on behalf of myself and my law firm in support 
of the Sunshine in Litigation Act.
    My name is Rick Meadow. I am the managing attorney of the 
Lanier Law Firm in New York City. We are a Houston-based law 
firm with offices in Los Angeles and Palo Alto, Houston and New 
York. We are involved in pharmaceutical litigation, asbestos 
litigation, toxic tort, and a number of other litigations. Led 
by Mr. Lanier, we took the forefront in the Vioxx litigation as 
lead counsel. As you previously stated, we achieved three of 
the successful verdicts in the Vioxx litigation against Merck 
Pharmaceuticals.
    Because of the nature of our particular practice, we are 
subject to numerous confidentiality orders and numerous 
confidentiality settlements. It is for that reason that we 
appear here today on behalf of and in favor of the Sunshine in 
Litigation Act.
    I would like to discuss the effect of these confidentiality 
settlements and confidentiality protective orders on numerous 
litigations.
    The first I would like to discuss is the public health and 
safety of the Zyprexa litigation, but because of the 
confidentiality order I can't address that.
    I would also like to discuss the public health and safety 
that is in effect because of the Bextra litigation, but because 
of the confidentiality order in effect I cannot do that either.
    I would like to discuss the Ortho Evra litigation that we 
are involved in, but I can't do that as well.
    Nor can I discuss those litigations involving Kugel Mesh, 
Vioxx--which continues--Avandia and many of the other 
litigations that we are involved in.
    Because of the nature of today's practice, where the 
majority of our litigations end up in the Federal court because 
of the multi-district litigation process, I am not at liberty 
to discuss the public health and safety and welfare of a number 
of products that this act would take care of and allow us to 
talk about it.
    I would also like to talk about how some corporate 
executives, based on internal emails, sell stock unbeknownst to 
an unknowing public, but I can't discuss that as well.
    I could also, would love to, discuss how some corporations 
pollute surrounding neighborhoods with cancer-causing toxic 
agents, but because of the confidentiality agreement and orders 
I am not allowed to discuss that as well.
    And there is one other litigation I would like to discuss 
where a major automobile manufacturer redesigned their product 
in midstream after a couple of rollover deaths, but I can't 
discuss that as well. But because of----
    Ms. Sanchez. I can now see why you were so confident your 
testimony would be less than 5 minutes.
    Mr. Meadow. Well, yes, these are--and you lead me to my 
next line--these are just a few of the many examples where the 
public safety and welfare have taken a backseat to the 
interests of corporate defendants as well as settling 
defendants that are injured by hazardous products and 
practices.
    At a time when the nation faces the looming possibility of 
Federal preemption, the lack of the disinfectant of the 
Sunshine Law would free corporations to operate under the cloak 
of darkness with full immunity on an unsuspecting and 
unprotected public. This is a concept which must concern you, 
the Members of Congress who are entrusted with the significant 
responsibility to represent and protect the public welfare.
    These same interests are behind many meritless arguments 
that the Sunshine Act would chill settlements and overburden 
the court system. I beg to differ. Not only is there no proof 
of this assertion, it impugns the integrity of the bar on both 
sides of any civil dispute.
    I have addressed these issues in my written statement, but 
this morning I would like to focus on the potential deterrent 
aspects of the Sunshine Act.
    Today, those who choose profits over people, and thus risk 
litigation if they are caught, take comfort in their proven 
ability to demand confidentiality in exchange for providing 
unfettered discovery and in exchange for ultimately settling 
with some claimants, who are often only a tiny fraction of the 
victims of a hazardous product.
    If the Sunshine Act were in place, these same interests 
would have good reason to think twice before rushing a product 
to market because their actions would be unveiled for all the 
public to see.
    The need for the Sunshine Act has recently become more 
urgent. The American public increasingly has nowhere to turn. 
The FDA, Consumer Product Safety Commission, EPA, and other 
governmental agencies are overworked, underfunded, and in some 
cases unmotivated to protect the public welfare. The last line 
of defense may rest with Congress beginning with the Sunshine 
in Litigation Act.
    Thank you.
    [The prepared statement of Mr. Meadow follows:]
                Prepared Statement of Richard D. Meadow


















    Ms. Sanchez. Thank you, Mr. Meadow. We appreciate your 
testimony.
    At this time, I would invite Professor Freeman to give his 
testimony.

TESTIMONY OF JOHN P. FREEMAN, DISTINGUISHED PROFESSOR EMERITUS, 
            UNIVERSITY OF SOUTH CAROLINA LAW SCHOOL

    Mr. Freeman. Thank you, Madam Chairwoman.
    I am delighted to be here. As my written statement 
reflects, I have taught various courses, including White Collar 
Crime, Securities, and Professional Responsibility, over the 
years, over 35 years, before my retirement. From time to time I 
also assisted either as a lawyer, a consultant or an expert 
witness in certain big-case litigation, including Big Tobacco--
which to a considerable extent was driven out of South Carolina 
by some of our top lawyers, asbestos cases the same--but also 
other cases that affect the public interest, such as Dalkon 
Shield litigation, sexual predators and Catholic priests, 
defective car seats, Benlate fungicide, which cut a wide swath 
among farmers, and so forth.
    From my experience in big complex cases, protective orders 
are very, very common and very overbroad. As my written 
statement reflects, decades ago judges were complaining about 
the issuance of protective orders, and one judge saying on the 
record he was unaware of any case in the past half-dozen 
years--and this is 1981--of even a modicum of complexity where 
an umbrella protective order was not agreed to.
    I included in my written statement a recent, to update, 
within the last 2 months, order from the Seventh Circuit, a 
District Court order, where you have a magistrate judge 
complaining about lawyers in that circuit--which has taken the 
lead in trying to clamp down on protective orders--just not 
doing it, lawyers not following, not getting the message. And 
somebody needs to send a strong message. It hasn't been sent 
over decades.
    The secrecy selling is of keen interest to me. As you know, 
we have dealt with that in South Carolina. And I would just 
raise a hypothetical, two actually, with you.
    One: Assume that you have a witness to a vicious criminal 
assault who is a sole witness and the only person whose 
testimony could really convict the wrongdoer. And assume that 
the perpetrator's lawyer goes to that witness and says, ``Here 
is $25,000. I want you to take this money. I don't want you to 
report to the police. I don't want you to cooperate with the 
authorities. It didn't happen.'' It is just: Wipe it off the 
map, and here is the money. Go spend it. Enjoy it. And assume 
that that transaction is struck.
    And nobody would have a problem condemning that transaction 
for witness tampering, obstruction of justice, conspiracy, 
bribery, all kinds of heinous things.
    Well, suppose it is a design defect in an automobile. And 
there, after tremendous discovery and a lot of effort, finally 
the plaintiff has figured it out and has come up with the 
killer documents--the key documents, the smoking gun documents.
    And the company, realizing that it is going to get stung 
and that all this is going to come out, goes to the plaintiff 
and goes to the plaintiff's lawyer and says, ``Here is a 
million. Here is $3 million. We want your file. It didn't 
happen. You can't talk to anybody about it. We will--you will 
owe us liquidated damages if you--you are not cooperating with 
a soul.''
    And you might say, ``Well, so what?'' The deal goes down. 
The settlement is agreed to. The money is exchanged. And you 
can say, ``Well, that happens every day. Nothing wrong with 
that. And it is a free country.''
    But what has happened in the hypothetical number two is the 
same thing that happened in hypothetical number one: You have a 
victim of serious wrongdoing or a witness to serious wrongdoing 
taking money in exchange for a promise not to cooperate with 
anybody. And we forget that victims of torts involving health 
and safety are often witnesses. And for them to take money and 
have their testimony and their ability to cooperate bought off, 
I say is heinous. It is heinous in the criminal case. I say it 
is heinous in the civil case. It is not what we talk about in 
our ethics courses. It is not proper.
    As for some of the complaints, you know, there are theories 
that it is going to take too much time away; it is going to tie 
up our courts in knots. I don't believe that for a second. I 
mentioned that there is a group, the Lawyers for Civil 
Justice--Mr. Morrison was a--didn't represent them, but was a 
former president of that group--and they declare it is 
imperative that this legislation be killed; it is bad 
legislation, and if you pass it other people are going to 
emulate it at the state level.
    Well, if it is bad legislation and it is going to tie our 
courts in knots, there is no risk that anybody is going to 
follow it. What I suggest people are really afraid of is that 
this starts momentum going in favor of truth in our courts. I 
want to see that.
    Thank you.
    [The prepared statement of Mr. Freeman follows:]
                 Prepared Statement of John P. Freeman














    Ms. Sanchez. Thank you, Professor Freeman. We appreciate 
your testimony.
    At this time, I would invite Judge Kravitz to please begin 
his testimony.

    TESTIMONY OF THE HONORABLE MARK R. KRAVITZ, JUDGE, U.S. 
         DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT

    Judge Kravitz. Thank you, Madam Chairperson. I am pleased 
to be here on behalf of the Judicial Conference Standing 
Committee and the Civil Rules Committee.
    I just want to give you a little bit about my background, 
as the others have, so you will understand where I am coming 
from on this issue. I practiced for 27 years, and during that 
period of time I worked with protective orders for both 
plaintiffs and defendants. And a large portion of my practice 
was devoted to representing media companies who were trying to 
intervene in cases and open government. And I am proud to say 
that I have received two awards in Connecticut for my efforts 
at open government and efforts against secrecy in government. 
And I say that not to be boastful but rather so that you know 
that I do not have a personal history of secrecy in government 
at all.
    Yet, the Rules Committee is opposed to this legislation 
for, I think, three very good reasons.
    First, there is no empirical evidence to suggest that 
protective orders or sealed settlements are substantially used 
in the Federal courts or that there is any abuse. My friend 
Professor Freeman talked about every case having a protective 
order. We have actually dug into the data, and 6 percent of 
Federal cases have protective orders, and sealed settlements 
are in one half of 1 percent of all cases that are solved.
    The Rules Committee actually devotes itself to using 
empirical information, not anecdotal information, and 
information about the Federal courts, not the state courts, to 
inform the rules process. And I would just say, if the 
committee has empirical information that suggests there is a 
problem to get it to the Rules Committee so that it can use 
that in the context of the rules process.
    Secondly, this is not, with all due respect, Madam 
Chairperson, at least insofar as the protective orders are 
concerned, a modest proposal. What this proposal suggests is 
that at the start of a case, before the judge knows anything 
about the case, the judge is going to have to review the 
documents, sometimes millions of pages of documents that the 
defendant is going to have to turn over, and before those 
documents have been given to the plaintiff is going to have to 
make a determination as to whether those documents are 
``relevant to public health and safety.''
    We are not talking about documents being filed in court. 
Once documents are filed in court, the protective order 
provisions aren't what govern. It is the Constitution and the 
substantial body of case law that protects open judicial 
proceedings that govern. So we are talking about the exchange 
of information between parties outside of court to get the 
plaintiff up to speed as to what the facts are.
    And in my experience, both as a judge and a lawyer, the 
entry of a protective order allows litigants to exchange more 
documents at an earlier point in the litigation than would be 
possible without them.
    This legislation will require--the burdens of it really 
cannot be overstated. I am going to have to--I cannot make a 
determination that documents are relevant to public health and 
safety unless I review those documents. I am going to have to 
review them without the plaintiff having them because this is 
all before the plaintiff gets them. And then I am going to have 
to make a judgment with no help from experts or anything 
whether they implicate or are relevant to the public health and 
safety.
    First of all, I don't think I have the time to do that. And 
second of all, I don't think I have the knowledge to do that on 
any reasoned basis. And what we are going to result in is 
satellite litigation which is going to bog down the discovery. 
We should be in the business of getting Mr. Lanier the 
documents as quickly as possible, not as slowly as possible and 
not as expensively as possible. And Rule 1 of the Federal Rules 
says the goal here should be a just, speedy and inexpensive 
determination of the cases. And I believe that this provision 
on protective orders will disserve that interest.
    And finally, even though it sounds good, these provisions, 
they are unlikely to produce any benefits because the 
agreements that Professor Freeman talked about, they are going 
to be entered into anyway, and they just won't get filed with 
courts. Settlements are secret not because judges are sealing 
them. It happens in only .5 percent of all cases. Settlements 
are secret because the parties themselves are agreeing to 
secrecy orders. So the benefits that this act is designed to 
achieve, I am afraid, and the Rules Committee is afraid, won't 
be achieved.
    Thank you, Madam Chairperson.
    [The prepared statement of Judge Kravitz follows:]
          Prepared Statement of the Honorable Mark R. Kravitz*
---------------------------------------------------------------------------
    *See Appendix for attachments to the prepared statement of this 
witness.


























    Ms. Sanchez. Thank you. I appreciate your testimony, Judge 
Kravitz.
    And at this time, I would invite Judge Anderson to please 
present his testimony.

TESTIMONY OF THE HONORABLE JOSEPH F. ANDERSON, JR., JUDGE, U.S. 
       DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA

    Judge Anderson. Thank you, Chairwoman Sanchez, Ranking 
Member Cannon, and Members of the Subcommittee. Thank you for 
inviting me to appear before you to discuss the Sunshine in 
Litigation subject, of particular importance to me as a trial 
judge with 22 years experience.
    I should say at the outset that I am not here representing 
the Judicial Conference or any other organization. I am here 
simply to convey my thoughts on the need for the awareness of 
the adverse consequences of what I prefer to call ``court-
ordered secrecy.''
    As civil litigation has mushroomed in the United States 
courts in the past two decades, litigants have frequently 
requested that judges ``approve'' a settlement, often in cases 
where court approval is not legally required. And as part of 
the approval process, judges are sometimes asked to enter 
orders restricting public access to information about the case 
and its procedural history.
    In these instances, litigants are not content to simply 
agree between themselves to remain silent as to the settlement 
terms. Instead, their preference is to involve the trial court 
in a ``take it or leave it'' consent order that brings to bear 
the contempt sanctions of the court to anyone who breaches the 
court-ordered confidentiality.
    Unfortunately, trial judges often struggle under the crush 
of burgeoning case loads. Eager to achieve speedy and concrete 
resolutions to their cases and ever mindful of the need for 
judicial economy, many judges all too often acquiesce in the 
demands for court-ordered secrecy.
    In late 2002, the judges on the District Court of South 
Carolina voted unanimously to adopt a local rule for our court 
which places some modest restrictions on court-ordered secrecy 
associated with settlements in civil cases. We were then, and 
we remain, the only Federal district court in the country with 
such a rule.
    In the brief time allotted to me, I would like to relate 
several events which prompted me to propose this rule to our 
court and say just a word about our court's 6-year experience 
in operating under the rule.
    In 1986 when I was a 36-year-old baby judge, I was assigned 
a case that had been pending on another judge's docket for 
several years. The case was ready for trial, and the lawyers 
predicted a grueling 6-month trial. It was brought by 350 
plaintiffs who lived around a large 56,000-acre freshwater lake 
in upstate South Carolina. The plaintiffs contended that the 
defendant had knowingly deposited excessive amounts of PCBs 
into the lake, and that they had experienced severe health 
problems associated with being exposed to this toxic substance.
    Much to my relief, shortly before the trial was to begin, 
the parties announced that they had reached an amicable 
settlement. The defendant would pay three-and-a-half million 
dollars into a fund to be set up to provide primary medical 
monitoring and care for the 350 plaintiffs, and then there was 
a small amount of a per capita distribution to each of the 
plaintiffs to settle the case.
    There was one catch, however: The settlement was absolutely 
contingent upon my entry of a gag order prohibiting the parties 
from ever discussing the case with anyone and also requiring 
the return of all allegedly ``smoking gun'' documents. I was 
advised by counsel for both sides that if I did not go along 
with their request, the carefully constructed compromise 
settlement would disintegrate, and the case would proceed to 
the 6-month trial.
    As a judge with less than a year's experience on the court 
and other complex cases stacking up on my docket, and believing 
it was the fairest and best thing do in the case, I agreed to 
the request for court-ordered secrecy. When I signed the order, 
everyone was content: The plaintiffs had a handsome settlement; 
the lawyers for both sides were paid; the defendant received 
its court-ordered secrecy; there were no objections to my 
order; and I had one less case to try.
    In the ensuing years, I began to question my decision to 
enter a protective order in that particular case. Other people 
lived around that lake and were exposed to the same substance. 
I saw lawyers request the court order secrecy both at 
settlement and in connection with the exchange of documents 
during discovery.
    Just to take another example, I knew of a case on our 
docket of another judge who restricted information to case 
information about a go-cart which was allegedly defective and 
which was settled for one-and-a-half million dollars. Again, a 
court ordered gag order secrecy; the plaintiff's lawyer was 
restricted from discussing the case or even representing 
another litigant involving that same go-cart, which I later 
learned was still being marketed to the public.
    These are just two instances, nothing anecdotal about 
them--people live around the lake; children ride those go-
carts--where the judge had lit the lightning match through the 
appellate court system through an order restricting information 
about those hazards.
    Responding to this series of events, I proposed to our 
court that we adopt a local rule prohibiting, in most civil 
cases, court-sanctioned secret settlements. When we proposed 
our rule for comment, we received heated objections from around 
the country. There were dire predictions that our court would 
be overwhelmed with the number of cases that went to trial as a 
result of our rule restricting court-ordered secrecy.
    Well, after 6 years, the dire predictions have appeared to 
be wrong. Our case has actually tried fewer cases in the 6 
years following the enactment of our local rule than it did in 
the 6 years preceding the enactment of our rule.
    Of the national furor that was created when our rule was 
proposed at least brought this attention to the forefront. I 
think judges are now more aware of the adverse consequences of 
court-ordered secrecy. This legislation has served to further 
that interest and raise the consciousness of judges on this 
very important topic.
    Thank you very much.
    [The prepared statement of Judge Anderson follows:]
      Prepared Statement of the Honorable Joseph F. Anderson, Jr.












    Ms. Sanchez. Thank you, Judge Anderson. We appreciate your 
testimony.
    We will now begin the first round of questioning. And I 
will begin by recognizing myself.
    Mr. Meadow, I would like to start with you. Some critics of 
the Sunshine in Litigation Act say that there is no empirical 
evidence establishing that court secrecy orders endanger public 
health and safety, that proponents of this act are simply 
relying on anecdotal evidence alone. How would you respond to 
that criticism?
    Mr. Meadow. Based on my experience, the litigations that we 
are involved in are mass torts affecting--each drug we are 
involved in is affecting thousands and thousands of people. So 
if they come up and say it is only 6 percent, that one--maybe 1 
percent of that can involve tens of thousands of people. So any 
time we discover a dirty document or something like that, it is 
going to affect thousands and thousands of people.
    So I think the overall public policy speaks to a favorable 
climate for this act vs. the small--I haven't seen the 
empirical data. But in my personal experience from the 
litigations I am involved in, you are talking about tens of 
thousands of people who are affected by one protective order.
    Ms. Sanchez. Thank you.
    Professor Freeman, why do you believe, as you state in your 
prepared statement, that judges can't be counted on to address 
the problem of court secrecy?
    Mr. Freeman. Because it is ubiquitous and because nothing 
seems to be happening. I didn't say that all Federal cases have 
protective orders. I said in----
    Ms. Sanchez. Many.
    Mr. Freeman [continuing]. Quoting a judge, cases with 
complexity are what we are talking about here. And there the 
protective orders are very, very common, and secrecy agreements 
are very common. And as I read the legislation, it deals not 
just with the approval of secret settlements, essentially to 
cover up evidence, but also the enforcement of secret 
settlements, which to me is important.
    But, you know, I would refer you to this order that was 
issued by the magistrate within the last 60 days in a circuit 
where the judges led by Judge Posner and Judge Easterbrook have 
really sought to crack down on overbroad protective orders. And 
that was a 1999 decision that led the way with follow-up 
decisions--1999, we know, now is--what?--9 years ago. And this 
is within the last 60 days the judge saying, ``You know, I--in 
this case, the magistrate judge entered a directive to the 
lawyers in the case saying, ``Don't you come to me and ask for 
a protective order unless it meets the following standards, one 
through whatever.'' And then he didn't get that. And that is 
why he wrote that order.
    And, you know, people have been talking a long time, but 
where is the beef? Where is the actual output that protects--
that promises to protect--the public on matters of limited 
nature, health and safety in particular? It is time to do 
something because it just hasn't happened yet.
    Ms. Sanchez. Thank you.
    We know that plaintiffs sometimes, and maybe oftentimes, 
agree to these various types of confidentiality orders covered 
by the Sunshine in Litigation Act. And one example of that 
would be a protective order prohibiting the disclosure of 
discovery materials or an order sealing a settlement agreement.
    Why do lawyers who represent plaintiffs agree to such 
orders even though they may be contrary to the public interest?
    Mr. Freeman. For the money--for themselves and for their 
clients. This is about selling secrecy, and secrecy is a very, 
very valuable commodity it turns out, particularly when there 
is something very wrong that needs to be covered up.
    A company that has tremendous exposure, say running to the 
billions, can be very happy to pay the plaintiff and the lawyer 
who have figured out--gotten the smoking gun documents under a 
protective order, can't disclose them to anybody--got them, and 
now the company is faced with the possibility of the truth 
coming out, and being picked up on the Internet, being picked 
up on the news. It becomes a very simple transaction to buy 
that evidence and pay these people off.
    And the lawyer, you can say, ``Well, that is crooked on the 
part of the lawyer.'' But the problem is for the lawyer, the 
lawyer's job is to protect the client and do the very best for 
the client. The lawyer doesn't see himself or herself as 
representing society as a whole. So that skews the transaction.
    Legislation that came in and inserted the public interest 
into the calculation would be excellent.
    Ms. Sanchez. Thank you.
    Judge Anderson, you noted in your prepared statement that 
the local rule adopted by the district in which you sit as a 
judge has not inhibited settlement or increased the judges' 
workload. That rule, as I understand it, addresses only sealed, 
court-filed settlement agreements.
    The Sunshine in Litigation Act goes a little bit further 
than that. It also covers, among other things, protective 
orders. And I am wondering if you believe that the provisions 
of the act would, as some critics have claimed, inhibit 
settlement or significantly increase the workload of our 
courts, if that.
    Judge Anderson. I don't think it would inhibit settlement. 
It would increase the workload of the district judge. I do 
think we could count on the litigants to point out to us what 
is confidential, or what is arguably confidential. So it would 
increase our workload to some extent, but we could handle it.
    Ms. Sanchez. Thank you.
    My time has expired. So at this time I would recognize the 
Ranking Member for his 5 minutes to question.
    Mr. Cannon. Thank you, Madam Chair. Do you intend to do a 
second round? I personally don't see a need, but.
    Ms. Sanchez. I do have probably another question or two 
that I would like to ask. And given that there are not many of 
us here, I don't think that it would be overburdensome to go 
through a second round of questions.
    Mr. Cannon. I don't think it would be overburdensome at 
all. I don't know how we move this issue forward, though, 
because it is not going to be in our jurisdiction, it appears 
to me.
    But Mr. Kravitz, you seem to have had a response to what 
Mr. Anderson said about the parties. I suspect you are thinking 
in terms of the parties, plural, because----
    Judge Kravitz. Well, we won't have parties. I mean, the 
idea is this is all before Mr. Lanier and Mr. Meadow have the 
documents. So I am going to have to review them presumably 
under seal with no expertise at all with the defendants trying 
to convince me that it doesn't involve the public health and 
safety.
    We are far better served by getting Mr. Meadow the 
documents and then having him tell me where the smoking guns 
are, and having him tell me that public health and safety is 
implicated. And so, no, we are not going to have the parties, 
because he won't have the documents before I decide what the 
confidential agreement is, and whether the statute is met.
    And I will say in this regard, I am unsure. I--you know, we 
have heard it is only a problem in complex cases. But this 
statute applies to all cases. So in every single case--so if I 
have a case that involves a person, an employment case where a 
person was allegedly fired for having child pornography at 
work. Is that a case that has relevance to public health and 
safety? I mean, I am going to have to go through these 
questions on each one of my cases, not just the complex drug 
cases.
    Mr. Cannon. I--what you say, since we have a couple of 
judges here, that I am astonished at how hard it is to be a 
judge, and I appreciate your work. And I don't see much reason 
to make it more difficult.
    Judge Anderson, can I just follow up on this and add, ask 
this question: You said that your district has done a modest 
rule. In fact, under the current rules, no judge ever has to 
sign one of these agreements. You have talked about the 
pressure that he is under with his docket.
    But aren't we--why do we have to have this rule, taken out 
of order, passed by Congress instead of going through the 
normal rule enabling process, to do something that judges 
already pretty much have discretion and are able to do?
    Judge Anderson. And that is the best question that could be 
asked on this subject. We judges have life tenure, and why do 
we need some rule to hide behind on protective orders?
    My answer is: We judges have to work very hard to stay 
current. We, in my district, we are assigned between five and 
six hundred cases per year. But we have to close out between 
two and three cases each working day to stay current.
    So when the parties walk in with a settlement that they 
have worked out together and it provides for some payment of 
money, it is awfully difficult for the judge to say, ``Well, I 
am going to stand in the way of that settlement. I am not going 
to approve it. We are going to trial.'' And the plaintiffs 
might lose at trial, and then the judge has impaired a 
compromise settlement that was worked out legitimately just in 
the court.
    Mr. Cannon. Right. And that is a great answer. And part of 
the reason I am so anxious to give honor to the judiciary--you 
guys do a great job. These are very hard things. But isn't the 
answer to that to step back as a society and say we need more 
judges, or address the issue in some other way?
    Because you didn't deal with the issue of: Do you have 
discretion? Clearly your court, your district, has taken upon 
itself an additional set of guidelines. And while they are 
modest compared to this bill, each individual judge has a great 
deal of latitude.
    Shouldn't we be looking--and this is why it is 
inappropriate for this Subcommittee, because we are not the 
Subcommittee that deals with courts. And I have been on that--
in fact I am on the other Subcommittee. We deal with this issue 
all the time. Isn't that the place where we say, ``How do we 
want to administer justice in America? Do we need more judges? 
What is taking time? What are our judges not doing?''
    And if our judges are not doing their--the job that you 
would like them to do based on your testimony, which is to be 
looking more carefully at these kinds of cases because someone 
may be impaired in the future, that the plaintiff may be 
impaired because he doesn't get his settlement, or otherwise. 
Shouldn't we be looking, then, at some other solution rather 
than a rule that we legislate instead of taking through the 
rules process?
    Judge Anderson. Well, I am a big fan of the rules making 
process. And I will say we judges work very hard. But I join 
the bandwagon for more judges. I take a briefcase home every 
weekend to read for the next week.
    Mr. Cannon. I will say that--and I know many, many Federal 
judges and state judges--that they work amazingly hard. And I 
don't want to make it more difficult by going out of order--
regular order of the rules, regular order on our Committee--and 
do something that I just don't see a compelling reason for 
doing, especially when you have got judges like in your 
district, Judge Anderson, and who generally, who don't--without 
the support of your rule, judges around the country have, I 
think, have the same kind of discretion that this allows. They 
do have, I grant you, the kind of pressures. And maybe we ought 
to look at that.
    And, the light--I see the time is running out.
    Ms. Sanchez. The gentleman's time has expired.
    And I would just also remind the Members of the Committee 
that the full Committee has jurisdiction over such issues, and 
they referred it to this Subcommittee. So it is proper for us 
to consider it here today.
    I am going to just go into a second round of questions. I 
have a few last questions, and hopefully we will conclude the 
hearing fairly soon so that you gentlemen can get back to what 
you do in your normal, everyday lives.
    I want to start with Judge Kravitz. In your prepared 
statement, you say that the Sunshine in Litigation Act would, 
and I am quoting from your testimony, ``effectively amend the 
Federal Rules of Civil Procedure outside the rulemaking 
process, contrary to the Rules Enabling Act.'' And you add that 
``direct amendment of the Federal Rules through legislation 
circumvents the careful safeguards Congress itself has 
established.''
    But isn't it true that the act wouldn't actually amend the 
Federal Rules, but instead it would amend Title 28 of the 
United States Code?
    Judge Kravitz. Well, technically it does. But it says that 
a court shall not enter an order under Rule 26(c) of the 
Federal Rules of Civil Procedure. That is what the act says.
    So what it is doing is, in effect, amending the Rules of 
Civil Procedure and saying that a court cannot enter the order 
that is otherwise provided unless they make these findings.
    And the Rules Enabling Act process is an exacting and 
thorough process, as I know Judge Anderson understands. There 
are--it is also transparent, completely transparent. We publish 
these rules for comment; we have--and for these rules, we had 
three hearings nationwide----
    Ms. Sanchez. I understand that.
    Judge Kravitz [continuing]. People testify.
    Ms. Sanchez. I understand that. But I am just trying to get 
at the authority issue here because I want to make it clear for 
the record. It isn't the position of the Judicial Conference, 
is it, that Congress lacks the authority to legislate with 
respect to matters covered by the Sunshine in Litigation Act?
    Judge Kravitz. No, no. No, no.
    Ms. Sanchez. Okay.
    Judge Kravitz. No. The idea is that there is a Rules 
Enabling Act process that Congress put together. It has worked 
extremely well. And the rules that come out of that process are 
very, very good, and they are based on empirical data, not 
stories from my courtroom. And----
    Ms. Sanchez. I want to draw your attention to----
    Judge Kravitz [continuing]. It is the----
    Ms. Sanchez [continuing]. Something that Judge Abner Mikva 
has said, that the Sunshine in Litigation legislation involves, 
and I am quoting from him, ``policy issues that should be 
decided by policymakers in Congress, not by judges.''
    And my question is: Why should Congress defer to the 
Judicial Conference if the Judicial Conference has, by its 
inaction, acted inconsistently with what Congress believes to 
be a fundamental mandate of good public policy, which is trying 
to protect the health and welfare of other potential victims 
who will never have this information come to light because of 
these secrecy orders?
    Judge Kravitz. Well, listen, the Congress obviously has the 
power to pass legislation--it is not that. It is just that 
Congress established a very orderly and sensible process for 
coming up with rules of civil procedure and criminal procedure. 
That process has worked extremely well for the last 70 years on 
a variety of topics, many of which have policy implications to 
them.
    And this is a way of short-circuiting that process--not 
getting the empirical information, not having input from a wide 
spectrum of professors and others. And so that is why I think 
the Judicial Conference is so adamant about the fact that this 
process has just worked so extremely well that----
    Ms. Sanchez. I understand that. But we also do have 
processes in Congress by which receive testimony; we get 
experts to send testimony; we get to question witnesses, much 
like what is happening today. And, you know, there are--
legitimately, if there is a perceived lack of movement in an 
area in which Congress has a fundamental policy interest in 
looking after----
    Judge Kravitz. I can't disagree with you. All I can say, 
though, is I would like to see the empirical information about 
how often protective orders that have been entered in 
connection with discovery. I am not talking about sealed 
settlements that have actually ended up, in Federal court, 
ended up with a health and safety issue. We have looked at that 
issue carefully, and it is not there.
    Ms. Sanchez. Let me ask you this, Judge Kravitz. Although 
it is perhaps that the number of them is not huge, or gross of 
the overall docket, would you agree with Mr. Meadow, though, 
that the potential people that are affected by just one could 
be in the tens of thousands if not hundreds of thousands?
    Judge Kravitz. I would like to hear that information. We 
found that protective----
    Ms. Sanchez. But what about the fact that Mr. Meadow can't 
provide it because there are all these secrecy agreements that 
hide the number of people that have been impacted?
    Judge Kravitz. I will say that that was very dramatic. But 
I gather that--I would venture to say that Mr. Meadow actually 
filed pleadings in court. And those pleadings in court are 
subject to the constitutional right of public access. And Mr. 
Meadow, I am sure, makes very strong arguments in court in 
those public documents about the health and safety in the 
conduct of defendants. So--and you, the Congress and other 
people, can get copies of those pleadings.
    I talked to Mr. Meadow--his Vioxx cases were in state 
court; they weren't in Federal court. We are talking about the 
Federal rules. And I just think we need to look carefully at 
what has actually happened in Federal court, not in state 
court, and see if there is a problem. And if it is a problem, 
we will deal with it.
    Ms. Sanchez. I understand.
    But the question, more specifically, was--leaving aside 
state cases--was to talk about Federal cases in which there is 
an interest in potential effects to other plaintiffs. Do you or 
do you not agree that a plaintiff who has been injured, or even 
killed, because of the negligence or the fault of another, 
keeping that information secret does have the potential to 
impact tens of thousands of people?
    Judge Kravitz. It does. But I think we have to distinguish 
between during the course of discovery before trial or 
settlement and at the end of the case. And what I am saying is, 
the provisions here about the course of discovery are going to 
slow down things and not get Mr. Meadow the information he 
needs.
    Now, if at the end of the case he believes that--well, 
first of all, if it is tried, it is all open to the public. If 
it is settled, and not he but somebody else wants access to 
that information, they have an ability to come to the courts.
    And courts do modify orders; courts do vacate orders. In 
the Wyeth case dealing with the vaccines, the court vacated the 
order and allowed that information to go to public authority. 
But that is the end of the case, after we have gotten Mr. 
Meadow the information that he wants. And I thinks that is the 
real--but that this order requires it during the discovery 
process.
    Ms. Sanchez. I understand that distinction that you are 
making.
    Mr. Meadow, would you care to respond to that? Or I also 
have another question I would like to ask.
    Mr. Meadow. No, absolutely. The judge is right that when we 
file a complaint, it is public; it is a public document; you 
can go down to the courthouse and read it. But these complaints 
are mere allegations of what we think a company has done wrong. 
We don't have any specific information. It is not until we get 
the actual documents.
    And, normally, after we file a complaint, it could be 
months before we get any documents because we spent the first 6 
months negotiating for a protective order and for 
confidentiality. And when we finally get the confidentiality 
order, and we start getting the documents, those documents are 
redacted. And we have to fight yet again. The defendants who 
are going over these documents, and they are normally multi-
billion-dollar corporations, usually turn on six to seven law 
firms to review the documents. So they have already been gone 
through.
    And this legislation places the burden of whoever seeks the 
protective order on that who is seeking the order. So the 
defendants know what documents are affected by the protective 
order.
    So the complaint, I don't think--I think it is a red 
herring in this because it is bare-bones, and nobody goes down 
and reads our complaints. You know, the press may pick it up, 
and then the company denies all allegations and says they are 
all false anyway. So until we get a protective order in place, 
we can't see the documents. And then we have a second go-around 
with those documents.
    Ms. Sanchez. Thank you, Mr. Meadow.
    My time has expired. I would now recognize Mr. Cannon for 5 
minutes.
    Mr. Cannon. Thank you, Mr. Kravitz. Did you want to respond 
to Mr. Meadow's comments?
    Judge Kravitz. Well, I just--can I just give you--I have 
talked about anecdotal information, so I shouldn't do it. But 
here is a case I just tried about a year ago: The plaintiff 
alleged that the brakes on the truck were defective. The 
defendant alleged that the driver was drunk and asleep at the 
time of the truck accident, which killed two people.
    Truckloads of information was given to the plaintiff under 
the form of a protective order, during the course of which we 
got the plaintiff's new information; there were experts on both 
sides. It was tried to a jury. The jury found that the driver 
was asleep and drunk and that the brakes were fine.
    Now, that is--we know that at the end of the case. Now, 
tell me, at the beginning of this case, when the requests for 
information about the brakes were coming, is that a case that 
is relevant to public health and safety or not? I just don't 
know how I am going to decide that information in those cases. 
And you can go on and on about the scenarios.
    So all I am saying is I think that there is--judges have 
the ability to modify orders, and they do. Judges have the 
ability at the end of the case to allow information that has 
been subject to a confidentiality agreement to get out to the 
public, so that if the brakes were found to be defective by the 
jury, and somebody else wanted this information, they could get 
it. Of course, this all came out at a public trial of that 
case.
    So I just think we--I would urge the Committee to just kind 
of look at the sealed settlement provisions differently from 
the discovery proceedings. And we do not need to impose further 
burdens and costs on litigants in the course of discovery; 
there is already plenty of them. And I do believe that this 
would impose significant costs, and it will result in Mr. 
Meadow not getting his documents any time soon.
    Mr. Cannon. Thank you.
    You know, these are complicated issues. And sitting on both 
this Committee and the Committee on Intellectual Property and 
the Courts, it is--let me just give you one little experience. 
I sat on that Committee for 6 years with Barney Frank. Now, 
Barney Frank and I are on the opposite sides of the political 
spectrum. But after 6 years, he left the Committee to be, I 
think, the Ranking Member on Financial Services. But we had a 
little chat, and it occurred to us--or to me, at least--that we 
had sat on that Committee and disagreed on many things but had 
never once disagreed about judicial oversight and economy.
    And we have in place here a system that allows for the 
development of rules in an open and public fashion where all 
thoughts can be weighed. And that system was--actually I agree 
with you, Mr. Kravitz--that has worked for a long time. In 
fact, I was just thinking how long I have been involved as a 
lawyer, and it tracks back quite a ways. And it has worked 
well, and I have followed it closely.
    On the other hand, we in Congress have some pretty dramatic 
authority. We, for instance, can get from you, outside of your 
agreement system that is, the content of the information that 
you can't disclose to us because we are Congress, and we are 
not constrained by those agreements. There are some 
limitations, and we have to work through those. But we have 
great powers.
    And those great powers, I think, we need to use very 
thoughtfully, very carefully, especially when society is 
changing as rapidly as it is right now. We need to maintain, in 
some ways, continuity. And so in the regular order of 
developing a rule, things happen that make sense. And in the 
regular order of this Congress, things happen we hope that make 
sense.
    And going out of regular order, it is true that the full 
Committee can't actually mark this bill up now. But this 
Subcommittee, I don't believe, can mark this bill up, and I am 
not--I don't believe that this testimony is even going to be 
relevant when we get to a full Committee markup if it goes that 
far.
    There is a good reason for having these kinds of regular 
order. And it just seems to me that there is nothing that has 
been said here at this hearing that compels anything, any 
activity, by this Committee or by the full Committee.
    I am very impressed with Judge Anderson's comments about 
what they have done and what he has done in his--the other 
judges in his district have done. That makes enormous sense.
    I think that there is agreement by the panel that judges 
have a lot of latitude, and I don't think anyone would disagree 
with Judge Kravitz that orders can be changed. I don't think 
anybody would disagree with Judge Kravitz that after a trial 
has happened that that is a different environment and that this 
rule would create burdens before you can get to that open a 
trial.
    And, in fact, I believe that the greatest benefit that most 
plaintiffs really ultimately have is the threat of the trial 
that the defendants will have to defend. And going through that 
process may mean that the brakes are determined not to be 
defective. And, therefore, there are classes of people that 
could emerge to sue won't be empowered. But on the other hand, 
it means that you have gotten a decision in a public, open 
fashion, and that leaves a very small number of cases where you 
might have a settlement agreement.
    And I think we have heard great insight on that process. I 
don't think that insight leads us to change the ordinary course 
and create by legislation a new rule. I think it makes it, 
gives a basis for thinking about how these things should go. 
And I think it creates a basis for other districts to look at 
what your district has done, Judge Anderson, and say, ``Do we 
want to do the same kind of thing?''
    I think that these are very powerful ideas, but they are 
not ideas that should motivate this Congress or any other to do 
a bill that would change by legislative fiat rules that have 
grown in an organic, open and public fashion.
    And so, Madam Chair, my time is----
    Ms. Sanchez. Would the gentleman yield?
    Mr. Cannon. Certainly.
    Ms. Sanchez. Just because Judge Kravitz seems to be so 
interested in empirical information, I would ask--and we will 
submit written questions as well, which I will go over 
shortly--but I would be interested to know just how many times 
judicial orders are actually changed regarding these 
confidentiality agreements. So if you have that information, we 
will allow you to submit that.
    Judge Kravitz. It actually is, if you read the study on 
protective orders that is part of attached to my testimony, 
there are statistics--I don't have them at my hand----
    Ms. Sanchez. Okay.
    Judge Kravitz [continuing]. On modifications and which 
orders come through stipulations----
    Ms. Sanchez. Because I would suspect--and this is just 
speculation on my part, of course, until I receive the 
information--that it is probably not very often that that 
occurs.
    Judge Kravitz. I don't know that you are right about that.
    But let me just say, too, I said in 6 percent of all cases 
where a protective order, in only 9 percent of that 6 percent 
involves personal injury. I mean, the vast number involves 
things that have nothing to do with personal injury.
    So we could look at the--but I, my recollection was that 
there was information on there. And, actually, only 50 
percent--50 percent--of those protective orders were actually 
stipulated. Most of them were litigated, and then there was a 
decision by a judge about them as to whether or not to have 
them.
    Mr. Cannon. In reclaiming my time, let me just point out 
that you would expect a very small number of these orders would 
be reviewed, but they get reviewed when there is a serious 
issue. And a judge, he gets paid--not enough, by the way; 
although we did increase that, and I----
    Ms. Sanchez. We have attempted, have attempted---- 
[Laughter.]
    Mr. Cannon. We ought to grab it on anything that will go.
    At least we have done our work on our side, I believe. And 
hopefully the Senate can actually do something before they are 
out.
    But the whole point here is that Federal judges are in a 
position of stature--and not adequately paid, but hopefully 
better paid in the future--to make these kinds of decisions 
about what is important and what kind of rules and what kind of 
rulings that they have issued should be changed.
    And so I am not sure that the number is so important as 
compared to the fact that it is done by men of judgment and 
women of judgment when it is reasonably required. And I think 
that you are going to find that the bench is competent. And, 
therefore, the orders, the changes on those rulings are going 
to be appropriate, and not that the number is significant but 
the action by judges, I think, that you will find to be 
appropriate.
    Thank you, Madam Chair.
    Ms. Sanchez. That remains to be seen.
    We want to thank all of the witnesses for their testimony 
today.
    Without objection, Members will have 5 legislative days to 
submit any additional written questions--I told you I would 
tell you about that--which we will forward to the witnesses and 
ask that you answer as promptly as you can so that they can be 
made a part of the record.
    Without objection, the record will remain open for 5 
legislative days for the submission of any additional materials 
as well.
    Again, I want to thank everyone for their patience. And I 
wish everyone a safe and productive August work period.
    And this hearing of the Subcommittee of Commercial and 
Administrative Law is now adjourned.
    [Whereupon, at 11:45 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Attachments to the Prepared Statement of the Honorable Mark R. Kravitz, 
       Judge, U.S. District Court for the District of Connecticut

                              ATTACHMENT 1












































                              ATTACHMENT 2














































































































































































































































































































































                              ATTACHMENT 3
















































                                

       Answers to Post-Hearing Questions from Richard D. Meadow, 
                       the Lanier Law Firm, PLLC




                                

 Answers to Post-Hearing Questions from John P. Freeman, Distinguished 
      Professor Emeritus, University of South Carolina Law School


                                

 Answers to Post-Hearing Questions from the Honorable Mark R. Kravitz, 
       Judge, U.S. District Court for the District of Connecticut






                                

    Answers to Post-Hearing Questions from the Honorable Joseph F. 
  Anderson, Jr., Judge, U.S. District Court for the District of South 
                                Carolina


                                 
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