[Senate Hearing 110-263]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-263
 
  THE SUNSHINE IN LITIGATION ACT: DOES COURT SECRECY UNDERMINE PUBLIC 
                           HEALTH AND SAFETY?

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

                                HEARING

                               before the

                       SUBCOMMITTEE ON ANTITRUST,
                 COMPETITION POLICY AND CONSUMER RIGHTS

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 11, 2007

                               __________

                          Serial No. J-110-67

                               __________

         Printed for the use of the Committee on the Judiciary



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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ARLEN SPECTER, Pennsylvania
JOSEPH R. BIDEN, Jr., Delaware       ORRIN G. HATCH, Utah
HERB KOHL, Wisconsin                 CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         JON KYL, Arizona
RUSSELL D. FEINGOLD, Wisconsin       JEFF SESSIONS, Alabama
CHARLES E. SCHUMER, New York         LINDSEY O. GRAHAM, South Carolina
RICHARD J. DURBIN, Illinois          JOHN CORNYN, Texas
BENJAMIN L. CARDIN, Maryland         SAM BROWNBACK, Kansas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
            Bruce A. Cohen, Chief Counsel and Staff Director
      Michael O'Neill, Republican Chief Counsel and Staff Director
                                 ------                                

   Subcommittee on Antitrust, Competition Policy and Consumer Rights

                     HERB KOHL, Wisconsin, Chairman
PATRICK J. LEAHY, Vermont            ORRIN G. HATCH, Utah
JOSEPH R. BIDEN, Jr., Delaware       ARLEN SPECTER, Pennsylvania
RUSSELL D. FEINGOLD, Wisconsin       CHARLES E. GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         SAM BROWNBACK, Kansas
BENJAMIN L. CARDIN, Maryland         TOM COBURN, Oklahoma
                     Jeffrey Miller, Chief Counsel
                Peter Levitas, Republican Chief Counsel
                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah......     3
Kohl, Hon. Herb, a U.S. Senator from the State of Wisconsin......     1
    prepared statement...........................................    82
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, 
  prepared statement.............................................    89

                               WITNESSES

Anderson, Joseph F., Jr., U.S. District Court Judge, District of 
  South Carolina.................................................     7
Bailey, Leslie A., Brayton-Baron Attorney, Public Justice, 
  Oakland California.............................................    10
Bradley, Johnny, Jr., Pachuta, Mississippi.......................     5
Morrison, Stephen G., Partner, Nelson Mullins Riley & 
  Scarborough, LLP, Columbia, South Carolina.....................    12
Weiner, Robert N., Partner, Arnold and Porter, Washington, D.C...     9
Zitrin, Richard A., Adjunct Professor of Law, University of 
  California at Hastings, San Francisco, California..............    14

                         QUESTIONS AND ANSWERS

Responses of Joseph F. Anderson to questions submitted by 
  Senators Kohl and Hatch........................................    28
Responses of Leslie A. Bailey to questions submitted by Senator 
  Kohl...........................................................    34
Responses of Stephen Morrison to questions submitted by Senator 
  Kohl and Hatch.................................................    36
Responses of Robert N. Weiner to questions submitted by Senators 
  Kohl and Hatch.................................................    46
Responses of Richard A. Zitrin to questions submitted by Senator 
  Kohl...........................................................    52

                       SUBMISSIONS FOR THE RECORD

Anderson, Joseph F., Jr., U.S. District Court Judge, District of 
  South Carolina, statement......................................    55
Bailey, Leslie A., Brayton-Baron Attorney, Public Justice, 
  Oakland California, statement..................................    61
Bradley, Johnny, Jr., Pachuta, Mississippi, statement............    80
Lawyers for Civil Justice, U.S. Chamber Institute for Legal 
  Reform, U.S. Chamber of Commerce, joint statement..............    84
Miller, Arthur R., University Professor, New York University 
  School of Law, New York, New York, letter and attachment.......    91
Morrison, Stephen G., Partner, Nelson Mullins Riley & 
  Scarborough, LLP, Columbia, South Carolina, statement..........   168
Reporters Committee for Freedom of the Press, Lucy A. Dalglish, 
  Gregg P. Leslie, Corinna J. Zarek, Arlington, Virginia, 
  statement......................................................   175
Resnik, Judith, Arthur Liman Professor of Law, Yale Law School, 
  New Haven, Connecticut, statement..............................   181
Weiner, Robert N., Partner, Arnold and Porter, Washington, D.C., 
  statement......................................................   206
Zitrin, Richard A., Adjunct Professor of Law, University of 
  California at Hastings, San Francisco, California, statement...   215
S. 2449, ``Sunshine in Litigation Act of 2007''..................   240


  THE SUNSHINE IN LITIGATION ACT: DOES COURT SECRECY UNDERMINE PUBLIC 
                           HEALTH AND SAFETY?

                              ----------                              


                       TUESDAY, DECEMBER 11, 2007

                                       U.S. Senate,
                                Committee on the Judiciary,
                                 Subcommittee on Antitrust,
                    Competition Policy and Consumer Rights,
                                                   Washington, D.C.
    The Committee met, Pursuant to notice, at 2:29 p.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Herb Kohl, 
Chairman of the Committee, presiding.
    Present: Senators Kohl and Hatch.

 OPENING STATEMENT OF HON. HERB KOHL, A U.S. SENATOR FROM THE 
                       STATE OF WISCONSIN

    Chairman Kohl. This hearing will come to order. Today, we 
will examine the important issue of court secrecy.
    Far too often, court-approved secrecy agreements hide vital 
public health and safety information from the American public, 
putting lives at stake. The secrecy agreements even prevent 
government officials or consumer group from learning about and 
protecting the public from defective and dangerous products.
    The following example demonstrates how this issue arises 
and the devastating implications secret settlements can indeed 
have.
    Back in 1996, a 7-year-old boy in Washington State took an 
over-the-counter medicine to treat an ear infection. Within 
hours, he suffered a stroke, fell into a coma, and he died 3 
years later. The child's mother sued the drug manufacturer, 
alleging their product caused the stroke.
    Unknown to the mother and to the public, many similar 
lawsuits alleging harm caused by this very same medicine had 
been secretly settled. It was not until the year 2000 that the 
FDA banned an ingredient found in the boy's medicine.
    If it were not for this court secrecy in the previous 
lawsuits, the boy's mother may well have known about the risks.
    While this case is tragic, it is not unique. In these types 
of cases, the defendant requires the victim to agree to secrecy 
about all information disclosed during the litigation or else 
forfeit the settlement.
    That individual victim recovers the money that they need to 
pay medical costs, but, as a result, the public is often kept 
in the dark about potential dangers.
    We are all familiar with well known examples of these types 
of cases involving complications from silicone breast implants, 
adverse reactions to prescription or over-the-counter medicine, 
side-saddle gas tanks prone to causing deadly car fires, park 
to reverse problems in pickup trucks, defective heart valves, 
dangerous birth control devices, tire malfunctions, and 
collapsing baby cribs, just to name a few.
    Information about these defective products and the dire 
safety consequences did not deserve court-endorsed protection. 
In fact, that protection prevented the public from learning 
vital information that could have kept them far safer.
    The most famous case of abuse involved Bridgestone and 
Firestone tires. From 1992 to 2000, tread separations of 
various Bridgestone and Firestone tires were causing accidents 
across the country, many resulting in serious injury and even 
fatalities.
    Instead of owning up to their mistakes and acting 
responsibly, the company quietly settled dozens of lawsuits, 
most of which included secrecy settlements. It was not until 
1999, when a Houston public television station broke the story, 
that the company acknowledged its wrongdoing and recalled 6.5 
million tires.
    By then, it was too late for the more than 250 people who 
had died and more than 800 injured in accidents related to 
these defective tires.
    Legislation that I've introduced in the past and that I 
intend to reintroduce today seeks to restore the appropriate 
balance between secrecy and openness. Under our bill, the 
proponent of a protective order must demonstrate to the judge's 
satisfaction that the order would not restrict the disclosure 
of information relevant to public health and safety hazards.
    This legislation does not prohibit secrecy agreements 
across the board, for indeed there are appropriate uses for 
such orders, such as protecting trade secrets, and this bill 
makes sure that such information is kept secret.
    But protective orders that hide health and safety 
information from the public, in an effort to protect the 
company's reputation or its profit margin, should not be 
permitted.
    The bill does not place an undue burden on judges or our 
courts. It simply states that where the public interest in 
disclosure outweighs legitimate interests in secrecy, courts 
should not shield important health and important safety 
information from the public.
    We take great pride in our court system and in its 
tradition of fairness for plaintiffs and defendants alike. 
However, courts are public institutions, meant to do more than 
simply resolve cases. They must also serve the greater goods of 
law, order and justice.
    We believe that our legislation will help to restore this 
balance.
    We thank everybody for being here. We look forward to your 
testimony.
    [The prepared statement of Senator Kohl appears as a 
submission for the record.]
    And we turn now to the ranking member on this subcommittee, 
Senator Orrin Hatch.

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE 
                            OF UTAH

    Senator Hatch. Thank you, Mr. Chairman.
    I want to begin by thanking you for organizing this 
hearing. You have put together a balanced panel and the 
witnesses have submitted thoughtful testimony on a complicated 
issue, and I want to thank all of you witnesses, as well.
    Mr. Chairman, you have championed the Sunshine in 
Litigation Act for many years, and this proposal had its first 
Judiciary hearing in April 1994.
    To put that in some perspective, in 1994, Republicans were 
also in the minority. In the intervening decade, much has 
changed in the practice of litigation. Specifically, we have 
witnessed the use of electronic discovery, and one question I 
want to examine today is whether this practice of e-discovery 
should impact our judgments about this legislation.
    The Sunshine in Litigation Act addresses court secrecy. 
More specifically, it addresses the lack of public access to 
materials obtained in discovery and to the content of 
settlement agreements.
    To provide greater public access to these essentially 
private matters, previous proposals have modified the use of 
protective orders in Federal courts, limiting the discretion of 
the presiding judge to issue a protective order for information 
that might be relevant to the protection of the public health 
and safety.
    There are strong arguments on both sides of this proposal. 
Yet, in preparation for this hearing, I found that the 
explosion of e-discovery has only strengthened the views of 
those opposed to this legislation.
    For example, some years ago, Professor Arthur Miller of New 
York University Law School criticized sunshine litigation in 
the Harvard Law review.
    In preparation for this hearing, however, Professor Miller 
wrote to me and stated that ``My views on the subject are even 
stronger today, reinforced by dramatic changes in the 
litigation landscape. The massive expansion of discovery in 
today's electronic world magnifies the need for broad judicial 
discretion to protect all litigants' privacy and property 
rights.''
    Now, I think that going forward, the committee should heed 
this warning.
    I would ask, Mr. Chairman, that Professor Miller's article 
and letter be submitted for the record at this point.
    Chairman Kohl. It will be done.
    Senator Hatch. These practical concerns also implicate 
constitutional interests of privacy and due process. The U.S. 
Supreme Court has addressed these privacy issues in Seattle 
Times v. Rhinehart. The Court found that ``A litigant has no 
First Amendment right of access to information made available 
only for purposes of trying his suit.''
    Now, some appear to believe that materials obtained in 
discovery and the content of settlement agreements are 
essentially public matters that are made private by protective 
orders. In my view, this gets it backward. While there are 
public elements to litigation, most obviously, the complaint, 
the Supreme Court has indicated that privacy interests deserve 
protection in litigation.
    The committee should also consider the potential unintended 
consequences of any legislation modifying the use of protective 
orders. Given the burdensome character of discovery, it is not 
clear what the consequences of this legislation will be on the 
incentives to settle rather than to go to trial.
    Some believe that an agreement of confidentiality 
facilitates the informational exchange necessary to the 
adversary process. Greater public access to materials obtained 
through discovery and to settlement agreements might create 
disincentives to settlement, increasing litigation costs and, 
of course, the caseload of the various Federal courts.
    Finally, Congress should be mindful that the courts are an 
independent branch of government and that the management of its 
caseload is a quintessentially judicial function. Yet, this 
legislation would fundamentally rework Rule 26(c) of the 
Federal Rules of Civil Procedure, which provides judges with 
broad discretion to issue protective orders.
    Now, at this point, the Judicial Conference is not 
considering a change to these rules. In part, this might be 
owing to a finding by the Federal Judicial Center that of the 
288,846 civil cases terminated in 2001 or 2002 in the 52-
district study, 1,270 of them had sealed settlement agreements, 
which is .44 percent, less than one-half of 1 percent.
    Now, Mr. Chairman, I ask that an article by Robert Reagan 
detailing these findings be included in the record.
    Chairman Kohl. Without objection.
    Senator Hatch. Now, Mr. Chairman, our courts exist to 
adjudicate cases and controversies. When the parties to a 
dispute agree to settle, that particular case or controversy 
becomes moot. We need to consider whether it is consistent with 
our commitment to due process to require judges essentially to 
make fact findings about the public health impact of 
information obtained through discovery, without the truth-
seeking benefits of the adversarial process.
    Mr. Chairman, I have great respect for you. Thank you again 
for your work on this hearing. I look forward to the hearing 
with you and working with you on this issue in the coming year.
    Unfortunately, I can't stay very long, because I've got the 
full Intelligence Committee, on which I sit, in an also equally 
important hearing and I'm going to have to slip out to that.
    But I appreciate you holding this hearing on this very 
important matter.
    Thank you, Mr. Chairman.
    Chairman Kohl. Thank you very much, Senator Hatch, for 
coming here today.
    We'd like now to introduce our panel of witnesses. Our 
first witness testifying today will be Johnny Bradley, Jr. Mr. 
Bradley is a former petty officer second class with the U.S. 
Navy.
    Mr. Bradley sued Cooper Tire and Rubber Company after an 
SUV rollover accident, allegedly caused by defective tires, 
killed his wife and left him and his son seriously injured.
    Mr. Bradley, we thank you for coming today and we offer our 
condolences to you and your family for your loss.
    Our next witness today will be Judge Joseph Anderson. Judge 
Anderson currently serves as a judge for the U.S. District 
Court for the District of South Carolina. Prior to his 
judgeship, Judge Anderson practiced law in Edgefield, South 
Carolina, and he served as a representative in the South 
Carolina General Assembly.
    Our next witness will be Robert Weiner. Mr. Weiner is a 
partner at Arnold and Porter in Washington, D.C., where he 
litigates in antitrust, toxic tort, patent and commercial 
matters. He also served in the Office of the Counsel to the 
President under President Clinton.
    Our next witness will be Leslie Bailey. Ms. Bailey is an 
attorney with Public Justice, a public interest law firm, where 
her practice focuses primarily on consumer and civil rights.
    Our next witness will be Stephen Morrison. Mr. Morrison is 
a partner at Nelson Mullins in Columbia, South Carolina, where 
he practices in the areas of technology law, business and 
product liability. He serves an adjunct professor of law at the 
University of South Carolina.
    Our final witness today will be Richard Zitrin. Mr. Zitrin 
is an adjunct professor of ethics at the University of 
California at Hastings, and he practices law at Zitrin and 
Frassetto. From 2000 to 2004, he served as the Director of the 
Center for Applied Legal Ethics at the University of San 
Francisco School of Law.
    We thank you all for appearing at our subcommittee's 
hearing to testify today.
    We now ask all of our witnesses to rise and raise your 
right hand, as I administer the oath.
    [Witnesses sworn.]
    Chairman Kohl. We thank you so much.
    We will now begin to hear from our witnesses, starting with 
Mr. Bradley, and we'd like to request that you keep your 
remarks to 5 minutes or less.
    Mr. Bradley?

     STATEMENT OF JOHNNY BRADLEY, JR., PACHUTA, MISSISSIPPI

    Mr. Bradley. Good afternoon, Chairman Kohl, Ranking Member 
Hatch and the members of the subcommittee.
    My name is Johnny Bradley and I am from Pachuta, 
Mississippi. I am here today to represent those who live every 
day with the devastating consequences of court secrecy.
    Unfortunately, I know firsthand what it feels like to lose 
someone because of a defective product.
    On July 14, 2002, my life changed forever. I became a 
widower and my young son, Diante, lost his mother. My wife died 
in a car wreck when the tread separated on one of the rear 
Cooper tires on our Ford Explorer. As a result, our car rolled 
over 4.5 times, killed my wife instantly, and rendered me 
unconscious for approximately 2 weeks.
    With my son in the back seat and me and my wife in the 
front, my cheerful family had been driving from California to 
visit my family in Mississippi. Since we were traveling across 
the country, we even had our vehicle checked at a nearby repair 
shop prior to leaving California.
    You see, my wife and I were both in the Navy, previously 
stationed in Guam, and we had the rare opportunity to finally 
visit my family on our way to a new post in Pensacola, Florida. 
Though I worked on torpedoes and my wife was an E-5 postal 
clerk, we were both selected to become Navy recruiters, a real 
honor for both of us to broaden our Navy careers.
    My son, who was six, was also excited to see his 
grandmother in Mississippi. It was like Christmas in July to 
visit our family on the mainland after being stationed in Guam, 
and he anticipated lots of presents and delicious southern 
cooking.
    We never made it past New Mexico. The last thing I remember 
about that tragic day was that I dozed out, with my wife 
driving. When I woke up from my coma 2 weeks later, I was told 
that my wife had died. My family had waited 2 weeks to hold my 
wife's funeral, because they wanted me to be able to attend.
    Sadly, my young son had to go in place, because my own 
injuries were so severe.
    My left leg had to be fused at the knee and my intestines 
were cut in half from the force of the seatbelt in the wreck. 
To this day, I cannot walk properly and I must always travel 
with my colostomy bag.
    I believe that if we had known about the dangerous tread 
separation defect in Cooper tires, my wife would still be alive 
today. You see, only after the death of my wife and through 
litigation in Federal court with my highly specialized 
attorney, I did learn about a series of design defects in 
Cooper tires that Cooper had known about previously.
    To my horror, I found out that Cooper had faced numerous 
incidents like mine since the 1990's and had in its possession 
thousands of documents detailing these defects.
    Why have the details from as any 200 lawsuits against 
Cooper remained covered up? Why were these dangers never 
discovered by the public? Why were all of these tragic stories 
never shared before?
    I found out through my attorney that almost all of these 
documents were kept confidential through various protective 
orders, demanded by the tire company and entered by courts 
around the country, so that vital information that could have 
saved our family would never be disclosed to the public.
    We bought these Cooper tires because we thought they would 
be safer than Firestone tires. If I had known that they were 
even worse than Firestone, and my attorney found out through 
these confidential documents, I would have never touched these 
tires.
    You might be wondering how my attorney came across these 
documents if they were confidential. I was lucky enough to 
obtain counsel from Bruce Kaster, who has specialized in this 
type of litigation for over two decades.
    To this day, I would never even have known about the 
dangers of Cooper Tires and four specific design defects if 
Bruce had not known to ask for these documents.
    I can sit here today and give you the facts about what 
happened to me, but the protective order issued by the Federal 
court forbids me from talking about the documented evidence of 
Cooper tire defects uncovered by my attorney during litigation.
    I know some Cooper tire problems were reported in the 
newspaper prior to my wife's death, but without specific 
documents, evidence not cloaked in secrecy, these defects were 
not nearly as publicized.
    Chairman Kohl. Thank you very much, Mr. Bradley.
    [The prepared statement of Mr. Bradley appears as a 
submission for the record.]
    Judge Anderson?

 STATEMENT OF HON. JOSEPH F. ANDERSON, UNITED STATES DISTRICT 
 COURT JUDGE, UNITED STATES DISTRICT COURT FOR THE DISTRICT OF 
                         SOUTH CAROLINA

    Judge Anderson. May I remain seated?
    Chairman Kohl. Yes, certainly. That would be just fine.
    Judge Anderson. Chairman Kohl, Ranking Senator Hatch, thank 
you for allowing me to appear before you to discuss sunshine in 
litigation, a subject of particular interest to me as a trial 
judge with 21 years experience on the Federal bench.
    I should say at the outset that I am not here representing 
the United States Judicial Conference or any other 
organization. I am here simply to convey my thoughts on the 
need for 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 or three decades, litigants frequently 
request that judges approve settlements, often in cases where 
court approval is not necessary, and, as part of this approval 
process, judges are sometimes asked to enter orders restricting 
public access to settlement information and perhaps the 
procedural history of the case.
    In these instances, litigants are not content to simply 
agree between themselves to remain silent as to the settlement 
terms. Instead, they prefer to involve the trial judge in a 
take-it-or-leave-it consent order that would bring to bear 
contempt sanctions on anyone who breaches the court-ordered 
secrecy.
    Unfortunately, we trial judges often struggle under the 
crush of burgeoning caseloads. Eager to achieve speedy and 
concrete resolutions to our 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 of my district court in South 
Carolina voted unanimously to adopt a local rule that would 
restrict court-ordered secrecy associated with settlement in 
civil cases. We were then and we remain today the only Federal 
district in the country with such a rule.
    In the brief time allotted to me, I'd like to relate 
several events which prompted me to propose our rule to our 
court and to say just a word about our court's experience 
operating under this rule.
    In 1986, when I was a 36-year-old newly appointed Federal 
trial judge, I was assigned a case that had been pending on 
another judge's docket for several years. The case was ready 
for trial, which the lawyers predicted would take a grueling 6 
months. The case was brought by 350 plaintiffs who lived around 
a large fresh water lake in upstate South Carolina. The 
plaintiffs contended that the defendant in the case had 
knowingly deposited excess amounts of PCBs into the lake and 
that they had experienced severe health problems from 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 $3.5 million into a fund to 
be set up for a medical monitoring program and primary health 
care program for the 350 plaintiffs and a small amount of 
settlement money would be set aside for a per capita 
distribution to each plaintiff.
    There was one catch. The settlement was contingent upon my 
entry of a gag order prohibiting the parties from ever 
discussing the case with anyone and, also, requiring a return 
of the allegedly smoking gun documents produced in the 
litigation.
    I was advised by counsel that if I did not go along with 
their request, the carefully crafted settlement package would 
disintegrate and the case would proceed to a contentious 6-
month trial.
    As a judge with less than a year's experience on the bench, 
with other complex cases stacking up on my docket and believing 
it was the fairest and in the best interest of all parties, I 
agreed to the request for court-ordered secrecy.
    When I signed the order, everyone was content. The 
plaintiffs recovered a handsome some. The lawyers for both 
sides were paid. The defendant received its court-ordered 
secrecy. There were no objections to the order and the judge 
had one less case to try.
    In the ensuing years, I questioned my decision to enter a 
secrecy order in that particular case. I also became troubled 
by what I viewed as a discernable trend in civil litigation. 
Lawyers were sometimes requesting court-ordered secrecy both at 
settlement and in connection with the exchange of documents 
during discovery.
    I was aware of instances in both state and Federal courts 
in South Carolina where judges had agreed to requests for 
court-ordered secrecy in cases where one could reasonably argue 
that the public interest and public safety should have required 
openness.
    Responding to this series of events, I proposed to our 
court that we adopt a local rule prohibiting, in most cases, 
court-sanctioned secret settlements. When our rule was released 
for public comment, we received heated objections from around 
the country.
    Virtually every opponent of our rule suggested that an 
inevitable byproduct of such a local rule restricting secrecy 
would be a substantial increase in the number of cases going to 
trial, which would, in turn, overwhelm our court.
    The rule was nevertheless adopted and we now have a 5-year 
operating perspective. The dire predictions of those who 
suggested that the rule would cause settlements to disappear 
proved to be wrong. In fact, according to statistics provided 
by our clerk of the court, our court tried fewer cases in the 5 
years following the rule's enactment than we did in the 5 years 
immediately preceding its enactment.
    In short, our rule has worked well and our court has not 
been overwhelmed as a result.
    Trade secrets, proprietary information, sensitive personal 
identifiers, national security data and the like remain 
protected. New business investments in South Carolina continue 
to go up each year.
    However, in those rare cases where the public interest or 
safety could be adversely affected by court-ordered secrecy, 
judges on our court have not hesitated to enforce the rule and 
keep the docket transparent.
    The national furor created when our rule was proposed for 
public comment, perhaps together with the tendency of the Kohl 
Sunshine Act, began a vigorous debate and much needed review of 
the adverse consequences associated with court-ordered secrecy.
    While the issue has not been entirely resolved, I'm of the 
opinion that the secrecy trend seems to be waning. More 
importantly, I believe that both state and Federal judges have 
become more sensitive and enlightened to the need for sunshine 
in litigation.
    Thank you for allowing to share my sentiments with you.
    [The prepared statement of Judge Anderson appears as a 
submission for the record.]
    Chairman Kohl. Thank you very much, Judge Anderson.
    Mr. Weiner?

STATEMENT OF ROBERT N. WEINER, PARTNER, ARNOLD AND PORTER, LLP, 
                        WASHINGTON, D.C.

    Mr. Weiner. Chairman Kohl, Senator Hatch, thank you for 
inviting me to testify on this subject.
    I have been a defense lawyer for nearly 30 years and the 
views I offer today were formed by that experience, but are not 
those of my firm or any client.
    In fact, I testified on this subject in 1990 before the 
Senate, your subcommittee, Senator, and the key issues haven't 
changed. But the world has and the most important change is the 
accelerating erosion of privacy as a result of the internet.
    Public disclosure now is far more public than public 
disclosure back in 1990, and that makes compelled disclosure 
more problematic. Many people who put a premium on civil 
liberties take for granted the extraordinary intrusion that 
litigation authorizes in this country.
    If two people disagree privately, no one expects that 
either one of them can delve into the files of the other for 
information relevant to the dispute, but if you file a lawsuit, 
whether it's meritorious or not, you get that right and you get 
the right to take a deposition, asking anything conceivably 
relevant to the lawsuit.
    That can encompass, depending on the claims, personal 
information for a corporation. It can encompass personnel 
records, secret formulas of the product, all sorts of 
information, and electronic discovery makes this problem worse, 
because the volume of discovery, the enormous volume of 
discovery makes it more likely that commercial information, 
sensitive commercial and personal information will be 
disclosed.
    Now, these materials exchanged in discovery didn't start 
out public and the fact that an opening asks for them doesn't 
make them public.
    Let's take a hypothetical case. The plaintiff files a 
complaint. It may be wrong, but the court has to accept it as 
true at the outset. And suppose the plaintiff serves a 
discovery request for a defendant's secret formula for its 
product, says it's relevant to the toxic effect of the product.
    Well, if the defendant is not sure that its secret formula 
is going to be protected in discovery, then what's going to 
happen? It's going to fight. It's going to fight producing it, 
and that takes time and resources of the court and the parties.
    And the court rules that it is not protected, what happens? 
Well, then the plaintiff has leverage for settling the case 
based not on the merits, but based on the risk of disclosure of 
commercially sensitive information.
    Now, Federal courts have discretion under the court rules 
to balance the competing interests of the parties affected by 
discovery and to enter a protective order on good cause based 
on the individual facts, and there's no reason to depart from 
that.
    There is lots of discussion about things that are concealed 
by protective orders, but I submit that that allegation strains 
plausibility, because protective orders cover the information 
exchanged in discovery.
    To star a suit, you need to file a complaint. That 
complaint is a public document. The plaintiff who files it can 
issue a press release. It is available electronically around 
the globe.
    Protective orders affect none of that and, at any time, a 
judge weighing the circumstances of the individual case can 
determine that information merits disclosure.
    Now, a statute like the Sunshine in Litigation Act that 
compels disclosure that is relevant, with respect, relevant to 
safety, with respect, is unwise, because all product liability 
cases involve allegations of safety and, presumably, in 
discovery, the documents produced are somehow relevant to 
safety.
    The question is whether there is a real risk of the 
product, whether the risks of the product outweigh its 
benefits, and that is the ultimate question in most cases, 
product liability cases, for the jury to decide after a full 
trial, discovery, after all the proceedings.
    But the statute asks judges to decide it at the outset, 
without a developed record, and that invites unfair and ill-
informed results.
    Now, the experts on this issue have no axe to grind. The 
Federal Judicial Center, the Federal Rules Advisory Committee 
have determined that this system is working, and I submit there 
is no need for rules that strip the courts of their discretion 
to decide each case on the merits.
    Thank you, Senator.
    Chairman Kohl. Thank you, Mr. Weiner.
    [The prepared statement of Mr. Weiner appears as a 
submission for the record.]
    Ms. Bailey?

 STATEMENT OF LESLIE A. BAILEY, BRAYTON-BARON ATTORNEY, PUBLIC 
                  JUSTICE, OAKLAND, CALIFORNIA

    Ms. Bailey. Thank you, Mr. Chairman, for inviting me to 
testify today on the issue of court secrecy.
    I'm an attorney at Public Justice. We're a national public 
interest law firm based here in Washington, and we have a 
special litigation project that is dedicated to fighting 
unwarranted court secrecy. Among other things, we intervene in 
cases and object to secrecy orders on behalf of the public and 
the press.
    It is undisputed that much of the civil litigation in this 
country is taking place in secret. Whether it's protective 
orders, secret settlements or sealing of court records, the 
public courts are being used to keep smoking gun evidence of 
wrongdoing from the public eye.
    Court secrecy is at least as common today as it was in the 
1990's, when the Firestone tire and breast implant scandals 
came to light. A Seattle Times series earlier this year 
uncovered more than 400 cases in a single court that had been 
wrongly sealed, many involving matters of public safety.
    Also, earlier this year, it came to light that Allstate 
Insurance Company had implemented a program where it was 
intentionally underpaying its policyholders on legitimate 
claims in order to increase shareholder profits.
    It worked. The program resulted in record operating income 
during a time marked by some of the worst natural disasters in 
recent history, including Hurricane Katrina. And the documents 
about this program were produced in litigation, but were kept 
secret from the public pursuant to a protective order.
    It was not until a lawyer who had seen them published his 
notes that the contents of the documents became known.
    The reason this happens is that defendants want secrecy and 
plaintiffs and judges do not do enough to oppose it. Defendants 
want secrecy, for the most part, because information about 
hazardous products and fraudulent business practices is bad PR 
and can lead to more lawsuits against them.
    Plus, in the settlement context, the defendant sometimes 
just does the math. It's cheaper to pay off the occasional 
individual who figures out the evidence, as long as you can 
keep it secret, than it would be to fix the product or change 
the practice.
    Plaintiffs, for their part, might well go into a case 
thinking one of their goals is to help make sure what happened 
to them doesn't happen to anyone else. But then they're offered 
a settlement that will pay their medical bills or rebuild their 
home in exchange for their silence.
    They feel horrible taking the deal, because they know 
someone else might get a hurt as a result of them keeping their 
mouth shut, but they need the money.
    Judges, meanwhile, are overburdened. And as long as the 
parties agree, it's all too common for a judge to sign off on 
secrecy without considering the public's interest at all.
    All the while, we continue to drive unsafe cars, drink 
unsafe water, take unsafe drugs, and put our money and our 
trust into institutions that are defrauding and deceiving us.
    That's the first and most obvious effect of secrecy, but 
there are other costs. Secrecy makes discovering the truth much 
more difficult and costly. When a defendant is able to keep its 
wrongdoing secret, it doesn't have to pay as much to the next 
person who is injured, and cases that would be resolved easily 
if the truth were known instead take years or never reach 
resolution.
    The current system is not working. And the reason it's not 
working is that as long as each party pursues his or her own 
narrow interest, no one in the process, in many cases, is 
protecting the interests of the public.
    My organization, Public Justice, has fought several secrecy 
orders in recent years and, in some cases, though certainly not 
all, we've succeeded in making documents public that should 
never have been concealed in the first place.
    For example, an expert witness in a case brought against 
Honda by a 17-year-old girl who was paralyzed in a crash was 
observed intentionally destroying the evidence that showed she 
had been wearing her seatbelt.
    When the judge found out, he issued a scathing 36-page 
sanctions decision detailing his findings and entering a 
verdict against Honda. But within a few days, the case settled 
and, as a condition of settlement, the judge was asked to 
vacate and seal his decision.
    He did. And once the court record of what had taken place 
was sealed, this same expert was used over and over again by 
car companies sued by other people hurt in car crashes, and no 
one was allowed to ask him about what he had done.
    We challenged that sealing order, and we were able to get 
it reversed. But for every success story, there are hundreds of 
equally harmful secrecy orders that remain in force.
    It shouldn't take intervention by a public interest group 
to make sure unnecessary secrecy is avoided. Hundreds of 
thousands of cases are handled each year by the courts, and 
it's not possible for a small number of nonprofits with a 
handful of lawyers to intervene in more than a tiny fraction of 
them, especially since challenges to secrecy orders offer no 
possibility of recovering attorney's fees.
    But if Federal judges were required by law to weigh the 
potential harm to the public interest before entering a secrecy 
order, this would help counter the factors that encourage 
secrecy to flourish.
    Thank you bringing this issue to the attention of Congress.
    [The prepared statement of Ms. Bailey appears as a 
submission for the record.]
    Chairman Kohl. Thank you very much, Ms. Bailey.
    Mr. Morrison?

STATEMENT OF STEPHEN G. MORRISON, PARTNER, NELSON MULLINS RILEY 
          & SCARBOROUGH, LLP, COLUMBIA, SOUTH CAROLINA

    Mr. Morrison. My name is Steve Morrison. I am a trial 
lawyer who usually defends people who get sued.
    I have tried over 240 cases to jury verdict and argued over 
60 appeals in the highest courts of the Federal and state 
systems of this nation. It has been my privilege to be lead 
counsel in 27 states. I have represented large multi-nationals, 
Fortune 500s. I've also represented individuals and families.
    I usually represent people who get sued, so I'm usually on 
the defense side. I have been a past president of the Defense 
Research Institute, an organization of 21,000 defense lawyers 
in the United States, a past president of Lawyers for Civil 
Justice, which is a group of corporate lawyers and corporate 
members, as well as defense bar organizations, trying to strive 
for a civil justice system that we can all be proud of.
    I've testified before the United States Judicial Conference 
and their rules committees going forward.
    Having said that, I do not represent any of those entities 
at this point in time. I speak only for myself and not for any 
client.
    I want to speak on three fundamental subjects very quickly. 
The first you might call the ham sandwich and the hog farm, Mr. 
Chairman.
    The second is the power of due process, and the third is 
the outrageous presumption of evil.
    The first part is essentially about the litigation 
environment that we operate in. For $100, you can file a 
lawsuit saying your ham sandwich made me sick and then, for 
that same $100, you can invoke the power of the Federal court 
to do discovery on a hog farm.
    That is, you can do discovery way outside of whether the 
ham sandwich was defective and unreasonably dangerous or had a 
public health issue.
    And as you gather up those documents on the hog farm and 
the electronic discovery on the hog farm and so forth, if this 
bill were to pass, you could then just put that out into the 
public domain. So that's the context within which we work.
    Let's look at the power of due process. If you have private 
information, private property, if you will, it should only be 
presented to the public in context and what the power of the 
Federal court does is produces a context for private 
information to be published in the context of a private 
dispute.
    You say my product is unsafe. I say that it is safe and my 
data is out in the process where I have a say and you have a 
say. It's not posted on the internet, on the Channel Islands. 
It's not posted out of context. It's not posted in snippets.
    It's not unfairly presented as evil with no opportunity to 
respond.
    What the Federal courts do and should continue to do is 
simply have within their discretion the ability to have 
information produced to the public in open court in the context 
of evidentiary rules, cross-examination, and the adversarial 
process.
    It works and it has worked and it produces in the tort 
system the ability to produce a safer public.
    Let's talk about the presumption then of evil, the 
outrageous presumption of evil. In the context that people are 
arguing you here today, there is a suggestion that if a 
document is held private in a piece of litigation, that 
document is evidence of evil, or that if an individual settles 
a lawsuit, that is evidence that they are an evil doer, that 
they have a bad motive.
    In fact, what happens in litigation is someone will find a 
document that they perceive to be embarrassing and they can 
spin it in a certain way in their adversarial process and they 
want to put that out in the public to embarrass someone.
    Why is that? For leverage, for leverage to produce a higher 
settlement in a civil case. It has nothing to do with 
protecting the public. It has to do with economics.
    So what we're about to embark on is a process whereby the 
courts would be limited in the tools that they have to maintain 
private property as private until such time as appropriate 
showings have been made for it to be shown in open court.
    I want to comment briefly on the so-called secret 
settlements. In South Carolina, as Judge Anderson has said, 
where I live, we have this court rule. But if I want to enter a 
contract with a plaintiff for the settlement to remain 
confidential and not ask for the court approval, the court 
doesn't participate in that, and the vast majority of 
confidential settlements are done on private contracts.
    So rarely is a court, as the U.S. Judicial Conference and 
the National Center for State Courts have produced data, rarely 
does a court actually approve a settlement being confidential. 
It's a very unusual circumstance.
    In sum, we should maintain the status quo, giving the 
judges the absolute power to manage the due process by which 
information is disclosed to the public.
    Thank you.
    [The prepared statement of Mr. Morrison appears as a 
submission for the record.]
    Chairman Kohl. Thank you, Mr. Morrison.
    Mr. Zitrin?

   STATEMENT OF RICHARD A. ZITRIN, ADJUNCT PROFESSOR OF LAW, 
UNIVERSITY OF CALIFORNIA AT HASTINGS, SAN FRANCISCO, CALIFORNIA

    Mr. Zitrin. Thank you, Chairman Kohl, for inviting us here 
today and for having a hearing on this very important issue and 
for enlightening both the U.S. Senate and the American people 
about a hidden, but very, very significant issue that affects 
our public health and safety.
    I have some prepared remarks, but I'm going to abandon 
them. There are some things that have been said by Mr. Morrison 
and Mr. Weiner and, indeed, Senator Hatch.
    First, these are not confidential settlements. They're 
secret settlements. Confidential is what my clients tell me, a 
lawyer-client confidential privilege. This Senate has various 
confidentialities.
    What we're talking about is secrecy. There is nothing 
confidential about documents that are exchanged in the 
discovery process and, indeed, our entire system of justice is 
based upon a reaction to the Star Chambers in Britain that made 
these pieces of litigation private.
    We do not engage in private litigation. We have public 
courts and, as I know the Senator knows, the United States 
Constitution and the Bill of Rights talks about the right to a 
speedy and open trial.
    So when Mr. Weiner says that these are private disputes and 
Mr. Morrison repeats that, they are private disputes, but they 
happen in a public forum. They happen under the jurisdiction of 
judges and they are subject to the scrutiny of the American 
people.
    So to start off with a presumption they are private is 
simply antithetical not only to the laws of the United States, 
but to the very foundations of our country that reacted against 
the Star Chamber.
    That's the first point I want to make.
    The second one is this. I'm glad we had Mr. Bradley go 
first, because I think we very, very carefully have to not lose 
sight of the fact that in this procedural debate about whether 
we're going to have this kind of protective order of that, 
what's presumptive, what's not presumptive, we lose the fact 
that thousands and thousands of people are being killed and 
maimed and permanently harmed because we have these secret 
settlements.
    Before December 2006, 8,000 cases involving the Lilly drug 
Zyprexa were settled secretly in the Eastern District of New 
York complex multi-district litigation, and, at that point, in 
December of 2006, just a year ago, the New York Times did an 
expose about the fact that Zyprexa caused great weight gain in 
30 percent of the people who received the drug.
    And within 2 weeks, 18,000 more cases were settled. Lord 
knows how many people were misprescribing--how many doctors 
were misprescribing Zyprexa because they didn't know about the 
severe weight gain and the dangers of diabetes.
    Also, there were internists who were being encouraged by 
Lilly to prescribe Zyprexa for uses that were absolutely 
contraindicated by the FDA, with absolutely no evidence that 
they would work.
    Thousands of internists prescribed Zyprexa for Alzheimer's, 
when it had absolutely no effect on Alzheimer's, thus 
jeopardizing other remedies that could have helped those 
patients, and endangering them with diabetes, as well.
    What stopped it was disclosure. What stopped it was shining 
the light of the law on that information. And how we can sit 
here and debate the niceties of procedural protections versus 
the lives of American citizens is, frankly, beyond me.
    I come to this as an expert in legal ethics. That's my 
field. Fifteen years ago, I realized how can I or my students 
be ethical lawyers if they will allow themselves to engage in 
this kind of process.
    A couple of other points that were made by Mr. Weiner and 
Mr. Morrison that I want to briefly mention.
    Courts have discretion under the Sunshine in Litigation Act 
that, Senator, you have proposed, Senator Kohl, and they will 
continue to have discretion. We're not saying that all 
protective orders are illegal. What we're saying is if Mr. 
Morrison is representing the defendant and, say, I representing 
the plaintiff, can't make a backroom deal to stipulate to a 
protective order, take all the smoking gun documents, stick 
them under the table and never have the see the light of day, 
without a judge, like Judge Anderson, scrutinizing it to make 
sure that these documents don't relate directly to the public 
health and safety.
    We're not giving carte blanche to judges to make frivolous 
decisions. What we're doing is giving the power to judges to 
make judicious decisions so they can continue with their 
mandate to protect the American public.
    And what your legislation would do is prevent us from 
secretizing this information so that no one will ever know that 
it exists. So that people like Mr. Bradley and his wife and 
family are not jeopardized by the fact that the information 
about Cooper tires was secret, while the information about 
Firestone tires has been made known.
    No one is trying to prevent legitimate protective orders. 
No one is trying to embarrass anybody and no one is trying, I'm 
sure the Senator is not trying to reveal trade secrets to the 
public.
    This legislation is designed to protect the American public 
from lawyers who put money first and safety second, who make 
backroom deals with hush money to prevent the American public 
from getting the knowledge that they need to know.
    And the idea, and I'll be just a second, the idea that we 
can't get this information out to the public, which Mr. 
Morrison suggested, the idea that the public can't deal with 
this information is to denigrate our American public.
    You know, Americans are pretty savvy about sorting out the 
wheat from the chafe. When given the information, Americans can 
figure out what is right and what is wrong, what is safe and 
what us unsafe.
    It is only where there is a veil of silence that we don't 
have the information for our citizens to make that decision.
    If we shine the light of the law on this information, we 
leave it to our very, very able citizens to make a decision 
about what to do, which they can't do right now at the cost of 
lives in the thousands.
    Thank you, Chairman.
    [The prepared statement of Mr. Zitrin appears as a 
submission for the record.]
    Chairman Kohl. Well, we thank you all for your testimony.
    Just to summarize or synthesize this legislation as Mr. 
Zitrin and others have very succinctly indicated, the purpose 
of the legislation is to give a judge an opportunity to rule on 
whether or not a public health and safety hazard is involved in 
a protective order, that there is information, and that that 
whole arrangement between a defendant and a plaintiff that 
prevents very important public health and safety issues from 
coming to the surface.
    A judge has the discretion to make that decision. He has a 
requirement that the take a look at it and then he can decide 
whether or not a protective order is necessary or not 
necessary.
    I mean, obviously, you know where I'm coming from, because 
I wouldn't be here having this hearing if I wasn't coming from 
that point of view.
    And several on this panel, including a sitting judge, have 
indicated that it's an important issue. The judge himself says 
that he has had something like that in the manner in which he 
conducts, in his district court, now in place for many years, 
and he thinks it's a good thing.
    You're from the same State, is that right?
    Mr. Morrison. Yes, sir.
    Chairman Kohl. So I'm sure you have some familiarity, if 
not considerable familiarity with how the issue is resolved in 
the judge's court.
    So what I'd like to encourage here is an interaction 
between members of the panel, one to challenge another, and all 
of you are experts in some fashion or another, so that we can 
bring as much information to the table as possible in this 
hearing, which is, after all, the purpose of the hearing.
    So I guess I'll just start out and we'll go from there.
    Mr. Morrison, Judge Anderson is a good man.
    Mr. Morrison. He sure is and Judge Anderson and I graduated 
from law school in the same class. He was No. 1 in our class, I 
guess I should tell you.
    Chairman Kohl. He is a smart man.
    Mr. Morrison. Not only a good man, but a smart man.
    Chairman Kohl. What is the criticism of the way in which he 
handles this issue in his court?
    Mr. Morrison. Well, in fact, in the way that it has worked 
over the last 5 years with regard to the settlements, Judge 
Anderson's approach and our local rule basically indicates that 
if you're going to have a confidential settlement approved by 
the court, then you have to make certain showings and the judge 
gets involved.
    The practicality of that, in my practice, is that normally 
you don't ask the Federal court for a confidential settlement. 
Normally, you don't ask them for anything.
    There are three kinds of settlements that have to be 
approved by the court. One is a class action, one is a death 
settlement, and one is a minor settlement for a child.
    Now, those require approval by the court and when those 
come into play, then the rule comes into play. We do have a 
rule one in our court and that is that rule one of the local 
rules is that each judge can do what they want to do as opposed 
to follow the rule, but, in fact, most of the judges follow the 
rule that's set forth.
    But most of the settlements we engage in as the plaintiff's 
bar and the defense bar in South Carolina are not submitted to 
the court for approval.
    So there are many confidentiality agreements that are 
entered into that simply say that the case has been settled.
    A confidentiality agreement does not mean that the public 
doesn't know the case has been settled and, as Mr. Weiner 
pointed out, it also doesn't mean that they don't know why the 
case was brought, because their complaint is fully public.
    So the thought that there would be 8,000 settlements in 
8,000 individual cases, nobody knew they were brought and 
nobody knew they were settled, is a little bit distant from my 
personal experience.
    So the way we actually work in South Carolina is that 
unless the case is a class action or a minor or a death 
settlement, you don't ask for the court approval and, 
therefore, the court doesn't interfere in any way in the 
confidentiality of the settlement, if the parties want it.
    Another point I would make, Mr. Chairman, is that in the 
context of paying someone a lot of money, a million dollars or 
more, that's a lot, a lot of people don't want that public. 
They don't want all the public aspects that come upon them.
    They don't want the amount to be public. They don't mind if 
somebody says it's settled or it didn't settle. So what usually 
is held confidential is simply the amount of a settlement, and 
that gets me to that presumption of evil that I think is the 
wrong presumption for us to make.
    Just because you pay a lawsuit to be resolved doesn't mean 
that you're a wrongdoer or an evildoer. There are lots of 
reasons to resolve a lawsuit that have nothing to do with 
anything other than the jurisdiction or the amount of defense 
costs or the entire process, maybe your product is not even 
being produced anymore, you don't want to spend a lot of money 
on it.
    So you don't want any presumptions built in there. So in 
the context of our rule in South Carolina, it is only involving 
settlements and it is only involving court approval of the 
settlements.
    It's not involving protective orders. We operate under the 
regular Federal Rules of Civil Procedure. So if I'm in Judge 
Anderson's court, which I am frequently, then he or his 
colleagues on the bench will make a decision as to whether or 
not they will enter a protective order protecting the data 
that's being exchanged during the lawsuit and, generally 
speaking, they will protect that data if it is confidential, if 
it's not already public.
    If it's private data, they will protect that until such 
time as it needs to be disclosed for a motion or for evidence 
and so forth, and that's where the due process comes in, 
because they are literally, in our state, supervising the 
evidence as it comes in and they supervise the private data.
    So if one side is spinning it one way, the other side gets 
to be fully heard. And if the press wants to watch, they can 
watch both sides and, generally, they're fair enough to report 
on both sides.
    It's only when data is taken from a private source and 
pushed out into the public out of context and without due 
process that there's real significant harm done.
    Judge Anderson. (OFF-MIKE) to be emphasized that we are 
talking about the rare case, the case where a teacher is 
accused of molesting a child and the judge knows that the 
teacher is going to stay in the classroom and the judge is 
asked to put his signature on an order keeping that from the 
public.
    The Federal Judicial Center study indicated it was a very 
small minority of cases that we're talking about here that are 
sealed, and I agree. I would note, for the record, though, that 
flies in the face of the predictions that we were told, the 
dire predictions that we were told that we would have hundreds 
and hundreds of cases going to trial.
    I mean, those two arguments are, to me, inconsistent. And 
as I said, our rule has worked well. In those rare cases--I 
didn't have enough time, but I can point to instances in South 
Carolina where some of our state judges and Federal judges have 
refused to acquiesce and request that they put their signature 
on an order gagging the parties, requiring the return of 
documents, the destruction of documents, no discussion of the 
case, or even instances, and I've cited it in my written 
submission, where not only are the lawyers and parties 
prohibited from ever talking about the case, but the 
plaintiff's lawyers are prohibited from ever becoming involved 
in a similar case for a future plaintiff.
    So the ramifications go on and on. I certainly do agree 
with what's been said, that it's a rare case that we're talking 
about, but it's precisely those rare cases where court-ordered 
confidentiality is not good for the public interest and it 
hurts the legal system.
    Chairman Kohl. We're all going to participate in this, but 
I just want to give Mr. Morrison 30 seconds to respond.
    The judge is saying in those rare cases, and we are talking 
about rare cases here, I think we all admit that instances 
where a judge would have to make a decision that the public 
health and safety is involved in this settlement and I'm not 
going to allow it to be secret.
    In those rare cases, the judge there has the opportunity to 
say I'm not going to allow this.
    Thirty seconds, and stay on point, please. What's wrong 
with that?
    Mr. Morrison. Well, in staying on point, that's the way it 
works right now. The judge has the power at any point in time 
to stop--
    Chairman Kohl. But many judges don't use that power, 
because they're busy, as Judge Anderson said, they have many 
things to do and they're not required to look at it. The law 
doesn't require them to take a look at public health and safety 
considerations.
    So all we're doing in this legislation is requiring the 
judge to take a look at that issue when he finally disposes of 
the case.
    Mr. Morrison, again, please stay on point. What's wrong 
with that?
    Mr. Morrison. It's not the role of the court in a single 
tort case to try to make that judgment.
    Chairman Kohl. Well, now, wait a minute, wait a minute. If 
the judge is convinced that public health and safety is 
involved, and this is a public court, serving the people's 
interest.
    Mr. Morrison. Right.
    Chairman Kohl. He's a judge put in place to represent the 
public interest and we believe in the veracity of the judge.
    If the judge decides that this protective order violates 
the public's need to know in this case and he says I can't let 
that happen, and this does not happen every day, it's rare, 
what is the problem?
    Mr. Morrison. A, he has the absolute power to do that now 
with no legislation.
    Chairman Kohl. But he is not required to do it and I'm 
saying isn't it the purpose of the public's court that the 
judge should be asked to make a judgment, in his mind, when he 
allows a protective settlement to go forward, should make a 
judgment that the public interest is being served in allowing 
it to go forward.
    Mr. Morrison. No.
    Chairman Kohl. He should not be asked to make that 
judgment.
    Mr. Morrison. No, sir. The protection of the public on 
these issues that you're talking about lies in the Consumer 
Product Safety Commission, the National Highway Traffic Safety 
Administration, and any number of other agencies where you have 
passed laws in Congress requiring people to self-report.
    Like the Mattel lead paint came to light because Mattel 
reported it themselves under a regulatory process. So that when 
you have a piece--the judge is not--Your Honor--not very often 
in a case where there's more than just the two parties involved 
in the case.
    He's not a social regulator. He's not in the process of 
being in that social regulation standpoint and he always has 
the power, either sua sponte or at the request of the other 
side, to lift a protective order if he feels that that is in 
the interest of the public.
    He always has that. But to require basically a regulatory 
overlay by the Federal courts every time they are exposed to 
one tort case is to cause mischief, I believe.
    Chairman Kohl. OK. Mr. Zitrin?
    Mr. Zitrin. Senator Kohl, the most frequent forum for 
secret agreements is a protective order entered into by 
stipulation. And judges are busy people. We can hardly expect 
judges to go back behind the stipulated protective order and do 
an analysis of whether what's being secretized, as I've coined 
the word, we haven't gotten on Wikipedia yet, but hopefully it 
will get there, what's being secretized is actually something 
that's a danger to the public health and safety.
    I believe that's why you have proposed a bill that isn't 
talking just about agreements, but very significantly and 
centrally about protective orders.
    It doesn't mean that judges are going to leap out and start 
investigating every single case. What it does mean is that 
protective orders should not be entered into merely by 
stipulation until the judge gives his or her actual imprimatur 
based on what's actually going on in that case.
    In my experience, and I have tried not quite as many cases 
to verdict as Steve Morrison has, but dozens, and I continue to 
practice trial law part-time. In my experience, these 
stipulated protective orders are routine. I practice in the 
legal malpractice area. They're in every case, because the law 
firms involved don't want to be embarrassed by information.
    But, there, we're not talking about dangers to the public 
health and safety of the kind that victimized our first witness 
and his family.
    So it makes all the sense in the world to me to have a 
judicial imprimatur on those protective orders before they are 
approved.
    And I do want to mention one other thing that I am stealing 
from my friend, Judge Anderson down there, because Joe Anderson 
has written that, in his experience, it is actually not a cost 
of time to the court to go through one time the issue of 
whether there should be disclosure or should not be a 
protective order as to one particular item, whether it be the 
GM side impact gas tank cases or the Zyprexa drug or the other 
Lilly drugs that they've failed to report in the past, because 
what happens when the protective order is automatically entered 
on stipulation is that every time that issue comes up in 
another court, the litigation, discovery process, motions to 
compel, responses to motions to compel, appeals on a motion to 
compel, that process is fought out every single time anew.
    So in GM, according to the Montana Supreme Court, GM gave 
$500 million in settlements because of side impact gas tank 
cases, at the same time that they were engaged in a public 
relations campaign about how these things were merely an NBC 
Dateline piece of fluff and not dangerous.
    As a result, 240 cases, at least, were settled. Each of 
those 240 cases had to go through the discovery process anew. 
If it had happened one time in the District of South Carolina 
or under this Sunshine in Litigation Act, then the word would 
be out the first time, the public would know, and you wouldn't 
have to start out from ground zero every time an order to 
conduct a discovery.
    The best evidence that we have is this actually will save 
the court some time. So I respectfully disagree with Steve 
Morrison, as I did down in South Carolina when we met down 
there. I guess I'll leave it at that.
    Chairman Kohl. Thank you.
    Ms. Bailey, and then Mr. Weiner.
    Ms. Bailey. Thank you. I'd first like to respond to an 
argument that Mr. Morrison made about regulatory agencies being 
charged with safety, so we don't need courts to pay attention.
    I think if self-reporting actually worked, we wouldn't see 
so many of the problems that we see with products harming 
people after information has come out about safety in 
litigation, but before a regulatory agency has acted.
    So my point is that even if the parties do comply with a 
regulatory requirement to report on their products, it could be 
months or years before the FDA issues a black box warning or 
pulls a dangerous drug off the market and, in the meantime, 
because the public didn't know, people are continually at risk, 
and I think that we need to not forget about that important 
window of time.
    Second, I just would like to second what Professor Zitrin 
said about this being a very small number of cases. I think 
that when corporate defendants and others argue that the burden 
is going to be too great on them to go through all these 
documents and produce everything, unless it is subject to a 
blanket protective order, I think we're forgetting that if they 
believe that they are not in possession of any documents that 
prove that they did something wrong, the problem is solved. 
They can just produce it. There's no need to push for secrecy. 
It's only in the very small number of cases where there is 
something that the public really needs to know and has a right 
to know that we need a law like this.
    Chairman Kohl. Very good.
    Mr. Weiner?
    Mr. Weiner. Yes, Mr. Chairman. I think that one of the 
things we do as lawyers is we focus on distinctions and many 
distinctions, I'm concerned, are being ordered here today.
    Because a plaintiff--I represent defendants almost 
exclusively. I don't recall my clients ever volunteering to be 
sued. They are in court because someone else has chosen to make 
an accusation.
    And because someone chooses to make an accusation doesn't 
mean that my clients sacrifice their right of privacy. If you 
want to talk about something that is inconsistent with our 
democratic values, I would submit that that proposition would 
be inconsistent with our democratic values.
    Another distinction I think that is blurred is the 
distinction between a dispute being private, a lawsuit being 
private, which is not something I've contended, and the 
documents that are exchanged in discovery between the parties, 
with minimal supervision by the court, whether those are 
private, and they are private.
    The Supreme Court has said they're private. Just because my 
opponent chooses to ask for the client's documents that were 
otherwise private before the lawsuit was ever brought doesn't 
make my client's documents public.
    And the use of--if there were such a word as secretized, it 
would connote that you're taking something that is public and 
open and you're making it secret, and that is not true of 
documents that are produced in discovery.
    Now, in many cases, in some cases, at least, documents 
should be open and available and courts have the ability to 
require that now.
    Last, the suggestion was made that when lawyers enter into 
settlements or enter into protective orders that protect the 
confidentiality of private information, they are somehow 
unethical.
    Mr. Zitrin may wish to change the rules of ethics. In fact, 
I believe he has proposed to do that, but right now, my 
obligation as a defense lawyer is within the bounds of the law 
to seek to serve zealously the interests of my client, and that 
is the obligation of the plaintiff's lawyer, as well.
    And the theory of our adversary system is that through that 
clash, the truth and the public interest will emerge and by 
serving those interests, a lawyer acts ethically, not 
unethically, and to say otherwise, I think, under our current 
system, is wrongheaded.
    Chairman Kohl. Mr. Weiner, I'm sure you're familiar with 
how Judge Anderson conducts his court in this area.
    What has occurred there that offends you? We don't have to 
theorize that there's something. We have a real life situation 
here.
    Mr. Weiner. Well, I don't know enough about the rule in 
South Carolina. I would say this, that it is an unusual 
settlement where people go to the court and ask for the court's 
approval.
    And when you enlist the offices of the court in order to 
approve a settlement, then I think that that incorporates a 
different standard as to what may be confidential and what not 
with regard to that disclosure.
    They've asked the court to make a decision and the bases of 
that court decision, there is a stronger argument in that 
circumstance that the bases of that decision should be public.
    But that doesn't mean when parties--if someone sues me, 
sues my client, my client is involuntarily brought into court 
and then they decide that maybe it wasn't a good idea and maybe 
the costs of defending the case are greater than the costs of 
settling it, whatever reason, they settle that case without the 
intervention of the court, then I think there are very 
different issues at stake regarding the confidentiality of 
documents that started out confidential and should stay that 
way.
    Chairman Kohl. Judge Anderson?
    Judge Anderson. Well, Senator, in the written materials I 
submitted, I didn't talk hypothetically. I cited chapter and 
verse of actual cases.
    For example, a case in Greenville, South Carolina, where a 
child was killed on a go-cart, allegedly, with a defective 
steering mechanism. The settlement was $1.4 million, 
conditioned on an order of confidentiality signed by the judge.
    When I checked, that model go-cart was still on the market, 
still being marketed. Opponents say that, ``Well, you can go 
look at the complaint.''
    The complaints are always public documents and if there's 
any bad information the public needs to know about, all they 
need to do is read the complaint.
    But I would submit that's a specious argument. We have 250 
to 300,000 Federal lawsuits filed a year. Many, many of those 
fall by the wayside. Many of those are thrown out by the trial 
judge on summary judgment or go away with nuisance value 
settlements.
    But when a case settles for $1.4 million, to me, that 
raises a red flag that there may--there may, and I'm not 
casting aspersions, but there may have been a problem with that 
product that the public deserves to know about, and that's just 
one example, and I've cited many others in the article that I 
submitted.
    So I think we sit here and we talk in generalities, but 
I've, in my written submissions, tried to give you specific 
examples of real life cases that I've come to be familiar with.
    As I've said, I carefully picked the case that I mentioned, 
because it involved myself. I pointed the finger at myself. I 
wouldn't really be casting aspersions on someone else.
    But I think that was a typical example of the incredible 
amount of pressure that is put upon a judge to go along with 
it.
    In the case I mentioned involving PCBs in the lake, we had 
engaged in sort of an experimental summary jury trial, which 
was popular at one time, in which you bring in essentially an 
advisory jury.
    They think they're a real jury. They think they're trying a 
real case. You give a very abbreviated presentation of the 
evidence in a 1-day forum and then the jury goes back and comes 
back with a verdict.
    In this case, we used advisory verdict on the water 
contamination case and they came back in 20 minutes with a 
defense verdict. So it looked as though the plaintiffs were 
going to lose that case if we went to trial.
    So here I am faced with a $3.5 million settlement, primary 
medical care for life for all 350 plaintiffs, and to say, well, 
the judge didn't have to go along with it if he didn't want to 
kind of ignores the issue.
    There was incredible pressure on me to go along, because I 
did not want to take that favorable settlement off the table 
for those plaintiffs.
    So I signed the order and, as I said, it kind of was a 
bellwether case that I remember in my formative years that 
helped me come to the conclusion it was wrong to do so.
    And your legislation, I think, is a very nuanced middle 
ground approach that just requires judges to engage in the 
balancing process. We do that all the time. We balance 
interests in civil and criminal litigation day in and day out. 
It's nothing we're not used to doing and I think your 
legislation is sort of a wakeup call to us judges to be mindful 
of the other side of the equation.
    Chairman Kohl. This is posed to whomever wants to respond.
    What this legislation is intending to do is to arrive at 
what Judge Anderson suggested is a balance and to prevent the 
kind of activity in court which involves powerful companies 
with enormous assets and a lot at stake and plaintiffs who have 
been injured and have an opportunity to recover a lot of money 
if they will just stay quiet from engaging in that process, 
both the defendant and the plaintiff, at the expense of the 
public interest, that's the whole point here, and giving a 
judge the right to look at this thing in a nuanced way and to 
make some judgment as to what the public interest is.
    I think you, Mr. Morrison, said that's not a judge's 
responsibility, we have regulatory agencies, and so on. If that 
isn't a judge's responsibility to make these right at the point 
of attack, which is where the trial is taking place, if the 
judge doesn't have that responsibility or the right to exercise 
that--no, doesn't have that responsibility to take a look at 
it, then I would submit that we're taking away an awful lot of 
what a judge is supposed to do in our society.
    But that's what this legislation is intended to do, to 
prevent money, that is to say, money flowing from a defendant 
to a plaintiff, from preventing very important information that 
could theoretically have an impact on the lives of hundreds of 
thousands of people from coming to the surface.
    Well, if that isn't a reasonable application of a court of 
law, in a very few cases, which has been pointed out here, 
again, tell me, in 30 seconds, please, what's the problem?
    Mr. Morrison. Let me use the example I think Judge 
Anderson, who is a very good friend of mine and I hope he's 
telling me the truth that we will be after the hearing, in the 
context of the PCB case that he had, and I want to defend his 
decision to sign the order.
    But here's what you had. I think you had 350 people in the 
case and they're getting medical monitoring, which is going to 
cost about $10,000 a year for life.
    The defendant has won the case in the summary jury trial or 
the advisory jury trial. The defendant doesn't think that the 
PCBs in the water are sufficient to cause any health or human 
hazard.
    But if the judge insists on telling everybody in the public 
that they paid $3.5 million for the PCBs, under those 
circumstances, then how many more people are going to line up 
at the pay window and say, ``Wait a minute, I want the $10,000 
for medical monitoring and I want this and that and so forth.''
    So what the judge did in that case, and he may have felt 
under a lot of pressure and it was his case and not mine, was a 
very rational thing.
    Remember, the defendant had won the case on the science 
with 12 tried and true in a summary jury trial where they're 
presenting a summary of the evidence on both sides, with jury 
arguments.
    And under those circumstances, how unfair would it be to 
require the defense to publish in the newspaper that they're 
settling for what amounts to a nominal amount. There's no way 
they could defend the case for $3.5 million, and to put that 
out there.
    It would be unfair. The presumption of a health and human 
safety problem would be tremendous there.
    Now, if the judge made an independent decision that the 
PCBs are, in fact, causing cancer, et cetera, et cetera, et 
cetera, of course, he's not the EPA, the EPA actually regulates 
PCBs and they have a lot of data and a lot of scientists they 
call in in hearings just like this to take care of the social 
regulatory issues as to what is an appropriate admissible level 
of PCBs in a water source, and they're geared up to do it.
    And so I don't think you're taking anything away from the 
judge. I think the judge made a rational decision at the time 
that he now feels bad about and I'm sure that he knows more 
about the case and can argue back on that point.
    Chairman Kohl. Let's give him a chance.
    Judge Anderson?
    Judge Anderson. As I say, it's a difficult call, it really 
is, and Steve has pointed out the other side of the equation.
    It's rare to have a summary jury trial. They have been 
disfavored by the appellate courts and we don't really do that 
much anymore, but that was a unique case where we did have a 
sort of a peak at what a jury might do.
    Of course, another jury exposed to the full evidence might 
have gone the other way. But suffice it to say I was concerned 
about the part of my order that required all the documents to 
be returned and destroyed, so forth, documents that had been 
laboriously fought over for several years about their relevance 
and production and so forth.
    Mr. Zitrin. May I comment on Mr. Morrison's statement?
    Chairman Kohl. Mr. Zitrin?
    Mr. Zitrin. Thank you, Mr. Chairman.
    I don't think this legislation and I don't think anyone, 
and I know the written materials that I have submitted 
certainly don't suggest that the amount of money awarded as a 
result of the settlement be public.
    We've been spending the afternoon discussing the 
documentary evidence, the information that the public is 
entitled to know.
    And Mr. Morrison, I thought I heard him say is the 
defendant going to have to go out to the press and announce how 
much the settlement was for, and the answer to that is no.
    No one is suggesting that. We're not talking about having 
the defendant go through the old mill with a sign saying $3.5 
million. Rather, we're talking about a situation where the 
information is available to the public.
    It's not the money amount of the settlement that's 
important. It's the information.
    Now, Judge Anderson's case, which I've heard him talk about 
before, is a difficult one, but I do think that there is 
another issue that's important to mention, which is that all of 
the evidence, and there have been some empirical studies done 
on this by, among other people, James Rooks, who is here in the 
hearing room today, show that even when you don't allow the 
secrecy, cases continue to settle, that there is a disincentive 
for the toxic polluter or potential toxic polluter to take that 
case to trial in a public forum.
    So while they may not settle for some kind of premium paid 
for in silence, these cases still settle.
    So I think that we should--I think Judge Anderson deserves 
a bit more credit than his good friend, Mr. Morrison, is 
prepared to give him at this point.
    Chairman Kohl. Ms. Bailey, and then Mr. Weiner. Ms. Bailey?
    Ms. Bailey. Thank you. Mr. Morrison referred to potential 
plaintiffs lining up at the pay window and I think what he's 
suggesting is that if the public knows the truth, they will be 
more likely to sue.
    And if that's the case, I think that should be a 
consequence that we're all willing to accept. If facts do come 
out showing a product to be unsafe or a business to be 
defrauding its customers, discouraging lawsuits is not a good 
reason to hide the truth.
    And I would also say that a law like the Sunshine in 
Litigation Act would actually take some of the burden off 
judges, in the sense that parties who know that the judge is 
not permitted to enter a secrecy order if the case involves 
public health or safety won't be able to request it.
    And so meritorious cases will still be able to be settled 
for good reasons rather than just for hush money.
    Chairman Kohl. Mr. Weiner, would you like to make one 
comment?
    Mr. Weiner. Yes, Mr. Chairman. I think that the proposed 
legislation goes beyond what may be intended, maybe not what 
was intended, but I think it goes beyond what descriptions of 
it have suggested.
    What the legislation says is that the order would not 
restrict disclosure of information which is relevant to the 
protection of public health or safety.
    Suppose you have a case involving a pharmaceutical product. 
Every pharmaceutical product has--every prescription drug has 
side effects. When the FDA approves a prescription drug, they 
do so based on a weighing of the risks and the benefits.
    All the evidence about the drug is going to be relevant, 
particularly in the way the relevance is defined under the 
Federal rules, is relevant to public health and safety.
    And so saying that an order won't restrict disclosure of 
information that is relevant to the public health and safety is 
really to say that in such a suit, you can't restrict 
disclosure at all, and I think that simply is not conducive to 
a fair adjudication of issues in our courts.
    Chairman Kohl. Any other comments, folks? This has really 
been a great panel.
    Mr. Morrison?
    Mr. Morrison. Mr. Chairman? Thank you, Your Honor. If I 
might, the issue of doing the discovery over again, let me just 
mention, in the side saddle gas tanks, what General Motors did 
was put together a reading room where anybody who was involved 
in any of those cases could go in and look at the documents.
    What Ford did in the Firestone-Bridgestone tires was set up 
a reading room where anybody could go in and look at the 
documents. It wasn't a matter of you had to start de novo on 
discovery.
    But the documents themselves could not be disclosed 
piecemeal outside the context of due process supervised by a 
judge, so that they were confidential until determined 
otherwise.
    And then with regard to this opening of the pay window, 
which suggests that if people knew the truth, they would sue 
more and that would be OK. But what is the truth in a difficult 
case? Is the truth that the defendant won the summary jury 
trial because there was no causal connection between the 
chemical and the sickness or that the plaintiffs couldn't prove 
that there was a causal medical connection?
    And if that's the truth and the people still got $10,000, 
that's the pay window I was talking about. I wasn't talking 
about trying to prevent people from knowing the truth for the 
lawsuit.
    But the truth is a nuanced piece that only the court knows 
when they've been through the whole process that they have 
worked with. It's not, as Mr. Zitrin suggests, you just take a 
document from somebody with the police power of the state, 
because you had $100 and could file against the ham sandwich, 
and then you reach out and get all their documents and then 
you're free to do whatever you want with them, publish them in 
the New York Times or put them on the internet without any 
context at all.
    That would be grossly unfair and it would be really, truly, 
undemocratic.
    Thank you, Mr. Chairman.
    Chairman Kohl. Well, we thank you all for coming. You've 
shed an awful lot of light and information on this very 
important topic.
    Let's see how it all makes its way through the process. 
Thank you so much.
    [Whereupon, at 3:52 p.m. the hearing was adjourned.]
    [Questions and answers and submissions for the record 
follow.]
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