[Congressional Record Volume 153, Number 189 (Tuesday, December 11, 2007)]
[Senate]
[Pages S15140-S15143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ENZI (for himself, Mr. Baucus, Mr. Tester, and Mr. 
        Barrasso):
  S. 2448. A bill to amend the Surface Mining Control and Reclamation 
Act of 1977 to make certain technical corrections; to the Committee on 
Energy and Natural Resources.
  Mr. ENZI. Mr. President, I rise to introduce legislation that is of 
great importance to my State. Last year a bipartisan coalition of 
Senators came together to pass the Surface Mining Control and 
Reclamation Act Amendments of 2007. Since that time, some lawyers and 
bureaucrats in Washington have taken it upon themselves to misinterpret 
the law. We need to fix this. The legislation I am introducing will yet 
again reiterate congressional intent as to how the program should be 
run. The bill that passed as part of the Tax Relief and Health Care Act 
2006, which was a part originally of the pension reform bill, fixed the 
abandoned mine land trust fund so it would run as Congress originally 
intended, which was some 30 years earlier. For the first time in years, 
States were scheduled to receive funding they were promised that would 
be used to clean up abandoned coal mines where that was needed.
  For States that had been certified by the Office of Surface Mining as 
having completed their coal cleanup work, funding was expected to go to 
these States to do whatever the State legislators chose to be a 
priority for that State.
  The language is simple and straightforward. It reads:

       Payments shall be made in 7 equal annual installments, 
     beginning in fiscal year 2008.

  As we passed the legislation, everyone involved knew what that meant. 
For years, our State's money has been held hostage to pay for other 
programs. With the passage of the abandoned mine land bill, the money 
would flow with no strings attached and no diversions to other 
programs. Congressional intent was very clear. Unfortunately, last week 
I was told by lawyers and bureaucrats at the Department of Interior 
that they have decided to ignore the congressional intent and have 
chosen to send the money to States such as Wyoming in the form of 
grants. It seems they don't have enough Federal employees because their 
plan will create an onerous program that will undoubtedly require more 
hires.
  As one of the lead Senators in passing the original legislation, I 
know what Congress meant when we wrote:

       Payments shall be made in 7 equal and annual installments, 
     beginning in fiscal year 2008.

  To ensure that no confusion existed, I met with the Office of Surface 
Mining and with the Office of Management and Budget on numerous 
occasions to discuss that particular issue. Congress intended for 
payments to be made. Congress did not expect the agency to create a new 
grant program. When I realized this egregious misinterpretation of the 
law was a possibility, I took immediate action. I asked those same 
lawyers and bureaucrats who did not read the law to provide me with the 
legislative language that makes it explicitly clear that they should 
interpret the law the way Congress intended.
  That is the bill I am introducing today with my colleague from 
Montana and the other Senator from Wyoming. Only in the absurd world 
that is Washington could an agency believe the word ``payment'' means 
grant. I look forward to working with my colleagues to swiftly move 
this forward so the executive branch can finally follow what Congress 
intended.
  I have to tell my colleagues it was quite a shock to find out a whole 
program was going to be set up so Wyoming could ask for its money 
piecemeal. We have been begging for 30 years to get this money. The 
money has been paid in by the coal companies to cover reclamation and 
then anything that had to do with coal impact. We did the reclamation. 
We are now handling the coal impact. But the money has been held 
hostage; $550 million worth of money has been held over that period.
  Last year Congress said: Wyoming and Montana--Montana has $58 
million--deserve their money. So do several other States. We will give 
it to them.
  Now there was a little question about what that did with debt, but we 
were able to show them that paying off debt with debt wound up with the 
same amount of debt but wasn't stealing from the States. So we were 
able to get that confirmed by this body and put into law. It said we 
would be paid in seven equal annual payments, beginning in the year 
2008. Now we find out it could be millions of payments over a number of 
years under a grant program. They do realize they can't deny any grant 
request the State has, but each and every transaction would have to go 
through somebody. We are not about to hire that many people to do what 
is explicit in the language.
  I will ask the rest of my colleagues to help us on this amendment. We 
will find a place to put it, and we will get it done this year so the 
intent of the law we passed last year will get done.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. Leahy):
  S. 2449. A bill to amend chapter 111 of title 28, United States Code, 
relating to protective orders, sealing of cases, disclosures of 
discovery information in civil actions, and for other purposes; to the 
Committee on the Judiciary.
  Mr. KOHL. Mr. President, I rise today to introduce the Sunshine in 
Litigation Act of 2007, a bill to curb the ongoing abuse of secrecy 
orders in Federal courts. The result of this abuse, which often comes 
in the form of sealed settlement agreements, is to keep important 
health and safety information from the public.
  This problem has been recurring for decades, and most often arises in 
product liability cases. Typically, an individual brings a cause of 
action against a manufacturer for an injury or death that has resulted 
from a defect in one of its products. The injured party often faces a 
large corporation that can spend an unlimited amount of money defending 
the lawsuit and prolong its resolution. Facing a formidable opponent 
and mounting medical bills, plaintiffs often have no choice but to 
settle the litigation. In exchange for the award he or she was seeking, 
the victim is forced to agree to a provision that prohibits him or her 
from revealing information disclosed during the litigation.
  Plaintiffs get a respectable award, and the defendant is able to keep 
damaging information from getting out. Because they remain unaware of 
critical public health and safety information that could potentially 
save lives, the American public incurs the greatest cost.
  This concern for excessive secrecy is warranted by the fact that 
tobacco companies, automobile manufacturers, and pharmaceutical 
companies have settled with victims and used the legal system to hide 
information which, if it became public, could protect the American 
people. Surely, there are appropriate uses for such orders, like 
protecting trade secrets and other truly confidential company 
information. This legislation makes sure such information is protected. 
But, protective orders are certainly not supposed to be used for the 
sole purpose of hiding damaging information from the public to protect 
a company's reputation or profit margin.
  One of the most famous cases of abuse involved Bridgestone/Firestone 
tires. From 1992-2000, tread separations of various Bridgestone and 
Firestone tires were causing accidents across the country, many 
resulting in serious injuries and even fatalities. Instead of owning up 
to their mistakes and acting responsibly, Bridgestone/Firestone quietly 
settled dozens of lawsuits, most of which included secrecy agreements. 
It wasn't 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. More than 250 people had 
died, and more than 800 were injured as a result of the defective 
tires.
  If the story ended there, and the Bridgestone/Firestone cases were 
just

[[Page S15141]]

an aberration, one might argue that there is no urgent need for 
legislation. But, unfortunately, the list goes on. There is the case of 
General Motors. Although an internal memo demonstrated that GM was 
aware of the risk of fire deaths from crashes of pickup trucks with 
``side saddle'' fuel tanks, an estimated 750 people were killed in 
fires involving these fuel tanks. When victims sued, GM disclosed 
documents only under protective orders and settled these cases on the 
condition that the information in these documents remained secret. This 
type of fuel tank was installed for 15 years before being discontinued.
  Evidence suggests that the dangers posed by protective orders and 
secret settlements continue. On December 11, 2007, at a hearing before 
the Senate Judiciary Committee Subcommittee on Antitrust, Competition 
Policy and Consumer Rights, Johnny Bradley, Jr. described his tragic 
personal story about the implications of court-endorsed secrecy. In 
2002, Mr. Bradley's wife was killed in a rollover accident allegedly 
caused by tread separation in his Cooper tires. While litigating the 
case, his attorney uncovered documented evidence of Cooper tire design 
defects. Through aggressive litigation of protective orders and 
confidential settlements in cases prior to the Bradleys' accident, 
Cooper had managed to keep the documents confidential. Prior to the end 
of Mr. Bradley's trial, Cooper Tires settled with him on the condition 
that almost all litigation documents would be kept confidential under a 
broad protective order. With no access to documented evidence of design 
defects, consumers will continue to remain in the dark.
  In 2005, the drug company Eli Lilly settled 8,000 cases related to 
harmful side effects of its drug Zyprexa. All of those 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.'' In that case, 
the plaintiffs uncovered documents that showed that, through its own 
research, Lilly knew about the side effects as early as 1999. While the 
plaintiffs kept quiet, Lilly continued to sell Zyprexa and generated 
$4.2 billion in sales that year. More than a year later, information 
about the case was leaked to the New York Times and another 18,000 
cases settled. Had the first settlement not included a secrecy 
agreement, consumers would have been able to make informed choices and 
avoid the harmful side effects, including enormous weight gain, 
dangerously elevated blood sugar levels and diabetes.
  There are no records kept of the number of confidentiality orders 
accepted by State or Federal courts. However, anecdotal evidence 
suggests that court secrecy and confidential settlements are prevalent. 
Beyond General Motors, Bridgestone/Firestone, Cooper Tires, and 
Zyprexa, secrecy agreements had real life consequences by allowing 
Dalkon Shield, Bjork-Shiley heart valves, and numerous other dangerous 
products and drugs to remain on the market. And those are only the ones 
we know about.
  While some States have already begun to move in the right direction, 
we still have a long way to go. It is time to initiate a Federal 
solution for this problem. The Sunshine in Litigation Act is a modest 
proposal that would require Federal judges to perform a simple 
balancing test to ensure that the defendant's interest in secrecy truly 
outweighs the public interest in information related to public health 
and safety.
  Specifically, prior to making any portion of a case confidential or 
sealed, a judge would have to determine--by making a particularized 
finding of fact--that doing so would not restrict the disclosure of 
information relevant to public health and safety. Moreover, all courts, 
both Federal and State, would be prohibited from issuing protective 
orders that prevent disclosure to relevant regulatory agencies.
  This legislation does not prohibit secrecy agreements across the 
board. It 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 safety information from the public. The time to focus some 
sunshine on public hazards to prevent future harm is now.
  I urge my colleagues to support this important legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
placed in the Record, as follows:

                                S. 2449

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Sunshine in Litigation Act 
     of 2007''.

     SEC. 2. RESTRICTIONS ON PROTECTIVE ORDERS AND SEALING OF 
                   CASES AND SETTLEMENTS.

       (a) In General.--Chapter 111 of title 28, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1660. Restrictions on protective orders and sealing of 
       cases and settlements

       ``(a)(1) A court shall not enter an order under rule 26(c) 
     of the Federal Rules of Civil Procedure restricting the 
     disclosure of information obtained through discovery, an 
     order approving a settlement agreement that would restrict 
     the disclosure of such information, or an order restricting 
     access to court records in a civil case unless the court has 
     made findings of fact that--
       ``(A) such order would not restrict the disclosure of 
     information which is relevant to the protection of public 
     health or safety; or
       ``(B)(i) the public interest in the disclosure of potential 
     health or safety hazards is outweighed by a specific and 
     substantial interest in maintaining the confidentiality of 
     the information or records in question; and
       ``(ii) the requested protective order is no broader than 
     necessary to protect the privacy interest asserted.
       ``(2) No order entered in accordance with paragraph (1), 
     other than an order approving a settlement agreement, shall 
     continue in effect after the entry of final judgment, unless 
     at the time of, or after, such entry the court makes a 
     separate finding of fact that the requirements of paragraph 
     (1) have been met.
       ``(3) The party who is the proponent for the entry of an 
     order, as provided under this section, shall have the burden 
     of proof in obtaining such an order.
       ``(4) This section shall apply even if an order under 
     paragraph (1) is requested--
       ``(A) by motion pursuant to rule 26(c) of the Federal Rules 
     of Civil Procedure; or
       ``(B) by application pursuant to the stipulation of the 
     parties.
       ``(5)(A) The provisions of this section shall not 
     constitute grounds for the withholding of information in 
     discovery that is otherwise discoverable under rule 26 of the 
     Federal Rules of Civil Procedure.
       ``(B) No party shall request, as a condition for the 
     production of discovery, that another party stipulate to an 
     order that would violate this section.
       ``(b)(1) A court shall not approve or enforce any provision 
     of an agreement between or among parties to a civil action, 
     or approve or enforce an order subject to subsection (a)(1), 
     that prohibits or otherwise restricts a party from disclosing 
     any information relevant to such civil action to any Federal 
     or State agency with authority to enforce laws regulating an 
     activity relating to such information.
       ``(2) Any such information disclosed to a Federal or State 
     agency shall be confidential to the extent provided by law.
       ``(c)(1) Subject to paragraph (2), a court shall not 
     enforce any provision of a settlement agreement between or 
     among parties that prohibits 1 or more parties from--
       ``(A) disclosing that a settlement was reached or the terms 
     of such settlement, other than the amount of money paid; or
       ``(B) discussing a case, or evidence produced in the case, 
     that involves matters related to public health or safety.
       ``(2) Paragraph (1) does not apply if the court has made 
     findings of fact that the public interest in the disclosure 
     of potential health or safety hazards is outweighed by a 
     specific and substantial interest in maintaining the 
     confidentiality of the information.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 111 of title 28, United States Code, is 
     amended by adding after the item relating to section 1659 the 
     following:

``1660. Restrictions on protective orders and sealing of cases and 
              settlements''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by this Act shall--
       (1) take effect 30 days after the date of enactment of this 
     Act; and
       (2) apply only to orders entered in civil actions or 
     agreements entered into on or after such date.
                                 ______
                                 
      By Mr. LEAHY (for himself and Mr. Specter):
  S. 2450. A bill to amend the Federal Rules of Evidence to address the 
waiver of the attorney-client privilege and the work product doctrine; 
to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, today I introduce legislation to create 
Federal Rule of Evidence 502. I am pleased that Senator Specter has 
joined me in this

[[Page S15142]]

effort. After much study, several hearings, and significant public 
comment, the Judicial Conference's Standing Committee on Rules of 
Practice and Procedure, and the Advisory Committee on Evidence Rules, 
arrived at a proposed new rule that is intended to provide 
predictability and uniformity in a discovery process that has been made 
increasingly difficult with the growing use of email and other 
electronic media. I commend all of the judges, professors and 
practitioners who were involved in the rule's drafting and subsequent 
improvement for their hard work and attention to this issue. The 
legislation we are introducing today contains the text that the 
Judicial Conference recommends.
  Billions of dollars are spent each year in litigation to protect 
against the inadvertent disclosure of privileged materials. With the 
routine use of email and other electronic media in today's business 
environment, discovery can encompass millions of documents in a given 
case, vastly expanding the risks of inadvertent disclosure. The rule 
proposed by the Standing Committee is aimed at adapting to the new 
realities that accompany today's modes of communication, and reducing 
the burdens associated with the conduct of diligent electronic 
discovery.
  Our proposed legislation would set clear guidelines regarding the 
consequences of inadvertent disclosure of privileged material, and 
provides that so long as reasonable steps are taken in the prevention 
of such a disclosure, or to assure the prompt retrieval of disclosed 
information, no waiver will result. Moreover, an inadvertent disclosure 
of privileged information would not result in a broader subject matter 
waiver beyond the specific materials disclosed.
  If a disclosure of privileged material is made voluntarily, only the 
privilege associated with the voluntarily disclosed material is waived, 
and not other undisclosed related materials. But if voluntary 
disclosure of privileged material is done selectively in an effort to 
mislead or gain unfair advantage, then where fairness dictates, this 
will result in a subject matter waiver.
  This legislation would also provide that confidentiality agreements 
entered into by parties to litigation, and approved by the court, will 
bind all non-parties in other State or Federal litigation. This 
provision will add meaningful protection to parties entering 
confidentiality agreements and, along with other components of the 
proposed rule, will aid in reducing the burdens of excessive pre-
production document review.
  Unlike other Federal court rules, any proposed rule that modifies an 
evidentiary privilege must be approved by Congress pursuant to the 
Rules Enabling Act. The modification of a privilege is an undertaking 
not to be approached lightly, and the process that resulted in proposed 
Rule 502 was thorough and thoughtful. It has resulted in widespread 
approval of the proposed rule from the bench and bar at both the State 
and Federal level.
  I urge all Senators to join Senator Specter and me to pass this 
proposal and take a positive step toward modernizing and improving the 
Federal Rules of Evidence.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2450

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT; 
                   LIMITATIONS ON WAIVER.

       (a) In General.--Article V of the Federal Rules of Evidence 
     is amended by adding at the end the following:

     ``Rule 502. Attorney-Client Privilege and Work Product; 
       Limitations on Waiver

       ``The following provisions apply, in the circumstances set 
     out, to disclosure of a communication or information covered 
     by the attorney-client privilege or work-product protection.
       ``(a) Disclosure Made in a Federal Proceeding or to a 
     Federal Office or Agency; Scope of a Waiver.--When the 
     disclosure is made in a federal proceeding or to a federal 
     office or agency and waives the attorney-client privilege or 
     work-product protection, the waiver extends to an undisclosed 
     communication or information in a federal or state proceeding 
     only if:
       ``(1) the waiver is intentional;
       ``(2) the disclosed and undisclosed communications or 
     information concern the same subject matter; and
       ``(3) they ought in fairness to be considered together.
       ``(b) Inadvertent Disclosure.--When made in a federal 
     proceeding or to a federal office or agency, the disclosure 
     does not operate as a waiver in a federal or state proceeding 
     if:
       ``(1) the disclosure is inadvertent;
       ``(2) the holder of the privilege or protection took 
     reasonable steps to prevent disclosure; and
       ``(3) the holder promptly took reasonable steps to rectify 
     the error, including (if applicable) following Federal Rule 
     of Civil Procedure 26(b)(5)(B).
       ``(c) Disclosure Made in a State Proceeding.--When the 
     disclosure is made in a state proceeding and is not the 
     subject of a state-court order concerning waiver, the 
     disclosure does not operate as a waiver in a federal 
     proceeding if the disclosure:
       ``(1) would not be a waiver under this rule if it had been 
     made in a federal proceeding; or
       ``(2) is not a waiver under the law of the state where the 
     disclosure occurred.
       ``(d) Controlling Effect of a Court Order.--A federal court 
     may order that the privilege or protection is not waived by 
     disclosure connected with the litigation pending before the 
     court--in which event the disclosure is also not a waiver in 
     any other federal or state proceeding.
       ``(e) Controlling Effect of a Party Agreement.--An 
     agreement on the effect of disclosure in a federal proceeding 
     is binding only on the parties to the agreement, unless it is 
     incorporated into a court order.
       ``(f)  Controlling Effect of This Rule.--Notwithstanding 
     Rules 101 and 1101, this rule applies to state proceedings 
     and to federal court-annexed and federal court-mandated 
     arbitration proceedings, in the circumstances set out in the 
     rule. And notwithstanding Rule 501, this rule applies even if 
     state law provides the rule of decision.
       ``(g) Definitions.--In this rule:
       ``(1) `attorney-client privilege' means the protection that 
     applicable law provides for confidential attorney-client 
     communications; and
       ``(2) `work-product protection' means the protection that 
     applicable law provides for tangible material (or its 
     intangible equivalent) prepared in anticipation of litigation 
     or for trial.''.
       (b) Technical and Conforming Changes.--The table of 
     contents for the Federal Rules of Evidence is amended by 
     inserting after the item relating to rule 501 the following:

``502. Attorney-client privilege and work-product doctrine; limitations 
              on waiver.''.
       (c) Effective date.--The amendments made by this Act shall 
     apply in all proceedings commenced after the date of 
     enactment of this Act and, insofar as is just and 
     practicable, in all proceedings pending on such date of 
     enactment.

  Mr. SPECTER. Mr. President, I seek recognition today to introduce 
legislation, together with Senator Leahy, to enact Federal Rule of 
Evidence 502.
  Federal Rule of Evidence 502, which was drafted and proposed to 
Congress by the Judicial Conference of the United States, is a rule to 
provide heightened protection against inadvertent loss of the attorney-
client privilege during the discovery process. At a time when 
litigation costs are skyrocketing and discovery alone can last for 
years, this rule is urgently needed. And unlike other Federal rules of 
procedure, which go into effect unless Congress acts, rules governing 
evidentiary privilege must be enacted by Congress.
  Current law on attorney-client privilege and work product is 
responsible in large part for the rising costs of discovery--especially 
electronic discovery. Right now, it is far too easy to inadvertently 
lose--or ``waive''--the privilege. A single inadvertently disclosed 
document can result in waiving the privilege not only as to what was 
produced, but as to all documents on the same subject matter. In some 
courts, a waiver may be found even if the producing party took 
reasonable steps to avoid disclosure. Such waivers will not just affect 
the case in which the accidental disclosure is made, but will also 
impact other cases filed subsequently in State or Federal courts.
  Thus, lawyers must spend significant amounts of time ensuring that 
documents containing privileged communications and work product are not 
inadvertently produced. In this day and age when there can be literally 
millions of electronic files to comb through looking for privileged 
material, the risk of one slipping through the cracks is very high. The 
fear of waiver leads to undue expense and to extravagant claims of 
privilege.
  The proposed rule will alleviate these burdens in two primary ways: 
First, it

[[Page S15143]]

protects against undue forfeiture of attorney-client privilege and work 
product protections when privileged communications are inadvertently 
produced in discovery--where the party producing the documents took 
reasonable steps to prevent the disclosure and does not try to use the 
disclosed information in a misleading way. Second, it permits parties 
and courts to protect against the consequences of waiver by permitting 
limited disclosure of privileged information between the parties to 
litigation. This allows parties and courts to manage the effects of 
disclosure and provide predictability in current and future litigation.
  The proposed rule enjoys wide support from parties on both sides of 
the ``v.'' Both plaintiffs and defendants want this rule because it 
makes the litigation more efficient and less costly; it ensures that 
the wheels of justice will not become bogged down in the mud of 
discovery.
  The Judicial Conference, which is the body responsible for proposing 
new procedural rules, has undertaken an extensive process in crafting 
this rule over the last year and a half. The rule was approved by the 
Judicial Conference's Advisory Committee on Evidence Rules, the 
Standing Committee on Rules of Practice and Procedure, and the Judicial 
Conference itself, after a public comment period that included several 
hearings with supportive comments and testimony from bench and bar. 
There were more than 70 public comments, and more than 20 witnesses 
testified.
  The time is ripe to move forward and enact this proposed rule into 
law. Therefore, I have worked with Senator Leahy to bring this bill to 
the floor in a timely and bipartisan fashion. This rule is necessary to 
protect the attorney-client privilege, to bring clarity to the law, and 
to ensure fairness for all parties. And every day we wait wastes the 
time and resources of litigants and the courts. I urge my colleagues to 
join with Senator Leahy and me in supporting this bill.

                          ____________________