[Federal Register Volume 80, Number 182 (Monday, September 21, 2015)]
[Notices]
[Pages 57046-57049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23638]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
[Docket No. NHTSA-2015-0095; Notice 1]
Request for Public Comments on NHTSA Enforcement Guidance
Bulletin 2015-01: Recommended Best Practices for Protective Orders and
Settlement Agreements in Civil Litigation
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.
ACTION: Request for public comments.
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SUMMARY: NHTSA's ability to identify and define safety-related motor
vehicle defects relies in large part on manufacturers' self-reporting.
However, although federal regulations may require them to report
certain information to NHTSA, manufacturers do not always do so, or do
not do so in a timely manner. Additionally, the information a
manufacturer is required to report varies greatly depending on the
product and company size and purpose. Given these constraints, safety-
related information developed or discovered in private litigation is an
important resource for NHTSA.
This proposed Enforcement Guidance Bulletin sets forth NHTSA's
current thinking on this topic, and guiding principles and best
practices to be utilized in the context of private litigation. To the
extent protective orders, settlement agreements, or other
confidentiality provisions prohibit information obtained in private
litigation from being transmitted to NHTSA, such limitations are
contrary to Rule 26 of the Federal Rules of Civil Procedure, its state
corollaries, and sound principles of public policy. Although such
restrictions are generally prohibited by applicable rules and law, the
Agency recommends that litigants include a specific provision in any
protective order or settlement agreement that provides for disclosure
of relevant motor vehicle safety information to NHTSA, regardless of
any other restrictions on the disclosure or dissemination of such
information.
This notice solicits comments from the public, from counsel, and
from other interested parties concerning this proposed enforcement
guidance, and best practices to be followed by litigants in private
litigation regarding protective orders and settlement agreements that
contain confidentiality provisions limiting disclosure of safety-
related information.
DATES: All comments should be submitted early enough to ensure that
Docket Management receives them not later than October 19, 2015.
ADDRESSES: You may submit comments to the docket number identified in
the heading of this document by any of the following methods:
Federal eRulemaking Portal: go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
Mail: Docket Management Facility, M-30, U.S. Department of
Transportation, West Building Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
Hand Delivery or Courier: U.S. Department of
Transportation, West Building Ground Floor, Rm. W12-140, 1200 New
Jersey Avenue SE., Washington, DC, 20590 between 9 a.m. and 5 p.m. ET,
Monday through Friday, except Federal holidays.
Fax: (202) 493-2251.
Regardless of how you submit your comments, you should mention the
docket number of this document.
You may call the Docket at 202-366-9324.
Note that all comments received will be posted without change to
http://www.regulations.gov, including any personal information
provided.
FOR FURTHER INFORMATION CONTACT: Kara Fischer, Office of the Chief
Counsel, NCC-111, National Highway Traffic Safety Administration, 1200
New Jersey Avenue SE., Washington, DC 20590 (telephone: 202-366-8726).
SUPPLEMENTARY INFORMATION: In this notice, NHTSA has begun assembling
for guidance and informative purposes an Enforcement Guidance Bulletin
which sets forth guiding principles and best practices for private
litigants utilizing protective orders and settlement agreements with
confidentiality provisions. NHTSA is not establishing a binding set of
rules on best practices, or even suggesting that a single set of best
practices would apply in all situations. The Agency fully realizes that
best practices may vary widely depending on circumstance, and
[[Page 57047]]
private litigants remain free to choose the practices that best fit
their needs in pursuing litigation.
However, since NHTSA recognizes the public interest in this topic,
we solicit public comment before issuing a final ``Enforcement Guidance
Bulletin'' document. Commenters who recommend specific best practices
should be careful to address the practical impact that those practices
may have on individuals and entities of differing size, and the
relative costs and benefits of implementing various practices. After
receiving comments, we will issue a subsequent notice delineating a
final Enforcement Guidance Bulletin for informative purposes. We will
also post the Enforcement Guidance Bulletin on the Agency's Web site
for easy reference.
In light of the foregoing, NHTSA proposes the following Enforcement
Guidance for private litigants pertaining to the use of confidentiality
provisions in protective orders and settlement agreements:
The National Highway Traffic Safety Administration (``NHTSA'' or
``the Agency'') is tasked with, among other things, setting Federal
Motor Vehicle Safety Standards (``FMVSS''), identifying and ensuring
the remedy of safety-related defects, and monitoring and enforcing
compliance with these standards to safeguard the well-being of the
American public. The only way the Agency can fully achieve these
objectives is if it has the necessary information within its grasp,
including information discovered or identified in private litigation.
NHTSA's ability to identify and define safety-related motor vehicle
defects relies in large part on timely and accurate reporting by
manufacturers, suppliers, and various parties throughout the industry,
whether by statutory or regulatory requirement or pursuant to
compulsory process. Although federal law may require industry
participants to report certain information to NHTSA, they do not always
do so, or do not do so in a timely manner. Additionally, the type of
information an industry participant is required to report varies
greatly depending on the product and company size and purpose. While
certain entities are required to report both deaths and injuries
resulting from the use of their products, others only must report
deaths. In those cases, in the absence of a fatal incident a
potentially defective product may not come across NHTSA's radar until
dozens, if not hundreds, of people have sustained serious injury--if it
ever reaches NHTSA at all.
Given these constraints, safety-related information developed or
discovered in private litigation is an important resource for NHTSA.
Yet confidentiality restrictions imposed as part of a protective order
or settlement agreement in private litigation--whether court-sanctioned
or privately negotiated--often prevent parties from providing
information about potentially dangerous products to the Agency. As many
scholarly articles have noted, as has history has borne out, such
restrictions have kept critical safety information out of the hands of
both regulators and the public. As a matter of law and sound public
policy, NHTSA cannot countenance this situation.
There is no doubt that confidentiality provisions, protective
orders, and the sealing of cases are appropriate litigation tools in
some circumstances. In most instances, however, the interests of public
health and safety trump any confidentiality interests. In matters that
concern the safety of the American driving public and pedestrians, it
is important that entities and individuals are not prevented from
providing relevant information to the very Agency tasked with ensuring
that safety.
To the extent protective orders, settlement agreements, or other
confidentiality provisions prohibit vehicle safety-related information
from being transmitted to NHTSA, such limitations are contrary to
established principles of public policy and law, including Rule 26 of
the Federal Rules of Civil Procedure and its state corollaries which
require a showing of good cause to impose confidentiality. The recent
General Motors ignition switch and Takata airbag recalls are but two
examples of how vital early identification of motor vehicle risks or
defects is for the safety and welfare of the American public.
To further this important public policy, the Agency encourages and
recommends that parties include a provision in any protective order or
settlement agreement that--despite whatever other restrictions on
confidentiality are imposed--specifically allows for disclosure of
relevant motor vehicle safety information to NHTSA and other applicable
government authorities.
I. Legal and Policy Background
``Once a matter is brought before a court for resolution, it is no
longer solely the parties' case, but also the public's case.'' Brown v.
Advantage Eng'g, Inc., 960 F.2d 1013, 1016 (11th Cir. 1992). As a
general rule, the public is permitted ``access to litigation documents
and information produced during discovery.'' Phillips v. Gen. Motors
Corp., 307 F.3d 1206, 1210 (9th Cir. 2002). Where there is a
presumptive right of public access under the federal rules, courts have
discretion upon a showing of ``good cause'' to restrict access to
documents or information ``to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense.'' Fed. R. Civ.
P. 26(c)(1). As the Seventh Circuit has stated, Rule 26(c)'s good cause
requirement means that, ``[a]s a general proposition, pretrial
discovery must take place in the public unless compelling reasons exist
for denying the public access to the proceedings.'' Am. Telephone and
Telegraph Co. v. Grady, 594 F.2d 594, 596 (7th Cir. 1978); see also,
Public Citizen v. Liggett Group, Inc., 858 F.2d 775, 790 (1st Cir.
1988). Trial courts enjoy broad discretion in determining when to issue
a protective order and the degree and scope of protection required.
Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984).
General allegations of harm, unsubstantiated by specific examples
or articulated reasoning, however, are insufficient to warrant such an
order. Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.2d 470, 476 (9th
Cir. 1992); Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3d
Cir. 1986). Rather, the burden is on the party seeking protection from
disclosure to ``allege specific prejudice or harm'' that will result if
the protective order is not granted. In re Roman Catholic Archbishop of
Portland in Oregon, 661 F.3d 417, 424 (9th Cir. 2011), cert. denied,
132 S. Ct. 1867 (2012); In re Terra Intern., Inc., 134 F.3d 302 (5th
Cir. 1998) (good cause requirement contemplates a particular and
specific demonstration of fact as distinguished from conclusory
statements); Glenmeade Trust Co. v. Thompson, 56 F.3d 476 (3d Cir.
1995) (generalized allegations of injury insufficient to satisfy the
good cause requirement for issuance of protective order); Iowa Beef
Processors, Inc. v. Bagley, 601 F.2d 949, 954 n. 5 (8th Cir. 1979)
(party seeking protective order bears burden of making ``good cause''
showing that the information being sought falls within scope of Rule
26(c) and that moving party will be harmed by its disclosure).
Even if a court concludes that such harm will result from
disclosure, it still must proceed to balance ``the public and private
interests to decide whether a protective order is necessary.''
Phillips, 307 F.3d at 1211. See Shingara v. Skiles, 420 F.3d 301, 308
(3d Cir. 2005) (``[A] court always must consider the public interest
when deciding whether to impose a protective order.''); Glenmede
[[Page 57048]]
Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995) (``[T]he
analysis [of good cause] should always reflect a balancing of private
versus public interests.''). In doing so, courts consider a number of
factors, including:
(1) Whether disclosure will violate any privacy interests; (2)
whether the information is being sought for a legitimate purpose or
for an improper purpose; (3) whether disclosure of the information
will cause a party embarrassment; (4) whether confidentiality is
being sought over information important to public health and safety;
(5) whether the sharing of information among litigants will promote
fairness and efficiency; (6) whether a party benefitting from the
order of confidentiality is a public entity or official; and (7)
whether the case involves issues important to the public.
Glenmede Trust Co., 56 F.3d at 483. See also In re Roman Catholic
Archbishop of Portland in Oregon, 661 F.3d at 424.
The public's interest in access to court records is strongest when
the records concern public health or safety. See, e.g., Brown &
Williamson Tobacco Corp. v. F.T.C, 710 F.2d 1165, 1180-81 (6th Cir.
1983) (vacating district court's sealing of court records involving the
content of tar and nicotine in cigarettes and emphasizing that the
public had particularly strong interest in the court records at issue
because the ``litigation potentially involves the health of citizens
who have an interest in knowing the accurate `tar' and nicotine content
of the various brands of cigarettes on the market''); see also United
States v. General Motors, 99 FRD. 610, 612 (D.D.C. 1983) (the ``greater
the public's interest in the case the less acceptable are restraints on
the public's access to the proceedings''); In re Air Crash at
Lexington, Ky., August 27, 2006, No. 5:06-CV-316-KSF, 2009 WL 16836289,
at *8 (E.D. Ky. June 16, 2009) (noting the ``public has an interest in
ascertaining what evidence and records the . . . Court [has] relied
upon in reaching [its] decisions,'' and that ``the public interest in a
plane crash that resulted in the deaths of forty-nine people is quite
strong, as is the public interest in air safety''). In balancing the
privacy interests of the party seeking protection, a court ``must
consider the need for public dissemination, in order to alert other
consumers to potential dangers posed by the product.'' Koval v. Gen.
Motors Corp., 62 Ohio Misc. 2d 694, 699, 610 NE.2d 1199, 1202 (Com. Pl.
1990) (citing Hendricks v. Jeep Corp. (D. Mont. June 3, 1986), case No.
CV-82-092-M-PGH (unreported) and United States v. Hooker Chemicals &
Plastics Corp., 90 FRD. 421 (W.D.N.Y. 1981)).
A number of states have enacted ``Sunshine in Litigation'' acts,
which thrust the interests of public health and safety into the
forefront by preventing parties from concealing safety hazards through
settlement agreements or protective orders. Some, such as Florida,
broadly forbid courts from entering protective orders that may have the
``purpose or effect of concealing a public hazard or any information
concerning a public hazard'' or that ``may be useful to members of the
public in protecting themselves from injury.'' Fla. Stat. Ann. Sec.
69.081 (West 2015). Others, such as Texas, establish a presumption that
court records--including all documents filed with the court, unfiled
settlement agreements, and unfiled discovery documents ``concerning
matters that have a probable adverse effect upon the general public
health or safety''--are open to the general public; records may be
sealed only upon a showing that there is a specific, serious, and
substantial interest in nondisclosure which clearly outweighs the
presumption of public access and any probable effect on public health
or safety. Tex. R. Civ. P. 76a.
A federal corollary introduced on May 14, 2015, currently pending
before the House of Representatives, H.R. 2336 (114th Congress, 2015-
2017), would create a presumption against protective orders and the
sealing of settlements and cases ``in which the pleadings state facts
that are relevant to the protection of public health or safety.'' The
presumption would control unless a party asks a judge to find that a
specific and substantial interest in maintaining secrecy outweighs the
public health and safety interest and that the order is no broader than
necessary to protect the privacy interest asserted. Id. It would also
prohibit a court from approving or enforcing a provision that restricts
a party from disclosing public health or safety information to any
federal or state agency with authority to enforce laws regulating an
activity related to such information. Id.
Several states have taken a broader approach, enacting statutes and
court rules to address the question of whether or not courts should
enforce confidentiality agreements, regardless of the subject matter.
The common theme of these statutes is a balancing of interests. For
example, drawing upon federal precedent requiring consideration of the
public interest at stake, Idaho Court Administrative Rule 32 directs
courts considering shielding requests to first determine whether the
interest in privacy or public disclosure predominates and to ``fashion
the least restrictive exception from disclosure consistent with privacy
interests.'' Idaho R. Admin. 32(f). See also Mich. Ct. R. 8.119(F)
(records may be sealed upon showing of good cause and that no less
restrictive means are available to protect the interest asserted);
D.S.C. LCivR 5.03 (party must state why sealing is necessary and
explain why less restrictive alternatives will not afford adequate
protection). Indiana's legislature went a step further, requiring an
affirmative showing that a public interest will be protected by sealing
a record, and mandating that records shall be unsealed as soon as
possible after the reason for sealing them no longer exists. Ind. Code
Sec. 5-14-3-5.5 (2011). See also, Richard Rosen, Settlement Agreements
in Com. Disputes, n. 103 Sec. 10.04 (2015) (citing to statutory
provisions in California, Colorado, Michigan, Montana, New Hampshire,
New York, Ohio, Oregon, South Carolina, and Utah). Although the
specifics of each provision vary, all are consistent with the notion
that the safety of public should be given considerable weight in
determining whether to restrict access to information.
Basic contract principles also dictate that the public health and
safety concern should be of paramount significance in drafting and
approving protective orders and settlement agreements. While parties
are generally free to contract as they see fit, ``courts will not
hesitate to declare void as against public policy contractual
provisions which clearly tend to the injury of the public in some
way.'' 17A C.J.S. Contracts Sec. 281 (2015) (internal citations
omitted); see Thomas James Associates, Inc. v. Jameson, 102 F.3d 60, 66
(2d Cir. 1996) (``[C]ourts must not be timid in voiding agreements
which tend to injure the public good or contravene some established
interest of society.'') (internal quotations and citations omitted);
see also Vasquez v. Glassboro Service Ass'n, Inc., 83 N.J. 86, 415 A.2d
1156 (1980) (citing text for general proposition that courts have broad
power to declare agreements violative of public policy).
``While the term `public policy' lacks precise definition, . . . it
may be stated generally as a legal principle which holds that no one
may lawfully do that which has a tendency to injure the public welfare.
. . .'' O'Hara v. Ahlgren, Blumenfeld and Kempster, 537 NE.2d 730 (Ill.
1989). ``An agreement is against public policy if it is injurious to
the interests of the public, contravenes some established interest of
society, violates some public statute, is against good morals, tends to
interfere with the public welfare or safety, or is at war with the
interests of society or is in
[[Page 57049]]
conflict with the morals of the time.'' E & B Mktg. Enterprises, Inc.
v. Ryan, 568 NE.2d 339, 209 Ill. App. 3d 626 (1st Dist. 1991). See also
Johnson v. Peterbilt of Fargo, Inc., 438 NW.2d 162 (N.D. 1989)
(``Public policy, with respect to contract provisions, is a principle
of law whereby a contract provision will not be enforced if it has a
tendency to be injurious to the public or against the public good.'').
An agreement is unenforceable if the interest in its enforcement is
outweighed by the public policy harmed by enforcement of the agreement.
17A C.J.S. Contracts Sec. 281 (citation omitted).
In fact, the Florida Sunshine in Litigation Act specifically
codifies this concept: ``Any portion of an agreement or contract which
has the purpose or effect of concealing a public hazard, any
information concerning a public hazard, or any information which may be
useful to members of the public in protecting themselves from injury
which may result from the public hazard, is void, contrary to public
policy, and may not be enforced.'' Fla. Stat. Ann. Sec. 69.081(4). See
also Ark. Code Ann. Sec. 16-55-122 (2011) (rendering void any
settlement provision purporting to restrict disclosure of an
environmental hazard). Although the Florida provision broadly addresses
any contract, this notion is particularly applicable in the context of
protective orders or settlement agreement terms that prevent litigants
from disclosing information to NHTSA.
The good cause requirements found in Rule 26 and related state
provisions, and the doctrines underlying NHTSA's own regulations all
advance the unassailable public policy of maintaining and preserving
the health and welfare of the public. This strong policy has been
realized and enforced by the refusal of many courts and litigants to
engage in protective orders or settlement agreements that keep
regulators and the public in the dark about potential safety hazards.
See Culinary Foods, Inc. v. Raychem Corp., 151 FRD. 297 (N.D. Ill.),
clarified 153 FRD. 614 (1993) (any information as to whether products
liability defendant's products were dangerous, and whether defendant
knew of dangers and either failed to take action or attempted to
conceal information, would not be encompassed by protective order under
discovery rule); Cipollone v. Liggett Group, Inc., 113 FRD. 86, 87
(D.N.J. 1986) (``Discovery may well reveal that a product is defective
and its continued use dangerous to the consuming public. . . . It is
inconceivable to this court that under such circumstances the public
interest is not a vital factor to be considered in determining whether
to further conceal that information and whether a court should be a
party to that concealment.''); Toe v. Cooper Tire & Rubber Co. (Iowa
District Court, Polk County, No. CL 106914) (Order on Defendant's
Motion to Continue Protective Order, Jan. 18, 2012) (unsealing
transcript where confidential documents related to tire defect were
discussed). See also, Ohio Valley Envtl. Coal. v. Elk Run Coal Co.,
Inc., 291 FRD. 114 (S.D. W.Va. 2013) (good cause did not exist for
issuance of protective order in environmental group's suit against
company because there was no specific showing of identifiable harm
company would suffer and case involved issues of importance to public
health and safety); In re Roman Catholic Archbishop of Portland in
Oregon, 661 F.3d 417 (9th Cir.), cert. denied, 132 S. Ct. 1867 (2011)
(private interest in nondisclosure was not outweighed by public
interests in protecting public safety).
II. Recommended Best Practices
Consistent with the foregoing legal and policy background, it is
NHTSA's position that protective orders and settlement agreements
should not be used to shield critical safety information from the
Agency, either intentionally or unintentionally. This is not to say
that parties should not enter into these agreements. To the contrary,
these tools are often necessary to promote full and complete
disclosure, to prevent abuses of the discovery process, and to protect
legitimate privacy and proprietary interests. However, as explained
above, they cannot be used to preclude disclosure of safety-related
information from regulatory agencies and other government authorities.
To do so is contrary to law and the underlying policies inherent in
Rule 26 and state corollaries, and against sound public policy.
NHTSA recommends that all parties include a provision in any
protective order or settlement agreement that--despite whatever other
restrictions on confidentiality are imposed, and whether entered into
by consent or judicial fiat--specifically allows for disclosure of
relevant motor vehicle safety information to NHTSA and other applicable
authorities. Such a provision could be stated generically, providing
that nothing in the order or agreement shall be construed to prohibit
either party from disclosing information to a regulatory agency or
governmental entity who has an interest in the subject matter of the
underlying suit. For example, the provision could state that
``discovery material may only be disclosed to . . . governmental
entities with an interest in the public safety hazards involving
[description of product/vehicle].'' Or, it could specifically address
NHTSA's interest, as contemplated by the recent NHTSA Consent Order
requiring Chrysler to ``develop and implement a plan ensuring that, in
safety-related litigation, FCA US uses its best efforts to include in
any protective order, settlement agreement, or equivalent, a provision
that explicitly allows FCA US to provide information and documents to
NHTSA.'' See In re: FCA US LLC, AQ14-003, July 24, 2015 Consent Order,
Attachment A, p. 27 at ] (B)(12), available at www.safercar.gov/rs/chrysler/pddfs/FCA_Consent_Order.pdf.
Whatever the language, confidentiality agreements and protective
orders should not be utilized to prevent the parties from producing
information that implicates public safety to the very entity charged
with ensuring and protecting that safety. Instead, such orders and
agreements should clearly authorize and facilitate the disclosure of
safety-related information to NHTSA. Such a provision is consistent
with, and in some cases mandated by, federal and state statutory
schemes and regulations and applicable case law, and is wholly in line
with principles of sound public policy.
Applicability/Legal Statement: This Enforcement Guidance Bulletin
sets forth NHTSA's current interpretation and thinking on this topic
and guiding principles and best practices to be utilized in the context
of private litigation. This Bulletin is not a final agency action and
is intended as guidance only. This Bulletin is not intended, nor can it
be relied upon, to create any rights enforceable by any party against
NHTSA, the Department of Transportation, or the United States.
Moreover, these recommended practices to not establish any defense to
any violations of the statutes and regulations that NHTSA administers.
This Bulletin may be revised in writing without notice to reflect
changes in NHTSA's evaluation and analysis, or to clarify and update
text.
Authority: 49 U.S.C. 30101, et seq.; delegations of authority
at 49 CFR 1.95(a), 501.2(a)(1), 501.5.
Issued: September 14, 2015.
Timothy H. Goodman,
Assistant Chief Counsel for Litigation and Enforcement.
[FR Doc. 2015-23638 Filed 9-18-15; 8:45 am]
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