ACC Joins Coalition Letter To Congress Opposing Proposed Litigation Act

ACC joined the Coalition to Protect Privacy, Property, Confidentiality, and Efficiency in the Courts in a letter sent April 24th to both Senate and House Judiciary Committees to register their strong opposition to the Sunshine in Litigation Act of 2009, H.R. 1508 (the text of the proposed bill can be found at http://www.opencongress.org/bill/111-h1508/text ). H.R. 1508 purports to prevent parties from using the federal judicial process to conceal matters that harm the public health or safety by imposing requirements for issuing discovery protective orders under Rule 26(c) of the Federal Rules of Civil Procedure.

The Act would restrict federal judges from entering a protective order, or sealing a case or settlement, without making specific factual findings that the order would not harm the public’s interest in disclosure of information relevant to health or safety—or that the public’s interest is outweighed by the need for confidentiality/privacy in a particular case. These restrictions force courts to prematurely examine and adjudicate potentially millions of non-relevant documents, a tremendous burden on the courts and defendants. These early decisions could also provide a record on which to base appeals or challenges to protective orders – another costly, burdensome result. The bill would also prohibit courts from approving or enforcing settlements or issuing protective orders or sealing orders that would restrict disclosure of information to regulatory agencies.   In short, this pending legislation forces premature discovery decisions and restricts judicial discretion to protect confidentiality.

After years of study, the Judicial Conference Committee on Rules of Practice and Procedure and the Advisory Committee on Civil Rules did not recommend changes to Rule 26(c) of the Federal Rules of Civil Procedure similar to those proposed in the Sunshine in Litigation Act, and for good reason.

According to Judge Mark Kravitz in a statement on behalf of the Rules Committees of the Judicial Conference of the United States, in 1994 the Federal Judicial Center (FJC) was asked to conduct an empirical study on whether discovery protective orders were operating to keep information about public safety or health hazards from the public.  The study was completed in April 1996 and showed that out of approximately 220,000 civil cases filed in federal courts in that two year period, in only about 6% were discovery protective orders requested, and most of the requests made by motion. Under 25% of the protective order requests were made by party stipulations and courts usually accept them.

Judge Kravitz adds that “[i]n most civil cases in which discovery protective orders were entered, the empirical study showed that the orders did not impact public safety or health”. The FJC study selected at random 398 cases that had protective order activity. The data from those cases reveals that “protective orders targeted by H.R. 1508 represent only a small fraction of civil cases in federal courts.” In just 50% of the 398 cases studied did a protective order restrict disclosure of discovery materials.  In the other half of the cases the protective orders “governed the return or destruction of discovery materials or impos[ed] a discovery stay pending some event or action”.  Additionally, in those cases in which a protective order was entered, approximately “9% were personal injury cases, in which public safety or heath issues might conceivably arise.”  The burdens of H.R 1508 would be imposed in the many more cases having nothing to do with public health or safety.

The FJC also completed a two year study in 2002 which analyzed the frequency and practice of sealing orders that limited disclosure of settlement agreements.  Of 288,846 cases in 52 district courts during that two year period, only 1,270 had filed sealed settlement agreements, or one in 227 cases (0.44%). Of those 1,270 sealed-settlement cases, only 503 cases were determined to have potential public health or safety characteristics (or 0.18% of all cases examined). The FJC concluded that there were so few orders sealing settlement agreements because most settlement agreements are private contractual obligations.

The Coalition’s letter discouraging the passage of this Act is co-signed by the ACE Group, American Insurance Association, American Tort Reform Association, Beckman Coulter, Boehringer Ingelheim USA Corp., Caterpillar Inc., Civil Justice Association of California, DRI, Eli Lilly and Co., Federation of Defense & Corporate Counsel, International Association of Defense Counsel, Lawyers for Civil Justice, LyondellBasell Industries, Inc., Mazda North American Operations, National Association of Manufacturers, National Association of Mutual Insurance Companies, Nationwide Mutual Insurance Co., PhRMA, Property Casualty Insurers Association of America, The Chubb Corp., The Travelers Companies, Inc., U.S. Chamber Institute for Legal Reform, and U.S. Chamber of Commerce.

Coalition Letter to Senate Judiciary re S.537

Coalition Letter to House Judiciary re H.R. 1508