Joseph F. Anderson Jr., chief judge of the U.S. District Court in South Carolina, surprised his colleagues in the judiciary and throughout the legal and access communities, when he sent a letter this summer to the other judges on his court recommending that federal courts stop signing orders sealing settlements in civil trials.
Anderson said he was prompted in part by what happened in the Firestone tire litigation. Records revealing a defect in the tires were sealed in earlier litigation, then were unsealed in later lawsuits over more fatalities said to be caused by the tires.
“Arguably some lives were lost because judges signed secrecy agreements regarding Firestone tire problems,” Anderson wrote.
Anderson’s letter also mentioned the Catholic priest sexual abuse scandals and Enron.
The South Carolina federal court accepted public comment on the proposal for several weeks and eventually adopted the rule. Parties could still agree on their own to keep documents confidential, but they could not ask the court to prevent the release of records filed with the court.
The move prompted other courts to reexamine their role in sealing settlement records. The judges in the U.S. District Court for South Florida initiated their own inquiry into the pros and cons of sealing settlements, as did the South Carolina Judicial Department, which accepted public comment on a proposed rule until Jan. 8.
Corporate and individual citizen defendants have traditionally favored sealing settlements because records often reveal valuable trade secret or intellectual property information.
Plaintiffs lawyers have been complicit in routine sealing because a promise of confidentiality often prompts defendants into settling instead of going through a costly and risky trial. Plus, many plaintiffs don’t want to announce to the world that they are newly wealthy.
Many in the personal injury trial attorneys bar went on record as supporting Anderson’s proposal, though, saying access to relevant documents is in the public interest, not just the private interest of the individual litigants.
As Texas personal injury attorney Chuck Noteboom recently wrote, “If there is anything good to come out of the Enron and Arthur Anderson scandals, the WorldCom debacle and the sexual abuse cases against the clergy, it is this: The judiciary is taking the lead in advancing the notion that secrecy hurts society, and secret settlements hurt people.”