Bill Would Crack Secrecy in Suits on Product Liability

SACRAMENTO — A coalition of consumers, environmentalists, seniors and trial lawyers Monday demanded passage of newly revived legislation that would make public the details of confidential legal agreements reached in product liability, environmental hazard and certain fraud cases.

On the flip side of the big-stakes economic battle, the titans of California business and industry dug in for a heavy siege, arguing that such exposure could make trade secrets known to foreign competitors and worsen the recession.

Sen. Bill Lockyer (D-Hayward), chairman of the Senate Judiciary Committee and often an ally of personal-injury attorneys, said his bill would put an end to secret out-of-court “settle and seal” deals that he said enable manufacturers to “sweep their misdeeds under the carpet.”

Supporters of the Lockyer bill contend that confidential provisions of settlements in some product liability cases impose a lock of secrecy that endangers the public by hiding information about other hazards.

They cited such controversies as silicone breast implants as an example of judicial and government power failing to alert consumers to possible product defects.

The bill is sponsored by the California Trial Lawyers Assn., a major donor to legislative election campaigns, as well as the Sierra Club, Consumers Union, Center for Public Interest Law, Congress of California Seniors, American Assn. of Retired Persons, California Newspaper Publishers Assn. and other organizations.

Opponents, representing the core of the state’s business and commerce interests, include the California Chamber of Commerce, California Manufacturers Assn., and Assn. for California Tort Reform, an umbrella organization representing insurance companies and other financial institutions, physicians, hospitals and pharmaceutical companies.

Opponents stalled passage of the bill last year, but Lockyer reactivated the measure last week and said he intends to seek approval by the full Senate this week. Friday is the final day of the legislative session for the Senate and Assembly to act on their own bills.

Lockyer said Florida, Texas and New York have opened out-of-court settlements in certain cases. On its own, the Superior Court in San Diego County has adopted a similar local rule.

“While the consumers in all those other places find out about environmental or product hazards, they are denied that information in the state of California,” Lockyer told a news conference. “There is a cloak of secrecy over California.”

He condemned as propaganda and “a lie” the arguments of opponents that the bill would do violence to the California business climate.

“They are panicking,” he said. “They are claiming that their business success depends on defrauding . . . the California consumer.”

The California Manufacturers Assn. warned that the bill could result in the loss of “hundreds, perhaps thousands of jobs” under a provision that, the group said, would allow a foreign manufacturer to use technology developed by a California firm to “make and market the product to the rest of the world.”

Another opponent, John Sullivan, president of the Assn. for California Tort Reform, said a judge can now order a confidential settlement to be made public if the jurist believes it is in the public’s interest.

Under the bill, Sullivan said, businesses in the early stages of litigation would be faced with turning over everything detrimental that plaintiffs asked for or spending enormous sums on lawyers to “develop new legal arguments that try to justify why this information should be kept confidential.”

As part of their battle plan, opponents of the bill leaked to reporters a 1989 memo from the Washington-based Assn. of Trial Lawyers of America to its state affiliates. The document suggested that legislation lifting the confidentiality protections would be in the public interest but that the business community “will be very defensive.”

The memo warned that “out front activity (by trial lawyers) may actually help kill the bill. This bill should be cast as a pro-consumer, pro-safety piece of legislation without necessarily being identified as trial lawyer inspired.”

Doug deVries, vice president of the California Trial Lawyers Assn., termed the release of the memo an attempt to obscure the issues. “We have been out front on these issues and the consumer groups should have been.”