Ryan J. Vanderford is an associate with Bush Seyferth PLLC in its Troy, MI office.
Civil litigants invariably agree to keep certain case-related information private through confidentiality provisions included with protective orders and settlement agreements. California is on the brink of banning such confidentiality provisions in product liability and environmental cases. The Public Right to Know Act (SB-1149) is set for a full vote in the California Assembly after the Assembly Judiciary Committee passed the California Senate version of the Bill on June 14, 2022.
If enacted, the legislation would prohibit settlement agreements in civil “defective product” or “environmental hazard” cases that restrict “the disclosure of factual information” related to those cases. The Bill defines “defective product or environmental hazard” as “a product or environmental hazard that has caused, or is likely to cause, significant or substantial bodily injury or illness, or death,” but it does not require any kind of preliminary evidentiary showing from Plaintiff to show a product might be “defective” or environmental condition may be a “hazard.” It appears allegations in an unverified complaint will suffice.
The Bill also creates a presumption that no court or tribunal can restrict the discoverability of factual information in such cases. With certain exceptions discussed below, courts would be prohibited from entering protective orders restricting the disclosure of information during discovery, or even requiring the return or destruction of documents produced during discovery at the conclusion of the litigation.
The Bill also gives teeth to its prohibitions: It authorizes the State Bar of California to investigate attorneys that may have violated the Act.
There are limited carveouts in the Bill: The amount of a settlement, a Plaintiff’s identity, medical information, and immigration status may be protected. Trade secrets or current proprietary customer lists can also be protected, but only if the party requesting confidentiality moves the court for an order and demonstrates that the presumption in favor of disclosure is clearly outweighed by a specific and substantial overriding confidentiality interest.
The Bill appears poised to fundamentally change the nature of confidentiality in product liability and environmental cases California and will have immediate effects if passed. The cost of such litigation will go up, the judicial process will slow, and frivolous lawsuits will be encouraged.