(The Return of) Ignatz, by Sam Heldman

Monday, September 02, 2002

confidential settlements The NYT reports that the Judges of the U.S. District Court in South Carolina have adopted a rule "to ban secret legal settlements". The frustrating thing, as with so much legal coverage, is that you have to read between the lines even to get a hint of what the rule actually says. And it turns out, if my close reading of the story is correct, that the rule in fact doesn't ban secret legal settlements as most of us would understand that phrase; it would still allow parties to agree on confidentiality provisions as part of settlement agreements, such that the amount and other terms of the settlement would be kept secret by them. And the amount and other terms of settlement, as a matter of course, don't appear in the publicly-available records of federal court litigation. All that the record would show, and thus all that the public might be able to find out, is that the case was suddenly dismissed on a joint motion.

So, if the new rule wouldn't actually let us all know the amount of each settlement, would it at least mean that we'd all be privy to the discovery in the case, so that we could learn the juicy facts and smoking guns even though the case settled? Not really, if I'm reading correctly. The reason is that the juicy facts and smoking guns don't appear in the court's case-file until pretty far along in the case, if ever, under the rules of most courts. Discovery -- the fruits of the long process of finding out information from the other side, and from other sources, to get ready for trial -- doesn't get filed in the record, as a matter of course. Juicy facts make it into the record, generally speaking, only (a) in fighting over summary judgment (i.e., whether there's enough evidence to warrant a trial) and (b) at trial.

So it sounds like this rule will have some good impact in some limited circumstances, in that it will keep judges from "sealing" cases upon settlement, which will be good when those cases have proceeded far enough before settlement that there is juicy information in the case file. Maybe this will mean that corporations will be slightly more likely to settle before trying to get summary judgment in their favor, because filing for summary judgment will result in a public record chock-full of juicy facts that they won't be able to have sealed upon a settlement. But this effect, if any, will probably be marginal at best. Even without a widespread impact, the rule is well-intentioned and won't do any serious harm, I think. It will even do some good in repeated-tort sort of cases, like products liability suits.

Mostly, I wish that newspapers in this electronic age would link to a copy of any judicial order that they are discussing, so that we can read it for ourselves.

posted by sam 7:04 AM 0 comments


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