Jarrell Cook

Bill would open Court settlements, with slight exception

By Jarrell Cook, Legislative Manager, Government Relations

Capitol Update, March 31, 2017 Share this on FacebookTweet thisEmail this to a friend

AB 889 by Assembly Member Mark Stone (D-Scotts Valley) is scheduled for hearing by the Assembly Judiciary Committee on April 4th at 9:00am. The bill would prohibit a court from entering an order, approve approving a settlement agreement, or limits limiting access to court records that restricts disclosure of information that may present a “danger to public health or safety” unless the public interest in that disclosure is outweighed by a specific and substantial overriding interest.

The aim of the bill is to prevent instances where defective products escape the public notice even though they are repeatedly the subject of lawsuits due to the secrecy agreements when parties settle. To do so, the bill creates a substantial presumption of disclosure that can only be overcome if a party can show (1) the public interest is outweighed by a specific and substantial overriding interest in confidentiality, (2) a substantial probability exists that the interest will be substantially prejudiced upon disclosure, (3) what is kept secret is no broader than necessary to protect the interest, (4) that no less restrictive means than secrecy exists to protect the interest, and (5) that the confidential information will not be kept secret longer than necessary.

Judges may already, in their discretion, choose to exclude information related to public hazards from settlement agreements. This new bill lessens their discretion by creating a presumption for disclosure. This new standard, combined with the bill’s five-part test, will make it more difficult for manufacturers to settle; especially in instances where disclosing information related to the alleged defect would reveal competitive information regarding their manufacturing processes or operating procedure.

The author chairs the Judiciary Committee, so observers can expect it to be successfully referred to the Assembly Committee on Privacy and Consumer Protection.

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