[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
SUNSHINE IN LITIGATION ACT OF 2008
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
COMMERCIAL AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
ON
H.R. 5884
__________
JULY 31, 2008
__________
Serial No. 110-202
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
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43-831 PDF WASHINGTON : 2009
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COMMITTEE ON THE JUDICIARY
JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California LAMAR SMITH, Texas
RICK BOUCHER, Virginia F. JAMES SENSENBRENNER, Jr.,
JERROLD NADLER, New York Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina ELTON GALLEGLY, California
ZOE LOFGREN, California BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas STEVE CHABOT, Ohio
MAXINE WATERS, California DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts CHRIS CANNON, Utah
ROBERT WEXLER, Florida RIC KELLER, Florida
LINDA T. SANCHEZ, California DARRELL ISSA, California
STEVE COHEN, Tennessee MIKE PENCE, Indiana
HANK JOHNSON, Georgia J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois TOM FEENEY, Florida
BRAD SHERMAN, California TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota
Perry Apelbaum, Staff Director and Chief Counsel
Sean McLaughlin, Minority Chief of Staff and General Counsel
------
Subcommittee on Commercial and Administrative Law
LINDA T. SANCHEZ, California, Chairwoman
JOHN CONYERS, Jr., Michigan CHRIS CANNON, Utah
HANK JOHNSON, Georgia JIM JORDAN, Ohio
ZOE LOFGREN, California RIC KELLER, Florida
WILLIAM D. DELAHUNT, Massachusetts TOM FEENEY, Florida
MELVIN L. WATT, North Carolina TRENT FRANKS, Arizona
STEVE COHEN, Tennessee
Michone Johnson, Chief Counsel
Daniel Flores, Minority Counsel
C O N T E N T S
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JULY 31, 2008
Page
THE BILL
H.R. 5884, the ``Sunshine in Litigation Act of 2008''............ 3
OPENING STATEMENTS
The Honorable Linda T. Sanchez, a Representative in Congress from
the State of California, and Chairwoman, Subcommittee on
Commercial and Administrative Law.............................. 1
The Honorable Chris Cannon, a Representative in Congress from the
State of Utah, and Ranking Member, Subcommittee on Commercial
and Administrative Law......................................... 8
WITNESSES
Mr. Richard D. Meadow, the Lanier Law Firm, PLLC
Oral Testimony................................................. 53
Prepared Statement............................................. 56
Mr. John P. Freeman, Distinguished Professor Emeritus, University
of South Carolina Law School
Oral Testimony................................................. 65
Prepared Statement............................................. 67
The Honorable Mark R. Kravitz, Judge, U.S. District Court for the
District of Connecticut
Oral Testimony................................................. 74
Prepared Statement............................................. 76
The Honorable Joseph F. Anderson, Jr., Judge, U.S. District Court
for the District of South Carolina
Oral Testimony................................................. 89
Prepared Statement............................................. 91
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Material submitted by the Honorable Chris Cannon, a
Representative in Congress from the State of Utah, and Ranking
Member, Subcommittee on Commercial and Administrative Law:
Letter from the Judicial Conference of the United States..... 9
Letter from the American Bar Association (ABA)............... 17
Letter from the U.S. Department of Justice................... 20
Letter from Arthur R. Miller, Professor, New York University
School of Law.............................................. 36
Prepared Statement of Stephen G. Morrison, Esquire........... 44
Prepared Statement of the Honorable Herb Kohl, a U.S. Senator
from the State of Wisconsin, submitted by the Honorable Linda
T. Sanchez, a Representative in Congress from the State of
California, and Chairwoman, Subcommittee on Commercial and
Administrative Law............................................. 51
APPENDIX
Material Submitted for the Hearing Record
Attachments to the Prepared Statement of the Honorable Mark R.
Kravitz, Judge, U.S. District Court for the District of
Connecticut.................................................... 108
Answers to Post-Hearing Questions from Richard D. Meadow, The
Lanier Law Firm, PLLC.......................................... 321
Answers to Post-Hearing Questions from John P. Freeman,
Distinguished Professor Emeritus, University of South Carolina
Law School..................................................... 323
Answers to Post-Hearing Questions from the Honorable Mark R.
Kravitz, Judge, U.S. District Court for the District of
Connecticut.................................................... 324
Answers to Post-Hearing Questions from the Honorable Joseph F.
Anderson, Jr., Judge, U.S. District Court for the District of
South Carolina................................................. 327
SUNSHINE IN LITIGATION ACT OF 2008
----------
THURSDAY, JULY 31, 2008
House of Representatives,
Subcommittee on Commercial
and Administrative Law,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:40 a.m., in
room 2237, Rayburn House Office Building, the Honorable Linda
Sanchez (Chairwoman of the Subcommittee) presiding.
Present: Representatives Sanchez, Cannon, and Jordan.
Staff present: Matthew Wiener, Majority Counsel; Daniel
Flores, Minority Counsel; Andres Jimenez, Majority Professional
Staff Member; and Megan Crowley, Minority Clerk.
Ms. Sanchez. This hearing of the Committee on the
Judiciary, Subcommittee on Commercial and Administrative Law
will now come to order.
I will now recognize myself for a short statement.
Serious concerns have been raised as to whether court
secrecy orders may endanger public safety and health. There are
several examples of court secrecy orders that have concealed
from the public and governmental regulatory agencies
information about dangerous products and other potential harms.
None is more well known, perhaps, than the secrecy orders
involving Firestone tires. Defective Firestone tires resulted
in more than 250 deaths and many more serious injuries
throughout the 1990's. Although Firestone knew of the defects
by the early 1990's, it concealed the information from the
public by settling numerous lawsuits under the cover of court
secrecy orders. Those orders prohibited plaintiffs from sharing
information with the public about the defects uncovered during
litigation.
Not until 2000, when Firestone issued a recall, did the
public finally learn of them. By then it was too late for those
who were already victims and for their families. This is just
one notable example. We expect to hear about others during this
morning's testimony.
The fundamental question before us is whether Congress
should leave the issue of court secrecy in the hands of Federal
judges or, instead, address the issue itself. Should we choose
the latter, we have H.R. 5884, the ``Sunshine in Litigation Act
of 2008.'' H.R. 5884 mirrors a bill pending before the Senate
that has been favorably reported by a bipartisan majority of
the Senate Committee on the Judiciary.
H.R. 5884 is modest in its scope. Its key provision would
require courts to do what some Federal judges already do:
consider the public's interest in health and safety before
entering certain confidentiality orders that would conceal
information from the public uncovered during discovery.
H.R. 5884 would not prohibit a court from ordering the
confidentiality of discovery materials when confidentiality is
due, such as when protecting a trade secret, other proprietary
commercial information, or personal information of a private
nature.
It would simply require a court, before entering a
nondisclosure order, to find that the asserted interest in
confidentiality outweighs the public interest in open access.
And it would require that the nondisclosure order be no broader
than necessary to protect the privacy interest that justifies
its issuance.
To help us evaluate whether these and related restrictions
on court secrecy orders should be legislatively mandated, we
will hear from four witnesses. They are: Richard Meadow, a
partner in the Lanier Law firm in New York; Professor John
Freeman, Distinguished Professor Emeritus of Law at the
University of South Carolina School of Law; the Honorable Mark
Kravitz, a judge on the United States District Court for the
District of Connecticut, who is testifying on behalf of the
Judicial Conference of the United States; and the Honorable
Joseph Anderson, Jr., a judge on the United States District
Court for the District of South Carolina. Accordingly, I look
forward to hearing today's testimony from our witnesses.
[The bill, H.R. 5884, follows:]
Ms. Sanchez. And at this time, I would now recognize my
colleague Mr. Cannon, the distinguished Ranking Member of the
Subcommittee, for his opening remarks.
Mr. Cannon. Thank you, Madam Chair.
Just as a matter of curiosity, which I should probably
frame as a parliamentary inquiry, I would think this normally
would come under the jurisdiction of the Intellectual Property
and Courts Subcommittee. Is there a reason why we are doing it
here?
Ms. Sanchez. I would expect that, perhaps, for issues
involving trade secrets that might be the case. But we are
talking about issues of public health and welfare. So I believe
the jurisdiction is properly in this Subcommittee.
Mr. Cannon. As the Chair knows, I am always anxious to
expand the jurisdiction of this Committee. And so I think we
should go forward. But my sense is that since we are dealing
with the rules, or the way we make the rules, that this
probably would fit--what we probably ought to do is get courts
in this Committee, because IP has plenty of other things to do.
I want to thank the witnesses for their testimony today
regarding H.R. 5884, the ``Sunshine in Litigation Act of
2008.'' Oftentimes we hold hearings on legislation in this
Subcommittee which is supported or opposed by partisan groups
on opposite sides of the issue. That is not the case with the
bill we are considering today.
Rather, the Sunshine in Litigation Act is opposed not just
by what would generally be perceived as conservative or pro-
business groups but by non-partisan groups such as the Judicial
Conference of the United States and the American Bar
Association. The bill is also opposed by the Department of
Justice.
I ask unanimous consent that opposition letters from the
Judicial Conference, the ABA and the Department of Justice be
entered into the record.
Ms. Sanchez. Without objection, so ordered.
[The information referred to follows:]
Mr. Cannon. And why are these groups opposed to 5884?
First, they are opposed that the bill circumvents the
regular order for promulgating changes to the Federal Rules of
Civil Procedure established in the Rules Enabling Act. The
Rules Enabling Act was passed by Congress so that before a
Federal rule is adopted or modified, it is thoroughly vetted
and studied by the Judicial Conference, the public, and the
Supreme Court before being presented to Congress.
There is no reason to abandon that process for the rules
changes proposed in H.R. 5884.
Second, they are opposed because the bill is not only
unnecessary but would increase the burden and cost of
litigation. This bill is unnecessary because discovery
protective orders are rare. An extensive empirical study
conducted by the Judicial Conference revealed that in the
Federal judicial districts surveyed, protective orders were
requested in only 6 percent of all civil cases.
This bill will increase the burden and cost of litigation
because if confidentiality and privacy are not protected,
litigants will be forced to oppose any document request that an
opposing party makes for information which may be sensitive or
confidential.
It will also force judges to make findings of fact every
time a protective order is requested. As Judge Kravitz wrote in
his testimony, requiring courts to review discovery information
to make public health and safety determinations in every
request for a protective order, no matter how irrelevant to
public health or safety, will burden judges and further delay
pretrial discovery--which already, by the way, takes way too
long. I think we have a consensus on that.
For these reasons, the Judicial Conference has consistently
concluded that provisions affecting Rule 26(c)--similar to
those sought in H.R. 5884--were not warranted and would
adversely affect the administration of justice.
In short, this bill is a bad idea, and it is a bad idea
made worse by skipping the process that Congress set forth in
the Rules Enabling Act. Hopefully, after this hearing we can
lay this bill to rest.
Madam Chair, the size of this panel did not allow us to
call some additional witnesses to testify in person. However,
these witnesses have graciously provided us with their written
views on the bill. I ask unanimous consent that written views
of Professor Arthur Miller, a professor at New York University
School of Law and one of the foremost experts on this area of
the law, be entered into the record.
Ms. Sanchez. Without objection, so ordered.
[The information referred to follows:]
Mr. Cannon. As well as the written views of Stephen
Morrison, a partner at Nelson Mullins, who has tried more than
240 cases to a jury verdict and has argued more than 60 appeals
in the nation's highest courts, including the Supreme Court of
the United States.
Ms. Sanchez. Also without objection, so ordered.
[The information referred to follows:]
Mr. Cannon. I thank you, Madam Chair. I yield back.
Ms. Sanchez. I thank the gentleman for his statement.
I would also ask unanimous consent to enter into the record
a statement of Senator Kohl, who has introduced substantially
this legislation in successive cycles. Without objection, his
testimony will be entered into the record.
[The prepared statement of Senator Kohl follows:]
Prepared Statement of the Honorable Herb Kohl, a U.S. Senator from the
State of Wisconsin
Thank you, Chairwpman Sanchez, for holding a hearing H.R. 5884, the
Sunshine in Litigation Act of 2008, and the use of secrecy agreements
and sealed settlements. I would also like to thank Congressman Wexler
for introducing this legislation; legislation that I have been working
on for many years and which recently passed the Senate Judiciary
Committee with bipartisan support. I am pleased to see the bill
advancing here in the House and I look forward to working with
Congresswoman Sanchez and Congressman Wexler on this important issue.
Far too often, court approved secrecy agreements and sealed
settlements hide vital public health and safety information from the
American public--putting lives at stake. We are all familiar with well-
known cases where protective orders and secret settlements prevented
the public from learning about the dangers of silicone breast implants,
IUDs, a prescription pain killer, side-saddle gas tanks, and defective
heart valves and tires. This critical health and safety information did
not deserve court endorsed protection.
The Sunshine in Litigation Act is a narrowly targeted measure that
will make sure court-endorsed secrecy does not keep the public from
learning about health and safety dangers. Under the bill, judges must
consider public health and safety before granting a protective order or
sealing court records and settlement agreements. They have the
discretion to grant or deny the secrecy based on a balancing test that
weighs the public's interest in a potential public health and safety
hazard and legitimate interests in secrecy. The bill does not place an
undue burden on our courts. It simply states that in a limited number
of cases, judges must a closer look at requests for secrecy.
Last December, at a hearing in the Senate Judiciary Subcommittee on
Antitrust, Competition Policy and Consumer Rights, we learned that
while some judges may be more aware of the issue, this problem
continues and we have examples to prove it. Johnny Bradley told us the
chilling details of a car accident caused by tire tread separation that
killed his wife and left him and his son severely injured. During his
lawsuit against Cooper Tire, he learned that information about similar
accidents had been kept secret for years through court orders and
secret settlements. Today, details about this tire defect remain
protected by court orders while Cooper Tire continues to aggressively
fight attempts to make them public.
We also learned about the case of Zyprexa, a drug used to treat
schizophrenia and bipolar disorder. In 2005, the drug company Eli Lilly
settled 8,000 cases related to Zyprexa. The cases alleged that Eli
Lilly did not disclose known harmful side-effects of Zyprexa, such as
inordinate weight gain and dangerously high blood sugar levels that
sometimes resulted in diabetes. Documents exchanged during discovery
showed that Eli Lilly knew of the harmful side effects but did not
inform prescribing doctors or the FDA. However, all of the settlements
required plaintiffs to agree ``not to communicate, publish or cause to
be published . . . any statement . . . concerning the specific events,
facts or circumstances giving rise to [their] claims.'' As a result,
the public did not learn about these settlements or Zyprexa's dangerous
side effects until two years later when The New York Times leaked
documents from the case that were covered by a protective order.
Finally, we heard from Judge Joe Anderson, a federal district court
judge in South Carolina. We are pleased that the Subcommittee will hear
from him today. Judge Anderson expressed his support for the Sunshine
in Litigation Act as a balanced approach to address ``a discernable and
troubling trend'' for litigants to ask for secrecy in cases where
public health and safety might be adversely affected. He told us about
a local rule in South Carolina, one that goes even further than our
bill, and how it has been a great success. Despite concerns for the
increased burden such a measure would put on South Carolina's federal
courts, the number of trials has not increased and cases continue to
settle even though secrecy is no longer an option.
In response to concerns about national security and personally
identifiable information, we included language to ensure that this
information is protected. We have also heard concerns about protecting
trade secrets. I would like to make it very clear that our bill
protects trade secrets. We are confident that judges, as they are
already required to do, will give ample consideration to them as part
of the balancing test. However, we will not permit trade secrets that
pose a threat to public health and safety--such a defective tire
design--to justify secrecy.
We take great pride in our court system and its tradition of
fairness for plaintiffs and defendants alike. However, the courts are
public institutions meant to sometimes go beyond simply resolving cases
between private parties; they also serve the greater goods of law,
order and justice. We must not allow court endorsed secrecy to
jeopardize public health and safety or undermine the public's
confidence in our judicial system.
Again, I thank Chairwoman Sanchez and Congressman Wexler for their
attention to this important issue and I look forward to working with
them to enact the Sunshine in Litigation Act.
Ms. Sanchez. Without objection, the Chair will be
authorized to declare a recess of the hearing at any point.
And at this point, I am now pleased to introduce the
witnesses for our hearing. Our first witness is Richard Meadow.
Mr. Meadow has successfully tried over 25 cases to verdict.
Since joining the Lanier Law Firm, Mr. Meadow was part of the
trial team that obtained plaintiff verdicts in the Vioxx
litigation in excess of $300 million. An active participant in
New York and national bar associations, Mr. Meadow currently
serves on the board of directors of the New York State Trial
Lawyers Association. Mr. Meadow has lectured at numerous legal
conferences and has been appointed to many committees that
explore issues germane to the medical and legal communities. I
want to welcome you to today's panel.
Our second witness is John Freeman. Professor Freeman
joined the University of South Carolina Law Faculty in 1973.
Prior to that, Professor Freeman started law practice in 1970
with the Jones Day law firm and subsequently worked for the
Securities and Exchange Commission, where he served as special
counsel analyzing mutual fund issues. He has taught corporate
and securities law and legal ethics for over 30 years, and has
testified as an expert witness or served as trial counsel in
various legal malpractice lawsuits, ethics proceedings, and
investment-related cases.
Professor Freeman has written and lectured extensively on
ethics, malpractice and business-related matters, and writes a
regular column on professionalism topics for the South Carolina
Lawyer. Most recently, Professor Freeman has been addressing as
a writer and commentator certain problems with the way mutual
fund sponsors conduct their businesses. Professor Freeman
retired from the faculty in 2008. He has received various
service awards and serves as one of the four public members on
South Carolina's Judicial Merit Selection Commission. We want
to welcome you to today's panel.
Our third witness is Mark Kravitz. Judge Kravitz was
appointed in 2003 by President George W. Bush to the U.S.
District Court for the District of Connecticut. Previously,
Judge Kravitz was a partner at the law firm of Wiggin & Dana,
LLP, where he worked for nearly 27 years, most recently as the
chair of the firm's Appellate Practice Group. Before joining
Wiggin & Dana, Judge Kravitz served as a law clerk to Circuit
Judge James Hunter, III, of the U.S. Court of Appeals for the
Third Circuit, and then to Justice William H. Rehnquist of the
United States Supreme Court.
From 2001 to 2007, Judge Kravitz served as a member of the
Standing Committee on the Rules of Practice and Procedure in
the United States Courts, the body that oversees the rules of
procedure and evidence that apply in all Federal courts. During
that period, he also served as liaison member of the Advisory
Committee on Criminal Rules. In June of 2007, Chief Justice
John Roberts, Jr., appointed Judge Kravitz to chair the
Advisory Committee on Civil Rules, the body that oversees the
Federal Rules of Civil Procedure.
From 1999-2003, Judge Kravitz was a regular columnist and
commentator for the National Law Journal on appellate law. He
has also authored numerous articles on a variety of topics.
Judge Kravitz served as an adjunct professor at the University
of Connecticut School of Law from January 1995 to 2001 and a
lecturer in law at the Yale University Law School in 2000.
Welcome to today's panel.
Our final witness is Joseph Anderson, Jr. After clerking
for the Fourth Circuit's chief judge, Clement Haynsworth, Judge
Anderson entered private practice with his family law firm. In
1980, he was elected to the South Carolina House of
Representatives, where he served until his appointment to the
Federal bench. Judge Anderson was also active in political
campaigns other than his own, twice serving as county chair for
Senator Strom Thurmond's reelection efforts and once for
Congressman William Jennings Bryan Dorn's bid for governor.
Judge Anderson has been very active in the community as a
member, board member and president of various organizations,
including the Lions Club, United Way and the Boy Scouts. As a
practicing lawyer and judge, he has published a variety of
articles on substantive topics in trial advocacy.
I want to thank you all for your willingness to participate
in today's hearing.
Without objection, your written statements that you have
provided will be placed into the record in their entirety.
And we are going to ask that you please limit your oral
testimony to 5 minutes. We do have a lighting system that we
sometimes remember to employ here. You will get a green light
when your time begins. When the light switches from green to
yellow, that is a warning that you have about a minute to
conclude your testimony. And then when you receive the red
light, that will let you know that your time has expired. Of
course, if you are mid-sentence or mid-thought when you get the
red light, we will allow you to complete your final thought
before moving on to the next witness.
With that, at the conclusion of your testimony, we will
then allow Members to ask questions subject to the 5-minute
limit.
If everybody understands the rules and everybody is ready
to proceed, I would invite Mr. Meadow to please begin his
testimony.
TESTIMONY OF RICHARD D. MEADOW,
THE LANIER LAW FIRM, PLLC
Mr. Meadow. [Off mike.]
Ms. Sanchez. Rarely do we have a witness that keeps it to
less than 5 minutes.
Mr. Meadow. I am pleased to appear before the Committee
today to testify on behalf of myself and my law firm in support
of the Sunshine in Litigation Act.
My name is Rick Meadow. I am the managing attorney of the
Lanier Law Firm in New York City. We are a Houston-based law
firm with offices in Los Angeles and Palo Alto, Houston and New
York. We are involved in pharmaceutical litigation, asbestos
litigation, toxic tort, and a number of other litigations. Led
by Mr. Lanier, we took the forefront in the Vioxx litigation as
lead counsel. As you previously stated, we achieved three of
the successful verdicts in the Vioxx litigation against Merck
Pharmaceuticals.
Because of the nature of our particular practice, we are
subject to numerous confidentiality orders and numerous
confidentiality settlements. It is for that reason that we
appear here today on behalf of and in favor of the Sunshine in
Litigation Act.
I would like to discuss the effect of these confidentiality
settlements and confidentiality protective orders on numerous
litigations.
The first I would like to discuss is the public health and
safety of the Zyprexa litigation, but because of the
confidentiality order I can't address that.
I would also like to discuss the public health and safety
that is in effect because of the Bextra litigation, but because
of the confidentiality order in effect I cannot do that either.
I would like to discuss the Ortho Evra litigation that we
are involved in, but I can't do that as well.
Nor can I discuss those litigations involving Kugel Mesh,
Vioxx--which continues--Avandia and many of the other
litigations that we are involved in.
Because of the nature of today's practice, where the
majority of our litigations end up in the Federal court because
of the multi-district litigation process, I am not at liberty
to discuss the public health and safety and welfare of a number
of products that this act would take care of and allow us to
talk about it.
I would also like to talk about how some corporate
executives, based on internal emails, sell stock unbeknownst to
an unknowing public, but I can't discuss that as well.
I could also, would love to, discuss how some corporations
pollute surrounding neighborhoods with cancer-causing toxic
agents, but because of the confidentiality agreement and orders
I am not allowed to discuss that as well.
And there is one other litigation I would like to discuss
where a major automobile manufacturer redesigned their product
in midstream after a couple of rollover deaths, but I can't
discuss that as well. But because of----
Ms. Sanchez. I can now see why you were so confident your
testimony would be less than 5 minutes.
Mr. Meadow. Well, yes, these are--and you lead me to my
next line--these are just a few of the many examples where the
public safety and welfare have taken a backseat to the
interests of corporate defendants as well as settling
defendants that are injured by hazardous products and
practices.
At a time when the nation faces the looming possibility of
Federal preemption, the lack of the disinfectant of the
Sunshine Law would free corporations to operate under the cloak
of darkness with full immunity on an unsuspecting and
unprotected public. This is a concept which must concern you,
the Members of Congress who are entrusted with the significant
responsibility to represent and protect the public welfare.
These same interests are behind many meritless arguments
that the Sunshine Act would chill settlements and overburden
the court system. I beg to differ. Not only is there no proof
of this assertion, it impugns the integrity of the bar on both
sides of any civil dispute.
I have addressed these issues in my written statement, but
this morning I would like to focus on the potential deterrent
aspects of the Sunshine Act.
Today, those who choose profits over people, and thus risk
litigation if they are caught, take comfort in their proven
ability to demand confidentiality in exchange for providing
unfettered discovery and in exchange for ultimately settling
with some claimants, who are often only a tiny fraction of the
victims of a hazardous product.
If the Sunshine Act were in place, these same interests
would have good reason to think twice before rushing a product
to market because their actions would be unveiled for all the
public to see.
The need for the Sunshine Act has recently become more
urgent. The American public increasingly has nowhere to turn.
The FDA, Consumer Product Safety Commission, EPA, and other
governmental agencies are overworked, underfunded, and in some
cases unmotivated to protect the public welfare. The last line
of defense may rest with Congress beginning with the Sunshine
in Litigation Act.
Thank you.
[The prepared statement of Mr. Meadow follows:]
Prepared Statement of Richard D. Meadow
Ms. Sanchez. Thank you, Mr. Meadow. We appreciate your
testimony.
At this time, I would invite Professor Freeman to give his
testimony.
TESTIMONY OF JOHN P. FREEMAN, DISTINGUISHED PROFESSOR EMERITUS,
UNIVERSITY OF SOUTH CAROLINA LAW SCHOOL
Mr. Freeman. Thank you, Madam Chairwoman.
I am delighted to be here. As my written statement
reflects, I have taught various courses, including White Collar
Crime, Securities, and Professional Responsibility, over the
years, over 35 years, before my retirement. From time to time I
also assisted either as a lawyer, a consultant or an expert
witness in certain big-case litigation, including Big Tobacco--
which to a considerable extent was driven out of South Carolina
by some of our top lawyers, asbestos cases the same--but also
other cases that affect the public interest, such as Dalkon
Shield litigation, sexual predators and Catholic priests,
defective car seats, Benlate fungicide, which cut a wide swath
among farmers, and so forth.
From my experience in big complex cases, protective orders
are very, very common and very overbroad. As my written
statement reflects, decades ago judges were complaining about
the issuance of protective orders, and one judge saying on the
record he was unaware of any case in the past half-dozen
years--and this is 1981--of even a modicum of complexity where
an umbrella protective order was not agreed to.
I included in my written statement a recent, to update,
within the last 2 months, order from the Seventh Circuit, a
District Court order, where you have a magistrate judge
complaining about lawyers in that circuit--which has taken the
lead in trying to clamp down on protective orders--just not
doing it, lawyers not following, not getting the message. And
somebody needs to send a strong message. It hasn't been sent
over decades.
The secrecy selling is of keen interest to me. As you know,
we have dealt with that in South Carolina. And I would just
raise a hypothetical, two actually, with you.
One: Assume that you have a witness to a vicious criminal
assault who is a sole witness and the only person whose
testimony could really convict the wrongdoer. And assume that
the perpetrator's lawyer goes to that witness and says, ``Here
is $25,000. I want you to take this money. I don't want you to
report to the police. I don't want you to cooperate with the
authorities. It didn't happen.'' It is just: Wipe it off the
map, and here is the money. Go spend it. Enjoy it. And assume
that that transaction is struck.
And nobody would have a problem condemning that transaction
for witness tampering, obstruction of justice, conspiracy,
bribery, all kinds of heinous things.
Well, suppose it is a design defect in an automobile. And
there, after tremendous discovery and a lot of effort, finally
the plaintiff has figured it out and has come up with the
killer documents--the key documents, the smoking gun documents.
And the company, realizing that it is going to get stung
and that all this is going to come out, goes to the plaintiff
and goes to the plaintiff's lawyer and says, ``Here is a
million. Here is $3 million. We want your file. It didn't
happen. You can't talk to anybody about it. We will--you will
owe us liquidated damages if you--you are not cooperating with
a soul.''
And you might say, ``Well, so what?'' The deal goes down.
The settlement is agreed to. The money is exchanged. And you
can say, ``Well, that happens every day. Nothing wrong with
that. And it is a free country.''
But what has happened in the hypothetical number two is the
same thing that happened in hypothetical number one: You have a
victim of serious wrongdoing or a witness to serious wrongdoing
taking money in exchange for a promise not to cooperate with
anybody. And we forget that victims of torts involving health
and safety are often witnesses. And for them to take money and
have their testimony and their ability to cooperate bought off,
I say is heinous. It is heinous in the criminal case. I say it
is heinous in the civil case. It is not what we talk about in
our ethics courses. It is not proper.
As for some of the complaints, you know, there are theories
that it is going to take too much time away; it is going to tie
up our courts in knots. I don't believe that for a second. I
mentioned that there is a group, the Lawyers for Civil
Justice--Mr. Morrison was a--didn't represent them, but was a
former president of that group--and they declare it is
imperative that this legislation be killed; it is bad
legislation, and if you pass it other people are going to
emulate it at the state level.
Well, if it is bad legislation and it is going to tie our
courts in knots, there is no risk that anybody is going to
follow it. What I suggest people are really afraid of is that
this starts momentum going in favor of truth in our courts. I
want to see that.
Thank you.
[The prepared statement of Mr. Freeman follows:]
Prepared Statement of John P. Freeman
Ms. Sanchez. Thank you, Professor Freeman. We appreciate
your testimony.
At this time, I would invite Judge Kravitz to please begin
his testimony.
TESTIMONY OF THE HONORABLE MARK R. KRAVITZ, JUDGE, U.S.
DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT
Judge Kravitz. Thank you, Madam Chairperson. I am pleased
to be here on behalf of the Judicial Conference Standing
Committee and the Civil Rules Committee.
I just want to give you a little bit about my background,
as the others have, so you will understand where I am coming
from on this issue. I practiced for 27 years, and during that
period of time I worked with protective orders for both
plaintiffs and defendants. And a large portion of my practice
was devoted to representing media companies who were trying to
intervene in cases and open government. And I am proud to say
that I have received two awards in Connecticut for my efforts
at open government and efforts against secrecy in government.
And I say that not to be boastful but rather so that you know
that I do not have a personal history of secrecy in government
at all.
Yet, the Rules Committee is opposed to this legislation
for, I think, three very good reasons.
First, there is no empirical evidence to suggest that
protective orders or sealed settlements are substantially used
in the Federal courts or that there is any abuse. My friend
Professor Freeman talked about every case having a protective
order. We have actually dug into the data, and 6 percent of
Federal cases have protective orders, and sealed settlements
are in one half of 1 percent of all cases that are solved.
The Rules Committee actually devotes itself to using
empirical information, not anecdotal information, and
information about the Federal courts, not the state courts, to
inform the rules process. And I would just say, if the
committee has empirical information that suggests there is a
problem to get it to the Rules Committee so that it can use
that in the context of the rules process.
Secondly, this is not, with all due respect, Madam
Chairperson, at least insofar as the protective orders are
concerned, a modest proposal. What this proposal suggests is
that at the start of a case, before the judge knows anything
about the case, the judge is going to have to review the
documents, sometimes millions of pages of documents that the
defendant is going to have to turn over, and before those
documents have been given to the plaintiff is going to have to
make a determination as to whether those documents are
``relevant to public health and safety.''
We are not talking about documents being filed in court.
Once documents are filed in court, the protective order
provisions aren't what govern. It is the Constitution and the
substantial body of case law that protects open judicial
proceedings that govern. So we are talking about the exchange
of information between parties outside of court to get the
plaintiff up to speed as to what the facts are.
And in my experience, both as a judge and a lawyer, the
entry of a protective order allows litigants to exchange more
documents at an earlier point in the litigation than would be
possible without them.
This legislation will require--the burdens of it really
cannot be overstated. I am going to have to--I cannot make a
determination that documents are relevant to public health and
safety unless I review those documents. I am going to have to
review them without the plaintiff having them because this is
all before the plaintiff gets them. And then I am going to have
to make a judgment with no help from experts or anything
whether they implicate or are relevant to the public health and
safety.
First of all, I don't think I have the time to do that. And
second of all, I don't think I have the knowledge to do that on
any reasoned basis. And what we are going to result in is
satellite litigation which is going to bog down the discovery.
We should be in the business of getting Mr. Lanier the
documents as quickly as possible, not as slowly as possible and
not as expensively as possible. And Rule 1 of the Federal Rules
says the goal here should be a just, speedy and inexpensive
determination of the cases. And I believe that this provision
on protective orders will disserve that interest.
And finally, even though it sounds good, these provisions,
they are unlikely to produce any benefits because the
agreements that Professor Freeman talked about, they are going
to be entered into anyway, and they just won't get filed with
courts. Settlements are secret not because judges are sealing
them. It happens in only .5 percent of all cases. Settlements
are secret because the parties themselves are agreeing to
secrecy orders. So the benefits that this act is designed to
achieve, I am afraid, and the Rules Committee is afraid, won't
be achieved.
Thank you, Madam Chairperson.
[The prepared statement of Judge Kravitz follows:]
Prepared Statement of the Honorable Mark R. Kravitz*
---------------------------------------------------------------------------
*See Appendix for attachments to the prepared statement of this
witness.
Ms. Sanchez. Thank you. I appreciate your testimony, Judge
Kravitz.
And at this time, I would invite Judge Anderson to please
present his testimony.
TESTIMONY OF THE HONORABLE JOSEPH F. ANDERSON, JR., JUDGE, U.S.
DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA
Judge Anderson. Thank you, Chairwoman Sanchez, Ranking
Member Cannon, and Members of the Subcommittee. Thank you for
inviting me to appear before you to discuss the Sunshine in
Litigation subject, of particular importance to me as a trial
judge with 22 years experience.
I should say at the outset that I am not here representing
the Judicial Conference or any other organization. I am here
simply to convey my thoughts on the need for the awareness of
the adverse consequences of what I prefer to call ``court-
ordered secrecy.''
As civil litigation has mushroomed in the United States
courts in the past two decades, litigants have frequently
requested that judges ``approve'' a settlement, often in cases
where court approval is not legally required. And as part of
the approval process, judges are sometimes asked to enter
orders restricting public access to information about the case
and its procedural history.
In these instances, litigants are not content to simply
agree between themselves to remain silent as to the settlement
terms. Instead, their preference is to involve the trial court
in a ``take it or leave it'' consent order that brings to bear
the contempt sanctions of the court to anyone who breaches the
court-ordered confidentiality.
Unfortunately, trial judges often struggle under the crush
of burgeoning case loads. Eager to achieve speedy and concrete
resolutions to their cases and ever mindful of the need for
judicial economy, many judges all too often acquiesce in the
demands for court-ordered secrecy.
In late 2002, the judges on the District Court of South
Carolina voted unanimously to adopt a local rule for our court
which places some modest restrictions on court-ordered secrecy
associated with settlements in civil cases. We were then, and
we remain, the only Federal district court in the country with
such a rule.
In the brief time allotted to me, I would like to relate
several events which prompted me to propose this rule to our
court and say just a word about our court's 6-year experience
in operating under the rule.
In 1986 when I was a 36-year-old baby judge, I was assigned
a case that had been pending on another judge's docket for
several years. The case was ready for trial, and the lawyers
predicted a grueling 6-month trial. It was brought by 350
plaintiffs who lived around a large 56,000-acre freshwater lake
in upstate South Carolina. The plaintiffs contended that the
defendant had knowingly deposited excessive amounts of PCBs
into the lake, and that they had experienced severe health
problems associated with being exposed to this toxic substance.
Much to my relief, shortly before the trial was to begin,
the parties announced that they had reached an amicable
settlement. The defendant would pay three-and-a-half million
dollars into a fund to be set up to provide primary medical
monitoring and care for the 350 plaintiffs, and then there was
a small amount of a per capita distribution to each of the
plaintiffs to settle the case.
There was one catch, however: The settlement was absolutely
contingent upon my entry of a gag order prohibiting the parties
from ever discussing the case with anyone and also requiring
the return of all allegedly ``smoking gun'' documents. I was
advised by counsel for both sides that if I did not go along
with their request, the carefully constructed compromise
settlement would disintegrate, and the case would proceed to
the 6-month trial.
As a judge with less than a year's experience on the court
and other complex cases stacking up on my docket, and believing
it was the fairest and best thing do in the case, I agreed to
the request for court-ordered secrecy. When I signed the order,
everyone was content: The plaintiffs had a handsome settlement;
the lawyers for both sides were paid; the defendant received
its court-ordered secrecy; there were no objections to my
order; and I had one less case to try.
In the ensuing years, I began to question my decision to
enter a protective order in that particular case. Other people
lived around that lake and were exposed to the same substance.
I saw lawyers request the court order secrecy both at
settlement and in connection with the exchange of documents
during discovery.
Just to take another example, I knew of a case on our
docket of another judge who restricted information to case
information about a go-cart which was allegedly defective and
which was settled for one-and-a-half million dollars. Again, a
court ordered gag order secrecy; the plaintiff's lawyer was
restricted from discussing the case or even representing
another litigant involving that same go-cart, which I later
learned was still being marketed to the public.
These are just two instances, nothing anecdotal about
them--people live around the lake; children ride those go-
carts--where the judge had lit the lightning match through the
appellate court system through an order restricting information
about those hazards.
Responding to this series of events, I proposed to our
court that we adopt a local rule prohibiting, in most civil
cases, court-sanctioned secret settlements. When we proposed
our rule for comment, we received heated objections from around
the country. There were dire predictions that our court would
be overwhelmed with the number of cases that went to trial as a
result of our rule restricting court-ordered secrecy.
Well, after 6 years, the dire predictions have appeared to
be wrong. Our case has actually tried fewer cases in the 6
years following the enactment of our local rule than it did in
the 6 years preceding the enactment of our rule.
Of the national furor that was created when our rule was
proposed at least brought this attention to the forefront. I
think judges are now more aware of the adverse consequences of
court-ordered secrecy. This legislation has served to further
that interest and raise the consciousness of judges on this
very important topic.
Thank you very much.
[The prepared statement of Judge Anderson follows:]
Prepared Statement of the Honorable Joseph F. Anderson, Jr.
Ms. Sanchez. Thank you, Judge Anderson. We appreciate your
testimony.
We will now begin the first round of questioning. And I
will begin by recognizing myself.
Mr. Meadow, I would like to start with you. Some critics of
the Sunshine in Litigation Act say that there is no empirical
evidence establishing that court secrecy orders endanger public
health and safety, that proponents of this act are simply
relying on anecdotal evidence alone. How would you respond to
that criticism?
Mr. Meadow. Based on my experience, the litigations that we
are involved in are mass torts affecting--each drug we are
involved in is affecting thousands and thousands of people. So
if they come up and say it is only 6 percent, that one--maybe 1
percent of that can involve tens of thousands of people. So any
time we discover a dirty document or something like that, it is
going to affect thousands and thousands of people.
So I think the overall public policy speaks to a favorable
climate for this act vs. the small--I haven't seen the
empirical data. But in my personal experience from the
litigations I am involved in, you are talking about tens of
thousands of people who are affected by one protective order.
Ms. Sanchez. Thank you.
Professor Freeman, why do you believe, as you state in your
prepared statement, that judges can't be counted on to address
the problem of court secrecy?
Mr. Freeman. Because it is ubiquitous and because nothing
seems to be happening. I didn't say that all Federal cases have
protective orders. I said in----
Ms. Sanchez. Many.
Mr. Freeman [continuing]. Quoting a judge, cases with
complexity are what we are talking about here. And there the
protective orders are very, very common, and secrecy agreements
are very common. And as I read the legislation, it deals not
just with the approval of secret settlements, essentially to
cover up evidence, but also the enforcement of secret
settlements, which to me is important.
But, you know, I would refer you to this order that was
issued by the magistrate within the last 60 days in a circuit
where the judges led by Judge Posner and Judge Easterbrook have
really sought to crack down on overbroad protective orders. And
that was a 1999 decision that led the way with follow-up
decisions--1999, we know, now is--what?--9 years ago. And this
is within the last 60 days the judge saying, ``You know, I--in
this case, the magistrate judge entered a directive to the
lawyers in the case saying, ``Don't you come to me and ask for
a protective order unless it meets the following standards, one
through whatever.'' And then he didn't get that. And that is
why he wrote that order.
And, you know, people have been talking a long time, but
where is the beef? Where is the actual output that protects--
that promises to protect--the public on matters of limited
nature, health and safety in particular? It is time to do
something because it just hasn't happened yet.
Ms. Sanchez. Thank you.
We know that plaintiffs sometimes, and maybe oftentimes,
agree to these various types of confidentiality orders covered
by the Sunshine in Litigation Act. And one example of that
would be a protective order prohibiting the disclosure of
discovery materials or an order sealing a settlement agreement.
Why do lawyers who represent plaintiffs agree to such
orders even though they may be contrary to the public interest?
Mr. Freeman. For the money--for themselves and for their
clients. This is about selling secrecy, and secrecy is a very,
very valuable commodity it turns out, particularly when there
is something very wrong that needs to be covered up.
A company that has tremendous exposure, say running to the
billions, can be very happy to pay the plaintiff and the lawyer
who have figured out--gotten the smoking gun documents under a
protective order, can't disclose them to anybody--got them, and
now the company is faced with the possibility of the truth
coming out, and being picked up on the Internet, being picked
up on the news. It becomes a very simple transaction to buy
that evidence and pay these people off.
And the lawyer, you can say, ``Well, that is crooked on the
part of the lawyer.'' But the problem is for the lawyer, the
lawyer's job is to protect the client and do the very best for
the client. The lawyer doesn't see himself or herself as
representing society as a whole. So that skews the transaction.
Legislation that came in and inserted the public interest
into the calculation would be excellent.
Ms. Sanchez. Thank you.
Judge Anderson, you noted in your prepared statement that
the local rule adopted by the district in which you sit as a
judge has not inhibited settlement or increased the judges'
workload. That rule, as I understand it, addresses only sealed,
court-filed settlement agreements.
The Sunshine in Litigation Act goes a little bit further
than that. It also covers, among other things, protective
orders. And I am wondering if you believe that the provisions
of the act would, as some critics have claimed, inhibit
settlement or significantly increase the workload of our
courts, if that.
Judge Anderson. I don't think it would inhibit settlement.
It would increase the workload of the district judge. I do
think we could count on the litigants to point out to us what
is confidential, or what is arguably confidential. So it would
increase our workload to some extent, but we could handle it.
Ms. Sanchez. Thank you.
My time has expired. So at this time I would recognize the
Ranking Member for his 5 minutes to question.
Mr. Cannon. Thank you, Madam Chair. Do you intend to do a
second round? I personally don't see a need, but.
Ms. Sanchez. I do have probably another question or two
that I would like to ask. And given that there are not many of
us here, I don't think that it would be overburdensome to go
through a second round of questions.
Mr. Cannon. I don't think it would be overburdensome at
all. I don't know how we move this issue forward, though,
because it is not going to be in our jurisdiction, it appears
to me.
But Mr. Kravitz, you seem to have had a response to what
Mr. Anderson said about the parties. I suspect you are thinking
in terms of the parties, plural, because----
Judge Kravitz. Well, we won't have parties. I mean, the
idea is this is all before Mr. Lanier and Mr. Meadow have the
documents. So I am going to have to review them presumably
under seal with no expertise at all with the defendants trying
to convince me that it doesn't involve the public health and
safety.
We are far better served by getting Mr. Meadow the
documents and then having him tell me where the smoking guns
are, and having him tell me that public health and safety is
implicated. And so, no, we are not going to have the parties,
because he won't have the documents before I decide what the
confidential agreement is, and whether the statute is met.
And I will say in this regard, I am unsure. I--you know, we
have heard it is only a problem in complex cases. But this
statute applies to all cases. So in every single case--so if I
have a case that involves a person, an employment case where a
person was allegedly fired for having child pornography at
work. Is that a case that has relevance to public health and
safety? I mean, I am going to have to go through these
questions on each one of my cases, not just the complex drug
cases.
Mr. Cannon. I--what you say, since we have a couple of
judges here, that I am astonished at how hard it is to be a
judge, and I appreciate your work. And I don't see much reason
to make it more difficult.
Judge Anderson, can I just follow up on this and add, ask
this question: You said that your district has done a modest
rule. In fact, under the current rules, no judge ever has to
sign one of these agreements. You have talked about the
pressure that he is under with his docket.
But aren't we--why do we have to have this rule, taken out
of order, passed by Congress instead of going through the
normal rule enabling process, to do something that judges
already pretty much have discretion and are able to do?
Judge Anderson. And that is the best question that could be
asked on this subject. We judges have life tenure, and why do
we need some rule to hide behind on protective orders?
My answer is: We judges have to work very hard to stay
current. We, in my district, we are assigned between five and
six hundred cases per year. But we have to close out between
two and three cases each working day to stay current.
So when the parties walk in with a settlement that they
have worked out together and it provides for some payment of
money, it is awfully difficult for the judge to say, ``Well, I
am going to stand in the way of that settlement. I am not going
to approve it. We are going to trial.'' And the plaintiffs
might lose at trial, and then the judge has impaired a
compromise settlement that was worked out legitimately just in
the court.
Mr. Cannon. Right. And that is a great answer. And part of
the reason I am so anxious to give honor to the judiciary--you
guys do a great job. These are very hard things. But isn't the
answer to that to step back as a society and say we need more
judges, or address the issue in some other way?
Because you didn't deal with the issue of: Do you have
discretion? Clearly your court, your district, has taken upon
itself an additional set of guidelines. And while they are
modest compared to this bill, each individual judge has a great
deal of latitude.
Shouldn't we be looking--and this is why it is
inappropriate for this Subcommittee, because we are not the
Subcommittee that deals with courts. And I have been on that--
in fact I am on the other Subcommittee. We deal with this issue
all the time. Isn't that the place where we say, ``How do we
want to administer justice in America? Do we need more judges?
What is taking time? What are our judges not doing?''
And if our judges are not doing their--the job that you
would like them to do based on your testimony, which is to be
looking more carefully at these kinds of cases because someone
may be impaired in the future, that the plaintiff may be
impaired because he doesn't get his settlement, or otherwise.
Shouldn't we be looking, then, at some other solution rather
than a rule that we legislate instead of taking through the
rules process?
Judge Anderson. Well, I am a big fan of the rules making
process. And I will say we judges work very hard. But I join
the bandwagon for more judges. I take a briefcase home every
weekend to read for the next week.
Mr. Cannon. I will say that--and I know many, many Federal
judges and state judges--that they work amazingly hard. And I
don't want to make it more difficult by going out of order--
regular order of the rules, regular order on our Committee--and
do something that I just don't see a compelling reason for
doing, especially when you have got judges like in your
district, Judge Anderson, and who generally, who don't--without
the support of your rule, judges around the country have, I
think, have the same kind of discretion that this allows. They
do have, I grant you, the kind of pressures. And maybe we ought
to look at that.
And, the light--I see the time is running out.
Ms. Sanchez. The gentleman's time has expired.
And I would just also remind the Members of the Committee
that the full Committee has jurisdiction over such issues, and
they referred it to this Subcommittee. So it is proper for us
to consider it here today.
I am going to just go into a second round of questions. I
have a few last questions, and hopefully we will conclude the
hearing fairly soon so that you gentlemen can get back to what
you do in your normal, everyday lives.
I want to start with Judge Kravitz. In your prepared
statement, you say that the Sunshine in Litigation Act would,
and I am quoting from your testimony, ``effectively amend the
Federal Rules of Civil Procedure outside the rulemaking
process, contrary to the Rules Enabling Act.'' And you add that
``direct amendment of the Federal Rules through legislation
circumvents the careful safeguards Congress itself has
established.''
But isn't it true that the act wouldn't actually amend the
Federal Rules, but instead it would amend Title 28 of the
United States Code?
Judge Kravitz. Well, technically it does. But it says that
a court shall not enter an order under Rule 26(c) of the
Federal Rules of Civil Procedure. That is what the act says.
So what it is doing is, in effect, amending the Rules of
Civil Procedure and saying that a court cannot enter the order
that is otherwise provided unless they make these findings.
And the Rules Enabling Act process is an exacting and
thorough process, as I know Judge Anderson understands. There
are--it is also transparent, completely transparent. We publish
these rules for comment; we have--and for these rules, we had
three hearings nationwide----
Ms. Sanchez. I understand that.
Judge Kravitz [continuing]. People testify.
Ms. Sanchez. I understand that. But I am just trying to get
at the authority issue here because I want to make it clear for
the record. It isn't the position of the Judicial Conference,
is it, that Congress lacks the authority to legislate with
respect to matters covered by the Sunshine in Litigation Act?
Judge Kravitz. No, no. No, no.
Ms. Sanchez. Okay.
Judge Kravitz. No. The idea is that there is a Rules
Enabling Act process that Congress put together. It has worked
extremely well. And the rules that come out of that process are
very, very good, and they are based on empirical data, not
stories from my courtroom. And----
Ms. Sanchez. I want to draw your attention to----
Judge Kravitz [continuing]. It is the----
Ms. Sanchez [continuing]. Something that Judge Abner Mikva
has said, that the Sunshine in Litigation legislation involves,
and I am quoting from him, ``policy issues that should be
decided by policymakers in Congress, not by judges.''
And my question is: Why should Congress defer to the
Judicial Conference if the Judicial Conference has, by its
inaction, acted inconsistently with what Congress believes to
be a fundamental mandate of good public policy, which is trying
to protect the health and welfare of other potential victims
who will never have this information come to light because of
these secrecy orders?
Judge Kravitz. Well, listen, the Congress obviously has the
power to pass legislation--it is not that. It is just that
Congress established a very orderly and sensible process for
coming up with rules of civil procedure and criminal procedure.
That process has worked extremely well for the last 70 years on
a variety of topics, many of which have policy implications to
them.
And this is a way of short-circuiting that process--not
getting the empirical information, not having input from a wide
spectrum of professors and others. And so that is why I think
the Judicial Conference is so adamant about the fact that this
process has just worked so extremely well that----
Ms. Sanchez. I understand that. But we also do have
processes in Congress by which receive testimony; we get
experts to send testimony; we get to question witnesses, much
like what is happening today. And, you know, there are--
legitimately, if there is a perceived lack of movement in an
area in which Congress has a fundamental policy interest in
looking after----
Judge Kravitz. I can't disagree with you. All I can say,
though, is I would like to see the empirical information about
how often protective orders that have been entered in
connection with discovery. I am not talking about sealed
settlements that have actually ended up, in Federal court,
ended up with a health and safety issue. We have looked at that
issue carefully, and it is not there.
Ms. Sanchez. Let me ask you this, Judge Kravitz. Although
it is perhaps that the number of them is not huge, or gross of
the overall docket, would you agree with Mr. Meadow, though,
that the potential people that are affected by just one could
be in the tens of thousands if not hundreds of thousands?
Judge Kravitz. I would like to hear that information. We
found that protective----
Ms. Sanchez. But what about the fact that Mr. Meadow can't
provide it because there are all these secrecy agreements that
hide the number of people that have been impacted?
Judge Kravitz. I will say that that was very dramatic. But
I gather that--I would venture to say that Mr. Meadow actually
filed pleadings in court. And those pleadings in court are
subject to the constitutional right of public access. And Mr.
Meadow, I am sure, makes very strong arguments in court in
those public documents about the health and safety in the
conduct of defendants. So--and you, the Congress and other
people, can get copies of those pleadings.
I talked to Mr. Meadow--his Vioxx cases were in state
court; they weren't in Federal court. We are talking about the
Federal rules. And I just think we need to look carefully at
what has actually happened in Federal court, not in state
court, and see if there is a problem. And if it is a problem,
we will deal with it.
Ms. Sanchez. I understand.
But the question, more specifically, was--leaving aside
state cases--was to talk about Federal cases in which there is
an interest in potential effects to other plaintiffs. Do you or
do you not agree that a plaintiff who has been injured, or even
killed, because of the negligence or the fault of another,
keeping that information secret does have the potential to
impact tens of thousands of people?
Judge Kravitz. It does. But I think we have to distinguish
between during the course of discovery before trial or
settlement and at the end of the case. And what I am saying is,
the provisions here about the course of discovery are going to
slow down things and not get Mr. Meadow the information he
needs.
Now, if at the end of the case he believes that--well,
first of all, if it is tried, it is all open to the public. If
it is settled, and not he but somebody else wants access to
that information, they have an ability to come to the courts.
And courts do modify orders; courts do vacate orders. In
the Wyeth case dealing with the vaccines, the court vacated the
order and allowed that information to go to public authority.
But that is the end of the case, after we have gotten Mr.
Meadow the information that he wants. And I thinks that is the
real--but that this order requires it during the discovery
process.
Ms. Sanchez. I understand that distinction that you are
making.
Mr. Meadow, would you care to respond to that? Or I also
have another question I would like to ask.
Mr. Meadow. No, absolutely. The judge is right that when we
file a complaint, it is public; it is a public document; you
can go down to the courthouse and read it. But these complaints
are mere allegations of what we think a company has done wrong.
We don't have any specific information. It is not until we get
the actual documents.
And, normally, after we file a complaint, it could be
months before we get any documents because we spent the first 6
months negotiating for a protective order and for
confidentiality. And when we finally get the confidentiality
order, and we start getting the documents, those documents are
redacted. And we have to fight yet again. The defendants who
are going over these documents, and they are normally multi-
billion-dollar corporations, usually turn on six to seven law
firms to review the documents. So they have already been gone
through.
And this legislation places the burden of whoever seeks the
protective order on that who is seeking the order. So the
defendants know what documents are affected by the protective
order.
So the complaint, I don't think--I think it is a red
herring in this because it is bare-bones, and nobody goes down
and reads our complaints. You know, the press may pick it up,
and then the company denies all allegations and says they are
all false anyway. So until we get a protective order in place,
we can't see the documents. And then we have a second go-around
with those documents.
Ms. Sanchez. Thank you, Mr. Meadow.
My time has expired. I would now recognize Mr. Cannon for 5
minutes.
Mr. Cannon. Thank you, Mr. Kravitz. Did you want to respond
to Mr. Meadow's comments?
Judge Kravitz. Well, I just--can I just give you--I have
talked about anecdotal information, so I shouldn't do it. But
here is a case I just tried about a year ago: The plaintiff
alleged that the brakes on the truck were defective. The
defendant alleged that the driver was drunk and asleep at the
time of the truck accident, which killed two people.
Truckloads of information was given to the plaintiff under
the form of a protective order, during the course of which we
got the plaintiff's new information; there were experts on both
sides. It was tried to a jury. The jury found that the driver
was asleep and drunk and that the brakes were fine.
Now, that is--we know that at the end of the case. Now,
tell me, at the beginning of this case, when the requests for
information about the brakes were coming, is that a case that
is relevant to public health and safety or not? I just don't
know how I am going to decide that information in those cases.
And you can go on and on about the scenarios.
So all I am saying is I think that there is--judges have
the ability to modify orders, and they do. Judges have the
ability at the end of the case to allow information that has
been subject to a confidentiality agreement to get out to the
public, so that if the brakes were found to be defective by the
jury, and somebody else wanted this information, they could get
it. Of course, this all came out at a public trial of that
case.
So I just think we--I would urge the Committee to just kind
of look at the sealed settlement provisions differently from
the discovery proceedings. And we do not need to impose further
burdens and costs on litigants in the course of discovery;
there is already plenty of them. And I do believe that this
would impose significant costs, and it will result in Mr.
Meadow not getting his documents any time soon.
Mr. Cannon. Thank you.
You know, these are complicated issues. And sitting on both
this Committee and the Committee on Intellectual Property and
the Courts, it is--let me just give you one little experience.
I sat on that Committee for 6 years with Barney Frank. Now,
Barney Frank and I are on the opposite sides of the political
spectrum. But after 6 years, he left the Committee to be, I
think, the Ranking Member on Financial Services. But we had a
little chat, and it occurred to us--or to me, at least--that we
had sat on that Committee and disagreed on many things but had
never once disagreed about judicial oversight and economy.
And we have in place here a system that allows for the
development of rules in an open and public fashion where all
thoughts can be weighed. And that system was--actually I agree
with you, Mr. Kravitz--that has worked for a long time. In
fact, I was just thinking how long I have been involved as a
lawyer, and it tracks back quite a ways. And it has worked
well, and I have followed it closely.
On the other hand, we in Congress have some pretty dramatic
authority. We, for instance, can get from you, outside of your
agreement system that is, the content of the information that
you can't disclose to us because we are Congress, and we are
not constrained by those agreements. There are some
limitations, and we have to work through those. But we have
great powers.
And those great powers, I think, we need to use very
thoughtfully, very carefully, especially when society is
changing as rapidly as it is right now. We need to maintain, in
some ways, continuity. And so in the regular order of
developing a rule, things happen that make sense. And in the
regular order of this Congress, things happen we hope that make
sense.
And going out of regular order, it is true that the full
Committee can't actually mark this bill up now. But this
Subcommittee, I don't believe, can mark this bill up, and I am
not--I don't believe that this testimony is even going to be
relevant when we get to a full Committee markup if it goes that
far.
There is a good reason for having these kinds of regular
order. And it just seems to me that there is nothing that has
been said here at this hearing that compels anything, any
activity, by this Committee or by the full Committee.
I am very impressed with Judge Anderson's comments about
what they have done and what he has done in his--the other
judges in his district have done. That makes enormous sense.
I think that there is agreement by the panel that judges
have a lot of latitude, and I don't think anyone would disagree
with Judge Kravitz that orders can be changed. I don't think
anybody would disagree with Judge Kravitz that after a trial
has happened that that is a different environment and that this
rule would create burdens before you can get to that open a
trial.
And, in fact, I believe that the greatest benefit that most
plaintiffs really ultimately have is the threat of the trial
that the defendants will have to defend. And going through that
process may mean that the brakes are determined not to be
defective. And, therefore, there are classes of people that
could emerge to sue won't be empowered. But on the other hand,
it means that you have gotten a decision in a public, open
fashion, and that leaves a very small number of cases where you
might have a settlement agreement.
And I think we have heard great insight on that process. I
don't think that insight leads us to change the ordinary course
and create by legislation a new rule. I think it makes it,
gives a basis for thinking about how these things should go.
And I think it creates a basis for other districts to look at
what your district has done, Judge Anderson, and say, ``Do we
want to do the same kind of thing?''
I think that these are very powerful ideas, but they are
not ideas that should motivate this Congress or any other to do
a bill that would change by legislative fiat rules that have
grown in an organic, open and public fashion.
And so, Madam Chair, my time is----
Ms. Sanchez. Would the gentleman yield?
Mr. Cannon. Certainly.
Ms. Sanchez. Just because Judge Kravitz seems to be so
interested in empirical information, I would ask--and we will
submit written questions as well, which I will go over
shortly--but I would be interested to know just how many times
judicial orders are actually changed regarding these
confidentiality agreements. So if you have that information, we
will allow you to submit that.
Judge Kravitz. It actually is, if you read the study on
protective orders that is part of attached to my testimony,
there are statistics--I don't have them at my hand----
Ms. Sanchez. Okay.
Judge Kravitz [continuing]. On modifications and which
orders come through stipulations----
Ms. Sanchez. Because I would suspect--and this is just
speculation on my part, of course, until I receive the
information--that it is probably not very often that that
occurs.
Judge Kravitz. I don't know that you are right about that.
But let me just say, too, I said in 6 percent of all cases
where a protective order, in only 9 percent of that 6 percent
involves personal injury. I mean, the vast number involves
things that have nothing to do with personal injury.
So we could look at the--but I, my recollection was that
there was information on there. And, actually, only 50
percent--50 percent--of those protective orders were actually
stipulated. Most of them were litigated, and then there was a
decision by a judge about them as to whether or not to have
them.
Mr. Cannon. In reclaiming my time, let me just point out
that you would expect a very small number of these orders would
be reviewed, but they get reviewed when there is a serious
issue. And a judge, he gets paid--not enough, by the way;
although we did increase that, and I----
Ms. Sanchez. We have attempted, have attempted----
[Laughter.]
Mr. Cannon. We ought to grab it on anything that will go.
At least we have done our work on our side, I believe. And
hopefully the Senate can actually do something before they are
out.
But the whole point here is that Federal judges are in a
position of stature--and not adequately paid, but hopefully
better paid in the future--to make these kinds of decisions
about what is important and what kind of rules and what kind of
rulings that they have issued should be changed.
And so I am not sure that the number is so important as
compared to the fact that it is done by men of judgment and
women of judgment when it is reasonably required. And I think
that you are going to find that the bench is competent. And,
therefore, the orders, the changes on those rulings are going
to be appropriate, and not that the number is significant but
the action by judges, I think, that you will find to be
appropriate.
Thank you, Madam Chair.
Ms. Sanchez. That remains to be seen.
We want to thank all of the witnesses for their testimony
today.
Without objection, Members will have 5 legislative days to
submit any additional written questions--I told you I would
tell you about that--which we will forward to the witnesses and
ask that you answer as promptly as you can so that they can be
made a part of the record.
Without objection, the record will remain open for 5
legislative days for the submission of any additional materials
as well.
Again, I want to thank everyone for their patience. And I
wish everyone a safe and productive August work period.
And this hearing of the Subcommittee of Commercial and
Administrative Law is now adjourned.
[Whereupon, at 11:45 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record
Attachments to the Prepared Statement of the Honorable Mark R. Kravitz,
Judge, U.S. District Court for the District of Connecticut
ATTACHMENT 1
ATTACHMENT 2