[Senate Hearing 110-263] [From the U.S. Government Publishing Office] S. Hrg. 110-263 THE SUNSHINE IN LITIGATION ACT: DOES COURT SECRECY UNDERMINE PUBLIC HEALTH AND SAFETY? ======================================================================= HEARING before the SUBCOMMITTEE ON ANTITRUST, COMPETITION POLICY AND CONSUMER RIGHTS of the COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED TENTH CONGRESS FIRST SESSION __________ DECEMBER 11, 2007 __________ Serial No. J-110-67 __________ Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 40-286 PDF WASHINGTON DC: 2008 --------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866)512-1800 DC area (202)512-1800 Fax: (202) 512-2250 Mail Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman EDWARD M. KENNEDY, Massachusetts ARLEN SPECTER, Pennsylvania JOSEPH R. BIDEN, Jr., Delaware ORRIN G. HATCH, Utah HERB KOHL, Wisconsin CHARLES E. GRASSLEY, Iowa DIANNE FEINSTEIN, California JON KYL, Arizona RUSSELL D. FEINGOLD, Wisconsin JEFF SESSIONS, Alabama CHARLES E. SCHUMER, New York LINDSEY O. GRAHAM, South Carolina RICHARD J. DURBIN, Illinois JOHN CORNYN, Texas BENJAMIN L. CARDIN, Maryland SAM BROWNBACK, Kansas SHELDON WHITEHOUSE, Rhode Island TOM COBURN, Oklahoma Bruce A. Cohen, Chief Counsel and Staff Director Michael O'Neill, Republican Chief Counsel and Staff Director ------ Subcommittee on Antitrust, Competition Policy and Consumer Rights HERB KOHL, Wisconsin, Chairman PATRICK J. LEAHY, Vermont ORRIN G. HATCH, Utah JOSEPH R. BIDEN, Jr., Delaware ARLEN SPECTER, Pennsylvania RUSSELL D. FEINGOLD, Wisconsin CHARLES E. GRASSLEY, Iowa CHARLES E. SCHUMER, New York SAM BROWNBACK, Kansas BENJAMIN L. CARDIN, Maryland TOM COBURN, Oklahoma Jeffrey Miller, Chief Counsel Peter Levitas, Republican Chief Counsel C O N T E N T S ---------- STATEMENTS OF COMMITTEE MEMBERS Page Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah...... 3 Kohl, Hon. Herb, a U.S. Senator from the State of Wisconsin...... 1 prepared statement........................................... 82 Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, prepared statement............................................. 89 WITNESSES Anderson, Joseph F., Jr., U.S. District Court Judge, District of South Carolina................................................. 7 Bailey, Leslie A., Brayton-Baron Attorney, Public Justice, Oakland California............................................. 10 Bradley, Johnny, Jr., Pachuta, Mississippi....................... 5 Morrison, Stephen G., Partner, Nelson Mullins Riley & Scarborough, LLP, Columbia, South Carolina..................... 12 Weiner, Robert N., Partner, Arnold and Porter, Washington, D.C... 9 Zitrin, Richard A., Adjunct Professor of Law, University of California at Hastings, San Francisco, California.............. 14 QUESTIONS AND ANSWERS Responses of Joseph F. Anderson to questions submitted by Senators Kohl and Hatch........................................ 28 Responses of Leslie A. Bailey to questions submitted by Senator Kohl........................................................... 34 Responses of Stephen Morrison to questions submitted by Senator Kohl and Hatch................................................. 36 Responses of Robert N. Weiner to questions submitted by Senators Kohl and Hatch................................................. 46 Responses of Richard A. Zitrin to questions submitted by Senator Kohl........................................................... 52 SUBMISSIONS FOR THE RECORD Anderson, Joseph F., Jr., U.S. District Court Judge, District of South Carolina, statement...................................... 55 Bailey, Leslie A., Brayton-Baron Attorney, Public Justice, Oakland California, statement.................................. 61 Bradley, Johnny, Jr., Pachuta, Mississippi, statement............ 80 Lawyers for Civil Justice, U.S. Chamber Institute for Legal Reform, U.S. Chamber of Commerce, joint statement.............. 84 Miller, Arthur R., University Professor, New York University School of Law, New York, New York, letter and attachment....... 91 Morrison, Stephen G., Partner, Nelson Mullins Riley & Scarborough, LLP, Columbia, South Carolina, statement.......... 168 Reporters Committee for Freedom of the Press, Lucy A. Dalglish, Gregg P. Leslie, Corinna J. Zarek, Arlington, Virginia, statement...................................................... 175 Resnik, Judith, Arthur Liman Professor of Law, Yale Law School, New Haven, Connecticut, statement.............................. 181 Weiner, Robert N., Partner, Arnold and Porter, Washington, D.C., statement...................................................... 206 Zitrin, Richard A., Adjunct Professor of Law, University of California at Hastings, San Francisco, California, statement... 215 S. 2449, ``Sunshine in Litigation Act of 2007''.................. 240 THE SUNSHINE IN LITIGATION ACT: DOES COURT SECRECY UNDERMINE PUBLIC HEALTH AND SAFETY? ---------- TUESDAY, DECEMBER 11, 2007 U.S. Senate, Committee on the Judiciary, Subcommittee on Antitrust, Competition Policy and Consumer Rights, Washington, D.C. The Committee met, Pursuant to notice, at 2:29 p.m., in room SD-226, Dirksen Senate Office Building, Hon. Herb Kohl, Chairman of the Committee, presiding. Present: Senators Kohl and Hatch. OPENING STATEMENT OF HON. HERB KOHL, A U.S. SENATOR FROM THE STATE OF WISCONSIN Chairman Kohl. This hearing will come to order. Today, we will examine the important issue of court secrecy. Far too often, court-approved secrecy agreements hide vital public health and safety information from the American public, putting lives at stake. The secrecy agreements even prevent government officials or consumer group from learning about and protecting the public from defective and dangerous products. The following example demonstrates how this issue arises and the devastating implications secret settlements can indeed have. Back in 1996, a 7-year-old boy in Washington State took an over-the-counter medicine to treat an ear infection. Within hours, he suffered a stroke, fell into a coma, and he died 3 years later. The child's mother sued the drug manufacturer, alleging their product caused the stroke. Unknown to the mother and to the public, many similar lawsuits alleging harm caused by this very same medicine had been secretly settled. It was not until the year 2000 that the FDA banned an ingredient found in the boy's medicine. If it were not for this court secrecy in the previous lawsuits, the boy's mother may well have known about the risks. While this case is tragic, it is not unique. In these types of cases, the defendant requires the victim to agree to secrecy about all information disclosed during the litigation or else forfeit the settlement. That individual victim recovers the money that they need to pay medical costs, but, as a result, the public is often kept in the dark about potential dangers. We are all familiar with well known examples of these types of cases involving complications from silicone breast implants, adverse reactions to prescription or over-the-counter medicine, side-saddle gas tanks prone to causing deadly car fires, park to reverse problems in pickup trucks, defective heart valves, dangerous birth control devices, tire malfunctions, and collapsing baby cribs, just to name a few. Information about these defective products and the dire safety consequences did not deserve court-endorsed protection. In fact, that protection prevented the public from learning vital information that could have kept them far safer. The most famous case of abuse involved Bridgestone and Firestone tires. From 1992 to 2000, tread separations of various Bridgestone and Firestone tires were causing accidents across the country, many resulting in serious injury and even fatalities. Instead of owning up to their mistakes and acting responsibly, the company quietly settled dozens of lawsuits, most of which included secrecy settlements. It was not until 1999, when a Houston public television station broke the story, that the company acknowledged its wrongdoing and recalled 6.5 million tires. By then, it was too late for the more than 250 people who had died and more than 800 injured in accidents related to these defective tires. Legislation that I've introduced in the past and that I intend to reintroduce today seeks to restore the appropriate balance between secrecy and openness. Under our bill, the proponent of a protective order must demonstrate to the judge's satisfaction that the order would not restrict the disclosure of information relevant to public health and safety hazards. This legislation does not prohibit secrecy agreements across the board, for indeed there are appropriate uses for such orders, such as protecting trade secrets, and this bill makes sure that such information is kept secret. But protective orders that hide health and safety information from the public, in an effort to protect the company's reputation or its profit margin, should not be permitted. The bill does not place an undue burden on judges or our courts. It simply states that where the public interest in disclosure outweighs legitimate interests in secrecy, courts should not shield important health and important safety information from the public. We take great pride in our court system and in its tradition of fairness for plaintiffs and defendants alike. However, courts are public institutions, meant to do more than simply resolve cases. They must also serve the greater goods of law, order and justice. We believe that our legislation will help to restore this balance. We thank everybody for being here. We look forward to your testimony. [The prepared statement of Senator Kohl appears as a submission for the record.] And we turn now to the ranking member on this subcommittee, Senator Orrin Hatch. STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE OF UTAH Senator Hatch. Thank you, Mr. Chairman. I want to begin by thanking you for organizing this hearing. You have put together a balanced panel and the witnesses have submitted thoughtful testimony on a complicated issue, and I want to thank all of you witnesses, as well. Mr. Chairman, you have championed the Sunshine in Litigation Act for many years, and this proposal had its first Judiciary hearing in April 1994. To put that in some perspective, in 1994, Republicans were also in the minority. In the intervening decade, much has changed in the practice of litigation. Specifically, we have witnessed the use of electronic discovery, and one question I want to examine today is whether this practice of e-discovery should impact our judgments about this legislation. The Sunshine in Litigation Act addresses court secrecy. More specifically, it addresses the lack of public access to materials obtained in discovery and to the content of settlement agreements. To provide greater public access to these essentially private matters, previous proposals have modified the use of protective orders in Federal courts, limiting the discretion of the presiding judge to issue a protective order for information that might be relevant to the protection of the public health and safety. There are strong arguments on both sides of this proposal. Yet, in preparation for this hearing, I found that the explosion of e-discovery has only strengthened the views of those opposed to this legislation. For example, some years ago, Professor Arthur Miller of New York University Law School criticized sunshine litigation in the Harvard Law review. In preparation for this hearing, however, Professor Miller wrote to me and stated that ``My views on the subject are even stronger today, reinforced by dramatic changes in the litigation landscape. The massive expansion of discovery in today's electronic world magnifies the need for broad judicial discretion to protect all litigants' privacy and property rights.'' Now, I think that going forward, the committee should heed this warning. I would ask, Mr. Chairman, that Professor Miller's article and letter be submitted for the record at this point. Chairman Kohl. It will be done. Senator Hatch. These practical concerns also implicate constitutional interests of privacy and due process. The U.S. Supreme Court has addressed these privacy issues in Seattle Times v. Rhinehart. The Court found that ``A litigant has no First Amendment right of access to information made available only for purposes of trying his suit.'' Now, some appear to believe that materials obtained in discovery and the content of settlement agreements are essentially public matters that are made private by protective orders. In my view, this gets it backward. While there are public elements to litigation, most obviously, the complaint, the Supreme Court has indicated that privacy interests deserve protection in litigation. The committee should also consider the potential unintended consequences of any legislation modifying the use of protective orders. Given the burdensome character of discovery, it is not clear what the consequences of this legislation will be on the incentives to settle rather than to go to trial. Some believe that an agreement of confidentiality facilitates the informational exchange necessary to the adversary process. Greater public access to materials obtained through discovery and to settlement agreements might create disincentives to settlement, increasing litigation costs and, of course, the caseload of the various Federal courts. Finally, Congress should be mindful that the courts are an independent branch of government and that the management of its caseload is a quintessentially judicial function. Yet, this legislation would fundamentally rework Rule 26(c) of the Federal Rules of Civil Procedure, which provides judges with broad discretion to issue protective orders. Now, at this point, the Judicial Conference is not considering a change to these rules. In part, this might be owing to a finding by the Federal Judicial Center that of the 288,846 civil cases terminated in 2001 or 2002 in the 52- district study, 1,270 of them had sealed settlement agreements, which is .44 percent, less than one-half of 1 percent. Now, Mr. Chairman, I ask that an article by Robert Reagan detailing these findings be included in the record. Chairman Kohl. Without objection. Senator Hatch. Now, Mr. Chairman, our courts exist to adjudicate cases and controversies. When the parties to a dispute agree to settle, that particular case or controversy becomes moot. We need to consider whether it is consistent with our commitment to due process to require judges essentially to make fact findings about the public health impact of information obtained through discovery, without the truth- seeking benefits of the adversarial process. Mr. Chairman, I have great respect for you. Thank you again for your work on this hearing. I look forward to the hearing with you and working with you on this issue in the coming year. Unfortunately, I can't stay very long, because I've got the full Intelligence Committee, on which I sit, in an also equally important hearing and I'm going to have to slip out to that. But I appreciate you holding this hearing on this very important matter. Thank you, Mr. Chairman. Chairman Kohl. Thank you very much, Senator Hatch, for coming here today. We'd like now to introduce our panel of witnesses. Our first witness testifying today will be Johnny Bradley, Jr. Mr. Bradley is a former petty officer second class with the U.S. Navy. Mr. Bradley sued Cooper Tire and Rubber Company after an SUV rollover accident, allegedly caused by defective tires, killed his wife and left him and his son seriously injured. Mr. Bradley, we thank you for coming today and we offer our condolences to you and your family for your loss. Our next witness today will be Judge Joseph Anderson. Judge Anderson currently serves as a judge for the U.S. District Court for the District of South Carolina. Prior to his judgeship, Judge Anderson practiced law in Edgefield, South Carolina, and he served as a representative in the South Carolina General Assembly. Our next witness will be Robert Weiner. Mr. Weiner is a partner at Arnold and Porter in Washington, D.C., where he litigates in antitrust, toxic tort, patent and commercial matters. He also served in the Office of the Counsel to the President under President Clinton. Our next witness will be Leslie Bailey. Ms. Bailey is an attorney with Public Justice, a public interest law firm, where her practice focuses primarily on consumer and civil rights. Our next witness will be Stephen Morrison. Mr. Morrison is a partner at Nelson Mullins in Columbia, South Carolina, where he practices in the areas of technology law, business and product liability. He serves an adjunct professor of law at the University of South Carolina. Our final witness today will be Richard Zitrin. Mr. Zitrin is an adjunct professor of ethics at the University of California at Hastings, and he practices law at Zitrin and Frassetto. From 2000 to 2004, he served as the Director of the Center for Applied Legal Ethics at the University of San Francisco School of Law. We thank you all for appearing at our subcommittee's hearing to testify today. We now ask all of our witnesses to rise and raise your right hand, as I administer the oath. [Witnesses sworn.] Chairman Kohl. We thank you so much. We will now begin to hear from our witnesses, starting with Mr. Bradley, and we'd like to request that you keep your remarks to 5 minutes or less. Mr. Bradley? STATEMENT OF JOHNNY BRADLEY, JR., PACHUTA, MISSISSIPPI Mr. Bradley. Good afternoon, Chairman Kohl, Ranking Member Hatch and the members of the subcommittee. My name is Johnny Bradley and I am from Pachuta, Mississippi. I am here today to represent those who live every day with the devastating consequences of court secrecy. Unfortunately, I know firsthand what it feels like to lose someone because of a defective product. On July 14, 2002, my life changed forever. I became a widower and my young son, Diante, lost his mother. My wife died in a car wreck when the tread separated on one of the rear Cooper tires on our Ford Explorer. As a result, our car rolled over 4.5 times, killed my wife instantly, and rendered me unconscious for approximately 2 weeks. With my son in the back seat and me and my wife in the front, my cheerful family had been driving from California to visit my family in Mississippi. Since we were traveling across the country, we even had our vehicle checked at a nearby repair shop prior to leaving California. You see, my wife and I were both in the Navy, previously stationed in Guam, and we had the rare opportunity to finally visit my family on our way to a new post in Pensacola, Florida. Though I worked on torpedoes and my wife was an E-5 postal clerk, we were both selected to become Navy recruiters, a real honor for both of us to broaden our Navy careers. My son, who was six, was also excited to see his grandmother in Mississippi. It was like Christmas in July to visit our family on the mainland after being stationed in Guam, and he anticipated lots of presents and delicious southern cooking. We never made it past New Mexico. The last thing I remember about that tragic day was that I dozed out, with my wife driving. When I woke up from my coma 2 weeks later, I was told that my wife had died. My family had waited 2 weeks to hold my wife's funeral, because they wanted me to be able to attend. Sadly, my young son had to go in place, because my own injuries were so severe. My left leg had to be fused at the knee and my intestines were cut in half from the force of the seatbelt in the wreck. To this day, I cannot walk properly and I must always travel with my colostomy bag. I believe that if we had known about the dangerous tread separation defect in Cooper tires, my wife would still be alive today. You see, only after the death of my wife and through litigation in Federal court with my highly specialized attorney, I did learn about a series of design defects in Cooper tires that Cooper had known about previously. To my horror, I found out that Cooper had faced numerous incidents like mine since the 1990's and had in its possession thousands of documents detailing these defects. Why have the details from as any 200 lawsuits against Cooper remained covered up? Why were these dangers never discovered by the public? Why were all of these tragic stories never shared before? I found out through my attorney that almost all of these documents were kept confidential through various protective orders, demanded by the tire company and entered by courts around the country, so that vital information that could have saved our family would never be disclosed to the public. We bought these Cooper tires because we thought they would be safer than Firestone tires. If I had known that they were even worse than Firestone, and my attorney found out through these confidential documents, I would have never touched these tires. You might be wondering how my attorney came across these documents if they were confidential. I was lucky enough to obtain counsel from Bruce Kaster, who has specialized in this type of litigation for over two decades. To this day, I would never even have known about the dangers of Cooper Tires and four specific design defects if Bruce had not known to ask for these documents. I can sit here today and give you the facts about what happened to me, but the protective order issued by the Federal court forbids me from talking about the documented evidence of Cooper tire defects uncovered by my attorney during litigation. I know some Cooper tire problems were reported in the newspaper prior to my wife's death, but without specific documents, evidence not cloaked in secrecy, these defects were not nearly as publicized. Chairman Kohl. Thank you very much, Mr. Bradley. [The prepared statement of Mr. Bradley appears as a submission for the record.] Judge Anderson? STATEMENT OF HON. JOSEPH F. ANDERSON, UNITED STATES DISTRICT COURT JUDGE, UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA Judge Anderson. May I remain seated? Chairman Kohl. Yes, certainly. That would be just fine. Judge Anderson. Chairman Kohl, Ranking Senator Hatch, thank you for allowing me to appear before you to discuss sunshine in litigation, a subject of particular interest to me as a trial judge with 21 years experience on the Federal bench. I should say at the outset that I am not here representing the United States Judicial Conference or any other organization. I am here simply to convey my thoughts on the need for 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 or three decades, litigants frequently request that judges approve settlements, often in cases where court approval is not necessary, and, as part of this approval process, judges are sometimes asked to enter orders restricting public access to settlement information and perhaps the procedural history of the case. In these instances, litigants are not content to simply agree between themselves to remain silent as to the settlement terms. Instead, they prefer to involve the trial judge in a take-it-or-leave-it consent order that would bring to bear contempt sanctions on anyone who breaches the court-ordered secrecy. Unfortunately, we trial judges often struggle under the crush of burgeoning caseloads. Eager to achieve speedy and concrete resolutions to our 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 of my district court in South Carolina voted unanimously to adopt a local rule that would restrict court-ordered secrecy associated with settlement in civil cases. We were then and we remain today the only Federal district in the country with such a rule. In the brief time allotted to me, I'd like to relate several events which prompted me to propose our rule to our court and to say just a word about our court's experience operating under this rule. In 1986, when I was a 36-year-old newly appointed Federal trial judge, I was assigned a case that had been pending on another judge's docket for several years. The case was ready for trial, which the lawyers predicted would take a grueling 6 months. The case was brought by 350 plaintiffs who lived around a large fresh water lake in upstate South Carolina. The plaintiffs contended that the defendant in the case had knowingly deposited excess amounts of PCBs into the lake and that they had experienced severe health problems from 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 $3.5 million into a fund to be set up for a medical monitoring program and primary health care program for the 350 plaintiffs and a small amount of settlement money would be set aside for a per capita distribution to each plaintiff. There was one catch. The settlement was contingent upon my entry of a gag order prohibiting the parties from ever discussing the case with anyone and, also, requiring a return of the allegedly smoking gun documents produced in the litigation. I was advised by counsel that if I did not go along with their request, the carefully crafted settlement package would disintegrate and the case would proceed to a contentious 6- month trial. As a judge with less than a year's experience on the bench, with other complex cases stacking up on my docket and believing it was the fairest and in the best interest of all parties, I agreed to the request for court-ordered secrecy. When I signed the order, everyone was content. The plaintiffs recovered a handsome some. The lawyers for both sides were paid. The defendant received its court-ordered secrecy. There were no objections to the order and the judge had one less case to try. In the ensuing years, I questioned my decision to enter a secrecy order in that particular case. I also became troubled by what I viewed as a discernable trend in civil litigation. Lawyers were sometimes requesting court-ordered secrecy both at settlement and in connection with the exchange of documents during discovery. I was aware of instances in both state and Federal courts in South Carolina where judges had agreed to requests for court-ordered secrecy in cases where one could reasonably argue that the public interest and public safety should have required openness. Responding to this series of events, I proposed to our court that we adopt a local rule prohibiting, in most cases, court-sanctioned secret settlements. When our rule was released for public comment, we received heated objections from around the country. Virtually every opponent of our rule suggested that an inevitable byproduct of such a local rule restricting secrecy would be a substantial increase in the number of cases going to trial, which would, in turn, overwhelm our court. The rule was nevertheless adopted and we now have a 5-year operating perspective. The dire predictions of those who suggested that the rule would cause settlements to disappear proved to be wrong. In fact, according to statistics provided by our clerk of the court, our court tried fewer cases in the 5 years following the rule's enactment than we did in the 5 years immediately preceding its enactment. In short, our rule has worked well and our court has not been overwhelmed as a result. Trade secrets, proprietary information, sensitive personal identifiers, national security data and the like remain protected. New business investments in South Carolina continue to go up each year. However, in those rare cases where the public interest or safety could be adversely affected by court-ordered secrecy, judges on our court have not hesitated to enforce the rule and keep the docket transparent. The national furor created when our rule was proposed for public comment, perhaps together with the tendency of the Kohl Sunshine Act, began a vigorous debate and much needed review of the adverse consequences associated with court-ordered secrecy. While the issue has not been entirely resolved, I'm of the opinion that the secrecy trend seems to be waning. More importantly, I believe that both state and Federal judges have become more sensitive and enlightened to the need for sunshine in litigation. Thank you for allowing to share my sentiments with you. [The prepared statement of Judge Anderson appears as a submission for the record.] Chairman Kohl. Thank you very much, Judge Anderson. Mr. Weiner? STATEMENT OF ROBERT N. WEINER, PARTNER, ARNOLD AND PORTER, LLP, WASHINGTON, D.C. Mr. Weiner. Chairman Kohl, Senator Hatch, thank you for inviting me to testify on this subject. I have been a defense lawyer for nearly 30 years and the views I offer today were formed by that experience, but are not those of my firm or any client. In fact, I testified on this subject in 1990 before the Senate, your subcommittee, Senator, and the key issues haven't changed. But the world has and the most important change is the accelerating erosion of privacy as a result of the internet. Public disclosure now is far more public than public disclosure back in 1990, and that makes compelled disclosure more problematic. Many people who put a premium on civil liberties take for granted the extraordinary intrusion that litigation authorizes in this country. If two people disagree privately, no one expects that either one of them can delve into the files of the other for information relevant to the dispute, but if you file a lawsuit, whether it's meritorious or not, you get that right and you get the right to take a deposition, asking anything conceivably relevant to the lawsuit. That can encompass, depending on the claims, personal information for a corporation. It can encompass personnel records, secret formulas of the product, all sorts of information, and electronic discovery makes this problem worse, because the volume of discovery, the enormous volume of discovery makes it more likely that commercial information, sensitive commercial and personal information will be disclosed. Now, these materials exchanged in discovery didn't start out public and the fact that an opening asks for them doesn't make them public. Let's take a hypothetical case. The plaintiff files a complaint. It may be wrong, but the court has to accept it as true at the outset. And suppose the plaintiff serves a discovery request for a defendant's secret formula for its product, says it's relevant to the toxic effect of the product. Well, if the defendant is not sure that its secret formula is going to be protected in discovery, then what's going to happen? It's going to fight. It's going to fight producing it, and that takes time and resources of the court and the parties. And the court rules that it is not protected, what happens? Well, then the plaintiff has leverage for settling the case based not on the merits, but based on the risk of disclosure of commercially sensitive information. Now, Federal courts have discretion under the court rules to balance the competing interests of the parties affected by discovery and to enter a protective order on good cause based on the individual facts, and there's no reason to depart from that. There is lots of discussion about things that are concealed by protective orders, but I submit that that allegation strains plausibility, because protective orders cover the information exchanged in discovery. To star a suit, you need to file a complaint. That complaint is a public document. The plaintiff who files it can issue a press release. It is available electronically around the globe. Protective orders affect none of that and, at any time, a judge weighing the circumstances of the individual case can determine that information merits disclosure. Now, a statute like the Sunshine in Litigation Act that compels disclosure that is relevant, with respect, relevant to safety, with respect, is unwise, because all product liability cases involve allegations of safety and, presumably, in discovery, the documents produced are somehow relevant to safety. The question is whether there is a real risk of the product, whether the risks of the product outweigh its benefits, and that is the ultimate question in most cases, product liability cases, for the jury to decide after a full trial, discovery, after all the proceedings. But the statute asks judges to decide it at the outset, without a developed record, and that invites unfair and ill- informed results. Now, the experts on this issue have no axe to grind. The Federal Judicial Center, the Federal Rules Advisory Committee have determined that this system is working, and I submit there is no need for rules that strip the courts of their discretion to decide each case on the merits. Thank you, Senator. Chairman Kohl. Thank you, Mr. Weiner. [The prepared statement of Mr. Weiner appears as a submission for the record.] Ms. Bailey? STATEMENT OF LESLIE A. BAILEY, BRAYTON-BARON ATTORNEY, PUBLIC JUSTICE, OAKLAND, CALIFORNIA Ms. Bailey. Thank you, Mr. Chairman, for inviting me to testify today on the issue of court secrecy. I'm an attorney at Public Justice. We're a national public interest law firm based here in Washington, and we have a special litigation project that is dedicated to fighting unwarranted court secrecy. Among other things, we intervene in cases and object to secrecy orders on behalf of the public and the press. It is undisputed that much of the civil litigation in this country is taking place in secret. Whether it's protective orders, secret settlements or sealing of court records, the public courts are being used to keep smoking gun evidence of wrongdoing from the public eye. Court secrecy is at least as common today as it was in the 1990's, when the Firestone tire and breast implant scandals came to light. A Seattle Times series earlier this year uncovered more than 400 cases in a single court that had been wrongly sealed, many involving matters of public safety. Also, earlier this year, it came to light that Allstate Insurance Company had implemented a program where it was intentionally underpaying its policyholders on legitimate claims in order to increase shareholder profits. It worked. The program resulted in record operating income during a time marked by some of the worst natural disasters in recent history, including Hurricane Katrina. And the documents about this program were produced in litigation, but were kept secret from the public pursuant to a protective order. It was not until a lawyer who had seen them published his notes that the contents of the documents became known. The reason this happens is that defendants want secrecy and plaintiffs and judges do not do enough to oppose it. Defendants want secrecy, for the most part, because information about hazardous products and fraudulent business practices is bad PR and can lead to more lawsuits against them. Plus, in the settlement context, the defendant sometimes just does the math. It's cheaper to pay off the occasional individual who figures out the evidence, as long as you can keep it secret, than it would be to fix the product or change the practice. Plaintiffs, for their part, might well go into a case thinking one of their goals is to help make sure what happened to them doesn't happen to anyone else. But then they're offered a settlement that will pay their medical bills or rebuild their home in exchange for their silence. They feel horrible taking the deal, because they know someone else might get a hurt as a result of them keeping their mouth shut, but they need the money. Judges, meanwhile, are overburdened. And as long as the parties agree, it's all too common for a judge to sign off on secrecy without considering the public's interest at all. All the while, we continue to drive unsafe cars, drink unsafe water, take unsafe drugs, and put our money and our trust into institutions that are defrauding and deceiving us. That's the first and most obvious effect of secrecy, but there are other costs. Secrecy makes discovering the truth much more difficult and costly. When a defendant is able to keep its wrongdoing secret, it doesn't have to pay as much to the next person who is injured, and cases that would be resolved easily if the truth were known instead take years or never reach resolution. The current system is not working. And the reason it's not working is that as long as each party pursues his or her own narrow interest, no one in the process, in many cases, is protecting the interests of the public. My organization, Public Justice, has fought several secrecy orders in recent years and, in some cases, though certainly not all, we've succeeded in making documents public that should never have been concealed in the first place. For example, an expert witness in a case brought against Honda by a 17-year-old girl who was paralyzed in a crash was observed intentionally destroying the evidence that showed she had been wearing her seatbelt. When the judge found out, he issued a scathing 36-page sanctions decision detailing his findings and entering a verdict against Honda. But within a few days, the case settled and, as a condition of settlement, the judge was asked to vacate and seal his decision. He did. And once the court record of what had taken place was sealed, this same expert was used over and over again by car companies sued by other people hurt in car crashes, and no one was allowed to ask him about what he had done. We challenged that sealing order, and we were able to get it reversed. But for every success story, there are hundreds of equally harmful secrecy orders that remain in force. It shouldn't take intervention by a public interest group to make sure unnecessary secrecy is avoided. Hundreds of thousands of cases are handled each year by the courts, and it's not possible for a small number of nonprofits with a handful of lawyers to intervene in more than a tiny fraction of them, especially since challenges to secrecy orders offer no possibility of recovering attorney's fees. But if Federal judges were required by law to weigh the potential harm to the public interest before entering a secrecy order, this would help counter the factors that encourage secrecy to flourish. Thank you bringing this issue to the attention of Congress. [The prepared statement of Ms. Bailey appears as a submission for the record.] Chairman Kohl. Thank you very much, Ms. Bailey. Mr. Morrison? STATEMENT OF STEPHEN G. MORRISON, PARTNER, NELSON MULLINS RILEY & SCARBOROUGH, LLP, COLUMBIA, SOUTH CAROLINA Mr. Morrison. My name is Steve Morrison. I am a trial lawyer who usually defends people who get sued. I have tried over 240 cases to jury verdict and argued over 60 appeals in the highest courts of the Federal and state systems of this nation. It has been my privilege to be lead counsel in 27 states. I have represented large multi-nationals, Fortune 500s. I've also represented individuals and families. I usually represent people who get sued, so I'm usually on the defense side. I have been a past president of the Defense Research Institute, an organization of 21,000 defense lawyers in the United States, a past president of Lawyers for Civil Justice, which is a group of corporate lawyers and corporate members, as well as defense bar organizations, trying to strive for a civil justice system that we can all be proud of. I've testified before the United States Judicial Conference and their rules committees going forward. Having said that, I do not represent any of those entities at this point in time. I speak only for myself and not for any client. I want to speak on three fundamental subjects very quickly. The first you might call the ham sandwich and the hog farm, Mr. Chairman. The second is the power of due process, and the third is the outrageous presumption of evil. The first part is essentially about the litigation environment that we operate in. For $100, you can file a lawsuit saying your ham sandwich made me sick and then, for that same $100, you can invoke the power of the Federal court to do discovery on a hog farm. That is, you can do discovery way outside of whether the ham sandwich was defective and unreasonably dangerous or had a public health issue. And as you gather up those documents on the hog farm and the electronic discovery on the hog farm and so forth, if this bill were to pass, you could then just put that out into the public domain. So that's the context within which we work. Let's look at the power of due process. If you have private information, private property, if you will, it should only be presented to the public in context and what the power of the Federal court does is produces a context for private information to be published in the context of a private dispute. You say my product is unsafe. I say that it is safe and my data is out in the process where I have a say and you have a say. It's not posted on the internet, on the Channel Islands. It's not posted out of context. It's not posted in snippets. It's not unfairly presented as evil with no opportunity to respond. What the Federal courts do and should continue to do is simply have within their discretion the ability to have information produced to the public in open court in the context of evidentiary rules, cross-examination, and the adversarial process. It works and it has worked and it produces in the tort system the ability to produce a safer public. Let's talk about the presumption then of evil, the outrageous presumption of evil. In the context that people are arguing you here today, there is a suggestion that if a document is held private in a piece of litigation, that document is evidence of evil, or that if an individual settles a lawsuit, that is evidence that they are an evil doer, that they have a bad motive. In fact, what happens in litigation is someone will find a document that they perceive to be embarrassing and they can spin it in a certain way in their adversarial process and they want to put that out in the public to embarrass someone. Why is that? For leverage, for leverage to produce a higher settlement in a civil case. It has nothing to do with protecting the public. It has to do with economics. So what we're about to embark on is a process whereby the courts would be limited in the tools that they have to maintain private property as private until such time as appropriate showings have been made for it to be shown in open court. I want to comment briefly on the so-called secret settlements. In South Carolina, as Judge Anderson has said, where I live, we have this court rule. But if I want to enter a contract with a plaintiff for the settlement to remain confidential and not ask for the court approval, the court doesn't participate in that, and the vast majority of confidential settlements are done on private contracts. So rarely is a court, as the U.S. Judicial Conference and the National Center for State Courts have produced data, rarely does a court actually approve a settlement being confidential. It's a very unusual circumstance. In sum, we should maintain the status quo, giving the judges the absolute power to manage the due process by which information is disclosed to the public. Thank you. [The prepared statement of Mr. Morrison appears as a submission for the record.] Chairman Kohl. Thank you, Mr. Morrison. Mr. Zitrin? STATEMENT OF RICHARD A. ZITRIN, ADJUNCT PROFESSOR OF LAW, UNIVERSITY OF CALIFORNIA AT HASTINGS, SAN FRANCISCO, CALIFORNIA Mr. Zitrin. Thank you, Chairman Kohl, for inviting us here today and for having a hearing on this very important issue and for enlightening both the U.S. Senate and the American people about a hidden, but very, very significant issue that affects our public health and safety. I have some prepared remarks, but I'm going to abandon them. There are some things that have been said by Mr. Morrison and Mr. Weiner and, indeed, Senator Hatch. First, these are not confidential settlements. They're secret settlements. Confidential is what my clients tell me, a lawyer-client confidential privilege. This Senate has various confidentialities. What we're talking about is secrecy. There is nothing confidential about documents that are exchanged in the discovery process and, indeed, our entire system of justice is based upon a reaction to the Star Chambers in Britain that made these pieces of litigation private. We do not engage in private litigation. We have public courts and, as I know the Senator knows, the United States Constitution and the Bill of Rights talks about the right to a speedy and open trial. So when Mr. Weiner says that these are private disputes and Mr. Morrison repeats that, they are private disputes, but they happen in a public forum. They happen under the jurisdiction of judges and they are subject to the scrutiny of the American people. So to start off with a presumption they are private is simply antithetical not only to the laws of the United States, but to the very foundations of our country that reacted against the Star Chamber. That's the first point I want to make. The second one is this. I'm glad we had Mr. Bradley go first, because I think we very, very carefully have to not lose sight of the fact that in this procedural debate about whether we're going to have this kind of protective order of that, what's presumptive, what's not presumptive, we lose the fact that thousands and thousands of people are being killed and maimed and permanently harmed because we have these secret settlements. Before December 2006, 8,000 cases involving the Lilly drug Zyprexa were settled secretly in the Eastern District of New York complex multi-district litigation, and, at that point, in December of 2006, just a year ago, the New York Times did an expose about the fact that Zyprexa caused great weight gain in 30 percent of the people who received the drug. And within 2 weeks, 18,000 more cases were settled. Lord knows how many people were misprescribing--how many doctors were misprescribing Zyprexa because they didn't know about the severe weight gain and the dangers of diabetes. Also, there were internists who were being encouraged by Lilly to prescribe Zyprexa for uses that were absolutely contraindicated by the FDA, with absolutely no evidence that they would work. Thousands of internists prescribed Zyprexa for Alzheimer's, when it had absolutely no effect on Alzheimer's, thus jeopardizing other remedies that could have helped those patients, and endangering them with diabetes, as well. What stopped it was disclosure. What stopped it was shining the light of the law on that information. And how we can sit here and debate the niceties of procedural protections versus the lives of American citizens is, frankly, beyond me. I come to this as an expert in legal ethics. That's my field. Fifteen years ago, I realized how can I or my students be ethical lawyers if they will allow themselves to engage in this kind of process. A couple of other points that were made by Mr. Weiner and Mr. Morrison that I want to briefly mention. Courts have discretion under the Sunshine in Litigation Act that, Senator, you have proposed, Senator Kohl, and they will continue to have discretion. We're not saying that all protective orders are illegal. What we're saying is if Mr. Morrison is representing the defendant and, say, I representing the plaintiff, can't make a backroom deal to stipulate to a protective order, take all the smoking gun documents, stick them under the table and never have the see the light of day, without a judge, like Judge Anderson, scrutinizing it to make sure that these documents don't relate directly to the public health and safety. We're not giving carte blanche to judges to make frivolous decisions. What we're doing is giving the power to judges to make judicious decisions so they can continue with their mandate to protect the American public. And what your legislation would do is prevent us from secretizing this information so that no one will ever know that it exists. So that people like Mr. Bradley and his wife and family are not jeopardized by the fact that the information about Cooper tires was secret, while the information about Firestone tires has been made known. No one is trying to prevent legitimate protective orders. No one is trying to embarrass anybody and no one is trying, I'm sure the Senator is not trying to reveal trade secrets to the public. This legislation is designed to protect the American public from lawyers who put money first and safety second, who make backroom deals with hush money to prevent the American public from getting the knowledge that they need to know. And the idea, and I'll be just a second, the idea that we can't get this information out to the public, which Mr. Morrison suggested, the idea that the public can't deal with this information is to denigrate our American public. You know, Americans are pretty savvy about sorting out the wheat from the chafe. When given the information, Americans can figure out what is right and what is wrong, what is safe and what us unsafe. It is only where there is a veil of silence that we don't have the information for our citizens to make that decision. If we shine the light of the law on this information, we leave it to our very, very able citizens to make a decision about what to do, which they can't do right now at the cost of lives in the thousands. Thank you, Chairman. [The prepared statement of Mr. Zitrin appears as a submission for the record.] Chairman Kohl. Well, we thank you all for your testimony. Just to summarize or synthesize this legislation as Mr. Zitrin and others have very succinctly indicated, the purpose of the legislation is to give a judge an opportunity to rule on whether or not a public health and safety hazard is involved in a protective order, that there is information, and that that whole arrangement between a defendant and a plaintiff that prevents very important public health and safety issues from coming to the surface. A judge has the discretion to make that decision. He has a requirement that the take a look at it and then he can decide whether or not a protective order is necessary or not necessary. I mean, obviously, you know where I'm coming from, because I wouldn't be here having this hearing if I wasn't coming from that point of view. And several on this panel, including a sitting judge, have indicated that it's an important issue. The judge himself says that he has had something like that in the manner in which he conducts, in his district court, now in place for many years, and he thinks it's a good thing. You're from the same State, is that right? Mr. Morrison. Yes, sir. Chairman Kohl. So I'm sure you have some familiarity, if not considerable familiarity with how the issue is resolved in the judge's court. So what I'd like to encourage here is an interaction between members of the panel, one to challenge another, and all of you are experts in some fashion or another, so that we can bring as much information to the table as possible in this hearing, which is, after all, the purpose of the hearing. So I guess I'll just start out and we'll go from there. Mr. Morrison, Judge Anderson is a good man. Mr. Morrison. He sure is and Judge Anderson and I graduated from law school in the same class. He was No. 1 in our class, I guess I should tell you. Chairman Kohl. He is a smart man. Mr. Morrison. Not only a good man, but a smart man. Chairman Kohl. What is the criticism of the way in which he handles this issue in his court? Mr. Morrison. Well, in fact, in the way that it has worked over the last 5 years with regard to the settlements, Judge Anderson's approach and our local rule basically indicates that if you're going to have a confidential settlement approved by the court, then you have to make certain showings and the judge gets involved. The practicality of that, in my practice, is that normally you don't ask the Federal court for a confidential settlement. Normally, you don't ask them for anything. There are three kinds of settlements that have to be approved by the court. One is a class action, one is a death settlement, and one is a minor settlement for a child. Now, those require approval by the court and when those come into play, then the rule comes into play. We do have a rule one in our court and that is that rule one of the local rules is that each judge can do what they want to do as opposed to follow the rule, but, in fact, most of the judges follow the rule that's set forth. But most of the settlements we engage in as the plaintiff's bar and the defense bar in South Carolina are not submitted to the court for approval. So there are many confidentiality agreements that are entered into that simply say that the case has been settled. A confidentiality agreement does not mean that the public doesn't know the case has been settled and, as Mr. Weiner pointed out, it also doesn't mean that they don't know why the case was brought, because their complaint is fully public. So the thought that there would be 8,000 settlements in 8,000 individual cases, nobody knew they were brought and nobody knew they were settled, is a little bit distant from my personal experience. So the way we actually work in South Carolina is that unless the case is a class action or a minor or a death settlement, you don't ask for the court approval and, therefore, the court doesn't interfere in any way in the confidentiality of the settlement, if the parties want it. Another point I would make, Mr. Chairman, is that in the context of paying someone a lot of money, a million dollars or more, that's a lot, a lot of people don't want that public. They don't want all the public aspects that come upon them. They don't want the amount to be public. They don't mind if somebody says it's settled or it didn't settle. So what usually is held confidential is simply the amount of a settlement, and that gets me to that presumption of evil that I think is the wrong presumption for us to make. Just because you pay a lawsuit to be resolved doesn't mean that you're a wrongdoer or an evildoer. There are lots of reasons to resolve a lawsuit that have nothing to do with anything other than the jurisdiction or the amount of defense costs or the entire process, maybe your product is not even being produced anymore, you don't want to spend a lot of money on it. So you don't want any presumptions built in there. So in the context of our rule in South Carolina, it is only involving settlements and it is only involving court approval of the settlements. It's not involving protective orders. We operate under the regular Federal Rules of Civil Procedure. So if I'm in Judge Anderson's court, which I am frequently, then he or his colleagues on the bench will make a decision as to whether or not they will enter a protective order protecting the data that's being exchanged during the lawsuit and, generally speaking, they will protect that data if it is confidential, if it's not already public. If it's private data, they will protect that until such time as it needs to be disclosed for a motion or for evidence and so forth, and that's where the due process comes in, because they are literally, in our state, supervising the evidence as it comes in and they supervise the private data. So if one side is spinning it one way, the other side gets to be fully heard. And if the press wants to watch, they can watch both sides and, generally, they're fair enough to report on both sides. It's only when data is taken from a private source and pushed out into the public out of context and without due process that there's real significant harm done. Judge Anderson. (OFF-MIKE) to be emphasized that we are talking about the rare case, the case where a teacher is accused of molesting a child and the judge knows that the teacher is going to stay in the classroom and the judge is asked to put his signature on an order keeping that from the public. The Federal Judicial Center study indicated it was a very small minority of cases that we're talking about here that are sealed, and I agree. I would note, for the record, though, that flies in the face of the predictions that we were told, the dire predictions that we were told that we would have hundreds and hundreds of cases going to trial. I mean, those two arguments are, to me, inconsistent. And as I said, our rule has worked well. In those rare cases--I didn't have enough time, but I can point to instances in South Carolina where some of our state judges and Federal judges have refused to acquiesce and request that they put their signature on an order gagging the parties, requiring the return of documents, the destruction of documents, no discussion of the case, or even instances, and I've cited it in my written submission, where not only are the lawyers and parties prohibited from ever talking about the case, but the plaintiff's lawyers are prohibited from ever becoming involved in a similar case for a future plaintiff. So the ramifications go on and on. I certainly do agree with what's been said, that it's a rare case that we're talking about, but it's precisely those rare cases where court-ordered confidentiality is not good for the public interest and it hurts the legal system. Chairman Kohl. We're all going to participate in this, but I just want to give Mr. Morrison 30 seconds to respond. The judge is saying in those rare cases, and we are talking about rare cases here, I think we all admit that instances where a judge would have to make a decision that the public health and safety is involved in this settlement and I'm not going to allow it to be secret. In those rare cases, the judge there has the opportunity to say I'm not going to allow this. Thirty seconds, and stay on point, please. What's wrong with that? Mr. Morrison. Well, in staying on point, that's the way it works right now. The judge has the power at any point in time to stop-- Chairman Kohl. But many judges don't use that power, because they're busy, as Judge Anderson said, they have many things to do and they're not required to look at it. The law doesn't require them to take a look at public health and safety considerations. So all we're doing in this legislation is requiring the judge to take a look at that issue when he finally disposes of the case. Mr. Morrison, again, please stay on point. What's wrong with that? Mr. Morrison. It's not the role of the court in a single tort case to try to make that judgment. Chairman Kohl. Well, now, wait a minute, wait a minute. If the judge is convinced that public health and safety is involved, and this is a public court, serving the people's interest. Mr. Morrison. Right. Chairman Kohl. He's a judge put in place to represent the public interest and we believe in the veracity of the judge. If the judge decides that this protective order violates the public's need to know in this case and he says I can't let that happen, and this does not happen every day, it's rare, what is the problem? Mr. Morrison. A, he has the absolute power to do that now with no legislation. Chairman Kohl. But he is not required to do it and I'm saying isn't it the purpose of the public's court that the judge should be asked to make a judgment, in his mind, when he allows a protective settlement to go forward, should make a judgment that the public interest is being served in allowing it to go forward. Mr. Morrison. No. Chairman Kohl. He should not be asked to make that judgment. Mr. Morrison. No, sir. The protection of the public on these issues that you're talking about lies in the Consumer Product Safety Commission, the National Highway Traffic Safety Administration, and any number of other agencies where you have passed laws in Congress requiring people to self-report. Like the Mattel lead paint came to light because Mattel reported it themselves under a regulatory process. So that when you have a piece--the judge is not--Your Honor--not very often in a case where there's more than just the two parties involved in the case. He's not a social regulator. He's not in the process of being in that social regulation standpoint and he always has the power, either sua sponte or at the request of the other side, to lift a protective order if he feels that that is in the interest of the public. He always has that. But to require basically a regulatory overlay by the Federal courts every time they are exposed to one tort case is to cause mischief, I believe. Chairman Kohl. OK. Mr. Zitrin? Mr. Zitrin. Senator Kohl, the most frequent forum for secret agreements is a protective order entered into by stipulation. And judges are busy people. We can hardly expect judges to go back behind the stipulated protective order and do an analysis of whether what's being secretized, as I've coined the word, we haven't gotten on Wikipedia yet, but hopefully it will get there, what's being secretized is actually something that's a danger to the public health and safety. I believe that's why you have proposed a bill that isn't talking just about agreements, but very significantly and centrally about protective orders. It doesn't mean that judges are going to leap out and start investigating every single case. What it does mean is that protective orders should not be entered into merely by stipulation until the judge gives his or her actual imprimatur based on what's actually going on in that case. In my experience, and I have tried not quite as many cases to verdict as Steve Morrison has, but dozens, and I continue to practice trial law part-time. In my experience, these stipulated protective orders are routine. I practice in the legal malpractice area. They're in every case, because the law firms involved don't want to be embarrassed by information. But, there, we're not talking about dangers to the public health and safety of the kind that victimized our first witness and his family. So it makes all the sense in the world to me to have a judicial imprimatur on those protective orders before they are approved. And I do want to mention one other thing that I am stealing from my friend, Judge Anderson down there, because Joe Anderson has written that, in his experience, it is actually not a cost of time to the court to go through one time the issue of whether there should be disclosure or should not be a protective order as to one particular item, whether it be the GM side impact gas tank cases or the Zyprexa drug or the other Lilly drugs that they've failed to report in the past, because what happens when the protective order is automatically entered on stipulation is that every time that issue comes up in another court, the litigation, discovery process, motions to compel, responses to motions to compel, appeals on a motion to compel, that process is fought out every single time anew. So in GM, according to the Montana Supreme Court, GM gave $500 million in settlements because of side impact gas tank cases, at the same time that they were engaged in a public relations campaign about how these things were merely an NBC Dateline piece of fluff and not dangerous. As a result, 240 cases, at least, were settled. Each of those 240 cases had to go through the discovery process anew. If it had happened one time in the District of South Carolina or under this Sunshine in Litigation Act, then the word would be out the first time, the public would know, and you wouldn't have to start out from ground zero every time an order to conduct a discovery. The best evidence that we have is this actually will save the court some time. So I respectfully disagree with Steve Morrison, as I did down in South Carolina when we met down there. I guess I'll leave it at that. Chairman Kohl. Thank you. Ms. Bailey, and then Mr. Weiner. Ms. Bailey. Thank you. I'd first like to respond to an argument that Mr. Morrison made about regulatory agencies being charged with safety, so we don't need courts to pay attention. I think if self-reporting actually worked, we wouldn't see so many of the problems that we see with products harming people after information has come out about safety in litigation, but before a regulatory agency has acted. So my point is that even if the parties do comply with a regulatory requirement to report on their products, it could be months or years before the FDA issues a black box warning or pulls a dangerous drug off the market and, in the meantime, because the public didn't know, people are continually at risk, and I think that we need to not forget about that important window of time. Second, I just would like to second what Professor Zitrin said about this being a very small number of cases. I think that when corporate defendants and others argue that the burden is going to be too great on them to go through all these documents and produce everything, unless it is subject to a blanket protective order, I think we're forgetting that if they believe that they are not in possession of any documents that prove that they did something wrong, the problem is solved. They can just produce it. There's no need to push for secrecy. It's only in the very small number of cases where there is something that the public really needs to know and has a right to know that we need a law like this. Chairman Kohl. Very good. Mr. Weiner? Mr. Weiner. Yes, Mr. Chairman. I think that one of the things we do as lawyers is we focus on distinctions and many distinctions, I'm concerned, are being ordered here today. Because a plaintiff--I represent defendants almost exclusively. I don't recall my clients ever volunteering to be sued. They are in court because someone else has chosen to make an accusation. And because someone chooses to make an accusation doesn't mean that my clients sacrifice their right of privacy. If you want to talk about something that is inconsistent with our democratic values, I would submit that that proposition would be inconsistent with our democratic values. Another distinction I think that is blurred is the distinction between a dispute being private, a lawsuit being private, which is not something I've contended, and the documents that are exchanged in discovery between the parties, with minimal supervision by the court, whether those are private, and they are private. The Supreme Court has said they're private. Just because my opponent chooses to ask for the client's documents that were otherwise private before the lawsuit was ever brought doesn't make my client's documents public. And the use of--if there were such a word as secretized, it would connote that you're taking something that is public and open and you're making it secret, and that is not true of documents that are produced in discovery. Now, in many cases, in some cases, at least, documents should be open and available and courts have the ability to require that now. Last, the suggestion was made that when lawyers enter into settlements or enter into protective orders that protect the confidentiality of private information, they are somehow unethical. Mr. Zitrin may wish to change the rules of ethics. In fact, I believe he has proposed to do that, but right now, my obligation as a defense lawyer is within the bounds of the law to seek to serve zealously the interests of my client, and that is the obligation of the plaintiff's lawyer, as well. And the theory of our adversary system is that through that clash, the truth and the public interest will emerge and by serving those interests, a lawyer acts ethically, not unethically, and to say otherwise, I think, under our current system, is wrongheaded. Chairman Kohl. Mr. Weiner, I'm sure you're familiar with how Judge Anderson conducts his court in this area. What has occurred there that offends you? We don't have to theorize that there's something. We have a real life situation here. Mr. Weiner. Well, I don't know enough about the rule in South Carolina. I would say this, that it is an unusual settlement where people go to the court and ask for the court's approval. And when you enlist the offices of the court in order to approve a settlement, then I think that that incorporates a different standard as to what may be confidential and what not with regard to that disclosure. They've asked the court to make a decision and the bases of that court decision, there is a stronger argument in that circumstance that the bases of that decision should be public. But that doesn't mean when parties--if someone sues me, sues my client, my client is involuntarily brought into court and then they decide that maybe it wasn't a good idea and maybe the costs of defending the case are greater than the costs of settling it, whatever reason, they settle that case without the intervention of the court, then I think there are very different issues at stake regarding the confidentiality of documents that started out confidential and should stay that way. Chairman Kohl. Judge Anderson? Judge Anderson. Well, Senator, in the written materials I submitted, I didn't talk hypothetically. I cited chapter and verse of actual cases. For example, a case in Greenville, South Carolina, where a child was killed on a go-cart, allegedly, with a defective steering mechanism. The settlement was $1.4 million, conditioned on an order of confidentiality signed by the judge. When I checked, that model go-cart was still on the market, still being marketed. Opponents say that, ``Well, you can go look at the complaint.'' The complaints are always public documents and if there's any bad information the public needs to know about, all they need to do is read the complaint. But I would submit that's a specious argument. We have 250 to 300,000 Federal lawsuits filed a year. Many, many of those fall by the wayside. Many of those are thrown out by the trial judge on summary judgment or go away with nuisance value settlements. But when a case settles for $1.4 million, to me, that raises a red flag that there may--there may, and I'm not casting aspersions, but there may have been a problem with that product that the public deserves to know about, and that's just one example, and I've cited many others in the article that I submitted. So I think we sit here and we talk in generalities, but I've, in my written submissions, tried to give you specific examples of real life cases that I've come to be familiar with. As I've said, I carefully picked the case that I mentioned, because it involved myself. I pointed the finger at myself. I wouldn't really be casting aspersions on someone else. But I think that was a typical example of the incredible amount of pressure that is put upon a judge to go along with it. In the case I mentioned involving PCBs in the lake, we had engaged in sort of an experimental summary jury trial, which was popular at one time, in which you bring in essentially an advisory jury. They think they're a real jury. They think they're trying a real case. You give a very abbreviated presentation of the evidence in a 1-day forum and then the jury goes back and comes back with a verdict. In this case, we used advisory verdict on the water contamination case and they came back in 20 minutes with a defense verdict. So it looked as though the plaintiffs were going to lose that case if we went to trial. So here I am faced with a $3.5 million settlement, primary medical care for life for all 350 plaintiffs, and to say, well, the judge didn't have to go along with it if he didn't want to kind of ignores the issue. There was incredible pressure on me to go along, because I did not want to take that favorable settlement off the table for those plaintiffs. So I signed the order and, as I said, it kind of was a bellwether case that I remember in my formative years that helped me come to the conclusion it was wrong to do so. And your legislation, I think, is a very nuanced middle ground approach that just requires judges to engage in the balancing process. We do that all the time. We balance interests in civil and criminal litigation day in and day out. It's nothing we're not used to doing and I think your legislation is sort of a wakeup call to us judges to be mindful of the other side of the equation. Chairman Kohl. This is posed to whomever wants to respond. What this legislation is intending to do is to arrive at what Judge Anderson suggested is a balance and to prevent the kind of activity in court which involves powerful companies with enormous assets and a lot at stake and plaintiffs who have been injured and have an opportunity to recover a lot of money if they will just stay quiet from engaging in that process, both the defendant and the plaintiff, at the expense of the public interest, that's the whole point here, and giving a judge the right to look at this thing in a nuanced way and to make some judgment as to what the public interest is. I think you, Mr. Morrison, said that's not a judge's responsibility, we have regulatory agencies, and so on. If that isn't a judge's responsibility to make these right at the point of attack, which is where the trial is taking place, if the judge doesn't have that responsibility or the right to exercise that--no, doesn't have that responsibility to take a look at it, then I would submit that we're taking away an awful lot of what a judge is supposed to do in our society. But that's what this legislation is intended to do, to prevent money, that is to say, money flowing from a defendant to a plaintiff, from preventing very important information that could theoretically have an impact on the lives of hundreds of thousands of people from coming to the surface. Well, if that isn't a reasonable application of a court of law, in a very few cases, which has been pointed out here, again, tell me, in 30 seconds, please, what's the problem? Mr. Morrison. Let me use the example I think Judge Anderson, who is a very good friend of mine and I hope he's telling me the truth that we will be after the hearing, in the context of the PCB case that he had, and I want to defend his decision to sign the order. But here's what you had. I think you had 350 people in the case and they're getting medical monitoring, which is going to cost about $10,000 a year for life. The defendant has won the case in the summary jury trial or the advisory jury trial. The defendant doesn't think that the PCBs in the water are sufficient to cause any health or human hazard. But if the judge insists on telling everybody in the public that they paid $3.5 million for the PCBs, under those circumstances, then how many more people are going to line up at the pay window and say, ``Wait a minute, I want the $10,000 for medical monitoring and I want this and that and so forth.'' So what the judge did in that case, and he may have felt under a lot of pressure and it was his case and not mine, was a very rational thing. Remember, the defendant had won the case on the science with 12 tried and true in a summary jury trial where they're presenting a summary of the evidence on both sides, with jury arguments. And under those circumstances, how unfair would it be to require the defense to publish in the newspaper that they're settling for what amounts to a nominal amount. There's no way they could defend the case for $3.5 million, and to put that out there. It would be unfair. The presumption of a health and human safety problem would be tremendous there. Now, if the judge made an independent decision that the PCBs are, in fact, causing cancer, et cetera, et cetera, et cetera, of course, he's not the EPA, the EPA actually regulates PCBs and they have a lot of data and a lot of scientists they call in in hearings just like this to take care of the social regulatory issues as to what is an appropriate admissible level of PCBs in a water source, and they're geared up to do it. And so I don't think you're taking anything away from the judge. I think the judge made a rational decision at the time that he now feels bad about and I'm sure that he knows more about the case and can argue back on that point. Chairman Kohl. Let's give him a chance. Judge Anderson? Judge Anderson. As I say, it's a difficult call, it really is, and Steve has pointed out the other side of the equation. It's rare to have a summary jury trial. They have been disfavored by the appellate courts and we don't really do that much anymore, but that was a unique case where we did have a sort of a peak at what a jury might do. Of course, another jury exposed to the full evidence might have gone the other way. But suffice it to say I was concerned about the part of my order that required all the documents to be returned and destroyed, so forth, documents that had been laboriously fought over for several years about their relevance and production and so forth. Mr. Zitrin. May I comment on Mr. Morrison's statement? Chairman Kohl. Mr. Zitrin? Mr. Zitrin. Thank you, Mr. Chairman. I don't think this legislation and I don't think anyone, and I know the written materials that I have submitted certainly don't suggest that the amount of money awarded as a result of the settlement be public. We've been spending the afternoon discussing the documentary evidence, the information that the public is entitled to know. And Mr. Morrison, I thought I heard him say is the defendant going to have to go out to the press and announce how much the settlement was for, and the answer to that is no. No one is suggesting that. We're not talking about having the defendant go through the old mill with a sign saying $3.5 million. Rather, we're talking about a situation where the information is available to the public. It's not the money amount of the settlement that's important. It's the information. Now, Judge Anderson's case, which I've heard him talk about before, is a difficult one, but I do think that there is another issue that's important to mention, which is that all of the evidence, and there have been some empirical studies done on this by, among other people, James Rooks, who is here in the hearing room today, show that even when you don't allow the secrecy, cases continue to settle, that there is a disincentive for the toxic polluter or potential toxic polluter to take that case to trial in a public forum. So while they may not settle for some kind of premium paid for in silence, these cases still settle. So I think that we should--I think Judge Anderson deserves a bit more credit than his good friend, Mr. Morrison, is prepared to give him at this point. Chairman Kohl. Ms. Bailey, and then Mr. Weiner. Ms. Bailey? Ms. Bailey. Thank you. Mr. Morrison referred to potential plaintiffs lining up at the pay window and I think what he's suggesting is that if the public knows the truth, they will be more likely to sue. And if that's the case, I think that should be a consequence that we're all willing to accept. If facts do come out showing a product to be unsafe or a business to be defrauding its customers, discouraging lawsuits is not a good reason to hide the truth. And I would also say that a law like the Sunshine in Litigation Act would actually take some of the burden off judges, in the sense that parties who know that the judge is not permitted to enter a secrecy order if the case involves public health or safety won't be able to request it. And so meritorious cases will still be able to be settled for good reasons rather than just for hush money. Chairman Kohl. Mr. Weiner, would you like to make one comment? Mr. Weiner. Yes, Mr. Chairman. I think that the proposed legislation goes beyond what may be intended, maybe not what was intended, but I think it goes beyond what descriptions of it have suggested. What the legislation says is that the order would not restrict disclosure of information which is relevant to the protection of public health or safety. Suppose you have a case involving a pharmaceutical product. Every pharmaceutical product has--every prescription drug has side effects. When the FDA approves a prescription drug, they do so based on a weighing of the risks and the benefits. All the evidence about the drug is going to be relevant, particularly in the way the relevance is defined under the Federal rules, is relevant to public health and safety. And so saying that an order won't restrict disclosure of information that is relevant to the public health and safety is really to say that in such a suit, you can't restrict disclosure at all, and I think that simply is not conducive to a fair adjudication of issues in our courts. Chairman Kohl. Any other comments, folks? This has really been a great panel. Mr. Morrison? Mr. Morrison. Mr. Chairman? Thank you, Your Honor. If I might, the issue of doing the discovery over again, let me just mention, in the side saddle gas tanks, what General Motors did was put together a reading room where anybody who was involved in any of those cases could go in and look at the documents. What Ford did in the Firestone-Bridgestone tires was set up a reading room where anybody could go in and look at the documents. It wasn't a matter of you had to start de novo on discovery. But the documents themselves could not be disclosed piecemeal outside the context of due process supervised by a judge, so that they were confidential until determined otherwise. And then with regard to this opening of the pay window, which suggests that if people knew the truth, they would sue more and that would be OK. But what is the truth in a difficult case? Is the truth that the defendant won the summary jury trial because there was no causal connection between the chemical and the sickness or that the plaintiffs couldn't prove that there was a causal medical connection? And if that's the truth and the people still got $10,000, that's the pay window I was talking about. I wasn't talking about trying to prevent people from knowing the truth for the lawsuit. But the truth is a nuanced piece that only the court knows when they've been through the whole process that they have worked with. It's not, as Mr. Zitrin suggests, you just take a document from somebody with the police power of the state, because you had $100 and could file against the ham sandwich, and then you reach out and get all their documents and then you're free to do whatever you want with them, publish them in the New York Times or put them on the internet without any context at all. That would be grossly unfair and it would be really, truly, undemocratic. Thank you, Mr. Chairman. Chairman Kohl. Well, we thank you all for coming. You've shed an awful lot of light and information on this very important topic. Let's see how it all makes its way through the process. Thank you so much. 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