A Balancing Act: Discovery Costs, Public Access, and Privacy

Introduction

Secrecy in litigation drives up discovery costs for plaintiffs who are generally already at a financial disadvantage compared to defendants, prevents the public from learning of health and safety hazards, and leads to more injuries and deaths. Leveling the playing field while assuring an adequate level of privacy may be possible in incremental steps.

Secrecy in Litigation

Currently, courts may issue protective orders on all discovery documents and allow documents filed with the court to be filed under seal, sealing everything from the identities of the parties to the disposition of the case. Settlement agreements can also be sealed. One must make a petition to unseal a document. Obtaining court-enforced confidentiality is fairly easy and common. Rule 26(c)(1) of the FRCP states that “The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”

The Problem

Public access to information and the resolution of cases on the merits are not mutually exclusive. Protection orders and sealing mean that subsequent plaintiffs retain new lawyers who need time to learn the case and must begin the process of scavenging through the data dump anew. If gag orders are still in effect, plaintiffs are limited in potential witnesses as well. For repeat defendants, each subsequent discovery process can be cheaper because the defendant uses the same lawyer and knows where to find all the needed documents, especially if utilizing electronic discovery. The documents the plaintiff produces are generally not as voluminous as the defendant’s and her facts do not differ substantially from those of previous plaintiffs.

Secrecy also means that by covering up defective products or toxic leaks, more unsuspecting victims and future plaintiffs are created. Consider that Bridgestone/Firestone tires killed 103 people by 2000, even though the Van Etten discovery commenced two years earlier.

A Difficult Balancing Act

On the face of it, limiting protection orders and sealing could cut costs for plaintiffs during the discovery process and would warn the public about potential hazards. If parties are aware that all discovery documents are presumptively public, but remain subject to mandatory redaction, they will be less likely to dump items like thousands of invoices for pretzels, which include account numbers, or irrelevant documents they truly do not want exposed. This will shift costs to the cheapest cost avoider: the document owner will have to parse through his own records, rather than forcing the other party to do so. Parties may also seek judicial discretion to narrow overly broad production requests. For defendants, a default public rule could lower costs: future plaintiffs may be eliminated entirely.

However, a lack of secrecy could also prevent some plaintiffs from bringing legitimate suits for fear of public exposure. A default public rule could also mean smaller settlements for current plaintiffs, a greater incentive for defendants to not settle, and possibly a longer, more expensive discovery process for both sides if more requests are contested. As the Court argued in Seattle Times, heightened First Amendment scrutiny of each request for a protective order would necessitate burdensome evidentiary findings and could lead to time-consuming interlocutory appeals.” [1] Moreover, a default public rule would create major privacy issues. A simple complaint, long before any wrong-doing is proven, should not force parties to forego their privacy, potentially making them vulnerable to wholly unrelated claims.

Drawing the Line

Status Quo

The appropriate level of privacy should be determined based upon the stages of the trial process, unlike the wholesale approach adopted by the Sunshine in Litigation Act (SLA). Protective orders for documents exchanged during discovery should remain available to the parties to enter into voluntarily and to motion for before the court. Without a determination of wrongdoing, privacy should remain intact, but government agencies devoted to insuring public health and safety should be able to access documents made available for discovery.

Presumptively Public

Once a court has reached a decision, however, the disposition of the case and all documents presented at trial should be presumptively public unless “the public interest in the disclosure of potential health or safety hazards is outweighed by a specific and substantial interest in maintaining the confidentiality of the information . . . and the requested protective order is no broader than necessary to protect the privacy interest asserted” (to borrow language from the SLA). Taxpayers pay for the courts. Once a court makes an official determination of wrongdoing that implicates public health and safety, the public should have an opportunity to be warned.

Presumptively Private, But…

The issue of settlements not approved by the court is thornier; it cannot be examined in a vacuum. At play is the cost structure of the trial process: innocent defendants may find it cheaper to settle and wronged plaintiffs may prefer to take some money now rather than taking a gamble on a large jury verdict later, regardless of the case’s merits. On the one hand, parties should have a right to contract freely. On the other hand, unlike most contracts, these types of contracts have a significant potential to hurt third parties. The DOJ says that it “typically include[s] language in [its] confidentiality agreements that [it] ha[s]the right to share information with state or federal law enforcement authorities," though it suggests that there could be cases where a federal agency might legitimately want to preclude access by a state agency. Allowing for agency intervention may be a minimum step to take, but it may not mean much given that many are strapped for resources. On circumspection though, the prevention of further deaths and injuries outweighs the cut in financial awards current plaintiffs may have to endure; plaintiffs could still win high damage awards in court. Secrecy in settlement should not be enforced where there is a public interest in the disclosure of potential health or safety hazards. There is evidence that states that have moved in this direction have not experience an overburdening of their courts, suggesting that parties will still continue to make settlements just as before.

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[1] Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984)

-- KateVershov - 1 Jun 08