Commentary: A Disturbing Trend Toward Secrecy

The trend toward secrecy in litigation is becoming all too routine. One recent example: On Sept. 8, General Motors Corp. settled four cases, at a U.S. court in Oklahoma City, about crashes involving its pickup trucks. But GM and the alleged victims agreed to keep the deals confidential. While GM declined to comment, plaintiffs' attorneys say the company can count on secrecy to contain potential payouts in 50 similar pending cases.

Companies such as GM often prefer to keep their litigation under wraps. And judges can make it easy--agreeing to requests to keep confidential everything from potentially damning evidence to sealed court filings--which is what's at issue in the dispute involving BUSINESS WEEK, Bankers Trust, and Procter & Gamble. While legal experts say there are no hard numbers measuring the trend, anecdotal evidence suggests that hushed settlements and protective orders for ongoing litigation are commonplace enough to be troubling.

A HIGH PRICE. The use of secrecy "has gotten worse and worse," says Miami attorney Richard J. Ovelmen, who has defended the right to access for The Miami Herald. "It's an attempt by very rich and powerful litigants to convert the public judicial system into a private dispute mechanism." Before the drift toward secrecy gets out of hand, judges, lawmakers, and attorneys need to better balance the conflicting rights of corporations and the public.

Companies, of course, have many legitimate reasons for wanting confidentiality, including the protection of privacy and trade secrets. And judges have great leeway to grant their requests for such "good cause." Furthermore, just because companies often choose to settle with complainants rather than fight costly legal battles, say defense lawyers, doesn't mean they must then disclose the details. "If you got sued for something you thought was totally unfounded, what business is that of the public?" asks Washington attorney Alfred W. Cortese, who has worked for GM.

But in some cases, the public pays too high a price for closed-door deals. For one thing, investors and consumers need to know about complaints against a company's operations or products. Sealed deals can blot out new information about allegedly harmful products and put consumers at risk. Confidential settlements in 1985 and 1991 between Dow Corning Corp. and silicone breast-implant users shielded documents showing that the company may have known about its product's potential problems as early as the mid-1970s, says Dan Bolton, the San Francisco attorney who brought both of those cases. Dow Corning had no comment.

EXPEDIENCE. The press, too, shares the need for openness in its duty to uncover corporate wrongdoing or questionable government activities. To perform its role, the media should normally have access to legal documents that shed light on matters that citizens in a democracy have a right to know about.

Yet there's strong momentum toward secrecy. Plaintiffs often will agree to a secret deal to get higher compensation from companies that want the whole mess kept under lock and key. Judges let these settlements go forward because resolving cases helps clear their overcrowded dockets. "Everyone's interest is satisfied except that of the public," says Arthur H. Bryant, executive director of Trial Lawyers for Public Justice in Washington.

Courts, legislatures, and lawyers need to exercise more vigilance against the secrecy trend. Judges should give greater weight to the public interest in decisions to grant confidentiality requests, and plaintiffs should stand up to pressures to settle in private. Otherwise, the public can be shortchanged by a judicial system they pay for but which doesn't always protect them.

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