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While out-of-state judges are mulling whether to ban secret settlements in civil cases, efforts are quietly under way in New Jersey to ensure public access to court proceedings and to limit overuse of protective orders. Subcommittees of the federal Lawyers Advisory Committee for the District of New Jersey and the Supreme Court Civil Practice Committee are considering whether measures are needed to strike a balance between preserving privacy and proprietary information and safeguarding public health and safety. Rosemary Alito, who heads the federal subcommittee, says her panel has been looking at the need for local rules “effectuating the 3rd Circuit standards for closing courtrooms to the public and filing documents under seal.” The subcommittee is drafting a report and proposed rules to be considered by the entire advisory committee in January. If approved, the proposals would go to the district judges, says Alito, a partner with McCarter & English in Newark, N.J. The state subcommittee, formed last spring to explore revising Court Rule 4:10-3, which governs protective orders, is to present preliminary findings to the entire Civil Practice Committee today. Staff member Mary Rubenstein says the committee is issuing an interim report rather than a final one because members are divided and there is strong sentiment on both sides. The subcommittee’s study was prompted by suggestions last December by Superior Court Judge Jack Sabatino in Frankl v. Goodyear, MER-L-003052-99. He proposed that all requests for protective orders be supported by affidavits detailing the need for confidentiality, with “citation to legal authority” where “the governing law is in doubt.” Where moving papers do not make a clear prima facie showing of good cause, as required by the rule, or where there are “substantial countervailing reasons for denying the order,” Sabatino recommended “a limited evidentiary hearing, possibly held in camera, as may be warranted.” The state subcommittee is also studying whether the rule should be “more clear in its allocation of the burden of proof,” according to a report by the full committee last March. Sabatino noted in Frankl that in 1992, the committee rejected a suggestion that the rule be amended to allow sealing of documents only in “extraordinary circumstances.” SECRET SETTLEMENTS UNDER SCRUTINY Defense and plaintiffs’ lawyers say that recent events like the recall of Firestone tires and secret settlements in sex-abuse claims against Catholic priests have caused concern over health and safety consequences of closed documents. In South Carolina, federal district judges voted unanimously in July for a local rule banning all secret settlements. During the comment period that ended Sept. 30, there was support and opposition from across the United States. The moving force behind the South Carolina rule change is Joseph Anderson Jr., chief judge of the district, who wrote to his fellow judges this summer urging a ban as “the right thing to do.” In the Firestone tire cases, he wrote, “Some of those people may have avoided death or injury if the judges in the early … cases had not agreed to seal the record.” He also said that Enron and the priest cases undermine public confidence in institutions and create suspicion of “things that are kept secret by public bodies.” Anderson’s letters describe immense pressures on litigants and judges to resolve contentious cases with a settlement that fairly compensates the plaintiff but is conditioned on confidentiality. Judges want to clear their dockets, while plaintiffs’ lawyers are ethically bound to obtain the best possible deal for their clients, he says. Plaintiffs can often recover more by agreeing to secrecy, spurring criticism that defendants are buying silence. The “quandary” would be eliminated by taking secret settlements off the table as a bargaining chip, wrote Anderson. Like their counterparts elsewhere, lawyers in New Jersey tend to divide along adversarial lines, with the plaintiffs’ bar opposed to secrecy and the defense bar supporting it in most circumstances. Christopher Placitella, a partner with Wilentz Goldman & Spitzer in Woodbridge, N.J., says he has never agreed to seal documents in a case where public health or safety is potentially impacted. That would appear to cover a lot of his cases, which include tobacco litigation, asbestos cases, groundwater contamination claims, diet-drug matters and Frankl, where he represents Consumers for Automobile Reliability and Safety, which is seeking disclosure of documents produced by Goodyear in a rollover case. Placitella, immediate past-president of the state chapter of the Association of Trial Lawyers of America, says that the secret settlement of asbestos claims against Johns-Manville in the 1930s and 1940s led to decades of additional deaths from asbestosis. Employment plaintiffs’ lawyer Bennet Zurofsky, with Newark’s Reitman Parsonnet, says a client in a racial discrimination case first balked at a “very good settlement” that was conditioned on confidentiality, then dropped his objection, leaving Zurofsky concerned that the employer’s “serious wrong” will remain secret. On the other side is Bruce Helies, a former president of the New Jersey Defense Association, who says he insists on confidentiality in settling a case and goes to trial if plaintiffs will not consent. Most of the time, they do, he says. Helies, a partner with Wolff, Helies, Duggan, Spaeth & Lucas in Manasquan, N.J., says broad-brush rules against sealing documents will deter settlement and drive defense lawyers to more extreme tactics. Still, he acknowledges there are situations “where information has to be disclosed to the public that there is still a lingering danger out there,” such as in the Ford rollover and Dalkon shield cases. Those same concerns do not apply, however, in the case of a legal malpractice claim for a one-time error like missing a filing date, says Helies. Mechanisms are in place to deal with a pattern of repeated harm, he notes. A lawyer, for example, will not be able to get malpractice insurance and that fact will be reported to the state. Like others, he points out that banning secret settlements will just spur more private settlements whose terms will not be filed with the court. As for protective orders, companies have valid reasons for seeking to protect trade secrets and other proprietary information, he says. Adds federal court practitioner Donald Robinson, of Newark’s Robinson & Livelli, the district does not need a ban on sealing documents but a rule mandating advance notice to the public when a request to seal is filed. Standing orders like those of U.S. Magistrate Judge John Hughes in New Jersey bear out the contention that judges give serious consideration to applications to seal discovery orders or judgments. Hughes requires proposed confidentiality orders to include a statement showing good cause. That requirement reflects circuit precedent, Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994). Florida has probably gone farthest in keeping court records open with its decade-old Sunshine-in-Litigation Act, Fl. Stat. Sec. 69.081, which prohibits court orders that conceal “public hazards.” Anderson originally proposed a rule for South Carolina based on the Florida law, which would have applied to all filings whose contents would have “a probable adverse effect upon the general public health or safety, or the administration of public office, or the operation of government.” Instead, the judges voted for a blanket ban that would apply only to settlements. They will take up the matter on Nov. 1. In the meantime, Jean Hoefer Toal, chief justice of the South Carolina Supreme Court, says she will follow the lead of her federal colleagues. The U.S. District Court for the Southern District of Florida also announced last month that it was studying the secret settlement issue.

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