Magazine article Multinational Monitor

Dirty Secrets

Magazine article Multinational Monitor

Dirty Secrets

Article excerpt

With their high-profile campaign to gut the U.S. tort system facing uncertain prospects, big business has undertaken a much quieter and subtler effort to knock out one of the pillars of the civil justice system: the open discovery process.

A proposed change to Federal Rule of Civil Procedure 26(c) would allow courts to enter protective orders sealing from public scrutiny evidence acquired in discovery - the process by which litigants can demand relevant information from opposing parties in order to prepare their case for trial - solely on agreement of the parties to a lawsuit. Under the current Federal Rules, courts can only issue protective orders if "good cause" is shown.

The proposed rule is backed by big business, which claims the changes are needed to protect corporations' privacy interests. But any legitimate privacy interests are already protected by the current good cause rule.

Corporations' real goal is to prevent an injured plaintiff who discovers "smoking gun" evidence in one case from sharing the information with other potential plaintiffs or government regulators.

Although Rule 26(c) only covers documents obtained in discovery, not information revealed during court proceedings, the proposed revisions would have far-reaching effects. That's because when plaintiffs do discover "smoking gun" documents, corporations are typically quick to settle, and the documents never make their way into a courtroom.

Business has managed to sell its view to a committee of the Judicial Conference of the United States, a judges' rule-making body. If ultimately adopted by the Judicial Conference and approved by the Supreme Court, the new rule would govern civil suits filed in the federal court system, unless Congress affirmatively rejects it.

If approved, the proposed change to Rule 26(c) would give corporations enormous leverage to demand secrecy agreements from plaintiffs. Plaintiffs often have little choice but to accede to corporate defendant demands for secrecy agreements: whatever social interest the injured plaintiff might have in bringing damning evidence to the public's attention is likely to yield to the plaintiff's legitimate personal interest in gaining access to information that might enable them to receive just compensation for injuries suffered.

The fact that courts, under the new rule, would routinely enforce secrecy agreements between the parties, rather than subjecting them to scrutiny for a finding of good cause, means that the judicial check over abuse of secrecy agreements would be removed.

With the wholesale shift in approach to discovery secrecy contemplated by the proposed Rule 26(c), outside parties would be the only remaining countervailing force to the secrecy imperative. The new rule would continue to permit outside parties to intervene and ask courts to undo protective orders that thwart important public interests. …

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