California bill would discourage secrecy in court orders and settlements

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A bill that cleared California’s Senate Judiciary Committee last month would discourage secrecy about safety hazards discovered in litigation.

The Public Right to Know Act of 2022 would create a presumption that court orders may not conceal information about defective products or environmental hazards that pose a danger to the public, according to an April 5 press release and Law360.

To overcome the presumption, a court must find that the public interest in disclosure is clearly outweighed by a specific and substantial need for secrecy. Trade secrets, settlement amounts and other specific categories of information would still be protected.

Any settlement agreements that bar disclosure of information about defective products and environmental hazards would be void as against public policy and could not be enforced.

Lawyers who fail to abide by the law could face legal discipline.

The full California State Senate is expected to vote on the bill in upcoming weeks, according to Law360.

Seven other states have, to varying degrees, enacted similar presumptions favoring disclosure, according to Law360. The states are South Carolina, Arkansas, Nevada, Oregon, Texas, Montana and Virginia.

Industry groups led by the California Chamber of Commerce “vehemently oppose the bill,” according to Law360. Business groups argue that the bill would discourage settlements and increase time and money spent on litigation.

Supporters point to protective orders and settlements that allowed pharmaceutical company Purdue Pharma to continue marketing OxyContin for more than a decade, despite evidence that the company knew that it was being misused.

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