How about a secret chapter 11 proceeding, to benefit Apple’s penchant for secrecy?  The issues are arising in the context of a chapter 11 filing by a would-be supplier to Apple of sapphire glass, GT Advanced. The secrecy sought for Apple seems contrary to law, and contrary to demands by the US Chamber of Commerce for transparency in bankruptcy court proceedings in Garlock. LAW360 has the story, and relevant papers.

Also compare and consider a recent ruling that upheld a Florida medical malpractice law. According to a story regarding the ruling, the 11th Circuit held that a claimant consents to state law by filing suit, and thereby waived any right to block  ex parte discussions of medical records between defense lawyers and the treating doctor. By parity of reasoning, a chapter 11 debtor consents to disclosure of its affairs, regardless of prior confidentiality terms.

 

In the NFL concussion litigation, the federal judge overseeing the case has now ordered release of supporting financial calculations for the preliminarily approved class action settlement. The order follows motions for access by players and media.

Contrast that disclosure order against the approach in asbestos litigation. Asbestos bankruptcies are de facto class action proceedings. Nonetheless, bankruptcy judges routinely approve stipulations to hide financial information, and parties on all sides are involved in sealing up the data. The recent Garlock trial sealing order is the poster child example of sealing run amuck. Meanwhile, the same thing happens in the underlying asbestos litigation – settlement information is hidden, and so judges and lawyers operate on a combination of myths, facts, and rumors.

Will mass tort litigation ever become fully transparent?

The Delaware Corporate and Commercial Litigation blog by Francis Pileggi includes an update on the constitutional challenges to the Delaware Chancery rule creating secret arbitrations presided over by Delaware chancery judges. The post includes myriad links –  you can follow follow them back to see why most commentators see the procedure as a violation of First Amendment rights to access information, among others. The defense is focused on economics for Delaware lawyers and making business happy, as illustrated by this post

 

Bouchard argued repeatedly that Delaware’s Chancery Court needs to have this confidential process to keep it competitive in the field of business litigation, which brings in millions to Delaware every year through state incorporation fees. Businesses must be incorporated in Delaware to access Chancery Court.

Allowing the court to remain competitive and bring in this revenue benefits the citizens of Delaware, Bouchard said. There is no harm to the public, he argued, because the disputes handled by the procedure would otherwise go to private arbitration, where the public already is barred.

It is a "cut to the chase" program, Bouchard said, that is designed to resolve business disputes in as little as 90 days. A civil suit in public court could take years just to get to trial, he said, and cost far more to reach resolution. The program also is different from a bench trial because appeal options and the power of the judge/arbitrator are more limited, he said.

 

 An amicus brief opposes secrecy and was filed by the Reporters’ Committee for Freedom of the Press and media companies, including AP and the NYT. The Sturm College of Law in Denver has collected many of the  briefs here

Here is an interesting NLJ article on the state secrets privilege from a law professor and dean with an impressive background in both public interest litigation and academics. The law professor, Alan B. Morrison, currently is the Lerner Family Associate Dean for Public Interest and Public Service Law at the George Washington University School of Law. In short, he suggests that the price for exercising the privilege should be that the government pays for the harm caused. Here are two key paragraphs:

“The problem to date has been that the arguments have all been about whether the claims of secrecy are actually justified and who should decide that. The best way around that debate is for Congress to pass a law saying to the intelligence community, “You can keep your secrets, but you (the U.S. Treasury) must pay the claimant’s damages if you won’t allow the case to be tried in the ordinary fashion.” That’s what the law says will happen if the government wants to take my land to build a military base, and that same principle should apply in these cases as well.

Here’s how such a law might work. Cases would be filed in the usual way, and if the government contended that state secrets might have to be divulged if the case were tried, it would make whatever efforts it could to dismiss the case on nonstate secrets grounds. But if that failed, the attorney general could formally invoke the state secrets privilege. At that point, the case would be transferred to the Court of Federal Claims, which hears claims against the government that it has taken someone’s property without compensation. However, once the government invoked the state secrets defense, it would lose its right to contest its liability: The only issue remaining would be the proper amount of actual, but not punitive, damages.”

Is it ethical for government lawyers to demand, or a plaintiff’s lawyer to sign, a tort claim settlement agreement that includes terms that purport to limit the use of the settlement agreement in future litigation? “No” is the answer provided in this article addressing the issue in the context of government and private lawyers involved in tort and civil rights claims against the City of Chicago. The article is:

SETTLEMENTS YOU CAN’T SIGN: ETHICAL
IMPLICATIONS OF CHICAGO’S MACHINERY OF DENIAL
By Craig B. Futterman, Jason E. Huber, and Pier Petersen

The article is interesting and valuable in multiple ways. One is its discussion of the settlement secrecy actics formerly used by the City of Chicago, but now apparently abandoned. More value lies in its footnote 32 citation to laws around the US that in one way or another require public access to most settlement agreements arising from tort claims against the government. Also valuable is its closing reminder/discussion of the many cases in which courts have enforced similar unethical settlement agreement terms despite the seeming perversity of that result.

Hat tip to Jerry Crimmins for reporting on the existence of the article and other related background facts in a July 17 , 2009 article in the Chicago Daily Law Bulletin.

Do not miss a fascinating June 24 article in the New York Times regarding the tort litigation seeking damages from the Saudi royal family for the 9/11 attacks, and make sure to click back through the prior articles and briefs linked to in the past articles. One issue of course is sovereign immunity. Another issue is secrecy – the article quotes from documents said to help prove the claim that some members of the royal family provided financial support to groups said to be linked to terrorists. So far, the immunity defense is prevailing. There also is an ongoing battle about whether the documents can be made public since they were apparently leaked to one of the plaintiff’s firms, the Motley Rice firm of asbestos and tobacco fame.