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Zack Hutchins
Director of Communications

June 5, 2001

Council opposes bill to limit courts' right to keep information confidential

The Business Council is strongly opposing a bill that would limit the rights of litigants and courts to seal court records to keep information arising from civil litigation confidential.

The Council is encouraging its members to ask legislative leaders and their own elected officials to reject the bill (S.1066/DeFrancisco).

"This would needlessly deprive litigants and courts of a right to privacy and, in the process, give trial lawyers a bonanza of new opportunities," said Daniel B. Walsh, president/CEO of The Business Council. "This is a new license for fishing expeditions for the trial bar."

This bill would prevent courts from sealing court records if doing so would conceal a "public hazard," any information on such a hazard, or information that the public could use to protect itself from such a hazard.

"But the bill defines 'public hazard' far too broadly, so it could be interpreted to cover virtually any situation," Walsh said. "This would, in effect, keep courts from ordering confidentiality agreements and would prevent litigants from agreeing on confidentiality themselves."

The bill would also imperil companies' ability to protect valuable confidential information such as trade secrets, since that information is often disclosed in discovery.

By minimizing litigants' chances of privacy, the bill could also effectively prolong litigation and encouraging more of it, he added.

Walsh noted that, in some cases, defendants who think a claim has no merit will nonetheless offer a small settlement because settling is cheaper than defending. In these cases, protecting the privacy of information that is a part of litigation is often an incentive to settle.

This law would significantly lessen that incentive, he added.

The current practice of letting courts and litigants decide on such questions of privacy is a better way to handle such situations, The Council said in a legislative memorandum opposing the bill.