New Ruling Lifts Veil of Secrecy in Civil Cases : Justice: Contending private accords were keeping ‘damaging information’ from the public, the San Diego Superior Court is in the forefront of a nationwide movement with its action.

When James and Patricia Miller went public with the news that the Ford Motor Co. was paying them $6 million to settle a lawsuit, their disclosure was the exception rather than the rule.

Ford had wanted to keep secret the terms of the agreement ending the $23-million suit--which the Millers had brought in San Diego Superior Court over a car crash on a country road near Carlsbad.

The Millers, who live in Carlsbad, had agreed to keep quiet--but only if the company would notify its customers about what the family claims is a need to fit the rear seats of Ford autos with shoulder harnesses and lap belts, not just the belts.

Ford declined, contending that a damage suit settlement was not the way it wanted to debate seat belt policy--and so, last April, when the deal was done, the Millers told all about the $6 million.

The family’s action marked a departure from the secrecy that increasingly has enveloped court cases fought over product and environmental hazards and over medical malpractice.

In San Diego, however, it no longer is the exception to make public the details of civil settlements such as the one the Millers negotiated with Ford. It is, in fact, the rule.

In a first for a California court, the San Diego Superior Court has enacted a rule that does away with secrecy agreements in most civil cases. It came about after the court’s former presiding judge complained that secrecy agreements were being used to keep “damaging information” from other victims in all kinds of cases, but especially those involving hazardous products.

The rule, which took effect July 1, goes well beyond settlements. It includes the other documents in the court file on the case and any exhibits, too.

Under the rule, a court file can remain secret only after a three-part test proves that secrecy is “in the public interest,” the material contains trade secrets or other privileged material and disclosure “would cause serious harm.” Everything else remains open.

The court’s presiding judge, Judith McConnell, said the rule is likely to be controversial because it had become so common for lawyers, especially defense attorneys, to seek confidentiality.

Lawyers had sought to keep secret information that could be damaging. But, just as routinely, they would seek to stifle material that was just plain embarrassing. Even they concede there were abuses.

David E. Monahan, a San Diego lawyer, said it got to the point that “you would wind up with something about as confidential as a laundry ticket being marked, ‘Attorneys’ Eyes Only.’ ”

Still, defense attorneys said, there can be legitimate reasons for secrecy.

During a case, a corporation might have a genuine business reason for keeping material from a rival who is able to peek into the court file, said Wayne Boehle, a Santa Monica lawyer and president of the Assn. of Southern California Defense Counsel.

And, when it’s over, the company might not want to release the amount of a settlement for fear it will be inundated by thousands of other lawsuits, only some of which may have merit, Boehle said. Going to court, if only to file dismissal papers, takes time and money, and the public already is frustrated with clogged courts, he said.

“Without further clarification and some indication as to how this (rule) is going to be utilized, I would hope it does not filter its way up into the Los Angeles court system,” Boehle said.

But, given the San Diego court’s reputation for innovation--it was the first court in California to experiment with a fast-track system that pushes civil cases to trial speedily, a plan that since has spread throughout the state--McConnell said she suspects the rule may be copied.

And, she said, the court’s judges, who enacted the rule by themselves and without outside lobbying, are sure it’s the right rule.

“If you’re going to use public courts, you have to be willing to expose yourself to public scrutiny,” she said.

That sentiment is the precise motivation behind a movement emerging around the nation to keep court files open to the public--despite lawyers’ efforts to the contrary.

In the past few months, Texas passed a court rule and Florida enacted a law calling for open files. A similar rule is under consideration in New York. And a Virginia law that took effect in July, 1989, allows attorneys in separate but similar personal injury cases to share information.

However, in Rhode Island, an open files law that passed the legislature earlier this summer was vetoed by Gov. Edward D. DiPrete after pressure by a lobbyist with ties to General Motors and by defense lawyers from around the nation.

The new rules shift control over secrecy from partisan lawyers to impartial judges--requiring the judges to grant secrecy only when it is justified under the rules or as a matter of law.

The fight over secrecy signals that the legal system is “in the throes of completely changing the perception of a civil lawsuit,” according to George Washington University law professor Mary Cheh.

With the government unwilling or unable to look at harm being caused by unsafe products or other dangers, lawsuits are replacing consumer protection agencies, she said.

In an interview last week, Cheh said tension always has been inherent in the court system, because the courts are publicly funded yet provide a forum for suits between private parties.

“We never really thought about the implications of that until we realized that lawsuits sometimes were the only way to vindicate serious harms by large corporations or other aggregates of power,” she said.

Consumers and government regulators might remain unaware of a safety hazard until it becomes the focus of a high-profile lawsuit, she said. The suit, and the public attention it sparks, then serves as the vehicle for change, she said.

But lawsuits bring change, she said, only if the results reach consumers, who then can shun an offending product; manufacturers, who can opt to stop producing it; and the government, which can regulate the field.

Texas Supreme Court Justice Lloyd Doggett, the author of the openness rule in that state, concurs.

“There are a number of cases in which the general public health and safety is seriously undermined by secrecy,” he said, because problems are handled case by case rather than as an overall problem affecting many people.

According to the Assn. of Trial Lawyers of America, a national organization that serves plaintiffs’ lawyers, the use of secrecy practices in civil cases has jumped “steadily and significantly” since the mid-1970s. Specific figures on the number of cases kept secret are not available.

Typically, the secrecy process is initiated by defendants, judges and lawyers said.

That’s because, under the wide-ranging questions that both sides pursue under court authority in preparing for a trial, called “discovery,” a plaintiff can demand all information that a defendant has about the cause and circumstance of an injury.

Under a protective order, issued by a judge, a party to a suit is legally barred from distributing information received from the opposing side to others. In a 1987 manual produced for defense lawyers, the attorneys were urged to routinely seek protective orders in all complex products liability cases.

Most civil cases are settled before a trial. Under a confidentiality agreement, a plaintiff promises, in return for a favorable settlement, to keep quiet.

That paid-for secrecy is often too attractive to pass up for a plaintiff--especially if the plaintiff is handicapped or elderly or has a fixed income--or for a cash-strapped plaintiff’s lawyer, who probably operates on a contingency fee.

After commonly waiting two or three years since filing the suit, the choice then becomes to accept the immediate cash or “wait another year to go to trial and risk that they may not win,” said Michael C. Maher, an Orlando, Fla., attorney and the current president of the trial lawyers’ group.

“They can’t afford that risk. Literally.”

But, in the process, the public is denied vital truths on health, safety and the environment that could protect people from injuries and even death, plaintiffs’ lawyers claim.

According to the trial lawyers’ group, secrecy has kept the public and regulators from learning about such hazards as automobile fuel systems that could ignite upon impact, exploding cigarette lighters, defective heart valves and chemical leaks.

Since the Miller settlement with Ford became public knowledge, it has generated intense press attention over the safety of lap-only rear seat restraints, said Craig McClellan, the family’s San Diego lawyer. His office has collected an inch-thick collection of newspaper clippings on the case.

The suit stemmed from a 1988 head-on collision that killed one of James Miller’s 11-year-old twin sons and left the other a paraplegic.

Both boys were seated in the rear of the family’s 1986 Ford Escort and were wearing lap belts. The parents, who were seated in the front, wore shoulder belts and escaped with bruises and broken bones.

“We felt that, if we kept quiet about this that it wouldn’t help anybody else in the future,” said James Miller, 45, a pressman.

“It didn’t matter how much money they offered,” he said. “We weren’t going to keep quiet.”

Ford’s San Diego lawyers declined to comment on the case or could not be reached. The company has denied any liability in connection with the accident.

Defense lawyers, meanwhile, claim that an avalanche of additional suits is not the sole product of widespread publicity about settlements.

They said that widespread publicity about settlements can make it more difficult for any company to obtain a fair jury in a future case. And, they said, a settlement in one case may mistakenly indicate the value of claims in another case.

In addition, defense lawyers said, some plaintiffs’ lawyers are too interested in publicity for themselves and distort the nature of cases and reasons for a settlement.

“The question is whether it’s the public’s right to know or a special interest group wanting to be able to get information for litigation in subsequent cases, whether that’s an overriding interest,” said Edward D. Chapin, a San Diego defense lawyer.

Judge Michael I. Greer, the former presiding judge of the San Diego Superior Court, said that the defense concerns have validity. But, he said, the San Diego rule came about at his urging after he “became acutely aware of the widespread abuse” of secrecy practices.

In a memorandum he sent last December to the court’s approximately 70 other judges, Greer said confidentiality agreements and protective orders were “being used to conceal damaging information from potential plaintiffs in a wide variety of cases.”

“Suppose I have a case against XYZ Products Co.,” Greer said in an interview. “XYZ answers (questions in the case), but the court says those answers can be used only for this lawsuit and may not be passed onto other lawyers, just because XYZ contends they’re trade secrets.

“But we’ve got 200 other lawsuits against XYZ in the court. Are we going to go through that 200 times?”

McConnell, the current presiding judge, said the new rule still allows for some secrecy. Tax returns in domestic cases, psychological evaluations in custody cases and cases that the law keeps confidential--such as juvenile and adoption cases--will remain secret, she said.

The rule does not define when or how secrecy is “in the public interest.”

Defense attorneys said judges’ busy calendars might prove the ultimate flaw with the San Diego rule.

“If the court is confronted with issuing an order permitting a confidential agreement or running some risk of not settling the case, I guarantee you the judge is going to issue the order permitting the agreement and settling the case,” said Douglas M. Butz, president of the San Diego Defense Lawyers, a defense bar group.

Michael I. Neil, a San Diego attorney and a past president of the Assn. of Southern California Defense Counsel, the nation’s largest group of insurance defense lawyers with about 2,300 members, said he thinks the rule may be a mistake.

“I’m not so sure that’s in the best interest of the litigation process,” he said. “Courts are inundated with suits right now. I think we ought to be doing everything we can to encourage settlements. If that proves to discourage settlements, it’s not in the best interest in my opinion of the judicial system or taxpayers.”

Still, Butz said, “I don’t envision any massive uprising in response to this rule.”

Cheh, the law professor, said she could envision several ways for inventive lawyers to get around the rule.

The case could be brought in any other county in California but San Diego, she said.

Or settlements could be reached before the case ever makes it to the courthouse door, she said.

Or, she said, a case could be taken out of the mainstream court system and into the increasingly popular rent-a-judge market, where the two sides agree to have it heard by a private judge.

Or, since the whole point of having a settlement agreement signed by a judge is to make it enforceable as a court judgment, defense lawyers could simply insist that the judge never sign off on the deal--a likely prospect if a check is presented with the proposition.

McConnell even conceded that there are ways around the rule.

“It’s one of those things that, if a party clearly wants to keep a settlement confidential, they can do it,” she said. “It doesn’t take a great deal of intelligence to figure out.”

But, she said, “We are going to take them one case at a time.” She added, “And the courts are supposed to be open to the public unless there’s some reason to be closed.”