Sunshine in Litigation Act Introduced in U.S. Senate Could Limit Companies’ Ability To Protect Confidential Information

In the wake of the recent automotive cases that have required federal courts to weigh the general public’s health and safety interest against corporate confidentiality when determining whether to seal court records, a bill has been proposed in the U.S. Senate that would prohibit a court from denying public access to information in cases in which the pleadings state facts relevant to the protection of public health or safety.  In recent years, similar Sunshine in Litigation bills have been proposed but have not reached the floor.  This version of the bill, introduced by U.S. Senators Richard Blumenthal and Lindsey Graham, would create a presumption that the public interest in health and safety outweighs the interest in maintaining the confidentially of information gathered in discovery.

The legislation would prevent a court from approving a settlement agreement restricting the disclosure of information obtained through discovery to the public and from approving any provision of a settlement that restricts a party from disclosing public health or safety information relevant to the litigation to any government agency that has authority to enforce laws regulating activity related to the information.  Such disclosure would be kept confidential “to the extent provided by law” but companies can have little recourse if this information is later made public.

Lastly the bill prohibits the courts from enforcing any provision of a settlement that precludes a party from disclosing that a settlement was reached and the terms thereof except as to the amount of money paid, or provisions preventing the discussion of evidence produced in the litigation that involves matters related to public health and safety.