Secret Justice: Alternative Dispute Resolution

As the court system moves

more and more cases to

settlements through various

“alternative dispute

resolution” programs, the

public and the press run the

risk of being shut out of the

process. And in controversial

cases, where a manufacturer’s

product could be causing

serious harm to consumers,

the incentives are even greater

for litigants to follow the ADR

route. But courts have given

Fall 2001 the press some access to ADR,

The Reporters Committee and there are solid arguments For Freedom of the Press in favor of such access. Secret Justice: A continuing series What is ADR? The American judicial system has, historically, been open to the public, Alternative Dispute Resolution (ADR) of evidence do not apply and the arbitrator(s) and the U.S. Supreme Court has con- is the general name given to a variety of need not adhere exactly to the law. tinually affirmed the presumption of procedures available to parties in civil cases to openness. However, as technology resolve their disputes before a formal trial. Why do parties use ADR? expands and as the perceived threat of The main types of ADR are: The primary motivations for ADR are to violence grows, individual courts save money and control risk. Preparing for attempt to keep control over proceed- Mediation: trial is extremely expensive, and parties can ings by limiting the flow of informa- In mediation, a neutral third party helps save money if they can resolve the case tion. Courts are reluctant to allow the parties come to an agreement about without having to incur the expense of trial media access to certain cases or to how to resolve the case. The mediator has preparation. Also, when parties settle cases, certain proceedings, like jury selec- no authority to impose a solution on the they have some control over the outcome of tion. Courts routinely impose gag or- parties. Instead, he goes back and forth the case in that they can negotiate for terms ders to limit public discussion about between sides to help them come to an of the settlement. If a lawsuit goes to trial, pending cases, presuming that there is understanding about how the case could be the outcome of the case is left entirely in the no better way to ensure a fair trial. resolved to their mutual satisfaction. A hands of the judge or jury. Parties cannot Many judges fear that having cameras mediator can be helpful in helping parties control the risk of losing at trial. ADR gives in courtrooms will somehow interfere evaluate their case realistically, as the medi- parties a chance to control that risk. with the decorum and solemnity of ator can point out which facts or arguments In some cases, privacy or confidentiality judicial proceedings. Such steps, pur- he believes or rejects. When courts order may be a factor. Most litigants think of portedly taken to ensure fairness, may parties to try ADR, they most often order ADR as private, and thus, if they seek secre- actually harm the integrity of a trial mediation. cy, they may be motivated to try ADR. because court secrecy and limits on However, in many cases, confidentiality is information are contrary to the fun- Non-mediated settlement: not a major concern. Nevertheless, lawyers damental constitutional guarantee of This process is where the parties negoti- put confidentiality clauses into settlement a public trial. ate with each other without the help of a agreements as a matter of habit, even if The public should be the benefi- third party to come to a mutually satisfacto- confidentiality was not specifically negoti- ciary of the judicial system. Criminal ry resolution of the case. This process is not ated. Thus, settlements are usually secret proceedings are instituted in the name ordered or overseen by a court and, there- merely by virtue of routine. of “the people” for the benefit of the fore, is a private, rather than public, pro- It should also be noted that, in the last public. Civil proceedings are available cess. However, the settlement agreement decade or so, courts have developed rules for members of the public to obtain might become a public record if (a) one of that require parties to try ADR, usually justice, either individually or on be- the parties is a public entity or (b) the mediation, before trial. Mandatory ADR half of a “class” of persons similarly agreement is submitted to the court for has become popular because it helps unclog situated. The public, therefore, should approval or enforcement. Private settle- the court system and because most cases can be informed — well informed — about ment agreements are rarely given to a court settle once the parties have undertaken dis- trials of public interest. The media, as for approval unless a state statute requires covery and understand what evidence ex- the public’s representative, needs to it. For example, many states require that ists. Most experienced litigation lawyers be aware of threats to openness in any settlement involving a minor be sub- can fairly assess whether they can win a case court proceedings, and must be pre- mitted to a court for approval to ensure that and how much the case is worth, although pared to fight to insure continued ac- the minor’s interests are protected. they know that anything could happen at cess to trials. trial, and they would prefer to settle for a In this series, the Reporters Com- Summary jury trial or mini trial: fair amount than risk a terrible verdict. But mittee takes a look at key aspects of These procedures permit parties to court-ordered conferences raise the issue of court secrecy and how they affect the present their case to a judge or jury, which whether those conferences should be newsgathering process. We will ex- issues a non-binding opinion or verdict. deemed public hearings, especially when amine trends toward court secrecy, The opinion or verdict is then used by the they are run by a court magistrate. and what can be done to challenge it. parties as a basis for settlement discussions. In 1998, Congress passed the Alterna- The first article in this “Secret Jus- It helps the parties see what might happen tive Dispute Resolution Act which orders tice” series, published in Fall 2000, at a trial or what other people might think federal courts to use ADR as a means of concerned the growing trend of anon- about the facts and evidence. unburdening the federal court caseload. ymous juries. The second installment, Each district court is required to promul- published in Spring 2001, covered gag Arbitration: gate rules that “require that litigants in all orders on participants in trials. In arbitration, the parties authorize a civil cases consider the use of an alternative neutral third party (or panel) to decide the dispute resolution process at an appropriate This report was researched and writ- outcome of their dispute. The process is stage in the litigation.” In most jurisdic- ten by Ashley Gauthier, who is the 2001- similar to a trial in the sense that each side tions, parties are required to attend a settle- 2002 McCormick-Tribune Legal Fellow presents facts and arguments to the decision ment conference at least once prior to trial. at the Reporters Committee. maker(s), but it is different because the rules The statute also mandates that “each dis-

PAGE 2 THE REPORTERS COMMITTEE FOR FREEDOM OF THE PRESS FALL 2001 trict court shall . . . provide for the confi- 2. What type of ADR proceeding it is; being used as evidence later. This policy dentiality of the alternative dispute resolu- 3. Whether documents were ever filed was developed to encourage honesty dur- tion processes and to prohibit disclosure of with, presented to or enforced by a court, and; ing ADR. Following this belief, courts have confidential dispute resolution communi- 4. Whether the litigants are private or ruled that there is no right of access to cations.” The statute does not describe how public entities. summary jury trials or settlement proceed- the courts should accommodate First If you seek access to the ADR proceed- ings. See U.S. v. Glens Falls Newspapers Inc. Amendment concerns. ing itself, it probably will not be granted. (2nd Cir.); In re Asbestos Products Liability Most courts believe that ADR works only if Litigation (E.D. Pa., listed below under 3d Can ADR be kept secret? the parties feel free to say whatever they Cir.); Cincinnati Gas & Elec. Co. v. General Success in challenging the secrecy of want without fear of it being reported or Elec. Co. (6th Cir.); In re Cincinnati Enquirer ADR will depend on a few factors: used against them later. In fact, there is a (6th Cir.); CMS Enterprise Group v. Ben & 1. Whether you are seeking access to the rule of evidence in every jurisdiction that Jerry’s Homemade, Inc. (Pennsylvania). ADR proceeding itself or only to docu- prevents parties from using confidential If you seek access only to settlement ments; statements made in ADR proceedings from documents, then you may have a better

Secret settlements in hazardous cases

Secret settlements have been scrutinized over the past year, The Georgia rule applies only to documents filed with the mostly due to the infamous Ford-Firestone lawsuits involving court and does not allow third-party intervention. (Ga. Unif. people injured or killed in rollover accidents blamed on defec- Super. Ct. R. 21) tive tires. The Florida rule applies only to court orders and judgments, But the secrecy issues in those cases are different from the but it does allow third-party intervention. (Fla. Stat. Ann. question of access to settlements in general. In cases discussed 69.081) elsewhere in this report, the issue focuses on whether the press Last year, California’s Judicial Council amended its Rules of or public are entitled to access alternative dispute resolution Court to spell out the conditions that must be met before a proceedings or documents, such as settlement agreements. In document may be sealed. The rule has made it more difficult many of the “public hazard” cases, however, the issue is whether for records to be sealed, but it does not specifically grant access other documents, such as pleadings or discovery materials, can to unfiled documents in public hazard cases. (Cal. Rule of Court be sealed as a condition of settlement. The analysis of legal 243.1) This year, the legislature considered a bill that would issues relating to those other documents is often different from have banned secret settlements in cases involving public haz- the analysis of whether there is access to the ADR proceedings ards, but the bill failed in the last legislative session. (A.B. 36, themselves. S.B. 11) A few states have rules that allow access to settlement Arizona also considered a bill that would have limited the agreements and other materials in cases that present public abilities of parties to enter into secret settlements in public safety issues. Texas Rule of Civil Procedure 76a was one of the hazard cases. The bill failed after substantial lobbying by first such rules, and it remains one of the broadest. It allows business interests. (Arizona S.B. 1530) access to unfiled settlements and unfiled discovery as well as Similarly, Nevada rejected a bill that would have made documents filed with the court. It also allows third parties, like public any settlement that concealed a public danger. (Nevada the media, to intervene. S.B. 411) It is still possible to seal a record in Texas, but a party must Despite the lack of media-friendly legislation, sealing orders meet two hefty requirements. First, a court must balance the can usually be challenged when parties try to seal court records presumption of openness and the public’s interest in the records as a condition of settlement. An oft-cited case in this area is against a specific and substantial interest a party may have for Brown v. Advantage Engineering Inc., 960 F.2d sealing the records. The records cannot be sealed unless some 1013 (11th Cir. 1992). significant interest outweighs the interest in keeping the records In Brown, the U.S. Court of Appeals in Atlanta (11th Cir.) open. Second, the court must find that there is no less restrictive held that a district court had abused its discretion in sealing a means to protect the privacy interest asserted by the party. court record as a condition of a settlement without finding that Other states that have passed antisecrecy rules are Virginia, there were extraordinary circumstances that required sealing. North Carolina, New York, Oregon, Georgia and Florida, but The appellate court said, “It is immaterial whether the their statutes are not as broad as the Texas rule. sealing of the record is an integral part of a negotiated settle- The Virginia statute allows plaintiffs’ attorneys to share ment between the parties, even if the settlement comes with the information, but it does not allow information to be released to court’s active encouragement. Once a matter is brought before the public. (Va. Code Ann. 8.01-420.01(A)) a court for resolution, it is no longer solely the parties’ case, but The North Carolina and Oregon statutes apply only to also the public’s case. Absent a showing of extraordinary cir- settlements involving the government, not private companies. cumstances . . . the court file must remain accessible to the (N.C. Gen Stat. 132-1.3(b)(2); Or. Rev. Stat. 30.402) public.” The New York statute allows records to be sealed upon a Thus, the media should make efforts to challenge sealing showing of “good cause,” but the standard is fairly loose and not orders, as courts may find the sealing orders erroneous on their sufficient to protect the public interest. (N.Y. Ct. R. 216.1(a)) own.

FALL 2001 SECRET JUSTICE: ALTERNATIVE DISPUTE RESOLUTION PAGE 3 chance of obtaining access. The primary And the U.S. Court of Appeals in New Nat. Bank Securities Litigation. factors will be whether those documents York (2d Cir.) has consistently denied ac- Cases discussing access to ADR are com- were ever filed with, presented to or en- cess to settlement agreements merely be- piled below. The cases are sorted by juris- forced by a court and whether the litigants cause it thought the interest in diction for practitioners to see what cases are private or public entities. confidentiality outweighed the public’s right govern in their area. Also, cases allowing ac- If a settlement agreement was made in of access. See U.S. v. Glens Falls Newspapers cess are marked with a “+” and cases deny- private between two private parties and was Inc.; City of Hartford v. Chase; In re Franklin ing access are marked with a “-”. never submitted to a court for any reason, then the chances of obtaining access are minimal. Under those circumstances, the settlement agreement is not a “court record” Cases concerning public access because it was never in the court’s posses- sion. The court does not have an agreement to alternative dispute resolution to provide to the public, and it would have no reason to force a private party to turn over the document in its private possession. Federal cases: pel production of settlement agreement is See Enprotech Corp. v. Renda (3d Cir.). not appealable when settlement had not If a settlement agreement were submit- (Federal district court cases are been filed with the court, compliance with ted to the court for either approval or en- included within their circuit.) terms and conditions of the settlement forcement, then the agreement would likely agreement had not been ordered by the court, and no order for enforcement of Second Circuit be considered to be a “court record” subject agreement had been sought). to disclosure. See Bank of America Nat’l - U.S. v. Glens Falls Newspapers Inc., 160 F.3d Trust & Sav. Ass’n v. Hotel Rittenhouse Assocs. - In re Asbestos Products Liability Litigation, 853 (2nd Cir. 1998) (settlement negotia- 1991 WL 170827, 19 Media L. Rep. 1220 (3d Cir.); SEC v. Van Waeyenberghe (5th tions and agreements do not have to be Cir.); Union Oil Co. of Calif. v. Leavell (7th (E.D. Pa. 1991) (denying media access to released to the public because the need for pretrial conference where settlement op- Cir.); EEOC v. The Erection Co. (9th Cir.); In a fair and efficient resolution of the case tions may be discussed; stating that settle- re Marriage of Johnson (Illinois). outweighs the negligible presumption of ment has historically been private and However, settlement agreements are access to settlement materials). closed to the press and public). generally not required to be submitted to a - City of Hartford v. Chase, 942 F.2d 130 (2nd court for approval. Usually, court approval Cir. 1991) (confidentiality order that was Fourth Circuit is required only in limited circumstances, predicate for settlement cannot be subse- such as when one of the parties is a minor. quently modified by trial court; confiden- + Boone v. Suffolk, 79 F. Supp. 2d 603 (E.D. See Duggan v. Koenig (Alaska); C.L. v. Edson tiality order operates to bar disclosure of Va. 1999) (there is no First Amendment or (Wisconsin); Schnell v. Farmers Insurance city records and provides defense to state statutory right of access to settlement Exchange (Wisconsin). public records act). agreements in civil cases, but common law right of access required settlement agree- Otherwise, the parties merely file a joint - Palmieri v. State of N.Y., 779 F.2d 861 (2d ment to be unsealed). motion to dismiss with the court, explain- Cir. 1985) (State sought access to settle- ing that the dispute has been resolved be- ment agreement and information regard- + Ex parte Knight Ridder, Inc., 982 F.Supp. tween the parties and court action is no ing that agreement; held that it was 1080 (D.S.C. 1997) (settlement agreement longer necessary. erroneous to modify sealing order absent was judicial record to which right of public If a public entity is a party to the agree- express finding of improvidence of magis- access existed under common law and First trate’s initial grant of protective orders or Amendment). ment, then a court could rule that the doc- extraordinary circumstances or compel- ument must be disclosed pursuant to the ling need by state for information). First Amendment or an open records law, in Fifth Circuit - U.S. v. Town of Moreau, N.Y., 979 F.Supp. spite of confidentiality provisions. See Soci- + SEC v. Van Waeyenberghe, 990 F.2d 845 ety of Professional Journalists v. Briggs (D. 129 (N.D.N.Y. 1997) (newspaper and re- porter were not entitled to access to settle- (5th Cir. 1993) (presumptive right of ac- Utah — listed below under 10th Cir.); An- ment negotiation information). cess to settlements; lower court failed to chorage Sch. Dist. v. Anchorage Daily News balance right of access with interest in (Alaska); Copley Press, Inc. v. Superior Court - In re Franklin Nat. Bank Securities Litiga- sealing). (California); Register Div. of Freedom News- tion, 92 F.R.D. 468 (E.D.N.Y. 1981) aff’d papers, Inc. v. County of Orange (California); sub nom. FDIC v. Ernst & Ernst, 677 F.2d 230 (2d Cir.1982) (holding that settlement Sixth Circuit Lesher Communications, Inc. v. Contra Costa will remain sealed despite strong public County (California); The Tribune Co. v. Hard- - Cincinnati Gas & Elec. Co. v. General Elec. interest in the case because settlement Co., 854 F.2d 900 (6th Cir. 1988) (no right ee (Florida); Helen, Georgia v. White County would not have been reached without se- of access to summary jury trial because it is News (Georgia); State ex rel. Findlay Pub. Co. crecy provision). analogous to a settlement conference). v. Hancock Cty. Bd. of Comm’rs. (Ohio); - In re Cincinnati Enquirer, 94 F.3d 198 (6th State ex rel. Sun Newspapers v. Westlake Third Circuit Board of Education (Ohio); Morning Call, Cir. 1996) (newspaper failed to demon- strate First Amendment right of access to Inc v. Housing Authority of City of Allentown + Bank of America Nat’l Trust & Sav. Ass’n v. Hotel Rittenhouse Assocs., 800 F.2d 339 (3d summary jury trial in class action arising (Pennsylvania). from prison riots). However, at least one court has found Cir. 1986) (reversing order denying access that settlements are protected by excep- to settlement agreement and related mo- tions). tions that keep secret records pertaining to Seventh Circuit litigation. See Tuft v. City of St. Louis (Mis- - Enprotech Corp. v. Renda, 983 F.2d 17 (3d +/-Union Oil Co. of Calif. v. Leavell, 220 F.3d souri). Cir. 1993) (order denying motion to com- 562 (7th Cir. 2000) (finding that settle-

PAGE 4 THE REPORTERS COMMITTEE FOR FREEDOM OF THE PRESS FALL 2001 ment agreement and other court records agreement; however, the sealing of the quired disclosure of settlement files in case should not be sealed because court records agreement should be made only upon a against county). should be open to the public, but also showing of good cause; any showing that noting that parties who want secrecy should the records would be available under a Colorado “opt for arbitration”). relevant open records law mandates a strong presumption against an order of - B.H. v. McDonald, 49 F.3d 294 (7th Cir. - Pierce v. St. Vrain Valley School Dist., 981 confidentiality; case remanded). 1995) (there was no public right of access P.2d 600 (Colo. 1999) (reversing appellate to in-chambers conferences concerning + Mullins v. Griffin, 886 F. Supp. 21 (N.D. court decision that found that settlement implementation of consent decree). Ga. 1995) (court deletes restriction on provision requiring confidentiality violat- disclosure of terms of settlement from ed public policy; holding that First Amend- + Arkwright Mut. Ins. v. Garrett & West, Inc., consent order). ment does not bar public entities from 782 F.Supp. 376 (N.D.Ill. 1991) (settle- entering into confidential settlements ment would not be sealed absent compel- where efficient resolution of matter out- ling argument for secrecy). D.C. Circuit weighs public access). + E.E.O.C. v. National Children’s Center, Inc., Ninth Circuit 98 F.3d 1406 (D.C. Cir. 1996) (consent Connecticut decree in sexual harassment suit should + EEOC v. The Erection Co., 900 F.2d 168, 17 not have been sealed, in light of strong - Waterbury Teachers Ass’n v. Freedom of In- Media L. Rep. 1667 (9th Cir. 1990) (re- public interest in disclosure). formation Com’n, 694 A.2d 1241 (Conn. versing sealing of consent decree for fail- 1997) (portions of board of education griev- ure of court to articulate any findings for ance hearings involving negotiations and closure order). State cases: settlements could be kept secret despite + U.S. ex rel. McCoy v. California Medical open meetings laws). Review, Inc., 133 F.R.D. 143 (N.D.Cal. Alaska 1990) (good cause did not exist to hold Florida settlement hearing in secret or to seal + Anchorage Sch. Dist. v. Anchorage Daily News, briefs related to the hearing). 779 P.2d 1191 (Alaska 1989) (settlement + The Tribune Co. v. Hardee, 19 Media L. documents involving school district must Rep. 1318 (Fla. Cir. Ct. 1991) (public be disclosed despite confidentiality clause hospital must disclose settlement agree- Tenth Circuit because the policy of encouraging settle- ment under state public records act even +/-Daines v. Harrison, 838 F.Supp. 1406 ments by ensuring confidentiality was out- though settlement agreement of federal (D.Colo. 1993) (holding that magistrate weighed by the policy favoring disclosure lawsuit contained confidentiality provi- abused his discretion in ordering that terms of public records). sion). of settlement agreement between sheriff’s -/+Duggan v. Koenig, 14 Media L. Rep. 2242 + Miami Herald Publishing Co. v. Collazo, 329 department and dismissed deputy be kept (Alaska Superior Ct. 1987) (newspaper had So.2d 333 (Fla. App. 1976) (order sealing confidential, since secrecy surrounding right of access to some information in settlement agreement reversed). disbursement of public funds was contrary sealed settlement resolving lawsuit filed by to public policy and parties had not dem- minors who were alleged victims of sexual Georgia onstrated an interest favoring confidenti- assault; paper could obtain total value of ality that would outweigh interests favoring settlement amount and ranges of settle- - Savannah College of Art and Design v. School disclosure; however, the agreement never ment payments, but actual documents and of Visual Arts Inc., 515 S.E.2d 370 (Ga. was part of the court’s records and thus it information about identities, injuries and App. 1999) (motion to unseal confidential is beyond court’s authority to order disclo- specific facts about assaults would remain settlement agreement denied where par- sure of the settlement; stated that petition- sealed). ty’s privacy interest in confidentiality out- ers must follow procedures in Colorado weighed public’s right of access to court Open Records Act to obtain settlement records). agreement). Arkansas + Helen, Georgia v. White County News, 25 + Arkansas Best Corp. v. General Elec. Capital - Resolution Trust Corp. v. Hess, 859 F.Supp. Media L. Rep. 1123 (Ga. Super. Ct. 1996) Corp., 878 S.W.2d 708 (Ark. 1994) (find- 1411 (D.Utah 1994) (court ruled that con- (settlement documents relating to police ing that public had right of access to settle- gressional committees were not entitled to chief’s civil rights suit against city are pub- ment agreement). discover financial information confiden- lic records under state open records act; tially obtained by RTC during settlement confidentiality provision is void as against negotiations). California public policy). + Society of Professional Journalists v. Briggs, + Copley Press, Inc. v. Superior Court, 74 Cal. 675 F. Supp. 1308 (D. Utah 1987) (settle- Rptr. 2d 69 (Cal. App. 1998) (news media Illinois ment agreement resolving lawsuit that in- has right of access to the amount of a + In re Marriage of Johnson, 598 N.E.2d 406 volved allegations of county officials’ settlement reached between a school dis- (Ill. App. 1992) (right of access under ei- misconduct is public document to which trict and a student who was sexually as- ther First Amendment or common law First Amendment right of access applies). saulted on school property). applies to settlement records such as tran- + Register Div. of Freedom Newspapers, Inc. v. scripts filed with trial court in personal Eleventh Circuit County of Orange, 205 Cal.Rptr. 92 injury action and divorce proceeding, but + Pansy v. Stroudsburg, 23 F.3d 772 (11th (Cal.App. 1984) (requiring county to dis- such right does not extend to settlement Cir. 1994) (settlement agreement that was close documents from settlement of claim document that was not submitted to the never filed with, interpreted or enforced brought by county jail inmate). court). by a federal district court was held not to + Lesher Communications, Inc. v. Contra Costa + Centralia Press Ltd. v. Mt. Vernon Illinois, be a “judicial record” under the right of County, 21 Media L. Rep. 1879 (Cal. Supe- 25 Media L. Rep. 1120 (Ill. Cir. Ct. 1996) access doctrine, even though the court rior Ct. 1993) (Public Records Act re- (settlement agreement in civil suit involv- issued an order sealing the terms of the

FALL 2001 SECRET JUSTICE: ALTERNATIVE DISPUTE RESOLUTION PAGE 5 ing city is public record not exempt from crimination must be made public under did not arise out of closed meetings but were disclosure under state public records law). state public records law, but redactions are simply negotiated by counsel). permitted to protect third-party sources). + Carbondale Convention Center, Inc. v. City of + Courier-Journal & Louisville Times Co. v. Carbondale, 614 N.E.2d 539 (Ill. App. 1993) O’Bannon, 15 Media L. Rep. 1935 (Ky. (parties failed to show why settlement Kentucky App. 1988) (access to civil arbitration award agreement should be exempt from Free- granted). dom of Information law). + Lexington-Fayette Urban County Govern- ment v. Lexington Herald-Leader Co., 941 S.W.2d 469 (Ky. 1997) (settlement agree- Maine Iowa ment in case against police department + Doe v. Department of Mental Health, Mental must be disclosed because privacy interest + Des Moines School District v. Des Moines Retardation, and Substance Abuse Services, does not overcome public’s right of access Register, 487 N.W.2d 666 (Iowa 1992) 699 A.2d 422 (Me. 1997) (arbitrator’s de- and Open Meetings Act litigation exception (settlement of dispute between school cisions regarding disciplinary action taken did not apply to settlement agreements that board and former principal alleging dis- against state employees did not fall within

An interview with Richard C. Reuben

Richard C. Reuben is an associate profes- appropriate for reporters to look at those Businesses will often agree in a sor of law and adjunct associate professor of records. Similarly, a settlement agreement contract that, if a dispute arises, they journalism at the University of Missouri- adopted as a court record is fair game. will go to private arbitration rather Columbia and the editor of Dispute Resolu- than file a complaint in court. If arbi- tion Magazine, published by the American Why is a court-ordered settlement tration is chosen in this manner, is it Bar Association section on dispute resolution. conference not considered to be a court public? He has worked as a journalist at the Atlanta proceeding? This is where the state Constitution and the Daily Journal Corp. in Because there’s a lot of action doctrine kicks in. California. He is also the former associate information, ideas and inter- One of the standards the director of Stanford Center on Conflict and ests that are discussed that U.S. Supreme Court has Negotiation and a former fellow at Harvard may or may not find their used over the years to de- Negotiation Research Project. He received way into the final settlement termine whether private his J.S.D. from Stanford Law School and agreement, and it’s the agree- conduct can be viewed as earned an undergraduate degree in journal- ment itself that the parties are public is the “entanglement ism from Georgia State University. For his asking the courts to enforce. rationale.” Under this ra- doctoral dissertation, he wrote about how tionale, where the public Alternative Dispute Resolution (ADR) could You wrote about ways and private conduct are suf- be considered a “state action” for constitu- in which ADR could be in- ficiently entangled to the tional purposes. terpreted as being state ac- point that it would be fair tion. What is state action, to attribute that private Why do courts generally deny ac- and why is the concept im- conduct to the govern- cess to ADR proceedings? portant? ment, the courts will do so. Access to ADR proceedings is often State action is the basic With regard to arbitra- denied because confidentiality is typi- requirement for the application of the Bill tion, there are laws that allow for en- cally an important reason why people of Rights to any given situation. The con- forceability of arbitration agreements use ADR, particularly mediation. One of stitution is fundamentally a limitation on and awards. Under the Federal Arbitra- the advantages of the mediation process the power of government to inject itself tion Act and similar state laws, courts is to get away from media scrutiny and into private life and affairs. The state action may decide whether there is an agree- talk about the parties’ underlying inter- doctrine is the test used to determine wheth- ment to arbitrate and if there is one the ests at stake in the lawsuit. ADR provides er the actor is a government actor, and that court will enforce that agreement. When a forum in which parties can discuss their determines whether a constitutional guar- the arbitrator decides the case, it might differences in a frank and candid manner antee, such as free speech, applies. When go back to the court for purposes of without worrying about someone else there is state action those protections do enforcement, and the court has continu- hearing it. But for a journalist, what apply, as a general matter, and when the ing jurisdiction over the case while it is sounds like “confidential” on one side government is not participating in the al- privately arbitrated. When you look at sounds like “secret” on the other. leged offensive conduct, then the constitu- the case law on entanglement, this is tion does not apply. State and federal statutes actually a higher degree of entangle- Why do some courts allow access may apply, but the constitution doesn’t ment than has been found in most of the to settlement agreements but not to apply. Thus, in the context of ADR, consti- cases in which the courts actually found the conferences? tutional protections may be applied if the entanglement. Thus, the structure of The reason is because the final agree- ADR process constitutes a state action, but the law that generally permits the en- ments are often public records. For ex- constitutional protections would not apply forceability of those private agreements ample, an arbitration agreement affirmed if it were not state action. to arbitrate creates the type of entangle- by a court is a public record, and it is ment that gives rise to the application of

PAGE 6 THE REPORTERS COMMITTEE FOR FREEDOM OF THE PRESS FALL 2001 confidentiality exception to Freedom of information, which was protected from (sealing the record of a confidential settle- Access Act and could be disclosed). disclosure). ment violated the common law principle of openness regarding public access to - Doe v. Roe, 495 A.2d 1235 (Me. 1985) + Bangor Pub. Co. v. Univ. of Maine System, court proceedings and records). (denying newspaper the right to intervene 1995 WL 870104, 24 Media L. Rep. 1792 to challenge secret settlement, finding that (Me. Superior Ct. 1995) (university required news media has no sufficient interest in to disclose documents relating to the finan- Massachusetts settlements). cial terms of employee settlements, even though files were held by outside counsel). - H.S. Gere & Sons, Inc. v. Frey, 509 N.E.2d +/-Guy Gannett Pub. Co. v. Univ. of Maine, 555 271 (Mass. 1987) (settlement documents A.2d 470 (Me. 1989) (settlement agree- could remain “impounded” because infor- ment between university and former bas- Maryland mation sought was not generally public ketball coach was subject to disclosure information; parties and witnesses had le- + Baltimore Sun Co. v. Mayor and City Council pursuant to Freedom of Access Act, except gitimate expectation that information of Baltimore, 755 A.2d 1130 (Md. 2000) for sentence containing certain medical would remain private).

the state action doctrine. Because of the the parties are compelled into mediation or tlement of disputes. During early settle- partnership between public and private another form of ADR. On the other hand, ment discussions, either with or without actors, those private arbiters should be what makes those processes work is the a mediator, the parties need some space considered public actors for constitu- cloak of confidentiality that surrounds them. to talk frankly about their issues and tional purposes. So it’s a real question of policy. I think the concerns without fear of seeing it in the courts and legislatures are willing to sacri- paper the next day or having it come Is there the same type of entangle- fice some access in favor of another impor- back to haunt them in a subsequent trial. ment where parties go to arbitration tant societal goal, which is the settlement of But there are harder questions. If one of and don’t need the court to order or disputes. But where one of the parties is a the parties is a public agency, an open enforce the agreement? governmental entity, the arguments are discussion may need to take place for the It would still be covered by the Fed- greatest that the media should be permitted public’s benefit. And even harder ques- eral Arbitration Act, even if the court access. tions arise when there is a great public doesn’t enforce it. interest in the outcome of a private dis- Why is confidentiality so important pute, such as the Firestone cases. There’s Why do parties think that private to parties? a great public interest in what happened, resolution can be better than public Here it is helpful to distinguish among but there’s also a great public interest in resolution? ADR processes. I’ll speak mostly to media- settlement that may outweigh the inter- When we talk about public resolu- tion: mediation is a process in which two est in access. tion, we are talking about trial and courts parties, aided by a mediator, discuss the are constrained in the way they can re- issues that are presented by the conflict as What should a journalist know to solve disputes. They are constrained by well as the underlying concerns, problems better understand the process? rules of procedure, rules of evidence and and issues that give rise to the conflict. There are plenty of stories that can be rules of law. One of the benefits of ADR Often, people are reluctant to do this to written about the conflict that don’t nec- is that it lets the parties work out the begin with. Indeed, it is part of a mediator’s essarily require the media to be in on the dispute in the way that best satisfies their job to talk about the very things that people details of the settlement discussion. needs, and it may be in a way that the want to avoid. Yet for the process to work, There really is room for both interests court wouldn’t have jurisdiction or au- these issues must be discussed. The media- [in access and in confidentiality] to be thority to do. tor must create an environment in which satisfied. But a journalist should under- that kind of discussion can take place, and in stand what the process are, what media- Should public access to ADR pro- order for the process to work, particularly tion is and how it is different from ceedings depend on whether the liti- when you talk about private disputes like arbitration. gants are public or private entities? family matters or business matters, the par- Second, journalists should understand In some respects, it does matter. In ties need some assurance that their state- the reasons why confidentiality is im- most states, where one of the parties is a ments won’t come back to hurt them, such portant in private consensual processes government entity subject to open as being used in a court of law, be used in a like mediation so they can continue to records and meetings laws, press access later proceeding or be disclosed to a cover the case and work effectively with may be granted. On the other hand, business competitor. Without such assur- parties and mediators. When I was a access to disputes involving private par- ances, parties just would not be willing to journalist, I had access to settlement ties is often determined by the parties participate. negotiations, but I had to make assur- themselves. ances that certain things wouldn’t be Do you have an opinion as to whether reported. The information allowed me Should access depend on the type it is better policy to allow access to ADR to cover cases fairly and get background of ADR used? For example, should or not? information, even if I didn’t print every- there be different rules for non-me- I think that, as a matter of policy, the thing. diated settlement as opposed to court- courts have struck the correct balance be- If you develop trusting relationships ordered settlement? tween these two important competing in- with people in the mediation process, It seems to me that the arguments are terests — access to dispute resolution and such as mediators or attorneys, you can greater that one should have access when the societal interest in promoting early set- still get good stories.

FALL 2001 SECRET JUSTICE: ALTERNATIVE DISPUTE RESOLUTION PAGE 7 Michigan agreement did not relieve it of duty to mary jury trial, but law provided that doc- disclose agreement; exception from open uments introduced at summary jury trial + Heritage Newspapers Inc. v. City of Dearborn, meeting requirement for conferences with are not subject to a Rule 76a request). 1995 WL 688259, 23 Media L. Rep. 2338 counsel regarding litigation did not ex- (Mich. Cir. Ct. 1995) (settlement agree- empt agreement from disclosure). ments in lawsuits involving the city are Virginia public records subject to disclosure). + State ex rel. Sun Newspapers v. Westlake Board of Education, 601 N.E.2d 173 (Ohio + Shenandoah Publishing House, Inc. v. Fan- App. 1991) (settlement agreement between ning, 368 S.E.2d 253 (Va. 1988) (errone- Minnesota board of education and former employee ous to seal settlement and other documents without compelling justification). + Minnesota v. Hennepin County, 505 N.W.2d was a public record; public entity cannot 294 (Minn. 1993) (Minnesota courts have enter into enforceable promises of confi- + LeMond v. McElroy, 391 S.E.2d 309 (Va. inherent judicial power to order closed dentiality with respect to public records). 1990) (Commonwealth’s accounting settlement conferences when necessary, records, including payment request for even if public bodies are parties to the Pennsylvania settlement check and computer sheet show- litigation; in this case, trial court erred in ing amount paid as result of settlement closing conference between city and coun- + Morning Call, Inc v. Housing Authority of agreement, were not documents compiled ty because it was not designed to resolve City of Allentown, 769 A.2d 1246 (Pa. Cm- specifically for use in litigation so as to lawsuit and was therefore subject to Open wlth. 2001) (settlement agreement between come within exception to Freedom of In- Meetings Law). city housing authority and utility business formation Act). was public record; confidentiality clause - Minneapolis Star & Tribune Co. v. Schuma- did not preclude access to full, unredacted Washington cher, 392 N.W.2d 197 (Minn. 1986) (prop- copy of release). er for judge to seal settlement). + Morning Call, Inc. v. Lower Saucon Town- + Yakima Newspapers, Inc. v. City of Yakima, ship, 627 A.2d 297 (Pa. Cmwlth. 1993) 890 P.2d 544 (Wash. App. 1995) (settle- Missouri (settlement agreement between township ment agreement between city and former and private party was public record subject fire chief was public record which must be - Tuft v. City of St. Louis, 936 S.W.2d 113 disclosed to newspaper). (Mo. App. 1996) (settlement agreement to public inspection and copying). between city and one of its employees was -/+CMS Enterprise Group v. Ben & Jerry’s + Pierce-Herald v. City of Puyallup, 15 Media exempt from disclosure under exemption Homemade, Inc., 1995 WL 500847 L. Rep. 1527 (Wash. Superior Ct. 1988) for records relating to litigation involving (Pa.Com.Pl. 1995) (holding that there is (settlement agreement resolving suit a public governmental body). no right of access to summary trial because against city is a public record and must be it is an extension of the settlement confer- disclosed). Nevada ence; also ruling that the advisory verdict would be sealed until settlement or jury West Virginia + McKay v. Board of County Com’rs of Douglas verdict after full trial; however, also ruling County, 746 P.2d 124 (Nev. 1987) (there is that media may attend summary trial up to + Daily Gazette Co., Inc. v. Withrow, 350 no exception to the open meeting law for verdict stage and may attend verdict stage S.E.2d 738 (W.Va. 1986) (settlements of discussions between county board and at- if they agree not to publish the result until federal civil rights suits against sheriff were torney concerning proposed settlement of after settlement or full trial verdict; sum- public records subject to disclosure under claim). mary trial judge shall release to the media Freedom of Information Act despite con- fidentiality agreements). + Nevada recently passed a law that prohib- the results of the summary trial either its government officials from secretly set- upon settlement or full trial verdict). tling lawsuits. Any settlement involving a Wisconsin government agency or employee is deemed Tennessee + In re Estates of Zimmer (Zimmer v. Mewis), a public record, pursuant to A.B. 277. 442 N.W.2d 578 (Wis. App. 1989) (there However, this statute has not yet been + Contemporary Media, Inc. v. City of Mem- is a presumptive right of access to settle- interpreted by any case law. phis, 1999 WL 292264 (Tenn. App. 1999) (holding that a governmental entity can- ment records). not enter into confidentiality agreements + C.L. v. Edson, 409 N.W.2d 417 (Wis. App. New York with regard to public records; settlement 1987) (affirming trial court’s order unseal- - Glens Falls Newspapers v. WWIDA, 684 agreement with city is a public record). ing settlement documents in a case against N.Y.S.2d 321 (N.Y. App. 1999) (FOI re- a psychiatrist for alleged sexual and psy- quest for access to confidential settlement Texas chological abuse of patients, including agreement denied on ground that disclo- minors and incompetents). + Thomas v. El Paso Cty. Comm. College Dist., sure of agreement would be advantageous + Journal/Sentinel, Inc. v. School Bd. of School to competitors). 2001 WL 815049 (Tex. App. 2001) (com- munity college district was compelled, Dist. of Shorewood, 521 N.W.2d 165 (Wis. under Public Information or Open Records App. 1994) (“memorandum of understand- Ohio Act, to disclose settlement agreement from ing” reciting settlement terms of lawsuit suit by student). was subject to public disclosure under pub- + State ex rel. Findlay Pub. Co. v. Hancock Cty. lic records law). Bd. of Comm’rs., 684 N.E.2d 1222 (Ohio - In re Kaiser Foundation Health Plan of Texas, 1997) (settlement agreement entered into 997 S.W.2d 605 (Tex. App. 1998) (com- + Schnell v. Farmers Insurance Exchange, 23 by county in federal civil rights lawsuit plex case that found that Texas Rule of Media L. Rep. 1542 (Wisc. Cir. Ct. 1994) must be disclosed; confidentiality provi- Civ. Proc. 76a, which governs the sealing (settlement documents in civil suit involv- sion did not preclude disclosure under of court records, does not apply to ADR ing minors are open to public; strong pub- Public Records Act; fact that board no agreements governed by Rule 11; newspa- lic interest in ensuring that children are longer had actual possession of settlement per sought documents introduced at sum- treated fairly by judicial system).

PAGE 8 THE REPORTERS COMMITTEE FOR FREEDOM OF THE PRESS FALL 2001