June 2008

An Update on the Sunshine in Litigation Act

Rule 26(c) of the Federal Rules of Civil Procedure authorizes a court to enter protective orders, on a showing of good cause, to protect parties or persons from “annoyance, embarrassment, oppression or undue burden or expense.” The courts’ authority includes the power to prohibit or condition discovery, to limit the scope of disclosure or discovery, and to order that “trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.”

The Proposed Change

The ABA Section of Litigation believes a proposed bill, S.2449 (the Sunshine in Litigation Act of 2007), would unnecessarily and unwisely restrict the courts’ authority under Rule 26(c). The bill would limit a court’s ability to enter an order (1) restricting disclosure of information obtained through discovery, (2) approving a settlement agreement that would restrict the disclosure of such information, or (3) restricting access to court records in civil cases.

Specifically, the proposed legislation would prohibit a court from entering such orders unless it first makes findings of fact that (1) the information to be restricted is not “relevant to the protection of public health or safety” or (2) if it is relevant, that the public interest in the disclosure of “potential health or safety hazards is outweighed by a specific and substantial interest” in maintaining the confidentiality of the information and the proposed protective order is no broader than is necessary to protect the privacy interest asserted. The bill further provides that no order entered under these standards (other than one approving a settlement agreement) may remain in effect after entry of final judgment unless the court makes another “separate finding of fact,” either at or after the entry of judgment, that these requirements have been met. The bill provides that its terms apply to motions made under Rule 26(c), as well as to stipulated applications.

Rules Committee and DOJ Response

On March 4, 2008, Hon. Lee H. Rosenthal, Chair of the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, wrote to Senator Patrick Leahy, Chairman of the Senate Judiciary Committee, opposing the legislation. The Rules Committee concluded that the bill was “not necessary to protect the public health and safety and that the discovery protective order provision would make it more difficult to protect important privacy interests and would make civil litigation more expensive, more burdensome, and less accessible.” The Department of Justice (DOJ) also has articulated its concerns with the proposed legislation, noting, among other things, that “[c]onfidentiality issues are necessarily case-specific, and the individual judge assigned to the case is best suited to determine the propriety of maintaining the confidentiality of information disclosed by or to the parties, the conditions of nondisclosure, and the duration of any such protections.”

In response, the Section is recommending that the ABA House of Delegates adopt a resolution reaffirming its support for the congressionally enacted, judicial rulemaking process set forth in the Rules Enabling Act and opposing those portions of the Sunshine in Litigation Act of 2007 or other legislation that would circumvent that process. This resolution, if adopted by the House in August, will align the ABA’s position with that of the Rules Committee and DOJ.

Judith A. Miller
Chair, Section of Litigation