Whether you live in Encinitas or another part of San Diego County, you should know about a bill that has been introduced in California to “prohibit settlement agreements that keep secret information about dangerous products and environmental hazards,” according to a recent article in the Sacramento Bee. The bill is not the first of its kind. To be sure, a number of other states have enacted similar laws to help ensure that consumers can have important information about hazardous products that could cause personal injuries. We want to provide some more information about the bill, and to give you an idea of how it could impact personal injury lawsuits in Southern California concerning product defects.
Confidential Settlements and Defective Products in California
Assemblyman Mark Stone introduced Assembly Bill 889, which is designed to prevent lawsuit settlements that are conditioned on information about defective products that could pose “a danger to public health and safety” being kept confidential. Currently, when consumers file lawsuits against manufacturers after being injured by a product with a safety defect, for example, the manufacturer can settle the lawsuit and require the consumer to agree to confidentiality. Often, such confidentiality is to ensure that a protective order issued by the court that “prevent[s] plaintiffs from disclosing information that they have learned and insist, as a condition of settling a lawsuit, that the parties remain silent about the matter.”
Such a settlement, in effect, can prevent the public from obtaining information about a potentially harmful product. In addition, such settlements may prevent regulators from learning about possible defects that could prompt a safety recall. As the article contends, “such secrecy leads to deaths and serious injuries as the public and regulators are kept in the dark about unsafe products and toxic conditions.” If Assembly Bill 889 passes, it would prevent plaintiffs from entering into settlement agreements that would prevent this kind of information from staying secret.
How Settlements can Result in Additional Consumer Injuries
Why do these kinds of settlement agreements arise? In many instances, manufacturers (or other associated with a defective product) may benefit more by settling a claim and keeping information out of the public realm as opposed to allowing the lawsuit to move forward. The article explains that businesses often “fear that revelations will cause a loss of sales and harm their reputation.”
When protective orders prevent plaintiffs from providing information about a potentially defective product, these hazardous consumer items can stay on the market for a longer period of time. There are real-world examples of this happening. For example, a tire recall occurred in 2000 due to a defect that resulted in the deaths of more than 150 people. When the recall occurred—after these deaths had been reported—it became clear that “more than 200 cases had been secretly settled in the decade prior to the recall.”
If the bill passes, it could provide consumers with more information that could prevent personal injuries. At the same time, it could change the way that product liability lawsuits lead to settlements (and what those settlements can look like).
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(image courtesy of Imthaz Ahamed)