BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 1682 (Mark Stone)
Version: May 4, 2016
Hearing Date: June 28, 2016
Fiscal: Yes
Urgency: No
NR
SUBJECT
Confidential settlement agreements: sexual offenses
DESCRIPTION
This bill would prohibit a confidentiality or secrecy provision
in a settlement agreement in a civil action for an act of
childhood sexual abuse or an act of sexual assault against an
elder or dependent adult, as specified, and would prohibit a
court from entering an order restricting access to or disclosure
of any information obtained through discovery.
The bill would make a confidential settlement agreement, as
specified, void as a matter of law and against public policy,
and would create a presumption that an attorney who advises a
client to sign such an agreement has committed an act involving
moral turpitude and subject to professional discipline. The
bill would require the State Bar of California to investigate
and take appropriate action against such an attorney.
BACKGROUND
Existing law disfavors the secret settlement of certain civil
actions in which the public has a strong interest. For example,
it is the policy of the State of California that confidential
settlement agreements are disfavored in any civil action based
on a violation of the Elder Abuse and Dependent Adult Civil
Protection Act (EADACPA). (Code Civ. Proc. Sec. 2017.310.) In
addition, confidential settlement of a civil action where the
factual basis for the action is "an act that may be prosecuted
as a felony sex offense" is prohibited.
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Seeking to ensure that the perpetrators of other sexual crimes
are made known to the public, this bill would prohibit the
secret settlement of civil actions involving the sexual abuse or
exploitation of minors, and the sexual abuse of elder or
dependent adults.
CHANGES TO EXISTING LAW
Existing law prohibits a confidential settlement agreement in
any civil action the factual foundation for which establishes a
cause of action for civil damages for an act that is a felony
sex offense. (Code Civ. Proc. Sec. 1002(a).)
Existing law , despite the provision above, does not prohibit any
of the following:
an agreement that requires nondisclosure of the amount paid in
settlement of a claim;
an agreement preventing the defendant or any person acting on
the defendant's behalf from disclosing any medical information
or personal identifying information regarding the victim of
the felony sex offense or of any information revealing the
nature of the relationship between the victim and the
defendant; and
any right of the crime victim to disclose his or her medical
information or personal information, or relationship to the
defendant. (Code Civ. Proc. Sec. 1002(b)-(c).)
This bill would prohibit a confidentiality or secrecy provision
in a settlement agreement in a civil action with a factual
foundation establishing a cause of action for civil damages for
(1) an act of childhood sexual abuse, (2) sexual exploitation of
a minor, or (3) an act of sexual assault against an elder or
dependent adult, as specified.
The bill would prohibit a court from entering an order, in any
of civil actions above, restricting disclosure or access to
information obtained through discovery.
The bill would repeal the provision specifying that a settlement
agreement or stipulated agreement that requires nondisclosure of
the amount of money paid in settlement of a claim is not
prohibited.
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The bill would make a confidentiality or secrecy provision in a
settlement agreement, entered into on or after January 1, 2017,
void as a matter of law and against public policy.
This bill would provide that an attorney who demands such a
confidentiality or secrecy provision in a settlement agreement
as a condition of settlement or who advises a client to sign an
agreement with a confidentiality or secrecy provision is
presumed to have committed an act involving moral turpitude that
is subject to professional discipline and would require the
State Bar of California to investigate and take appropriate
action in cases brought to its attention.
COMMENT
1.Stated need for the bill
According to the author:
Strong public policy argument can be made that secret
settlements are inappropriate in some cases, specifically
matters of concern to the public because they involve
particularly vulnerable victims, highly dangerous behavior, or
especially egregious conduct. [?]Nevertheless,
confidentiality provisions are commonly included in civil
settlements. Despite headlines focusing on abusive priests in
the Catholic Church, secret settlements involving childhood
sexual abuse are by no means limited to the Catholic Church.
Other recent examples where secret settlements have occurred
include community youth service organizations; foster parents;
administrators of homes for the mentally disabled;
professional athletes; youth swim coaches; a college football
coach; and pop stars.
2.Shedding light on allegations of sexual abuse
This bill would prohibit, in civil actions for damages based on
allegations of child sexual abuse, child sexual exploitation, or
sexual assault against an elder or dependent adult, confidential
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settlement agreements. In support, the Association for Los
Angeles Deputy Sheriffs writes:
Although minors cannot legally enter into contracts or be held
to settlements signed by their parents or guardians, secret
settlements likely discourage them from ever reporting their
abuse to law enforcement. Years later, after they are adults,
it may be too late for law enforcement to act because the
statute of limitation on charging the acts as crimes may have
passed. Secret settlements interfere with the prosecution of
predators and could endanger minors. By shielding cases from
the public and law enforcement, secret settlements unfairly
allow convicted sexual offenders with the financial means to
pay for the silence of their victims in an attempt to escape
criminal prosecution. Such settlements also endanger other
potential victims by shielding such offenders from public
knowledge and scrutiny.
Staff notes that this bill would only apply to confidential
settlement agreements entered into after a civil action has been
filed with the court, and thus would not prohibit earlier
settlement agreements or expose alleged abusers, who settle
prior to a civil suit being filed, to the public. In addition,
the settling of a civil case is not necessarily an indication of
guilt. The victim or defendant may not wish to go through burden
and stress of litigation, and settlements often result in larger
sums to the injured party because neither party needs to pay an
attorney through the end of trial. That being said, this
Committee has supported legislation that disfavors or prohibits
confidential settlement agreements in the past to ensure, as a
matter of public policy, that the public has notice of certain
bad actors.
3.The court's role in managing discovery and evidence
Discovery is the formal exchange of evidentiary information and
materials between parties to a pending action. A party is
entitled to disclosure in discovery as a "matter of right unless
statutory or public policy considerations clearly prohibit it.
Greyhound v. Superior Court (1961) 56 C2d 355, 378. In general,
any party may obtain discovery about any unprivileged matter
that is relevant to the subject matter of the action. (Code Civ.
Proc. Secs. 2016.010-2036.050.)
Once discovered, all relevant information is admissible unless
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excluded by statute, for reasons of public policy, or because
the court determines the evidence is too unreliable to be
presented to the trier of fact. Evidence Code Section 352
provides that "the court in its discretion may exclude evidence
if its probative value is substantially outweighed by the
probability that its admission will (a) necessitate undue
consumption of time or (b) create substantial danger of undue
prejudice, of confusing the issues, or of misleading the jury."
This bill would prohibit the court from entering an order that
restricts the disclosure of information obtained through
discovery. This would arguably prevent a court from prohibiting
a party from seeking information that is irrelevant to the civil
law suit, and may also serve to prevent the court from excluding
evidence from trial despite the fact that its probative value is
substantially outweighed by the probability of misleading the
jury. The ability of the judge to exclude relevant evidence
under Section 352 is especially important in cases involving
sexual abuse, where a victim's sexual history may confuse or
prejudice the jury, and the disclosure of such information
stands to re-victimize the victim.
This bill would also prohibit the court from restricting public
access to court records regarding information obtained through
discovery. Given the broad scope of discovery described above,
depriving the court of the ability to limit access to certain
records could seriously violate the privacy rights of the
parties, and third parties implicated in the discovery process.
Again, this kind of public disclosure could re-victimize a
victim, and could also destroy the reputation of a defendant who
was falsely accused.
The Legislature has tasked courts with managing discovery and
evidence because judges are in the best position to prevent
abuse of the process and protect the parties. While the
author's aim of making sexual predators known to the public is a
laudable goal, a "one-size-fits-all" approach would deny judges
the discretion they need to ensure fairness and prevent abuse of
the system.
The following amendments would strike the discovery provisions
from the bill, thereby allowing a court to issue discovery
protective orders and exempt certain evidence from trial for
statutory or public policy reasons, but would otherwise prohibit
the "sealing" or court records so that the public may have
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access to information related to sexual predators.
Author's amendments:
1. On page 2, strike lines 19-21 and insert
"Notwithstanding any other law, in a civil action described
in subdivision (a), a court shall not enter, by stipulation
or otherwise, an order restricting the disclosure of
information in a manner that conflicts with subdivision
(a)."
2. On page 3, strike lines 1-6
In support, the Conference of California Bar Associations
writes, "for far too long, sexual predators, in cooperation with
plaintiffs and their lawyers, have been able to keep the facts
about their actions hidden from public view by agreeing to
settlements in public litigation that keep the facts of the case
secret. AB 1682 would substantially increase public protection
by prohibiting agreements shielding these dangerous secrets in
cases involving allegations of childhood sexual abuse or sexual
exploitation of a minor."
1.Attorney discipline
This bill would provide that any confidentiality or secrecy
provision within a settlement agreement entered into after
January 1, 2017, is void as a matter of law and against public
policy. Thus, as a practical matter, under this bill, any
settlement agreement entered into would stand, but the secrecy
provision would be void, thereby making the agreement open to
the public.
This bill would then provide that any attorney who, in a civil
action described by this bill, demands or advises that a client
or party sign a settlement agreement with a confidentiality
provision is presumed to have committed an act involving moral
turpitude and shall be subject to professional discipline. The
bill would require that the State Bar investigate the attorney.
Existing law provides that "the commission of any act involving
moral turpitude, dishonesty or corruption, whether the act is
committed in the course of his relations as an attorney or
otherwise, and whether the act is a felony or misdemeanor or
not, constitutes a cause for disbarment or suspension."
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A search of the California Codes revealed that in no other
statute is such a presumption used. In addition, this bill does
not require that an attorney have knowledge that the
confidentiality provision in a settlement agreement was
prohibited, or establish how an attorney would rebut the
presumption of moral turpitude. Further, the discipline
included in this bill is arguably harsher than similar (or even
more egregious) acts, and could amount to a deprivation of due
process for an attorney who is suspended or disbarred.
Accordingly, the author may wish to amend the bill to provide
that an attorney who demands or advises that a client or party
sign a prohibited agreement may be subject to disciplinary
action.
Author's amendment:
1. Page 3, line 19 strike "An attorney who" and insert
"Failure to comply with this section by any attorney may be
grounds for professional discipline and the State Bar of
California shall investigate and take appropriate action in
any such cases brought to its attention."
2. Page 3, strike lines 20-29
These amendments will ensure that the State Bar has the
authority to investigate an attorney who advises (or demands)
that a party or client sign a confidential settlement agreement
in a civil action for child or elder sexual abuse. On behalf of
California Attorney General Kamala D. Harris, the California
Department of Justice writes, "This bill closes a perilous
loophole in the law that allows perpetrators of sexual abuse
against children to evade full accountability by negotiating
confidential settlement agreements in civil actions. By
affirming that such provisions are in direct contrast with the
interests of public policy, AB 1682 will ensure that
California's laws conform with its commitment to defending the
welfare of its youngest residents."
Support : Association for Los Angeles Deputy Sheriffs; Attorney
General Kamala D. Harris; Bay Area Women Against Rape;
California Association of Code Enforcement Officers; California
Coalition Against Sexual Assault; California College and
University; California Police Chiefs Association; California
Narcotic Officers Association; Center Against Sexual Assault of
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Southwest Riverside County; Center for Community Solutions;
Coalition for Family Harmony; Conference of California Bar
Associations; Consumer Attorneys of California; Kene Me-Wu
Family Healing Center; Los Angeles County Professional Peace
Officers Association; Los Angeles Police Protective League;
Monterey County Rape Crisis Center; North County Rape Crisis and
Child Protection Center; One SAFE Place; Project Sister Family
Services; Riverside Sheriffs Association; Women's Center - Youth
& Family Services; Numerous individuals
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation :
AB 1628 (Beall, 2012) would have, among other provisions,
prohibited the confidential settlement of a civil action the
factual basis for which is a cause of action for an act of
childhood sexual abuse. This bill was held on Suspense in the
Assembly Appropriations Committee.
AB 2875 (Pavley, Ch. 151, Stats. 2006) prohibits the
confidential settlement of a civil action the factual basis for
which is a cause of action for "an act that may be prosecuted as
a felony sex offense."
AB 634 (Steinberg, Ch. 242, Stats. 2003) enacted law disfavoring
confidential settlement agreements in actions for a violation of
Elder and Dependent Adult Civil Protection Act.
Prior Vote :
Assembly Floor (Ayes 76, Noes 0)
Assembly Appropriations Committee (Ayes 18, Noes 0)
Assembly Judiciary Committee (Ayes 9, Noes 0)
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