BILL NUMBER: AB 36 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 6, 2001
AMENDED IN ASSEMBLY MAY 16, 2001
AMENDED IN ASSEMBLY FEBRUARY 5, 2001
INTRODUCED BY Assembly Member Steinberg
DECEMBER 4, 2000
An act to add Section 188 to the Code of Civil Procedure, relating
to confidentiality.
LEGISLATIVE COUNSEL'S DIGEST
AB 36, as amended, Steinberg. Confidentiality of writings.
Existing law provides for the confidentiality of trade secrets,
government records, records maintained by financial and other
institutions, privileged communications, and other writings.
This bill would provide that, in an action based upon bodily
injury , or wrongful death
, or financial loss allegedly caused by a
defective product , financial fraud, unfair insurance claims
practice, or environmental hazard, as defined, specified
information contained in settlement agreements and confidentiality
agreements not filed with the court, and specified information
acquired through discovery, shall be presumed to be public
information and may not be kept confidential pursuant to an
agreement of the parties or by court order, if that information
would be beneficial in protecting the public from a defective
product or environmental hazard . The bill would permit this
information to be kept confidential for a period of time
only pursuant to a court order based upon specified findings. The
bill would further provide that, unless the information is a
trade secret, as defined, or otherwise privileged, in an action
based upon injury, wrongful death, or financial loss allegedly caused
by a defective product, financial fraud, unfair insurance claims
practice, or environmental hazard except for
reasonable provisions designed to protect legitimate claims of
confidentiality, as specified , any portion
provision of an agreement or contract that
restricts a party from disclosing certain has the
purpose or effect of concealing information to
that would be useful in protecting the public from a
defective product or environmental hazard from the public or a
governmental agency, as specified, is void and may not be enforced,
with specified exceptions. The bill would authorize a court to
request require certain documents
to be provided to the court in order to implement its
provisions , and to redact proprietary or other material not
necessary for informing the public, as specified . This bill
would provide that its provisions are not intended to affect
medical malpractice actions, or other actions except for those
involving product defects or environmental hazards, or the
confidentiality of communications, negotiations, or settlement
discussions between participants in mediation proceedings or the
confidentiality of evidence protected under specified sections of the
Evidence Code. The bill would specify other exceptions from,
and limitations of, these provisions. The bill would also
state legislative findings.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Secrecy agreements that prohibit disclosure to the public or
public safety agencies of information that is evidence of defective
products , financial fraud, unfair insurance claims
practices, or environmental hazards and that the
plaintiff shows, pursuant to subdivision (i) of Section 188 of the
Code of Civil Procedure, would be beneficial in protecting the public
are injurious to the health, safety, and economic well-being
of all Californians.
(b) Secrecy These secrecy agreements
can have tragic consequences. They can also allow companies to
shield information that shows a practice of treating
consumers unfairly and can permit those companies to continue illegal
practices without accountability, and which can
allow companies to shield life-threatening dangers and harmful
practices from public view, thereby severely jeopardizing public
welfare and safety.
(c) It is therefore against the public interest to allow
these secrecy agreements about defective products,
financial fraud, unfair insurance claims practices, or environmental
hazards to remain confidential agreements except
in very limited circumstances.
SEC. 2. Section 188 is added to the Code of Civil Procedure, to
read:
188. (a) The Legislature finds that the Judicial Council
has adopted Rule 243.1 of the California Rules of Court, which
creates a presumption against secrecy for certain documents filed
with the court. It is the intent of the Legislature to better
protect Californians from injuries, deaths, or financial loss caused
by defective products, financial fraud, unfair insurance claims
practices, or environmental hazards by also creating a presumption
against secrecy for settlement agreements and confidentiality
agreements not filed with the court and information acquired through
discovery.
(b) Notwithstanding any other provision of law, in an
action based upon injury, wrongful death, or financial loss
bodily injury or wrongful death allegedly caused
by a defective product , financial fraud, unfair insurance
claims practice, or environmental hazard, information that
is evidence of a defective product , financial fraud, unfair
insurance claims practice, or environmental hazard
contained in settlement agreements and confidentiality agreements not
filed with the court, and information acquired through discovery
that is evidence of a defective product , financial fraud,
unfair insurance claims practice, or environmental hazard,
shall be presumed to be public information and may
not be kept confidential pursuant to agreement of the parties
or by order of the court, if the plaintiff shows pursuant to
subdivision (i) that information would be beneficial in protecting
the public from defective products or environmental hazards .
This information may be kept confidential for a period that the court
deems appropriate only pursuant to a court order based upon a
finding that either:
(1) The information is a trade secret, as defined in Section
3426.1 of the Civil Code, or otherwise privileged under existing law.
(2) (A) An overriding interest exists that overcomes the right of
public access to the information .
(B) The ; (B) the overriding interest
supports keeping the information confidential .
(C) A ; (C) a substantial probability exists
that the overriding interest will be prejudiced if the information is
not kept confidential .
(D) The ; (D) the proposed confidentiality is
narrowly tailored .
(E) No ; and (E) no less restrictive means
exist to achieve the overriding interest.
(c) Unless the information is a trade secret, as defined in
Section 3426.1 of the Civil Code, or otherwise privileged under
existing law, in an action based upon injury, wrongful death, or
financial loss allegedly caused by a defective product, financial
fraud, unfair insurance claims practice, or environmental hazard, any
portion of an agreement or contract that restricts a party from
disclosing information that is evidence of a defective product,
financial fraud, unfair insurance claims practice, or environmental
hazard to a governmental agency with enforcement authority over the
defective product, financial fraud, unfair insurance claims practice,
or environmental hazard is void, contrary to public policy, and may
not be enforced.
(d)
The burden of proving entitlement to confidential treatment under
this chapter shall be on the party seeking confidentiality.
(b) Except for reasonable provisions designed to protect
legitimate claims of confidentiality under paragraph (1) or (2) of
subdivision (a), any provision of an agreement or contract that has
the purpose or effect of concealing information from the public or a
governmental agency with enforcement authority over a defective
product or environmental hazard, which information would be
beneficial in protecting the public is void, contrary to public
policy, and may not be enforced.
(c) In order to implement this section, the court may
require the requesting party to provide an identifying log or other
document. Whether or not the court orders that the information
may be kept confidential pursuant to subdivision (a), it may
nevertheless redact any proprietary or other material it finds not
necessary for informing the public of the defective product or
environmental hazard.
(e)
(d) As used in this section:
(1) "Defective product" means a product that may be defective
because of a defect in manufacturing, or design, or a failure to
adequately warn the consumer of a hazard involved in the foreseeable
use of the product, where the defect may result in personal
bodily injury to one or more persons.
(2) "Financial fraud" means any fraudulent insurance practice or
any fraudulent plan or scheme to sell a publicly offered investment
product without full disclosure of the risks associated with the
purchase of the product, where the plan or scheme may cause or has
caused financial loss.
(3) "Unfair insurance claims practice" means any act or omission
that would constitute a violation of subdivision (h) of Section
790.03 of the Insurance Code.
(4)
(2) "Environmental hazard" means a release or
threatened release of a hazardous substance that poses a
threat to public health or safety involving present or
future danger of death, bodily injury, or health disability
to human beings exposed to a hazardous substance release or
threatened release .
(f)
(e) An attorney shall not sell or offer for sale any
information obtained through discovery to any member of the State Bar
or to any other person in violation of the prohibitions on attorney
solicitation, fee splitting, or financial arrangements among lawyers
or nonlawyers included in Rules 1-320, 1-400, and 2-200 of the Rules
of Professional Conduct adopted by the Supreme Court. Violation of
this paragraph shall be a basis for professional discipline by the
State Bar. This section does not alter or mitigate any existing rule
or provision that may also be applicable to the conduct.
(g)
(f) Nothing in this section is intended to affect the
confidentiality of communications, negotiations, or settlement
discussions between mediation participants pursuant to Chapter 2
(commencing with Section 115) 1115) of
Division 9 of the Evidence Code, or the confidentiality of evidence
protected by Section 1153.5 or 1154 of the Evidence Code.
(h)
(g) Nothing in this section shall be deemed to prohibit the
entry or enforcement of that part of a confidentiality agreement,
settlement agreement, or stipulated agreement between the parties
which requires the nondisclosure of the amount of any money paid in a
settlement of a claim.
(h) Nothing in this section shall be deemed to limit or abrogate
the attorney-client privilege, the work product doctrine, or any
other privilege recognized under law.
(i) Nothing in this section shall be deemed to restrict the power
of the trial court under subdivision (f) of Section 2031 to enter an
interim protective order, whether stipulated to by the parties or
not, that limits the dissemination of documents claimed in good faith
to warrant confidential treatment pursuant to paragraph (1) or (2)
of subdivision (a), if that order will expedite the production of
documents and avoid unnecessary delays. That order shall (1) permit,
subject to reasonable measures designed to protect legitimate claims
of confidentiality under paragraph (1) or (2) of subdivision (a),
the disclosure of the documents to the parties, their lawyers, and
their experts, and to governmental agencies with enforcement
authority over the allegedly defective product or environmental
hazard; (2) provide that any person to whom the documents were
properly disclosed may serve a notice identifying, with reasonable
particularity, documents as to which confidentiality was improperly
claimed under paragraph (1) or (2) of subdivision (a); and (3)
further provide that, upon service of that notice, the party seeking
confidentiality shall have the burden to move within 30 days for
confidential treatment under paragraph (1) or (2) of subdivision (a)
and the burden of proving entitlement to that relief. Failure to
make that motion within 30 days shall be deemed a waiver of
confidentiality as to those documents. After a party has issued
notice and the party who has been issued notice has motioned the
court pursuant to this subdivision, the party who issued notice shall
have the burden of showing that the information would be beneficial
in protecting the public from defective products or environmental
hazards. The burden of proving entitlement to confidential treatment
under this chapter shall be on the party seeking confidentiality.
(j) In the event that the plaintiff seeks to make a settlement or
confidentiality agreement involving a defective product or
environmental hazard public in order to protect the public under the
provisions of this chapter, the same notice and other procedures
required in subdivision (i) for making documents obtained in
discovery public shall apply.
(k) Except for those documents denied confidential treatment
pursuant to a court order issued pursuant to this section, all other
documents produced under the terms of a protective order shall remain
subject to the terms of that order, subject to further order of the
court. Nothing in this section shall prevent any party from issuing
subsequent notices pursuant to subdivision (i).
(l) Nothing in this section is intended to affect medical
malpractice actions or other actions except those involving product
defects or environmental hazards.
(m) In order to streamline the process for review under this
section, the court may require, pursuant to paragraph (3) of
subdivision (g) of Section 2031, the party who makes a motion for
confidential treatment under subdivision (i) to provide an
identifying log or other document. Nothing in this section is
intended to prohibit a party from requesting that a record be filed
under seal pursuant to Section 243.2 of the California Rules of
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