South Carolina's 10 active federal trial judges have unanimously voted to ban secret legal settlements, saying such agreements have made the courts complicit in hiding the truth about hazardous products, inept doctors and sexually abusive priests.
"Here is a rare opportunity for our court to do the right thing," Chief Judge Joseph F. Anderson Jr. wrote to his colleagues, "and take the lead nationally in a time when the Arthur Andersen/Enron/Catholic priest controversies are undermining public confidence in our institutions and causing a growing suspicion of things that are kept secret by public bodies."
If the U.S. District Court for the District of South Carolina adopts the rule, after a public comment period that ends Sept. 30, it will be the strictest ban on secrecy in settlements in the federal court system.
Anderson said the new rule might save lives.
"Some of the early Firestone tire cases were settled with court-ordered secrecy agreements that kept the Firestone tire problem from coming to light until many years later," he wrote.
Lawyers said the proposal, which was widely discussed at the American Bar Association's conference in Washington last month, is likely to be influential in other federal courts and in state courts, which often follow federal practice in procedural matters. In South Carolina, the state's chief justice has expressed great interest in the proposal.
But some legal experts and industry groups said a blanket rule is unwise.
"The judges of South Carolina, God bless them, have not evaluated the costs of what they are proposing," said Arthur Miller, a law professor at Harvard and an expert in civil procedure. He said the ban on secret settlements would discourage people from filing suits and settling them, and threaten personal privacy and trade secrets.
Robert A. Clifford, a Chicago lawyer who typically represents plaintiffs, scoffed at the notion that defendants would not settle without secrecy provisions, saying the alternative to a public settlement was a far more public trial.
Anderson was most concerned with the selling of secrecy as a commodity, he said in an interview. He recalled being told by a plaintiff's lawyer that the lawyer had obtained additional money for his client in exchange for the promise of secrecy.
"That's what really lit my fuse," the judge said. "It meant that secrecy was something bought and sold right under a judge's nose."