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Press Release |
Contact: Elisa Odabashian or Michael
McCauley |
Press Release Contact: Elisa Odabashian or Michael
McCauley
Monday, December 4,
2000
415-431-6747
Consumers
Union West Coast Regional Office
Measures by Assemblymember Steinberg and
Senator Escutia Would Limit Agreements in Product Defect,
Environmental Hazard and Financial Fraud Cases
SACRAMENTO -- Elisa Odabashian, Senior Policy Analyst with
Consumers Union's West Coast Regional Office, made the following statement today
in support of AB 36 (Steinberg, D-Sacramento) and SB 11 (Escutia, D-Norwalk),
which would limit secret out-of-court settlements in product defect, environmental
hazard, unfair insurance claims practice or financial fraud lawsuits.
"Many lives could be saved and much suffering
could be averted if corporations were not allowed to use secrecy
orders in court settlements to hide information about product
defects, environmental hazards, or financial fraud."
"The Firestone/Ford tire tragedies highlight
how secrecy orders can have very serious consequences on public
safety. Over the last decade--long before the recent recall of
millions of Firestone tires sold largely on the popular Ford
Explorer--there were 50-100 Firestone tire lawsuits. Most of these
court cases were settled with secrecy orders in place that
effectively kept information about the potential dangers associated
with the tires from the public. According to the Detroit Free Press,
to date, there have been 119 deaths and 500 serious injuries
associated with Firestone tire tread separations. Many of these
deaths and injuries could have been prevented if secret settlements
had been barred."
"Consumers Union believes this legislation will
be a strong deterrent to businesses tempted to engage in unethical
acts that take lives, harm the environment, or commit financial
fraud. We believe this law will motivate corporations to correct the
errors that brought them into court in the first place, instead of
hiding behind secrecy orders and continuing business as usual until
hundreds of unsuspecting consumers are harmed or killed, and recalls
are required. We applaud Assemblyman Steinberg and Senator Escutia
for taking up this important matter and we urge the legislature to
support it."
Under the proposed measures, out-of-court
secret settlements would be barred unless they met strict standards
and procedures imposed by the courts. The bills also apply to
discovery materials like crash test reports, company documents, and
consumer complaints not used at trial.
By applying to settlement agreements and
documents not filed with the court, the measures fill a large gap
left open by a recently approved Judicial Council rule which applies
only to material actually filed with the court. The new Judicial
Council rule creates a presumption against secrecy and allows a
court to seal records only if strict standards and procedures are
met.
Steinberg and Escutia's identical measures are
sponsored by state Attorney General Bill Lockyer and the Consumer
Attorneys of California and supported by a broad range of public
interest organizations, including Center for Public Interest Law,
Congress of California Seniors, Consumer Federation of California,
Consumers for Auto Reliability and Safety, Foundation for Taxpayers
and Consumer Rights, Sierra Club, and United Policyholders.
Consumers Union, publisher of Consumer Reports magazine, is an independent, nonprofit testing, education, and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers
