In a state court, access to settlement agreements depends on the law of the state. Some states, including South Carolina and Virginia, have laws that limit the parties` ability to be secret when seeking court approval of the terms of the settlement. “The Michigan Supreme Court has made it much more difficult — not only for the city, but for all individuals — to settle lawsuits in the future because the personal information of those involved is no longer protected from public disclosure,” John Johnson, Jr., a detroit City management consultant, said in a statement released following the release of the Supreme Court`s decision. If a party wishes certain information to remain confidential in those States, the onus is on the party to prove why. There is disagreement among communities on the degree of legal involvement at which a settlement agreement becomes a court case, but if a settlement agreement is not filed with the court, public access rights are significantly lower. While there are good reasons for public policy to maintain the confidentiality of private settlement agreements, there is no precedent to support the respondent`s argument that these political considerations outweigh the equally strong public policy in favor of FOIA disclosures. But a quick search across the country for cases involving confidential settlements and public facilities shows that the city`s tactics were not uncommon. Although public funds cannot be disbursed through such agreements with private companies, ethical issues still arise when the initial claim arises from health or safety issues that could affect the general public. Gregory Beck, an attorney with washington-based surveillance group Public.C Citizen, noted that confidentiality provisions are an integral part of settlement agreements that include companies that intend to prevent bad publicity from reaching consumers, as well as attorneys for other plaintiffs.

O`Shea said he still strongly believes that because the deal involved public funds and the policies of a public school board, the details of the settlement should be disclosed — regardless of the insurance company`s involvement or the concerns of the former teaching assistant. In the New Jersey case, former West Milford resident Martin O`Shea filed a lawsuit in September to force disclosure of the settlement agreement using the state`s Open Records Act. Confidentiality clauses in by-law agreements may provide some level of protection, particularly in cases of low public interest, but disclosure cannot be excluded if settlement agreements are sought under the FOIA. This restriction must be understood and taken into account by municipalities when deciding whether or not to settle a particular case. The court also found that “the scope of solicitor-client privilege is narrow” and that the nature of settlement agreements is that they are disclosed to third parties, including counterparty, and that, therefore, solicitor-client privilege is not applicable. The court noted that, despite the fact that the judges who oversaw the settled disputes and urged the parties not to disclose the settlements, the court orders seized in the case did not expressly state that the agreements were sealed. As a result, no foiA exemption was applicable and the submission of settlement agreements was ordered. Some courts have rejected secret settlements on the grounds that settlement agreements are like private contracts and that court involvement alters the analysis. The Seventh Circuit ruled that if a settlement agreement receives court approval, it must also be included in the public records of a case, unless it contains trade secrets or other confidential information. • Connecticut: The Stamford School Board in January agreed to a confidential settlement with a student whose family claimed the board failed to protect her rights after receiving threatening and racist voice messages from other students. In recent months, there have been reports of numerous secret settlements received by government agencies. A small sample includes: Proponents of confidential settlements say they prevent “imitative” lawsuits, ensure fair negotiations in future cases, protect the reputation of parties who pay a disputed claim, and give privacy to recipients of an important settlement.

Opponents of such agreements argue that they impede a true understanding of the value of business, have potential tax consequences, reduce the liability of a wrongdoer, and impede future litigation by restricting access to information and witnesses. Often, a confidentiality clause in a settlement agreement results in a higher severance package. In fact, the few courts that have considered the issue so far have rejected the position that information exchanged between opponents during settlement negotiations is entitled to separate protection under the FOIA. In Madison v Department of Justice, 641 F. 2d 1036, 1040-41 (1st Cir. 1981), it was found that settlement proposals submitted to an agency by “past and potential adversaries” must be disclosed because they do not meet the “interagency or internal to agency” threshold requirement of exemption 5, 5 U.S.C. § 552(b)(5). See also Norwood v.

FAA, 580 F. Supp. 994, 1002-03 (W.D. Tenn. 1984) (based on Madison County) (upon request for clarification and reconsideration). The trial court ruled that the documents were not exempt under the FOIA. With regard to the exception to privacy, the Court noted that “there is no habit, more or ordinary vision of the Community which, in the Court`s view, would justify concluding that agreements concluded by a public body to settle claims for damages against it, including amounts of public funds to be spent in accordance with the consent of the public body, represents information of a personal nature”. “In New Jersey in particular, there is a need for transparency so that taxpayers can understand where their money is going and we can get information about the problems and causes of actions that would be avoided,” Gill said. Doherty took a more cynical look at the reasons and timing of the council`s contact, suggesting that the council could keep the details of the settlement out of the media due to pure political calculations. • California: A school district in Ventura agreed in January to a confidential settlement with a principal who had accused the district of unlawful dismissal.

However, what each of these adverse decisions did not take into account is that there is now a separate privilege of “settlement negotiations,” which has been explicitly recognized in a series of recent cases. In Bottaro v. Hatton Associates, 96 F.R.D. 158, 159-60 (E.D.N.Y. 1982), the details of a settlement were retained prior to their discovery in recognition of the “strong public policy of promoting settlements” and the public interest in “isolating the negotiating table from unnecessary intruders.” This “settlement privilege,” as recognized in Bottaro, was then applied in a later case where the details of settlement negotiations between opposing parties were privileged prior to discovery “to protect policies that promote settlements.” Olin Corp.c. North American Insurance Company, 603 F. Supp. 445, 449-50 (S.D.N.Y. 1985). See Chrysler Corp.c.

Fedders Corp., Civil No. 78-Civ-3393, folio op. cit. to 4 (S.D.N.Y. 11 January 1983) (refusal to apply the privilege on the basis of incomplete proof of its applicability to certain documents in question). In addition, the protection of the inherently sensitive details of settlement negotiations under the FOIA is strongly enforced by long-standing public policy that promotes the resolution of legal claims. Already at the end of the last century, the Supreme Court declared that “the settlement of legal disputes or disputes without recourse to litigation is generally preferable”. St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650, 656 (1898).

More recently, the D.C Circuit Court of Appeals noted in more detail: “The voluntary resolution of civil controversies is in favor of jurisprudence … there is everything you can gain by promoting a methodology that facilitates compromises. Autera v. Robinson, 419 F.2d 1197, 1199 (D.C. Cir. 1969). In summary, not only are there extremely powerful political interests that enforce the confidentiality of settlement documents, but there are now many legal powers to meet those interests through FOIA exemption protection, which have simply not recognized the adverse cases decided so far on this difficult issue. Notwithstanding these few cases, bodies should endeavour to protect their interests in sensitive comparative documents on the basis of the exceptional positions described above, and if those positions are convincingly advanced in future cases with compelling factual circumstances, case law should evolve favourably towards such protection. In fact, as one court has already said in a similar context, any other outcome would “seriously undermine” the negotiation process and “run counter to public policy that favours compromise over confrontation.” Murphy v. VAT, 571 F.

Supp. to 506. The Michigan Supreme Court later upheld these lower court decisions in Detroit Free Press, Inc.c. The City of Detroit dismissed the appeal, finding that the Lower Court did not err in ruling that a settlement agreement was a public record submitted to the FOIA. The Supreme Court, like the Court of Appeal, has stated that “there is no FOIA exception for settlement agreements” and that “a public entity cannot reduce its obligations under the foia.” Draft settlement agreements can also be considered court documents subject to the right of public access, and the courts have been divided on the degree of court involvement in these documents and are being converted into court records…..