In California a broad coalition of businesses are in pitched battle to hold off an attempt by personal injury lawyers to gain control over the confidential information they obtain from a defendant in a lawsuit.

At stake, for the lawyers, are bigger settlements and more fuel for their litigation industry. For the rest of us, the battle is to preserve property rights in business research and planning - the property essential to attracting the investors critical to economic success and the jobs it produces.

The lawyers are spinning their scheme as one to flush out "smoking gun documents" and "secret settlements." But in reality it's a key part of their proclaimed "national drive for documents."

Leverage Over Business
The fight is over discovery information obtained before a trial. This information is usually freely shared among attorneys in a case, with the understanding that trade secrets and other sensitive, proprietary information will remain secure under a judge-approved protective order.

In its raw form, discovery information is untested by cross examination and may be taken wildly out of context. Indeed, it may be so unreliable as to be inadmissable in a later trial.

Trial lawyers want to be able to make this information public as they see fit. They accurately foresee higher settlements from firms preferring to settle rather than face an increased risk of losing information to competitors.

If a case proceeds and information is released, trial lawyers can add it to their national database where "litigation groups" specialize in selling or swapping it - sometimes in ready-to-sue "litigation kits."

Bills to cripple the use of protective orders have been in play in 16 states this year. None has been enacted. With legislators gone home for the year in most states, the focus is on California in the final week of its long legislative session.

Trial lawyers introduced their California measure in two identical bills (AB 36 and SB 11) last December with fanfare and an announced plan to rush them to the Governor. Their launch was based on Firestone tire failures and Ford rollovers.

They relied on in the following months until it was blunted by revelations that some personal injury lawyers had kept potentially significant tire failure accident information from federal regulators rather than risk an investigation that might have weakened their own lawsuits.

Their behavior raised questions about the wisdom of a law to give more power over lawsuit information to the plaintiffs' bar.

A Bad Precedent
California lawmakers listening to lawyers' tire and rollover stories should take a close look at Congress' response. The Transportation Recall Enhancement, Accountability, and Documentation Act, or TREAD, signed by President Clinton in November mandates increased requirements for reporting to the National Highway Transportation Safety Administration, or NHTSA, and bigger penalties - including criminal sanctions - for not reporting incidents and complaints related to autos, auto parts, and tires.

Congress also gave NHTSA more money and testing responsibility. At the same time it passed the TREAD Act, Congress rejected a trial lawyer-backed anti-protective order bill.

This was not the first time Congress said no to this kind of legislation. A bill in the mid-1990s led to a Federal Judicial Conference study and a report to Congress that said: "There is no evidence that protective orders in fact create any significant problem in concealing information about public hazards or in impeding efficient sharing of discovery information."

On the other hand, there is no doubt the trial lawyers' proposal itself is a hazard to public health.

Consider San Diego's Alliance Pharmaceutical Corp., which spent $2 million to defeat a lawsuit then had to go back to court to prevent the law firm that sued it from using the company's proprietary information in a seminar for other plaintiffs' lawyers. The litigation cost Alliance valuable time and money in its research to develop a blood substitute for emergency room use and a liquid breathing product for critically ill patients.

No one wants to inhibit the release of information genuinely important to warning the public about a real hazard. If trial lawyers had written a bill to do precisely that, it would face little opposition. California businesses have had no trouble living with state case law which already lets a judge deny confidential protection when the public interest outweighs the privacy interests of parties' in a lawsuit.

Our strength as a nation flows in significant part from a legal system that protects the property rights and privacy of every individual - whether in his or her home or in the marketplace where ideas and hard work are rewarded by protection from appropriation by government or by less-creative competitors.

Unnecessary legislation weakening this protection would be the worst message and the unhealthiest precedent California could deliver to the nation in this new millennium.

*John H. Sullivan is president of the Civil Justice Association of California in Sacramento, a non-profit association representing businesses, professionals, and local governments.