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New Bill Broadly Prohibits Confidential Settlements

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Senator Connie Leyva (D) recently introduced SB 1149, which prohibits confidential settlement agreements in lawsuits alleging defective products or environmental conditions that pose a danger to public health or safety – defined to mean “a product or condition that has caused, or is likely to cause, significant or substantial bodily injury or illness, or death.”

SB 1149 is jointly sponsored by Consumer Reports and Public Justice.

The bill states its intent is to improve public health and safety, while reasonably protecting litigant privacy. In actuality, the bill will harm the public and businesses by allowing unwarranted disclosure of proprietary business information and trade secrets. This will discourage discovery and settlements, lengthen trial time, and further clog the courts.

The bill also wrongly assumes that every lawsuit and settlement is based in merit and truth. Many lawsuits may be based upon false or inaccurate allegations, but a business may settle to avoid years of costly litigation.

California has previously passed legislation disallowing secret settlements for sexual harassment and discrimination cases, a trend that will continue if this bill passes.

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