Safety over Secrecy Act Introduced by U.S. Senator might limit corporations gagging plaintiffs harmed by fracing

Safety over Secrecy Act Introduced Press Release by U.S. Senator Sheldon Whitehouse, May 13, 2014
Washington, DC – U.S. Senator Sheldon Whitehouse (D-RI) has introduced legislation to protect the health and safety of American citizens by limiting the ability of big corporations to demand that plaintiffs remain silent about their experiences as a condition of settling their disputes.  Currently, for example, natural gas companies facing lawsuits from citizens who claim their water has been contaminated by the extraction process can require citizens to keep details of their cases secret in exchange for a cash settlement.

Whitehouse’s bill, the Safety over Secrecy Act (S. 2317), could help to limit the use of confidentiality agreements in cases involving hazards to public health and safety.

“While confidentiality agreements can be useful tools to protect sensitive information and trade secrets, too often they are used to hide important safety concerns from regulators, policymakers, the news media, public health experts, and the general public,” Whitehouse said in a prepared statement submitted to the Congressional Record.

“Under current law, judges are not specifically required to consider the public interest when determining the enforceability of confidentiality agreements.  In cases involving hazards to public health and safety—and only in those cases—this bill would change that, and would require judges to balance a party’s specific interest in confidentiality against the public interest in disclosure of information when approving or enforcing confidentiality agreements.”

The full text of Whitehouse’s Congressional Record statement is below.

Mr./Madam President, today I am pleased to introduce the Safety over Secrecy Act, which prohibits courts from enforcing confidentiality agreements in the settlement of civil suits involving hazards to public health and safety.  This bill will ensure that plaintiffs in such suits do not have to remain silent about their experiences as a condition of settling their disputes.

While confidentiality agreements can be useful tools to protect sensitive information and trade secrets, too often they are used to hide important safety concerns from regulators, policymakers, the news media, public health experts, and the general public.  Over the past 20 years, we have learned of numerous cases where court-approved secrecy has shielded serious public health and safety dangers from the public—putting hundreds, if not thousands, of lives at risk.  These cases have involved hydraulic fracturing, or “fracking,” asbestos, defective auto components, and “adverse incidents” from drugs.

Typically in these cases, victims face large corporations that can spend unlimited amounts of money defending lawsuits and prolonging their resolution.  Faced with mounting litigation expenses and medical bills, plaintiffs often seek to settle their suits.  In exchange for damages, they are forced to agree to provisions that prohibit them from discussing their cases or revealing information disclosed during litigation. Defendants are thus able to keep damaging information from getting out.  As a result, the public—as well as regulatory agencies—remain unaware of the risks.

Let’s take fracking, where drillers from Pennsylvania to Arkansas and Wyoming to Texas have entered into cash settlements or property buyouts with individuals who claim fracking has contaminated their water and polluted their air.  In the vast majority of these cases, the cost of the awards has been the plaintiffs’ silence.  As Aaron Bernstein, associate director of the Center for Health and the Global Environment at the Harvard School of Public Health, put it in an interview, non-disclosure agreements “have interfered with the ability of scientists and public health experts to understand what is at stake” in the country’s quickly evolving energy infrastructure.

Perhaps the most notorious case of fracking hush money is the Hallowich case.  In that case, Chris and Stephanie Hallowich’s dream house—built on ten acres of land in southwestern Pennsylvania—turned out to be sitting atop the Marcellus Shale, one of the biggest fracking operations in the country.  The previous land owner had leased the mineral rights to various gas companies.  Soon after moving in, Chris, Stephanie, and their young children began experiencing headaches, nose bleeds, burning eyes, and sore throats.  After complaining for three years of what they concluded were the side effects of contaminated air and water, the Hallowiches brought suit.  Without accepting responsibility for any health effects, the companies agreed to pay the Hallowiches $750,000 so that they could move off the property, in exchange for the Hallowiches’ promise to remain silent about the case.  The case gained international attention when the Pittsburg Gazette obtained an unsealed settlement transcript two years later and discovered that the Hallowiches’ seven and ten year-old children had been gagged for life along with their parents under the confidentiality agreement.  Needless to say, these gag orders make it difficult to challenge industry claims about the safety of the fracking process.  And fracking is just one of many areas where defendants impose secrecy as a condition of settlement.

Under current law, judges are not specifically required to consider the public interest when determining the enforceability of confidentiality agreements.  In cases involving hazards to public health and safety—and only in those cases—this bill would change that, and would require judges to balance a party’s specific interest in confidentiality against the public interest in disclosure of information when approving or enforcing confidentiality agreements.  My bill would not prohibit secrecy agreements across the board because there are appropriate uses for such agreements—including protecting trade secrets and other confidential company and personal information.  Given its narrow scope, this bill would not place undue burdens on our judges or judiciary system.

In introducing the Safety over Secrecy Act, I want to recognize former Senator Kohl and his Sunshine in Litigation Act, which he introduced in various forms between 1995 and 2011.  That bill, which I was proud to support in the Judiciary Committee, was a broader version of the legislation I have just introduced.  I supported that bill when Senator Kohl introduced it, and I plan to offer my full support when it is introduced again in this Chamber.

I yield the floor. [Emphasis added]

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2014 05 15 US_S2317_Confidentiality Bill by U.S. Sentator Sheldon Whitehouse

[Refer also to:

April 19, 2014: Third Report in Three Days Shows Scale Of Fracking Perils; PSE Study: ‘We can conclude that this process has not been shown to be safe’

December 20, 2013: Pennsylvania Supreme Court Says It’s Unconstitutional For Gas Companies To Frack Wherever They Want

“By any responsible account,” [Pennsylvanian Supreme Court] Chief Justice Castille wrote, “the exploitation of the Marcellus Shale Formation will produce a detrimental effect on the environment, on the people, their children, and the future generations, and potentially on the public purse….” ]

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