Today's Law As Amended

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AB-889 Secrecy agreements.(2017-2018)



SECTION 1.
 It is the intent of the Legislature to better protect Californians from death or substantial injury caused by any danger to the public health or safety, including defective products and environmental hazards, by creating a presumption against secrecy that protects the openness of information acquired through discovery. This presumption is to apply to settlement and confidentiality agreements, whether or not filed with the court, and to all stipulations for protective orders that would limit the disclosure of information acquired through discovery.

SEC. 2.

 Section 1002 of the Code of Civil Procedure is amended to read:

1002.
 (a) Notwithstanding any other law, a provision within a settlement agreement that prevents the disclosure of factual information related to the action is prohibited in any civil action the factual foundation for which establishes a cause of action for civil damages for any of the following:
(1) An act that may be prosecuted as a felony sex offense.
(2) An act of childhood sexual abuse, as defined in Section 340.1.
(3) An act of sexual exploitation of a minor, as defined in Section 11165.1 of the Penal Code, or conduct prohibited with respect to a minor pursuant to Section 311.1, 311.5, or 311.6 of the Penal Code.
(4) An act of sexual assault, as defined in paragraphs (1) to (9), inclusive, of subdivision (e) of Section 15610.63 of the Welfare and Institutions Code, against an elder or dependent adult, as defined in Sections 15610.23 and 15610.7 15610.27  of the Welfare and Institutions Code.
(b) Notwithstanding any other law, in a civil action described in paragraphs (1) to (4), inclusive, of subdivision (a), a court shall not enter, by stipulation or otherwise, an order that restricts the disclosure of information in a manner that conflicts with subdivision (a).
(c) Subdivisions (a) and (b) do not preclude an agreement preventing the disclosure of any medical information or personal identifying information, as defined in subdivision (b) of Section 530.55 of the Penal Code, regarding the victim of the offense listed in subdivision (a) or of any information revealing the nature of the relationship between the victim and the defendant. This subdivision shall not be construed to limit the right of a crime victim to disclose this information.
(d) Except as authorized by subdivision (c), a provision within a settlement agreement that prevents the disclosure of factual information related to the action described in subdivision (a) that is entered into on or after January 1, 2017, is void as a matter of law and against public policy.
(e) An attorney’s failure to comply with the requirements of this section by demanding that a provision be included in a settlement agreement that prevents the disclosure of factual information related to the action described in subdivision (a) that is not otherwise authorized by subdivision (c) as a condition of settlement, or advising a client to sign an agreement that includes such a provision, may be grounds for professional discipline and the State Bar of California shall may  investigate and take appropriate action in any such case brought to its attention.

SEC. 3.

 Section 1002.5 is added to the Code of Civil Procedure, to read:

1002.5.
 (a) As used in this section, the following terms have the following meanings:
(1) “Danger to the public health or safety” means a defective product or environmental hazard that has caused or is likely to cause repeated significant or substantial bodily injury or death.
(2) “Defective product” means a product that may be defective because of a defect in manufacturing, or design, or a failure to adequately warn the consumer of a hazard involved in the foreseeable use of the product, where the defect may result in bodily injury or death to one or more persons.
(3) “Environmental hazard” means a release of a hazardous substance that poses a threat to public health or safety involving danger of death, bodily injury, or health disability to human beings exposed to hazardous substance release.
(4) “Independent finding” means a finding by the court based solely on the court’s review of the law as applied to the facts of the case, and not based in whole or in part on a stipulation of the parties to keep information secret or arguments in support of a stipulation to keep information secret.
(5) “Personally identifiable information” includes the following:
(A) The identity of, or personal information about, victims of harm, including children and victims of abuse.
(B) Personal contact information of corporate officers or board members, or information relating to any individual’s finances, medical history, health, or similar information.
(b) Notwithstanding any other law, in any civil action in which the pleadings state facts relevant to the existence of a danger to the public health or safety, an agreement between the parties that restricts the disclosure of information relating to that danger shall be void as contrary to public policy and shall not be enforced by a court or tribunal unless the agreement is entered by the court pursuant to paragraph (2) of subdivision (c). This subdivision does not prohibit parties from keeping confidential the settlement amount.
(c) (1) Except as provided in paragraph (2), in any civil action in which the pleadings state facts relevant to the existence of a danger to the public health or safety caused by a defective product or environmental hazard, there shall be a presumption that disclosure of information relating to that danger shall not be restricted, and a court shall not enter, by stipulation or otherwise, an order that does any of the following:
(A) Restricts the disclosure of information about the danger.
(B) Approves a settlement agreement that would restrict the disclosure of information about the danger.
(C) Restricts access to court records containing information about the danger.
(2) A court may enter an order otherwise prohibited by this subdivision if it finds that either of the following conditions is satisfied:
(A) The pleadings do not state facts relevant to the existence of a danger to the public health or safety.
(B) The presumption in favor of disclosure of the information is clearly outweighed by a specific and substantial overriding interest in maintaining the confidentiality of the information or records and the order does not restrict any more information than is necessary to protect that interest. A court shall not base this finding on the existence of a stipulation to keep the information secret.
(3) A party who is the proponent for the entry of an order under paragraph (2) has the burden of proof in obtaining the order. The proponent, in his or her request for the order, shall set forth with particularity the specific information for which protection is sought, the specific and overriding interest necessitating confidentiality, such as that the information relates to a current proprietary customer list, or that the information is a trade secret that would give the proponent’s competitors valuable proprietary information if revealed.
(d) This section does not apply to or affect any of the following:
(1) The confidentiality of preagreement negotiations, settlement discussions between mediation participants pursuant to Chapter 2 (commencing with Section 1115) of Division 9 of the Evidence Code, or of evidence protected by Section 1153.5 or 1154 of the Evidence Code.
(2) Actions relating to a business dispute, including actions for breach of contract, in which all the parties are business entities.
(3) A trade secret, as defined in Section 3426.1 of the Civil Code. A “trade secret” does not include information or records about a product that is defective, hazardous, or unlikely to be used by a competitor to the proponent’s competitive disadvantage.
(4) Personally identifiable information.
(e) An attorney’s failure to comply with the requirements of this section by demanding that a provision be included in a settlement agreement that violates subdivision (b) may be grounds for professional discipline and the State Bar of California may investigate and take appropriate action in any such case brought to its attention. This section does not prevent an attorney for a party from requesting an order under paragraph (2) of subdivision (c).
(f) This section does not eliminate or supplant existing legal standards governing protective orders, the sealing of court records, or confidential settlements, but, rather, imposes additional requirements that must be independently satisfied.
(g) A person, including a representative of the news media, may bring an action to contest a confidentiality provision in a final order, judgment, or written settlement agreement that violates this section in the court in which the case was filed, if all of the following conditions are satisfied:
(1) The person makes a prima facie case that the order or settlement restricts information concerning a danger to public health or safety.
(2) Public knowledge of the information will decrease the likelihood of harm caused by the danger to public health or safety.
(3) The action contesting the confidentiality provision will not delay or prejudice the rights of the parties to the underlying action.