Bill Text

Bill Information

PDF |Add To My Favorites |Track Bill | print page

AB-889 Secrecy agreements.(2017-2018)

SHARE THIS:share this bill in Facebookshare this bill in Twitter
Date Published: 04/21/2017 04:00 AM
AB889:v96#DOCUMENT

Amended  IN  Assembly  April 20, 2017
Amended  IN  Assembly  April 06, 2017
Amended  IN  Assembly  March 30, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 889


Introduced by Assembly Member Mark Stone

February 16, 2017


An act to amend Section 1002 of, and to add Section 1002.5 to, the Code of Civil Procedure, relating to secrecy agreements.


LEGISLATIVE COUNSEL'S DIGEST


AB 889, as amended, Mark Stone. Secrecy agreements: public dangers. agreements.
Existing law specifies that certain types of confidential or privileged information shall not be introduced as evidence in a court action. Existing law generally permits the parties to a civil action to include, as a condition to a settlement, a provision requiring that information about the settlement or the underlying dispute be kept confidential; however, existing law prohibits a confidential settlement agreement in a civil action with a factual foundation establishing a cause of action for civil damages for an act that may be prosecuted as a felony sex offense. Existing law also establishes that flouting this prohibition is grounds for professional discipline for an attorney, and it requires the State Bar of California to investigate and take appropriate action in any case brought to its attention.
This bill would instead authorize but not require the State Bar to investigate these cases of attorney misconduct. This bill would also provide that in an action based upon the existence of a danger to the public health or safety, as defined, information relating to the danger that was discovered during the course of litigation shall not be kept secret pursuant to an agreement of the parties or a court order, except pursuant to a court order based upon independent findings, as specified, and it would permit affected persons to contest in court a final order, judgment, or written settlement agreement that violates this prohibition. The bill would similarly establish that flouting this prohibition is grounds for professional discipline for an attorney.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


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 15610.27 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 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 device, instrument, manufactured product, substance, defective product or environmental condition 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.

(2)

(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.

(3)

(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 an any individual’s finances, medical history, health, or similar information.
(b) Notwithstanding any other law, in any civil action in which the pleadings allege 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 about a relating to that danger to the public health or safety shall be void as contrary to public policy and shall not be enforced by a court or tribunal, 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 allege state facts relevant to the existence of a danger to the public health or safety, a court shall not enter, by stipulation or otherwise, an order that does any of the following with respect to a danger to the public health or safety: 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 first makes an independent finding either that the order will not restrict the disclosure of information relevant to the protection of public health or safety, or that all of the following criteria are met:
(A) The public interest in the disclosure of the information is outweighed by a specific and substantial overriding interest in maintaining the confidentiality of the information or records in question, such as state-of-the-art trade secrets or a current proprietary customer list, and the overriding interest supports keeping the information secret. In applying this factor, there shall be a rebuttable presumption that protecting an individual’s personally identifiable information relating to financial, health, or other similar information outweighs the need for disclosure.
(B) A substantial probability exists that the specific and substantial interest will be substantially prejudiced if the information is not kept secret.
(C) The request for an order is no broader than necessary to protect the specific and substantial overriding interest asserted, and the order is narrowly tailored to protect the secrecy only of that information for which an overriding specific and substantial overriding interest exist.
(D) A less restrictive means to avoid the substantial prejudice to the specific and substantial overriding interest does not exist.
(E) The information is to be kept secret no longer than necessary to meet the requirements of this paragraph.
(3) A party who is the proponent for the entry of an order under paragraph (2) or (3) has the burden of proof in obtaining the order.
(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, that is not related to a danger to the public health or safety.
(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 prevents the disclosure of factual information related to the action described in violates 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, (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) An affected person, including a representative of the news media, may bring an action to contest a final order, judgment, or written settlement agreement that violates this section in the court in which the case was filed.