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AB-889 Secrecy agreements.(2017-2018)

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Date Published: 01/29/2018 09:00 PM
AB889:v93#DOCUMENT

Amended  IN  Assembly  January 29, 2018
Amended  IN  Assembly  January 08, 2018
Amended  IN  Assembly  May 30, 2017
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 the Code of Civil Procedure, relating to secrecy agreements.


LEGISLATIVE COUNSEL'S DIGEST


AB 889, as amended, Mark Stone. Secrecy 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 that a court or arbitral tribunal may order information relating to a current, proprietary customer list or a trade secret be kept secret in narrow circumstances. 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, as amended by Section 24 of Chapter 561 of the Statutes of 2017, is amended to read:

1002.
 (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 condition that has caused or is likely to cause repeated significant or substantial bodily injury or death to one or more persons.
(2) “Protective order” means an order issued by a judge that prevents the disclosure or dissemination of confidential information within documents that are obtained during discovery or in the course of litigation, including an order requiring a party to return documents to an opposing party at the end of the litigation.

(2)

(3) “Trade secret” means a party’s proprietary information, including a formula, pattern, compilation, program, device, method, technique, or process. “Trade secret” does not mean information or records that concern a defective, hazardous, or obsolete product or environmental condition or that are unlikely to be used to a competitor’s economic advantage. has the same meaning as set forth in Section 3426.1 of the Civil Code.
(b) 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.
(c) 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 fact action for civil damages regarding a defective product or environmental condition that poses a danger to public health or safety.
(d) Notwithstanding any other law, there shall be a presumption that disclosure of information relating to a civil action described in this sectionsubdivision (b) or (c) shall not be restricted, and a court or arbitral tribunal shall not enter, by stipulation or otherwise, an a protective order that restricts the disclosure of information described in this section, those subdivisions, except as provided in subparagraph (C) of paragraph (2) of subdivision (e). This subdivision does not prevent a court from issuing a protective order if the documents or information sought to be covered by the order include trade secrets or proprietary information.
(e) (1) Subdivisions (b) and (d) 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 an offense listed in subdivision (b) or of any information revealing the nature of the relationship between the victim and the defendant. This paragraph shall not be construed to limit the right of a crime victim to disclose this information.
(2) Subdivisions (c) and (d) do not preclude an agreement preventing the disclosure of any of the following relating to a cause of action described in subdivision (c):
(A) Medical information or personal identifying information, as defined in subdivision (b) of Section 530.55 of the Penal Code, regarding a person injured by a defective product or environmental condition.
(B) The amount of a settlement.
(C) (i)Information relating to a current, proprietary customer list or a trade secret, if the party seeking to prevent its disclosure moves the court or arbitral tribunal for an order of nondisclosure and the order is granted pursuant to clause (ii). a protective order. The order shall be narrowly tailored and narrowly construed. A court is not obligated to review any documents that are subject to a requested protective order if the moving party attests, under penalty of perjury, that the documents do not contain evidence showing that the party responsible for the product or condition knows or should know that the product or condition is an ongoing danger to the public health or safety. If the party moving for a protective order does not attest to this fact, the court may refuse to issue the order or may hold a hearing requiring the moving party to show good cause as to why the protective order should be issued without the attestation.

(ii)A court or arbitral tribunal may grant an order of nondisclosure if the moving party demonstrates that the presumption in favor of disclosure is clearly outweighed by a specific and substantial overriding interest. The order shall be narrowly tailored to restrict no more information than necessary to protect the interest, and it shall be narrowly construed.

(f) (1) A provision within a settlement agreement that prevents the disclosure of factual information related to the action described in subdivision (b) that is entered into on or after January 1, 2017, is void as a matter of law and against public policy.
(2) A provision within a settlement agreement that prevents the disclosure of factual information related to the action described in subdivision (c) that is entered into on or after January 1, 2019, is void as a matter of law and against public policy.
(g) 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 subdivisions (b) and (c) that is not otherwise authorized by this section 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 investigate and take appropriate action in any such case brought to its attention.