I took the time today to read again the Seattle Times article by Maureen O’Hagan, “Seattle lawyer turns into healthy food crusader,” and I was struck by a discussion I had with the reporter:
Marler, … says he and his firm, Marler Clark, have pried $500 million in settlements out of companies that have sickened customers. The vast majority of the firm’s cases settle. “We have a lot of big cases, $7 (million) to $10 million cases,” Marler said. “People don’t just give you that kind of money unless you have your foot on their throat.”
I won’t say that she did not believe we have reached over $500 million in settlements in the last 10 years, but she was skeptical. And, who could blame her? I mean, no matter how hard you look, you will find only one verdict (Finley E. coli O157:H7 Outbreak $4.75 million) and only a few settlements — Jack in the Box’s $15.6 million settlement with Brianne Kiner, Odwalla’s $12 million – $15 million E. coli O157:H7 settlement, and an $11 million E. coli O157:H7 settlement with BJ’s.
Those settlement amounts became public, in part, only because of mistakes — the defense lawyer failed to seal the BJ’s court file and it appears that Odwalla leaked the settlement, even though the parents of the injured children wanted the settlements to be confidential. The Kiner settlement was different; both sides, the Kiners and Jack in the Box, wanted the settlement to be public.
So, no wonder that Ms. O’Hagan questioned the settlement total. All three settlements that were revealed — Kiner, Odwalla and BJ’s — were the exception to the general rule of confidentiality.
The bottom line is that defendants (aka, companies that poison customers) and their insurers want confidentiality. Why? What food company really wants to admit it paid money for poisoning someone? And, what insurance company wants to admit it paid any money at all to anyone at any time?
As for victims, many agree to the defendant’s desire for confidentiality to get money that is rightfully theirs as compensation for injuries, while others simply feel the public does not need to know the amount of the settlement — in essence, they have a right to privacy.
The reality is that nearly all settlement agreements today contain a provision like:
Confidentiality. In further consideration of the payment to be made by Releasee, Releasors and their attorneys, including all individuals employed by or with the Releasors and/or their attorneys agree and represent that the existence of this Agreement, the Agreement itself, the terms of the Agreement, and the allegations of the complaint, are and shall remain confidential. Except as permitted below, Releasors and their attorneys agree that they will not disclose and have not in the past disclosed this Agreement or the contents thereof to any person, organization and/or entity, and will use their best efforts to insure that any such person who is permitted knowledge of the terms of this Agreement, will not violate the letter or spirit of this Agreement and the confidentiality provisions contained herein.
As I said, injured plaintiffs may desire privacy and therefore find the confidentiality of settlements — especially for their children — beneficial. Defendants and insurers clearly benefit from secret settlements by keeping both if they paid and how much they paid confidential.
However, does the public as a whole suffer from these confidential settlements?
What if a food company repeatedly causes harm and then covers up, not only the amount of the settlement but also the cause of the outbreak, through a confidential settlement? And how does the public benefit from allowing settlements by insurance companies to be secret — especially given that taxpayers have bailed out several of these companies?
What if each settlement amount was transparent? What if the media reported on the settlement? What if the public knew about the number of settlements and the amounts? Would it change legislative behavior? Would it change regulatory behavior? Would it change consumer-purchasing behavior? Would it change a company’s investment in food safety?
I fear that as long as settlements are confidential we will never know. Perhaps it is time for transparency?