Senators Introduce Legislation to Limit Secret Settlements in Product Liability Cases

Legislation_to_Limit_Secret_Settlements_in_Product_Liability_CasesIn an effort to discourage secret settlements of the sort General Motors reportedly entered into in cases involving defective ignition switches, two senators have introduced the Sunshine in Litigation Act.

In their statement about the bill, Senators Richard Blumenthal  (D-Conn.) and Lindsey Graham (R-S.C.) charge that sealed settlements “prevented the public … from learning about the dangers posed by these faulty ignition switches,” the Detroit Free Press reports. The legislation would compel federal judges to consider the public interest before sealing court records in personal injury and product liability lawsuits.

GM entered into sealed settlements with owners of some of the 2.6 million recalled cars equipped with defective ignition switches, according to the Free Press. The defective switch has been linked to 13 deaths and 42 crashes. The switch, if jostled, can unexpectedly move from the “run” position, which shuts off the car’s engine and electrical system and disables the air bags.

If this bill becomes law, a judge would need to determine that secrecy interests outweigh public health and safety concerns before sealing a settlement. A court could not restrict a party in such a settlement from disclosing public health or safety information to federal or state agencies. And the bill requires that information uncovered in the discovery phase in one case must be shared with like cases, the Free Press reports.

It took General Motors 10 years to initiate a recall of Chevrolet Cobalts, Saturn Ions and other models with the defective switches. Records indicate that GM was aware of the switch problem in 2004 but rejected proposed solutions in 2004 and 2005, according to the New York Times. Congress, the Justice Department, and federal safety regulators are investigating the delay and who was responsible.

GM has been fined $35 million – the maximum allowed – for failing to disclose the defect sooner, the Free Press reports. The recall did not begin until early this year and has built to include some 2.6 million vehicles.

 

 

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