Is The Public's Safety Being Protected By Court-Ordered Secrecy In Lawsuits?

This spring, attorney Matthew Rinaldi wanted to put out a press release warning that adults who tried to use the children's toy Slip 'N Slide could face serious injury.

His firm had settled a lawsuit earlier against the manufacturer, Kransco, for 37-year-old Bill Evans of Ceres, Calif., who was left a quadriplegic after fracturing his neck on the popular lawn toy.

But when Rinaldi informed Kransco of his plans for the press release, its lawyers stopped him cold. They threatened "dire consequences" if he went ahead, he said.

The Evans case had been settled confidentially, and the proposed press release was not permissible under the settlement.

"We told him that if he violated the confidentiality agreement that we would take any action available to us," said Kransco lawyer Stuart Gordon, who also said he protested inaccuracies in the release.

The debate shows the controversy over court secrecy is as combustible as ever: Does a company's right to keep its business affairs secret outweigh the public's right to information about potentially harmful products?

"The battle rages on, despite the fact that most every court and scholar that has addressed it has said that court secrecy is having a bad effect on society and on the judicial system," said Francis Hare, an Alabama trial lawyer who has written a textbook on the topic.

Business groups argue that confidentiality orders are necessary to keep trade secrets and other proprietary information from leaking out in lawsuits.

Firms routinely ask judges to seal documents and impose stiff gag orders on opposing counsel during litigation and as a condition of any settlement. They also say that publicizing big settlements would attract frivolous lawsuits from people seeking similar payoffs.

" `Secrecy agreement' conjures up such a sinister image," said William Fay, executive director of the Product Liability Coordinating Committee, a business lobbying group. "Yet if you are injured by a product, you want a quick recovery, and a lot of times a company will settle if a protective order is involved, as opposed to where one is not."

Implant information kept secret

Recently, in litigation involving cars, drugs and medical devices, there have been notable examples of the impact of court secrecy. The Food and Drug Administration was kept in the dark for years about alleged defects in silicone breast implants because of secrecy in lawsuits, according to a former chairman of an FDA scientific advisory panel that investigated the devices. The FDA restricted their use in 1992.

Because of the growing criticism, 15 states have regulated court secrecy since 1989. Either by enacting legislation or changing court rules, they have made it harder for courts to seal records without considering the health and safety impact.

Last month, the debate spilled into Congress. On June 28, the Senate, facing strong business opposition, defeated by a 51-49 procedural vote a proposal by Sen. Herb Kohl, D-Wis., that would have required federal judges to weigh the public interests involved before sealing records in a lawsuit.

In the Slip 'N Slide litigation, Kransco has used protective orders and settled out of court at least two claims where adults alleged to have suffered severe injuries and claimed that Kransco's warnings were inadequate.

"It's pretty obvious that the company has attempted to limit the information available to the public and to lawyers regarding the safety of the Slip 'N Slide, and that they have been successful in doing it," said Bruce Bachhuber, a Wisconsin lawyer who won a $12.3 million jury verdict, including $10 million in punitive damages, against Kransco in 1991 for a man who broke his neck on a Slip 'N Slide. The case was settled later for $7.5 million.

Kransco, which was sold this spring to Mattel Inc. for $260 million, maintains that Slip 'N Slides are safe when used properly, that they have been used by millions of children without incident and that the firm has long warned that the product is not for adult use, said Gordon, the Kransco lawyer.

The original manufacturer, Wham-O, stopped making Slip 'N Slides in the 1970s after several serious injuries and lawsuits, a company official said in a legal deposition.

Slide reintroduced in 1983

In 1982, Kransco, a San Francisco toy company, acquired Wham-O, and in 1983 it reintroduced the slide with a new design and product warnings that it has carried ever since. Messages are stamped on the box, on the instructions and on the slide itself: "Warning: Can cause injury if not properly used" and "Not recommended for adult usage."

"There are a few people who don't care about whatever instructions they may read or choose not to read," Gordon said.

He said the firm has always denied liability in such suits, saying that the product clearly warns that adults should not use Slip 'N Slide. It uses confidentiality to minimize publicity that would only provoke more meritless suits, he said.

In 1992, Kransco stopped making Slip 'N Slides, claiming that it was losing market share. Yet, with an unknown number of Slip 'N Slides still in homes, Kransco last year asked the Consumer Product Safety Commission to help it publicize the risks.

The result was a safety alert jointly issued in May 1993, which said that because of their height and weight and the risk of severe spinal-cord injuries, adults and teenagers should not use Slip 'N Slides.

Five months after the Wisconsin jury verdict, Kransco President John Rosekranz wrote to the product-safety agency and vigorously defended the slides, arguing that the product warnings were adequate.

In a letter dated Sept. 6, 1991, he said that when properly used, the slides "do not create a substantial product hazard. We therefore plan no informational or corrective action."

But two years later, in the 1993 safety alert, Kransco reported that eight people - seven adults and one 13-year-old - had suffered neck injuries, quadriplegia or paraplegia while using the company's slides from 1971 to 1991. One man later died of his injuries.

Other court records show that when that 1991 letter was sent, Kransco officials already knew of all but one of the eight serious spinal-cord injuries.

Kransco lawyer Gordon said that the company did not seek to minimize risks of which it was aware and always dealt openly and forthrightly with the product-safety agency.