Metropolitan News-Enterprise


Tuesday, September 23, 2003


Page 1


C.A. Rejects Bid to Seal Toxic Tort Case Documents


By DAVID WATSON, Staff Writer


This district’s Court of Appeal yesterday rejected a bid to keep documents relating to a toxic tort insurance coverage dispute under seal while a judge’s ruling in the case is challenged.

Presiding Justice Paul A. Turner, writing for Div. Five, said the appellate court was returning 2,589 pages of documents filed under seal to lawyers for Huffy Corporation. The documents had been ordered sealed by Los Angeles Superior Court Judge Owen Lee Kwong.

Huffy filed the documents in support of its petition for a writ of mandate seeking to overturn Kwong’s denial of its cross-motion for summary adjudication in two related cases involving insurance coverage groundwater contamination at the San Gabriel superfund site near a former manufacturing plant in Azusa. More than 10 insurers, several of them based outside the U.S., are involved in the litigation.

The Environmental Protection Agency created the superfund site in 1984. In October of 2002 Kwong signed an order approving a stipulation in the litigation which permitted parties to file documents deemed to be confidential under seal.

Turner noted that Kwong did not, before signing the stipulation, make the express findings required under Rule 243.1 of the California Rules of Court to support an order sealing court records. He also noted that Huffy’s writ petition contained “extensive references to sealed documents,” but was not itself filed under seal.

“We reviewed the documents noting that among the papers were copies of notices of motion, proofs of service, copies of non-California opinions readily available on the Internet and in law libraries, and points and authorities which discussed well established rules of insurance coverage law,” Turner explained. “As permitted by rule 12.5(f)(2), we directed the parties to explain why any or all of the documents should remain sealed.”

In response, Huffy conceded that most of the documents did not meet the legal requirements for secrecy, but it asked that a settlement agreement and portions of 11 other documents remain under seal.

Turner described those documents as “a settlement agreement with a confidentiality clause which contains an express exception when disclosure is ordered by a court; papers which reveal the sources of payments to settle pollution claims; documents which contain admissions that defendant may have violated federal and state pollution laws; papers revealing the identity of witnesses to possible violations of federal and state pollution laws; and documents which, according to a government agency, disclose the identity of other entities that may have violated federal and state pollution laws.”

None of them, he said, met the requirements for preventing public scrutiny of appellate court records.

Turner pointed out the appellate panel was not reviewing the propriety of Kwong’s order permitting the parties to file extensive materials under seal.

“We are not ordering the respondent court to change its stipulated sealing order,” he explained. “Rather, we are addressing the question of whether this court’s records must be made available to the public given the showing made by defendant.  We are proceeding pursuant to rule 12.5(f)(2) which permits us to unseal records which were sealed in the trial court.”

The question of sealing the settlement agreement was controlled by Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, Turner said, requiring a showing of “substantial prejudice” to justify keeping the document under seal.

Turner observed:

“Defendant argues the entire settlement agreement must be sealed. Defendant has not asked to seal any particular parts of the settlement agreement. Much of the settlement agreement is routine verbiage which appears in most settlement agreements. Further, the settlement agreement has a specific provision that if disclosure is required by a court order, the confidentiality provisions are no longer applicable. No prejudice to defendant’s legitimate business and propriety interests will occur if the settlement agreement is ordered unsealed.”

The materials identifying the sources of settlement funding could not be kept secret absent a showing they involved privileged communications, and no such showing had been made, Turner explained. As for the other materials, Huffy failed to surmount the initial requirement of demonstrating an “overriding public interest” justifying secrecy, the justice said.

Turner said the appeals court was returning the documents to the lawyers who filed them. They were free, he said, to refile them in support of the petition, but not under seal.

He noted the documents remain protected by Kwong’s order.

If “the public or any journalist desires to see the currently sealed documents,” they should bring a challenge to that order before Kwong, he said.

Justices Orville A. Armstrong and Richard M. Mosk concurred.

Los Angeles lawyers Terry D. Avchen, Peter C. Sheridan, and Warren A. Koshofer of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro represented Huffy.

Steven M. Crane of the Los Angeles firm of Berkes, Crane, Robinson & Seal was local counsel for the insurer real parties in interest.

The case is Huffy Corporation v. Superior Court (Winterthur Swiss Insurance Co.), B166781.


Copyright 2003, Metropolitan News Company