Keeping Settlements Secret

Abstract

This article explores the tensions between the perceived public and private aspects of the litigation system by using the debate surrounding whether or not the public civil justice system can and should tolerate secret settlements. By evaluating the arguments against secret settlements, the article argues that, in civil litigation, the public rights inherent in the system must necessarily play out as secondary collateral concerns to the private rights of the individual litigants. To do otherwise is to upset the balance of the adversarial nature which is the bedrock of the civil justice system. The system itself is a decidedly private system, built around solving private interest disputes. The system happens to have some public aspects to it, but when such aspects attempt to trump private dispute settlement concerns, the very public values sought to be protected are actually jeopardized. The private, party-centric view of the system is actually the more effective perspective from which to design an all-encompassing civil justice system that preserves private rights and also protects some valuable public interest rights as well. It is therefore essential to acknowledge this inverse relationship between the public view and the private view of the civil litigation system when one is exploring any reforms to the system, such as whether or not to foster or ban secret settlements.

Part I of this article begins by discussing what a secret settlement is and how it operates. The article next explores how secret settlements are used by both defendants and plaintiffs in civil litigation. Part II of this article canvasses two opposing views of the purpose of the civil justice system: the “public view” and the “private view.” The article explores how public law proponents of the civil litigation system, like David Luban, Owen Fiss, and Abram Chayes have decidedly ideologically driven, results-based public-centric views about secret settlements (and the litigation system) which perhaps lead to untenable conclusions when applied in a civil justice system design context. The litigants themselves in this line of thinking take second seat to the public interest and, more curiously, the public interest and the litigants’ interests appear to be presented as ideologically opposite.

Instead, the article argues that rights-driven, more party-centric approaches to the civil litigation system such as those taken by Arthur Miller, Carrie Menkel-Meadow, and Christopher Drahozal and Laura Hines actually do a better job of balancing both private and public interests in the system itself. Part III reviews key public view criticisms about secret settlements and demonstrates that the solution to these criticisms are actually better informed by the private view of litigation. The public view postulates that secret settlements defy transparency, do not contribute to the public good, can perpetuate danger, may take advantage of vulnerable litigants, and should not be used in litigation where the government is a party. However, the private view of secret settlements turns the public view criticisms upside-down and exposes the problematic, exclusively public nature of the public view such that that norms of the public view are not nearly as achievable in actual operation as one might otherwise expect at first blush. Part IV of this article concludes by offering a solution. When reforming and designing the civil justice system, either in whole or in part – like whether or not to allow secret settlements – one can expect a fuller, more balanced normative dialogue by using the private view as a primary modality of thinking about litigation in a systemic way. In the end, the private view of litigation often has far more “public” to the “private” than one might expect.