Request for Public Comments on NHTSA Enforcement Guidance Bulletin 2015-01: Recommended Best Practices for Protective Orders and Settlement Agreements in Civil Litigation

Timothy H. Goodman
National Highway Traffic Safety Administration
September 21, 2015

[Federal Register Volume 80, Number 182 (Monday, September 21, 2015)]
[Notices]
[Pages 57046-57049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23638]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2015-0095; Notice 1]


Request for Public Comments on NHTSA Enforcement Guidance 
Bulletin 2015-01: Recommended Best Practices for Protective Orders and 
Settlement Agreements in Civil Litigation

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation.

ACTION: Request for public comments.

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SUMMARY: NHTSA's ability to identify and define safety-related motor 
vehicle defects relies in large part on manufacturers' self-reporting. 
However, although federal regulations may require them to report 
certain information to NHTSA, manufacturers do not always do so, or do 
not do so in a timely manner. Additionally, the information a 
manufacturer is required to report varies greatly depending on the 
product and company size and purpose. Given these constraints, safety-
related information developed or discovered in private litigation is an 
important resource for NHTSA.
    This proposed Enforcement Guidance Bulletin sets forth NHTSA's 
current thinking on this topic, and guiding principles and best 
practices to be utilized in the context of private litigation. To the 
extent protective orders, settlement agreements, or other 
confidentiality provisions prohibit information obtained in private 
litigation from being transmitted to NHTSA, such limitations are 
contrary to Rule 26 of the Federal Rules of Civil Procedure, its state 
corollaries, and sound principles of public policy. Although such 
restrictions are generally prohibited by applicable rules and law, the 
Agency recommends that litigants include a specific provision in any 
protective order or settlement agreement that provides for disclosure 
of relevant motor vehicle safety information to NHTSA, regardless of 
any other restrictions on the disclosure or dissemination of such 
information.
    This notice solicits comments from the public, from counsel, and 
from other interested parties concerning this proposed enforcement 
guidance, and best practices to be followed by litigants in private 
litigation regarding protective orders and settlement agreements that 
contain confidentiality provisions limiting disclosure of safety-
related information.

DATES: All comments should be submitted early enough to ensure that 
Docket Management receives them not later than October 19, 2015.

ADDRESSES: You may submit comments to the docket number identified in 
the heading of this document by any of the following methods:
     Federal eRulemaking Portal: go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Docket Management Facility, M-30, U.S. Department of 
Transportation, West Building Ground Floor, Rm. W12-140, 1200 New 
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery or Courier: U.S. Department of 
Transportation, West Building Ground Floor, Rm. W12-140, 1200 New 
Jersey Avenue SE., Washington, DC, 20590 between 9 a.m. and 5 p.m. ET, 
Monday through Friday, except Federal holidays.
     Fax: (202) 493-2251.
    Regardless of how you submit your comments, you should mention the 
docket number of this document.
    You may call the Docket at 202-366-9324.
    Note that all comments received will be posted without change to 
http://www.regulations.gov, including any personal information 
provided.

FOR FURTHER INFORMATION CONTACT: Kara Fischer, Office of the Chief 
Counsel, NCC-111, National Highway Traffic Safety Administration, 1200 
New Jersey Avenue SE., Washington, DC 20590 (telephone: 202-366-8726).

SUPPLEMENTARY INFORMATION: In this notice, NHTSA has begun assembling 
for guidance and informative purposes an Enforcement Guidance Bulletin 
which sets forth guiding principles and best practices for private 
litigants utilizing protective orders and settlement agreements with 
confidentiality provisions. NHTSA is not establishing a binding set of 
rules on best practices, or even suggesting that a single set of best 
practices would apply in all situations. The Agency fully realizes that 
best practices may vary widely depending on circumstance, and

[[Page 57047]]

private litigants remain free to choose the practices that best fit 
their needs in pursuing litigation.
    However, since NHTSA recognizes the public interest in this topic, 
we solicit public comment before issuing a final ``Enforcement Guidance 
Bulletin'' document. Commenters who recommend specific best practices 
should be careful to address the practical impact that those practices 
may have on individuals and entities of differing size, and the 
relative costs and benefits of implementing various practices. After 
receiving comments, we will issue a subsequent notice delineating a 
final Enforcement Guidance Bulletin for informative purposes. We will 
also post the Enforcement Guidance Bulletin on the Agency's Web site 
for easy reference.
    In light of the foregoing, NHTSA proposes the following Enforcement 
Guidance for private litigants pertaining to the use of confidentiality 
provisions in protective orders and settlement agreements:
    The National Highway Traffic Safety Administration (``NHTSA'' or 
``the Agency'') is tasked with, among other things, setting Federal 
Motor Vehicle Safety Standards (``FMVSS''), identifying and ensuring 
the remedy of safety-related defects, and monitoring and enforcing 
compliance with these standards to safeguard the well-being of the 
American public. The only way the Agency can fully achieve these 
objectives is if it has the necessary information within its grasp, 
including information discovered or identified in private litigation.
    NHTSA's ability to identify and define safety-related motor vehicle 
defects relies in large part on timely and accurate reporting by 
manufacturers, suppliers, and various parties throughout the industry, 
whether by statutory or regulatory requirement or pursuant to 
compulsory process. Although federal law may require industry 
participants to report certain information to NHTSA, they do not always 
do so, or do not do so in a timely manner. Additionally, the type of 
information an industry participant is required to report varies 
greatly depending on the product and company size and purpose. While 
certain entities are required to report both deaths and injuries 
resulting from the use of their products, others only must report 
deaths. In those cases, in the absence of a fatal incident a 
potentially defective product may not come across NHTSA's radar until 
dozens, if not hundreds, of people have sustained serious injury--if it 
ever reaches NHTSA at all.
    Given these constraints, safety-related information developed or 
discovered in private litigation is an important resource for NHTSA. 
Yet confidentiality restrictions imposed as part of a protective order 
or settlement agreement in private litigation--whether court-sanctioned 
or privately negotiated--often prevent parties from providing 
information about potentially dangerous products to the Agency. As many 
scholarly articles have noted, as has history has borne out, such 
restrictions have kept critical safety information out of the hands of 
both regulators and the public. As a matter of law and sound public 
policy, NHTSA cannot countenance this situation.
    There is no doubt that confidentiality provisions, protective 
orders, and the sealing of cases are appropriate litigation tools in 
some circumstances. In most instances, however, the interests of public 
health and safety trump any confidentiality interests. In matters that 
concern the safety of the American driving public and pedestrians, it 
is important that entities and individuals are not prevented from 
providing relevant information to the very Agency tasked with ensuring 
that safety.
    To the extent protective orders, settlement agreements, or other 
confidentiality provisions prohibit vehicle safety-related information 
from being transmitted to NHTSA, such limitations are contrary to 
established principles of public policy and law, including Rule 26 of 
the Federal Rules of Civil Procedure and its state corollaries which 
require a showing of good cause to impose confidentiality. The recent 
General Motors ignition switch and Takata airbag recalls are but two 
examples of how vital early identification of motor vehicle risks or 
defects is for the safety and welfare of the American public.
    To further this important public policy, the Agency encourages and 
recommends that parties include a provision in any protective order or 
settlement agreement that--despite whatever other restrictions on 
confidentiality are imposed--specifically allows for disclosure of 
relevant motor vehicle safety information to NHTSA and other applicable 
government authorities.

I. Legal and Policy Background

    ``Once a matter is brought before a court for resolution, it is no 
longer solely the parties' case, but also the public's case.'' Brown v. 
Advantage Eng'g, Inc., 960 F.2d 1013, 1016 (11th Cir. 1992). As a 
general rule, the public is permitted ``access to litigation documents 
and information produced during discovery.'' Phillips v. Gen. Motors 
Corp., 307 F.3d 1206, 1210 (9th Cir. 2002). Where there is a 
presumptive right of public access under the federal rules, courts have 
discretion upon a showing of ``good cause'' to restrict access to 
documents or information ``to protect a party or person from annoyance, 
embarrassment, oppression, or undue burden or expense.'' Fed. R. Civ. 
P. 26(c)(1). As the Seventh Circuit has stated, Rule 26(c)'s good cause 
requirement means that, ``[a]s a general proposition, pretrial 
discovery must take place in the public unless compelling reasons exist 
for denying the public access to the proceedings.'' Am. Telephone and 
Telegraph Co. v. Grady, 594 F.2d 594, 596 (7th Cir. 1978); see also, 
Public Citizen v. Liggett Group, Inc., 858 F.2d 775, 790 (1st Cir. 
1988). Trial courts enjoy broad discretion in determining when to issue 
a protective order and the degree and scope of protection required. 
Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984).
    General allegations of harm, unsubstantiated by specific examples 
or articulated reasoning, however, are insufficient to warrant such an 
order. Beckman Indus., Inc. v. Int'l Ins. Co., 966 F.2d 470, 476 (9th 
Cir. 1992); Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1121 (3d 
Cir. 1986). Rather, the burden is on the party seeking protection from 
disclosure to ``allege specific prejudice or harm'' that will result if 
the protective order is not granted. In re Roman Catholic Archbishop of 
Portland in Oregon, 661 F.3d 417, 424 (9th Cir. 2011), cert. denied, 
132 S. Ct. 1867 (2012); In re Terra Intern., Inc., 134 F.3d 302 (5th 
Cir. 1998) (good cause requirement contemplates a particular and 
specific demonstration of fact as distinguished from conclusory 
statements); Glenmeade Trust Co. v. Thompson, 56 F.3d 476 (3d Cir. 
1995) (generalized allegations of injury insufficient to satisfy the 
good cause requirement for issuance of protective order); Iowa Beef 
Processors, Inc. v. Bagley, 601 F.2d 949, 954 n. 5 (8th Cir. 1979) 
(party seeking protective order bears burden of making ``good cause'' 
showing that the information being sought falls within scope of Rule 
26(c) and that moving party will be harmed by its disclosure).
    Even if a court concludes that such harm will result from 
disclosure, it still must proceed to balance ``the public and private 
interests to decide whether a protective order is necessary.'' 
Phillips, 307 F.3d at 1211. See Shingara v. Skiles, 420 F.3d 301, 308 
(3d Cir. 2005) (``[A] court always must consider the public interest 
when deciding whether to impose a protective order.''); Glenmede

[[Page 57048]]

Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995) (``[T]he 
analysis [of good cause] should always reflect a balancing of private 
versus public interests.''). In doing so, courts consider a number of 
factors, including:

    (1) Whether disclosure will violate any privacy interests; (2) 
whether the information is being sought for a legitimate purpose or 
for an improper purpose; (3) whether disclosure of the information 
will cause a party embarrassment; (4) whether confidentiality is 
being sought over information important to public health and safety; 
(5) whether the sharing of information among litigants will promote 
fairness and efficiency; (6) whether a party benefitting from the 
order of confidentiality is a public entity or official; and (7) 
whether the case involves issues important to the public.

Glenmede Trust Co., 56 F.3d at 483. See also In re Roman Catholic 
Archbishop of Portland in Oregon, 661 F.3d at 424.
    The public's interest in access to court records is strongest when 
the records concern public health or safety. See, e.g., Brown & 
Williamson Tobacco Corp. v. F.T.C, 710 F.2d 1165, 1180-81 (6th Cir. 
1983) (vacating district court's sealing of court records involving the 
content of tar and nicotine in cigarettes and emphasizing that the 
public had particularly strong interest in the court records at issue 
because the ``litigation potentially involves the health of citizens 
who have an interest in knowing the accurate `tar' and nicotine content 
of the various brands of cigarettes on the market''); see also United 
States v. General Motors, 99 FRD. 610, 612 (D.D.C. 1983) (the ``greater 
the public's interest in the case the less acceptable are restraints on 
the public's access to the proceedings''); In re Air Crash at 
Lexington, Ky., August 27, 2006, No. 5:06-CV-316-KSF, 2009 WL 16836289, 
at *8 (E.D. Ky. June 16, 2009) (noting the ``public has an interest in 
ascertaining what evidence and records the . . . Court [has] relied 
upon in reaching [its] decisions,'' and that ``the public interest in a 
plane crash that resulted in the deaths of forty-nine people is quite 
strong, as is the public interest in air safety''). In balancing the 
privacy interests of the party seeking protection, a court ``must 
consider the need for public dissemination, in order to alert other 
consumers to potential dangers posed by the product.'' Koval v. Gen. 
Motors Corp., 62 Ohio Misc. 2d 694, 699, 610 NE.2d 1199, 1202 (Com. Pl. 
1990) (citing Hendricks v. Jeep Corp. (D. Mont. June 3, 1986), case No. 
CV-82-092-M-PGH (unreported) and United States v. Hooker Chemicals & 
Plastics Corp., 90 FRD. 421 (W.D.N.Y. 1981)).
    A number of states have enacted ``Sunshine in Litigation'' acts, 
which thrust the interests of public health and safety into the 
forefront by preventing parties from concealing safety hazards through 
settlement agreements or protective orders. Some, such as Florida, 
broadly forbid courts from entering protective orders that may have the 
``purpose or effect of concealing a public hazard or any information 
concerning a public hazard'' or that ``may be useful to members of the 
public in protecting themselves from injury.'' Fla. Stat. Ann. Sec.  
69.081 (West 2015). Others, such as Texas, establish a presumption that 
court records--including all documents filed with the court, unfiled 
settlement agreements, and unfiled discovery documents ``concerning 
matters that have a probable adverse effect upon the general public 
health or safety''--are open to the general public; records may be 
sealed only upon a showing that there is a specific, serious, and 
substantial interest in nondisclosure which clearly outweighs the 
presumption of public access and any probable effect on public health 
or safety. Tex. R. Civ. P. 76a.
    A federal corollary introduced on May 14, 2015, currently pending 
before the House of Representatives, H.R. 2336 (114th Congress, 2015-
2017), would create a presumption against protective orders and the 
sealing of settlements and cases ``in which the pleadings state facts 
that are relevant to the protection of public health or safety.'' The 
presumption would control unless a party asks a judge to find that a 
specific and substantial interest in maintaining secrecy outweighs the 
public health and safety interest and that the order is no broader than 
necessary to protect the privacy interest asserted. Id. It would also 
prohibit a court from approving or enforcing a provision that restricts 
a party from disclosing public health or safety information to any 
federal or state agency with authority to enforce laws regulating an 
activity related to such information. Id.
    Several states have taken a broader approach, enacting statutes and 
court rules to address the question of whether or not courts should 
enforce confidentiality agreements, regardless of the subject matter. 
The common theme of these statutes is a balancing of interests. For 
example, drawing upon federal precedent requiring consideration of the 
public interest at stake, Idaho Court Administrative Rule 32 directs 
courts considering shielding requests to first determine whether the 
interest in privacy or public disclosure predominates and to ``fashion 
the least restrictive exception from disclosure consistent with privacy 
interests.'' Idaho R. Admin. 32(f). See also Mich. Ct. R. 8.119(F) 
(records may be sealed upon showing of good cause and that no less 
restrictive means are available to protect the interest asserted); 
D.S.C. LCivR 5.03 (party must state why sealing is necessary and 
explain why less restrictive alternatives will not afford adequate 
protection). Indiana's legislature went a step further, requiring an 
affirmative showing that a public interest will be protected by sealing 
a record, and mandating that records shall be unsealed as soon as 
possible after the reason for sealing them no longer exists. Ind. Code 
Sec.  5-14-3-5.5 (2011). See also, Richard Rosen, Settlement Agreements 
in Com. Disputes, n. 103 Sec.  10.04 (2015) (citing to statutory 
provisions in California, Colorado, Michigan, Montana, New Hampshire, 
New York, Ohio, Oregon, South Carolina, and Utah). Although the 
specifics of each provision vary, all are consistent with the notion 
that the safety of public should be given considerable weight in 
determining whether to restrict access to information.
    Basic contract principles also dictate that the public health and 
safety concern should be of paramount significance in drafting and 
approving protective orders and settlement agreements. While parties 
are generally free to contract as they see fit, ``courts will not 
hesitate to declare void as against public policy contractual 
provisions which clearly tend to the injury of the public in some 
way.'' 17A C.J.S. Contracts Sec.  281 (2015) (internal citations 
omitted); see Thomas James Associates, Inc. v. Jameson, 102 F.3d 60, 66 
(2d Cir. 1996) (``[C]ourts must not be timid in voiding agreements 
which tend to injure the public good or contravene some established 
interest of society.'') (internal quotations and citations omitted); 
see also Vasquez v. Glassboro Service Ass'n, Inc., 83 N.J. 86, 415 A.2d 
1156 (1980) (citing text for general proposition that courts have broad 
power to declare agreements violative of public policy).
    ``While the term `public policy' lacks precise definition, . . . it 
may be stated generally as a legal principle which holds that no one 
may lawfully do that which has a tendency to injure the public welfare. 
. . .'' O'Hara v. Ahlgren, Blumenfeld and Kempster, 537 NE.2d 730 (Ill. 
1989). ``An agreement is against public policy if it is injurious to 
the interests of the public, contravenes some established interest of 
society, violates some public statute, is against good morals, tends to 
interfere with the public welfare or safety, or is at war with the 
interests of society or is in

[[Page 57049]]

conflict with the morals of the time.'' E & B Mktg. Enterprises, Inc. 
v. Ryan, 568 NE.2d 339, 209 Ill. App. 3d 626 (1st Dist. 1991). See also 
Johnson v. Peterbilt of Fargo, Inc., 438 NW.2d 162 (N.D. 1989) 
(``Public policy, with respect to contract provisions, is a principle 
of law whereby a contract provision will not be enforced if it has a 
tendency to be injurious to the public or against the public good.''). 
An agreement is unenforceable if the interest in its enforcement is 
outweighed by the public policy harmed by enforcement of the agreement. 
17A C.J.S. Contracts Sec.  281 (citation omitted).
    In fact, the Florida Sunshine in Litigation Act specifically 
codifies this concept: ``Any portion of an agreement or contract which 
has the purpose or effect of concealing a public hazard, any 
information concerning a public hazard, or any information which may be 
useful to members of the public in protecting themselves from injury 
which may result from the public hazard, is void, contrary to public 
policy, and may not be enforced.'' Fla. Stat. Ann. Sec.  69.081(4). See 
also Ark. Code Ann. Sec.  16-55-122 (2011) (rendering void any 
settlement provision purporting to restrict disclosure of an 
environmental hazard). Although the Florida provision broadly addresses 
any contract, this notion is particularly applicable in the context of 
protective orders or settlement agreement terms that prevent litigants 
from disclosing information to NHTSA.
    The good cause requirements found in Rule 26 and related state 
provisions, and the doctrines underlying NHTSA's own regulations all 
advance the unassailable public policy of maintaining and preserving 
the health and welfare of the public. This strong policy has been 
realized and enforced by the refusal of many courts and litigants to 
engage in protective orders or settlement agreements that keep 
regulators and the public in the dark about potential safety hazards. 
See Culinary Foods, Inc. v. Raychem Corp., 151 FRD. 297 (N.D. Ill.), 
clarified 153 FRD. 614 (1993) (any information as to whether products 
liability defendant's products were dangerous, and whether defendant 
knew of dangers and either failed to take action or attempted to 
conceal information, would not be encompassed by protective order under 
discovery rule); Cipollone v. Liggett Group, Inc., 113 FRD. 86, 87 
(D.N.J. 1986) (``Discovery may well reveal that a product is defective 
and its continued use dangerous to the consuming public. . . . It is 
inconceivable to this court that under such circumstances the public 
interest is not a vital factor to be considered in determining whether 
to further conceal that information and whether a court should be a 
party to that concealment.''); Toe v. Cooper Tire & Rubber Co. (Iowa 
District Court, Polk County, No. CL 106914) (Order on Defendant's 
Motion to Continue Protective Order, Jan. 18, 2012) (unsealing 
transcript where confidential documents related to tire defect were 
discussed). See also, Ohio Valley Envtl. Coal. v. Elk Run Coal Co., 
Inc., 291 FRD. 114 (S.D. W.Va. 2013) (good cause did not exist for 
issuance of protective order in environmental group's suit against 
company because there was no specific showing of identifiable harm 
company would suffer and case involved issues of importance to public 
health and safety); In re Roman Catholic Archbishop of Portland in 
Oregon, 661 F.3d 417 (9th Cir.), cert. denied, 132 S. Ct. 1867 (2011) 
(private interest in nondisclosure was not outweighed by public 
interests in protecting public safety).

II. Recommended Best Practices

    Consistent with the foregoing legal and policy background, it is 
NHTSA's position that protective orders and settlement agreements 
should not be used to shield critical safety information from the 
Agency, either intentionally or unintentionally. This is not to say 
that parties should not enter into these agreements. To the contrary, 
these tools are often necessary to promote full and complete 
disclosure, to prevent abuses of the discovery process, and to protect 
legitimate privacy and proprietary interests. However, as explained 
above, they cannot be used to preclude disclosure of safety-related 
information from regulatory agencies and other government authorities. 
To do so is contrary to law and the underlying policies inherent in 
Rule 26 and state corollaries, and against sound public policy.
    NHTSA recommends that all parties include a provision in any 
protective order or settlement agreement that--despite whatever other 
restrictions on confidentiality are imposed, and whether entered into 
by consent or judicial fiat--specifically allows for disclosure of 
relevant motor vehicle safety information to NHTSA and other applicable 
authorities. Such a provision could be stated generically, providing 
that nothing in the order or agreement shall be construed to prohibit 
either party from disclosing information to a regulatory agency or 
governmental entity who has an interest in the subject matter of the 
underlying suit. For example, the provision could state that 
``discovery material may only be disclosed to . . . governmental 
entities with an interest in the public safety hazards involving 
[description of product/vehicle].'' Or, it could specifically address 
NHTSA's interest, as contemplated by the recent NHTSA Consent Order 
requiring Chrysler to ``develop and implement a plan ensuring that, in 
safety-related litigation, FCA US uses its best efforts to include in 
any protective order, settlement agreement, or equivalent, a provision 
that explicitly allows FCA US to provide information and documents to 
NHTSA.'' See In re: FCA US LLC, AQ14-003, July 24, 2015 Consent Order, 
Attachment A, p. 27 at ] (B)(12), available at www.safercar.gov/rs/chrysler/pddfs/FCA_Consent_Order.pdf.
    Whatever the language, confidentiality agreements and protective 
orders should not be utilized to prevent the parties from producing 
information that implicates public safety to the very entity charged 
with ensuring and protecting that safety. Instead, such orders and 
agreements should clearly authorize and facilitate the disclosure of 
safety-related information to NHTSA. Such a provision is consistent 
with, and in some cases mandated by, federal and state statutory 
schemes and regulations and applicable case law, and is wholly in line 
with principles of sound public policy.
    Applicability/Legal Statement: This Enforcement Guidance Bulletin 
sets forth NHTSA's current interpretation and thinking on this topic 
and guiding principles and best practices to be utilized in the context 
of private litigation. This Bulletin is not a final agency action and 
is intended as guidance only. This Bulletin is not intended, nor can it 
be relied upon, to create any rights enforceable by any party against 
NHTSA, the Department of Transportation, or the United States. 
Moreover, these recommended practices to not establish any defense to 
any violations of the statutes and regulations that NHTSA administers. 
This Bulletin may be revised in writing without notice to reflect 
changes in NHTSA's evaluation and analysis, or to clarify and update 
text.

    Authority:  49 U.S.C. 30101, et seq.; delegations of authority 
at 49 CFR 1.95(a), 501.2(a)(1), 501.5.

    Issued: September 14, 2015.
Timothy H. Goodman,
Assistant Chief Counsel for Litigation and Enforcement.
[FR Doc. 2015-23638 Filed 9-18-15; 8:45 am]
 BILLING CODE 4910-59-P