HF 1701

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to courts; case records; prohibiting certain 
  1.3             agreements to seal certain documents in connection 
  1.4             with litigation; proposing coding for new law as 
  1.5             Minnesota Statutes, chapter 552. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [552.01] [DEFINITIONS.] 
  1.8      Subdivision 1.  [APPLICATION.] The definitions in this 
  1.9   section apply to this chapter. 
  1.10     Subd. 2.  [DOCUMENT.] "Document" means all materials 
  1.11  produced, generated, or obtained in the course of litigation in 
  1.12  any court, including settlement documents, releases, and other 
  1.13  documents terminating the litigation, and any and all materials 
  1.14  produced, generated, or obtained in discovery, whether 
  1.15  maintained by a court or contained in the files of counsel for 
  1.16  the litigants. 
  1.17     Subd. 3.  [ENVIRONMENTAL HAZARD.] "Environmental hazard" 
  1.18  means a release or threatened release of any substance which 
  1.19  poses a threat to public health or safety by presenting a 
  1.20  present or future danger of death, bodily injury, or physical or 
  1.21  emotional disability to persons exposed to the substance.  
  1.22  "Substance" includes any substance listed in any federal or 
  1.23  state list of hazardous substances produced in accordance with 
  1.24  federal or state statutes or rules. 
  1.25     Subd. 4.  [FINAL PROTECTIVE ORDER.] "Final protective order"
  2.1   means an order of any court of competent jurisdiction entered 
  2.2   pursuant to this chapter prohibiting public disclosure of a 
  2.3   particular document. 
  2.4      Subd. 5.  [FINANCIAL FRAUD.] "Financial fraud" means any 
  2.5   plan to sell an investment product to the general public without 
  2.6   full disclosure of the risks associated with the purchase of the 
  2.7   product if the plan would cause or has caused financial loss to 
  2.8   one or more persons in one or more transactions. 
  2.9      Subd. 6.  [TRADE SECRET.] "Trade secret" is anything 
  2.10  tangible or intangible or electronically kept or stored, which 
  2.11  constitutes, represents, evidences, or records a secret 
  2.12  scientific, technical, merchandising, production, or management 
  2.13  information, design, process, procedure, formula, invention, or 
  2.14  improvement, which gives the person owning it an opportunity to 
  2.15  obtain an advantage over competitors who do not know or use it, 
  2.16  and which is not itself evidence of a defective product or an 
  2.17  environmental hazard or a financial fraud. 
  2.18     Sec. 2.  [552.02] [CONCEALMENT OF CERTAIN PUBLIC HAZARDS 
  2.19  PROHIBITED.] 
  2.20     In actions alleging personal injury, wrongful death, or 
  2.21  monetary or property damages caused by a defective product, an 
  2.22  environmental hazard, or a financial fraud, no confidentiality 
  2.23  agreement, settlement agreement, stipulated agreement, or 
  2.24  protective order to keep from public disclosure information that 
  2.25  provides evidence of financial fraud, a defective product, or an 
  2.26  environmental hazard shall be entered or enforceable upon the 
  2.27  settlement of conclusion of any litigation or dispute, except as 
  2.28  provided under section 552.03.  An agreement by private 
  2.29  litigants to conceal documents that is not made under section 
  2.30  552.03, is void and unenforceable as against public policy. 
  2.31     Sec. 3.  [552.03] [FINAL PROTECTIVE ORDER.] 
  2.32     Subdivision 1.  [MOTION.] Any litigant in any action may 
  2.33  seek a final protective order from the court in which the action 
  2.34  is pending upon the conclusion of the litigation by settlement.  
  2.35  A final protective order shall be sought by written motion of 
  2.36  one or more parties.  The motion must identify the documents to 
  3.1   which a final protective order is sought, and shall contain a 
  3.2   request for a hearing.  Documents must be identified in a manner 
  3.3   sufficient to inform the court of their potential significance 
  3.4   to the public and to the litigants, but need not disclose the 
  3.5   contents of the documents.  The motion for a final protective 
  3.6   order shall identify for the court's review documents that 
  3.7   allege evidence of financial fraud, a defective product, or an 
  3.8   environmental hazard.  Other documents need not be identified 
  3.9   for review by the court.  Any party opposing the motion or 
  3.10  contesting the character of the documents identified by the 
  3.11  moving party may file a motion opposing a final protective order 
  3.12  and explaining the significance of the documents in question. 
  3.13     Subd. 2.  [PUBLIC NOTICE.] When a motion is filed under 
  3.14  this section, the court administrator shall post notice of a 
  3.15  motion for a final protective order in a public place in the 
  3.16  courthouse where the action is pending.  The notice shall 
  3.17  contain the caption of the case and the date scheduled for any 
  3.18  hearing upon the motion.  The notice shall remain posted until 
  3.19  the court acts upon the motion. 
  3.20     The court administrator of the court where the motion for a 
  3.21  final protective order is pending shall provide the attorney 
  3.22  general written notice of the filing of the motion.  The notice 
  3.23  shall contain the caption of the case and the date scheduled for 
  3.24  any hearing upon the motion.  Upon receipt of the notice, the 
  3.25  attorney general shall notify all federal, state, or local 
  3.26  regulatory agencies and governmental bodies with an interest in 
  3.27  the subject matter of the litigation that the motion has been 
  3.28  filed and the date scheduled for any hearing on it. 
  3.29     Subd. 3.  [HEARING.] The court shall conduct a hearing upon 
  3.30  a motion for a final protective order.  The hearing shall be 
  3.31  held no sooner than 21 days after the filing of the motion.  The 
  3.32  court may permit representatives of the public interest, 
  3.33  including the attorney general, representatives of federal, 
  3.34  state, and local regulatory or governmental bodies, 
  3.35  representatives of the media, and other persons, in addition to 
  3.36  the parties to the litigation, to address the court on the 
  4.1   issuance and scope of the proposed final protective order.  The 
  4.2   court may conduct the hearing in the manner most conducive to 
  4.3   just resolution of the issues, and may review documents in 
  4.4   camera. 
  4.5      The court shall independently examine the basis and scope 
  4.6   of the proposed final protective order and shall make written 
  4.7   findings under this section for each document proposed for 
  4.8   nondisclosure under the final protective order.  The court may, 
  4.9   in its discretion, refer the matter to a master, with the costs 
  4.10  taxed to the party moving for a final protective order.  The 
  4.11  master shall make an initial review and determination subject to 
  4.12  the approval of the court, as to whether a final protective 
  4.13  order should enter for each individual document. 
  4.14     Subd. 4.  [ORDER.] (a) A final protective order shall be 
  4.15  entered only for good cause shown, in order not to discourage 
  4.16  the broadest availability of information that provides evidence 
  4.17  to the public of financial fraud, a defective product, or an 
  4.18  environmental hazard.  The burden of proving that a final 
  4.19  protective order should issue rests upon the party seeking the 
  4.20  order.  The party seeking a final protective order has the 
  4.21  burden of proving to the court by a preponderance of the 
  4.22  evidence that an order should issue. 
  4.23     (b) In exercising its discretion to grant a final 
  4.24  protective order, a court may consider the following factors 
  4.25  among others, whether: 
  4.26     (1) the document as to which a final protective order is 
  4.27  sought would have been excluded from introduction into evidence 
  4.28  at trial because of any privilege, exclusionary rule, or 
  4.29  testimonial disqualification, under the rules of evidence; 
  4.30     (2) disclosure of the document would violate any interest 
  4.31  or right guaranteed by the constitution or laws of the United 
  4.32  States or this state; or 
  4.33     (3) disclosure of the document would reveal trade secrets 
  4.34  or confidential personal or business information which is not a 
  4.35  trade secret and which does not provide evidence of a financial 
  4.36  fraud, a defective product, or an environmental hazard. 
  5.1      (c) If the court finds that a party is seeking issuance of 
  5.2   a final protective order regarding trade secrets that provide 
  5.3   evidence of financial fraud, a defective product, or an 
  5.4   environmental hazard, the court may issue the final protective 
  5.5   order if it makes written findings that the moving party has 
  5.6   made a particularized showing that: 
  5.7      (1) the order will not conceal information that may enable 
  5.8   members of the public to protect themselves from financial 
  5.9   fraud, a defective product, or an environmental hazard; 
  5.10     (2) the party seeking the final protective order has a 
  5.11  cognizable interest in the material because it contains trade 
  5.12  secrets; and 
  5.13     (3) public disclosure would cause serious harm to the party 
  5.14  requesting confidentiality.  In making a finding under this 
  5.15  factor, the court shall consider whether disclosure of trade 
  5.16  secret information that provides evidence of financial fraud, a 
  5.17  defective product, or an environmental hazard, would benefit any 
  5.18  competitor of the party requesting confidentiality. 
  5.19     (d) If the court in the exercise of its discretion grants a 
  5.20  final protective order but finds that the documents protected 
  5.21  certain evidence of financial fraud, a defective product, or an 
  5.22  environmental hazard, the court shall notify the attorney 
  5.23  general and all interested federal, state, and local regulatory 
  5.24  agencies and governmental bodies.  The recipient agency shall 
  5.25  comply with the order to maintain confidentiality unless 
  5.26  disclosure is required in its judgment to protect the health and 
  5.27  safety of the public.  In that case, the agency may move for 
  5.28  reconsideration of the order of the court or may appeal the 
  5.29  final protective order. 
  5.30     Subd. 5.  [APPEAL.] Any interested party, including parties 
  5.31  to the litigation, the attorney general, representatives of 
  5.32  federal, state, or local regulatory agencies or governmental 
  5.33  bodies, or representatives of the media or any other interested 
  5.34  person, may appeal the grant or denial of a final protective 
  5.35  order under the rules of civil procedure.  For purposes of the 
  5.36  appeal, the grant or denial of a final protective order is a 
  6.1   final judgment.  The court hearing the appeal shall conduct a de 
  6.2   novo review of the motion and documents as to which a final 
  6.3   protective order has been sought. 
  6.4      Subd. 6.  [CONTEST OF VIOLATION.] Any person, other than a 
  6.5   party to a contract or other agreement subject to this section, 
  6.6   may contest any order, judgment, agreement, or contract that 
  6.7   violates this section by concealing documents not subject to a 
  6.8   final protective order.  The contest must be commenced by motion 
  6.9   in the court that entered the order or judgment, or by 
  6.10  commencing an action for declaratory judgment.  The motion or 
  6.11  action must be filed within three years of the date on which the 
  6.12  contract or other agreement subject to this section is executed 
  6.13  or within three years of the date of issuance of the judgment or 
  6.14  order challenged, and must specify the basis upon which the 
  6.15  violation is alleged. 
  6.16     The court shall conduct a hearing and review the challenged 
  6.17  materials under subdivision 1.  If the court finds that the 
  6.18  original concealment was in willful violation of this chapter, 
  6.19  the court may award sanctions as it deems appropriate.  A person 
  6.20  injured by a willful violation of this chapter has a cause of 
  6.21  action for damages against whoever willfully violated this 
  6.22  chapter. 
  6.23     A prevailing party in an action under this subdivision is 
  6.24  entitled to costs and reasonable attorney's fees from the party 
  6.25  concealing the documents.  If the court finds that the motion or 
  6.26  action contesting the order, judgment, agreement, or contract is 
  6.27  made in bad faith or otherwise qualifies under section 549.21, 
  6.28  subdivision 2, the court may award costs and reasonable 
  6.29  attorney's fees to the party concealing the documents. 
  6.30     If more than one person files a motion or action under this 
  6.31  subdivision, the court may consolidate the proceedings.  If more 
  6.32  than one motion or petition raises the same issue, the court 
  6.33  shall consolidate the proceedings. 
  6.34     A motion or petition based on issues or facts asserted and 
  6.35  decided in a prior motion or petition shall be dismissed unless 
  6.36  the new motion or petition establishes to the satisfaction of 
  7.1   the court newly discovered facts or circumstances supporting the 
  7.2   new motion or petition. 
  7.3      Subd. 7.  [APPLICATION.] Nothing in this section compels 
  7.4   the disclosure of any document or laws of the United States or 
  7.5   the state.