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Michael Phelan
Michael Phelan
Attorney • (866) 249-3164

Let There Be Light

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The best way to ensure that the products sold on the U.S. market are safe for their intended and foreseeable purposes is not through regulation or legislation, but rather through a strong and transparent civil justice system.  The preservation of the right to trial by jury was so important to the Founding Fathers that they inserted it into the Seventh Amendment to the Constitution.  The Seventh Amendment was ratified, along with all of the first ten Amendments, in 1791.

Powerful interest groups, who prefer cronyism to free-market competition, have mounted an attack on the Seventh Amendment.  If these groups had their way, all consumers would be denied entry to the civil justice system and forced to arbitrate their disputes before private panels of arbitrators.  In the name of “tort reform,” these groups also advocate for laws granting immunity from civil liability for the members of their special interest groups.  They also support judges and legislators who favor blocking access to State trial courts by preempting State common law trials involving products that are subject to federal regulation.  They favor capping the liability (i.e., responsibility) of wrong doers, capping the damages to which victims are entitled, and even interfering at the federal level with a citizen’s right to contract with an attorney.  If a product safety dispute somehow makes it to court, the forces aligned against the Seventh Amendment favor hiding from the public the information revealed in court.

A recent example unfolded in the United States District Court in Virginia involving a dispute in which a product manufacturer sued the Consumer Public Safety Commission to enjoin the Commission from publishing on its on-line database of product complaints a consumer product incident report.  The incident report had been provided to the CPSC by another government agency, and it linked the product in question to the death of an infant.  The District Court trial judge ruled that the name of the manufacturer and the product at issue would be kept secret in the lawsuit.  The manufacturer was allowed to proceed under the name, “Company Doe,” and all documents filed in court were sealed from public view.

The good news is that the U.S. Court of Appeals for the Fourth (which covers Virginia) overturned the trial judge’s decision to allow the manufacturer to hide behind the veil of secrecy.  On April 16, the Court of Appeals issued a ruling, in which it summarized the issue as follows:  “This appeal presents numerous issues relating to transparency in federal courts and the public’s constitutional and common-law rights of access to judicial records and documents.”

In his opinion, Judge Floyd commented:

Regrettably, the district court allowed the entire litigation — from filing to judgment — to occur behind closed doors, keeping all documents filed in the case under seal, not even reflected on the public docket.  As a result, neither the press nor the public was able to monitor the litigation as it unfolded.

Here is a link to the important decision, Company Doe v. Public Citizen, et al., Case No. 12-2209.  Of note are the organizations that filed Amicus (friends of the court) briefs in support of the two sides.  Amici for the CPSC included prominent members of the free press.  Amici for Company Doe included the National Association of Manufacturers and other industry associations.

In a free and transparent market-based system, unreasonably dangerous products would be exposed through the civil justice system, and rational consumers would factor in the danger when deciding to buy that product or a similar product made by a competitor.  The competitor making the safe and effective product benefits from this system.  Competition is harmed by cronyism.  Associations like the National Association of Manufacturers hire armies of lobbyists to grease the skids for the biggest manufacturers.  If such manufacturers are allowed to make unsafe products without fear of exposure, the upstart company trying to compete by making a better, safer product doesn’t stand a chance.  Neither do the consumers.