Appeals court rules against secret settlement

PENNSYLVANIA — If records are likely to be public under a state’s freedom of information law, a strong presumption exists that a court should not grant or maintain a settlement agreement that makes the records secret, the U.S. Court of Appeals in Philadelphia (3d Cir.) ruled in early May.

In May 1991, demoted Stroudsburg Borough police chief John Pansy sued the city in federal District Court in Scranton saying that his civil rights had been violated.

Pansy had been tried and acquitted in the County Court of Common Pleas in Stroudsburg on criminal charges of “improper handling” of parking meter money. After an investigation by the Pennsylvania attorney general’s office, he had been arrested, suspended and demoted to patrolman, and he claimed after his acquittal that the demotion and suspension violated his federal civil rights.

But Pansy and the borough reached a confidential settlement agreement and the federal judge in June 1992 filed an order that he had reviewed the settlement and would order Pansy’s action dismissed. He also ordered Pansy and the borough to abide by their agreement to keep settlement terms confidential.

In October 1992 the Pocono Record asked the borough for information and documents of the case under the Pennsylvania Right to Know Act, but borough officials denied the records citing the federal court’s order of confidentiality.

Ottaway Newspapers, owner of the Record, filed suit in state court under the open records law. Ottaway also asked to intervene in the civil rights case before the federal court.

The state court said it would not rule until the federal case was resolved. The lower federal court told the newspapers they were too late to intervene and that even if they had been timely, the settlement record, never filed with the court, was not a judicial record subject to disclosure. The newspapers appealed, joined by the Pennsylvania Newspaper Publishers Association.

The appeals court said that if the settlement agreement had been a judicial record it would automatically have been available under the right of access to judicial proceedings recognized in the circuit. However, because the agreement was never filed with the court it was not a judicial record, the court said, and its disclosure would be subject to provisions of the state’s Right to Know law.

The court ordered the lower federal court to balance public interests in disclosure and nondisclosure and to determine whether the records could be withheld under the Pennsylvania law.

(Pansy v. Stroudsburg v. Ottaway Newspapers; Media Counsel: George Westervelt, Stroudsburg)

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