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Settlements must be public, state Supreme Court says

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    NMU         PENNSYLVANIA         Freedom of Information    

Settlements must be public, state Supreme Court says

  • A confidential settlement agreement between a former employee of a county housing authority and the authority’s insurance company must be public under the Pennsylvania open records law.

Oct. 6, 2003 — The Supreme Court of Pennsylvania ruled last week that a court settlement against a public body is a public record under the state’s Right-to-Know Act, even when an insurance company is the sole party to the lawsuit.

An employee of the Westmoreland County Housing Authority sued the city in federal court claiming gender discrimination and a hostile work environment. The housing authority’s insurance company, the Housing and Redevelopment Insurance Exchange, defended the suit and settled with the employee under a confidentiality agreement.

The (Greensburg) Tribune-Review requested a copy of the settlement agreement from the agency under the state’s Right-to-Know Act. The housing authority refused, and the newspaper sued for production of the document.

The authority claimed that the confidentiality provision of the settlement prevented disclosure under the Right-to-Know Act, and the public policy of encouraging settlements outweighed the public interest in freedom of information.

The authority also claimed that the settlement was not a public document because the suit and settlement were handled exclusively by the insurance company. According to court documents, although the authority paid premiums to the insurance company, those premiums were not increased because of the suit, and the insurance company waived the deductible on the policy so no public funds were expended on the suit or the settlement. The authority had not even been provided a copy of the settlement agreement.

The Supreme Court of Pennsylvania upheld both the trial court and the appellate court in ruling for the Tribune-Review Oct. 1. Although the authority took no action and spent no funds in the suit, the insurance company was acting as its agent, the court ruled.

Citing similar decisions in Alaska, Iowa, Maine and Ohio, the Supreme Court also ruled that a confidentiality provision in a lawsuit against a public body must yield to the public’s right to know. The court acknowledged the public policy of encouraging settlements, but said that such a provision is void when it conflicts with the Right-to-Know Act.

“A public entity may not enter into enforceable promises of confidentiality regarding public documents,” Justice Sandra Shultz Newman wrote for the five-member majority.

The court did leave open the possibility that a settlement agreement with a public body could be made confidential by petitioning the court to seal the record.

Ronald Barber, attorney for the Tribune-Review, commented in an article in the newspaper, “Federal cases that charge public bodies with civil rights abuses should never be swept under the rug, no matter how hard the local officials try.”

(Tribune-Review Publishing Co. v. Westmoreland County Housing Authority, Media counsel: Ronald Barber, Strassburger, McKenna, Gutnick & Potter, Pittsburgh) GP

© 2003 The Reporters Committee for Freedom of the Press

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