On November 29, 2016, the Consumer Product Safety Commission (CPSC) published guidance for private litigants when drafting protective orders, confidentiality agreements, and settlement agreements in litigation related to consumer products within the CPSC’s jurisdiction. The guidance encourages parties to include a provision in their protective order or settlement agreement that allows for disclosure of relevant consumer product safety information to the CPSC and other authorities. As the Commission makes clear, the guidance is not a binding or enforceable rule and therefore does not change parties’ rights, duties, or obligations under applicable federal regulations.
The guidance was initiated by Commissioner Marietta S. Robinson after hearing from private litigators representing consumers whose injuries or deaths were caused by a product. These litigators apparently had been barred from disclosing critical information to the CPSC because of protective orders and settlement agreements entered in their cases. According to the CPSC, when litigation orders and agreements shield relevant and actionable safety information behind nondisclosure provisions, they violate the good-cause requirement of Rule 26 of the Federal Rules of Civil Procedure, its state corollaries, and public policy favoring the protection of public health and safety. The Commission cites to similar guidance issued recently by the National Highway Transportation Safety Administration.
The guidance contains the following sample language to be inserted in litigation agreements:
Nothing herein shall be construed to prohibit any party from disclosing relevant consumer product safety information to the Consumer Product Safety Commission.
Nothing herein shall be construed to prohibit any party from disclosing relevant safety information to a regulatory agency or government entity that has an interest in the subject matter of the underlying suit.
This guidance was published without notice and comment in a 3-2 vote by the Commission. Commissioner Ann Marie Buerkle issued a statement on November 22, explaining that she dissented because the guidance had not been made available for public comment. In a statement issued that same day, Commissioner Robinson explained that the guidance was published without notice and comment because there was no such requirement for guidance documents under the Administrative Procedures Act. The guidance simply provides tools to the public to ensure that information discovered in private litigation can be disclosed to the CPSC when appropriate. Likewise, parties are “free to read it, consider it, and decide whether to adopt its recommendations.” Time will tell whether and, if so, how a failure to incorporate the guidance will affect a company’s interactions with the Commission.