Matter of New York County Data Entry Worker Prod. Liab. Litig – Case Brief Summary (New York)

In Matter of New York County Data Entry Worker Prod. Liab. Litig. (162 Misc 2d 263, 616 NYS2d 424 [Sup Ct, NY County 1994], affd 222 AD2d 381, 635 NYS2d 641 [1st Dept 1995]), a products liability case, plaintiffs and defendants A.B. Dick Company (A.B.) and Sony Corporation of America (Sony) settled plaintiffs' claims, upon the condition that "each party would keep confidential the terms of the settlement agreements, including the consideration paid by the defendants" and obtained an order directing that the terms of the settlement between plaintiffs and A.B. remain confidential (162 Misc 2d at 264).

Thereafter, when the nonsettling defendants sought to discover the terms of the settlement in order to "recalculate their maximum exposure should an unfavorable verdict be reached, or to determine whether they should settle rather than continue" the litigation (id. at 265), retired Justice Stephen Crane soundly reasoned:

"Although trial strategy is important to any party in litigation, defendants' 'need' to obtain the settlement information arises not out of materiality or necessity but, rather, desirability. As much as defendants believe that obtaining this information now will better protect them at the time of trial, or assist them in assessing their risk of trial versus settlement, these are neither recognized nor accepted reasons for denying plaintiffs' motion and disclosing the terms of the settlement agreements." (Id.)

"The settlement of this case could not have been achieved without an agreement that the terms of the settlement, particularly the consideration paid, would not be revealed. Secrecy was deemed vital by all of the parties to the agreements. This secrecy induced changes of position by the parties relying on it. For the court to decline to support the parties in their reliance upon the agreements they have reached would work an injustice on these litigants and would inhibit future settlements." (Id. at 268-269.)