Details of Preliminary Lawsuit Settlements
Q: The Metropolitan Transportation Authority (MTA) board approved a settlement of a lawsuit by Clear Channel Outdoor regarding the removal of some billboards from MTA property to make way for a street improvement project. On or about the same time, the MTA agreed to sell some surplus property to the City for a park project, on the condition that the city approve a supplemental use district allowing four new Clear Channel billboards to be erected on another MTA property alongside one of the city’s freeways. According to materials filed in support of the supplemental use district, its establishment was required as a condition of settling the Clear Channel lawsuit. However, the MTA board has declined to make public the details of the lawsuit settlement, saying it is precluded from doing so until all parties agree to the settlement. Since Clear Channel obviously won’t agree to the settlement unless the supplemental use district is approved, the city council is essentially being asked to decide a matter in which the central element is unknown to the public, i.e., the exact details of the lawsuit settlement. Can the MTA legally withhold the agreement they’ve already approved?
A: Under the Public Records Act (“PRA”), records in the possession of state and local government entities are presumed to be public unless one of the PRA’s enumerated exemptions to disclosure applies. See Cal Govt Code Section 6252. Settlement agreements entered into by public agencies have been recognized as public records by California Courts. See Register Div. of Freedom Newspapers v. County of Orange, 158 Cal. App. 3d 893, 909 (1984). However, the PRA exempts from disclosure “[r]ecords pertaining to pending litigation to which the public agency is a party, or to claims made pursuant to Division 3.6 (commencing with Section 810), until the pending litigation or claim has been finally adjudicated or otherwise settled.” Govt Code Section 6254(b) (emphasis added).
California courts have confirmed that the litigation exemption applies to settlement communications. Bd. of Trs of California State Univ. v. Superior Court, 132 Cal. App. 4th 889, 899 (2005). As the court noted inBd. of Trs of California State Univ., “the parties to the litigation have a strong interest in protecting such communications between counsel from disclosure to third parties while litigation is pending. In fact, to allow disclosure to the public of such documents would chill the parties’ ability in many cases to settle the action before trial. Such a result runs contrary to the strong public policy of this state favoring settlement of actions. Id.
Here, based on your inquiry, it is unclear whether the “litigation or claim has been finally adjudicated or otherwise settled.” If the litigation is complete and the settlement is final, then the settlement agreement should be considered a public record subject to disclosure. If the completion of the litigation is contingent upon the City’s approval, the litigation would not appear to be final, and therefore the settlement agreement would arguably be exempted from disclosure under the PRA. One argument you could make is that the City has effectively been made party to the settlement, since its vote in favor of the supplemental use district is a condition of the settlement, in which case the City would arguably have a right to access the agreement, since the litigation exemption applies to “when sought by persons or entities not party to the litigation.” Bd. of Trs of California State Univ., 132 Cal. App. 4th at 899.