Cheating and Lying Revealed: The Problem with Secrecy Agreements

Robert Gratzinger is an expert witness who regularly testifies for the defense in automobile defect litigation. In 2002, in the middle of a trial, he intentionally destroyed critical evidence.  According to the trial judge, he and his client, American Honda, were trying to “win by cheating.”

To make a bad situation worse, Mr. Gratzinger’s behavior was kept secret for more than three years after the case settled. During that time, Honda and other car makers continued to employ Mr. Gratzinger in other auto defect cases, and to call him as a witness. Because the plaintiffs’ lawyers in those cases were prohibited from learning about the cheating, Mr. Gratzinger, Honda  and their cronies continued to seek to win cases through injustice.

What Mr. Gratzinger and Honda did in 2002 shocks the conscience. It is repugnant to what every trial lawyer claims to stand for. However, this situation is more than just a cautionary tale about dishonesty. It raises serious questions about secrecy in the courts, and whether our adversary system adequately addresses the difference between the public interest and private interests in products liability litigation.

The Case – Sarah Davis v. American Honda

Sarah Davis was rendered quadriplegic at age 17 while riding in the rear seat of a Honda Civic.  The car crashed and rolled over, and its roof crushed in on her  head and neck. A product liability case was filed against American Honda Motor Company, Inc. (the manufacturer of the Civic) and others, alleging that the Civic was defective in design due to an unreasonably weak roof structure. A key point of Honda’s defense was that Sarah would not have been injured if she had been wearing her seatbelt.

The case, pending in Placer County California, was reached for trial in July of 2002 with Judge James Garbolino presiding. Sarah’s lawyers presented detailed evidence that the Honda Civic had an unnecessarily weak roof structure, that Sarah was wearing her seatbelt when the car crashed, and that she could have safely ridden out the crash forces if the roof had been properly designed.

The seatbelt evidence included Sarah’s testimony that she was wearing the belt when the car crashed, and testimony from her expert witness. He testified  that there were faint but discernable physical signs– referred to as “witness marks”– on the belt’s metal latch plate, and that the marks were made by the fabric of the belt moving forcibly against the latch plate as Sarah tumbled inside the rolling car. This could only have happened if Sarah was wearing the belt during the crash. After 25 trial days, the plaintiff rested.

Before presenting its evidence, Honda asked for an opportunity (its third) to inspect the Civic. This request was granted. The inspection was attended by a junior lawyer from Sarah’s trial team, Honda’s lead attorney Paul Cereghini, Honda’s seatbelt expert Robert Gratzinger,  a Honda photographer, and attorneys for other defendants.

During the inspection, Mr. Gratzinger knelt down near the right rear seatbelt. After blowing vigorously on its latch plate, he took a rag from his pocket, and began rubbing on it. Plaintiff’s counsel shifted position to better see what Mr. Gratzinger was doing, and stood momentarily stunned. After Mr. Gratzinger made several passes with his cloth, plaintiff’s counsel instructed him to stop, and requested that Mr. Gratzinger turn the rag over to him so that it could be preserved as evidence. Mr. Cereghini then stepped in and ridiculed plaintiff’s counsel, asking whether he intended to make a “federal case” out of Mr. Gratzinger’s behavior. Mr. Cereghini then advised Mr. Gratzinger not to turn over the rag, and promised that he would secure the rag himself.

Upon being advised of what had transpired, Judge Garbolino immediately scheduled an evidentiary hearing outside of the presence of the jury. Subsequently, he made three rulings which frame the issues of dishonesty, court secrecy, and the difference between private and public interests in products cases.

Sanctions, Secrecy and Unsealing

On October 3, 2002, after the evidentiary hearing,  Judge Garbolino entered a scathing 36 page sanctions order, criticizing  Honda, Mr. Gratzinger and Mr. Cereghini for “trying to win by cheating.” The Court found, among other things:

1. Robert Gratzinger intentionally obliterated the witness marks on the latch plate for purposes of entering false evidence which would give Honda an unfair advantage against Sarah Davis.

2. Honda produced a rag at the hearing, but it was a substitute rag, not the one Mr.Gratzinger used to destroy the evidence.

3. Mr. Cereghini aided Honda’s efforts by preventing Davis’ counsel from securing Mr.Gratzinger’s rag, and by failing to keep his promise to secure the rag himself.

After a lengthy discussion of the odiousness of  Honda’s actions and the range of possible sanctions, Judge Gratzinger concluded the order by directing a verdict against Honda.

On October 11, 2002, Judge Garbolino entered a sealing order, burying the sanctions order as deeply as it could be buried under seven paragraphs of secrecy mandates, directives against disclosure, and dark threats against those who might reveal its contents. The sealing order was entered as part of a settlement which was entered into after the sanctions order had been in the public domain for several days, and as the jury was deliberating on damages.

On November 30, 2005, after three years of secrecy, Judge Garbolino vacated the sealing order, re-opening  the sanctions order to public view.

Private Interests v. The Public Interest

The sealing order and the unsealing order reflect a battle between private interests and the public interest.

Honda’s private interest was clearly served by the sealing order, which not only prevented others with similar cases from knowing that Honda had paid Sarah Davis, it also shielded both Honda and its witness, Mr. Gratzinger, from disclosure of their dishonest conduct.

How the private interest of Sarah Davis was served by the sealing order is a matter of speculation. It could be argued that a desire to avoid publicity might have led her to request secrecy.  That would make sense if the secret was limited to the amount of the settlement, but it does not explain why she would want the sanctions order hidden from public view.  The tale of Sarah’s suffering, as recounted by Judge Garbolino in the sanctions order, makes it likely that her primary motive was to end the litigation at any cost. Every aspect of her life had been ravaged by her injury and by Honda’s bitter fighting. It seems most likely that she was simply in no position to resist a demand from Honda that the sanctions order be hidden. She had little to gain by demanding that it remain available to the public. She simply needed the case to be over.

As clearly as Honda’s private interest was served by sealing the sanctions order, the public interest was harmed by it. The public interest requires that all litigants, particularly Honda, learn that they cannot hide dishonesty by settling a case. This is particularly true of Honda because it has long been suspected by plaintiffs’ lawyers of falsifying test results in products litigation. Indeed, the sanctions order describes specific evidence offered in Sarah Davis’ case in chief (before Mr. Gratzinger’s brazen acts)  that Honda’s records of test results are kept in pencil so they can be altered for American litigation, that its reported test results are inexplicably inaccurate, and that particular Honda employees have been instructed to alter test records. If, in case after case after case, Honda is found to be dishonest, plaintiffs across the country should know that. Likewise, courts across the country should know about dishonest litigants in order to be able to fashion meaningful discovery and sanctions orders.

The public interest also requires that Mr. Gratzinger, who makes his living testifying for a small group of powerful clients, understand that secrecy orders are not available to protect him from devastating cross-examination and from the public humiliation which he deserves. We must not allow witnesses to assume that profit-driven dishonesty is a business model which can be managed.

Limits on junk science have been a significant part of the public debate about products cases in recent years. The Daubert case and others have lead courts to serve the public interest by screening experts and their work before trial. In that context, how can anyone justify hiding factual findings that an expert has been caught “cheating to win?” If a  trial court is to have a meaningful gatekeeping role, findings like those in the Davis case must be open to the public.

Who is Looking Out for the Public Interest in Product Liability Cases?

The unsealing order in the Davis case was issued because Trial Lawyers for Public Justice, a non-profit organization based in Washington, DC., took up the cause of public access to court records. Representing intervenors, and over the objections of Honda, TLPJ made the argument that Judge Garbolino’s sealing order never had any basis in law. TLPJ relied upon a California statute which dictates the terms under which court documents can be sealed, and pointed out that the sealing order did not meet the statutory requirements. After a three year struggle, Judge Garbolino agreed.

Why did it take three years, and why was the California statute ignored to begin with? Why should Judge Garbolino, a public servant operating in a publicly funded forum, enter an order that mainly served Honda’s interest in hiding its dishonesty? The unsealing order does not address these questions.

On the available record, we are left to speculate that perhaps Honda demanded that Sarah Davis agree to filing a joint motion seeking the sealing order, and perhaps the Judge thought that Sarah Davis’ private interest would be best served by going along with Honda’s demand for secrecy. Perhaps the judge simply did not have the time or resources to consider the question, although that seems unlikely given his lengthy, well thought out, carefully crafted sanctions order. Whatever the explanation  might be, it is obvious that there was no one in the courtroom in October of 2002 arguing  against the secrecy order. Unfortunately, that means that there was no one looking out for the public interest in the Davis case until TLPJ came along.

The conflict between public and private interests crops up in all civil litigation. In July, 2000, the Roscoe Pound Institute sponsored a conference of the Forum for State Appellate Court Judges entitled Open Courts with Sealed Files: Secrecy’s Impact on American Justice. The Forum resulted in a written report which describes the risks and problems with court secrecy.

Secrecy is a particularly complex and acute problem in products liability cases. In discovery, manufacturer defendants regularly seek confidentiality agreements, arguing that their technical innovations and marketing strategies are at stake. Although some information may be truly confidential, much of what they label “confidential” is outdated, or is not secret at all. Many of these demands for secrecy serve no purpose except  to slow down the plaintiff’s discovery, or to stop the spread of information among other plaintiffs and their lawyers.

Aside from slowing down litigation, secrecy also presents special problems in products cases because poorly designed products pose a risk of  harm to the general public. As in the Davis case, when a plaintiff has pushed her case to the point where the defendant is willing to settle, she has often learned something that may be of value to other plaintiffs, yet be without the energy,  resources, or motive to resist demands for secrecy. If  information about a risk to the public health and safety is discovered during the expensive and exhausting work of developing a products liability case, why should a settlement require that it be hidden away? Why should the next plaintiff be required to start all over again? Why should a court system go out of its way to protect purveyors of dangerous products? What public interest is served by policies that favor secrecy?

There are no good answers to these questions. Our adversary system is premised on each lawyer’s duty to an individual client, and on the assumption that what is good for the private litigant is good for the public. Under our system, it is left to organizations like TLPJ to be on the lookout for issues of significant public interest, to raise money from voluntary sources, and  to lead the fight to protect those interests.

It is no criticism of the good and noble work of groups like TLPJ to ask whether this makes sense. The Report of the 2000 Roscoe Pound Institute Forum on secrecy identified several ideas that might assist in protecting the public interest in litigation matters, including a more fully developed legislative initiative against court secrecy, a broader public debate on the subject, adoption of a presumption of openness in the courts, and a higher level of judicial sensitivity to the public’s interest in access to information.

The Davis case certainly highlights these points.

Conclusion

The Davis sanctions order describes conduct which is so contrary to our experience as lawyers that our instinct is to assume that there is no risk that it will be repeated. Unfortunately, to believe that is to fail to appreciate the harm done by Judge Garbolino’s sealing order, and the importance of TLPJ’s work in obtaining the unsealing order. Dishonesty and defective products are a part of our society, and must be dealt with in our courts. Let us not compound these problems by tolerating secrecy in important public affairs.