Secrecy's dangerous side effects
When legal settlements allow companies to hide their mistakes, what we don't know can hurt us.
By Richard Zitrin
RICHARD ZITRIN practices law in San Francisco and teaches at UC
Hastings College of the Law. He is also the founder of the Center for
Applied Legal Ethics at the University of San Francisco.
February 8, 2007
DRUG GIANT Eli Lilly & Co. recently settled 18,000 lawsuits brought
by people claiming they were injured by the side effects of its
biggest-selling drug, Zyprexa, which is used to treat schizophrenia and
bipolar disorder. But the $500 million in settlements says less about
the dangers of the drug than the dangers of secrecy.
18 months earlier, Lilly had settled 8,000 other Zyprexa cases for $700
million. But those settlements required the plaintiffs to return all
sensitive documents obtained through the legal discovery process to
Lilly — a requirement that kept the strongest smoking-gun evidence out
of public view. The plaintiffs also had to agree "not to communicate,
publish or cause to be published, in any public or business forum or
context, any statement, whether written or oral, concerning the
specific events, facts or circumstances giving rise to [their] claims."
Lilly had strong motivation to settle. The documents contained
evidence that Zyprexa caused large, often enormous, weight gain in many
patients, significantly increasing the risk of dangerously high
blood-sugar levels and diabetes. They also showed that Lilly knew about
the problems in 1999, largely through its own research. Other documents
outlined a marketing scheme to encourage physicians to prescribe
Zyprexa for elderly patients with early signs of dementia. This
strategy not only had no clinical evidence to support it, it promoted
an "off-label" use not approved by the Food and Drug Administration, a
violation of federal law.
Lilly gave the original 8,000
plaintiffs ample incentive to settle. Those plaintiffs received
substantial compensation, and by agreeing to secrecy, they surely
avoided years of scorched-earth litigation, extremely costly in terms
of time, money and emotion.
When secrecy is the price of a legal
settlement, wrongdoers hide their mistakes as if they never happened
and continue with business as usual. That's what happened in the Lilly
case. The thousands of plaintiffs and dozens of lawyers involved in the
2005 settlements kept their part of the bargain, while Lilly continued
to sell Zyprexa in huge quantities — a reported $4.2 billion in sales
in 2005 — without warning either patients or doctors about the drug's
Part of the problem was that those plaintiffs had
little control over their cases. They were consolidated — as these
matters often are — in one huge federal case in which a committee of
plaintiffs' lawyers has much more say over a settlement than in typical
civil suits. In exchange for access to key Zyprexa data in the Lilly
case, the committee agreed to a "protective order" that kept the
information secret. That may have expedited things for their clients,
but it was a public disservice.
Courts have the power to grant
protective orders only to limit the disclosure of highly personal
information and legitimate trade secrets. But when all the lawyers in a
case agree, judges often grant protection even if the trade secrets in
question show how the product does not
work, not how it does.
Neither lawyers nor judges should ever be party to such agreements. It
is simply unacceptable as a matter of public policy to permit secret
deals that conceal evidence of dangers to the public.
Zyprexa cases, the documents eventually were exposed when Alaska
attorney James B. Gottstein, working on an entirely unrelated case,
subpoenaed the records of one of the plaintiffs' expert witnesses.
Gottstein not only used the documents in his lawsuit but, to his great
credit, disclosed them to the New York Times and several healthcare
groups. Gottstein was almost immediately ordered to return all the
documents he had, but the train had left the station: The New York
Times published articles about the dangers of Zyprexa, and excerpts
from the documents began appearing on the Internet. Within two weeks,
with much of the Zyprexa evidence now out in the open, Lilly settled
the additional 18,000 cases. Negotiated secrecy, Lilly's primary goal,
had become moot.
Some intrepid plaintiffs and their lawyers
refuse to play the secrecy game. In Northern California, plaintiffs in
dozens of Catholic Church sexual abuse cases have banded together and
refused to keep the names and whereabouts of molesters secret. And
recently, Eva Rowe, who lost her parents as the result of an explosion
at a Texas oil refinery in 2005, refused to settle with BP unless the
oil company agreed to release the millions of documents obtained as
evidence. Rowe and her lawyer hope that the documents, which they say
show how BP's under-funding and lackadaisical attitude created
significant safety problems, will serve as an industry blueprint on how
refinery safety should, and shouldn't, be handled.
disclosure is still the exception. But we should have learned our
lesson by now. From Zomax and Halcion in the 1980s to shredding
Firestone tires and GM gas-tank fires in the 1990s, to Vioxx and
Zyprexa today, when lawyers cut secret deals behind the public's back,
what we don't know can and does hurt us. The civil justice system
belongs to all of us, and no one should be allowed to use it to keep
the public in the dark.