Secret lawsuit settlement amounts

An edited version of this article appeared Sunday, May 31, in the Roanoke Times

Let's settle this thing

by Megan Rhyne

Two juveniles held in a Newport News detention center claim they were raped by two other residents. The two boys sued the city, saying the city was at fault because the facility was too crowded and did not separate juveniles based on size or other factors.

A few years ago, George Wallce, the longtime Hampton city manager, sued the city for firing him.

What do these two cases have in common, besides both being on the Peninsula?

Both cases settled before going to trial. That's usually a good thing, as it saves everyone the time, stress and resources of a full-blown court proceeding.

And in both cases, the city paid something out of city coffers -- that is, they paid taxpayer dollars -- to settle the case.

And in both cases, the public couldn't find out just how much they were on the hook for.

The Newport News and Hampton city councils agreed to a gag order sealing the settlement terms, including the amount paid out by the local government.

Wallace and the city council eventually agreed to release the information when Wallace later ran for a seat on the Hampton City Council.

A reporter for the Newport News Daily Press reviewed court records and minutes of the Newport News city council and found council approved of a $2.6 million payment from its debt service fund to cover "several recent legal settlements," though it was not clear whether the juveniles' case is one of those settlements.

When asked why they agreed to keep the settlement amount confidential, four of the seven Newport News council members punted by saying, basically, "the lawyers told us to do it." Two members said they didn't remember what they discussed about the settlements, and the seventh member lamentably replied, "I don't have any objections to the taxpayers not being able to know, as long as it doesn't violate our policies."

A settlement doesn't just seal itself. One or both of the parties have to ask a judge to seal all or part of the settlement. And an attorney is not likely going to ask for matters to be sealed without prior consultation with his or her client. That means that the Newport News city council had to, at some point, give some instructions to its attorney that it was OK to either ask for a gag order or to acquiesce in the other side's request for confidentiality on the amount paid to settle the case.

Later, the city has to approve of the appropriation of funds to pay the settlement. The Freedom of Information Act does allow the city council to meet privately to discuss actual litigation. But this provision allows for discussion only. Any votes, including ones to appropriate money, must be taken in open session.

It has been argued that because the government's insurance pays for a lawsuit settlement, the taxpayers are not directly affected. But the taxpayers have been paying the premiums to carry that insurnace. And as anyone who's watched their car insurance premiums rise after an accident knows, the city's liability insurance policy premiums will surely rise, too. And the taxpayers will pay for that increase.

These two Peninsula cases are by no means isolated events. As long as there will be accidents on public property, mismanagement of government programs and disgruntled public employees, there will be lawsuits against a local government. Settling cases may frequently be the most prudent thing to do, and it is generally understandable why some settlement terms are kept confidential. There might be a great deal of private information about an employee's medical history, for example, in a case alleging discrimination under the Americans with Disabilities Act.

In the Newport News case, there is general agreement that sexual assault victims need protection, and that even juvenile offenders deserve some protection if they mean to eventually become productive members of our society.

But this isn't a case where the public is clamoring for details about the incident. This is about knowing the basic fact of how much of the public's money the government is spending. Fiscal transparency should be the standard for all local governments, especially in these times of economic hardship.

Local governments should resist the urge to suggest or agree orders sealing settlement amounts. Local government officials usually take great pride in being well informed and in taking decisive action. It is therefore disheartening to hear the Newport News council members give such a scant defense of their part in or knowledge of keeping the settlement amount secret.

And as for the comment about being OK with the taxpayers not being able to know? Let's just say the citizens of Newport News now have extra incentive to keep their local government open and accountable.

Megan Rhyne is Executive Director of the Virginia Coalition for Open Government, a non-partisan, not-for-profit organization based in Williamsburg dedicated to keeping government records and meetings open to Virginia citizens.

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