Judge Butterfield Opens Settlement Documents

Many days, when I sit in court waiting for my case to be called, I am glad I am a lawyer and not a judge. Judges are called upon to exercise the patience of Job and the wisdom of Solomon. I get to vigorously advocate my client’s position and leave the hard choices up to the judge. Last week, as I had the privilege to represent the Wilson Daily Times, I remained unshaken in my conviction; but I have never been more glad I was not the judge than as I appeared before Judge G. K. Butterfield in a difficult public records access matter.

I am consistently comfortable as a lawyer, representing newspapers and the rights of North Carolina’s citizens in gaining access to public records, public meetings and judicial proceedings. I believe in the positions I take and feel that, almost without exception, our government and our people are best served by full access. But last week I saw those issues collide with the most bona fide argument for closure that I have encountered.

Two years ago, a retarded minor child alleged that she was sexually assaulted by a teacher’s assistant. The teacher’s assistant was criminally charged, and the minor – through her guardian ad litem and her mother – filed a civil lawsuit against the assistant, the school’s principal, and the Wilson County school system. Among the minor’s allegations were that assistant “engaged in illegal sexual acts and sexual abuse” on the school campus; that a proper investigation of assistant’s background would have revealed that he was unsuitable to be employed in that job; that the Board of Education became aware of his unsuitability and failed to take appropriate action; and that once the alleged behavior of the assistant was reported, the Board of Education and its agent, the principal, failed to report the allegations to law enforcement agents or plaintiff’s parents. The plaintiff alleged that as a result of the defendants’ actions and inactions, she has suffered severe emotional trauma, has undergone psychiatric counseling and hospitalization, and has suffered permanent injury.

A few months ago, the Board of Education — through its insurance carrier — settled the lawsuit with the minor, apparently agreeing to pay the minor some amount of money over a period of time. A condition of the settlement, though, was that the settlement be kept confidential. However, lawyers for the Board of Education made clear that the Board did not participate in settlement negotiations, did not approve the settlement, did not have a copy of the settlement agreement and, in fact, did not even know the terms of the settlement.

North Carolina’s Public Records law provides that settlements made on behalf of public agencies are public records. A public agency’s settlement may be kept confidential only if a court finds that there is an interest sufficient to override the presumption of openness and that the interest cannot be protected short of sealing the settlement. Last November, Judge Butterfield entertained the parties’ request for confidentiality and found there was sufficient basis to keep the settlement secret.

For the first time in 40 years, the Wilson Daily Times made the decision that the public’s interest demanded court intervention and a request that the settlement be opened. The paper intervened to challenge the sealing order. The newspaper argued that the public has a right to know when its government officials settle claims of such a grievous nature and, also in the process, spend the public’s money.

Judge Butterfield entertained arguments from all parties. Counsel for the minor asked the court to postpone a decision and, in the interim, to receive evidence from psychiatrists testifying to the devastation that would result from further publicity of the case. For example, counsel stated that the minor had a psychotic episode upon reading that the teacher’s assistant had been released on bond. The court stayed the proceedings for one week. At a second hearing, the court reviewed a psychiatric analysis of the minor and a letter from one of the treating psychiatrists.

Counsel for the minor argued strenuously that release of the settlement would destroy the minor. Counsel for the school board, though essentially taking no position on the closure, argued that the law has a provision for closure in some circumstances and — if it should not be invoked in this circumstance – when?

Saying that he had given the matter a great deal of consideration, Judge Butterfield ruled, as well as providing his opinions of the case generally. First, Judge Butterfield said that he was troubled by the way the case was settled. He said he believed the Board of Education may have abdicated its responsibility by handing the matter over to the school’s insurance carrier. The judge said that the School Board should have considered the matter, approved the settlement and entered it into the minutes of the Board.

The court next addressed the primary issue: access. Judge Butterfield said that he was “absolutely convinced beyond all doubt” that the minor child “suffers irreparably” from the assistant’s assault. He further found that disclosure of the full agreement would have an “obvious and severe detrimental impact on the disabled minor plaintiff’s mental health.” The judge ordered that the two documents he reviewed, detailing that injury, should never be public. However, the court found that notwithstanding the minor’s privacy interests, the public has a right to know of settlements entered into by public agencies. The court accepted the newspaper’s position that the settlement could be divided into legitimately confidential medical and psychiatric records of the minor and the “public” provisions relating to the county’s concessions and agreed financial settlement. Accordingly, the court modified its earlier order, allowing access to the amount of the monetary settlement, any admissions by the county and any remedial measures undertaken by the county. On Friday, January 29, lawyers for the Board of Education made the disclosures ordered by the judge, and on Saturday, The Wilson Daily Times reported that the general liability carrier for the School Board will pay, over time, a present value of $650,000 to the minor.

We sometimes use this space to throw darts at those who evade or try to evade North Carolina’s sunshine laws. This month we send a laurel to Judge Butterfield for his thoughtful and, I believe correct, treatment of a truly sensitive access issue. He preserved the public’s fundamental interest in access to public information while protecting a disabled minor’s privacy interest in psychiatric and medical information. As comfortable as I am representing the interests of this Association and the people of North Carolina entitled to access, I am comfortable with Judge Butterfield sitting on the bench deciding those issues.

TEXT OF PUBLIC RECORDS LAW:

§ 132-1.3. Settlements made by or on behalf of public agencies, public officials, or public employees; public records

(a) Public records, as defined in § G.S. 132-1, shall include all settlement documents in any suit, administrative proceeding or arbitration instituted against any agency of North Carolina government or its subdivisions, as defined in § G.S. 132-1, in connection with or arising out of such agency’s official actions, duties or responsibilities, except in an action for medical malpractice against a hospital facility. No agency of North Carolina government or its subdivisions, nor any counsel, insurance company or other representative acting on behalf of such agency, shall approve, accept or enter into any settlement of any such suit, arbitration or proceeding if the settlement provides that its terms and conditions shall be confidential, except in an action for medical malpractice against a hospital facility. No settlement document sealed under subsection (b) of this section shall be open for public inspection.

(b) No judge, administrative judge or administrative hearing officer of this State, nor any board or commission, nor any arbitrator appointed pursuant to the laws of North Carolina, shall order or permit the sealing of any settlement document in any proceeding described herein except on the basis of a written order concluding that (1) the presumption of openness is overcome by an overriding interest and (2) that such overriding interest cannot be protected by any measure short of sealing the settlement. Such order shall articulate the overriding interest and shall include findings of fact that are sufficiently specific to permit a reviewing court to determine whether the order was proper.

(c) Except for confidential communications as provided in § G.S. 132-1.1, the term “settlement documents,” as used herein, shall include all documents which reflect, or which are made or utilized in connection with, the terms and conditions upon which any proceedings described in this section are compromised, settled, terminated or dismissed, including but not limited to correspondence, settlement agreements, consent orders, checks, and bank drafts.