If you want your attorney to be subject to the confidentiality and nondisclosure provisions of your settlement agreement you better get him or her to sign it, not as your attorney, but, as a party.
In Monster Energy v. Schecter, the California Fourth Appellate District Court ruled that an attorneys’ signature under the notation “Approved as to Form and Content” on a settlement agreement did not make the attorney a party to the settlement agreement. Therefore, the attorney was no bound by the confidentiality and nondisclosure provisions in the settlement agreement.
Attorney Bruce Schecter represented Richard Fournier and Wendy Crossland (the Fourniers) in an action against Monster Energy Company (Monster) and a related defendant when their 14-year-old daughter went into cardiac arrest and died in 2011 after consuming two Monster brand energy drinks.
In 2015, Schechter negotiated a settlement for the Fourniers that included a confidentiality provision purporting to bind him and his firm. However, Schechter signed the agreement as “Approved as to form and content.”
Schecter later gave an interview to the website Lawyersandsettlements.com, in which he had handled a recent case against Monster, involving a 14-year-old girl, and had settled it for “substantial dollars for the family.”
Lawyersandsettlements.com then published an online article that included Schechter’s statements.
Monster sued Schechter and his law firm in which it alleged Schecter had breached the terms of the settlement agreement. Schechter and his firm then filed a special motion to strike in which it argued, among other things, that Monster could not show a probability of prevailing on its breach of contract claim because Schecter and his firm were not parties to the settlement agreement.
The trial court granted the motion as to every cause of action other than breach of contact cause of action. Schecter and his firm appealed.
The Appellate Court held, when a settlement agreement provides that a plaintiff and his or her counsel agree to keep the terms of the agreement confidential – and the plaintiff’s counsel signs the agreement under the words “approved as to form and content,” the plaintiff’s counsel could not be liable to defendant for breach of the confidentiality provision. The Court reasoned:
The only reasonable construction of this wording is that they were signing solely in the capacity of attorneys who had reviewed the settlement agreement and had given their clients their professional approval to sign it. In our experience, this is the wording that the legal community customarily uses for this purpose.
The Court instructed that a way to avoid this issue is:
. . . to draft a settlement agreement that explicitly makes the attorneys parties to the agreement (even if only to the confidentiality provision) and explicitly requires them to sign as such.
An attorney’s signature under the words “approved as to form and content” does not impose any specific obligation on the attorney to maintain the confidentiality of the settlement. Thus, if you want to bind opposing counsel to the confidentiality provision of a settlement agreement, the confidentiality provision must be specifically drafted to encompass opposing counsel as well as the party represented by the opposing counsel. The settlement agreement should also include an express statement signed by opposing counsel agreeing to be bound by the settlement agreement’s confidentiality provision.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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