Virginia Lawyers Weekly

The terms of wrongful death settlements in Virginia are always public information, even when the settlements are the result of private mediation, the Supreme Court of Virginia has ruled.

The opinion in the case of four deaths related to cardiac surgery reaffirms and expands the rule in a 1988 case that required disclosure of death settlement terms. The court found that public disclosure is mandated by statute and is based on society’s interest in the courts’ administration of death claims and in medical malpractice claims generally.

The case is Perreault, Am’x v. The Free Lance-Star, (VLW 008-6-085).

The case arises from a chain of events at Mary Washington Hospital in Fredericksburg four years ago. The deaths and illnesses of at least 10 heart surgery patients were blamed on tainted heart surgery medication made by Central Admixture Pharmacy Services. Lawsuits were filed, and the families of four patients who died reached settlements with Central Admixture after their cases were mediated.

Even though, under Virginia law, a settlement of a wrongful death case must receive court approval, both the victims’ families and Central Admixture sought to keep secret the financial terms of their settlements.

At first, the plan worked. Without any written petitions on file and without notice, Circuit Judge Ann Hunter Simpson heard the parties and entered orders approving the settlements. When two newspapers objected, however, Simpson permitted the newspapers to intervene and ultimately ruled that the law required public disclosure of the settlement terms.

Simpson allowed the settlement terms to remain under seal pending the appeal.

Lawyers for the settling parties had to contend with the 1988 opinion in Shenandoah Publishing House, Inc. v. Fanning. In that case, the Supreme Court used broad language to emphasize the public’s interest in disclosure of the terms of court-approved settlements.

The settling parties argued that the Fredericksburg cases were different because they were resolved through the use of private mediation. The lawyers pointed to the Virginia mediation statutes, one of which states that parties can agree in writing that a mediated agreement may be confidential.

Writing for the court, Justice Lawrence L. Koontz Jr. harmonized the mediation statute with other code sections by finding that disclosure is required in cases of wrongful death, even though other civil claims commonly are resolved without public disclosure.

The court rejected the suggestion that the statute requiring court approval of death settlements did not require that the financial terms be disclosed, since the law explicitly states that the “terms” must be stated in the petition for approval.

“Common sense dictates that the most significant of the ‘terms’ of any compromise settlement of a wrongful death claim include the monetary provisions….,” Koontz wrote.

Koontz echoed the language of Shenandoah Publishing, finding that the purpose behind the disclosure requirement was the public’s interest “in learning whether compromise settlements are equitable and whether the courts are administering properly the powers conferred upon them.”

Further, Koontz quoted, “[T]he people have a vital interest, one of personal and familial as well as community concern, in cases involving claims of medical malpractice on the part of licensed practitioners and other health care providers.”

Despite that broad interest, the new Perreault opinion does not suggest any expansion of Virginia’s disclosure or court approval requirements. Under the Code, courts must approve settlements in cases of wrongful death and settlements on behalf of minors and those considered “under a disability.” Other civil lawsuits, even those involving medical malpractice, are routinely settled and dismissed without court oversight and without public disclosure of the terms.

That’s a situation that calls for change, according to Roanoke lawyer T. Daniel Frith III, who regularly represents medical malpractice plaintiffs. “The public has a right to know that a certain doctor, dentist, hospital, or nursing home did a lousy job and someone got hurt as a result,” Frith wrote in a recent blog post.

The Virginia Coalition for Open Government takes a similar stance. “There is always a danger in keeping tort claim settlements private, especially when it involves people, entities or products that can affect the broader public,” according to Megan Rhyne, associate director of VCOG. “There is a public interest in knowing whether a hospital has made grievous mistakes, regardless of whether the patient lives or dies. The public needs this kind of information when making decisions on their future health care needs.”

Frith said that he recently received an offer for a pending malpractice claim that is contingent on strict restrictions on disclosure of, not just the dollar amount, but also the identity of the parties, the location of the medical care, and the facts of the case.
“This should be open,” he said. “I think that it is incumbent upon the judges to uphold the openness and transparency of the process.”

Frith acknowledged that plaintiffs’ lawyers commonly accede to requests for confidentiality because their clients generally have no interest in publicizing the details of their misfortune or the amount of their compensation.

The calls for more disclosure may be little more than cries in the wilderness. No attorney contacted for this story was aware of any effort to expand the requirements for settlement disclosure beyond cases involving death, minors, and persons under disability.

Moreover, hospitals, doctors, and their insurance companies have ways of reducing the likelihood of publicity about on-the-record settlements. One common tactic, lawyers confirm, is to have a settlement approval petition filed in an out-of-the-way jurisdiction.

S.D. Roberts Moore, a Roanoke lawyer who often represents medical malpractice plaintiffs, has seen settlements filed in Franklin, Bland, or Craig Counties to avoid news coverage. “If it is reported, it’s in some county weekly that nobody ever reads.”

Moore says medical liability insurers want to avoid having a public record of case values. “In my opinion, the primary reason they don’t want those cases reported is they don’t want a constant, continuous record of what death cases are being settled for these days,” Moore said.

Moore says the desire to protect doctors and hospitals from bad publicity is a secondary consideration.

Koontz’ opinion in Perreault remands the four cases to Spotsylvania County Circuit Court with direction that the records be made public. As of press time, it was not clear when and how the information would be released.

The Free Lance-Star reported, based on court records, that two other of the cardiac surgery death cases were settled for $249,000 and $130,000.

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