(May 6, 2005) California Chamber of Commerce-opposed legislation limiting business’ ability to maintain the confidentiality passed the Assembly Judiciary Committee earlier this week on a 6-3 vote.

AB 1700 (Pavley; D-Agoura Hills) exacerbates an already hostile legal environment by removing business’ ability to maintain the confidentiality of proprietary information.

“AB 1700 would undermine economic competition in California and make the state unattractive to business,” said Erika Frank, Chamber legislative advocate and general counsel.  “Public policy should support investment and competition in California because a strong competitive market generates revenue for the state, promotes productivity and produces jobs for California.”

Although adequate safeguards exist in current law, AB 1700 seeks to restrict confidential agreements when a 'public danger' is involved and to create a public right of access to any information related to the alleged danger. However, current law already protects public safety by empowering judges with the authority to deny confidentiality agreements in the name of public safety.  Courts are required to take public safety into account and have the discretion to refuse to approve settlement agreements that keep public safety hazards confidential.  Similarly, judges have the discretion to deny a request for a protective order in the interest of public safety.

AB 1700 will result in the exposure of propriety information with no showing of wrongdoing.  As a result, this bill will grant a right of access to potentially irrelevant business documents and force businesses to settle merit-less claims in an effort to avoid the disclosure of information.  Businesses should be able to keep this information confidential in order to preserve their investment and remain competitive. 

Key Vote
AB 1700 passed out of Assembly Judiciary on a party-line vote of 6-3.

Ayes:  Jones (D-Sacramento); Evans (D-Santa Rosa); Laird (D-Santa Cruz); Levine (D- Van Nuys); Lieber (D-Mountain View); Montañez (D-San Fernando).

Noes: Harman (R-Huntington Beach); Haynes (R-Murrieta); Cogdill (R-Modesto).