Many settlement agreements contain confidentiality provisions. Those provisions may be enforced through venue or arbitration clauses, liquidated-damages clauses, and prevailing-party attorney-fee provisions. But, what happens when the attorney for one of the settling parties spills the beans? Is the attorney or his or her firm contractually liable to the adverse party for that breach?
In Monster Energy Co. v. Schechter 7 Cal.5th 781, (Cal. 2019) the California Supreme Court held that an attorney’s signature on a settlement agreement acknowledging that it was “approved as to form and content” may reflect the attorney’s intent to be bound by the agreement. In that case, Wendy Crossland and Monster Energy Company settled a products-liability action. The settlement agreement contained a confidentiality provision. Crossland’s attorney, Bruce Schechter, signed the settlement agreement under the notation “Approved as to Form and Content.” Shortly after signing the settlement agreement, Monster Energy sued Schechter for breach of contract, alleging that Schechter violated the confidentiality provision by providing information about the settlement to a reporter that posted an article on a website. The superior court denied Schechter’s anti-SLAPP motion to strike the complaint. Schechter appealed and the appellate court reversed, finding that Schechter was not bound by the settlement agreement.
The California Supreme Court disagreed and reversed the appellate-court opinion. Applying ordinary principles of contract interpretation, the Supreme Court held that Schechter’s signature acknowledging that the agreement was “approved to form and content” did not preclude a finding that he intended to be bound by the confidentiality provision. The intent question requires an examination of the agreement as a whole to determine whether the attorney is contractually bound.