Appeals Court Shoots Down The Unconstitutional 'Non-Disparagement' Clauses Baltimore Attaches To Lawsuit Settlements

Legal Issues

from the court-says-it-won't-be-a-bagman-for-hush-money dept

When the City of Baltimore agreed to settle with a victim of police brutality, it inserted the usual clauses that come with every settlement. There was the standard non-admission of wrongdoing, along with a “non-disparagement” clause the city’s attorney told courts was used “in 95% of settlements” to prevent those being settled with from badmouthing the entity they sued.

Ashley Overbey received a $63,000 settlement from the city for allegations she was beaten, tased, verbally abused, and arrested after calling officers to her home to report a burglary. When a local newspaper published a story about the settlement, the City Solicitor chose to disparage Overbey by saying she was “hostile” when the police arrived at her home. As the comments filled up with invective against Overbey, she showed up in person to fire back at her detractors, claiming the police had been in the wrong and detailing some of the injuries she suffered.

The City — which had chosen to skew public perception against Overbey by commenting on the settlement — decided Overbey’s defense of herself violated the non-disparagement clause. So, it clawed back half of her settlement — $31,500 — for violating its STFU clause.

Overbey sued again, claiming this clause violated her First Amendment. Now, seven years after police showed up at her home and treated like the perpetrator — rather than a victim — of a crime, the Fourth Circuit Court of Appeals has ruled [PDF] these non-disparagement clauses are unconstitutional bullshit.

The City argued Overbey’s acceptance of the clause was actually an action of free expression. By opting for a payout, she was (and I am quoting the City here) “exercising her right not to speak in exchange for payment.” Alternatively, it argued that even if it was an unconstitutional waiver of rights, the court has no reason to intercede and nullify the clause.

The court agrees that it’s a waiver of rights, but disagrees about what it’s allowed to do about it:

We hold that the non-disparagement clause in Overbey’s settlement agreement amounts to a waiver of her First Amendment rights and that strong public interests rooted in the First Amendment make it unenforceable and void.

It goes on to point out that the government has no business compelling speech — i.e., violating someone’s decision to not speak about something. But that’s not what’s going on here. The clause penalizes settlement recipients for choosing to speak, which is definitely not Constitutional.

Overbey’s promise not to speak about her case cannot be fairly characterized as an exercise of her right to refrain from speaking, because none of the interests protected by the right to refrain from speaking were ever at stake in this case. No one tried to compel Overbey to make speech she did not want to make; no one tried to punish Overbey for refusing to say something she did not want to say. Instead, Overbey agreed, on pain of contractual liability to the City, to curb her voluntary speech to meet the City’s specifications. In doing so, she waived the First Amendment protections that would have otherwise shielded her speech from government sanction.

While it is possible for people to voluntarily waive their rights in certain situations, the discussion of a settled lawsuit isn’t one of these situations. Especially not when it deals with issues of considerable public interest, like allegations of police misconduct and abuse. The clause inserted into settlement agreements also drives a wedge between public agencies and the public they serve, contributing to the omnipresent distrust. In a case like this, the only purpose the clause serves is to silence speech the government doesn’t like.

Standing shoulder to shoulder with the citizenry’s interest in uninhibited, robust debate on public issues is this nation’s cautious “mistrust of governmental power.” Citizens United, 558 U.S. at 340. This mistrust is one of the “premise[s]” of the First Amendment, id., and we think it well-warranted here, because the non-disparagement clause is a government-defined and government-enforced restriction on government-critical speech. Indeed, when the government (1) makes a police-misconduct claimant’s silence about her claims a condition of settlement; (2) obtains the claimant’s promise of silence; (3) retains for itself the unilateral ability to determine whether the claimant has broken her promise; and (4) enforces the claimant’s promise by, in essence, holding her civilly liable to itself, there can be no serious doubt that the government has used its power in an effort to curb speech that is not to its liking.

That unconstitutionality voids the clause.

Accordingly, we conclude that enforcement of the non-disparagement clause at issue here was contrary to the citizenry’s First Amendment interest in limiting the government’s ability to target and remove speech critical of the government from the public discourse.

The court has zero patience for the City’s exhausting arguments about how unfair this is to the City:

As the City would have it, Overbey “sold her [speech] rights, with an option to buy them back, which she exercised, and now she has [her rights] again.” Id. at 39. Essentially, the City argues that half of Overbey’s settlement sum was earmarked for her silence, and that it would be unfair for Overbey to collect that half of her money when she was not, in fact, silent. When the second half of Overbey’s settlement sum is viewed in this light, it is difficult to see what distinguishes it from hush money. Needless to say, this does not work in the City’s favor. We have never ratified the government’s purchase of a potential critic’s silence merely because it would be unfair to deprive the government of the full value of its hush money. We are not eager to get into that business now.

The City will now have to give back the other half of Overbey’s money. You can’t beat the hell out of the First Amendment and expect to cash out. Litigants in Baltimore — and elsewhere in the circuit — have been freed to discuss the details of their cases in public without fear of reprisal. Hopefully, this will reduce the percentage of settlements with gag orders from 95% to 0% very quickly.

Filed Under: 1st amendment, 4th circuit, ashley overbey, free speech, non-disparagement