Daily Blast - July 11, 2019 - Lewis Brisbois Bisgaard & Smith LLP

Today, the California Supreme Court issued its opinion in Monster Energy Co. v. Schechter (July 11, 2019, S251392) __ Cal.5th ___, analyzing the following question: When a settlement agreement contains confidentiality provisions that are explicitly binding on the parties and their attorneys and the attorneys sign the agreement under the legend “APPROVED AS TO FORM AND CONTENT,” have the attorneys consented to be bound by the confidentiality provisions? The court concluded that an attorney’s signature on a document with an “approved as to form and content” notation “does not, as a matter of law, preclude a factual finding that the attorney intended to be bound by the document’s terms. The intent question requires an examination of the agreement as a whole, including substantive provisions referring to counsel.” (Slip opn., p. 17.)

The case arose out of a products liability and wrongful death action in which the parties entered into a confidential written settlement agreement. The agreement included several provisions purporting to impose confidentiality obligations on the parties and their counsel. All parties signed the agreement and their attorneys signed under a notation that they approved as to form and content. Counsel allegedly violated the agreement by making statements about the settlement and were sued for breach of contract, among other causes of action. Counsel urged they were not personally bound by the confidentiality provisions and filed an anti-SLAPP motion. The trial court denied the motion. The Court of Appeal reversed, concluding the “approved as to form and content” notation meant only that counsel recommended their clients sign the document. (Slip opn., pp. 1-2.)

The Supreme Court reversed. The court concluded the “approved as to form and content” notation “does not preclude a factual finding that counsel both recommended their clients sign the document and intended to be bound by its provisions.” (Slip opn., p. 1, original italics.) The “approved as to form and content” notation “affirms that counsel has read the document, it embodies the parties’ agreement, and counsel perceives no impediment to his client signing it.” (Id. at p. 12, citing Freedman v. Brutzkus (2010) 182 Cal.App.4th 1065, 1070.) If the agreement contains no provision purporting to bind counsel or otherwise impose any obligation on him of her, “counsel’s signature that he approved the agreement as to form and content could only mean he is approving it for his client’s signature.” (Slip opn., p. 12, original italics.) “But that will not always be the case. An attorney’s signature on an agreement containing substantive provisions imposing duties on counsel may reflect an intent to be bound even though counsel also approves the document for his client’s signature.” (Id. at pp. 12-13.) The court determined that a factfinder here could reasonably conclude counsel agreed to be bound. The confidentiality provisions were extensive and repeatedly referred both to the parties and their counsel. (Id. at p. 13.)