By James J. Reynolds of Shustak Reynolds & Partners, P.C. posted on Thursday, August 16, 2018.

James J. Reynolds

Partner

Almost every lawyer has seen if not signed off an agreement containing at the end of the document the words “approved as to form and content,” typically found in a settlement agreement.

What legal impact does the attorney’s signature have when approving form and content? In Monster Energy v Schenchter 2018 DJDAR 8092, the Fourth District Court of Appeal looked into this issue.

There the settling Plaintiff’s attorney signed off on the settlement agreement with Monster Energy in the underlying action–“ Approved as to form and content”. The Settlement Agreement contained a confidentiality clause whereby the Plaintiffs agreed not to discuss the settlement.

The Plaintiff’s attorney later on discussed the health concerns presented by energy drinks with a newspaper reporter who published the lawyer’s comments in an article addressing the health concerns and asking anyone injured by an energy drink to contact the attorney.

Monster Energy was not amused and sued the attorney for breach of contract and three other causes of action. The Defendant attorney filed a SLAPP Motion which was granted on all causes of action except the breach of contract. The attorney appealed the trial court’s denial of the SLAPP Motion arguing his was commercial speech protected by the First Amendment under the SLAPP statute.

The appellate court determined the attorney’s signature on the “approved as to form and content” signature block did not make him a party to the Settlement Agreement. Hence the confidentiality provision did not extend to the attorney. It was the settling Plaintiffs who agreed to keep the settlement confidential, not their attorney. The appellate court noted: “The only reasonable construction of this wording is that they were signing solely in the capacity of attorneys who had reviewed the settlement agreement and had given their client their professional approval to sign it. In our experience, this is the wording that the legal community customarily uses for this purpose.”

Per the appellate court, if a defendant wants to force the attorneys to keep the settlement confidential the attorney needs to be a party to the contract. “It seems easy enough, however, to draft a settlement agreement that explicitly makes the attorneys parties (even if only to the confidentiality provision) and explicitly requires them to sign as such.”

The Fourth District highlighted Monster’s possible claim against the settling Plaintiffs and Monster arguably could state a cause of action as a third-party beneficiary of the attorney-client contract between the Plaintiffs and their attorney. The appellate court ended with the warning an attorney who discloses confidential settlement provisions faces practical and ethical risks aside from being sued by the paying settling party “so we expect the issue to arise only rarely.” The risk, presumably, is the attorney’s clients filing a cross claim against the attorney for indemnity should the Plaintiffs be sued for violating the confidentiality clause.

Which is all a somewhat longwinded way of concluding the “approved as to form and content” means nothing legally.

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