WEBSTER, N.Y. -- There are three vacant houses on the 600 block of Salt Road in this community east of Rochester, and those who live on the street wonder why their neighbors moved out and no one else has moved in. "All of a sudden I saw a moving van moving one family out," said Ray Gerber, who lives several hundred feet north of the cluster of empty houses, now owned by Xerox Corp. "I worry about it." "We're in the dark," said Grace Krasucki, another Salt Road resident. The empty houses -- the result of a secret and costly legal battle -- stand as a testament to the growing use of secrecy procedures in the nation's civil courts and how that secrecy is hampering efforts by scientists and health officials to learn more about hazardous chemicals and their effects. Xerox, which runs a manufacturing facility opposite the vacant houses, discovered several years ago that a hazardous chemical had leaked into the ground water and contaminated a private well. At the time, Xerox disclosed the leak and assured the community that there was no long-term health threat. Two Salt Road families later sued Xerox over the contamination, alleging health problems. Last year, as part of a confidential settlement, Xerox paid the families about $4.75 million and relocated them, according to sources familiar with the case. Under terms of the settlement, a New York judge sealed all records of the lawsuits and prohibited those involved from discussing them. Violation of the judge's order could result in contempt of court proceedings. The settlement came after medical specialists, hired by the families' attorneys, said they would testify that air and water discharges from the plant were a likely cause of neurological problems experienced by seven members of the two families and was a probable factor in a rare form of cancer found in one teen-age girl. Xerox strongly disputed any causal link between the chemical leaks and any injuries and admitted no liability or fault in settling the case. In interviews, company officials said the judge's sealing order prevented them from discussing the matter. An attorney for one family, Charles Githler 2nd, also declined to comment. "I can't say anything about this case because there is a covenant of silence that was entered into at the time it was settled," he said.Health Officials Voice Concern This covenant of silence -- in the Xerox case and similar lawsuits alleging environmentally caused illnesses -- is prompting concern among scientists, doctors and public health officials. Je Anne Burg, an official with the federal Toxic Substances and Disease Registry, which collects and assesses data on human illness resulting from exposure to toxic chemicals, said her office has encountered several instances in which alleged victims, on instructions of their attorneys, have declined to cooperate with the agency. "The less information we have, the less accurately we can assess the health effects," Burg said. This article is another in a series that examines the use of secrecy in civil lawsuits that raise questions of public health and safety. Previous articles have focused on how corporations and other institutions, in defending themselves against product liability suits, are increasingly relying on established secrecy procedures to limit the disclosure of sensitive or potentially damaging information. Plaintiffs' attorneys also benefit, using secrecy as a lever to obtain larger settlements. This secrecy has a profound effect in environmental lawsuits because so little is known about the health effects of so many toxic chemicals, lawyers and other experts said. Except for such substances as lead and asbestos, which have been proven harmful, scientific and medical knowledge is still evolving about the long-term consequences of low-level exposure to toxic materials. Arthur H. Bryant, director of the Trial Lawyers for Public Justice, a public interest group that assists plaintiffs in environmental cases, said, "By making sure that nobody knows about injuries that are caused," manufacturers can influence the state of scientific knowledge "by controlling access to the data on which scientific opinions are based." Thomas W. Henderson, chairman of the American Bar Association's toxic and hazardous substances and environmental law committee, said an increasing number of plaintiffs' attorneys are expressing misgivings about confidential settlements in environmental disputes. "I don't think anybody's pleased about doing it," Henderson said. "I think there's a concern that the information ought to be public." Under the canons of legal conduct, plaintiffs' attorneys say they have little choice as long as the client is satisfied with the settlement, according to Sybil Shainwald, former head of a committee on toxic and environmental law for the American Trial Lawyers Association, a plaintiffs' attorneys group. "You represent a client, not a cause," Shainwald said. The filing and sealing of the Xerox lawsuits also made it more difficult for local health authorities to get information about the families' allegations, said Dr. Mark J. Merkens, deputy director of the Monroe County Health Department. "Before we got deeply involved, {the two families} sought legal counsel," Merkens said, adding that he was unaware of the outcome of the litigation or of the existence of any health problems. Xerox, in a brief mention of the lawsuits in recent annual reports to its stockholders, said it "denies any wrongdoing and intends to vigorously defend" against the allegations. Because the cases were settled before trial, Xerox officials stressed in recent interviews, none of the allegations were proven or even tested in court. They said that lawsuits often are settled for reasons unrelated to the merits of a case, such as the cost of a trial or fear of a hostile jury. "Our judicial system is wonderful, but you don't always win when you're right," said James Lamb, a Xerox spokesman. Xerox officials also said that confidential settlements often benefit the public by clearing crowded court dockets. Peter K. Bleakley of the Washington law firm Arnold & Porter, which Xerox hired for the Webster case, said: "It is perfectly appropriate for the parties to a lawsuit to insist, as part of that settlement package, that everything that's happened in the lawsuit will be kept confidential if that helps to encourage settlement . . . . I think that's to be praised, not to be criticized." Lamb added: "There is a tension between two public policies, one to encourage settlements and clear clogged court calendars and therefore get people redressed years earlier than they might otherwise be redressed, and secondly, the public policy of the right to know." New York State Supreme Court Justice Joseph G. Fritsch, who approved the settlement in April, said he would not discuss the issues in the case. Asked about his decision to seal the records, Fritsch said it was clear to him that Xerox would not have settled the suit without such secrecy. "If the agreement is conditioned by the defendant that it be sealed, the plaintiff has no choice," Fritsch said. "It's one of the tools, one of the elements that was bargained into it, just as the dollar amount was." Contamination Discovered Behind the lawsuits is a chain of events that goes back five years. In the fall of 1984, construction workers at the Xerox complex discovered discolored water during excavation. Xerox later learned that 63 pounds of trichloroethylene (known as TCE), a solvent used in cleaning and lubricating machinery, had leaked over a period of years from four underground storage tanks. In laboratory testing of animals, TCE has been found to be cause cancer; the U.S. Environmental Protection Agency considers TCE to be a probable carcinogen for humans. Xerox, which has maintained that the contamination was not in sufficient concentrations to be hazardous, did not tell Salt Road residents of the leak until August 1985. The company said it alerted the residents immediately after determining that contaminated ground water had traveled beyond Xerox's property. The EPA later charged Xerox with failing to report the leak to the agency in a timely fashion. Xerox later paid a $95,000 fine, while admitting no wrongdoing. After the leak became public, local health officials tested 16 private wells along Salt Road and other nearby streets and found TCE in one well, at a level 62 times greater than New York state's recommended limit. The owner of that well, the DelMonte family, later sued Xerox. The Statskey family, who lived next door, also sued. Although the TCE contamination was limited to one well, Xerox offered to pay the cost of connecting houses to the town water system. Arthur Zuckerman, a Xerox spokesman, was quoted at the time as saying, "These are people who neighbor us, and we realize they're upset," according to an account in the Rochester Democrat and Chronicle newspaper. The two lawsuits, filed in 1986 and 1987, eventually raised issues that went beyond those made public in 1985. In addition to faulting Xerox for the TCE contamination, attorneys for the families alleged that their clients' health had been affected by airborne emissions from the plant. According to sources familiar with the case, tests in the houses showed traces of a TCE derivative in the basements and the sump pumps. They also showed residues of two other toxic chemicals, styrene and selenium, in the soot that coated lawn furniture, the walls of their homes and their car windows. The plaintiffs alleged in sealed court papers that the substances were emitted from a building that manufactures toner, a chemical used in photocopying, the sources said. Xerox officials said that styrene itself is not used in the processing of toner and that a styrene polymer it does use does not break down in a way that would emit styrene. Selenium is used in processing toner but is emitted in virtually undetectable amounts, Xerox officials said, and also occurs naturally in the environment. Xerox spokesman Lamb said it was highly unlikely that the plant's emissions, which are filtered, could cause illnesses in the community. "If you were talking about a puff of toner coming out of a broken filter and traveling through the air . . . a hundred yards or more, then you are talking about a concentration so far below what you might find {inside the plant} and for such a short instance of time, that it becomes a silly conversation," he said. The company said its toner processing is done in a controlled and safe manner. "All of the emissions from our whole 1,000 acres here are under permit from the State of New York," said James C. MacKenzie, Xerox's director of environmental health and safety. The plaintiffs' attorneys had both families examined by medical specialists at the University of Rochester and Boston University. After a series of tests, the doctors concluded that seven of eight family members had neurological impairments, affecting their ability to concentrate, remember or perform tasks. In addition, the specialists found a case of Burkitt's lymphoma, a rare and fast-growing cancer of the lymph glands, in the teen-age daughter of one family. The cancer is in remission after chemotherapy. The specialists also found a pre-lymphomic condition in an older woman in the other family. Her condition could become malignant, the doctors said. The relationship between the illnesses and the contamination was "highly probable and causative," according to Dr. John P. Morgan, who was hired by the plaintiffs as an expert witness. Morgan, chief of pharmacology at City University of New York medical school and an expert in clinical toxicology, confirmed that he wrote a report that he cannot make public because of the judge's sealing order. He agreed to a limited discussion on the condition that he would not talk about the settlement or identify patients. After analyzing the medical reports in the case, Morgan said he concluded "beyond a reasonable degree of medical certainty" that there was "a cause and effect relationship" between the plant's discharges and the cancer case and the pre-lymphomic condition. After the Settlement As a result of settlement negotiations, the company first agreed to purchase the two houses and relocate the families. According to county land records, Xerox paid $150,000 and $162,500 for the houses. The two sides also agreed on a financial settlement, which the plaintiffs viewed as compensation for their health problems. Judge Fritsch then appointed two Rochester lawyers to guard the interests of two children in the case. The attorneys said that the agreed-upon figure was insufficient to meet the children's long-term needs, the sources said. At Fritsch's suggestion, Xerox increased its offer. Sources said the current value of the final settlement package is about $4.75 million. Since the settlement, another cancer case has been diagnosed. A 5-year-old girl, who spent her days in the care of her grandmother in a rented house on Salt Road, has developed large cell lymphoma, according to the girl's doctor. The girl underwent a bone marrow transplant after chemotherapy was unsuccessful, the doctor said. Her prognosis is uncertain. The girl's mother, who has consulted one of the lawyers who handled the Xerox settlement, said, "Right now, our main concern is her. Whether it's linked to that, I don't know. If it was, I would be furious." Lamb, the Xerox spokesman, said the company has no official knowledge of the girl's illness. He declined to comment. Meanwhile, county land records show that Xerox has bought other Salt Road properties that lie within the boundaries of the ground water contamination, paying $375,500 for an undeveloped lot, a 61-acre cow pasture and a house occupied by a third family, the Kinkeads. Xerox also agreed to relocate the Kinkead family, whose members have not had any health problems, according to Merle E. Kinkead. On Salt Road these days, the remaining families continue to hear rumors, but they don't know exactly what happened to the families that moved out. "I think they should let us know what the heck is going on," Ray Gerber said. "It pertains to everybody." Staff researcher Melissa Mathis contributed to this report. 2. Xerox determined that these three houses lay in the "plume" of ground water contaminated by the TCE leaks. A well on the DelMonte property showed evidence of TCE contamination. Two families, the Statskeys and the DelMontes, alleged in lawsuits that the contamination and airborne emissions had affected their health. Xerox has bought the houses and relocated the families, including a third family that did not sue. The lawsuits have been settled, with Xerox admitting no fault or liability. The company strongly disputed any causal link between its operations and any health problems. 3. A 5-year-old girl, who was cared for during the day by her grandmother in this house, has been found to have cancer. A Xerox spokesman said the company has no official knowledge of the case and therefore declined to comment. SOURCE: Xerox Corp.; Monroe Co., N.Y. land records "It is perfectly approproiate for the parties to a lawsuit to insist, as part of that settlement package, that everything that's happened in the lawsuit will be kept confidential if that helps to encourage settlement... I think that's to be praised, not to be criticised." -- Peter K. Bleakley, attorney wiht the Washinton firm of Arnold & Porter, which Xerox hired for the Webster case.