The California Supreme Court will soon decide an evidentiary issue that could significantly impact how company witnesses are defended at deposition.
The Court heard argument December 7 in Berroteran v. Ford Motor Co., No. S259522, a class action opt-out case alleging consumer fraud claims based on purported defects in a Ford truck engine. The appeal involves interpretation and operation of California Evidence Code section 1291 — an exception to the hearsay rule for former testimony — and specifically how it applies to the deposition testimony of company employees taken in prior cases.
Ford moved in limine to exclude as hearsay the deposition testimony of nine current and former Ford employees taken in similar cases. In response, Plaintiff relied on section 1291.
Section 1291 authorizes admission of former testimony when, among other things, the opponent had an interest and motive to “cross-examine” the witness in the prior case similar to its interest and motive in the present trial. The legislative history instructs that “the determination of similarity of interest and motive in cross-examination should be based on practical considerations and not merely the similarity of the party’s position in the two cases.” For example, the motives and interests are dissimilar “if the judge determines that the deposition was taken for discovery purposes and that the party did not subject the witness to a thorough cross-examination” for strategic reasons.
The trial court granted Ford’s motion based on Wahlgren v. Coleco Indus., Inc., 151 Cal.App.3d 543 (1984). Wahlgren was a diving injury product liability case against a swimming pool manufacturer. The trial court there excluded the deposition of a company witness taken in a prior case in Massachusetts that settled before trial. The court of appeal affirmed, holding that the manufacturer’s motive and interest to examine the witness at deposition was materially different from its present motive and interest at trial. The court reasoned that defendant’s practical strategic approach at the deposition of its employee, to refrain from a substantial examination, was consistent with prevailing custom and practice — to treat the deposition as discovery and to defer any examination of the company witness for the potential trial.
The court of appeal in Berroteran declined to follow Wahlgren and reversed the exclusion, concluding (without citation) that in the modern age of “omnipresent” videotape depositions played at trial, the practical calculus had radically changed. It criticized Wahlgren for imposing a “categorical bar” on admission of prior deposition testimony of a company witness based on an outmoded view of defense custom and practice — “espousing a blanket proposition that a party has a different motive in examining a witness at a deposition than at trial.” Berroteran held that the similarity of Ford’s substantive position in the two cases (e.g., the engine was not defective) shifted the burden to Ford to demonstrate that its interest and motive were dissimilar in the two cases and that Ford had not carried that burden. The Supreme Court accepted discretionary review.
As we argued in an amicus brief supporting Ford’s position (*Notice/Disclaimer*), from a defense perspective “a deposition of company employees or representatives is ordinarily a discovery event to survive, not a trial event to choreograph. Wahlgren got that right; the court of appeal [in Berroteran] did not.”
There are three primary flaws in Berroteran’s analysis. First, its rejection of Wahlgren was premised largely on its erroneous view that Wahlgren had created a “categorical bar” based on an unyielding assumption that company witness depositions are always treated as discovery. But, while Wahlgren spoke generally in explaining the usual defense mind-set at a client’s employee’s deposition and how it differed materially from counsel’s approach to the witness at trial, it never announced any “categorical bar” on such testimony. This misinterpretation became a straw man, as the court found Wahlgren’s “assumption” “that deposition testimony is limited to discovery” was inconsistent with both modern practice and the approach to the similar former testimony exception applied in federal courts, F.R.E. 804.
Second, the court assumed, without basis, that even if Wahlgren had correctly gauged the defense perspective in 1984 (which it questioned), that practice had radically changed thereafter. Ford and amici cited a slew of secondary literature and practice training guides demonstrating that defense counsel are not trained that depositions of their witnesses should be used to generate affirmative evidence for their case-in-chief.
Third, there is no basis to shift the burden and require a defendant to prove that its motives and interests are dissimilar. The proponent of evidence ordinarily has the burden of demonstrating admissibility, including the applicability of a hearsay exception. That the party’s substantive position is similar does not justify this dramatic departure from the usual allocation of burdens.
The case poses significant practical consequences. While liberally admitting former deposition testimony of company witnesses may provide plaintiffs with a shortcut to some proof at trial, that benefit comes at a high price, and not only for defendants. The costs of discovery for defendants will multiply. If every company witness deposition must be viewed by the defense as potentially admissible substantive evidence in every future case presenting a similar issue, then the heightened stakes require defense counsel to consider preparing the witness for and then conducting a full-scale trial examination at the deposition. Preparing company witnesses to be deposed is already time-consuming and expensive. The additional time, expense and burden of preparing for and conducting a full trial exam at deposition is wasteful; as we all know, more than 95% of cases will settle, most of them long before trial. In a litigation world where it is already prohibitively expensive to take most cases to trial and where young lawyers in particular see limited opportunities to gain trial experience, adding more, usually unnecessary expense makes little sense and unfairly enhances the settlement leverage of plaintiffs.
The Supreme Court will sort through these issues. Expect an opinion within the next 90 days.