We reported back in December [California Supreme Court Set to Decide How Defense Counsel Approach Defending Company Witness Depositions] on a case then pending before the California Supreme Court, Berroteran v. Superior Court. The case involves the former testimony exception to the hearsay rule, Evidence Code section 1291(a)(2), as applied to the deposition testimony of company witnesses taken in prior litigation. [Disclaimer: I wrote an amicus brief in support of the petition for review and another on the merits.]
Oral argument did not go well for the plaintiff. Consequently, it was not surprising that within a few days the parties notified the Court that they had reached a settlement. The Supreme Court could have dismissed the appeal at that point and left the issue unresolved. But because its core mission is “to secure uniformity of decision” and to settle important questions of law, Cal. Rule of Court 8.500(b), the Court went ahead and decided the appeal. 2022 WL 664719 (Cal. Mar. 7, 2022). And, as Larry David might say, the decision is pretty, pretty good.
The issue was application and operation of the hearsay exception’s requirement that the opposing party (here, Ford) have had a similar “interest and motive” to examine the witness at the deposition that it has at trial. Ford had been involved in pattern litigation, including class actions, alleging that defects in certain engines had caused owners to sustain economic losses. Depositions of various employees and designees had been taken in prior cases. In Berroteran’s opt-out case, he moved in limine to secure admission of the testimony over Ford’s hearsay objection. The trial court excluded the transcripts as hearsay, finding that Ford’s interest and motive in examining its own witnesses at their depositions was significantly different from its interest and motive in presenting their testimony at trial, despite the similarity of the issues in the cases. The court relied on the leading case, Wahlgren v. Coleco Indus., Inc., 151 Cal.App.3d 543 (1984), which recognized that, in practice, lawyers defending company witnesses at deposition strategically avoid extensive examination of the witnesses, preferring to keep their cards close to the vest and generally view their primary goal as damage control.
The court of appeal reversed on interlocutory review, finding that any such defense custom and practice was anachronistic in this age of “omnipresent” videotaped deposition testimony presented at trial. Reading Wahlgren as erecting a “categorical bar” on admission of former deposition testimony of party witnesses, the court declined to follow it. The court reasoned that Wahlgren’s absolute rule was out of step with the more flexible approach in federal court under the similarly worded federal rule, Federal Rule of Evidence 804(b)(1). The court found that Ford’s interest and motive was presumptively similar based on the identical nature of the issues in the cases and that Ford had not demonstrated any dissimilarity.
Notwithstanding the post-argument settlement, the Supreme Court recognized the importance of the decision and the need for guidance. In a lengthy decision, the Court reversed, rejecting the court of appeal’s analysis at every turn. The lower court had misread the law in several ways:
- The court had misread the importance of the legislative history. A legislative commission comment had drawn a clear distinction between former trial testimony and former deposition testimony; as to the latter, similarity of interest and motive “should be based on practical considerations and not merely the similarity of the party’s position in the two cases.” The lower court had relegated the comment to a footnote and basically ignored its content.
- The court had misread Wahlgren. That opinion created no “categorical bar”; it had merely articulated a general rule that the interest and motive at a discovery deposition of an aligned witness is different than at a trial, effectively a presumption of dissimilarity that the proponent was required to overcome.
- The court had misread the prevailing custom and practice. Practice guides and other secondary sources overwhelmingly recognized the disparate approaches counsel take toward examination of their witnesses at the different phases of litigation. The practical considerations in the defense bar had not been changed by the advent of videotaped testimony.
- The court had misread the federal decisions, or at least their import. The Supreme Court questioned the lower court’s interpretation of the case law, but, more significantly, it found the federal cases distinguishable based on the clear legislative history.
- The court had misread the burden of proof. Generally, the proponent of evidence bears the burden of proving the foundation for admissibility. The court’s shifting of the burden to Ford to demonstrate dissimilarity was an unsupported departure and not justified by the similarity of Ford’s litigation positions in the former and present cases.
The Court also recognized there would be increased burdens and costs if counsel were compelled to conduct a full-scale trial examination at each company witness deposition before counsel had completed discovery and prepared its final trial strategy and witness lists.
The Supreme Court’s opinion should allow defendants and their counsel to breathe a little easier when they make the usual decision to forego extensive “cross-examination” of aligned witnesses at their depositions.
But the Court did not stop there. As a bonus, the Supreme Court took the opportunity to flesh out the procedural and analytical considerations that should guide admissibility decisions for prior deposition testimony under section 1291(a)(2).
So, despite the settlement, a bad precedent was erased, the status quo was restored, and counsel and courts now have a decisional roadmap that should help resolve these issues predictably and consistently in the future.