Beth S. Rose, Vincent R. Lodato
July 31, 2020
In September 2018, we
circulated a Client Alert discussing a recent decision by the New Jersey
Appellate Division that addressed New Jersey evidence rules as they applied to
a product liability case where a non-settling defendant sought to shift blame
to a settled defendant to reduce its liability at trial. See Rowe v. Bell & Gossett Co., No. A-4530-1472, 2018 N.J.
Super. Unpub. LEXIS 1560 (App. Div. June 29, 2018). The New Jersey Supreme
Court granted certification, and in 2019, issued an opinion reversing the
Appellate Division’s decision. In Rowe v.
Bell & Gossett Co., 239 N.J. 531 (2019), the New Jersey Supreme Court held
that a non-settling defendant can rely on the statement against interest
exception to the hearsay rule (N.J.R.E.
803(c)(25)) to introduce interrogatory responses and deposition testimony from
settled defendants in order to apportion liability at trial.
Rowe, the decedent worked with various
asbestos-containing products during his thirty year career, which allegedly caused
his mesothelioma. Plaintiff’s initial complaint named twenty-seven defendants that
manufactured, supplied or sold the asbestos-containing products to which the decedent
was allegedly exposed. Most of those defendants were eventually dismissed from
the action and prior to trial, eight other defendants settled with plaintiff. Plaintiff
proceeded to trial against the one remaining defendant, Universal Engineering
Co., Inc. (“Universal”), which manufactured asbestos-containing furnace cement
that the decedent used during his career.
trial, plaintiff’s expert acknowledged that the decedent was exposed to
numerous asbestos-containing products during his career, but opined that Universal’s
cement was the primary cause of decedent’s illness. Universal’s expert,
however, testified that the amount of asbestos contained in Universal’s cement was
insufficient to cause the decedent’s mesothelioma. In addition, Universal sought
to introduce evidence establishing that the settled defendants bore liability
for the decedent’s illness to include them on the verdict sheet so the jury
could apportion liability amongst them for purposes of a credit. Although
Universal served notices in lieu of subpoena to compel live testimony of the
settled defendants at trial, the settled defendants took the position that their
witnesses were either out of state or were unavailable. Over plaintiff’s objections,
the trial court permitted Universal to introduce deposition testimony and
interrogatory responses from the settled defendants in order to apportion fault.
The interrogatory responses and deposition testimony fell into three general
categories: (1) successor liability for companies no longer in existence; (2)
the fact that the settled defendants’ products contained asbestos; and (3) the warnings
or lack thereof on the settled defendants’ asbestos-containing products.
The jury awarded plaintiff
$1.5M in damages, but only apportioned 20% liability to Universal. The jury
apportioned the remaining 80% of liability amongst the eight settled
defendants. The trial court molded the verdict and awarded plaintiff $300,000
against Universal. Plaintiff appealed the verdict to the Appellate Division.
appeal, Plaintiff argued that the trial court’s decision allowing the
introduction of the settled defendants’ deposition testimony and interrogatory
responses violated several evidentiary rules against hearsay. Universal argued
that the settled defendants’ deposition testimony and interrogatory responses
were admissible under several exceptions to the hearsay rule including:
testimony from a prior proceeding (N.J.R.E.
804(b)(1)); statements by a party-opponent (N.J.R.E.
803(b)(1)); and statements against interest (N.J.R.E. 803(c)(25)). Ultimately, the Appellate Division rejected
Universal’s arguments, holding that because Universal introduced the deposition
testimony against plaintiff rather than the settled defendants, none of these
hearsay exceptions applied. The Appellate Division also rejected Universal’s
argument that the settled defendants’ deposition testimony was admissible
because Universal did not sufficiently establish that the settled defendants
were “unavailable.” The Appellate Division reversed the verdict and remanded
the case for a new trial limited to apportionment.
appealed the Appellate Division’s ruling to the New Jersey Supreme Court. In a
unanimous decision, the Supreme Court reversed. The Court explained that in
multi-defendant tort cases, the settlement of fewer than all of the defendants
often causes the remaining parties to shift their trial strategies. Plaintiffs
are no longer incentivized to cast blame on the settled defendants. Meanwhile,
the non-settling defendant, whose interests may have previously been aligned
with the settled defendant, may seek to point the finger at the settled
defendant. The Court explained that this “tactical realignment poses special
challenges for the trial court,” in order to allow non-settling defendants to
prove the settling defendants’ fault within the confines of the evidentiary
rules. See Rowe, 239 N.J. at 556.
Rowe, the Court held that the
interrogatory responses and deposition testimony of the settling defendants
were admissible under N.J.R.E.
803(c)(25) – the hearsay exception for statements against interest. Under this
evidence rule, a statement is admissible if it is “so far contrary to the
declarant’s pecuniary, proprietary or social interest, or so far tended to
subject declarant to civil or criminal liability … that a reasonable person in
declarant’s position would not have made the statement unless the person
believed it to be true.” See N.J.R.E. 803(c)(25). To be admissible,
statements against interest do not require extrinsic proof that the statements
are reliable or trustworthy. Moreover, the proponent of the evidence does not
need to show that the declarant is unavailable to testify at trial. Indeed,
“the declarant need not be a party to the action in which the statement is
admitted.” All the proponent must show is that the statement was contrary to
the declarant’s interest at the time it was made. Whether a statement qualifies
as a statement against interest depends on the facts and circumstances of each
case. See Rowe, 239 N.J. at 558-60.
N.J.R.E. 803(c)(25) to the
non-settling defendants’ interrogatory responses and deposition testimony that
Universal introduced at trial, the Court held that the evidence was admissible
as a statement against interest. The Court noted that the interrogatory
responses and deposition testimony were binding on the non-settling defendants
since they were provided by corporate officers who had been designated to bind
the companies. Accordingly, the Supreme Court reinstated the jury’s verdict. It
did not, however, reach the question of whether the interrogatory responses or
deposition testimony would have been admissible under N.J.R.E. 804(b)(1) (testimony in prior proceedings), N.J.R.E. 803(b)(1) (statements by party
opponent) or Rule 4:16 – 1 (use of
Does This Case Mean?
is an important decision for defendants in multi-defendant product liability
and toxic tort cases. Before reaching its ultimate decision, the Court in Rowe took the time to provide a historical
summary on how the New Jersey Comparative Negligence Act and Joint Tortfeasor
Act operate in multi-defendant cases where there are defendants that settle
prior to trial and the non-settling defendants seek to shift blame to the
settled defendants. The Court’s decision illustrates the impact that
settlements on the steps of the courthouse can have on trial strategy. It also
highlights the importance of considering the discovery your client will need in
the event it is the sole defendant at trial. In short, defendants in
multi-defendant product liability and toxic tort cases need to be aware of how
hearsay and evidentiary rules may impact their evidence and trial strategy if a
co-defendant decides to settle prior to trial.
This Client Alert has been prepared by Sills Cummis & Gross P.C. for informational purposes only and does not constitute advertising or solicitation and should not be used or taken as legal advice. Those seeking legal advice should contact a member of the Firm or legal counsel licensed in their state. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. Confidential information should not be sent to Sills Cummis & Gross without first communicating directly with a member of the Firm about establishing an attorney-client relationship.