For The Defense, October 2010 - DRI Today

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T H I N K G L O B A L LYInternational Manufacturers BewareForeign Evidence in U.S.Product Liability LawBy Christopher T. Miller and William Seth Howardn Christopher T. Miller is a partner with SmithAmundsen LLC in its Chicago officeand vice chair of the firm’s Product Liability Group. He is an experienced trial lawyer,and his practice focuses on product liability and construction litigation. WilliamSeth Howard is an associate in SmithAmundsen LLC’s Chicago office wherehis practice focus is product liability, construction litigation and corporate/businessservices. He is a member of DRI’s International Law and Product Liability Committees.Scott Blake, a law clerk with SmithAmundsen LLC, assisted in the preparationof this article. Think Globally, continued on pagestandard by which manufacturers are judged in U.S.8480 n For The Defense n October 2010In this global economy manufacturers are compelledto produce many alternative product lines, includingone intended to comply with American laws andsafety standards and others intended to comply withforeign laws and standards. Recently, plaintiffs in theUnited States have attempted to use foreign standardsor foreign product models to prove that (1) reasonablealternative designs existed, (2) a manufacturer hadknowledge of an alternative design or potential defect,(3) a manufacturer failed to warn the consumer of alternativedesigns, or (4) a defendant breached a standard ofreasonable care in a negligence claim.A manufacturer presently has two arguments to barthis type of evidence. First, Federal Rule of Evidence402 provides that “evidence which is not relevant is notadmissible.” Second, Federal Rule of Evidence 403 precludesadmission of evidence that would have a tendencyto confuse or mislead a jury. American courts have unequivocallyand consistently held that foreign design andsafety standards are not admissible because they are notrelevant and will have a tendency to confuse a jury. SeeDeviner v. Electrolux Motor, 844 F.2d 769, 770 (11th Cir.1988); In re Baycol Products Litigation, 532 F. Supp. 2d1029, 1054 (D. Minn. 2007). However, the admissibility ofevidence of a foreign product itself has been another story.Foreign Product Designs Evidence AdmissibilityMany American courts have admitted evidence of foreignproducts with additional safety devices or differentdesigns. Alternative designs sold abroad are usuallyadmitted to show the feasibility of an alternative designor knowledge of a defect. For example, in Sherry v.Massey- Ferguson, Inc., the defendant manufactured twodifferent tractors; one model with a passenger seat thatwas sold in Europe, and an American model withouta passenger seat. 1997 U.S. Dist. LEXIS 10752, at *4–5(W.D. Mich. June 5, 1997). The court admitted photographsillustrating the alternative tractor designs thatwere sold in Europe because “[e]vi dence that an alternatetractor design was in production at the time of thesubject tractor’s manufacture unquestionably is relevantto the feasibility of plaintiff’s design theory.” Id. at*5. That is, the court believed that the alternative, foreigndesign was relevant to prove the feasibility of alternativedesigns and to show that the defendant knew ofalternative designs. See also Cantrell v. Hennessy Indus.,Inc., 829 S.W.2d 875 (Tex. Ct. App. 1992). In Cantrellv. Hennessy, the plaintiff used the European model ofdefendant’s tire- changing machine, which contained apressure- limiting device, as evidence that the alternativedesign was technically feasible and available yearsbefore the allegedly defective American product wasmanufactured. Id.Courts Should Discontinue AdmittingAlternative Foreign Design EvidenceU.S. courts clearly will not admit foreign standards andlaws as evidence but they may admit evidence of specificproducts manufactured for foreign sale. In attemptingto try to exclude the latter, a defendant should assertthat the plaintiff is trying to admit foreign standards, asopposed to alternative design evidence. That is, a manufacturerusually creates alternative designs only to meetthe requirements of the foreign laws where it sells theproduct. By admitting foreign, alternative designs as evidence,a court, by default, will also admit evidence of theforeign standards that required those designs, and thejudiciary, in effect, will have supplanted the U.S. legislativeprocess, essentially holding U.S. manufacturers tothe stricter requirements of foreign jurisdictions.The authors recognize that complying with domesticsafety standards does not absolve a manufacturer fromliability in most jurisdictions. But, the policy reasons fordenying requests to admit alternative, foreign designsdiffer from the policy reasons for allowing evidence ofdomestically produced alternative designs.Further, if alternative, foreign designs become the
D E F E N S E E T H I C S A N D P R O F E S S I O N A L I S MAggregate SettlementsWhat They Are and What They Aren’tBy Mark J. FucileGroup” settlements are becoming common in manypractice areas, ranging from product liability to employment.This trend, in turn, raises the question of whichmultiple settlements fall within the “aggregate settlementrule,” the ABA’s Model Rules of Prof’l Conduct R.1.8(g) and its state counterparts. The rule imposes strictrequirements:A lawyer who represents two or more clients shall notparticipate in making an aggregate settlement of theclaims of or against the clients, or in a criminal casean aggregated agreement as to guilty or nolo contenderepleas, unless each client gives informed consent,in a writing signed by the client. The lawyer’s disclosureshall include the existence and nature of all ofthe claims or pleas involved and of the participationof each person in the settlement.The distinction between simply settling multipleclaims and an “aggregate settlement” is not academic.An improperly handled aggregate settlement can exposeclaimants’ counsel to possible professional discipline andcivil damage claims. See, e.g., In re Hoffman, 883 So. 2d425 (La. 2004) (professional discipline); see, e.g., Waggonerv. Williamson, 8 So. 3d 147 (Miss. 2009) (civil damageclaims). Indeed, defense counsel run the risk that asettlement categorized as “aggregate” cannot be enforcedif it was not properly documented. See, e.g., Tax Authority,Inc. v. Jackson Hewitt, Inc., 898 A.2d 512 (N.J. 2006).Oddly, however, neither Model Rule 1.8(g) nor itsaccompanying Comment 13 defines “aggregate settlement.”In this column, we’ll look at what does anddoesn’t fall within the rule.What They AreThe ABA has acknowledged that the rule and commentfail to define “aggregate settlement” and has attemptedto fashion one:An aggregate settlement… occurs when two ormore clients who are represented by the same lawyertogether resolve their claims[.] It is not necessarythat all of the lawyer’s clients… having claims againstthe same parties… participate in the matter’s resolutionfor it to be an aggregate set tle ment[.] The ruleapplies when any two or more clients consent to havetheir matters resolved together.ABA Comm. on Ethics & Prof’l Responsibility, FormalOp. 06-438 (2006) at 2 (footnote omitted).Despite its seeming breadth, the definition offeredin Formal Ethics Opinion 06-438 remains tethered toModel Rule 1.8’s role as a specialized conflict rule:Unlike Model Rule 1.7 of the Model Rules of ProfessionalConduct which is a general rule governing conflictsof interest relating to a lawyer’s current clients,Rule 1.8 provides specific rules regarding… types ofconflicts of interest. As noted throughout the commentsto Rule 1.8, the rule supplements duties setforth in Rule 1.7.ABA Comm. on Ethics & Prof’l Responsibility, FormalOp. 06-438 at 1.Comment 13 to Model Rule 1.8 makes this same pointby describing the aggregate settlement rule as a “corollary”to the basic conflict rule stated in Model Rule 1.7.The title to Model Rule 1.8 underscores this further:“Conflict of Interest: Current Clients: Specific Rules.”In short, an “aggregate” settlement must involve apotential conflict. The conflict can either be explicit orimplicit. A classic explicit conflict arises when a settlementoffer is framed as “all or nothing.” In that situation,explicitly linking all of the cases together can pit theclaimants against each other and can compromise theirlawyer’s professional judgment and duty of loyalty. Animplicit, but still real, conflict arises when a lump sumis offered for multiple cases and the claimants’ lawyer—rather than the clients, by prior agreement on a divisionor a mechanism for doing so—is left to allocate the overallamount among the clients. In that situation, the lawyeris placed in the position of choosing among his or herown clients, when the lawyer owes each client a duty ofundivided loyalty.What They’re NotTwo categories of collective resolution are not includedin the aggregate settlement rule. The rationale variesfor each.First, settlements allowing individual claimants to“opt out” are not “aggregate” even if they are “collective”because they do not create a conflict. For example,multiple cases involving common facts, claims, or par-n Mark J. Fucile of Fucile & Reising LLP in Portland, Oregon, focuses on professionalresponsibility and product liability defense throughout the Northwest. He is amember of the International Association of Defense Counsel and DRI’s Product Liabilityand Lawyers’ Professionalism & Ethics Committees. Ethics, continued on pageties are often mediated at the same time. If the individual85For The Defense n October 2010 n 81
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