Monday, April 9, 2012

Through the Past, Darkly

We’ve been reading the Keith Richards autobiography, Life, and it made us think about the past. The Rolling Stones were formed 50 years ago, in April 1962. We were Beatles fans in the 1960's. (Still are). When the Rolling Stones showed up on The Ed Sullivan Show they seemed sort of terrifying. (Still are.) Time is no longer on their side. Or ours.
The Stones have been around long enough that their songs constitute the soundtrack of the Babyboomers. Maybe that is why Martin Scorsese repeatedly uses Stones tunes in his films. "Jumping Jack Flash" was recorded in 1968, an annus horribilis (Tet offensive, assassinations, Nixon election) if ever there was one. But the song that best captures the feel of 1968 -- "Gimme Shelter" -- came out the following year. In 1971, we pilfered Sticky Fingers (an album with the scandalous zipper -- try doing that with a cd or an iTune) from our sister's room. The 1980's was not a terrific decade for the Stones, though Steel Wheels at the end was a redemption.

We were listening to Voodoo Lounge while preparing for a Ninth Circuit oral argument. The issue was whether the district court erred in admitting evidence of prior bad acts. The panel was less than happy with our prosecutorial zeal back then. ‘Mr. AUSA, what percentage of cases does your office win? More than 95%, right? So why did you need to gild the lily and parade in front of the jury another heroin deal that took place ten years earlier?’ Well, gulp, because the defendant was guilty as Hell, always followed the same playbook, probably played a role in murdering a federal agent, and needed to go away with an LWOP (life without parole). Why the sympathy for the devil? Further, Federal Rule of Evidence 404(b) permits introduction of “crimes wrongs, or other acts” to prove “motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident.” One of the judges said something like, ‘The past is not always prologue.” Yeah, but sometimes it is. Anyway, evidence of prior acts is hot stuff. Appellate courts play close attention. It can clinch a conviction or it can be the biggest mistake in a trial. For a prosecutor to introduce prior acts is to play with fire.

Nowadays we usually argue against introduction of prior acts. Does that make us hypocritical? We (naturally) demur. Most of the time, when plaintiffs seek to drag in evidence of prior injuries, accidents, etc., there is little purpose beyond prejudice. The prior acts are not really similar. Or it is not even clear that they happened at all, or that they happened the way the plaintiffs want to argue they happened. Plus, a product liability plaintiff does not have to prove liability of a corporate defendant beyond a reasonable doubt. Tell you what: if plaintiff lawyers shoulder the reasonable doubt burden, then we defense hacks won’t file so many in limine motions seeking to preclude other acts evidence. Okay? No? We didn’t think so.

A court recently did a pretty careful job of going through the other acts analysis in the product liability case of Hershberger v. Ethicon Endo Surgery, Inc., 2012 U.S. Dist. Lexis 45220 (S.D. W.Va. March 30, 2012). Some of the analysis is sound. But we view the overall outcome with mixed emotions. The defendants moved to prevent introduction of investigative reports related to Ethicon stapler performance, as well as allegations of other incidents concerning stapler performance and litigation related to Ethicon staplers. The defendants’ motion was premised on arguments that that the evidence was: (1) irrelevant under Rules 401 and 402 of the Federal Rules of Evidence and the substantial similarity test; (2) far outweighed by undue prejudice under Rule 403; and (3) inadmissible hearsay.

Rule 404 was not discussed by the Hershberger court. Now discuss among yourselves why that is so.

The plaintiff argued that the prior incidents, which came from the defendants’ adverse event files, were relevant. The plaintiff proffered a summary of forty-five incidents and offered to produce to the Court the investigative files in full. Then, following the usual path, the defendants produced a chart of their own in reply to the plaintiff’s chart, setting forth the “inherent differences” between the allegations in this case and the forty-five incident files. Hershberger, 2012 U.S. Dist. LEXIS 45220 at *3. As is the case with adverse event reports, all the information was “necessarily derived second-or third-hand from medical personnel reporting an incident directly to Ethicon or through regional sales representatives.” Id. The main issue is whether the prior events were sufficiently similar so as to prove negligence, design defect, notice of defect, or causation.

The court reasoned that substantial similarity requires a showing that “(1) the products are similar; (2) the alleged defect is similar; (3) causation related to the defect in the other incidents; and (4) exclusion of all reasonable secondary explanations for the cause of the other incidents.” Id. at *5. Crucially, “nowhere in the incident files is there any indication that reasonable secondary explanations for the other incidents were eliminated. The most obvious reasonable secondary explanation, which to the Court’s knowledge was not ruled out in any of the forty-five other incidents, is surgical team error. Put simply, the forty-five other incidents are not clearly the result of a faulty Ethicon stapler, and thus, they are not substantially similar so as to permit their admission as direct evidence of negligence or a defect.” Id. at *7. So far so good. But “the threshold for admissibility is significantly lower if the other incidents are used to prove Ethicon’s notice or knowledge of a product issue.” Id. The court then came up with different rulings for different claims:

  • Negligence – The similar incidents evidence was relevant to “show that Ethicon had notice or knowledge or other staplers that reportedly malfunctioned, and Ethicon was therefore better positioned to foresee the injury that is the subject of this litigation.” Id. at *9. Yet while the similar acts are relevant to notice, they cannot constitute “direct proof negligence in this case-that is, arguing that Ethicon was negligent in marketing defective staplers in the past and it therefore was negligent in this case-is strictly prohibited in light of the Court’s above ruling regarding the (dis)similarity of the incidents.” Id.
  • Product defect – “[E]vidence of similar incidents is wholly inadmissible pursuant to the Court’s similarity finding. In a strict liability cause of action, Ethicon’s knowledge or notice of a potential defect in its product is irrelevant.” Id.
  • Breach of warranty – “The Court perceives no relevant use of the other incident evidence to Plaintiff’s breach of warranty claim. Presenting other incidents evidence to demonstrate that Ethicon’s stapler was not fit for its intended foreseeable uses is impermissible under the Court’s similarity ruling.” Id. at *10.
  • Punitive damages – “Such evidence is directly relevant to the jury’s determination of whether Ethicon acted in a wanton, willful, or reckless manner.” Id. [Ouch.]

Thus, the court deemed the evidence of prior adverse events relevant only for notice/negligence and punitive damages. But still remaining is whether, under Rule 403, the probative value of the prior acts is substantially outweighed by the danger of prejudice or jury confusion. Once again, the court applied that analysis differently to the different claims. As to the negligence claim, the court found “that introduction of other similar incidents is likely to waste time and confuse the jury. The applicability of other incidents to the negligence claim is somewhat obscure, and there is significant danger that the jury will consider the other incidents as direct evidence of negligence. Further, the probative value of the other events is minor-these records amount to uncorroborated and incomplete customer complaints constituting approximately 0.003% of Ethicon’s sales during the relevant time period.” Id. at *11.

No surprise, but that ruling gives us satisfaction. We’ve argued in the past that it is a very unfair and dangerous thing to permit plaintiffs to argue, and juries to deduce, that adverse events show negligence or product defects. For one thing, adverse events are not probative of causation. For another, in more and more litigation the adverse event process becomes tainted by litigation. Lawyer ads (that ain’t too proud to beg) can inflate adverse event reporting. Lawsuits themselves become adverse events. Some people complain about data-mining. Data-planting is just as bad. Accordingly, to the extent the Hershberger court rules that the adverse events are irrelevant or prejudicial, it's all right by us.

But you can't always get what you want. Are the good bits in Hershberger shattered by the ruling on punitive damages? The court held that “[a]s the punitive damages claim however, the risk of confusion is diminished-Ethicon’s knowledge and notice of other product complaints is directly relevant to punitive damages.” Id. at *12. (By the way, since the adverse events are admitted for knowledge and notice, the court holds that the hearsay objection fails.) That ruling leaves us scratching our heads. If the adverse events are unduly prejudicial with respect to the negligence claim, they are probably also prejudicial on punitive damages. We do not know whether or how the punitive damages issue would be staged at trial, but if the adverse events come in during the main liability phase, and if the plaintiff can argue that knowledge of such adverse events shows that the company was wanton or reckless, isn’t the prejudice nearly complete? Would a jury instruction really solve the problem? Would a defendant even ask for such a limiting instruction? Moreover, “to the extent Plaintiff may wish to cross-examine a defense witness regarding the general subject matter of the other incidents, i.e. the existence of reports of faulty staplers, such use may well be permissible.” Id. at *13. So not only will the adverse events come in, they might come in at a particularly dramatic time, and it might look like the defense was trying to hide them.

To be sure, we’re not trying to take a mostly good ruling and paint it black. But we wonder how this ruling will play out at trial. Predicting the future is harder than replaying a past that will not fade away.