September 16, 2019
This morning, the New Jersey Supreme Court held that in an asbestos personal injury action, a settled defendant’s answers to interrogatories and/or corporate representative’s deposition testimony, whether offered in the instant case or in another asbestos case in any jurisdiction, may be admissible as statements against interest for purposing of proving up a cross claim for an allocation of liability against that settled defendant at trial. The Court’s decision, in Rowe v. Universal, reverses a New Jersey Appellate Division decision largely disallowing the use of such evidence and reinstates the original jury verdict which included allocations of liability to eight settled defendants. MKC submitted amicus briefing to the Court in support of a reversal of the Appellate Division decision, urging the Court to consider the unique nature of asbestos litigation, particularly problems associated with proving cross claims in the context of a mass tort which has been ongoing for many decades across many jurisdictions. One important aspect of the Court’s holding is that statements of settled corporate defendants are declarations of that corporate defendant, not those of the individual offering the testimony or verifying discovery responses. As such, if those statements fall properly within the hearsay exception as sufficiently adverse to the corporation’s interests, those statements are admissible against the settled defendant whether made in the specific case, or another case, and regardless of whether the settled corporation is viewed as a party.
The Supreme Court’s general holding was articulated as follows:
We hold that the disputed excerpts from the settling defendants’ interrogatory answers and corporate representative depositions were admissible as statements against interest under N.J.R.E. 803(c) (25). At the time that the settling defendants made those statements, each statement was “so far contrary” to those defendants’ “pecuniary, proprietary, or social interest [s],” and “so far tended to subject ” the defendants “to civil . . . liability,” that “a reasonable person in [defendants’ ] position would not have made the statement unless the person believed it to be true.” See ibid. Those statements, in combination with other evidence presented at trial, gave rise to a prima facie showing that the settling defendants bore some fault in this matter. The trial court properly submitted to the jury the question of whether a percentage of fault should be apportioned to the settling defendants.
The decision notably spent considerable time discussing New Jersey’s Comparative Negligence Act and Joint Tortfeasors Contribution Law in the context of asbestos litigation, emphasizing that together these statutes seek to ensure the fair apportionment of damages against all responsible tortfeasors and to “prevent a plaintiff from arbitrarily selecting his or her victim.” The Court provided:
Applied together, the Comparative Negligence Act and the Joint Tortfeasors Contribution Law “implement New Jersey’s approach to fair apportionment of damages among plaintiffs and defendants, and among joint defendants.” Erny v. Estate of Merola, 171 N.J. 86, 99 (2002). The two statutes exist to “ensure that damages are ordinarily apportioned to joint tortfeasors in conformity to the factfinder’s allocation of fault.” Morey’s Pier, 230 N.J. at 160. They operate in tandem to “promote ‘the distribution of loss in proportion to the respective faults of the parties causing that loss.'” Brandt, 214 N.J. at 102 (quoting Brodsky, 181 N.J. at 114).
In finding that the evidence at issue fell squarely within the “statement against interest” of the hearsay rule, the Court addressed three significant attributes of the statements, namely that: i) the statements directly addressed the issue of successor liability and supported plaintiffs’ allegations that the named defendant was the successor in interest of a prior entity; ii) the statements addressed that the settling defendants or their predecessors manufactured or sold asbestos-containing products; and iii) the statements supported that the settling defendants manufactured or sold such products without a warning during the relevant time frame.
Among other troubling issues, the Appellate Division’s decision in Rowe contained two propositions which mystified the Asbestos Defense Bar. The first was a holding that certain of the proffered statements of settled defendants were inadmissible because those statements did not “admit” to all of the elements needed to establish liability. Second, was a holding that the statements were not adverse to the settled defendants’ interests because “the existence of asbestos containing products and the absence of warnings are objective, well-known historical facts…”
As to the former, the Supreme Court noted the following: “The Appellate Division reasoned that the statements at issue were inadmissible under N.J.R.E. 803(c)(25) because the fact that ‘a particular defendant manufactured or sold a product containing asbestos but did not warn about its hazards is only one piece of the much larger picture required to establish liability.’ We disagree. Nothing in N.J.R.E. 803(c)(25) requires a declarant’s statement to establish all elements of an adversary’s cause of action in order to be admissible as a statement against interest. Indeed, it is difficult to imagine any single statement that would address all elements of a cause of action in a complex product liability case such as this. “
As to the second proposition, the Supreme Court offered the following blunt appraisal: “Nor do we share the Appellate Division’s view that the statements were inadmissible under N.J.R.E. 803(c)(25) because ‘the existence of asbestos containing products and the absence of warnings are objective, well-known historical facts that the settling defendants could not avoid acknowledging in the face of incontrovertible proof.’ The settling defendants did not simply acknowledge the “existence” of asbestos-containing products sold without warnings; they admitted that they manufactured or sold such products without warnings during all or part of the relevant period. Nothing in the language of 39 N.J.R.E. 803(c)(25), or our case law construing that rule, suggests that it is limited to statements against interest that address novel or controversial issues, or statements that constitute the only proof of a given claim.”
In conclusion the Supreme Court held:
In short, all of the excerpts from the settling defendants’ answers to interrogatories and corporate representative deposition testimony at issue in this case satisfied the standard of N.J.R.E. 803(c)(25) and were admissible pursuant to that rule. We do not reach the question whether the evidence was 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(b).
If you should have any questions, or would like a copy of the opinion, please contact Thomas McNulty (tmcnulty@mcgivneyandkluger.com) or Trish Wilson (twilson@mcgivneyandkluger.com).