86 F.3d 811 (8th Cir. 1996), 95-1604, Baker v. General Motors Corp.

Docket Nº:95-1604.
Citation:86 F.3d 811
Party Name:Kenneth Lee BAKER; Steven Robert Baker, by next friend, Melissa Thomas, Appellees, v. GENERAL MOTORS CORPORATION, Appellant. The Product Liability Advisory Council, Inc., Amicus Curiae.
Case Date:June 14, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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86 F.3d 811 (8th Cir. 1996)

Kenneth Lee BAKER; Steven Robert Baker, by next friend,

Melissa Thomas, Appellees,



The Product Liability Advisory Council, Inc., Amicus Curiae.

No. 95-1604.

United States Court of Appeals, Eighth Circuit

June 14, 1996

Submitted Jan. 8, 1996.

Rehearing and Suggestion for Rehearing En Banc Denied July

24, 1996.[*]

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[Copyrighted Material Omitted]

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Kenneth Starr, Washington, DC, argued (Paul T. Cappuccio, Steven G. Bradbury, Gerald F. Masoudi, Richard A. Bowman, David R. Kelly, James W. Halabrooks, Jr., Steven L. Reitenour, Robert M. Lewis, Maynard L. Timm and Richard A. Cordray, on the brief), for appellant.

James W. Jeans, Platte City, MO, argued (Robert L. Langdon, J. Kent Emison and Carter J. Ross, on the brief), for appellee.

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Before BEAM, MORRIS SHEPPARD ARNOLD, Circuit Judges, and ALSOP, [**] District Judge.

BEAM, Circuit Judge.

In this products liability action, General Motors Corporation (GM) appeals a jury verdict in favor of plaintiffs for 11.3 million dollars. GM argues that the district court erred in: (1) entering a discovery sanction against it; (2) instructing the jury on punitive damages; and (3) allowing a former GM employee to testify at deposition and trial. We reverse.


This case arose out of an automobile accident in which Gerald Shoemaker and Beverly Garner were killed. Shoemaker and Garner collided head-on with another car after which a fire broke out in the engine compartment of their vehicle. Garner's sons, Kenneth and Steven Baker, brought this products liability action alleging that the engine fire was caused by a faulty fuel pump in the Chevrolet S-10 Blazer in which their mother was riding and that this defect caused her death. GM asserted that the fuel pump was neither faulty nor the cause of the fire and that instead, Garner died as a result of collision impact injuries.

As in any products liability case, the cornerstone of the plaintiffs' case is the product's defect. To help prove that defect, the plaintiffs asked GM to produce its 1241 reports (1241 reports are essentially complaints from customers regarding GM products) involving similar accidents. GM represented that all 1241 reports were indexed in summary form in its central computer file. GM stated that its customary response to discovery requests was to produce these 1241 summaries instead of the actual 1241 reports. From these summaries, plaintiffs could request the specific 1241 reports in which they were interested. Both the 1241 summaries and the reports proved difficult to obtain from GM and were the source of several discovery disputes during the months before trial.

On July 9, 1993, after several discovery stalemates, the district court issued an order which directed GM to produce "summaries of 1241 forms on non-collision under-hood electrical fires within 10 days" of the order. On July 20, GM produced a group of computer summaries, none predating 1988. GM stated that pre-1988 reports were no longer available due to a five-year retention policy and that its production, therefore, amounted to full compliance with the July 9th order.

After learning from other plaintiffs' attorneys in other GM cases that they had received 1241 reports which were allegedly over five years old, the plaintiffs asked the district court to sanction GM for what they believed to be abuses in the discovery process. On August 2, GM explained that although there were several exceptions to its five-year retention policy, none of these exceptions had resulted in the retention of any 1241 reports (or summaries) over five years old which were relevant to this case.

A few days later, the plaintiffs found more 1241 reports over five years old in a National Highway Transportation Safety Administration (NHTSA) file. The file had been compiled by the NHTSA during one of its investigations into possible automobile defects. The plaintiffs then supplemented their request for sanctions against GM. This time, GM stated that it had never occurred to anyone to search the NHTSA files for older 1241 reports and cited the public availability of the reports to justify its lack of production. GM did, however, expand its records search at this time. Two days before trial, GM produced another five hundred 1241 reports, some of which duplicated those found in the NHTSA file. GM claimed, however, that few of these reports were responsive to the July 9th order. Following this production, the district court granted the plaintiffs' request for sanctions against GM.

Noting GM's continuing delay in the discovery process, the district court ordered

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GM's affirmative defenses stricken and further ordered that:

the following matters, which relate to the substance of the July 9, 1993 order, shall be established for the purposes of this action:

The 1985 Chevrolet S-10 Blazer at issue in this case was defective in that General Motors placed an electric fuel pump in the fuel tank without an adequate mechanism to shut off the pump in the event of a malfunction or collision and that General Motors has been aware of this defect and hazard for many years. The fuel pump in the 1985 Chevrolet S-10 Blazer in this case continued to operate after the engine stopped upon impact.

Baker v. General Motors Corp., 159 F.R.D. 519, 528 (W.D.Mo.1994) (Baker I ). The case proceeded to trial on the sole issue of whether the defect in the 1985 Chevy Blazer "directly caused or directly contributed to cause" the death of Beverly Garner. Trial Trans. at 1725.

At trial, the plaintiffs called former GM employee, Ronald Elwell, to testify. 1 Prior to trial, Elwell's testimony had been the subject of much debate. Elwell and GM had been involved in an earlier employment dispute which had led Elwell to sue GM for wrongful discharge. GM counterclaimed, alleging that in testifying for various plaintiffs (and against GM) in other products liability actions, Elwell was divulging privileged information. In settling the wrongful discharge claim, Elwell consented to a Michigan injunction which barred him from testifying against GM in products liability cases. GM and Elwell also entered into a settlement agreement 2 memorializing, among other things, their monetary settlement and GM's desire to prevent future damaging testimony by Elwell. The settlement agreement provided, in part, that if Elwell were ordered to testify by a court or other tribunal, he could do so without violating the settlement agreement.

In this case, GM strenuously objected to both Elwell's deposition and trial testimony contending that Elwell's testimony was barred by the Michigan injunction. The plaintiffs countered that the Michigan injunction was not entitled to full faith and credit by the district court. Alternatively, they argued that even if the injunction were entitled to such credit, the settlement agreement allowed Elwell to testify. After in camera review of the Michigan injunction and the settlement agreement, the district court allowed the plaintiffs to depose Elwell and to call him as a witness at trial.

Elwell's trial testimony concerned his research on fuel-fed engine fires and the existence and contents of the "Ivey" document. The Ivey document is a value analysis document prepared by Edward Ivey, an Advance Design employee, and allegedly circulated among selected top GM and Oldsmobile officials. The Oldsmobile officials, according to Elwell's testimony, were at that time responsible for the overall fuel system design of GM vehicles. The document analyzed the potential expense of the loss of human life per vehicle due to fuel-fed engine fires. According to Elwell, the analysis implied that it would be worth only $2.40 per vehicle in operation for GM to prevent such fuel-fed fires.

At the end of trial, the district court incorporated its Rule 37 sanction language into the jury instructions. The district court also instructed the jury as to both compensatory and aggravating circumstance damages. 3

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GM objected to the jury instructions, arguing, inter alia, that the instructions gave the jury insufficient guidance in awarding what were essentially punitive damages. 4 GM also objected to the lack of differentiation between compensatory and punitive damages in the verdict form. Following trial, the jury awarded the plaintiffs 11.3 million dollars in damages, without apportioning between compensatory and aggravating circumstance damages.


A. The Discovery Sanction

GM argues that the district court abused its discretion in entering the discovery sanction. The district court has broad discretion in issuing sanctions for discovery abuse and its decision will be upheld absent an abuse of discretion. Anderson v. Home Ins. Co., 724 F.2d 82, 84 (8th Cir.1983) (citing Fox v. Studebaker-Worthington, Inc., 516 F.2d 989 (8th Cir.1975)). Our scope of review of the district court's actions is, therefore, very narrow. Prow v. Medtronic, Inc., 770 F.2d 117, 122 (8th Cir.1985).

We must first determine whether the district court was correct in finding a discovery violation to support its imposition of the sanction under Federal Rule of Civil Procedure 37 (Rule 37). To impose Rule 37 sanctions, there must be: (1) a court order compelling discovery; (2) a violation of that order which is wilful; 5 and (3) prejudice to the other party from the violation. Shelton v. American Motors Corp., 805 F.2d 1323, 1330 (8th Cir.1986); Edgar v. Slaughter, 548 F.2d 770, 772 (8th Cir.1977). In this case, all of these elements were present.

The July 9th order satisfies the first requirement, that there be a discovery order in place. GM failed to fully comply...

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