Jones v. Aero/Chem Corp.

• Decision Date: 11 December 1990
• Docket Number: No. 88-4234,88-4234
• Citation: 921 F.2d 875
• Parties: Rose Maree JONES, Plaintiff-Appellant, v. AERO/CHEM CORP. and Athea Laboratories, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 875

921 F.2d 875

Rose Maree JONES, Plaintiff-Appellant, v. AERO/CHEM CORP. and Athea Laboratories, Inc., Defendants-Appellees.

No. 88-4234.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Nov. 3, 1989.

Decided Dec. 11, 1990.

Alexander Blewett, III and Michael J. George, Hoyt & Blewett, Great Falls, Mont., for plaintiff-appellant.

Jack L. Lewis, Francis X. Clinch, and Susan J. Rebeck, Jardine, Stephenson, Blewett & Weaver, Great Falls, Mont., for defendants-appellees.

Appeal from the United States District Court for the District of Montana.

Before BROWNING and FLETCHER, Circuit Judges and REED, District Judge. ^*

PER CURIAM:

Appellant Rose Maree Jones, formerly a United States Customs Inspector in Montana, appeals from the denial of a motion for a new trial following an adverse jury verdict in her products liability action against Appellees Athea Laboratories and Aero/Chem Corporation (collectively "Athea"), assembler and distributor of the "Curb 20," a hand-held aerosol tear gas spraying device.

Jones was required to wear the Curb 20 tear gas canister in a holster on her duty belt. While Jones was inspecting a truck, a fold-up armrest fell and struck the top of the Curb 20 unit, discharging the tear gas above her hip. Jones suffered a chemical burn and developed allergic dermatitis which prevented her from returning to work.

The cause went to a jury which returned a special verdict finding "no defect" in the Curb 20. Two days later, counsel for third party defendant Emson Research Company ("Emson"), manufacturer of the component valve and actuator systems, gave counsel for Jones copies of correspondence from Athea to Emson, including a March 20, 1981 letter written by Gary Smith, engineer and Vice President of Athea. Smith's letter indicated Athea considered the actuator system "too sensitive," knew of the possibility of accidental discharge, and discussed remedial measures. ¹

The following day, Jones moved for new trial pursuant to Fed.R.Civ.P. 59, asserting: (1) the newly discovered evidence; (2) prejudicial misconduct in failing to produce the documents in discovery; (3) error in admitting testimony of the absence of prior complaints; and (4) error in admitting testimony that California had approved the Curb 20. At the hearing on the motion, the district court indicated it might later hold a hearing to determine whether Athea's failure to produce the documents involved misconduct. However, the district court denied the new trial motion without holding such a hearing. Jones appealed.

I. The "Hidden" Documents

Our review of the record indicates Jones asked the district court to make two determinations: (1) whether a new trial should be granted because the newly discovered evidence would likely have resulted in a different verdict, and (2) whether defendants' actions constituted misconduct and, if so, whether that misconduct denied Jones an opportunity to present her case fully and fairly. ²

a. Newly Discovered Evidence.

In deciding the Rule 59 motion, both parties argued and the district court applied the test borrowed from cases considering motions under Rule 60(b)(2) for relief from judgment based upon newly discovered evidence. See 11 C. Wright & A. Miller, Federal Practice and Procedure: Civil Sec. 2859 (1973) ("The same standard applies to motions on the ground of newly discovered evidence whether they are made under Rule 59 or Rule 60(b)(2)."); 7 J. Moore & J. Lucas, Moore's Federal Practice p 60.23 (2d ed. 1987) (distinction between evidence warranting Rule 59 and Rule 60(b)(2) relief is one of degree rather than kind; Rule 60(b)(2), allowing a more belated attack on a judgment, may require a stronger showing); Coastal Transfer Co. v. Toyota Motor Sales, U.S.A., 833 F.2d 208, 211-12 (9th Cir.1987).

Under this test the movant must show the evidence (1) existed at the time of the trial, (2) could not have been discovered through due diligence, and (3) was "of such magnitude that production of it earlier would have been likely to change the disposition of the case." Coastal Transfer, 833 F.2d at 211. We review the district court's determination under this standard for abuse of discretion. Id.

The court determined Jones met the first two requirements, but did not satisfy the third. The court concluded it was not likely the documents would have changed the outcome because they only corroborated testimony by Jones' expert. They would have been of de minimis value in light of the theory of defect Jones presented at trial: the Curb 20 was too sensitive in the locked position or moved too easily from the locked to the fire position.

Whether knowledge of the newly revealed correspondence would likely have affected the jury's verdict is a close question. Contrary to the district court's view, we think the letters do more than merely corroborate plaintiff's expert testimony; they demonstrate knowledge by Athea of a potential design problem. An admission by the company engineer that the valve was "too sensitive" is substantively different than testimony to that effect by the plaintiff's own hired expert.

However, the letters are not equivalent to a "smoking gun," as Jones argues. Rather than dictating a different result, they would likely have led Jones to prepare and present a different case--taking additional depositions, presenting other witnesses, and arguing a different theory of defect to the jury. Althea, too, would have defended differently. We are not persuaded, however, that the district court abused its discretion in concluding Jones failed to establish the outcome likely would have been different.

b. Misconduct.

The test to be applied when discovery misconduct is alleged in a Rule 59 motion must be borrowed from cases interpreting Rule 60(b)(3), just as the test applied to a Rule 59 motion alleging newly discovered evidence is borrowed from Rule 60(b)(2). ³

Under Rule 60(b)(3), the movant must,

(1) prove by clear and convincing evidence that the verdict was obtained through fraud, misrepresentation, or other misconduct.

(2) establish that the conduct complained of prevented the losing party from fully and fairly presenting his case or defense. Although when the case involves the withholding of information called for by discovery, the party need not establish that the result in the case would be altered.

Bunch v. United States, 680 F.2d 1271, 1283 (9th Cir.1982) (citation omitted). Moreover, as the court said in Anderson v. Cryovac, Inc., 862 F.2d 910 (1st Cir.1988):

Failure to disclose or produce materials requested in discovery can constitute "misconduct" within the purview of this subsection. See Rozier v. Ford Motor Co., 573 F.2d 1332, 1339 (5th Cir.1978). "Misconduct" does not demand proof of nefarious intent or purpose as a prerequisite to redress.... The term can cover even accidental omissions--elsewise it would be pleonastic, because "fraud" and "misrepresentation" would likely subsume it.... Accidents--at least avoidable ones--should not be immune from the reach of the rule.

Id. at 923. The court in Anderson found misconduct within the meaning of Rule 60(b)(3) because plaintiffs demonstrated (1) they exercised due diligence in their discovery requests, (2) defendant knew, or was charged with knowledge, of the missing document, and had constructive (if not actual) possession of it; and (3) defendant did not divulge the document's existence. Id. at 928.

Regardless of whether there was misconduct, Athea argues this court should find the letters cumulative, corroborative and of de minimis value under the Rule 60(b)(3) test of "full fair opportunity to present one's case" based on the district court's finding to that effect under the Rule 60(b)(2) "different outcome" test. We disagree. If Jones is able to demonstrate misconduct, the district court must make a fresh determination whether Jones has demonstrated "substantial interference" by showing "the material's likely worth as trial evidence or by elucidating its value as a tool for obtaining meaningful discovery." Id. at 926. As noted earlier, the letters were much more than merely corroborative or cumulative evidence. And, further, as we also have noted, evidence that was merely cumulative under the "different outcome" test, may have substantially interfered with Jones' ability to fully and fairly present her case--for example, concealment of Athea's statement the valve was too sensitive may have "precluded inquiry into a plausible theory of liability." Id. at 925. Additionally, Jones may be able to benefit from a presumption of substantial interference if she can demonstrate the misconduct was sufficiently knowing, deliberate or intentional. See generally id. at 923-27 (summarizing the applicable standards and burdens of proof).

It does not appear the district court considered the alleged misconduct in deciding Jones' Rule 59 motion; the district court did not hold a hearing to determine whether there had been misconduct, either knowing or accidental, nor did it make findings on this issue. ⁴ We therefore remand to the district court for appropriate proceedings to determine whether Jones can meet her burdens under the Rule 60(b)(3) standard as applied to this Rule 59 motion. ⁵

II. Evidentiary Issues

a. Jones argues a proper foundation was not laid for the admission of testimony of Althea's employees that Althea had not received complaints from customers that the Curb 20 accidentally discharged or that the actuator accidentally moved from the locked to the firing position.

The district court's finding that the three-quarters of a million Curb 20 units sold from 1979 onward were substantially identical, despite slight variation from unit to unit, was not clearly erroneous. The court did not err in determining the absence of reports of prior accidents occurred in circumstances sufficiently similar to Jones' situation to allow the jury to connect past experience with the accident sued upon....