Strom v. American Honda Motor Co., Inc.

• Decision Date: 26 July 1996
• Citation: 667 N.E.2d 1137,423 Mass. 330
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Walter J. STROM v. AMERICAN HONDA MOTOR CO., INC.

Page 1137

667 N.E.2d 1137

423 Mass. 330

Walter J. STROM v. AMERICAN HONDA MOTOR CO., INC.

Supreme Judicial Court of Massachusetts Barnstable.

Argued May 6, 1996.

Decided July 26, 1996.

David H. Sempert (Susan Donaldson Novins with him) Boston, for defendant.

Scott L. Rubin (Joel D. Fogel & Terry L. Fogel, & Richard Rougeau with him) Miami, FL, for plaintiff.

Richard P. Campbell & John A.K. Grunert, Boston, for Product Liability Advisory Council, Inc., amicus curiae, submitted a brief.

Before LIACOS, C.J., and WILKINS, ABRAMS, LYNCH, O'CONNOR, GREANEY and FRIED, JJ.

FRIED, Justice.

In this products liability action, a Superior Court judge allowed the motion of the plaintiff, Walter J. Strom, to compel discovery of documents, and ordered the defendant, American Honda Motor Co., Inc. (AHM), to comply with the discovery requests subject to AHM's reasonable requests for clarification and specificity. AHM appealed from this order. AHM asserts that the plaintiff failed to comply with Rule 30A of the Rules of the Superior Court (1996), thus depriving AHM of proper notice. AHM further asserts that, even if the plaintiff properly followed the mandates of rule 30A, AHM nevertheless lacks the necessary "control" over those documents, as required by Mass.R.Civ.P. 34, as amended, 385 Mass. 1212 (1982), for the Superior Court properly to order AHM to produce those documents.

I

In 1990, the plaintiff was injured in a motorcycle accident while operating a Honda motorcycle. The plaintiff brought suit in the Superior Court only against AHM, the United States distributor of the motorcycle, and sought to compel AHM to produce documents and information (discovery) in the possession of corporations related to it but not parties to this suit. The nonlitigating corporations are related to AHM as parent, subsidiary, and affiliate. Honda Motor Co., Ltd. (HMC), a Japanese corporation, is the parent corporation of AHM, ¹ Honda R & D Co., Ltd. (Honda R & D), and Honda of North America, Inc. (HNA). ² Honda R & D is the Japanese corporation which designed the motorcycle, and HNA is the legal arm of HMC's North American enterprises. Honda of America Mfg., Inc. (HAM), an Ohio corporation which manufactured the motorcycle, is a subsidiary corporation of AHM. ³

During discovery, the plaintiff sought documents and information from AHM, some of which were not in AHM's possession. AHM responded to the plaintiff's discovery requests with answers and such documents as were in its possession. The plaintiff, asserting that AHM maintained "control" over relevant discovery possessed by Honda R & D, HAM, HMC, "and any other similarly situated affiliate or subsidiary having possession of information relevant to the issues raised in this litigation," then moved for an order compelling AHM to produce such information and documents. The plaintiff's memorandum in support of his motion did not set forth, separately and in the order prescribed by rule 30A, the text of the interrogatory or request, the opponent's response, and an argument. AHM responded by asserting that the motion should be denied, because: first, the motion fails to identify sufficiently the information sought and to specify the inadequacies in AHM's responses, as required by rule 30A; second, whether or not AHM controls the information, the equitable doctrine of corporate disregard precludes efforts to compel AHM to obtain the information from the nonlitigating corporations; and third, AHM lacks the requisite control over the information as AHM does not have the legal right to obtain it. The judge addressed the equitable doctrine of corporate disregard first, holding that the corporate disregard doctrine applies to questions of liability and cannot be invoked to defeat discovery. The judge then found that AHM's response to discovery was inadequate, whether or not AHM controlled the documents sought, because the judge found that: first, AHM at least knew the location of the documents and failed to state that information in detail ⁴; and second, AHM failed even to attempt to obtain the documents. ⁵ The judge then addressed the control issue, and, examining the nature of AHM's control over information possessed by each of AHM's parent, affiliates, and subsidiary, found that AHM exerted sufficient control that AHM should be compelled to obtain the discovery.

With regard to the defendant's control over information in its parent's (HMC's) possession, the judge found that the "[p]laintiff's example of inter-corporate cooperation in the [National Highway Traffic Safety Administration] investigation ... [shows] that when needed, [AHM] had access to the documents in its parent's possession and the ability to obtain them," and therefore the plaintiff satisfied the control requirement for discovery purposes. With regard to the defendant's control over information in its corporate affiliates' (Honda R & D's and HNA's) possession, the judge found that the "[p]laintiff has made a prima facie showing that the various Honda affiliates are structurally interlocked, via its showing of the parent corporation's consolidated financial statement, which eliminates inter-corporate accounts and transactions and reflects that the various affiliates operate as interrelated departments of the corporate parent, HMC." With regard to the defendant's control over information in its corporate subsidiary's (HAM's) possession, the judge found that "the law clearly grants AHM 'control' over such information."

The judge then addressed the rule 30A specificity issue and dismissed AHM's argument, ruling that whatever difficulties lack of specificity may pose "can be addressed to those particular [i]nterrogatories or [r]equests for [p]roduction which [AHM] can justifiably argue are vague, overbroad or burdensome."

AHM appealed from this order to a single justice of the Appeals Court, pursuant to G.L. c. 231, § 118, first para. (1994 ed.). Asserting that the "unprecedented and onerous scope of [the discovery] order is contrary to the applicable rules of discovery, and violates the well-settled law of corporate separateness," AHM requested that the single justice "reverse and vacate" the discovery order. Although the single justice denied the particular relief sought, due to the "practical importance" of the question raised, the single justice authorized AHM to seek interlocutory appeal. AHM sought interlocutory appeal in the Appeals Court, and we transferred the case here on our own motion.

II

A

AHM asserts before this court that the Superior Court judge erred in granting the plaintiff's motion to compel where the plaintiff failed to comply with rule 30A. ⁶ Although "[i]ndividual judges have no power to dispense with rules lawfully adopted for the conduct of the business of the courts," Carp v. Kaplan, 251 Mass. 225, 228, 146 N.E. 779 (1925), the instant appeal does not present such a problem, because resolution of the question of control in this case is a necessary predicate to proper discovery.

In its general objection to the plaintiff's discovery requests, AHM stated that it "also objects to [discovery requests] that purport to call for information or documents in the possession, custody or control of others ... and to impose such an obligation upon [AHM] is beyond the scope of permissible discovery." Thus, before proper, traditional rule 30A discovery motions and sanctions can be had, the judge must decide the control issue and determine from which nonlitigating corporations AHM must obtain discovery. Therefore, we conclude that the Superior Court judge properly accepted the plaintiff's motion on the condition that "[d]efendant's arguments as to the lack of specificity in plaintiff's motion to compel can be addressed to those particular [i]nterrogatories or [r]equests for [p]roduction which defendant can justifiably argue are vague, overbroad or burdensome."

B

Rule 34(a) of the Massachusetts Rules of Civil Procedure, 365 Mass. 792 (1974), allows a party to seek documents and other matters in the "possession, custody or control" of the opposing party. This rule is identical to Fed.R.Civ.P. 34 (1995). The crux of this case is AHM's contention that, as to material in the possession or custody either of its parent corporation, HMC, its affiliated corporations, Honda R & D and HNA, or of its subsidiary, HAM, the Superior Court may only find "control" for purposes of rule 34 if the plaintiff demonstrates that AHM has the "legal right to obtain the [discovery] on demand."

This is a question of considerable importance to the practical administration of discovery in our courts, and we have never addressed it. "Because the Massachusetts Rules of Civil Procedure are patterned after the Federal rules, we interpret our rules consistently with the construction given their Federal counterparts," Solimene v. B. Grauel & Co., KG, 399 Mass. 790, 800, 507 N.E.2d 662 (1987), "absent compelling reasons to the contrary or significant differences in content," Rollins Envtl. Servs., Inc. v. Superior Court, 368 Mass. 174, 180, 330 N.E.2d 814 (1975). See Giacobbe v. First Coolidge Corp., 367 Mass. 309, 315-317, 325 N.E.2d 922 (1975). We follow the course of Federal decisions where they seem sensible, primarily because of the desirability of national uniformity, particularly in a matter such as this, which is likely to involve litigants with contacts in many jurisdictions.

The early pronouncements of the Supreme Court of the United States have provided the touchstone for interpreting the discovery rules. The Supreme Court has stated that "[m]odern instruments of discovery serve a useful purpose.... They together with pretrial procedures make a trial less a game of blindman's bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent." United States v. Procter & Gamble Co., 356 U.S. 677, 682, 78 S.Ct. 983, 986, 2 L.Ed.2d 1077 (1958). ⁷ " 'Discovery' is one of the working tools...