Product Liability -- 1998



Baker v. General Motors Corp.   (U.S. Supreme Court)

Validity of confidentiality agreement

The administrator of an estate brought a products liability action against GM, alleging that a defective fuel pump caused an automobile engine fire that, in turn, led to the death of a motorist. At trial, plaintiffs called a former GM employee to testify. The employee had entered into an earlier agreement with GM in which he consented to a Michigan injunction barring him from testifying against GM in products liability cases. The settlement did allow, however, for the employee to testify if he were ordered to do so by a court or other tribunal.

In this case, GM argued before the trial court that the former employee's testimony was barred by the Michigan injunction. The plaintiffs contended that the Michigan injunction was not entitled to full faith and credit by the district court, principally under a "public policy" exception to the full faith and credit clause. The district court agreed with plaintiffs and allowed both the deposition of the employee and the employee's testimony at trial. In part, the trial court held that "public policy" exception to full faith and credit allowed the employee's testimony. The plaintiffs obtained an $11.3 million verdict against GM.

On appeal, the Eighth Circuit reversed the judgment and remanded for a new trial. That court held that plaintiffs court not obtain the former employee's testimony, concluding that no "public policy" or other exception applied and that the Michigan injunction was entitled to full faith and credit.

A unanimous Supreme Court reversed on January 13, 1998. The majority ruled that the courts of one state do not violate the Full Faith and Credit Clause by compelling testimony from a witness enjoined from testifying by the courts of another state.

At the outset, the Court stressed that a court cannot refuse to afford full faith and credit to a judgment, whether legal or equitable, based on the "public policy" of its own jurisdiction. Nonetheless, the Court concluded that the Missouri court was not constitutionally compelled to apply the Michigan injunction. The Court stressed two considerations: first, that the Michigan Court had no authority to prescribe procedural rules for litigation in Missouri; and second, that the Michigan court had no jurisdiction over petitioners. Justice Scalia concurred in the result on the ground that a court may apply its own rules for enforcing judgments. Justice Kennedy concurred in the result on the ground that Michigan itself would not preclude re-litigation of an issue by non-parties such as petitioners.

The NAM filed an amicus brief urging the Court to rule that Ohio must give the same full faith and credit to the Michigan judgment that a Michigan court would, and that there is no due process interest in particular evidence. Even if there were such an interest, the plaintiffs can still go to the Michigan court to modify its order.