Amicus Curiae Brief — Baker v. General Motors Corp.

96 -§ 583 ~t sems om ts

| BiBaD

NO. 96-953 | MAY 98 1997

IN THE Uae OB BIB CERN

SUPREME COURT OF THE UNITED STATES

October Term, 1996

KENNETH LEE BAKER, ct al..

Petitioners,

Vv.

GENERAL MOTORS CORPORATION,

Respondent.

On Writ of Certioran to the

United States Court of Appeals for the

Eighth Circuit

BRIEF OF AMICI CURIAE STATES OF MISSOURI.

CONNECTICUT. IOWA, MISSISSIPPI.

WASHINGTON. WISCONSIN AND THE

COMMONWEALTH OF MASSACHUSETTS

IN SUPPORT OF PETITIONERS BAKER. ET AL.

JEREMIAH W. (JAY) NIXON

Attorncy General of the State of Missouri

*KAREN KING MITCHELL

Appellate Chief Counsel

P.O. Box 899

Jefferson City, MO 65102

Telephone: (573)-751-3321

*Counsel of Record

(additional counscl listed on inside cover)

RICHARD BLUMENTHAL

Attorney Gencral

State of Connecticut

THOMAS J. MILLER

Attorney Gencral

State of lowa

MIKE MOORE

Attorney Gencral

State of Mississippi

CHRISTINE O. GREGOIRE

Attorney Gencral

State of Washington

JAMES E. DOYLE

Attorney General

State of Wisconsin

SCOTT HARSHBARGER

Attorney Gencral

Commonwealth of Massachusetts

TABLE OF CONTENTS

TABLE OF AUTHORITIES

INTEREST OF AMICI CURIAE

SUMMARY OF ARGUMENT

ARGUMENT

I THE DECISION BELOW MISINTERPRETS

PRINCIPLES OF FEDERALISM AND DUE

PROCESS

I THE DECISION BELOW REPRESENTS A

DANGER TO THE PROPER ENFORCEMENT

OF LAWS PROTECTING PUBLIC HEALTH.

SAFETY, AND WELFARE

ill THE DECISION BELOW MISCONSTRUES

MISSOURI PUBLIC POLICY

CONCLUSION

tl

tl

TABLE OF AUTHORITIES

Cases: Page

Adamson v. CG. Harris, 726 S§ W.2d 475

(Mo. Ct. App. 1987) 8

Ake v. General Motors Corp., 942 F. Supp. 869

ob | i ee er ee ea 9

Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981) , 4

Bastian v. Tuttle, 606 S.W.2d 808 (Mo. Ct. App. 1980) )

Bishop v. General Motors Corp., No. 94-286-S

(E.D. Okla. June 29,1994)... | 10

Campbell v. Campbell, 780 SW. 2d 89

(Mo. Ct. App. 1989) ........ 9

Corning Truck & Radiator Service v. J W. M. Inc..

$42 S W.2d 520 (Mo. Ct. App. 1976)... 9

EEOC v. Astra USA, Inc., 94 F.3d 738 (ist Cir. 1996) 6.7

istin v. Estin, 334 U.S. 541 (1948) .... 6... 3

bisk v. Wellsville Fire Brick Co.,

152 S.W.2d 113 (Mo. 1941) ...... 8

Hall v. Wilder Mfg. Co., 293 SW. 760 (Mo. 1927) ere

Hamad v. Graphic Arts Center, Inc., 72 Fair Empl. Prac

Cases (BNA) 1759(D. Or. Jan 3,1997)... 7

Hannah v. General Motors Corp., No. Civ. 93-1368

PHX RCB (D. Ariz. May 30,1996) ............. §

Hamnsherry v. Lee, 311 U.S. 32 (1940) ............. 3

In re Veach, 287 S.\W.2d 753 (Mo. 1956) SE Pore 8

Kibler v. General Motors Corp., No. C94-1494R

(W.D. Wash. July 10,1996)... 10

Kremer v. Chemical Constr. Corp., 456 U.S 46) (1982) 4

Marrese v. American Academy of novesaeds Surgeons,

470 U.S. 373 (1985) ........... | 4

Martin v. Wilks, 490 U.S. 755 (1989) | =

Matsushita Elec. Indus. Co. v. Epaein, 116 S. c t. 873

ET as Saldge «alae cane SRP Pee eee eee 3

iii

Cases (continued): Page

McDonald v. Mabee, 243 U.S. 90 (1917) 4

Parsons Steel, Inc. v. First Alabama Bank.

474U S 518(1986)... sss 4

Richards v. Jefferson C. county. 16S. Ct 1761 (1996) 3

Ruskin v. General Motors Corp., No. CV930073883.

1995 WL 41399 (Conn. Super. Ct.) (Jan. 25, 1995) 10

Smith v. Superior Court, 49 Cal. Rptr. 2d 20

(Cal. App. Sth Dist. 1996), review denied, 1996 Cal

LEXIS 2185 (Cal. Apr 18,1996)

Mate v. Koehr, 831 S.'W.2d 926 (Mo. 1992) (en banc) 9

Williams v. General Motors Corp., 147 F.R.D. 270

'*n

I “3 | 10

Constitutional, Statutory & Rules Provisions: Page

Full Faith and Credit Clause, Art IV, §1 . \

Se —

Mo. Rev. Stat. §511.760 sss. 8

Mo. Rev. Stat § 511.778 ...s—sisi(‘#it#‘as s

Missouri Rule of Civil Procedure 56 .01(b)\ 1) 9

BRIEF AMICI CURIAE OF THE STATES

OF MISSOURI, CONNECTICUT, IOWA,

MISSISSIPPI, WASHINGTON, WISCONSIN AND

THE COMMONWEALTH OF MASSACHUSETTS

INTEREST OF AMICI

The undersigned amici curiae, the Attorneys General of

Missouri, Connecticut, lowa, Méississippi, Washington,

Wisconsin and the Commonwealth of Massachusetts,

respectfully submit this brief in support of petitioners Kenneth

Lee Baker and Steven Robert Baker, by his next friend, Melissa

Thomas. Amici have a great and abiding interest in the Full

Faith and Credit question currently before this Court

As constitutional officers of the States they represent, amici

have the responsibility to defend the values of federalism and

to represent the interests of the citizens of their respective

States. The decision under review violates rather than

promotes the values of federalism. It threatens to undermine

the proper enforcement of laws protecting public health, safety,

and welfare. And it rests on a misinterpretation of Missouri

public policy. Accordingly, the Eighth Circuit's judgment

should be reversed.

SUMMARY OF ARGUMENT

1. The Eighth Circuit held that the Full Faith and Credit

obligation prohibits a federal court in Missouri from admitting

the testimony of a witness who was subject to a Michigan state-

court decree enjoining him from testifying. But the petitioners

here, plaintiffs in a Missouri federal court proceeding, were not

parties or privies in the Michigan state court case and could not

— consistent with due process — be bound by the Michigan

judgment.

Far from serving the interests of federalism, the decision

below threatens them by approving a constitutionally

i)

impermissible interference with judicial proceedings outside

Michigan. This interference impairs the interest of each State

in the integrity of its own judicial proceedings by commanding

the unwarranted exclusion of probative, non-privileged

evidence solely as a result of a consent decree in a foreign

jurisdiction.

Il. If permitted to stand, the decision below would also

pose a danger to the proper enforcement of laws protecting

public safety. Under the court of appeals’ approach, an accused

wrongdoer could procure the nationwide silence of witnesses

through the device of a consent decree, as GM did here.

Moreover, the threat is not limited to private civil litigation, a

wrongdoer could purchase the silence of witnesses in civil,

administrative, or even criminal proceedings initiated by a State

or by a federal agency.

Ill. The court of appeals premised its decision on a

misunderstanding of Missouri public policy. The Eighth

Circuit concluded that the Michigan injunction was entitled to

Full Faith and Credit because “Missouri public policy embraces

the theory of full faith and credit.” Cert. App. 14a. It is nor

consistent with Missouri public policy, however, to bind an

absent party to a judgment and to deny the public its right to

every man's evidence. Missouri public policy lends no support

to the decision below.

ARGUMENT

1. THE DECISION BELOW MISINTERPRETS

PRINCIPLES OF FEDERALISM AND DUE PROCESS

Due process guarantees that a person “is not bound by a

judgment in personam in a litigation in which he is not

designated as a party or to which he has not been made a party

by service of process.” Martin v. Wilks, 490 U.S. 755, 761-62

3

(1989), see also Richards v. Jefferson Coumy, 116 §. Ct. 1761,

1765-66 (1996), Hansherry v. Lee, 311 U.S. 32, 40 (1940).

Yet here the Eighth Circuit held that the plaintiffs could not

call a former GM employee as a witness because of a Michigan

State court judgment rendered in a proceeding of which the

plaintiffs had no notice, in which they did not participate and in

which they were not represented in a class action or any other

capacity. The Eighth Circuit erred in reading the Full Faith and

Credit obligation as compelling such a result. The principles of

cooperative federalism embodied in the Full Faith and Credit

Clause, Art. IV, §1, and in the Full Faith and Credit statute, 28

U.S.C. § 1738, cannot and do not override fundamental due

process guarantees.

The Full Faith and Credit Clause “substituted a command

for the earlier principles of comity.” Estin v. Estin, 334 U.S.

541, 546 (1948). But “[a] state-court judgment generally is not

entitled to full faith and credit unless it satisfies the

requirements of the Fourteenth Amendment's Due Process

Clause.” Matsushita Elec. Indus. Co. v. Epstem, 116 S. Ct.

873, 884-85 (1996) (Ginsburg, J.. concurring in part and

dissenting in part). This Court has explained that, in order for

a judgment to be entitled to claim full faith and credit,

[t}he State must . . . satisfy the applicable requirements

of the Due Process Clause. A State may not grant

preclusive effect in its own courts to a constitutionally

infirm judgment, and other state and federal courts are

not required to accord full faith and credit to such a

judgment. Section 1738 does not suggest otherwise.

other state and federal courts would still be providing a

state court judgment with the “same” preclusive effect as

the courts of the State from which ihe judgment

emerged. In such a case, there could be no

constitutionally recognizable preclusion at all.

4

Kremer vy. Chemical Constr. Corp., 456 U.S. 461, 482-83

(1982)

Thus, the Full Faith and Credit obligation has always been

understood to be “subject to the requirements of due process

Marrese v. American Academy of Orthopaedic Surgeons, 470

U.S. 373, 380 (1985). See also Parsons Steel, Inc. v. birst

Alabama Bank, 474 U.S. 518, 523 (1986) (quoting Marrese).

McDonald v. Mabee, 243 U.S. 90, 92 (1917) (“[A]n ordinary

personal judgment for money, invalid for want of service

amounting to due process of law, is as ineffective in the State

as it is outside of it”).

There is no reason to depart from this settled principle here.

The values of cooperative federalism and comity embodied in

the Full Faith and Credit Clause and statute does not permit that

a judgment be binding against a nonparty unrepresented in the

previous action. To the contrary: “Both the Due Process and

Full Faith and Credit Clauses ensure that the States do not

‘reach out beyond the limits imposed on them by their status as

coequal sovereigns in a federal system.” A//state Ins. Co. v.

Hague, 449 U.S. 302, 334 (1981) (Powell, J., dissenting, joined

by Burger, C.J., and Rehnquist, now C.J.) (quoting World-Wide

| olkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).

Thus, the decision below positively disserves the values of

federalism by sanctioning an unwarranted inference with

judicial proceedings outside Michigan. Although in this case

the issue arose in a federal district court, the Full Faith and

Credit Clause applies equally to state courts. If the Eighth

Circuit's analysis is accepted, this limitation on evidence would

be applied in the future in state court actions. Each State has a

fundamental interest in the integrity of its judicial proceedings.

The exclusion of probative, non-privileged evidence solely as

a result of a consent decree in a foreign jurisdiction impairs the

search for truth and creates too great a risk that the State's own

5

judicial processes might be used as an instrument of injustice

As one court reasoned in permitting the testimony of Ronald

Elwell — the former GM employee involved in this case — the

Michigan injunction “prevents the jury from making a

determination based upon all the relevant, admissible evidence

The effect is an obscured search for truth.” Hannah v. General

Motors Corp., No. Civ. 93-1368 PHX RCB, slip op. at 5 (D.

Ariz. May 30, 1996). Another court concluded that the

injunction “not only violates our fundamental public policy

against suppression of evidence,” but also “would undermine

the fundamental integrity of this state’s judicial system.” Smith

v. Superior Court, 49 Cal. Rptr. 2d 20, 27 (Cal. App. Sth Dist.

dos review denied, 1996 Cal. LEXIS 2185 (Cal. Apr. 18,

l ).

In the ordinary case, states have an important interest in the

extraterritorial recognition of their judgments by sister states.

This interest is reflected in Art. IV, § | and 28 U.S.C. § 1738.

The instant controversy, however, is not an ordinary case

Here, countervailing interests — including fundamental

principles of both due process and federalism — show that the

Michigan injunction at issue was not entitled to Full Faith and

Credit.

Il. THE DECISION BELOW REPRESENTS A

DANGER TO THE PROPER ENFORCEMENT

OF STATE LAWS PROTECTING PUBLIC HEALTH,

SAFETY, AND WELFARE

The Eighth Circuit held that, under the Full Faith and Credit

obligation, the Michigan state court injunction precludes

petitioners from obtaining Mr. Elwell’s testimony in a federal

court in Missouri. This decision, if permitted to stand, would

give wrongdoers a simple guide to hampering or even

effectively preventing litigation against them: by procuring the

6

silence of adverse witnesses through consensual or contested

injunctions before a judge in a chosen locale. Any wrongdoer

could duplicate GM's strategy.

The underlying decision poses a particular threat to state

law enforcement efforts. Employees and company insiders

frequently provide critical information in environmental, anti-

trust, consumer protection, medicaid fraud and many other

kinds of state investigations. GM's brief in opposition to

certiorari provides one example of how Full Faith ‘and Credit

can be used to limit state law enforcement efforts. GM pointed

to tobacco litigation and the efforts of Brown & Williamson to

enforce a Kentucky state court injunction against Jeffrey

Wigand, a former vice president for research & development at

Brown Williamson. The tobacco company sought to prevent

Mr. Wigand from testifying in a lawsuit brought by the State of

Mississippi in Mississippi state Court.

Further examples highlight the extent of the danger posed

by the decision below. In EOC v. Astra USA, Inc., 94 F.3d

738 (st Cir. 1996), for instance, the First Circuit invalidated a

provision of an employment discrimination settlement in which

the plaintiff agreed not to cooperate with the EEOC’s sexual

harassment investigation involving other employees. The court

explained that, when approached by the EEOC, the plaintiff

stated “that she possessed relevant information but was unable

to disclose it ‘due to a confidential settlement agreement that

she had entered into with Astra."” /d. at 741. “[W)hen the

EEOC contacted ninety employees and requested information,

only twenty-six replied.” /d. The court explained that such

provisions in settlements were void as against public policy

Clearly, if victims of or witnesses to sexual harassment

are unable to approach the EEOC or even to answer its

questions, the investigatory powers that Congress

conferred would be sharply curtailed and the efficacy of

7

investigations would be severely hampered... In many

cases of widespread discrimination, victims suffer in

silence. In such instances, a sprinkling of settlement

agreements that contain stipulations prohibiting

cooperation with the EEOC could effectively thwart an

agency investigation.

/d. at 744. The court added that the right to provide truthful

information to the EEOC “is not a right that an employer can

purchase from an employee, nor is it a right that an employee

can sell to her employer.” /d. at 744 n.5.

Similarly, in Hamad v. Graphic Arts Center, Inc., 72 Fair

Empl. Prac. Cases (BNA) 1759 (D. Or. Jan. 3, 1997), a district

court refused to enforce a secrecy provision in a settlement

agreement between a company and a former employee when

the latter was called to testify in a racial discrimination case.

The court explained that “any provision in the settlement

agreement which prohibits [the former employee] from

testifying as required by the subpoena are against public policy

and therefore void.”

The logic of Astra and Hamad is squarely applicable here.

Yet under the Eighth Circuit's approach, the non-cooperaticn

agreements in Asira and Hamad would have been binding if

they had been memorialized in a consent decree, like the

agreement between Elwell and GM. Unless the decision below

is reversed, in the future wrongdoers will evade holdings like

Astra and Hamad by including noncooperation agreements in

consent decrees before friendly courts.

The danger posed by the Eighth Circuit decision is most

obvious in cases involving former and current employees, but

its effect is not limited to those situations. Unless the Eighth

Circuit’s decision is corrected, there is every reason to think

that wrongdoers would begin to negotiate secrecy agreements

X

involving third-party witnesses.

In short, the threat to the public welfare is plain. The Eighth

Circuit's decision should not be permitted to stand.

lil. THE DECISION BELOW MISCONSTRUES

MISSOURI PUBLIC POLICY

The Eighth Circuit premised its decision on the view that

“Missouri public policy embraces the theory of full faith and

credit.” Cert. App. 14a. But the court of appeals failed to

consider the matter in context. Although Missouri has adopted

the Uniform Enforcement of Foreign Judgments Act, see Mo.

Rev. Stat. §§ 511.760, 511.778, Missouri law, of course, has

long recognized — in accordance with the Federal Constitution

— that courts may not give full faith and credit to judgments of

sister state courts where those judgments are sought to be

applied in violation of due process. “That which was done in

violation of the due-process clause, is not entitled to be

enforced under the full-faith-and-credit clause.” Hall v. Wilder

Mfg. Co., 293 S.W. 760, 762 (Mo. 1927). See, e.g., Fisk v.

Wellsville Fire Brick Co., 152 $.W.2d 113, 118 (Mo. 1941)

(Illinois judgment not entitled to full faith and credit where

defendant did not enter an appearance and was not properly

served in foreign action); Adamson v. C.G. Harris, 726 S.W.2d

475, 477 (Mo. Ct. App. 1987) (“*A judgment rendered in

violation of due process is void in the rendering State and is not

entitled to full faith and credit elsewhere. .. . Due process

requires that the defendant . . . be subject to the personal

jurisdiction of the court... . ™) (quoting World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).

Thus, even a party to a prior proceeding may not be held to

a full faith and credit obligation under the Missouri statute by

demonstrating that it was not given “due notice” in the prior

proceeding. /n re Veach, 287 S.W.2d 753, 759 (Mo. 1956),

9

Bastian v. Tuttle, 606 S.W.2d 808, 809 (Mo. Ct. App. 1980);

Corning Truck & Radiator Service v. J.W.M., Inc., 542 S.W.2d

520, 524 (Mo. Ct. App. 1976); see also Campbell v. Campbell,

780 S.W.2d 89, 91 (Mo. Ct. App. 1989) (“Foreign judgments

do not qualify for registration under Missouri's Uniform Act

unless they are entitled to full faith and credit under the Full

Faith and Credit Clause of the Federal Constitution. And, that

Clause does not compel a state court to extend full faith and

credit to the judgment of a sister state whose rendering court

failed to give notice consistent with the procedural due process

guaranteed by the Fourteenth Amendment of the Federal

Constitution.”) (citation omitted).

A fortiori, Missouri law and public policy recognize that a

person who is not even a party in the prior proceeding cannot

be bound by the foreign judgment.

Further, Missouri recognizes the important public policy

interest in the disclosure of all relevant, non-privileged

information. Under Missouri law, a party should be provided

“with access to anything that is ‘relevant’ to the procecdings

and subject matter not protected by privilege.” State v.

Koehr, 831 S.W.2d 926, 927 (Mo. 1992) (en banc). Missouri

Rule of Civil Procedure 56.01(b)(1) provides that “[p]arties

may obtain discovery regarding any matter, not privileged,

which is relevant to the subject matter involved in the pending

action.”

Missouri is not alone in recognizing that the state has a

strong public policy interest in the disclosure of relevant, non-

privileged information. Numerous lower courts have permitted

Mr. Elwell to testify as to non-privileged, non-trade-secrets

information within his knowledge, on the ground that the public

policy of full discovery and disclosure demands such a result.

See, ¢.g., Ake v. General Motors Corp., 942 F. Supp. 869, 881

(W.D.N.Y. 1996) (specifically declining to follow the Eighth

10

Circuit's decision for this reason), Williams v. General Motors

Corp., 147 F.R.D. 270, 273 (S.D. Ga. 1993) (“This Court

concludes that the public interest — which must be weighed in

any consideration of injunctive relief — is not served in this

instance by prohibiting Elwell from testifying in Georgia as to

matters not within the scope of an attorney-client or work-

product privilege, or which divulgence would not constitute

misappropriation of a trade secret. Any interest GM might

have in silencing Elwell as to unprivileged or non-trade-secret

information is outweighed by the public interest in ‘full and fair

discovery.”); Bishop v. General Motors Corp., No. 94-286-S,

slip op. 2 (E.D. Okla. June 29, 1994) (“to the extent the

Michigan injunction prohibits Elwell from testifying to matters

outside the scope of any privilege, or with respect to trade

secrets, it violates Oklahoma and federal court public policy of

full discovery”), Ruskin v. General Motors Corp., No.

CV930073883, 1995 WL 41399, *2 (Conn. Super. Ct.) (Jan.

25, 1995) (“the Michigan injunction involves a blanket

prohibition that contravenes Connecticut public policy’).

Kibler v. General Motors Corp., No. C94-1494R, slip op. 2

(W.D. Wash. July 10, 1996) (noting “Washington's strong

public policy in favor of fuii disclosure in the search for truth

at trial”).

CONCLUSION

For the foregoing reasons, the judgment of the Court of

Appeals should be reversed insofar as it held that the Full Faith

and Credit obligation prevented Ronald Elwell from testifying

in this case

Respectfully submitted

JEREMIAH W. (JAY) NIXON

" Attorney General

KAREN KING MITCHELL

Counsel of Record

Appellate Chief Counsel

P O. Box 899

Jefferson City, Missouri 65102

(573) 751-3321

Attorneys for Amici Curiae

May 23, 1997