Portland, Ore. (September 21, 2020) - On August 26, 2020, the Oregon Court of Appeals upheld a trial court's decision to order a new trial and vacate a judgment in the asbestos case, Golik v. CBS Corp., 306 Or App 202 (2020). After the jury returned a $3.9 million verdict, the defendant premises owner discovered various bankruptcy form documents, including a work affidavit detailing alternative asbestos exposures, which had not been produced in discovery. The Oregon Court of Appeals confirmed that withholding the bankruptcy claim records was misconduct that materially affected defendant's trial strategy.

Background Facts

Plaintiff Alice Golik brought suit against defendant Georgia Pacific Consumer Products (Camas), LLC, as successor to Crown Zellerbach Corp., which owned a paper mill in Camas, Washington. The plaintiff alleged that decedent Robert Golik developed mesothelioma from asbestos exposure at the defendant's paper mill. The decedent died without having given deposition testimony. The plaintiff presented evidence that, for a few weeks during 1965, the decedent worked as an insulator helper at the defendant's mill. The decedent was employed by a contractor applying asbestos insulation at the mill. During discovery, the plaintiff produced various bankruptcy forms, along with the decedent's work affidavit. The affidavit provided a very general overview of the decedent's work history, including his time as a merchant marine, but without any details of asbestos exposure.

At trial, the defendant contended that "any exposure at its mill was not a substantial contributing factor in causing" the decedent's illness, because it was insignificant when compared to other asbestos exposures during his 20-year career. Both parties offered experts to opine on the decedent's alternative exposures. The jury was not persuaded with the defendant's argument and returned a verdict in favor of the plaintiff.

Following the trial, the court held a hearing to determine whether the plaintiff's settlements with bankruptcy trusts were reasonable. In preparation, the court gave the defendant permission to seek records directly from the bankruptcy trusts. When the defendant received the records from the bankruptcy trusts, it found records that had not been provided before trial. One such record was the decedent's affidavit, but unlike the prior affidavit, it was much more detailed, and provided that as a merchant marine, he "was regularly exposed on a daily basis to asbestos and asbestos-containing materials . . ."

Upon the defendant's motion, the trial court vacated the verdict and ordered a new trial based upon "[m]isconduct of the jury or prevailing party" and newly discovered evidence that the moving party "could not with reasonable diligence have discovered and produced at the trial."

The plaintiff appealed the trial court's decision, and the defendant cross-appealed on other grounds. The Oregon Court of Appeals ultimately upheld the trial court's decision to grant a new trial based on misconduct.

Local Counsel's Misconduct

The Oregon Court of Appeals first considered whether the plaintiff's failure to turn over the bankruptcy documents was "misconduct." The plaintiff argued that the failure to produce the documents was inadvertent, and "based on a miscommunication between the out-of-state firm and plaintiff's local counsel." In particular, the out-of-state firm alleged that it had asked local counsel to "send us all the claim forms," and local counsel "read that request very literally." The defendant countered by showing that it submitted multiple other requests that specifically asked for supporting documentation in addition to any claim forms.

The appellate court focused on the fact that "despite several clear discovery requests" requiring disclosure of documents submitted to bankruptcy trusts, local counsel failed to produce responsive documents, including the affidavit that was "a significant and valuable piece of evidence for the defense." The court also took note of the fact that local counsel failed to appear at any of the hearings or "otherwise make any effort to explain his actions."

While the appellate court did not dispute that there may have been other explanations for local counsel's actions, the record was sufficient to support the inference that "local counsel deliberately withheld discovery." On that basis, the Oregon Court of Appeals agreed that there was evidence of misconduct on behalf of the plaintiff's local counsel.

Materially Affecting Substantial Rights of Defendant

The court next considered if local counsel's "misconduct affected defendant's substantial rights." The plaintiff argued that the defendant could not show that the newly discovered evidence "will probably change the result if a new trial is granted." (internal citations omitted) (citing State v. Arnold, 320 Or 111, 120, 879 P2d 1272 (1994)). However, the appellate court rejected the plaintiff's proposed standard, and explained that ORCP 64 B(2) requires only that the misconduct "'materially affect[ ] the substantial rights of' the moving party, and neither we nor the Supreme Court have suggested that any greater showing than that must be made." (citing DeWolf v. Mt. Hood Ski Bowl, LLC, 284 Or App 435, 453, 392 P3d 759, rev den, 361 Or 885 (2017)).

The appellate court took note of the fact that at trial, the defendant's central argument was that any asbestos exposure at the mill was insignificant in comparison to other exposures to asbestos throughout decedent's career. The court determined that the defendant's "strategy was hampered by the lack of detailed evidence" regarding the decedent's other exposures. The appellate court reasoned that if the withheld affidavit was available at trial, a jury could have inferred that the decedent "was exposed to the most dangerous kind of asbestos on a daily basis for a total of 18 months—more than 18 times as long as the exposures at defendant's mill . . ." The court found that there was "some likelihood that the outcome would have been different" if the decedent's affidavit was available to the defendant. Accordingly, the Oregon Court of Appeals found that local counsel's misconduct "materially impaired defendant's ability to present its case to the jury."

Court's Analysis of Washington Law

The Oregon Court of Appeals also reviewed the trial court's denial of the defendant's motion for judgment notwithstanding the verdict. The trial court had determined that Washington law governed the plaintiff's claims. In doing so, the Oregon appellate court interpreted substantive Washington law on premises liability and duties owed by a landowner — an area of law that has yielded inconsistent outcomes in Washington trial courts and continues to be litigated with frequency.

Takeaway

This case is a stark reminder that courts take discovery violations seriously, to the point that the court will set aside a jury's verdict following a multi-week trial. The case goes to show that deliberate withholding of relevant documents, miscommunication between counsel, or failure to diligently search for and produce responsive records presents a real risk of a successful judgment being overturned.

If drafting discovery requests to a plaintiff represented by multiple law firms, it may be beneficial to use broad language to ensure there is no dispute that any law firm, attorney, or other agent acting on a plaintiff's behalf is obligated to turn over responsive records. In the context of asbestos litigation, this case serves as a reaffirmation of the importance and discoverability of bankruptcy trust records. In a similar note, it signals that both trial and appellate courts understand the importance of pursuing and presenting evidence of alternative exposures.

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