Trial Magazine

Over the past five years, the U.S. Department of Justice has aggressively investigated corporations that engage in misleading marketing of their products, especially when it leads to consumer injuries and deaths. Companies such as Nishikawa Rubber Co.,¹ Toyota,² General Motors,³ Takata,⁴ and Volkswagen⁵ have collectively paid billions of dollars in fines and pleaded guilty to dishonest practices. Attorneys representing consumers in civil litigation—and products liability cases specifically—should make every effort to use these previous guilty pleas to question a defendant’s overall credibility in the eyes of the jury, whether or not the lawsuit is related to that same misconduct.

Plaintiffs must challenge a corporate defendant’s character and truthfulness by impeaching it vis-à-vis the witnesses who represent it. In depositions and at trial, manufacturers often use corporate employees to persuade jurors that the company used due care in developing, designing, and testing the product at issue. But when a corporate defendant does that, it places its own credibility before the jurors: Every “fact” the employee testifies about relies on data its employer furnished. At that juncture, the defendant’s honesty is ripe for attack, and if the corporation has pleaded guilty to criminal misconduct or dishonesty, that evidence is admissible under Fed. R. Evid. 609⁶ and its state counterparts.⁷

It is hornbook law that the testimony of a corporate representative is admissible against its employer. One court has observed that a corporate representative testifies as a “living embodiment” of the company before the jurors.⁸ Whether the purpose of the employee’s testimony is to humanize the company or to substantiate its laborious design and testing, the defendant’s credibility becomes an issue through this witness. You can impeach this evidence⁹ by raising the employer’s guilty plea on cross-examination, regardless of a connection between the plea and the specific facts and claims your client is alleging in the civil case.¹⁰ The relevant issue is whether the guilty plea relates to the defendant’s credibility and its honesty in general.

You should anticipate that the defendant will file a motion in limine to challenge the admissibility of the corporation’s guilty plea. When that happens, ask the court to defer its ruling until the defendant’s witness is on the stand and has placed the credibility of the corporation at issue. I typically argue that the defendant’s motion is hypothetical or premature until the evidentiary issue is ripe for resolution. Most judges will defer a ruling when the parties agree not to raise the contested issue without first alerting the court and addressing the issue out of the presence of the jury.

Cross-Examination

When the opportunity to address the corporate defendant’s guilty plea arises, here’s one approach to questioning the witness:

“Mr. Jones, as your employer’s spokesperson, is it safe to say that you’ve come here to tell this jury how the company is both honest and very safety conscious?”

“As the company spokesperson, you’re basing your testimony on the information your employer gave you to defend against our defect claim, correct? And, of course, the company hopes the jury will agree with its defense that it made a very safe product, right?”

“Isn’t it fair to say that before the jury can find that your employer did everything right, it first has to find your testimony, which you’ve given based on the company’s records, honest and forthright?”

“Mr. Jones, do you have kids? Have you ever caught them in a lie and reminded them that if we aren’t consistently honest to the people around us, then, frankly, we should not expect them to believe what we say?”

“But, Mr. Jones, why should the jury believe any information your company supplies when just last year it pleaded guilty to conspiracy and fraud and paid the U.S. government more than $500 million in fines?”

“Mr. Jones, when your employer pleaded guilty to conspiracy and fraud, you do know that it publicly agreed it was guilty of high-level dishonesty, right?”

Potential Defenses

While an individual’s guilty plea evidencing dishonesty is routinely admitted in civil cases when the person testifying is the one who pleaded guilty, the case law is relatively scant when it involves a corporate party’s guilty plea. The defendant will likely argue that Rule 609 should not apply to a corporation, or that because its witness was not directly connected to the previous criminal act, the plea is not admissible.11 The defendant may also argue that evidence of its prior guilty plea should be excluded under Rule 609 because its past unrelated criminal dishonesty has no probative value and would be highly prejudicial if admitted.¹²

These arguments should not prevail because our legal system, down to our standard jury instructions, provides that corporations must be treated the same as individuals.¹³ Courts, including the U.S. Supreme Court, have ruled that corporations are entitled to the same benefits as individuals, even First Amendment protections.¹⁴ Consistent with this ¬well-established framework, plaintiffs should have the same rights against corporations as they do against individuals, including the right to impeach a corporate litigant when it has previously pleaded guilty to a crime of dishonesty.

---

Larry E. Coben is a shareholder at Anapol Weiss in Scottsdale, Ariz. He can be reached at LCoben@CobenLaw.com.

---

Notes

1. U.S. Dep’t of Justice, Nishikawa Agrees to Plead Guilty and Pay $130 Million Criminal Fine for Fixing Prices of Automotive Parts (July 20, 2016), https://tinyurl.com/y83awba5.
2. Nate Raymond, U.S. Judge Approves Toyota $1.2 Billion Settlement Over Concealing Defects, Reuters (Mar. 20, 2014), https://tinyurl.com/yco3rj3n. 
3. Nathan Bomey & Kevin McCoy, GM Agrees to $900M Criminal Settlement Over Ignition-Switch Defect, USA Today (Sept. 17, 2015), https://tinyurl.com/y98reo2r. 
4. U.S. Dep’t of Justice, Takata Corporation Agrees to Plead Guilty and Pay $1 Billion in Criminal Penalties for Airbag Scheme (Jan. 13, 2017), www.justice.gov/opa/pr/takata-corporation-agrees-plead-guilty-and-pay-1-billion-criminal-penalties- airbag-scheme.
5. U.S. Dep’t of Justice, Volkswagen AG Agrees to Plead Guilty and Pay $4.3 Billion in Criminal and Civil Penalties; Six Volkswagen Executives and Employees are Indicted in Connection With Conspiracy to Cheat U.S. Emissions Tests (Jan. 11, 2017), https://tinyurl.com/ybz5q33d.
6. Fed. R. Evid. 609(a) provides that when “attacking a witness’s character for truthfulness by evidence of a criminal conviction,” that evidence “must be admitted if the court can readily determine that establishing the elements of the crime required proving—or the witness’s admitting—a dishonest act or false statement.” 
7. Every state has adopted a version of Fed. R. Evid. 609. The main difference among them is some make admission of a conviction or guilty plea mandatory while others incorporate a balancing analysis like that under Fed. R. Evid. 403. See, e.g., Davis v. Volkswagen AG, No. 2014-C-2951 (Pa. Dist. & Cnty. Ct. Lehigh Cnty. July 2017) (The court took judicial notice of the defendant’s prior guilty plea and allowed the plea and its sentencing into evidence under Pa. R. Evid. 609(a). This transcript is on file with the author pending posttrial motions.). 
8. Stone v. C.R. Bard, Inc., 2003 WL 22902564, at *3 (S.D.N.Y. Dec. 8, 2003). 
9. This impeachment evidence may also be admissible under Fed. R. Evid. 405 because the corporate employee’s testimony places at issue the character and reputation of his or her employer. See Hickson Corp. v. Norfolk S. Ry. Co., 124 Fed. Appx. 336, 343 (6th Cir. 2005). 
10. Stone, 2003 WL 22902564, at *3 (The employee’s testimony “is fairly considered the testimony of [the defendant] itself, and is therefore subject to impeachment by [the defendant’s] prior felony convictions.”) 
11. See Walden v. Georgia-Pacific Corp., 126 F.3d 506, 524 (3d Cir. 1997) (affirming the  district court’s decision to preclude plaintiffs from using the witness’s employer’s guilty plea as impeachment evidence on cross-examination). But see Commerce Funding Corp. v. Comprehensive Habilitation Servs., 2005 WL 1026515, at *7–9 (S.D.N.Y May 2, 2005) (deciding not to apply Walden and allowing an employer corporation’s criminal conviction to be used to impeach its employee witness). 
12. Hickson Corp., 124 Fed.Appx. 343. 
13. See, e.g., Ninth Circuit Jury Instructions Committee, Manual of Model Civil Jury Instructions for the District Courts of the Ninth Circuit 4.1 (2007), www3.ce9.uscourts.gov/jury-instructions/sites/default/files/WPD/Civil_Instructions_2017_7.pdf; Judicial Council of California Advisory Committee on Civil Jury Instructions, California Civil Jury Instructions 5006 (2016), www.courts.ca.gov/partners/documents/CACI_2017_Edition.pdf.
14. See, e.g., Citizens United v. Fed. Elec. Comm’n, 558 U.S. 310, 315 (2010) (“[T]he Government may not suppress political speech based on the speaker’s corporate identity.”); First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765, 784 (1978) (holding that speech does not lose First Amendment protection “simply because its source is a corporation” unable to show whether that speech has a material effect on its business).