What happens when an injury doesn't surface until fifty years later? The case of Ramirez v. Avon Products, Inc. (2023) Los Angeles County Super. Ct. No. 20STCV22671 Case No. JCCP 4674, discusses this conundrum. It analyzes how courts have dealt with the issue of witness testimony where few at the corporation ever had personal knowledge of policies and procedures regarding the disputed claim at the time the incident took place. Testimony of the "Person Most Knowledgeable” does not earn businesses a pass on the hearsay rules.
General Facts
Alicia Ramirez contracted mesothelioma when she was exposed to a toxic substance over fifty years ago. Alicia, along with her husband Fermin Ramirez, filed a lawsuit against several defendants, including Avon Products, Inc. Alicia's suit was based on allegations that she was exposed to asbestos when she used asbestos-contaminated talcum powder produced by Avon. Alicia used the powder on a daily basis from the mid-1970s-2007. Avon is a cosmetics and fragrance company. Its products are designed to be asbestos free. Avon claims that it has never used asbestos as an ingredient or component in its products. Plaintiffs had the burden of proving that it was more likely than not that the products contained asbestos.
Avon moved for summary judgment on the ground that, "Plaintiffs cannot prove that Alicia Ramirez came into contact with an Avon product contaminated with asbestos." Avon relied on the declaration of Lisa Gallo, who served a Avon's VP of Global Innovation, Research and Development. Gallo had been designated by Avon as the "Person Most Knowledgeable" under Code of Civil Procedure 2025.230. The Ramirezes objected to her declaration stating that she lacked personal knowledge, foundation and relied on hearsay.
The trial court granted Avon's motion for summary judgment and found that the Ramirezes had failed to meet their burden of providing sufficient evidence that Avon's products more likely than not contained asbestos. It relied on evidence presented by Avon including Gallo's declaration that Avon never included or used asbestos and since the 1970s had an internal screening and testing program in place to ensure asbestos were not used. Gallo declared that "No talc was used in any Avon cosmetic product if even a single asbestos fiber was detected during Avon's three-step screening program." The court relied entirely on Gallo's declaration in making its determination that the Ramirezes had not supplied sufficient evidence to move the case forward. The Ramirezes appealed.
The Lower Court Erred in Overruling the Objections to the Gallo Declaration
The trial court overruled the Ramirezes objections to Gallo's testimony. They claimed it lacked foundation, personal knowledge and was based on hearsay. The lower court reasoned that, "Gallo was offered as a designated corporate representative and person most knowledgeable, which does give a basis for her legally to obtain and provide the foundational testimony, based on her independent review, which I think she did indicate she had done. And also when I look at her title and her duties and responsibilities, that further suggests that the declaration is appropriately admissible and may be considered by the court as affirmative evidence." The Ramirezes assert that because Gallo was not designated as an expert, her declaration was limited to matters of which she had personal knowledge and the rest constituted hearsay. The Court of Appeals agreed with this contention.
Evidence Code section 702(a) recognizes two types of witnesses- lay witnesses and expert witnesses. It states, "The testimony of a witness concerning a particular matter is inadmissible unless he has personal knowledge of the matter. Against the objection of a party, such personal knowledge must be shown before the witness may testify concerning the matter." Evidence Code section 801 covers the testimony of expert witnesses, who may present evidence not based on personal knowledge, but rather may use their verified professional expertise to provide their expert opinion to the court. The evidence code does not provide a category for a "knowledgeable corporate representative witness." There is also no exception to this rule for a witness who had completed an "independent review" as termed by the trial court.
Discovery Rules vs. Evidence Rules
Gallo could not be considered an independent witness as she worked for Avon and conducted her review on behalf of the company and their interests in this lawsuit. As such, Gallo was a lay witness and could only testify to the limits of her personal knowledge. As she began working at the company in 1994, it is clear that her personal knowledge did not include happenings or policies of the company prior to that time period. Further, the term "Person Most Qualified" used by the trial court is normally utilized in the Code of Civil Procedure and is relevant to depositions of entities that are not natural persons. The rules for discovery and civil procedure are not the same and are not meant to apply to evidence questions. The scope of discovery is not limited by admissible evidence, but rather is wide-ranging fact-gathering process. Some of what is learned in discovery may not be admissible in court under the evidence rules. The court states, "The mere fact that a person is asked about a matter at a deposition and provides information in response does not make that testimony admissible at trial."
Discovery is meant to benefit both sides in their fact-finding process, but generally the purpose of a deposition is not to assist the side whose witness is being deposed, but rather the side conducting the deposition. It follows that the purpose of Code of Civil Procedure section 2025.230 is not to help corporate entities, but rather to make it easier for opposing parties to cut through corporate governance structures to get the information needed to form their case. "The purpose of [Code of Civil Procedure] § 2025.230 is to eliminate the problem of trying to find out who in the corporate hierarchy has the information the examiner is seeking. Under former law, the entity was required only to designate one or more officers or employees to testify on its behalf. This permitted considerable buck-passing and ‘I don't know’ answers at deposition." Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2001) ¶ 8:474, p. 8E-18.
Furthermore, in Maldonado v. Superior Court (2002) 94 Cal.App.4th 1390, 1395-1396, the Court found, "If the subject matter of the questioning is clearly stated, the burden is on the entity, not the examiner, to produce the right witnesses. And, if the particular office or employee designated lacks personal knowledge of all the information sought, he or she is supposed to find out from those who do!"
Avon does not present any evidence to show that a corporate employee designated as the "Person Most Qualified" (PMQ) may testify without adhering to the rules of evidence as to expert and lay testimony. In essence, Avon contends that if a corporate representative is deposed by the opposing party, the corporate entity is no longer restrained by the rules of evidence at a later trial or hearing. The Appellate Court disagreed.
The Deposition of a Corporate Representative Does Not Eliminate Evidence Rules in Future Proceedings
Not enforcing evidence rules against a corporate PMQ deponent would eliminate depositions of corporations as a practical matter and could also potentially frustrate the Civil Discovery Act in addition to due process. It would place non-corporate plaintiffs at a clear disadvantage in lawsuits where the opposing party is a corporation.
The fact is that evidence rules apply to a PMQ deponent whether the witness is a plaintiff or defendant. Despite what Avon argues, this rule is not disadvantageous to corporate entities. In addition, the rule applies whether the deponent is a corporate entity or a natural person. Avon unsuccessfully contends, "Whereas natural persons may often resort to firsthand testimony about events to mount a defense, corporations, especially when defending against latent injury claims from decades-old exposure, cannot do the same. When corporations have existed for generations and the claims are based on long-ago activities, it is impossible to mount an effective defense the same way that a natural person would. For example, many of the individuals who may have contributed to the collective knowledge of the entity at one point may be unable to attend trial, may be possible to locate, or may have passed away. Further, the corporation's knowledge is not unified: unlike a single person’s recollection, the corporation’s information is stored in fragments and excerpts, requiring synthesis and analysis to be meaningful." (p. 12).
The Court responded to this argument by reiterating that the burden is on the plaintiff to prove that an exposure to toxins occurred decades ago. The plaintiff has no more access to information than Avon and is even more limited as it does not have those "fragments and excerpts" in its possession. The plaintiff is completely reliant on the corporate entity to gather any concrete information upon which to build its case. Although Alicia can readily recall using Avon products during the dates in question, she would have no way of proving the contents of the products she used without discovering information from Avon, or other sources such as outside expert witnesses familiar with the sources of talc used by Avon during that time period. Avon was also free to elicit expert testimony in its response to the lawsuit, but did not.
Finally, although there is evidence that Avon knew in the 1970s that some talc sources could contain asbestos and that there was a concern in the scientific community about it, Avon does not have any records to show how they avoided those particular sources that potentially contained asbestos, and only asserts that it immediately took steps to use asbestos-free talc. While Avon cannot produce any documents to support their contention, they expect Alicia to produce the original plastic bottles that she used over thirty years ago. As Alicia had no reason to suspect a toxic substance in the product in the 1970s, there is no reason why she would have saved those containers.
Avon next attempts to argue that corporate witnesses should be given special privileges through the Evidence Code. It stated, "The corporate witness is a channel though which compiled corporate information is conveyed: the proposed affirmative testimony is not mere speculation, but rather, can be corroborated by underlying evidence, which by itself, is admissible. Concerns over unreliable testimony -- those which animate the personal knowledge rule -- are thus not implicated by the corporate witness' testimony. Rather such testimony calls for the court to engage in the conventional 'practical compromise' as it would when, for example, a person is asked to testify about his own age." (p. 14).
Despite Avon's argument, the Court found that it failed to show that even if Gallo is lacking in personal knowledge she should still be allowed to testify when the underlying evidence itself has not been deemed admissible in its own right. Gallo does not identify the source for most of the information she used as the basis of her testimony and she did not work at the company until 1994. Given that many of the documents and procedures she referred to occurred in the 1970s, it is impossible that she had personal knowledge of the activities or policies of Avon at that time. The Court reasoned, "Even assuming for the sake of argument that Gallo could channel information received from individuals who had personal knowledge of events and could testify as witnesses, there is no indication that such persons were the source of Gallo's' information." (pp. 14-15). The oral passing on of information from those also potentially lacked personal knowledge, posed the highest kind of reliability issues. The fact that she was a corporate official repeating this information did not make it any more reliable. For these reasons, Gallo's declaration was insufficient to negate the claims made by the Ramirezes and the lower court erred in overruling the Ramirezes objections to Gallo's declaration.
Business Records Exception
Avon also claims that the exhibits attached to Gallo's declaration should serve as proof of her overall testimony. However, in examining these documents, the Court found that her lack of personal knowledge of the contents is not cured by their existence. Since most of the exhibits were not prepared by Avon, and no indication of how or when Avon obtained the exhibits, they could not be authenticated properly and were therefore hearsay evidence. Avon argued that for those exhibits prepared by Avon employees, even if those employees are not present to authenticate the documents, should be allowed pursuant to the business records exception to the hearsay rule.
The business documents exception is found in Evidence Code section 1271 which provides that "a document is admissible notwithstanding the hearsay rule if:
- The writing was made in the regular course of business;
- The writing was made at or near the time of the act, condition, or event;
- The custodian or other qualified witness testifies to its identity and the mode of its preparation; and
- The sources of information and method and time of preparation were such as to indicate its trustworthiness.
The exhibits attached to Gallo's declaration contain memos summarizing telephone conversations that were not prepared in the ordinary course of business, and many other documents show that they were not prepared at or near the time of the incident applicable to this case. It was impossible for the court to determine when the documents were prepared in relation to the activities highlighted in the Ramirezes' complaint. The Court found that all of the attached exhibits were hearsay and contained hearsay statements by someone other than the author of the document. The Court could not determine whether the sources of information in the exhibits were cited properly, or if the sources had personal knowledge of the contents. Furthermore, even if the Court agreed to permit the documents, they do not definitively show that asbestos were never used in Avon products. The documents only relate to one supplier during a limited time period. The Court found that the trial court abused its discretion in admitting these documents into evidence.
Besides the Gallo declaration and accompanying documents, Avon did not present any admissible evidence to combat the Ramirezes' claim. The granting of summary judgment was thereby reversed.