Supreme Court loosens muzzles on corporate whistle-blowers Unanimous ruling allows witness gagged in Mich. to testify in Mo. case

January 14, 1998|By Lyle Denniston | Lyle Denniston,SUN NATIONAL STAFF

WASHINGTON -- The Supreme Court strictly curbed the power of major companies to gag corporate whistle-blowers yesterday, turning them loose to attack unsafe or faulty products in lawsuits across the country.

If a company gets a gag order against a whistle-blower in one state, that cannot be used to stop that witness from testifying in other states, the court declared unanimously.

Striking down a Michigan court order, the court said that "decree cannot command obedience elsewhere on a matter the Michigan court lacks authority to resolve."

Although the case dealt specifically with lawsuits over General Motors cars and trucks, it also will affect cases over cigarettes and other tobacco products because it will allow former company chemists to testify in many states.

"The court told GM and other companies they're just not going to be able to buy the silence of people who have evidence in important cases," said Jeffrey White of the Association of Trial Lawyers of America.

Denounced by manufacturers

The ruling, however, was denounced by the National Association of Manufacturers, which said it would discourage companies from seeking settlement of lawsuits without trials.

Even though the decision focused on consumer products, it also may affect other disputes over the duties of states to respect proceedings of other states. The ruling went far to clarify the Constitution's "full faith and credit" clause that makes court orders in one state valid in others.

That clause is likely to be directly at issue in the future if gay couples, as expected, win the right to marry in one state (Hawaii), then seek to have their marriages recognized as legal elsewhere.

Gay rights lawyer Evan Wolfson of the Lambda Legal Defense Fund said the new ruling "is helpful to us" and said he plans to use language in the opinion that assures that "people's legal rights carry over from state to state, assuring them that they are citizens of one country."

Twenty-five states have passed laws to say they will not recognize gay marriages.

But those laws are based on claims that gay marriage is against those states' own policies, and Wolfson noted that the Supreme Court yesterday rejected state policy as a reason not to show respect for other state proceedings. The court did not mention the gay marriage issue.

Michigan gag order

The case before the court involved a Michigan court's attempt to gag a former General Motors engineer who has become a hostile witness in other states.

Ronald Elwell, a GM engineer for 30 years, has been in demand to testify against the company in lawsuits growing out of fatalities or injuries in GM cars or trucks.

A state court ordered him not to take the stand against GM in any other court in the nation. That order was part of a deal between Elwell and GM settling Michigan lawsuits they had filed against each other over his employment.

In Missouri, Elwell was summoned to testify against GM in a case involving a woman who burned to death in 1990 when the Chevrolet S-10 Blazer in which she was riding was involved in an accident and caught fire. The lawsuit contended that the Blazer had a defective fuel pump.

Over GM's objection, Elwell was allowed to testify, and his evidence helped win a jury verdict of $11.3 million. The trial judge who allowed the testimony said the Michigan ban did not have to be followed in Missouri because it violated "public policy" in that state.

No authority

Yesterday, the Supreme Court said the judge was wrong about that. There is no "public policy exemption permitting one state to resist recognition of another state's judgment," the court stressed in language affecting future interstate legal disputes.

But the justices went on to conclude that Missouri did not have to follow the Michigan testimony ban because the full faith and credit clause does not extend to an order a state court had no authority to issue.

Thus, the court overturned a federal appeals court decision declaring that Elwell should not have been allowed to testify.

The case now goes back to Missouri for a new trial on other legal issues.

Pub Date: 1/14/98

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