Judge precludes one defense instead of throwing out company's entire argument in product liability suit

Ford Motor Co. on Monday avoided what its lawyer called "the ultimate death penalty" when a Cobb County judge denied the plaintiffs' motion to throw out the automaker's defense in a product liability suit and instead chose a lesser punishment for withholding information.

But by the end of the daylong arguments, an appeal was virtually certain after the trial, which was restarted on Tuesday following a week's delay to deal with Ford's sanction.

If Ford loses, appeals judges can expect the company to say State Court Judge Kathryn J. Tanksley's punishment—throwing out the company's lead outside counsel and precluding the company's defense of a failure to warn claim—was unfair. If Ford wins, the plaintiffs are likely to say Tanksley should have tossed Ford's entire defense to claims that a defective seat belt killed their 15-year-old son.

At issue was Ford's failure to answer accurately a question asked by plaintiffs in discovery—whether the company had insurance coverage for verdicts. Plaintiffs' attorneys said last week that Ford's failure violated Georgia law requiring that potential jurors be screened for financial conflicts of interest that could occur if a juror's decision affected his premiums.

Tanksley learned on the morning of June 14—after a full day of voir dire—that contrary to Ford's statements in a pretrial order, the company had purchased excess verdict policies with a number of insurers.

She revoked the pro hac vice orders for Ford's top lawyers, D. Alan Thomas and his co-counsel, Paul F. Malek of Birmingham, Ala.-based Huie, Fernambucq & Stewart. The removal left Ford's defense in the hands of local counsel, Michael R. Boorman of Huff Powell & Bailey and his associate, Audrey K. Berland, who had been assisting Thomas and Malek.

Tanksley set aside Monday for arguments on the plaintiffs' motion to strike Ford's complete defense. Much of the hearing focused on when Ford's lawyers found out about the insurance carriers.

The plaintiffs, represented by J. Antonio DelCampo and Stephen G. Lowry of Harris Penn Lowry DelCampo, accused the defense of intentionally misleading the court by hiding their insurance resources. DelCampo repeatedly compared Ford and its lawyers to "bank robbers," saying they were attempting to simply "give back the money when they get caught."

Ford, represented by new counsel, Susan A. Cahoon of Kilpatrick Townsend & Stockton, blamed a miscommunication rather than willful deceit for the mistake. Cahoon attributed what she described as "disobedience to the pretrial process" to "a misunderstanding on the part of in-house counsel."

Both sides played testimony from Ford in-house counsel Beth A. Rose, who was questioned in a deposition via teleconference June 15.

Rose said she misunderstood an email from the company's outside counsel asking about insurance coverage. She directed them to say that Ford "has sufficient resources to satisfy any judgment in this case," which is what the defense stated in the pretrial order.

Rose testified that in a routine call discussing the day's events in court on June 13—the first day of voir dire—she and Thomas discussed the insurance coverage issue again. That's when she realized she had misunderstood the question previously and told Thomas that Ford does have coverage for excess verdicts.

She said Thomas asked for the names of the carriers, and she provided the names in an email the next morning after the company's insurance division opened. Thomas and Boorman provided the names to Tanksley that same morning—although Rose admitted the names were initially wrong because the insurance office made a mistake.

"It was a fundamentally inaccurate representation," acknowledged Cahoon. "We think it was unintentional, but it was wrong." But she argued that "striking an answer is the ultimate death penalty to impose on a party" and would be excessive.

Tanksley interrupted Cahoon to note the absence in the courtroom Monday of Thomas and Malek. "Since they are not here, it's appropriate to presume their testimony would not have been favorable," the judge said.

Cahoon immediately signaled an associate to find Thomas. "We had not anticipated that our failure to call Mr. Thomas would be used against Ford," Cahoon said. "He's not far away. We'll call him."

The judge announced a one-hour lunch break, after which Thomas testified that he learned of the insurance carriers on the evening of June 13 on the call with the general counsel's office and promptly brought the information to the court's attention Tuesday morning.

Thomas revealed little else in a series of questions from Lowry, repeatedly answering "I don't recall," or "Mr. Lowry, I'll take your word for it."

Tanksley eventually ordered a 30-minute recess for the lawyers to prepare suggestions for lesser sanctions. When they returned, they held firm. DelCampo still wanted to strike Ford's defense, or at least the wrongful death portion of it.

Cahoon, Kilpatrick's general counsel and longtime head of its litigation practice group, repeated an offer she had made in the morning: money—in an unspecified amount, to cover attorney fees and costs of plaintiffs, witnesses and the co-defendant, Donald R. Barrett, for the days the trial was delayed because of the withheld information.

After listening to more arguments from the plaintiffs, Ford and the co-defendant's attorney, Richard W. Brown, the judge sat with the courtroom in complete silence for several minutes around 4 p.m. before announcing her decision.

Calling Ford's withholding of information a "serious, serious violation," Tanksley ordered an "issue preclusion" sanction, saying that she would not allow the automaker to argue against one of the plaintiffs' charges: failure to warn against a product defect.

The judge's decision drew immediate objections from Cahoon. "We clearly disagree with any issue preclusion sanction," she said, asking for certification for interlocutory appeal of the judge's decision on the sanction, as well as for the judge's denial of Ford's motion for continuance of the trial until the fall.

DelCampo urged Tanksley not to delay over threats of appeal from Ford's defense attorneys.

Said DelCampo, "Regardless of what happens here, this case is going up on appeal."

Tanksley denied the appeal requests as well as the delay, saying she is "not inclined to certify for immediate review."

At the end of the day, the judge also effectively tossed Thomas out again, repeating her praise for Ford's local counsel Boorman and Berland, who had expressed concern last week they were unprepared to be lead counsel. Tanksley also added she would not give permission for Thomas and Malek to "sit behind the rail" to support Boorman and Berland in the trial.

Attorneys for the plaintiffs and co-defendant Barrett expressed to the judge an eagerness to get on with the proceedings, noting that the parties to the case had all traveled from out of town for the specially set two-week trial.

The case is Young v. Barrett, No. 2010 A 4415-4.