Jonathan R. Cooper
Martindale, Brzytwa & Quick
Cleveland, Ohio

Suppose you are the vice president of engineering for a fire-truck manufacturer. A fireman was recently injured when he fell from a seat at the rear of the fire truck. Your company has been making these seats the same way for 20 years. Each time a new design idea comes along you test it, do a fault-free analysis, and decide the existing design is better. You are now on the witness stand in a suit brought by the fireman who claims your seat design is defective. You have testified that your seat is the “best in the business.” Cross examination begins. The plaintiff’s attorney hands you a memo addressed to you dated 1975, in which Ed Whet, junior draftsman, wrote, “We should seriously consider a retaining brace for this seat. Otherwise, the instability could cause real injury.” The memo is on your company’s paper, and you vaguely remember Mr. Whet. You do not know if you have seen the memo before, and you are not sure what he meant by “retaining brace” or “instability.” The plaintiff’s attorney glares at you: “Your company knew this was dangerous twenty years ago didn’t it?” You feel your face turn red and you begin to sweat. “This perceptive young man was ready to fix the problem, but you ignored it?” The jury begins to scrutinize you more closely.

Almost every engineer who has designed a product has at least thought about product liability. Many have even been involved in a product-liability lawsuit. Although many injuries have little to do with product design, people who get injured often sue, with little regard for the suit’s merit. Sometimes the injured person deserves to win; some products contain flaws. Many times, however, the jury decides in favor of the plaintiff for all the wrong reasons. Jurors are often convinced that the engineer created a dangerous product and either had no concern for the consequences or was aware of potential problems and avoided the issue.

There are two problems at work in the fire-truck seat scenario: the document itself and preparation for it. Documents like the memo can be devastating for the unprepared. Some wreak havoc even when defendants are prepared. These documents call for both short and longterm responses. In the short term, it is wise to monitor existing documents and try to prevent their admission or at least dilute their effectiveness. In the long term, a good company-wide document-retention policy, when properly enforced, will go a long way toward alleviating these problems.

A document-retention policy consists of finding out what documents exist, making an orderly plan for destroying old or useless documents, correcting ambiguous or false impressions about existing documents, and enforcing the policy. After locating a potentially damaging document, decide the best strategy for defusing its effects. There are several ways to do this. First, if it is a recent memo, talk to the author. In the fire-truck example, assume the company’s engineers had done a study and determined that Mr. Whet’s idea, although it sounded good, would either create more harm than it would prevent, or would debilitate the product’s usability. The first thing management should do is convince Mr. Whet to retract his memo in writing or to reconsider it. If he will not change his mind, send him a memo stating why the proposed design is unreliable. If Mr. Whet’s memo turns up after he has left the company, write a memo to the file, outlining the reason for the late response and why the design is not feasible.

Next, implement document retention. Regular disposal of unnecessary documents is the best way to weaken the sting of harmful information. Maintain a schedule for locating documents, determine how long they should be kept, and make sure there are no lawsuits pending. Although courts regularly accept document-retention policies, documents may not be destroyed when there is an outstanding request for them during litigation. Even if requested, the Federal Civil Rules state that documents may not be destroyed if the possessor has notice that they may be relevant to litigation. A complaint or demand letter is often enough to establish such notice.

It is important to institute and maintain a retention policy that is sensible to both the manufacturer and to future litigation. A logical, consistently enforced retention policy forces staff to focus on what documents exist and to destroy them at the appropriate time. This is a sure-fire way to eliminate surprises. An inconsistent retention policy, or a policy containing suspicious exceptions, on the other hand, may lead a court to a finding of what’s called bad-faith destruction, or spoliation (intentional alteration of a document).

When considering which documents should be subject to a retention policy, several dangerous examples come to mind. The first involves memos like the draftsman’s. These memos are frequently addressed to senior management but never sent. Most often they are not thought out and are almost always disseminated and left floating around. This type of document can be devastating, if properly used, especially when the witness is unprepared for the document. Although this is the thorniest problem, it is by no means the only one.

Another example involves memoranda left from improving a product design. Memos and notes concerning product improvements convey information about, and often argue for, a different design. They are rarely written with regard to their interpretation in a trial yet are almost always discoverable and can be devastating when used as evidence against a company.

The third and probably most prevalent example involves reports of accidents or incidents. Accident reports are gathered for a variety of reasons. Some companies use them to evaluate product design, while others use them to guide marketing efforts. Another use is getting an early jump on potential litigation. Some clients even admit they don’t know why they collect accident reports; they simply do. Accident reports are a favorite topic for plaintiffs’ lawyers. They are fertile ground to sow arguments about a product’s danger and the manufacturer’s knowledge of such danger. Fortunately, most courts limit the admissibility of accident reports to those which are “substantially similar” to the case. Some courts are stringent with their interpretation of “substantial similarity,” requiring equivalent physical characteristics of the products involved and of the accident site, and equivalent training levels of participants in the accident. Other qualifications include identical manner and mechanisms of injury and reasonable similarity in time of the accident. Interpretations of “time of accident” can be broad, meaning anything from time of year to time of day. Two accidents between forklifts and cars could be considered dissimilar if one happened during winter and the other during summer or if one happened during rush hour and the other during the evening. Although requirements for substantial similarity can keep a variety of harmful documents away from the jury, one cannot count on a court to be stringent. The safest plan is to hold accident reports only as long as necessary and then dispose of them on a regular basis pursuant to a document-retention policy.

Some documents are useful for only a year or two. Accident reports should be kept for up to six years. It is important to keep reports from the date of the accident until the end of the relevant statute of limitations, or until after a lawsuit. If there is a suit, reports cannot be destroyed until after the case. If there is no suit, set a time limit for holding accident reports. It is wise to set a policy that applies to all reports and covers the longest possible statute of limitations since the relevant statute is not always clear. For example, it is not always obvious where the suit will be filed or which state’s law will apply. Keeping files for six years is recommended because that is the longest product-liability statute of limitations in the United States.

Assume you’re back on the stand responding to questions about Ed Whet’s memo. Being a wise senior engineer, you had implemented document-retention policies. Your response to the swaggering plaintiff’s attorney in our fire-truck case is: “Of course we know people could be injured. We do our best to prevent that. We studied the design proposed by Mr. Whet even before he suggested it. After I got his memo, I sat down with him and discussed the relative risks. He wrote a followup memo. Do you have a copy of that? Here, I have one.” You will be off the stand in a matter of minutes.

For information on Martindale, Brzytwa & Quick

• Know what you have
• Know why you have it
• Know how long you need it
• If you are sued, assume the plaintiff has it and develop a plan for dealing with it
• Get rid of it on schedule
• Be consistent
• Do not destroy anything arguably relevant to a pending suit

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