By Charles W. Branham III | AAJ Trial Magazine – July 2022

If a plaintiff tendered a witness who offered testimony at trial that someone “told me the defendant employer knew about the hazards, did not care, and hoped employees would get injured,” courts, quite correctly, would sustain a hearsay objection. No different rule exists for corporate defendants. An individual plaintiff or defendant may not take the stand and repeat clear hearsay.

Corporations often use their Federal Rule of Civil Procedure (FRCP) 30(b)(6) witness representatives to tell their litigation “story,” but under Federal Rule of Evidence (FRE) 602, these corporate designees must have personal knowledge of that story—that is, they must individually have knowledge of what they intend to discuss, typically “gained through firsthand observation or experience, as distinguished from a belief based on what someone else has said.”¹ Often, these witnesses do not have that knowledge, so you must push courts to exclude their trial testimony.

Corporate representatives are bound by the same evidentiary rules at trial—FRE 602 and state equivalents—as any other witness. These rules offer only limited, finite hearsay exceptions.² No hearsay exception exists to allow a corporate witness lacking personal knowledge of the facts to offer hearsay testimony at trial.

Don’t let corporate defendants use corporate representative witnesses who lack personal knowledge as mouthpieces for their story at trial. More often than not, you can restrict these representatives to testifying about their personal knowledge only. To do that, get the issue in front of the court through a motion in limine—then follow up with persistent objections whenever the representative seems to venture beyond matters of personal knowledge.

Personal Knowledge Requirement

Under FRE 602 and its state corollaries, a witness may not testify to any matter in the absence of personal knowledge.

For a jury to receive hearsay, the party seeking to admit the evidence must establish that it satisfies an exception to the rule. Corporate representatives whose knowledge was gathered by speaking to others and reviewing documents generally will not fall within a hearsay exception. (In limited circumstances, the ancient documents exception may apply.)

Defendants often complain that FRE 602 is not “fair.” However, the evidentiary rules are designed to ensure only reliable and truthful evidence is offered to fact-finders. The exceptions to the hearsay rule apply to company witnesses’ testimony just as they do to an individual’s testimony.

For example, under the well-recognized hearsay exception of “admissions by a party-opponent,”³ an adverse party can offer a corporate witness’s hearsay testimony against the corporation even when the corporate witness lacks personal knowledge.

If, for instance, a plaintiff gets an admission from a corporate witness that the company did not put a warning on its product, that admission is valid and admissible against the corporation. The evidentiary rules deem admissions by a party opponent that damage that party’s position to be reliable and thus admissible. Conversely, a corporate witness’s testimony that a company did put a warning on a product, in the absence of personal knowledge, is not admissible because the statement is hearsay.

Defendants’ misplaced use of FRCP 30(b)(6). Corporate defendants often wrongly argue that FRCP 30(b)(6) and its state equivalents permit testimony when the corporation designates the witness as a corporate representative. For discovery purposes, these rules do allow corporate representatives to testify about information available to the corporations they represent but about which they do not have personal knowledge. That’s because FRCP 30(b)(6) is primarily a discovery tool intended to allow opposing parties to obtain discoverable information from one source, rather than depose countless individual employees, officers, and directors—and it requires corporations to properly educate witnesses to testify on their behalf in depositions.

“Obviously, it is not literally possible to take the deposition of a corporation; instead, when a corporation is involved, the information sought must be obtained from natural persons who can speak for the corporation.”⁴ FRCP 30(b)(6) allows a party to require a corporation to designate a witness to appear at a discovery deposition and to testify on its behalf. The rule requires that the corporate designee testify as to matters known or reasonably available to the organization.

Courts have held that at such a deposition, the testimony “represents the knowledge of the corporation, not of the individual deponents.”⁵ The designated witness is “‘speaking for the corporation,’ and this testimony must be distinguished from that of a ‘mere corporate employee’ whose deposition is not considered that of the corporation and whose presence must be obtained by subpoena.”⁶

However, the plain text of FRCP 30(b)(6) contains no hearsay exception that would allow trial testimony by a witness—including a corporate representative—who lacks personal knowledge. FRCP 30(b)(6) is not an evidentiary rule, and no rule permits a party to offer the testimony of a 30(b)(6) witness who lacks personal knowledge at trial.

Federal Case Law

Courts across the country have enforced the hearsay rule when corporate defendants seek to have their representatives testify at trial on topics outside their personal knowledge. The Fifth Circuit’s holdings in Brazos River Authority v. GE Ionics, Inc.⁷ and the companion case, Union Pump Co. v. Centrifugal Technology, Inc.,⁸ as well as the New Jersey Appellate Division’s holding in Fishbain v. Colgate-Palmolive Co.⁹ define the parameters of this issue. In each of these cases, the courts determined that testimony from a corporate representative without personal knowledge constituted inadmissible hearsay.

In Brazos River, the plaintiff sought to elicit admissions from the defendant’s corporate representative about a product defect. The trial court excluded this testimony because the corporate designee lacked personal knowledge. The Fifth Circuit, however, reversed, reasoning that the testimony satisfied a hearsay exception as an admission by a party opponent.¹⁰

In Union Pump, the Fifth Circuit offered a more fulsome discussion of the basis for its decision in Brazos River:

Federal Rule of Civil Procedure 30(b)(6) allows corporate representatives to testify to matters within the corporation’s knowledge during deposition, and Rule 32(a)(3) permits an adverse party to use that deposition testimony during trial. However, a corporate representative may not testify to matters outside his own personal knowledge “to the extent that information [is] hearsay not falling within one of the authorized exceptions.”¹¹

And in Fishbain, a plaintiff suffering from mesothelioma claimed exposure to asbestos-contaminated cosmetic talc products. The defendant offered testimony from a corporate representative about its historic knowledge of asbestos-talc hazards and its 1970s testing practices. The New Jersey state trial court, overruling the plaintiff’s hearsay objection, admitted the testimony.

On appeal, the defendant argued the trial court properly admitted the testimony based on the witness’s designation as a corporate representative under New Jersey’s FRCP 30(b)(6) equivalent. The appellate court reversed, holding that the trial court erroneously allowed the corporate representative to testify about matters outside his personal knowledge.¹²

Brazos River and Union Pump, when harmonized with the appellate court’s holding in Fishbain, demonstrate that while the testimony of corporate representatives may be admitted as the statement of a party opponent despite lack of personal knowledge, a corporation may not eliminate FRE 602’s personal knowledge requirement based on a witness’s status as a corporate representative. And published opinions from federal courts across the country have held again and again that corporate representatives may not testify at trial to matters outside their personal knowledge.¹³

Countering defense arguments. Defendants sometimes cite Sara Lee Corp. v. Kraft Foods¹⁴ for the proposition that there are topics a corporate representative is “uniquely suited” to testify about, such as corporate policies or documents. This is an outlier opinion. Another federal district court has soundly rejected Sara Lee, noting that rules are rules and that courts may not fashion exceptions to the hearsay rule that do not exist.¹⁵

Many corporate defendants seek to offer testimony similar to that excluded in the Fishbain opinion – explanatory testimony about company practices that were in place decades before the corporate representative had any involvement with the company. The corporate representative may presume to interpret the thinking behind written policies or other documents that likewise predate their involvement. This is impermissible. While the personal knowledge requirement does not apply to experts interpreting historic corporate and scientific documents, only expert witnesses with special knowledge and expertise (not mere corporate representatives) may testify beyond their personal knowledge when interpreting documents and corporate practices.¹⁶

State Courts’ Perspective

State courts also have repeatedly ruled that corporate representatives may not testify at trial to matters outside their personal knowledge. In 2018, the South Carolina Supreme Court addressed the issue in Crawford v. Covil Corp.¹⁷Faced with proffered testimony of a defendant’s hired corporate representative who never worked for the company, the court held no hearsay exception existed that allowed a corporate representative who lacked personal knowledge to testify at trial.¹⁸

Similarly, in 2019, an Oregon trial court examined the interplay between the civil procedure requirement that a defendant prepare and produce a corporate representative to testify as the corporation and the evidentiary requirement that lay witnesses’ testimony be based on personal knowledge only. The court considered the testimony to be presented, precedents from other courts that had examined this issue, and the applicable rules. It ultimately excluded the testimony, stating that “all of those cases stand for the proposition that a corporate representative may not testify beyond his personal knowledge at trial at least in the context where it is that corporate representative’s own employer who is the party urging the testimony.”¹⁹

In 2021, additional state courts addressed this issue. Each court ruled no hearsay exception exists that allows a corporate representative to testify at trial on behalf of the corporation without personal knowledge.

In May 2021, the state court that handles all pending asbestos matters in Texas said of corporate representative testimony, “the problem is it’s hearsay… and there’s an exception to the hearsay rule on statements made by the witness, but… if one party asks for a hearsay statement under the opposing party rule, which is what the testimony of a corporate rep is, I don’t think that opens the door to all other hearsay.”²⁰

In June 2021, a Nevada court ruled that a corporate representative may only testify regarding those matters about which he or she has personal knowledge or when reciting information from corporate documents.²¹

And in a Wisconsin case against the beer brewer Pabst, a young corporate representative who joined the company in 2016 sought to testify on behalf of Pabst about facts and events from the 1960s and 1970s.²² The court took issue with Pabst offering this witness to testify about safety measures, the meaning of corporate documents, and the company’s conduct—all matters occurring more than 40 years before his employment. In a separate case against Pabst in Missouri, Pabst had offered that same corporate representative, and at deposition he identified multiple topics about which he had zero knowledge despite his designation as Pabst’s “person most knowledgeable.”²³ At trial, the Wisconsin court excluded his testimony as “pure hearsay.”²⁴

The law is clear that corporate representatives should not be allowed to testify about matters outside their personal knowledge unless that testimony satisfies a hearsay exception. So press corporate defendants on this issue—don’t let them have free rein to tell their story with witnesses who are not qualified to do so.

Charles W. Branham III is a partner at Dean Omar Branham Shirley in Dallas and can be reached at [email protected].

Notes

1. Black’s Law Dictionary defines “personal knowledge” as “the knowledge possessed by any individual. Usually accumulated through observation or personal experience.” Black’s Law Dictionary (11th ed. 2019).
2. R. Evid. 801, 802, 803, and 804.
3. R. Evid. 801.
4. 8A Charles Alan Wright et al., Federal Practice and Procedure §2103 (3d ed. 2022).
5. See United States v. Taylor, 166 F.R.D. 356, 361 (M.D.N.C. 1996), aff’d, 166 F.R.D. 367 (M.D.N.C. 1996).
6. Id. (citing 8A Wright et al. §2103, at 36–37).
7. 469 F.3d 416, 433–34 (5th Cir. 2006).
8. 404 F. App’x 899, 907 (5th Cir. 2010).
9. 2019 WL 4072135, at *11 (N.J. Super. Ct. App. Div. Aug. 29, 2019).
10. 469 F.3d at 433. It is important to understand the procedural posture of the Brazos case because it is that posture that generated the outcome.
11. 404 F. App’x at 907–08.
12. Fishbain, 2019 WL 4072135, at *11–14.
13. Brooks v. Global Mining Am., LLC., 2017 WL 3426043, at *6 (W.D. Ky. 2017) (holding “contrary to Defendant’s argument, Rule 30(b)(6) does not eliminate Rule 602’s personal knowledge requirement”); Wal-Mart Stores, Inc. v. Cuker Interactive, LLC, 2017 WL 1391457, at *4 (W.D. Ark. 2017); Stryker Corp. v. Ridgeway, 2016 WL 6585007, at *3 (W.D. Mich. 2016) (finding “to the extent that [the corporate representative’s] testimony is based not on her personal knowledge, but instead on hearsay not falling within one of the authorized exceptions, the testimony will be inadmissible at trial”); Reuther v. Gardner Realtors, 2016 WL 5337839, at *3 (E.D. La. 2016) (concluding “the Court will exclude [the witness] from testifying as a corporate representative to matters outside his or her own personal knowledge to the extent that such testimony is hearsay not falling within one of the authorized hearsay exceptions”); Indus. Eng’g & Dev., Inc. v. Static Control Components, Inc., 2014 WL 4983912, at *3 (M.D. Fla. 2014) (stating “[w]hile Rule 30(b)(6) permits [the corporate representative’s] deposition testimony to be based on matters outside his personal knowledge, Rule 602 limits his trial testimony to matters that are within his personal knowledge”); TIG Ins. Co. v. Tyco Int’l, Ltd., 919 F. Supp. 2d 439, 454 (M.D. Pa. 2013) (deciding “Although Rule 30(b)(6) allows a corporate designee to testify to matters within the corporation’s knowledge during deposition, at trial the designee may not testify to matters outside his own knowledge to the extent that information is hearsay not falling within one of the authorized exceptions.”) (internal quotations omitted).
14. 276 F.R.D. 500 (N.D. Ill. 2011).
15. Indus. Eng’g & Dev., 2014 WL 4983912, at *4, n.1.
16. See, e.g., In the Matter of N.Y.C. Asbestos Litig., 960 N.Y.S.2d 51 (N.Y. Sup. Ct. 2012) (expert permitted to testify to the state-of-the-art evidence and extensive publications concerning the dangers of asbestos published in 1930s); Farrall v. A.C. & S. Co., Inc., 558 A.2d 1078, 1081 (Del. Super. Ct. 1989) (expert may interpret unpublished corporate records and offer opinions regarding state of industry knowledge of asbestos cancer risks in 1940s); Nicolet, Inc. v. Nutt, 525 A.2d 146, 148–49 (Del. Super. Ct. 1987) (witness with expertise analyzing, correlating, and summarizing historic documents in environmental and industrial health matters may offer opinions regarding corporate knowledge of asbestos cancer risks).
17. Crawford v. Covil Corp., No. 2017-CP-42-04429 (S.C. Ct. Com. Pl. 2018).
18. Trial Transcript Day 2 at 311-314, Crawford v. Covil Corp., No. 2017-CP-42-04429 (S.C. Cir. Ct. July 17, 2018). The witness in this case also had a background as a testifying expert in asbestos litigation, but that did not insulate his testimony as a corporate representative from the hearsay rules. For copies of this and other cited transcripts, please email [email protected].
19. Hearing Transcript at 157–58, Levin v. Johnson & Johnson (Or. Cir. Ct. Nov. 1, 2019) (No. 19CV11244).
20. Hearing Transcript at 21, Thompson v. Certainteed Corp. (Tex. Dist. Ct. May 28, 2021) (No. 2018-10109).
21. Hearing Transcript at 120–21, Wagner v. 3M Co. (Nev. Dist. Ct. June 30, 2021) (No. CV19-01303).
22. Report of Proceedings at 153, Lorbiecki v. Air & Liquid Sys. Corp. (Wis. Cir. Ct. Sept. 30, 2021) (No. 18CV4971).
23. Deposition of John Kimes at 40:7-23; 46:18-47:7; 47:8-12; 62:18-63:2, Von Till v. Pabst Brewing Co., LLC (Mo. Cir. Ct. June 23, 2019) (No. 1722-cc-11890).
24. Report of Proceedings at 153–57, Lorbiecki.