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Evidence of Subsequent Remedial Measures Excluded in Contract Case

By Robert C. Rodriguez, Litigation News Associate Editor – January 5, 2011

In an extensive order, a district judge for the U.S. District Court for the Eastern District of Pennsylvania refused to limit application of Federal Rule of Evidence 407 to tort claims and reaffirmed the rule’s application to other claims such as breach of contract. Reynolds v. The University of Pennsylvania [PDF]. After excluding evidence relating to subsequent remedial measures before trial, the district court denied the plaintiff’s subsequent motion for a new trial based upon the exclusion of that evidence.

Dispute Regarding Marketing of University Program
Frank Reynolds was a student in the executive masters in management program at the University of Pennsylvania. After a series of disputes, Reynolds brought a breach of contract and unjust enrichment action against the university. He claimed that university officials failed to fulfill their promise to him, based upon marketing materials and his discussions with university officials, that upon his completion of the program he would, in effect, be considered a graduate of the university’s Wharton School. Reynolds alleged that a key consideration for him to attend the university’s program was to benefit from “the Wharton Brand.”

After Reynolds enrolled with the program and subsequently raised concerns about the nature of the program’s relationship with the Wharton School, a “town hall meeting” was held and university officials sought to clarify the nature of the program’s affiliation with the Wharton School. Reynolds wanted to use evidence about this “town hall meeting” at trial.

When it granted the university’s motion in limine to exclude the evidence and again when it denied Reynolds’ motion for new trial, the district court ruled that evidence regarding the town hall meeting was inadmissible. The district court concluded that the meeting constituted a subsequent remedial measure taken by the university that was subject to Rule 407. Rule 407 states that, “[w]hen, after an event, measures are taken which, if taken previously, would have made the event less likely to occur, evidence of the subsequent measures is not admissible to prove negligence or culpable conduct in connection with the event.”

Reynolds argued that Rule 407 was intended to apply to negligence claims or claims involving tortious conduct and did not apply to breach of contract claims. The district court rejected that argument and noted that the drafters of the rule could have used “tortious conduct” in the rule, but instead used the broader phrase “culpable conduct.” The court determined that evidence of remedial measures offered to prove “culpable conduct” could include evidence offered to show a breach of contract.

Striving for Predictable Protection
The district court concluded that Rule 407 should offer defendants “predictable” protection when they are devising ways to avoid a future injury or harm. According to the court, Reynolds’ desired distinction between tort and contract claims would mean that, before taking remedial action, “a potential defendant would need to assess the likelihood that a plaintiff will couch his claim in contract terms.” The district court rejected that reading of the rule because it would lessen the rule’s predictability.

The court held that the purpose of the rule is to incentivize remedial action. Even in the context of a potential breach of contract claim, defendants must not be discouraged by the threat of “admitting present liability” from “making clarifications necessary to avoid future confusion.”

“That essentially is what the university was trying to do here, as it was holding a town hall meeting to discuss ways to market its program in the future that would avoid any future misunderstandings or potential liability,” says Dori A. Hanswirth, New York, cochair of the ABA Section of Litigation’s Trial Practice Committee. Hanswirth takes no issue with the court defining “culpable conduct” to include a breach of contract. She notes that, “one party is usually alleging that the other party in some way displayed culpable conduct” in breaching a contract.

“In many ways, the Reynolds case is an example of the federal courts applying the subsequent remedial measure doctrine in a more clear and cohesive manner than the state courts, which are often in disagreement over how and when to apply the doctrine,” says Laura L. McLaughlin, St. Louis, cochair of the Section of Litigation’s Business Torts Litigation Committee.

McLaughlin believes the case is also a reminder for lawyers, especially young lawyers, to “know the rules, and at beginning, and throughout case, assess the admissibility limitations for key documents.” She points out, for example, that there is no mention of the plaintiff ever trying to admit evidence of the town hall meeting for purposes of showing the “feasibility of precautionary measures,” which is an exception to the exclusionary rule.

Keywords: litigation, Federal Rule of Evidence 407, exclusionary rule


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