April 01, 2013

Gossiping Agents and the Hearsay Rule

In high-stakes litigation, loose lips sink ships, and the rules around admissibility have been changing.

Timothy S. Tomasik

Principals beware: A gossiping agent can doom your case. In high-stakes litigation, loose lips sink ships. Damning admissions from an agent’s mouth can have an overwhelmingly persuasive force on a jury, and the admission or exclusion of an agent’s statement can often mean the difference between victory and defeat.

Here is a classic illustration, based on an actual case: The date is March 2002. The place is a large skyscraper in Chicago. It’s a stormy day.

As the winds reach 70 miles per hour, a 10,000-pound scaffold rips from its moorings and careens from the skyscraper’s 42nd floor. As the truck-sized platform crashes to the ground, multiple innocent bystanders are killed or catastrophically injured. The deadly event is tragic. Fault must be measured. Responsibility must be assigned. Litigation ensues.

The corporate building owner proclaims innocence: “We never inspected the scaffold and had no idea there was a danger. The scaffold was manufactured by someone else. Legions of contractors, architects, and engineers designed and installed the equipment holding the scaffold aloft. They are responsible, not us.”

Targeted discovery is served to get to the bottom of this. Among the volumes of information produced is a collection of audiotapes. The tapes reveal a series of meetings between representatives of the building owner and project managers involved in the construction of the scaffold. Hundreds of hours of review yield little in the way of substantive evidence. Then, buried deep within the tapes, the faint odor of gunpowder is discerned.

It is the smoking gun.

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