Court makes it harder for corporations to silence whistleblowers.

A recent decision by the U.S. Supreme Court essentially cuts large corporations off at the pass in their attempt to keep whistleblowers from giving damaging court testimony trial lawyers familiar with the case said.

In Baker v. General Motors Corp., the unanimous Court ruled that a former GM engineer could testify against the automaker in products liability litigation that occurred outside Michigan--despite his having signed an agreement saying he would not offer such testimony. (No. 96-653, 1998 WL 7072 (Jan. 13, 1998).)

The engineer, Ronald Elwell, retired from GM in the late 1980s, during which time his relationship with the corporation had soured. As part of a secret agreement stemming from employment disputes with GM, Elwell agreed not to testify against the automaker without its approval. GM formalized the agreement by obtaining an injunction from a Michigan court, forbidding Elwell to testify. As part of the settlement, GM gave Elwell an undisclosed amount of money.

Before the injunction was entered into the court record, Elwell was deposed in a lawsuit against GM, the highly publicized Moseley v. General Motors Corp. (Judges Rap Corporations for Pre-Trial Misconduct, TRIAL, Nov. 1995, at 93). The judge in that case allowed Elwell to testify against the automaker.

In Baker, the family of Beverly Gamer had alleged that her death in a Missouri vehicle crash was caused by a defective fuel pump in GM's 1985 Chevrolet S-10 Blazer. The federal judge presiding over the case in St. Louis found that Elwell could testify in Garner's case.

The jury that heard his testimony found for the plaintiff. On appeal, the Eighth Circuit threw out the verdict, ruling that the court in Missouri must abide by the Michigan courts injunction.

In January, the U.S. Supreme Court reversed the Eighth Circuit decision, ruling that the Michigan court could not prevent Elwell from testifying in lawsuits in other states. "Michigan has no authority to shield a witness from another jurisdiction's subpoena power in a case involving persons and causes outside Michigan's governance," Justice Ruth Bader Ginsburg wrote for the High Court.

J. Kent Emison, one of Elwell's attorneys, called the Supreme Court ruling "a tremendous decision across the board for civil litigants in preventing corporations from suppressing evidence.

"The Eighth Circuit's opinion was one that had no basis at all. In fact, the Eighth Circuit was the only appellate court to ever rule that [Elwell] could not testify. More than 30 trial courts and appellate courts had ordered that Elwell would be required to testify."

At issue in the case was the Constitution's Full Faith and Credit Clause. The Court found that while state courts must honor other state courts' judgments, there is no "general public policy exception" to the clause.

"Just as one state's judgment cannot automatically transfer title to land in another state, similarly the Michigan decree cannot determine evidentiary issues in a lawsuit brought by parties who were not subject to the jurisdiction of the Michigan court," Ginsburg wrote.

Having cleared up the testimony dispute in Baker, the Supreme Court sent the case back to the lower court for a new trial because the damage award was also invalidated for other reasons.

A spokesman for GM said the company still can try to block Elwell's testimony on other grounds, such as by arguing that the testimony would contain proprietary corporate information. (Court Says Ex-GM Engineer Can Testify, WALL ST. J., Jan. 14, 1998, at B11.)