Opinion ID: 1241804
Heading Depth: 1
Heading Rank: 2

Heading: The prejudicial effect of the trial court's error.

Text: This court has held on several occasions that when error is committed in the trial of civil as well as criminal cases an appellate court will ordinarily presume or deem that such error was prejudicial to the party against whom it was committed. See Elam v. Soares, 282 Or. 93, 102-03, 577 P.2d 1336 (1978), and the cases cited therein. As previously stated, the trial court erred in this case in instructing the jury that    the evidence in that case must be clear and convincing as distinguished from a mere preponderance of the evidence. Defendant cites Medak v. Hekimian, 241 Or. 38, 404 P.2d 203 (1965), as authority for its contention that any such error was harmless rather than prejudicial. In that case this court considered the following instruction: The defendants must establish their affirmative defenses by a preponderance of the evidence, except for the issues of fraud and estoppel. These require more than a mere preponderance of the evidence, and must be established by clear, convincing and satisfactory evidence. (Emphasis added) This court stated (at 46, 404 P.2d at 207) that although the instruction was incorrect as to estoppel,    we doubt that this fine distinction resulted in any prejudice to defendants' rights, and therefore, under ORS 19.125(2), refuse to reverse for this reason. While the conclusion in Medak that the error in the instruction in that case was not prejudicial was appropriate under the facts of that case, it does not follow that similar errors in instructions are likewise not prejudicial in all circumstances. Rather, in determining whether an error in an instruction is prejudicial, that error must be viewed in light of the evidence to be considered by the jury in its application of that instruction. Our review of the record in this case satisfies us that there was sufficient evidence from which the jury could have properly found by a preponderance of the evidence that defendant wilfully violated the provisions of ORS 646.608(1)(e) and (g) in that its employees knew or should have known that the labels on at least some of the fabrics were incorrect, so as to constitute a violation of the provisions of the statute  in other words, that the defendant was negligent in not knowing that the labels were incorrect. That evidence included the testimony of the Consumer Protection Division investigator and June Bert that Ms. Bert was able to select, by feel, four fabrics from defendant's Lake Oswego store that contained less than 100 percent wool, although labeled 100 percent wool. In addition, the investigator was also able to independently select by feel, without Ms. Bert's assistance, another fabric from one of defendant's other stores that was likewise labeled as containing 100 percent wool when, in fact, the wool content was much lower. [11] Although the record indicates that during the cross examination of Ms. Bert, the defense was able to demonstrate that she could not consistently identify the wool content of fabrics by feel, the jury was entitled to find that both she and the investigator were able to identify, by feel, fabrics that were inaccurately labeled and that were on sale in defendant's stores. Further, the state offered the testimony of a Mr. Kooning, an officer and director of another firm that dealt in fabrics. He testified that he could tell by feel that of the seven fabrics in question that were labeled as 100 percent wool, three were obviously not 100 percent wool. He further testified that in his business he would not have accepted the manufacturer's label on those fabrics and that he would expect his employees to likewise reject those fabrics and to conduct a burn test. Mr. Kooning also testified that he preferred to buy from companies that have a continuing guarantee filed with the Federal Trade Commission. Finally, the state offered the testimony of two adverse witnesses, Bernard Galitzki, defendant's president, and Pearl Galitzki, defendant's executive vice president, who testified that although defendant normally secured guarantees from their suppliers, they had failed to do so in the cases of the fabrics in question. In view of this evidence, from which the jury could have properly found by a preponderance of the evidence, if it believed that testimony, that defendant was negligent in not knowing that the labels were incorrect, we cannot say that it was harmless error for the court to instruct the jury that the evidence must be clear and convincing. On the contrary, whether or not we presume that error to have been prejudicial, we conclude from our review of the record that this error by the trial court was prejudicial and we so hold. We have not overlooked the contention by defendant that the State of Oregon has no right to enter into the field of regulation of interstate commerce on issues of fabric labeling because of preemption by federal law. This argument is based upon the assumption that Congress preempted the field by the passage of the Wool Products Labeling Act of 1939, 15 U.S.C. §§ 68-68j. According to defendant, this act demonstrates a pervasive scheme of regulation and that therefore, the states are preempted from taking action on the same subject. We cannot agree with this contention. Even assuming that the UTPA seeks to regulate the same subject as the Wool Products Labeling Act, defendant's contention is not persuasive. In Jones v. Rath Packing Co., 430 U.S. 519, 97 S.Ct. 1305, 51 L.Ed.2d 604 (1977), the U.S. Supreme Court stated (at 525, 97 S.Ct. at 1309) that: We start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress. And, at 526, 97 S.Ct. at 1310: The criterion for determining whether state and federal laws are so inconsistent that the state law must give way is firmly established in our decisions. Our task is `to determine whether, under the circumstances of this particular case, [the State's] law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' (Emphasis added) No such obstacle is presented in this case. As also stated by this court in Derenco v. Benj. Franklin Fed. Sav. and Loan, 281 Or. 533, 543, 577 P.2d 477 (1978): In recent cases, however, the court has limited application of this approach to preemption [pervasive or comprehensive scheme of federal regulation] by narrowly defining the field regulated by Congress. Defendant also contends that federal law (15 U.S.C. § 68c) prohibits it from removing the manufacturer's label. We note, however, that that federal statute only penalizes removal if done with intent to violate the provisions of sections 68 to 68j of this title   . In addition, section 68b(c) of the same act specifically allows any person to replace a label with a substitute if he finds or has reasonable cause to believe that the label is incorrect. Reversed and remanded.