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Hearsay—The Business Records Exception

July 5, 2011

Lawyers and Judges often refer to the hearsay exception found in Rule 803(6) as the “business records exception.”  It’s real name, however, is “Records of regularly conducted activity.”  Let’s look at what the rule says:

Rule 803. Hearsay Exceptions; Availability of Declarant Immaterial

The following are not excluded by the hearsay rule, even though the declarant is available as a witness:

(6) Records of regularly conducted activity.  A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record or data compilation, all as shown by the testimony of the custodian or other qualified witness, or by certification that complies with Rule 902(11), Rule 902(12), or a statute permitting certification, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. The term “business” as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.

Names aside, the admissibility of any record is determined by whether it meets the elements set forth in the Rule.  As we have discussed, the elements of the foundation of a hearsay exception can be formulated differently by different people and still be consistent with the rule.  Here is what the Tenth Circuit has to say about the elements:

To satisfy Rule 803(6) the inventory records must (1) have been prepared in the normal course of business; (2) have been made at or near the time of the events recorded; (3) be based on the personal knowledge of the entrant or of a person who had a business duty to transmit the information to the entrant; and (4) indicate the sources, methods and circumstances by which the record was made were trustworthy.  (citation omitted).  The proponent of the document must also lay this foundation for its admission.

United States v. Ary, 518 F.3d 775, 785 (10th Cir. 2008).

The important point is that the listing of elements tracks the language of the rule.  In an outline I prepared for a previous class, I listed the elements as follows:

(1) A memorandum, report, record, etc.; (2) Of acts, events, conditions, opinions, or diagnoses; (3) Made at or near the time; (4) Made by, or from information transmitted by, a person with knowledge; (5) If kept in the course of a regularly conducted business activity; (6) If it was their regular practice to do so; (7) All as shown by the testimony of the custodian or other qualified witness, or by certification under Rule 902(11) or (12); (8) Unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.

It’s absolutely no accident that my listing of the elements tracks the rule almost perfectly.  Remember how many times I stop in the middle of a discussion of a point of evidence and make us all pull out our rule book?  Do that on the exam, and in court, and you’ll help yourself!

Let’s see what Our Book says about the business records exception.  The primary case discussed is United States v. Vigneau, 187 F.3d 70 (1st Cir. 1999).  As we think about Vigneau, let’s remember the structure of evidence, and how we even get to the question of whether the documents meet the elements of Rule 803(6). 

Is it relevant?

The Vigneau brothers were charged with selling drugs.  The government’s theory was that Richard Crandall would ship drugs from Texas to Patrick Vigneau in the northeast, and Patrick would wire money back to Richard in Texas via Western Union.  In order to prove that Patrick was the one who wired the money to Richard, the government sought to introduce 21 Western Union “To Send Money” forms, each of which listed “Patrick Vigneau” as the sender.  The court explained the context in which these forms were used.  A customer wishing to send money would fill out the left side of the form, “writing (1) the sender’s name, address and telephone number; (2) the amount of the transfer; and (3) the intended recipient’s name and location.”  It fit the government’s theory nicely; someone named Patrick Vigneau sent money on 21 occasions to a drug dealer in Texas.  Patrick Vigneau is the defendant … it’s relevant!

What is it?

Well, it really is a form on which someone wrote the name “Patrick Vigneau.”  The government argued that meant the sender was in fact Patrick.  The defense, following our “small steps,” argued:

  1. the words of the statement are “Patrick Vigneau”
  2. the government claims the matter asserted in those words is “I am Patrick Vigneau”
  3. the government’s case depends on the truth that the sender was Patrick Vigneau
  4. the statement is offered to prove that the person who filled out the “To Send Money” forms was Patrick Vigneau
  5. the statement meets the definition of hearsay under Rule 801(c) because it is an out of court statement offered to prove the truth of the matter asserted in the statement

The court agreed and stated:

Whoever wrote the name “Patrick Vigneau” on the “To Send Money” forms was stating in substance: “I am Patrick Vigneau and this is my address and telephone number.”

The court ruled the forms were hearsay.

How can we get it in anyway?

Since the forms were offered to prove the truth of the statements in them, and therefore excluded by Rule 802, the court then considered whether the statements fit into any exception to the hearsay rule.  The court first considered whether the statements were admissions under Rule 801(d)(2).  Interestingly, the court treated “admissions” just like an exception: 

Of course, if there were independent evidence that the writer was Patrick Vigneau, the statements would constitute party-opponent admissions and would fall within an exception to the rule against hearsay, Fed. R. Evid. 801(d)(2) (the rule says admissions are “not hearsay,” but that is an academic refinement).

The crux of the Vigneau opinion is the court’s discussion of the foundation for the admissibility of a document under the business records exception in Rule 803(6).  Here’s a challenge for our discussion on Tuesday:

What is the court’s ruling, and which element of the foundation did the court find the government failed to meet?

We’ll leave Vigneau alone until we have had a chance to discuss it in class.  For now, let’s look at a few of the elements of the foundation required for Rule 803(6):

Who is a proper “custodian or other qualified witness” to lay this foundation?

First of all, you might not even need a witness if you can use Rule 902(11) or (12) to get the document self-authenticated.  Here’s the text of Rule 902(11):

Rule 902. Self-authentication

Extrinsic evidence of authenticity as a condition precedent to admissibility is not required with respect to the following:

(11) Certified domestic records of regularly conducted activity.  The original or a duplicate of a domestic record of regularly conducted activity that would be admissible under Rule 803(6) if accompanied by a written declaration of its custodian  or other qualified person, in a manner complying with any Act of Congress or rule prescribed by the Supreme Court pursuant to statutory authority, certifying that the record:

(A) was made at or near the time of the occurrence of the matters set forth by, or from information transmitted by, a person with knowledge of those matters;

(B) was kept in the course of the regularly conducted activity; and

(C) was made by the regularly conducted activity as a regular practice.

A party intending to offer a record into evidence under this paragraph must provide written notice of that intention to all adverse parties, and must make the record and declaration available for inspection sufficiently in advance of their offer into evidence to provide an adverse party with a fair opportunity to challenge them.

Our Book explains what this means on page 770-71 in the carry-over paragraph.  We’ll talk more about that in class too.

If you do need a witness, who does it have to be?  Our Book quotes the Seventh Circuit on page 770.  I went to the opinion itself and expanded the quote:

A qualified witness is not required, however, to have “personally participated in or observed the creation of the document,” United States v. Moore, 791 F.2d 566, 574 (7th Cir. 1986), or know who actually recorded the information, United States v. Dominguez, 835 F.2d 694, 698 (7th Cir. 1987). We broadly interpret the term “qualified witness” as requiring only someone who understands the system used. Moore, 791 F.2d at 574-75. “The witness ‘need only be someone with knowledge of the procedure governing the creation and maintenance of the type of records sought to be admitted.’ ” Dominguez, 835 F.2d at 698 (quoting United States v. Keplinger, 776 F.2d 678, 693 (7th Cir. 1985), cert. denied, 476 U.S. 1183 (1986)); United States v. Wables,731 F.2d 440, 449 (7th Cir. 1984).

Although this court has not previously examined whether a law enforcement agent may act as a “qualified witness” in this context, we and other circuits have liberally interpreted the term “qualified witness” under Rule 803(6).

United States v. Franco, 874 F.2d 1136, 1139 (7th Cir. 1989).

Personal Knowledge?

What does Rule 803(6) mean when it says “… a person with knowledge … ?”  Keep this very simple, the “personal knowledge” requirement applies to the person who records the data in the record, not to the “custodian or other qualified witness” who testifies to the elements of the foundation.  This comes up in Vigneau, which we’ll discuss more later.

What about trustworthiness?

The rule says:

… unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.

This passage gives lawyers a chance to make creative arguments, and calls on the trial judge to use discretion.  The indication of a lack of trustworthiness most often discussed is that the document was prepared in anticipation of litigation.  In this situation, there might just be a hard and fast rule.  In United States v. Blackburn, 992 F.2d 666, 670 (4th Cir. 1993), the Fourth Circuit applied “the well-established rule that documents made in anticipation of litigation are inadmissible under the business records exception.”  The Fourth Circuit again discussed the trustworthiness of documents prepared in anticipation of litigation in Certain Underwriters at Lloyd’s, London v. Sinkovich, 232 F.3d 200, 204-05 (4th Cir. 2000):

Sinkovich also argues that the district court abused its discretion by admitting Geary’s investigative report of the accident as a business record under Fed.R.Evid. 803(6). Sinkovich maintains that Geary’s incident report lacks the requisite indicia of reliability and trustworthiness that are necessary for the business record exception to apply because the report was not made in the ordinary course of business, but instead, it was compiled with an eye towards litigation.

Reports and documents prepared in the ordinary course of business are generally presumed to be reliable and trustworthy for two reasons: “First, businesses depend on such records to conduct their own affairs; accordingly, the employees who generate them have a strong motive to be accurate and none to be deceitful. Second, routine and habitual patterns of creation lend reliability to business records.” United States v. Blackburn, 992 F.2d 666, 670 (7th Cir.1993) (citing United States v. Rich, 580 F.2d 929, 938 (9th Cir.1978)). The absence of trustworthiness is clear, however, when a report is prepared in the anticipation of litigation because the document is not for the systematic conduct and operations of the enterprise but for the primary purpose of litigating. As Blackburn, 992 F.2d at 670, points out, the Advisory Committee’s notes in § 803(6) provide in terms: “[a]bsence of routine raises lack of motivation to be accurate.” See also Palmer v. Hoffman, 318 U.S. 109, 114 (1943);  Scheerer v. Hardee’s Food Sys. Inc., 92 F.3d 702, 706-07 (8th Cir.1996) (stating that a report lacks trustworthiness because it was made with knowledge that incident could result in litigation).

The Certain Underwriters panel, which included Judge Wilkins and my former boss United States District Judge G. Ross Anderson, Jr., sitting by designation, said the facts of the case

… illustrate the often-quoted words of Judge Jerome Frank, in Hoffman v. Palmer, 129 F.2d 976, 991 (2d Cir.1942), that such documents prepared specifically for use in litigation are “dripping with motivations to misrepresent.”

I’m not sure when this gets posted, but I am writing it on the morning of July 4, and it’s time to go celebrate our Independence!  Enough Blogging for now!

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2 Comments leave one →
  1. July 5, 2011 3:14 pm

    Just a thought, but what documents aren’t prepared in anticipation of litigation. These days, there may be lots of reasons other than litigation for preparing documents and keeping business records, but one of them is almost always at least the threat of litigation.
    Example on the criminal side: Doctors are statutorily required to report child abuse. Once the mandatory reporting requirement has been triggered, it is certainly arguable that every report from that point forward is prepared in anticipation of litigation.
    Suppose my argument is a winner in the courtroom. Any ideas on how you keep the child abuser from walking out of the court room?

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  1. Hearsay—Business Records—What is the Business Duty Rule? « artofevidence

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