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September 25, 2013 Articles

Email and the Business Records Exception

When trial rolls around, getting emails before the jury isn't always so easy

By Jason Knott

Email is a prevalent means of communication in the business world. As a consequence, it often plays a significant role in modern commercial litigation and white-collar criminal cases. In civil depositions, lawyers love to ask resistant witnesses to explain their own words, captured for eternity in electronic form. And prosecutors often use emails to put companies or individuals on the defensive.

When trial rolls around, however, getting those emails before the jury isn’t always so easy. The hearsay rule serves as one barrier to the admission of emails as evidence at trial. Under that rule, hearsay—an out-of-court statement offered in court to prove the truth of the matter asserted in the statement—is not admissible unless an exception to the rule applies. See Fed. R. Evid. 802.

For example, suppose that discovery in a caseinvolving allegations of fraud against BigBank and one of its employees, Bill, revealed the following email:

From:   [email protected]
To:       [email protected]
Re:       BigBank
I talked with Bill at BigBank yesterday. He said that he has been taking kickbacks for recommending us to government agencies. I have no idea what to do about this.

In a case against Bill and BigBank, the statement by Bill about taking kickbacks—as recited by Tom—would not be hearsay because it would be a statement by a party and offered against that party. In other words, Bill’s statement would be a party “admission” under Federal Rule of Evidence 801(d)(2). (This assumes that Bill’s statement would qualify as an “admission” by BigBank under that rule. If not, then seeking to admit the document against BigBank would open another can of worms.)

But under the hearsay rule, Tom’s email—which would be an out-of-court statement containing Bill’s out-of-court statement—could not be introduced against Bill (or against BigBank as Bill’s employer), unless an exception to the hearsay rule applied.

One possible exception that could still allow Tom’s email into evidence against Bill or BigBank is the business record exception, which is found in Federal Rule of Evidence 803(6). Lawyers sometimes have the knee-jerk reaction that all emails written in a business setting must fall within that exception. After all, the thinking goes, if Tom, a MegaCorp employee, wrote the email to a coworker, why shouldn’t it be admissible as a business record?

A number of courts have rejected this concept. For example, a 1997 case from the District of Massachusetts involved an email that was very similar to Tom’s email to Gisele. United States v. Ferber, 966 F. Supp. 90 (D. Mass. 1997). In Ferber, a Merrill Lynch employee wrote an email to his supervisor describing a conversation with the defendant in which the defendant had admitted improper dealings with government officials. The district court refused to admit the email, stating that it "is not the law" that "virtually any document found in the files of a business which pertain[s] in any way to the functioning of that business [is] admitted willy-nilly as a business record."

So, when does an email qualify as a business record subject to the hearsay exception? A recent opinion from Judge Carl Barbier in the Deepwater Horizon oil spill multidistrict litigation provides further guidance. Like the government in Ferber,the plaintiffs in the Deepwater Horizon case argued that emails written by corporate employees about their work were admissible under the business records objection. Judge Barbier disagreed, stating: “There is no across-the-board rule that all emails are admissible as business records.” In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, MDL No. 2179, 2012 WL 85447 (E.D. La. Jan. 11, 2012).

Instead, wrote Judge Barbier, whether a particular email is admissible depends on its content and the circumstances under which it was prepared. He identified five requirements that a party has to satisfy in order to show that an email is subject to the business records exception:

  1. The email must have been sent or received at or near the time of the event(s) recorded in the email.

  2. The email must have been sent by someone with knowledge of the event(s) documented in the email.

  3. "The email must have been sent or received in the course of a regular business activity, . . . which requires a case-by-case analysis of whether the producing defendant had a policy or imposed a business duty on its employee to report or record the information within the email."

  4. It "must be the producing defendant’s regular practice to send or receive emails that record the type of event(s) documented in the email."

  5. A custodian or qualified witness must attest that these conditions have been fulfilled.

Applying these factors to our hypothetical email, if Tom testified that he in fact sent the email the day after his call with Bill, that it was his duty to report to Gisele on his conversations with Bill, and that it was his regular practice to send these emails, then the email would likely be deemed admissible. By contrast, if Tom sent his email to Gisele as part of a casual exchange, the email would be unlikely to satisfy the exception. See Ferber, 966 F. Supp. at 98 (explaining that because the employee had no “business duty” to make and maintain emails recounting conversations with the defendant, the email did not qualify as business record).

As Judge Barbier’s factors demonstrate, it is important for proponents of email evidence to lay a good foundation for the admissibility of the evidence, either in advance of trial at deposition or in trial testimony. Defending lawyers, meanwhile, should address these foundational issues when preparing witnesses and should be ready to identify weaknesses in the foundation at trial.

Even if an email has the proper foundation to qualify as a business record, a court may still exclude it based on concerns that it is not trustworthy. The concept behind the business records exception to the hearsay rule is that records created in the ordinary course of business are more likely to be reliable. When other factors show that this default justification for the rule doesn’t apply, the records may be deemed untrustworthy, and as a consequence, they won’t be admitted. One example of this is when a drafter of a business record creates that record in anticipation of litigation over its subject matter. See United States v. Blackburn, 992 F.2d 666, 670 (7th Cir. 1993). Therefore, in our hypothetical, if Bill could show that Tom sent the email to Gisele as part of an effort to exculpate MegaCorp and pin the blame on Bill, the court might still exclude that particular email as untrustworthy even if it was deemed to be a business record.

Judge Barbier’s Deepwater Horizon opinion also identifies another common path to the admissibility of email evidence, which is the rule that party admissions are not hearsay. Thus, if we tweaked our hypothetical case to involve claims against MegaCorp based on its knowledge of Bill’s activities, Tom’s email could be deemed an admission by MegaCorp. If so, Tom’s statements in the email wouldn’t be hearsay. And Bill’s statement, as recited by Tom, would not be hearsay under the rule because it would not be introduced as proof of the truth of what Bill said, but instead to show that Tom was on notice that Bill at least believed that he had taken kickbacks.

The takeaway from Deepwater Horizon is that emails written in a business setting are not automatically admissible “business records” under Federal Rule of Evidence 803(6). Rather, the party seeking admission must show that the email was sent or received because of a business policy or duty to report or record the information contained in the email. If the proponent of the email cannot make this foundational showing, then the email is not a “business record.”

Keywords: litigation, trial practice, Federal Rule of Evidence 803(6), hearsay exception, party admission

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