Courts have worked to construct rules for use before and during trial that ensure only true business records—that is, records of regularly conducted activity that carry an air of trustworthiness and reliability—are admitted into evidence, while avoiding admission of day-to-day communications and other documents that cannot be categorized as business records. This avoids the frequent trial demand of classifying every single company document, including emails, charts, memoranda and marketing brochures, as a “business record” for purpose of introducing evidence. This article discusses the current state of the law under the Federal Rules of Evidence, and provides guidance for attorneys seeking to admit or defend against the omnibus admission of various categories of corporate documents.
The Rule as It Has Always Been
Courts, including those in the U.S. Court of Appeals for the Third Circuit, have generally rejected a categorical rule that all documents or emails originating or received by employees of a corporate party that are kept in the normal course of business are admissible as business records as in Roberts Technology Group v. Curwood, No. 16-3079 (E.D. Pa. May 17, 2016), Rogers v. Oregon Trail Electric Consumers, No. 2:2010cv01337 (D.Or. May 8, 2012); In re Oil Spill by the Oil Rig Deepwater Horizonin the Gulf of Mexico, on April 20, 2012, MDL 2179 (E.D. La. Jan. 11, 2012); American Home Assurance v. Greater Omaha Packing, No. 15-1313, (D. Neb. Apr. 14, 2014). Though some counsel at trial might seek to admit every record produced in litigation, skilled attorneys will preliminarily work to position important documents as business records through deposition testimony of company witnesses or by otherwise laying a proper foundation. This approach makes sense, as even the Federal Rules limit the scope of the business records exception to those documents that were made at or near the time of an occurrence by someone with knowledge of the occurrence, and were kept in the course of a regularly conducted activity where making the record was a regular practice of that activity.
As with all exceptions to the hearsay rules, trustworthiness is the key inquiry and should be, at least in part, the focus of foundation and authentication questioning related to business records. Fed. R. Evid. 803(6) specifically limits application of the exception in cases where the source of the information or method of preparation indicates a lack of trustworthiness. “The rationale for the business records exception is that business records are reliable due to the qualities of regularity of record-keeping, the fact that they are relied upon in business, and the fact that employees have a duty and incentive to produce reliable records.” Emails and digitally maintained documents produced during discovery rarely qualify based on this rationale or meet the trustworthiness standards necessary to justify admission. The vast majority of documents, which are created “solely at the author’s discretion raise motivational concerns and lack the reliability and trustworthiness that business records are ordinarily assumed to have.” Westfed Holdings v. United States, 55 Fed. C1. 544, 566 (Ct.Cl. 2003) (citing McCormick on Evidence, Section 288, at 257), 407 F.3d 1352 (Fed. Cir. 2005). Because of the inherent lack of trustworthiness, it is incumbent upon an attorney seeking to admit documents as business records to confirm the regularity of the record-keeping, demonstrate that the documents or emails are relied upon by corporate employees, and establish that corporate employees felt a duty to produce reliable records. To add to the challenge, in the age of digital communication, multiple courts have imposed restrictions above and beyond those outlined in the Federal Rules.
Restrictions in the Digital Age
One common requirement applied by several courts to avoid wholesale admission of documents or emails produced by corporate parties is to require the party seeking admission to demonstrate that the company imposed a business duty on its employees to make and maintain the document the party is seeking to introduce, as in Atrium Companies v. ESR Associates, 4:11-cv-01288 (S.D. Tex. Oct. 29, 2012); Canatxx Gas Storage v. Silverhawk Capital Partners, No. 4:2006cv01330, (S.D. Tex. May 8, 2008); see also Standard Oil v. Moore, 251 F.2d 188, 215 (9th Cir. 1957) (“A memorandum or record cannot be considered as having been made in the ‘regular course’ of business … unless it was made pursuant to established company procedures for the systematic or routine and timely making and preserving of company records.”). The proponent of business record has to show that it was not drafted, sent, or received casually, nor was its creation an isolated incident. The inquiry requires a case-by-case analysis. The court is tasked with determining whether the producing party had a policy or imposed a business duty on its employees to report or record the information within the email or document and whether the email or document was a direct result of that policy or duty. See also Marine Power Holding, v. Malibu Boats, No. 2:2014cv00912, (E.D. La. Aug. 8, 2016), (the district court reiterated the framework outlined in Deepwater Horizon). “If the information within an email or document pertains to a transaction or report of an isolated sporadic nature that is not within the scope of what the email [or document] sender or recipient regularly does to engage in business, the exception does not apply.”
Other courts have applied a slightly different approach, requiring specific evidence demonstrating that any emails or documents a party intends to introduce into evidence was part of the company’s normal practices and governed by a company policy. Under this standard, the proponent must show specific evidence that the documents are regular business records, are part of the normal business practice, and are governed by a particular policy regarding retention of the documents or creation of the documents. (“We have no basis to find the emails are regular business records of the protected accounts. We also have no basis to find the emails received by RTG are part of its normal business practices and governed by a policy. RTG show no retention email or electronic data policy.”) The proponent may also be required to specifically show the party’s recordkeeping practices to demonstrate that a particular email or document in fact constitutes a reliable business record, as in It’s My Party v. Live Nation, CIV. JFM-09-547, (D. Md. Aug. 23, 2012).
Ultimately, “whether a particular record qualifies for the business records exception hinges upon the content and preparation of the record.” Attorneys seeking to admit company documents or emails as business records will likely find themselves frustrated if they fail to make an effort to define important documents as business records during the lead up to trial. Similarly, attorneys seeking to exclude company documents or emails should be aware of the characteristics necessary for a document or email to be admitted to defend against its admission. The following list provides important characteristics of business records which courts may consider:
- Whether the record was made near the time of the occurrence it records by someone with knowledge of the occurrence.
- Whether the record was kept in the course of a regularly conducted activity where making the record was a regular practice of that activity.
- Whether the record was part of regular record keeping or alternatively, whether the record’s creation was an isolated incident not part of a normal business practice.
- Whether the producing party had a policy or imposed a business duty on its employees to report or record the information within the document and whether the creation or retention of the document was a direct result of that policy or duty.
- Whether the employee creating the record had a duty and incentive to produce a reliable record.
- Whether the record was created solely at the author’s discretion.
- Whether the record was drafted, sent, or received casually.
- Whether the information in the record was relied upon by the company.
- Whether the record contains otherwise trustworthy information.
Maintaining the Status Quo
As companies continue to increase the quantity of data they maintain, and as document and data collections and productions become even more massive, courts will have to regularly confront arguments that all documents maintained and produced by corporate parties are admissible as a matter of course. The question of whether emails and other company documents should fall under the business records exception to the hearsay rules is not a settled area of law, especially as employees and agents communicate or create records using different media and methods. Courts must remain vigilant in excluding documents that do not hold the same expectation of trustworthiness as true business records and attorneys must understand the characteristics of business records to lay a proper foundation to admit true business records. “The best approach,” as outlined by Rogers, Deepwater Horizon, and others is to hold emails, and ostensibly all other digital documents produced by a corporate parties, to the standards outlined in the Federal Rules and require evidence of a measure of trustworthiness before any company document is admitted.
Michael C. Zogby is a partner in the products liability and mass tort department at Drinker Biddle & Reath, and he is co-lead of the firm’s pharma and life sciences industry group. His products liability trial practice includes the defense of major pharmaceutical and medical device companies in products liability, negligence, failure to warn, strict liability design and manufacturing defect, and wrongful death actions.
Shane O’Connell is an associate in the products liability and mass tort department at the firm. His practice focuses on the defense of large scale multi-jurisdictional pharmaceutical and biomedical device cases throughout all stages of litigation and settlement.