Commercial Litigation and Arbitration

Fed.R.Evid. 803(8) and Expert Testimony — Foreign Official Report

Italian prosecutors hired an accounting expert to assist them pursue Deloitte-Italy in the Parmalat case. The expert was a ‛technical consultant“ to the prosecution under Italian law, and she prepared reports that the U.S. plaintiffs sought to introduce in the U.S. proceeding, In re Parmalat Securities Litigation, 477 F.Supp.2d 637 (S.D.N.Y. 2007), pursuant to Fed.R.Evid. 803(8), which creates a hearsay exception for:

Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth (A) the activities of the office or agency, or (B) matters observed pursuant to duty imposed by law as to which matters there was a duty to report, excluding, however, in criminal cases matters observed by police officers and other law enforcement personnel, or (C) in civil actions and proceedings and against the Government in criminal cases, factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.

District Judge Lewis A. Kaplan ruled, preliminarily, that: (1) ‛Rule 803(8) is available to reports of foreign public offices and agencies that otherwise come within its terms;“ (2) he would assume — ‛despite the linguistic awkwardness and without deciding“ — that the witness ‛was a public office or agency within the meaning of the Rule;“ and (3) that fact that the expert’s report ‛contains an abundance of opinions as distinguished from factual findings, that fact alone does not warrant its exclusion.“ Therefore, the critical issue was one of reliability, under the last clause of Rule 803(8).

The Parmalat Court excluded the expert reports and materials as insufficiently reliable to satisfy Rule 803(8) for three reasons:

First, focusing on the expert’s role in the Italian proceedings: As a paid expert who had received Ђ700,000 to assist the prosecutors, and whose livelihood depended on future engagements, ‛her role here is not that of a disinterested public servant.“

Second, focusing on the basis of the her testimony (akin to a Rule 702(1) analysis): She ‛operated under substantial informational constraints,“ which included no interviews of Deloitte personnel, such that ‛she did not hear both sides of the story, a fact that renders any findings and conclusions that she did reach unreliable.

Third, focusing on the findings resulting from the limited factual investigation: ‛[A]s the Second Circuit has said, ‘before the court can presume trustworthiness for purposes of Rule 803(8)(C), it must determine that the report contains factual findings based on a factual investigation.’ ...[I]t cannot be that any investigation at all, no matter how one-sided or superficial, necessarily suffices.“

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