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Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Email Admissibility — Double Hearsay Satisfied by (1) Business Record Incorporating (2) Admission — 801(d)(2)(B) Does Not Require Employee Have Ability to Bind Employer — Junior Status of Employee Goes to Weight

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In re Tribune Co., 2012 Bankr. LEXIS 1563 (Bankr. D. Del. April 9, 2012):

In preparing his response to the Bigelow Email, Peter Cohen of JPMorgan contacted another JPMorgan employee, Joachim Sonne, who advised by email:

Talked to EGI, Chris Hochschild, and he confirmed that they see their security as the most junior in the capital structure and junior to the PHONES.

(ADH Ex. 128). The parties agreed that ADH Exhibits 116 - 136 are admissible under the business records exception to hearsay (Fed.R.Evid. 803(6)). However, EGI objects to the admissibility of ADH Ex. 128 on the grounds of double hearsay, because the email contains a statement attributed to Hochschild, an analyst at EGI, who was not copied on the email and, in a recent deposition, stated that he has no recollection of making the statement. (See ADH Ex. 157 at 55:5 - 56:3). WTC argues that ADH Ex. 128 overcomes the double hearsay objections: the first layer of hearsay is overcome by the parties' agreement that the email is admissible under the business records exception, and the second layer of hearsay related to the Hochschild statement is overcome under Fed.R.Evid. 801(d)(2)(D), which provides that a statement is not hearsay if "[t]he statement is offered against an opposing party and . . .was made by the party's . . . employee on a matter within the scope of that relationship and while it existed."

Footnote 25. See Joy Global, Inc. v. Wisconsin Dept. Of Workforce Dev. (In re Joy Global, Inc.), 346 B.R. 659, 665 n. 13 (D.Del. 2006) (admitting an exhibit subject to a triple hearsay objection after deciding that each layer of hearsay was overcome by a separate hearsay exception).

I agree that Fed.R.Evid. 801(d)(2)(D) applies and that ADH Ex. 128 is admissible.

Footnote 26. EGI argues that Fed.R.Evid. 801(d)(2)(D) does not apply to ADH Ex. 128 because WTC failed to establish that the statement was within Hochschild's role and responsibilities for EGI. See McAdams v. United States, 297 Fed. App'x 183, 186 (3d Cir. 2008) (affirming lower court's exclusion of statement by VA medical center x-ray technician that the lobby floor was "like a skating rink," since the x-ray technician was not responsible for the condition or maintenance of the medical center floors), Greishaw v. Base Mfg., 2008 WL 509077, *4 (W.D. Pa. Feb. 21, 2008)(statement by accounts payable clerk held inadmissible because the clerk had no responsibility for personnel, compensation and sales commissions). William Pate, one of the leaders of EGI's team of professionals who structured and negotiated the 2007 LBO, stated that he was surprised JPMorgan would contact Hochschild on the subordination issue, rather than himself or Nils Larsen. (ADH Ex. 156 at 10:24- 11:12, 56:1 - 57:2). However, Fed.R.Evid. 801(d)(2)(D) does not require that a declarant have authority to bind its employer, but simply requires that an agent make the statement "within the scope of his or her employment. Big Apple BMW, Inc. v. BMW of North America, Inc., 91A F.2d 1358, 1372 (3d Cir. 1992) ("As the Advisory Committee noted when amending this rule, to limit its scope in this manner would preclude much probative evidence because an employer will rarely authorize it employee to make incriminating statements.").

In his deposition, Hochschild testified that he did not have a formal title at EGI, but was essentially an analyst (ADH Ex. 157 at 10:23 - 11:2) and that he "was involved in the operational due diligence [and]. . . also worked on the models and analytics around the investment." (Id. at 14:18-21). The evidence shows that in this position Hochschild had information about the framework of the deal and proposed capital structure for Tribune. (See, e.g., ADH Ex. 144 (email dated June 29, 2007 from Chandler Bigelow to Chris Hochschild with the subject heading "May 31st Debt/Cash (PF for the 1st step)", attaching financial information that includes the amount of the PHONES Notes in an entry titled "Total debt (before Zell note)")). Knowledge of information on the priority of the PHONES Notes relative to the EGI Notes was within the scope of Hochschild's responsibilities during his employment at EGI. ADH Ex. 128 is admissible, but, recognizing Hochschild's junior status, the statement in the email will be weighed accordingly.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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