Commercial Litigation and Arbitration

Email Admissibility — Every Level of Hearsay Must Be Addressed — Emails Received by Reporter from Counsel to a Party, While Business Records of Reporter, Are Hearsay as to Counsel’s Statements (Admissions Not Addressed)

Am. Home Assur. Co. v. Greater Omaha Packing Co., 2014 U.S. Dist. LEXIS 51287 (D. Neb. April 14, 2014):

This matter is before the Court on the motion of the counterclaim plaintiff Greater Omaha Packing Company, Inc., (Filing No. 434) for the reconsideration of the Court's April 4, 2014, memorandum opinion (Filing No. 432) and order and judgment (Filing No. 433) dismissing its counterclaim. Briefs have been filed by all parties. Oral arguments were held on April 9, 2014.


This case involves Greater  [*2] Omaha Packing Company, Inc. ("GOPAC"), a meat supplier, and Cargill Meat Solutions Corporation. ("Cargill") a meat producer/distributer, and its insurer, American Home Assurance Company. GOPAC and three other meat suppliers delivered hamburger makings to Cargill, which in turn used the meat to produce hamburger patties. In 2007, those patties were distributed in the United States and led to an E. coli outbreak. An investigation traced the E. coli back to Cargill.

Cargill hired Shawn Stevens, Esq., to defend against the claims of those who fell ill from consuming Cargill's burgers. During the course of his defense of Cargill, Mr. Stevens became aware of facts which led Cargill to file the instant action against GOPAC for essentially supplying Cargill with meat contaminated with E. coli in violation of its contract and warranties.

Some time after this discovery in 2009, Mr. Stevens was contacted by New York Times reporter, Michael Moss. The contents of their conversations, in part, led to Mr. Moss writing a Pulitzer Prize winning article (the "Article") about the meat industry and the 2007 outbreak. In the Article, Mr. Moss attributed statements to Mr. Stevens. These statements are the  [*3] basis of GOPAC's counterclaim of tortious interference with business relationships and expectancies (hereinafter "Tortious Interference"). The lack of evidence regarding these comments is also the basis of the Court's previous order granting summary judgment on GOPAC's claim.

In its summary judgment motion, GOPAC relied upon the Article and three e-mails to establish what Mr. Stevens said to Mr. Moss. These documents contain as many as three levels of hearsay. After review of the motion, briefs, and indices of evidence, the Court determined that GOPAC lacked admissible evidence to prove "Mr. Stevens made the comments to Mr. Moss that the Article attributes to him." Filing No. 432, at 9. GOPAC has now filed a motion for reconsideration on various grounds including whether a stipulation nullifies the Court's reasoning, whether the Business Record Exception covers the hearsay statements in question, and whether the Court applied the wrong legal standard in granting summary judgment.


A.  [*5] Stipulation

The Court begins its analysis on the issue of whether the parties stipulated to the admissibility of the Article and Moss E-mails. The Court finds that Mr. Coyle and Mr. Bylund stipulated to Mr. Bylund's offer: a mutual stipulation "with respect to authentication, foundation for documents that [the parties] produced." Filing No. 364-4, at 3. Mr. Bylund's offer did not mention the Business Record Exception and the Court finds the parties did not stipulate that all documents the parties produced fell into the Business Record Exception.3

3   The Court notes GOPAC made objections to documents which GOPAC or Cargill produced in discovery on the basis of hearsay. Filing No. 403-1. It follows that if the stipulation were as broad as GOPAC asserts, GOPAC could not have made those objections.

Even if the Court found that the parties had established the Business Record Exception for all documents which Cargill produced, either by establishing the foundational elements of the exception or by stipulation, such a finding would not cover hearsay within those documents, which would require separate exceptions for each level of hearsay. See Johnson v. Lutz, 253 N.Y. 124, 128, 170 N.E. 517 (N.Y. 1930)  [*6] ("It was not intended to permit the receipt in evidence of entries based upon voluntary hearsay statements made by third parties not engaged in the business or under any duty in relation thereto."); Nissan Motor Co. v. Armstrong, 145 S.W.3d 131, 140 (Tex. 2004) ("consumer complaints in a company's files are generally hearsay within hearsay, and require their own exception in addition to that for business records generally."). The breadth of the stipulation would not extend to the second level of hearsay, the statements in the Moss E-mails, because the mere presence of e-mails in a company's server is insufficient to establish that all the contents of those e-mails fall within the Business Records Exception. E.g., In re Oil Spill, MLD No. 2179, 2012 U.S. Dist. LEXIS 3406, 2012 WL 85447, at *3 (E.D. La. Jan. 11, 2012).

B. Records of a Regularly Conducted Activity

The issue before the Court is whether Mr. Moss's statements within the e-mails are admissible hearsay. In these e-mails, Mr. Moss claims Mr. Stevens made varying statements regarding GOPAC's and Cargill's liabilities for the E. coli outbreak. See Exhibits HHH, JJJ, and VVV. GOPAC wishes to admit into evidence these out-of-court statements to prove Mr. Stevens  [*7] made these comments to Mr. Moss. Therefore, the e-mails are being offered to prove the matter asserted in the e-mails. Fed. R. Evid. 801(c)(1). The parties argue as to whether the business record exception applies to those statements.

The "Business Record Exception" is Federal Rule of Evidence 803(6). The second element of the Business Records exception requires the record was kept in the course of a regularly conducted activity of a business. Courts analyze the business of the out-of-court declarant when determining whether the out-of-court statement was made in the regular course of its business. See e.g., G. Michael Fenner, The Hearsay Rule, pp. 169-70, 172-73 (3d ed. 2013); United States v. Vigneau, 187 F.3d 70, 75 (1st Cir. 1999) (citing Johnson, 253 N.Y. 124, 170 N.E. 517)). Cargill is not the out-of-court declarant for the Moss E-mails. GOPAC has not argued and cannot establish the regularity of Mr. Moss's e-mails nor whether these e-mails are records. Thus, Exhibits JJJ, HHH, and VVV do not fall into the Business Record Exception. GOPAC does not offer, and the Court cannot find, another exception under which to allow the Moss E-mails or the Article, so those documents are inadmissible  [*8] hearsay. Therefore, the Court will not reconsider the weight of this evidence in the Court's April 4, 2014, Order.

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