The trial in this asbestos case presented a classic product ID question: Was the Defendant the distributor of asbestos-containing pipe product that Plaintiff used on jobs where he worked as a pipe layer? The evidence was thin. Plaintiff knew the pipes were asbestos cement pipes made by a particular manufacturer. But he didn’t know the distributor. And there were no records from the time to show that Defendant was, in fact, the distributor.
To ID the product, Plaintiff put up deposition testimony from his foreman on some of the jobs. The foreman testified that he saw pipe invoices. He would check them to make sure they matched delivered quantities. But he was usually in a hurry and didn’t read them thoroughly. He recalled, somewhat vaguely, that he saw Defendant’s logo—“their K and stuff”—on at least some of them.
Defendant objected on hearsay grounds, but the trial court let it in. The jury ultimately rendered a net $1.6 million verdict against Defendant.
In a 2-1 decision, the Court of Appeal reverses, holding that the testimony was hearsay without exception.
I’m not sure I fully follow the majority opinion. The foreman is testifying to his perception of the markings on the invoices. His testimony (“I saw a K and stuff”), is not itself hearsay; it is his personal perception. By repeating the contents, however, he is conveying hearsay. That said, invoices usually fall within the business records exception in Evidence Code § 1271. Plaintiff appears to have obtained facts to lay that foundation from the Defendant’s PMQ, who testified that, although he had no knowledge particular to Plaintiff’s employer, it was Defendant’s practice to send invoices to its customers and that those invoices had the company logo printed on them. If that’s the case, there’s no hearsay issue at all.
The main question, instead, would be an issue of secondary evidence: Is the foreman’s oral testimony about the contents of the invoices sufficient to prove their content? Because the invoices were destroyed at no fault of Plaintiff, the proponent of the testimony, oral testimony would seemingly be permitted under § 1523(b). If so, we’re then left with just an the issue of whether the foreman’s recollection is so vague or shaky that it is more prejudicial than probative under § 352.
That’s not how things go down here, at least in the majority opinion.
The Court first addresses whether the invoices were out-of-court statements offered for their truth. There’s some digression about whether a logo or trademark is really even a statement offered for its truth. It’s an interesting issue. If a witness says, “Plaintiff got run over by a UPS truck,” is she really recounting hearsay in the form of UPS’s logo and the trade dress applied on its trucks? Indeed, the whole point of trademarking is that words and symbols develop secondary meaning, where they signify something that they don’t literally say.
In any event, the opinion skirts the issue, suggesting that the Foreman was testifying to more than just the mark, but also the contents of the invoices themselves. That seems basically reasonable because the testimony was not just that the foreman saw defendant’s invoices, but that he saw invoices for pipe. That’s where the business records exception should probably come in.
But the Court doesn’t go there. Instead, it addresses whether the testimony falls into the party admission exception to hearsay in § 1220. The Court says it does not because there was no evidence that the testimony was a statement of Defendant.
The Court’s discussion here is rather confusing, and it is this part that principally draws the dissent. The Court gets bogged down in a debate as to whether the relevant declarant for applying the exception was the foreman or the Defendant. It ultimately holds that because no copies of the actual invoices were offered, the pertinent declarant is the foreman, who wasn’t employed by Defendant. The party admission exception thus doesn’t apply.
That doesn’t make a ton of sense. The identity of the declarant doesn’t change based on the availability of a document. As noted, the foreman’s testimony isn’t hearsay, it is recounting hearsay. So the evidence that requires an exception is the invoice, not the foreman’s recollection of it. Whether or not the invoice is actually offered into evidence does not change the identity of the declarant. That is not a hearsay issue, but a secondary evidence one.
The real party admission difficulty the majority seems to be swirling around is that the question of admissibility is the same as the ultimate factual question on the merits. I.e, if it is proven that the invoice came from Defendant, that makes it both admissible and relevant as evidence on the ultimate fact. If not, the testimony is both inadmissible hearsay and irrelevant. The circular logic of that can get tricky. If proof of Fact X is a condition to the admission of the only evidence that could prove Fact X, that certainly presents a bit of an epistemological quandry. But it is hardly unique to this case.
Indeed, the Evidence Code specifically addresses how to handle it. Under § 403(a)(4), when the identity of a speaker is a preliminary condition to admissibility, it is established for the purposes of admissibility if the proponent comes forward with sufficient evidence to sustain a finding. It is then up to the trier of fact to decide the ultimate question. The Law Revision Commission said so much when the Evidence Code was enacted back in 1965:
The admissibility of some hearsay declarations is dependent solely upon the determination that a particular declarant made the statement. Some of these exceptions to the hearsay rule—such as inconsistent statements of trial witnesses and admissions—are mentioned specifically below. Since the only preliminary fact to be determined in regard to these declarations involves the relevancy of the evidence, they should be admitted upon the introduction of evidence sufficient to sustain a finding of the preliminary fact.So the admissibility question on § 1220 comes down to whether the was enough to get a jury on whether the invoices came from Defendant. Was the foreman’s testimony about recognizing the logo, when combined with the Defendant PMQ testimony that the company did, in fact, send customers invoices, and they did, in fact, have a “K and stuff” on them, enough to get there? The trial court seemed to think so. But the opinion doesn’t address it.
The Court then reaches the Secondary Evidence issue, holding that § 1523(b) doesn’t make testimony admissible, it just makes in not inadmissible under the secondary evidence rule in § 1523(a). That, of course, is correct. But if the invoice was subject to a hearsay exception, that doesn’t end the argument.
Finally, the Court addresses an authenticity issue. Even if the secondary evidence rule permits proof of the contents of a document by oral testimony, the document’s authenticity must nonetheless be established before the oral testimony can be admitted. §§ 1401, 1521(c). The Court here holds that the foreman’s testimony, even when combined with Defendant’s PMQ, was insufficient to show authenticity because nobody testified that the invoices the foreman saw were, in fact, issued by defendant.
But again, the Court here seems to miss the point of § 403, which specifically makes the authenticity of a document subject to the lower “evidence sufficient to sustain a finding” burden. § 403(a)(3). If A testifies that a company regularly sent invoices that looked a certain way, and B testifies that he saw an invoice for the company’s product that looked that certain way, that seems like enough that a trier of fact could fairly infer that what B saw was, in fact, a company invoice.
The Court’s seeming requirement for individualized proof of the genesis of any particular document is unworkably high. Maybe that’s lost in the facts of this case, or in the reality that asbestos litigation often entails fighting about the actions of out-of-business companies in the 1970s or earlier. But even in ordinary complex business cases, trials occur years after the facts. Employees move on, retire, or disappear. When that happens, the Court’s standard would exclude from evidence even documents in a company’s own files, provided nobody were around to vouch for their specific creation. That is why under the § § §403 standard, it’s generally enough to show that documents were generated and kept in accordance with a process, and that the document at issue has indications of being so generated.
Justice Needham dissents. As noted, he thinks that the burden of showing a party admission was met and that Court's finding that the foreman was the declarant was wrong. He also disagrees with the authenticity ruling, specifically pointing out that the majority misses the light burden under § 403.
Reversed.
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