Summary Evidence And Expert Evidence - No Indelible Link

In securities fraud prosecution, admitting summary evidence regarding the compensation and advances paid to defendants and investor principals when the summary evidence reflected facts and conclusions obtained by use of "only everyday reasoning rather than specialized knowledge" and where the lay witness presenting it "did not go on to offer any conclusions as to what the [summary] data meant," in United States v. Faulkenberry, __ F.3d __ (6th Cir. July 28, 2010) (Nos. 08-4233, 08-4404)

In complex or voluminous cases the use of summary evidence is often indispensable. This connection often means that as a practical matter, an expert witness is called upon to present summary evidence. It is particularly helpful where the area of expert testimony is complex or convoluted. See, e.g., United States v. Boesen, 541 F.3d 838, 848 (8th Cir. 2008) (In health care fraud prosecution, admitting summary charts of the defendant's billings over half a decade in order to show defendant's revenues, noting that the summary evidence helped the jury understand the expert's complex testimony and that the expert was subject to extensive cross-examination about the summary evidence.). But neither FRE 1006 which authorizes the presentation of summary evidence, nor its Advisory Committee Note limit summary evidence to experts. Yet confusion is often seen that summary evidence is the special provence of the expert witness. The Sixth Circuit recently addressed this impression, briefly and forcefully showing that there is no indellible link between the use of summary evidence and expert opinion testimony.

In the case, defendant Faulkenberry was charged with defrauding investors in the National Century Financial Enterprises (NCFE) securities. The NCFE purported to purchase at a discount the accounts-receivable of healthcare providers. This scheme was described as giving healthcare providers a source for immediate cash flow; "and in theory ... generated profits for NCFE in the amount of the discount and certain fees it charged the providers" for this service. The defendant was the NCFE Executive Vice-President for Client Development and after the firm's collapse, he was charged along with other executives, with securities fraud, wire fraud, conspiracy to commmit securities fraud and conspiracy to commit money laundering. At trial, the government presented evidence that the defendant and other "NCFE executives lied to investors in sales presentations; they lied to them in the governing documents for bond sales; and they lied to them in monthly investor reports that showed NCFE in full compliance" with its obligations. "This practice of deception was continuous from approximately 1995 to October 2002, when NCFE ceased operations." After his trial, the defendant was convicted by the jury and the district court entered an order for him to pay restitution in the amount of $2.4 billion dollars. Faulkenberry, __ F.3d at __.

The defendant appealed and one ground he advanced before the Sixth Circuit was that the trial judge erred in permitting the government to introduce in evidence the "testimony of prosecution witness Bernard Woolfley, who presented summary evidence regarding the compensation paid to NCFE's executives and the amount of advances wired" to certain favored principles in the NCFE scheme. "Woolfley was not designated as an expert in the case," noted the circuit and the defendant contended that the witness's testimony "should have been excluded, because it was based upon specialized knowledge and thus expert in nature." Faulkenberry, __ F.3d at __.

While expert witnesses frequently can and do serve as summary witnesses, the nature of summary evidence is not the exclusive preserve of qualified experts. According to the circuit:

"Lay testimony 'results from a process of reasoning familiar in everyday life, whereas an expert's testimony results from a process of reasoning which can be mastered only by specialists in the field.' Woolfley presented lay testimony here. Although he summarized a large amount of data, that task required only everyday reasoning rather than specialized knowledge. Moreover, Woolfley did not go on to offer any conclusions as to what the data meant: 'I have not made any independent determinations as to what is an eligible receivable or what is an ineligible receivable. The extent of my analysis has been to take the data that is in the funding system and summarize it.' So we reject this argument."
Faulkenberry, __ F.3d at __ (citing United States v. White, 492 F.3d 380, 401 (6th Cir. 2007) (internal quotation marks omitted)).

Having failed to show that summary testimony was necessarily expert testimony, the defendant then claimed "that Woolfley's testimony was improper because it was based upon documents not admitted into evidence." Apparently the defendant contended that if the witness was not an expert, he could not avail himself of the procedures like that available under FRE 705. That rule permits an expert to "testify ... without first testifying to the underlying facts or data." FRE 705. The circuit rejected that the only ground for admission of the evidence was under the expert rule: "A district court may admit summary evidence under Rule 1006 ... without admitting the underlying documents upon which the testimony is based," noted the circuit. Nothing prevented a lay witness from providing summary testimony under the FRE 1006, which admits "the conents of voluminous writings, recordings ... which cannot conveniently be examined in court" if done in the form of "a chart, summary or calculation, provided the underlying originals are made available to the others "for examination or copying, or both." Faulkenberry, __ F.3d at __ (citing United States v. Hemphill, 514 F.3d 1350, 1359 (D.C.Cir. 2008) (“the point of Rule 1006 is to avoid introducing all the documents”)).

Although not addressed by the court in Faulkenberry, in admitting summary evidence a court may be particularly focused on its role in aiding the jury understand the evidence, rather than that it is evidence itself. When this happens, it is helpful for the court to provide a limiting instruction to the jury, reminding them that the summary material or testimony is not "evidence" but rather it is an aid in assessing the underlying materials upon which the summary is based. See, e.g., United States v. Kapnison, 743 F.2d 1450, 1457–58 (10th Cir. 1984) (Admitting IRS agent's summary testimony but instructing the jury that the agent is summarizing the prosecution case based on the testimony and physical evidence admitted by the court, but that the expert was not vouching for the accuracy of the underlying testimony or physical evidence; jury instructed that the agent's expert opinion should carry only such weight as jury felt it deserved and it could be completely disregard since the charts and summary the expert presented were not evidence).

Federal Rules of Evidence