In consumer class action against defendant telecommunication service bundlers, alleging RICO and various state law claims, admitting declarations by employees about the defendant's routine business practice in signing up the plaintiffs for services under FRE 406, providing an inference that the standard practice had actually been carried out for summary judgment purposes; plaintiffs' objection to the declarations was sufficient and plaintiff did not need to formally ask that the declarations be struck in order to adequately preserve the matter for review, in Hancock v. American Tel. and Tel. Co., Inc., __ F.3d __ (10th Cir. Dec. 11, 2012) (No. 11-6233)
FRE 103(a) sets forth the requirements to preserve an evidentiary claims for review; FRE 406 governs the admission of evidence to show an organization's "routine practice" had been adhered to on a particular occasion. The Tenth Circuit recently noted a procedural point on the requirements for making an effective objection to this type of evidence. The case involved the use of declarations to show routine practice in a summary judgment proceeding. The circuit examined whether declarations could be used to show the absence of a disagreement about material facts on a party's motion for summary judgment. The case provides additional insight on how FRE 103 operates on a matter usually resolved on the papers, rather than at an evidentiary hearing.
In the case, a plaintiff class of consumers of bundled telecommunications services were dissatisfied with service "plagued by defects and deficiencies" that they received upon signing up with the defendant's service. The defendants sought enforcement of mandatory arbitration and forum-selection provisions in the service agreement, which would end the case in the Western District of Oklahoma federal court. Eventually, upon the defendants' motion, the trial judge dismissed the plaintiffs' claims.
Part of the plaintiffs' argument against dismissal was that "even if [d]efendants’ standard practice binds customers to the terms of service as a matter of law," there were still "factual disputes [which] preclude dismissal" of the case. In particular, the plaintiff alleged that the declarations were not competent because they were "not based on personal knowledge of [defendants telecommunications contractors] Southwestern Bell’s and BellSouth’s adherence to the standard practice." If this argument had merit, it could support the plaintiffs' position that they were not subject to the terms of the service agreement. The defendants' had submitted the declarations under FRE 406 to prove that in signing up customers "installation technicians followed the standard practice when installing Plaintiffs’ ... services and that Plaintiffs accepted the ... terms" of that agreement, including its forum-selection and arbitration clause.
The Tenth Circuit took little time finding that the declarations admissible, despite the plaintiffs' contention that the declarants had a lack of personal knowledge. The circuit noted that this type of evidence is admitted under FRE 406 “regardless of whether it is corroborated or whether there was an eyewitness.” The circuit noted that such evidence under FRE 406 was admissible "at the summary judgment stage as providing an inference that a routine practice was actually carried out." The Tenth Circuit cited a number of cases in support of this proposition, including:
- Morris v. Travelers Indem. Co. of Am., 518 F.3d 755, 761 (10th Cir. 2008) (“An affidavit from an agent that it was his usual practice to explain the various . . . coverage options constitutes relevant evidence that his conduct on the occasion he met with the insured was in conformity with that routine practice.”)
- Fed. Kemper Life Assur. Co. v. Ellis, 28 F.3d 1033, 1040 (10th Cir. 1994) (accepting testimony of an organization’s “standard operating procedure” as admissible to show adherence to that procedure on a particular occasion)
- Gould v. Winstar Commc’ns, Inc., 692 F.3d 148, 161 (2d Cir. 2012) (reversing summary judgment where a jury could infer that an employee reviewed specific documents because “she actively reviewed such documents as a matter of practice”).
The plaintiffs' objection to the declaration evidence raised an additional complexity in the case. As the circuit noted, they did not contest the merits of the declarations, but rather the competence of this evidence since the declarants had not demonstrated "personal knowledge of whether those affiliates follow the standard practice that AT&T designed," which was the basis for their admission. The circuit noted a question of whether the objection to the declarations had been adequately preserved. It noted that the
Plaintiffs did not formally move to strike Defendants’ declarations, but they did challenge the personal knowledge of the declarants when they opposed Defendants’ motions to dismiss and therefore preserved the issue. We see no reason our standard of review should differ from the motion-to-strike context. Accordingly, we review the district court’s consideration of the declarations for an abuse of discretion.Hancock, __ F.3d at __ (citing Jewell v. Life Ins. Co. of N. Am., 508 F.3d 1303, 1317 (10th Cir. 2007); Wright ex rel. Trust Co. of Kan. v. Abbott Lab., Inc., 259 F.3d 1226, 1233 (10th Cir. 2001)(“An abuse of discretion occurs where the district court clearly erred or ventured beyond the limits of permissible choice under the circumstances.”)).
The Tenth Circuit's Hancock case is relatively straight-forward matter, but does provide a quick refresher on the use and limitations of declaration evidence for summary judgment purposes.
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