Considering The Admissibility Of E-Mails As FRE 803(6) Business Records

Fourth Circuit considers the admissibility of e-mails for a non-hearsay purpose and notes a disagreement among other courts on the admissibility of e-mails under the FRE 803(6) as business records; circuit concludes that "because the e-mails could not, on this record, be admitted under an exception to the hearsay rule, the district court’s failure to give the limiting jury instruction was error," however any error was harmless, in United States v. Cone, 714 F.3d 197 (4th Cir. April 15, 2013) (Nos. 11–4888, 11–4934)

The admissibility of e-mail continues as an important issue. See generally Admitting E-mail Evidence. One issue which has divided the courts is whether e-mail may be admitted as a business record under FRE 803(6). In the most recent focus on this question, the Fourth Circuit reviewed some of the recent cases.

In the case, defendant Cone collaborated with his wife, defendant Zhao, in a "scheme to import and resell counterfeit pieces of computer networking equipment." As licensed distributors of Cisco products, the defendant's business, JDC, was "contractually prohibited from purchasing Cisco products for resale from outside of the United States." Despite this limitation, over a six year period JDC imported "Cisco products (or purported Cisco products) in China for resale at considerably below the expected market price for such products and then reselling the products with a high markup. The defendants were indicted for conspiracy to traffick in counterfeit goods and labels, as well as with "importation and sale of improperly declared goods." Cone, 714 F.3d at 203.

During the trial, the government introduced evidence that several JDC customers expressed dissatisfaction "with some of the products they purchased from JDC," including emails "from JDC customers" indicating "that some clients believed they had been sold counterfeit or fake products." The defendants objected to the admission of this email evidence, which the trial judge rejected. The jury returned a verdict against the defendants and they appealed, raising as one issue that "the district court determined that the e-mails were introduced for a non-hearsay purpose, i.e., to show that Zhao and Cone were on notice that they were selling counterfeit goods, [yet] the court declined to give a limiting jury instruction to that effect and instead," simply told the jury that “the e-mails say what they say and the jury will have to decide if they're believable or not. That's their job.” The defendants contended this limiting instruction was insufficient and that its use was reversible error.

Cone, 714 F.3d at 204.

However this might be, the government urged the circuit to reject that it was an error of any consequence. The government theory was that "the statements in the e-mails could have been admitted under a hearsay exception, namely the business records exception to the hearsay rule." (citing FRE 803(6)). The circuit rejected this contention as not having sufficient persuasive force based on the record. According to the Fourth Circuit:

E-mails, however, present unique problems of recent vintage in the context of the business records exception. As one district court recently explained:
Courts are in disagreement on whether e-mails can and should fall under the business records hearsay exception. The business records exception assumes that records containing information necessary in the regular running of a business will be accurate and reliable. See Certain Underwriters at Lloyd's London v. Sinkovich, 232 F.3d 200, 204–05 (4th Cir. 2000). E-mail, however, is typically a more casual form of communication than other records usually kept in the course of business, such that it may not be appropriate to assume the same degree of accuracy and reliability. As e-mail is more commonly used to communicate business matters both internally and externally, however, more formal paper records are becoming more unusual.
Its My Party, Inc. v. Live Nation, Inc., No. JFM–09–547, 2012 WL 3655470 at *5 (D. Md. Aug.23, 2012) (unpublished). The district court in that case excluded the e-mails on the basis that the “more specificity is required regarding the party's record keeping practices to show a particular e-mail in fact constitutes a reliable business record.” Id.

While properly authenticated e-mails may be admitted into evidence under the business records exception, it would be insufficient to survive a hearsay challenge simply to say that since a business keeps and receives e-mails, then ergo all those e-mails are business records falling within the ambit of Rule 803(6)(B). “An e-mail created within a business entity does not, for that reason alone, satisfy the business records exception of the hearsay rule.” Morisseau v. DLA Piper, 532 F.Supp.2d 595, 621 n.163 (S.D.N.Y. 2008). The district court's observation that the e-mails were kept as a “regular operation of the business” is simply insufficient on that basis alone to establish a foundation for admission under Rule 803(6)(B). Accordingly, because the e-mails could not, on this record, be admitted under an exception to the hearsay rule, the district court's failure to give the limiting jury instruction was error.
Cone, 714 F.3d at 220.

Ultimately, the circuit did agree that the error in admitting the e-mails here was harmless. It noted that the "government adduced overwhelming evidence of Cone and Zhao's guilt, we cannot conclude that Cone or Zhao were prejudiced by this single error concerning a minute portion of the total evidence against them." In addition to physical evidence that the government introduced (counterfeit labels seized from Zhao's home; routers identified as counterfeit goods), the circuit noted that the defendant's own words provided a sufficient basis for concluding the error was of no account, as "the government's evidence against Cone and Zhao was more than ample, and we conclude that the district court's jury instruction with respect to certain e-mails from JDC customers was harmless beyond a reasonable doubt." Cone, 714 F.3d at 220.

The Cone decision notes that e-mails may be admissible as a business record where the requirements of the rule are met. In that case, the record did not support admission of the e-mails under the business record exception.

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