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Lorraine v. Markel, 241 F.R.D. 534 (D. Md. 2007)
The Lorraines’ brought action in the District Court of Maryland to enforce a private arbitrator’s award finding that certain damages to their yacht, Chessie, was caused by a lightning strike that occurred on May 17, 2004, while the yacht was anchored in the Chesapeake Bay. Markel American Insurance Company counterclaimed to enforce the arbitrator’s award, which, in addition to concluding that certain damages to Chessie’s hull was caused by lightning, also concluded that the damage incurred was limited to an amount of $14,100, plus incidental costs. Following discovery, the parties filed cross-motions for summary judgment wherein the parties sought to confirm and enforce the arbitrator’s decision. The Chief Magistrate Judge denied both parties without prejudice because the parties had not complied with various federal rules of evidence.
The Court concluded that the parties collectively failed to consider the implications and the applicability of the federal rules of evidence with respect to the submission of electronically stored information (ESI) in support of their cross-motions for summary judgment. The Court determined that the federal rules of evidence apply to ESI for purposes of trial as well as for purposes of motions for summary judgment.
Whether ESI is admissible into evidence is determined by a collection of evidence rules that present themselves like a series of hurdles to be cleared by the proponent of the evidence. Failure to clear any of these evidentiary hurdles means that the evidence will not be admissible. Whenever ESI is offered as evidence, either at trial or in summary judgment, the following evidence rules must be considered: (1) is the ESI relevant as determined by Rule 401; (2) if relevant under Rule 401, is it authentic as required by Rule 901(a); (3) if the ESI is offered for its substantive truth, is it hearsay as defined by Rule 801, and if so, is it covered by an applicable exception under Rules 803, 804 and 807; (4) is the form of the ESI that is being offered as evidence an original or duplicate under the original writing rule, or if not, is there admissible secondary evidence to prove the content of the ESI (Rules 1001-1008); and (5) is the probative value of ESI substantially outweighed by the danger of unfair prejudice or one of the other factors identified by Rule 403, such that it should be excluded despite its relevance. These are the five distinct but interrelated evidentiary issues espoused by the Court.
Preliminarily, the process by which the admissibility of ESI is determined is governed by Rule 104, which addresses the relationship between the judge and the jury with regard to preliminary fact finding associated with the admissibility of evidence. Because Rule 104 governs the process of determining admissibility of ESI, it must be considered first. There is a significant difference between the way that Rule 104(a) and 104(b) operate. When the judge makes a preliminary determination regarding the admissibility of evidence under Rule 104(a), the Federal Rules of Evidence, except for privilege, do not apply. Typically under Rule 104(a), the judge determines whether an expert is qualified, and if so, whether his or her opinions are admissible; the existence of a privilege; and whether evidence is hearsay, and if so, if any recognized exception applies. Under Rule 104(b), the jury, not the court, makes the factual findings that determine admissibility, the facts introduced must be admissible under the rules of evidence.
The first evidentiary hurdle to overcome in establishing the admissibility of ESI is to demonstrate that it is relevant, as defined by Federal Rule of Evidence 401. The proponent of the evidence should consider all potential purposes for which it is offered, and to be prepared to articulate them to the court if the evidence is challenged. It is also important to remember that there is a distinction between the admissibility of evidence, and the weight to which it is entitled in the eyes of the fact finder. Establishing that ESI has some relevancy generally is not difficult. Counsel should be careful to articulate the multiple grounds of relevance so that evidence that might otherwise be admitted may not be excluded because “the proponent put all his or her eggs in a single evidentiary basket”, which the trial judge views as inapplicable. Once the proponent of ESI establishes its relevance and concomitant presumptive admissibility, the next step is to demonstrate that evidence is authentic.
In order for ESI to be admissible, it also must be shown to be authentic under Rule 901(a). A party seeking to admit an exhibit need only make a prima facie showing that it is what he or she claims it to be. The inability to get evidence admitted because of a failure to authenticate it almost always is a self-inflicted injury, which can be avoided by thoughtful advance preparation. Courts increasingly are demanding that proponents of evidence obtained from electronically stored information pay more attention to the foundational requirements than has been customary for introducing evidence not produced from electronic sources. The authentication requirements of Rule 901 are designed to set up a threshold preliminary standard to test the reliability of evidence, subject to later review by an opponent’s cross-examination. Factors that should be considered in evaluating the reliability of computer-based evidence include the error rate in data inputting, and the security of the systems. The degree of foundation required to authenticate computer based evidence depends on the quality and completeness of the data input, the complexity of the computer processing, the routineness of the computer operation, and the ability to test and verify the results of the computer processing. Determining what degree of foundation is appropriate in any given case is in the judgment of the court. The required foundation will vary not only with the particular circumstances but also with the individual judge.
Consideration should also be given to the ten methods identified in Rule 901(b). Although this rule addresses the requirements to authenticate electronically generated or electronically stored evidence, it is silent regarding how to do so. Rule 901(b), however; provides examples, that are non-exhaustive, of how authentication may be accomplished. The Court outlines appropriate ways to seek authentication of various electronic media such as email, Internet website postings, text messages and chat room content. The mere attachment of exhibits to motions could prove fatal if one does not provide the court with authenticating facts. Similarly, counsel should be prepared to proffer authenticating facts at the time of trial. Although courts have been lenient in applying the authenticating rules, there is a growing awareness that courts should seriously consider the accuracy and reliability of computerized evidence.
The fourth hurdle, so to speak, that must be overcome when introducing ESI is the potential application of the hearsay rule. Hearsay issues are pervasive when electronically stored and generated evidence is introduced. When analyzing the admissibility of ESI for hearsay issues, counsel should address each step of the inquiry in order: does the evidence contain a statement, made by a person, which is offered for its substantive truth, but which does not fall into the two categories of statements identified in 801(d)(1) and 801(d)(2). If, as a result of this analysis, a determination is made that the evidence is hearsay, then it is inadmissible unless it is covered by one of the exceptions found in Rules 803, 804 and 807.
If ESI has cleared the first three hurdles being shown to be relevant, authentic, and admissible under the hearsay rule or an exception thereto, it must also be admissible under the original writing rule (Rules 1001 – 1008) before it can be admitted into evidence or considered at summary judgment. When counsel intend to offer electronic evidence at trial or in support of a motion for summary judgment they must determine whether the original writing rule is applicable, and if so, they must be prepared to introduce an original, a duplicate original, or be able to demonstrate that one of the permitted forms of secondary evidence is admissible. The final evidentiary issue that must be considered in determining whether electronic evidence will be admitted is whether the probative value of the evidence is substantially outweighed by the danger of unfair prejudice, as proscribed under Rule 403 of the federal rules of evidence.
The Court’s opinion provides a comprehensive guide that will hopefully assist counsel in avoiding evidentiary pitfalls that could prove fatal to his or her case.
