United States v. James M. Laster (99-6244) and Jerry Lear (99-6247)

MOORE, Circuit Judge,

dissenting.

Laster and Lear argue that the district court erred in admitting certain business records into evidence. The majority agrees with Lear and Laster that these business records were not properly admitted into evidence under the business records exception to the hearsay rule, Fed. R.Evid. 803(6), because the government failed to lay a proper foundation. The majority concludes, however, that the court below properly admitted these records under the residual exception to the hearsay rule, Fed.R.Evid. 807. For the reasons explained below, I respectfully dissent from this holding.

The residual exception, Rule 807, reads in relevant part:

A statement not specifically covered by Rule 803 or 804 but having equivalent circumstantial guarantees of trustworthiness, is not excluded by the hearsay rule, if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rales and the interests of justice will best be served by admission of the statement into evidence.

Fed.R.Evid. 807. Despite the plain language of the rale, which states that it applies only to statements “not specifically covered by Rule 803 or Rule 804,” some courts have applied Rule 807 to statements not admissible under either Rule 803 or 804. Under this approach, out-of-court statements inadmissible under either Rule 803 or 804 may still be admissible under Rule 807, even when they are of a sort “specifically covered” by Rule 803 or 804, if they possess “equivalent circumstantial guarantees of trustworthiness.” Thus, for example, although grand jury testimony is arguably former testimony, and thus specifically covered (and inadmissible) under Rule 804(b)(1), a number of circuits, including this one, have held that the grand jury testimony of an unavailable witness is admissible under the residual exception when it bears the “equivalent circumstantial guarantees of trustworthiness.” See United States v. Barlow, 693 F.2d 954, 961-63 (6th Cir.1982), cert. denied, 461 U.S. 945 , 103 S.Ct. 2124 , 77 L.Ed.2d 1304 (1983). See also, e.g., United States v. *533 Earles, 113 F.3d 796, 800 (8th Cir.1997) (holding that grand jury testimony, although inadmissible under other hearsay exceptions, “may ... be considered for admission under the catch-all exception”), cert. denied, 522 U.S. 1075 , 118 S.Ct. 851 , 139 L.Ed.2d 752 (1998); United States v. Marchini, 797 F.2d 759, 764 (9th Cir.1986) (holding that grand jury testimony was admissible under the residual exception), cert. denied, 479 U.S. 1085 , 107 S.Ct. 1288 , 94 L.Ed.2d 145 (1987). But see United States v. Vigoa, 656 F.Supp. 1499, 1506 (D.N.J.1987) (concluding “that admission of grand jury testimony under [the residual exception] is a perversion of the Federal Rules of Evidence and should not be condoned”), aff 'd, 857 F.2d 1467 (3d Cir.1988).

The contrary (minority) view of the residual exception is that the residual exception means what it says-i.e., that it applies to those exceptional cases in which an established exception to the hearsay rule does not apply but in which circumstantial guarantees of trustworthiness, equivalent to those existing for the established hearsay exceptions, are present. See Conoco Inc. v. Dep’t of Energy, 99 F.3d 387, 392-93 (Fed.Cir.1997) (holding that summaries by certain purchasers, made long after the purchases had been made, were not admissible under the residual exception because such summaries were not as trustworthy as either business records, which are covered by Fed.R.Evid. 803(6), or market reports and commercial publications, covered by Fed.R.Evid. 803(17)). Not only is this minority approach consistent with the plain language of the rule, see United States v. Dent, 984 F.2d 1453, 1465-66 (7th Cir.) (Easterbrook, J., concurring, joined by Bauer, C.J.) (“Rule [807] reads more naturally if we understand the introductory clause to mean that evidence of a kind specifically addressed (“covered”) by one of the ... other [exceptions] must satisfy the conditions laid down for its admission, and that other kinds of evidence not covered (because the drafters could not be exhaustive) are admissible if the evidence is approximately as reliable as evidence that would be admissible under the specific [exceptions].”), cert. denied, 510 U.S. 858 , 114 S.Ct. 169 , 126 L.Ed.2d 129 (1993), but it is also consistent with the legislative history of the residual exception, see S.Rep. No. 93-1277, at 20 (1974), reprinted in 1974 U.S.C.C.A.N. 7051, 7066 (“It is intended that the residual hearsay exceptions will be used very rarely, and only in exceptional circumstances. The committee does not intend to establish a broad license for trial judges to admit hearsay statements that do not fall within one of the other exceptions contained in rules 803 and 804[ ].”) (emphases added), and the original Advisory Committee Note to Rule 807’s predecessors, see Fed.R.Evid. 803(24), Advisory Committee Note (1975 Adoption) (repealed 1997) (“It would ... be presumptuous to assume that all possible desirable exceptions to the hearsay rule have been catalogued.... Exception (24) and its companion provision ... are accordingly included. They do not contemplate an unfettered exercise of judicial discretion, but they do provide for treating new and presently unanticipated situations which demonstrate a trustworthiness within the spirit of the specifically stated exceptions.”) (emphasis added). 1

*534 This plain-language interpretation of the residual exception is sometimes described by its detractors as the “near-miss theory” of the residual exception: “[t]he doctrine that a ‘near miss’ under a specified exception ... renders evidence inadmissible under [the] residual exception.” United States v. Clarke, 2 F.3d 81, 84 (4th Cir.1993), ce rt. denied, 510 U.S. 1166 , 114 S.Ct. 1194 , 127 L.Ed.2d 544 (1994). In the same vein, however, the majority approach might be called the “close-enough” theory of the residual exception, i.e., the doctrine that hearsay is admissible under the residual exception even when it just misses admissibility under an established exception. Such an approach makes little sense given the listing of explicit hearsay exceptions in Rules 803 and 804, exceptions that the drafters of the residual exception thought sufficient to cover anticipated (in other words, common) hearsay situations. See United States v. Turner, 104 F.3d 217, 221 (8th Cir.1997) (“Allowing Turner to introduce the medical texts under [the residual exception], when Federal Rule of Evidence 803(18) specifically deals with the admissibility of this type of evidence, would circumvent the general purposes of the rules.”).

The majority today rejects, in sweeping fashion, the plain-language interpretation of the residual exception. In doing so, it goes far beyond this circuit’s prior holding in Barlow . For present purposes, Barlow stands for the rather narrow proposition that grand jury testimony may be admissible, in certain circumstances, under the residual hearsay exception. Barlow, 693 F.2d at 961-63 . In the present case, the majority adopts, as a general rule apparently covering every hearsay exception, the “close-enough” reasoning of Earles and similar cases. It does so without discussion of the structure of the hearsay exceptions, the legislative history of the residual exception, or the specific hearsay exception at issue in the present case, the business records exception.

Given the plain language of Rule 807, the language and structure of Rules 803 and 804, and the legislative history of the Federal Rules of Evidence, this holding is badly flawed. Moreover, special considerations counsel against holding that the business records in this ease were admissible under the residual hearsay exception. The business records at issue here were improperly admitted under the business records exception because, as the majority correctly concludes, Acquisto was unable to lay the proper foundation for their admission. The government, in short, did not produce a sponsoring witness satisfying the already low standard of United States v. Hathaway, 798 F.2d 902, 906 (6th Cir.1986) (“[A]ll that is required is that the [sponsoring] witness be familiar with the record keeping system.”).

This lack of a foundation for the admission of the business records is irrelevant, however, under the majority’s holding. The residual exception, after all, is always available under the majority’s theory for the admission of hearsay evidence inadmissible under the other specific hearsay exceptions, including the business records exception. The majority’s holding thus appears to make it unnecessary ever to call a sponsoring witness to establish the admissibility of business records, at least so long *535 as there is “ ‘no indication’ that the records [are] not reliable.” This cannot be squared with the language of Rule 803(6), which requires “the testimony of the custodian [of the records] or other qualified witness” to vouch for the existence of the other elements of the business records exception. Nor is it clear how, as a general matter, business records introduced without the testimony of a qualified sponsoring witness can be said to have “circumstantial guarantees of trustworthiness” equivalent to those that exist when a qualified sponsoring witness testifies to the trustworthiness of the records in question.

In sum, under the majority’s “close-enough” approach, the residual exception swallows all the other exceptions, as well as the rule. This court should not join the other circuits in expanding the residual hearsay exception to cover hearsay situations clearly anticipated by the drafters of the Federal Rules of Evidence. It should certainly not do so in the present case, in which an established hearsay exception clearly applied but rendered the documents inadmissible.

. See also 3 Stephen A. Saltzburg, Michael M. Martin, & Daniel J. Capra, Federal Rules of Evidence Manual 1931 (7th ed. 1998) ("Unfortunately, the intent of the drafters has often been ignored.... A broad application of the residual exception could permit the case-by-case exception to swallow the categorical rules.”); Daniel J. Capra, Case Law Divergence from the Federal Rules of Evidence, 197 F.R.D. 531 , 534, 543 (2000) ("Rule [807] permits the admission of residual hearsay only if that hearsay is 'not specifically covered' by *534 another exception. This might seem to indicate that hearsay that 'nearly misses' one of the established exceptions should not be admissible as residual hearsay, because it is specifically covered by, and yet not admissible under, another exception. In fact, however, most courts have construed the term 'not specifically covered’ by another hearsay exception to mean 'not admissible under’ another hearsay exception.”) (citing the majority view as an ''Example! 1 of Case Law in Conflict with the Text of the Rule, the Committee Note, or Both”).