Source: http://michael-muniz-s5ur.squarespace.com/blog/2017/12/26/shareholder-and-officer-liability-for-customs-penalties-new-decision-shows-customs-taking-hard-line-courts-may-follow
Timestamp: 2019-04-23 16:32:11+00:00

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Descartes Datamyne subscribers use trade data reports for a variety of purposes – to monitor competitors’ importing activities, to detect intellectual property infringements, to spot contract breaches, and to detect wrongdoing in a variety of circumstances. In some cases, some parties may wish to use trade data reports in litigation – and that can pose problems.
The federal rules of evidence place a great emphasis on presenting original information, which can be authenticated through testimony based on personal knowledge. Hearsay – out of court statements by persons not present – are disfavored. This presents substantial challenges for parties wishing to introduce trade data reports; they are summaries of inward vessel manifest data (rather than the manifests themselves), they are reported by publishers such as Descartes Datamyne, and the party offering the report will generally not have personal knowledge of the facts set out therein. Can the reports be received into evidence, for the truth of their contents?
This issue recently came up in a Lanham Act lawsuit in Federal District Court, where the defendant was charged with falsely marking its goods as “Made in USA”. The plaintiff had reports of vessel manifest data showing that, over a period of many years, the defendant had in fact been importing the goods in question from Taiwan on multiple vessels and at several different ports of entry. Obtaining the individual manifests, and the testimony of the shippers, vessel captains and other knowledgeable parties would have been a massive, prohibitively expensive task; could the reports be admitted into evidence to prove that the defendants had been importing?
(17) Market reports, commercial publications. Market quotations, tabulations, lists, directories, or other published compilations, regularly used and relied upon by the public or by persons in particular occupations.
Descartes Datamyne reports are compilations of official government records, namely inward foreign vessel manifests submitted to United States Customs and Border Protection. Section 4.7(a) of the Customs Regulations [19 C.F.R. §4.7(a)] requires vessel masters to submit these manifests to CBP, typically by electronic filing in advance of entry via the agency’s Advance Manifest System (AMS). See id., §4.7(b). Such manifests are submitted under penalty of civil and criminal sanctions for false statements or failure to provide truthful statements. See 19 C.F.R. §4.3a.
The Freedom of Information Act in conjunction with the U.S. Customs regulations authorizes press documents to copy certain official shipping documents, such as manifests and bills of lading and make them available to the public. The  reporters mentioned in [the publisher’s] affidavit collect import and export information from all U.S. ports of as contained on bills of lading, vessel manifests, and other official documents, submitted by steamship companies to the U.S. Customs Service. Additionally, [the publisher] has access to U.S. Customs Service Automated Manifest System data tapes. These official documents are made at or near the time by (or from information transmitted by) a person with knowledge and are kept in the course of regularly conducted shipping activity. It is the regular practice of the shipping industry to keep such records and information.
Vessel manifest data summaries are similar to the kind of records as those found admissible under FRE 803(17) by Third Circuit under FRE 803(17) in United States v. Woods4, where the Circuit Court found that a database used by the National Insurance Crime Bureau, showing the location where vehicles, identified by Vehicle Identification Number (VIN) were manufactured, could be used to show that a vehicle had been moved in interstate commerce for purposes of proving a federal carjacking offense. While expressing doubt that the database was admissible as a business record under FRE 803(6), the Third Circuit noted that it was admissible under FRE 803(17). The court indicated that the hearsay exception of FRE 803(17) was predicated on the two factors of necessity and reliability. “Necessity lies in the fact that if this evidence is to be obtained, it must come from the compilation, since the task of finding every person who had a hand in making the report would be impossible. Reliability is assured because the compilers know that their work will be consulted; if it is inaccurate, the public or the trade will cease consulting their product”5.
Getting vessel manifest reports admitted into evidence may be a key to proving or defending a case in litigation. However, most courts are not familiar with these reports, their provenance, or how they are compiled. If the party offering the report is not prepared to give a clear explanation of what the report is, and why it should be admitted, the court may not admit it.
A litigant seeking to have a manifest report admitted should be prepared to have a clear and concise explanation for the court of what the records purport to show, and why they should be admitted as an exception to the rule against hearsay, under Federal Rule of Evidence 803(17). A statement from the publisher explaining how the reports are generated – the source material, the methods in which the data is gathered and presented – can also be helpful. But the effort is more than worthwhile; it can save considerable cost and effort, and may often help the litigant carry the day.
John M. Peterson is a Partner at Neville Peterson LLP, New York City, Washington D.C. and Seattle. He can be reached at (212) 635-2730 or at mailto:jpeterson@npwny.com.
The opinions expressed in this article are those of its author and do not purport to reflect the opinions or views or Descartes Datamyne. In addition, this article is for general information purposes only and it’s not intended to provide legal advice or opinions of any kind and my not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely on this article without first seeking appropriate legal or other professional advice.
1 See United States ex rel. Doe v. Staples, 774 F.3d 83 (D.C. Cir. 2014)(vessel manifest records covered by publication bar to False Claims Act).
2 21 S.W. 3d 707 (Tx. App. 2000).
3 21 S.W. 3d at 716.
4 321 F.3d 361 (3d Cir. 2002).
5 321 F.3d 361, 364, citing 5 Weinstein’s Federal Evidence §803.19(2002).

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