Opinion ID: 70425
Heading Depth: 1
Heading Rank: 2

Heading: sufficiency of the evidence

Text: The Commission contends that the district court erred in granting Dizona's motion for judgment as a matter of law. This Court reviews a district court's grant of judgment as a matter of law de novo, applying the same legal standard as the district court. Price v. Marathon Cheese Corp., 119 F.3d 330, 333 (5th Cir. 1997). Judgment as a matter of law is appropriate after a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue. Fed.R.Civ.P. 50(a). In evaluating such a motion, the court must consider all of the evidence in the light most favorable to the nonmovant, drawing all factual inferences in favor of the non-moving party, and leaving credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts to the jury. Price, 119 F.3d at 333. Although the court should review the record as a whole, it must disregard all evidence favorable to the moving party that the jury is not required to believe  that is, the Court should give credence to the evidence favoring the nonmovant as well as that evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 151, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (internal quotations omitted). The Commission argues that the district court erred in setting aside the jury's verdict that Dizona had attempted to manipulate the market price of a commodity in interstate commerce in violation of 7 U.S.C. § 13(a)(2). Section 13(a)(2) forbids [a]ny person to manipulate the market or attempt to manipulate the price of any commodity in interstate commerce. The jury found that, on eight occasions, Dizona had attempted to manipulate the market price of natural gas in interstate commerce. The district court set aside the verdict, finding, among other things, that the evidence did not prove that Dizona committed an act that violated § 13(a)(2); instead, it stated that the evidence demonstrated that Dizona was simply giving in-house estimates to his superiors. The Commission sharply disputes this characterization of the evidence. Although the Commission acknowledges that Dizona provided Dyer his in-house estimates, which are his trader's marks on prices, those estimates were not the basis for the charge of attempted manipulation. The Commission asserts that the evidence shows that after Dyer received the traders' marks, she would respond by email with index directions (good and bad). The charge is that, after receiving the index directions, Dizona would report biased price and volume trade data with respect to his natural gas trades in accordance with Dyer's directions. The Commission further asserts that this data was labeled and intended to be treated as actual trade data  not as in-house estimates. The Commission contends that there is a wealth of evidence to support the jury's verdict. The Commission asserts that Dizona's reported trades were almost always false and were consistently biased in favor of price changes that would profit his employer. The Commission points to the audiotape of Dizona volunteering to falsify trade data for Carol Taylor, a trader in Canada. The Commission relies on Kaminski's testimony that a comparison of the trading data contained in trial exhibit 27 with data reported to the natural gas publications revealed that most of the reported data was false. The Commission also relies on a forensic e-mail trail demonstrating Dizona's role in submitting the data and its proffer of Dizona's interrogatory admissions that he sent trading data to the index compilers. In response, Dizona counters that the district court did not err in granting his motion for judgment as a matter of law because there was insufficient evidence to sustain the jury's verdict once the hearsay evidence has been excised. Dizona contends that certain exhibits the Commission submitted into evidence constitute hearsay and that this objection was preserved in district court. As Dizona asserts, in deciding whether [a judgment as a matter of law] should have been awarded, [we] must first excise inadmissible evidence; such evidence `contributes nothing to a legally sufficient evidentiary basis.' Hodges v. Mack Trucks, Inc., 474 F.3d 188, 193 (5th Cir.2006) (quoting Weisgram v. Marley, 528 U.S. 440, 454, 120 S.Ct. 1011, 145 L.Ed.2d 958 (2000)). Thus, we must determine whether the evidence was properly admitted before the jury. We review a district court's evidentiary ruling for abuse of discretion. United States v. Dixon, 132 F.3d 192, 197-98 (5th Cir.1997). It is undisputed that Coral produced the evidence in question pursuant to a subpoena issued by the Commission. Exhibits numbered 17 through 24 included the emails from the analyst to the traders and the emails forwarding the attached spreadsheet with their reported trades and their marks. Exhibit 27 is an Excel spreadsheet that Coral produced in response to a subpoena for the record of Coral's trades during the relevant time period. [2] During a pretrial hearing, Dizona objected to the admission of these exhibits, asserting that the Commission had failed to demonstrate that the evidence met the business records exception to the hearsay rule pursuant to Rule 803(6) of the Federal Rules of Evidence. Dizona's counsel objected as follows: We contend they are not business records. They were not kept in the ordinary course of business. They were not kept by someone. They don't meet any of the criteria of [Rule] 803(6) or (7). The district court responded: I might agree with you, but I don't think that's the criteria for admission and that's why I've overruled it. Although it is clear that the district court overruled the hearsay objection, the basis for admission is unclear. [3] Subsequently, at trial, Dizona objected to Exhibit 27 during the testimony of Mary Kaminski. Dizona's counsel again objected based on hearsay and relevance. During a conference at the bench, the court inquired regarding who compiled the document, and the Commission's attorney asserted that Coral's information technology department compiled Exhibit 27. Dizona's attorney responded, countering No, it was not, your Honor. [4] The court then stated let's just assume that that's true. The Commission's attorney then stated that: Coral maintains a database of trades and that system is, I believe, the Endure system. And in order to develop this Excel spreadsheet, they downloaded information directly out of Endure into this Excel spreadsheet. The attorney's assertions appear to attempt to lay the foundation for admission based upon the business records exception to the hearsay rule under Rule 803(6). However, as Dizona has argued, counsel's assertions do not constitute evidence and thus cannot lay the foundation for Rule 803(6). Dizona asserts that because the Commission did not call a Coral employee with personal knowledge to establish the documents as business records under Rule 803 of the Federal Rules of Evidence, the evidence was hearsay. With respect to Rule 803(6), [t]he exception requires that either the custodian of the business records or `other qualified witness' lay a foundation before the records are admitted. United States v. Brown, 553 F.3d 768, 792 (5th Cir.2008). However, [t]here is no requirement that the witness who lays the foundation be the author of the record or be able to personally attest to its accuracy. Id. (footnote and internal quotation marks omitted). A qualified witness is one who can explain the record keeping system of the organization and vouch that the requirements of Rule 803(6) are met. Id. (footnote and internal quotation marks omitted). Rule 803(6) provides, in pertinent part, that: A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record or data compilation, all as shown by the testimony of the custodian or other qualified witness, ... unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. In the case at bar, Kaminski, the Commission's investigator, testified only as a summary witness. [5] Kaminski did not interview any Coral employee or have any knowledge regarding the keeping of the records. On cross examination, Kaminski admitted that she did not know whether the spreadsheet was made at or near the time of the trade. She also admitted that she did not know whether the spreadsheet was made by a person with knowledge of the trade. She had no information about how the record was produced. Kaminski testified that her only previous experience with natural gas commodities was as a broker trading these commodities over the phone. Indeed, she had never investigated an irregularity in natural gas trading during her time with the Commission. Moreover, the district court instructed the jury that Kaminski's testimony is not independent evidence of the subject matter and is only as valid and reliable as the underlying admitted evidence it purports to summarize. Under those circumstances, Kaminski, in her role as a summary witness, was not a qualified witness who could explain Coral's record keeping system and vouch that the requirements of the rule had been met. See Brown, 553 F.3d at 792-93 (explaining that although the expert witness had undisputed knowledge and expertise with respect to the business's computer program, the expert was not a qualified witness under Rule 803(6) because he had no knowledge of the business's record keeping procedures or practices). We therefore conclude that the exhibits were not properly admitted under Rule 803(6). [6] Nonetheless, in its reply brief and at oral argument before this Court, the Commission asserted that because it did not rely on the evidence to establish the truth of the matter asserted, the evidence did not constitute hearsay. More specifically, the Commission asserted that the entries Dizona made in the spreadsheets in Exhibits 17 through 24 were false and thus, it was not offering those exhibits to prove the truth of the matter asserted. However, even assuming arguendo that assertion is correct, it does not apply to Exhibit 27, the spreadsheet that Coral produced in response to a subpoena for information regarding trades during the relevant time period. Kaminski compared the actual trade data in that spreadsheet with the data reported to the natural gas publications to demonstrate that Dizona had submitted false information. Indeed, in its brief, the Commission contends that there is a wealth of evidence that supports the jury's verdict, stating that [t]here was the comparison of the trading data contained in ... Exhibit 27 ... with Coral's reported data to Inside FERC and NGI. Therefore, contrary to the Commission's assertion, Exhibit 27 was offered for to prove the truth of the matter asserted. We recognize that prior to trial the Commission filed a motion requesting the district court to find that Dizona had waived his objections to the authenticity of the Commission's exhibits. Pursuant to Southern District Local Rule 44.1, the district court found that Dizona had waived his authenticity objections. [7] However, we do not interpret the district court's ruling as finding that the exhibits had been authenticated for purposes of Rule 803(6). [8] In any event, in the context of Rule 803(6), this Court has explained that authentication alone is not enough. United States v. Robinson, 700 F.2d 205, 210 (5th Cir.1983). In Robinson, the defendant objected to the admission of handwritten notes that had been taken during a county board of supervisors meeting. Id. The notes had been introduced along with a packet of county documents through the county records custodian. Id. This Court explained that, although the notes had been properly authenticated, [f]or the notes to be admissible under Rule 803(6), the government also had to establish that `it was the regular practice of that business activity' to have the notes made. Id. (quoting Rule 803(6)). Because the government failed to do so, this Court found that the notes should not have been admitted. Id. In the instant case, there was no showing that it was Coral's regular practice to make Exhibit 27. Accordingly, the authentication ruling standing alone is insufficient to meet the requirements of Rule 803(6). We therefore conclude that the district court abused its discretion in admitting Exhibit 27. We must now determine whether the evidence is sufficient to support the jury's verdict without considering Exhibit 27. As previously set forth, in addition to the summary witness's testimony, the Commission called Dr. Ronn as an expert who testified that the West Desk reported in a way that would positively affect Coral's earnings, as indicated by Dyer's good indicators, approximately 81 percent of the time. On cross examination, when specifically asked whether he had analyzed Dizona's individual trades, Dr. Ronn responded: In my testimony this afternoon, those locations were the trading locations for which the defendant was responsible. So, I don't know if that's responsive to your question or not. Dr. Ronn further explained that his report was for the West Trading Desk as a whole. The numbers I reported this afternoon were specific to the locations of the defendant. It appears that to the extent that Dr. Ronn considered the individual traders' data, he grouped Dizona's and Harp's trades. Indeed, Dr. Ronn testified that although he attributed certain trades to Dizona, he was not exactly clear on the relationship of Mr. Harp and Mr. Dizona. I have a sense that they worked together, and so that sense is what caused me to put this together as I did in Table 4. When asked whether he could tell this jury whether this gentleman that's on trial here made any entry onto a spreadsheet, Dr. Ronn responded that he cannot. Additionally, as previously set forth, the Commission submitted two audiotapes of phone calls in which Dizona was discussing trade data that he would report to the index compilers. Dizona's statements on the audiotape are incriminating but too vague to sufficiently support the jury's finding that he attempted to manipulate the price of natural gas on eight occasions. Under our de novo review, we are not persuaded that Dr. Ronn's general finding of biased reporting at Coral's West Desk and Dizona's incriminating statements on the audiotape are sufficient to demonstrate that Dizona made false entries into the spreadsheets that were sent to the publications. With this evidence alone, the Commission cannot show that Dizona attempted to manipulate the market price of natural gas in violation of § 13(a)(2). Thus, we affirm the district court's judgment vacating the jury's verdict with respect to the attempted manipulation charge.
As previously set forth, the jury rejected the allegation that Dizona had knowingly delivered false reports that tended to affect the market price of natural gas in violation of § 13(a)(2). The Commission's theory was that Dizona sent the spread sheets containing the false trades to the natural gas publications. After the verdict, the district court denied the Commission's motion for judgment as a matter of law. As discussed in section II. A, supra, Exhibit 27 was inadmissible hearsay. Without the evidence of the actual trades in Exhibit 27, the evidence is insufficient to demonstrate that Dizona had knowingly delivered false reports that tended to affect the market price of natural gas in violation of § 13(a)(2). Thus, we affirm the district court's judgment refusing to overturn the jury verdict with respect to the delivery of false reports charge. [9] For the foregoing reasons, the district court's judgment is AFFIRMED.