Opinion ID: 729705
Heading Depth: 3
Heading Rank: 1

Heading: The Business Record Exception

Text: 31 The Appellants challenge the admissibility of the records under the business records exception on the ground that the cardholders were not acting in the regular course of business when they made the oral statements to the bank employees and supplied the affidavits or letters to the issuing banks. We agree with the Appellants that neither the cardholders' oral statements nor their written affidavits and letters fall within the business records exception, Fed. R. Evid. 803(6). The business records exception does, however, encompass one level of hearsay: the bank records themselves and the computer recordation by bank personnel of the oral statements of the cardholders. 32 The cardholders statements do not qualify as business records of the cardholders because the business records exception applies only if the person who makes the statement 'is himself acting in the regular course of business.' Rock v. Huffco Gas & Oil Co., Inc., 922 F.2d 272, 279 (5th Cir. 1991) (quoting Florida Canal Industries, Inc. v. Rambo, 537 F.2d 200, 202 (5th Cir. 1976)). As the Appellants correctly point out, it is not the regular course of business for credit cardholders to fill out affidavits or otherwise give information to their banks regarding stolen credit cards. See United States v. Davis, 571 F.2d 1354, 1359 (5th Cir. 1978). 33 Second, the statements are not admissible as business records of the issuing banks because of the double hearsay involved. 34 Double hearsay exists when a business record is prepared by one employee from information supplied by another employee. If both the source and the recorder of the information, as well as every other participant in the chain producing the record, are acting in the regular course of business, the multiple hearsay is excused by Rule 803(6). However, if the source of the information is an outsider, Rule 803(6) does not, by itself, permit the admission of the business record. The outsider's statement must fall within another hearsay exception to be admissible because it does not have the presumption of accuracy that statements made during the regular course of business have. 35 United States v. Baker, 224 U.S. App. D.C. 68, 693 F.2d 183, 188 (D.C. Cir. 1982) (citing United States v. Davis, 571 F.2d 1354 (5th Cir. 1978)). In the present case, the cardholders--outsiders to the companies that generated the documents--were the sources of the information contained in the records. So although Fed. R. Evid. 803(6) provides an exception for one level of hearsay--that of the documents themselves created by the employee who recorded the cardholder statements--the sources of the information contained in the records were the cardholders, and their statements must fall within another hearsay exception to be admissible. 8 See Baker, 693 F.2d at 188. 36 The Government cites many cases that affirm the admission, under the business records exception, of a company's business records containing statements provided by outsiders. These cases, however, all involve situations in which the double hearsay problem was satisfied either by the use of multiple hearsay exceptions or because the outsider who provided the statements was also acting in the regular course of business. See, e.g., United States v. Goodchild, 25 F.3d 55, 60 (1st Cir. 1994).