Court Opinion

ID: 6105409
Source: CourtListenerOpinion
Date Created: 2022-01-21 01:00:25.092036+00
Date Added: 2024-06-11T08:53:48.476117
License: Public Domain

Case: 20-30568     Document: 00516174177         Page: 1    Date Filed: 01/20/2022

           United States Court of Appeals
                for the Fifth Circuit                                United States Court of Appeals
                                                                              Fifth Circuit

                                                                            FILED
                                                                     January 20, 2022
                                  No. 20-30568
                                                                       Lyle W. Cayce
                                                                            Clerk

   David Weinhoffer, as liquidating trustee of Offshore Specialty
   Fabricators L.L.C.,

                                                           Plaintiff—Appellant,

                                      versus

   Davie Shoring, Incorporated,

                                                           Defendant—Appellee.

                  Appeal from the United States District Court
                     for the Eastern District of Louisiana
                           USDC No. 2:19-CV-11175

   Before Higginbotham, Southwick, and Engelhardt, Circuit
   Judges.
   Patrick E. Higginbotham, Circuit Judge:
         David Weinhoffer and Davie Shoring, Inc., dispute the terms of an
   online auction. We review whether evidence of the terms was properly
   admitted. Because the district court abused its discretion by improperly
   admitting evidence and taking judicial notice of the terms, we reverse the
   judgment of the district court and remand this case for further proceedings.
Case: 20-30568        Document: 00516174177              Page: 2       Date Filed: 01/20/2022

                                         No. 20-30568

                                               I.
           Offshore Specialty Fabricators L.L.C. (“OSF”) was subject to a
   Chapter 11 bankruptcy plan administered by liquidating trustee David
   Weinhoffer. OSF contracted with Henderson Auctions to auction off a large
   housing module. Henderson advertised and hosted the auction on its website,
   but when auction participants clicked on the link to bid, they were directed
   to Proxibid, a third-party website, where they could view the auction’s terms
   and conditions and place their bids. Among these terms was a term declaring
   that bidders would be liable for only 20% of the bid price in the event of a
   breach of contract. Instead of using the website, Warren Davie, Davie
   Shoring’s principal, placed the winning bid of $177,500 on a phone call with
   a Henderson employee. After the auction concluded, Davie Shoring refused
   to pay for the module when it proved difficult to remove from storage.
           Weinhoffer brought suit as OSF’s liquidating trustee, seeking
   recovery of Davie Shoring’s bid of $177,500. Weinhoffer’s breach of sale
   contract claim was tried in a bench trial. Davie Shoring argued that the terms
   of the auction limited the damages to 20% of the winning bid, here $35,500.
   Davie testified that he read the auction terms, including the 20% damages
   limitation, on Henderson’s website before bidding. At trial, Davie Shoring
   introduced the auction terms and conditions in two forms: (1) as an internet
   printout labeled “Exhibit 41” and (2) as an archived webpage from a website
   known as the “Wayback Machine,” an online archive of web pages. 1
           Davie Shoring introduced Exhibit 41 through the testimony of Renita
   Martin, Henderson’s office manager. However, Martin testified that Exhibit

           1
            “The Wayback Machine is an online digital archive of web pages. It is run by the
   Internet Archive, a nonprofit library in San Francisco, California.” Mojave Desert Holdings,
   LLC v. Crocs, Inc., 844 F. App’x 343, 346 n.2 (Fed. Cir. 2021).

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                                    No. 20-30568

   41 had not been in Henderson’s possession “because the auction was no
   longer up on [Henderson’s] website.” Instead, Martin searched for the
   auction terms on Proxibid’s website to produce them in response to the
   subpoena. Martin explained that even if the auction page were still live on
   Henderson’s website, the terms and conditions would only be accessible if
   one clicked on the link to Proxibid’s separate website.
          Weinhoffer objected to Exhibit 41, contending that it was irrelevant,
   unauthenticated, and hearsay. The district court ruled that Martin had
   properly authenticated Exhibit 41 because, although she was not its author,
   her job description indicated that she was a proper custodian. The district
   court also ruled that Exhibit 41 was within one of Federal Rule of Evidence
   803’s hearsay exceptions.
          Davie Shoring’s counsel requested that, in addition to admitting
   Exhibit 41, the district court take judicial notice of the same terms in an
   archived version of the Proxibid webpage, available on the Wayback
   Machine. The district court took judicial notice of the terms and conditions
   as they appeared in the archived webpage, explaining that the archived
   webpage was a “source[] whose accuracy cannot reasonably be questioned”
   under Federal Rule of Evidence 201.
          The district court relied on Exhibit 41 to determine that the “Special
   Terms” provided “plaintiff’s sole and exclusive remedy” for breach,
   limiting Weinhoffer’s recovery to 20% of Davie Shoring’s bid. The district
   court entered judgment for Weinhoffer in the amount of $35,500 plus costs.
   Weinhoffer timely appealed.
                                         II.
          “We review evidentiary rulings only for abuse of discretion and will
   reverse a judgment on the basis of evidentiary rulings only if the challenged

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                                               No. 20-30568

   ruling affects a substantial right of the party.” 2 We apply the same standard
   when reviewing a district court’s use of judicial notice. 3 “In a bench trial,
   reversal is only warranted if all of the competent evidence is insufficient to
   support the judgment, or if it affirmatively appears that the incompetent
   evidence induced the court to make an essential finding which it otherwise
   would not have made.” 4
                                                    III.
              We first address whether the admission of Exhibit 41 was proper
   under the Federal Rules of Evidence. As Exhibit 41 was not properly
   authenticated, we reverse the district court.
                                                     A.
              Authentication is a condition precedent to admissibility. 5 The party
   offering an exhibit must produce evidence sufficient to support a finding that
   the item is what the proponent claims it to be. 6 Where a website or electronic
   source is concerned, “testimony by a witness with direct knowledge of the
   source, stating that the exhibit fairly and fully reproduces it, may be enough
   to authenticate.” 7 Although a witness need not be a document’s author to
   authenticate it for purposes of Rule 901, 8 we have observed that a witness

              2
                  S. Pac. Transp. Co. v. Chabert, 973 F.2d 441, 448 (5th Cir. 1992).
              3
                  Ctr. for Biological Diversity, Inc. v. BP Am. Prod. Co., 704 F.3d 413, 422 (5th Cir.
   2013).
              4
                  S. Pac. Transp. Co., 973 F.2d at 448.
              5
                  United States v. Jackson, 636 F.3d 687, 693 (5th Cir. 2011) (citing Fed. R. Evid.
   901(a)).
              6
                  Id.
              7
                  Thompson v. Bank of America Nat. Ass’n, 783 F.3d 1022, 1027 (5th Cir. 2015).
              8
                  United States v. Duncan, 919 F.2d 981, 986 (5th Cir. 1990).

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                                            No. 20-30568

   attempting to authenticate online content as evidence was unlikely to have
   the requisite direct knowledge where that content was created and
   maintained by a third party. 9
          Martin’s testimony is the only way Davie Shoring attempted to
   authenticate Exhibit 41. However, Martin had no personal knowledge of the
   terms applicable to the auction. Martin had to search a third party’s website
   to obtain the terms because Henderson did not have them in its possession.
   Moreover, Martin’s testimony indicates that she was unfamiliar with
   Proxibid’s website and that she needed the assistance of a colleague to locate
   the terms. Thus, Martin’s authentication testimony only amounts to an
   affirmation of her memory that Exhibit 41 is what she found on the internet.
          Although the standard for authentication is low, Martin had
   inadequate direct knowledge to authenticate Exhibit 41. Davie Shoring could
   have avoided running afoul of Rule 901 by calling someone with more direct
   knowledge of Proxibid’s recordkeeping. The district court abused its
   discretion by relying on inadmissible evidence when it reduced Weinhoffer’s
   damages; we accordingly reverse its ruling.
                                                B.

          Although Exhibit 41 was inadmissible due to improper authentication,
   we write further for the benefit of the parties and the district court following
   remand. At trial, Weinhoffer’s counsel also objected to Exhibit 41 as hearsay.
   Hearsay evidence is generally inadmissible, but Rule 803 provides exceptions
   to this prohibition. 10 The district court ruled that Exhibit 41 “fits under
   Federal Rule of Evidence 803” because Martin was a proper custodian who

          9
              Thompson, 783 F.3d at 1027.
          10
               Fed. R. Evid. 803.

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   gave testimony at trial regarding the exhibit’s origins. The district court did
   not specify which exception applied, but the business records exception in
   Rule 803(6) is the only exception Davie Shoring cites on appeal.
          Rule 803(6)(D) requires that a custodian or qualified witness testify as
   to an exhibit’s ability to qualify as a business record. Weinhoffer argues that
   Martin was not a proper custodian or qualified witness for Exhibit 41. This
   Court has explained that 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.” 11 This requires the witness to be “familiar with the
   record keeping procedures of the organization” 12
          Martin is not a proper custodian or qualified witness as to Exhibit 41
   as a business record. Martin was Henderson’s employee, but Henderson did
   not have custody of the record contained in Exhibit 41; Proxibid did. Martin
   was not familiar with Proxibid’s record keeping procedures and cannot testify
   that the other requirements of the Rule 803(6) are met. Because the district
   court’s ruling that Exhibit 41 “fit under 803” was a legal error, it was an
   abuse of discretion. 13
                                                 IV.
          In addition to admitting Exhibit 41 into evidence, the district court
   took judicial notice of the terms from an archived webpage on the premise
   that the Wayback Machine constitutes a source whose accuracy cannot
   reasonably be questioned as required by Rule 201(b)(2). None of our sister
   circuits have squarely addressed whether archival internet sources like the

          11
               United States v. Iredia, 866 F.2d 114, 120 (5th Cir. 1989) (per curiam).
          12
               United States v. Brown, 553 F.3d 768, 793 (5th Cir. 2008) (internal quotations
   omitted).
          13
               Marlin v. Moody Nat. Bank, N.A., 533 F.3d 374, 377 (5th Cir. 2008).

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   Wayback Machine possess the “high degree of indisputability [that] is the
   essential prerequisite” of judicial notice. 14 A brief Federal Circuit order
   denied a motion to take judicial notice of content from the Wayback Machine
   because it was not first offered to the district court. 15 Many district courts
   have since relied on that Federal Circuit decision to justify taking judicial
   notice of an archived webpage, even though the Federal Circuit did not hold
   that taking judicial notice of archived information was appropriate. 16
   However, other district courts have held that evidence from the Wayback
   Machine “is not so reliable and self-explanatory that it may be an appropriate
   candidate for judicial notice.” 17 In this circuit, a district court found that
   documents from the Wayback Machine were not appropriate for judicial
   notice, citing the Wayback Machine’s terms of use which disclaim any
   guarantees of accuracy regarding content stored there. 18
           A more recent Federal Circuit decision discussed whether Wayback
   Machine content was publicly accessible. 19 At issue was whether an exhibit
   was authenticated as identical to the document viewed by the patent

           14
                Fed. R. Evid. 201 (advisory committee notes to the 1972 amendments).
           15
              Juniper Networks, Inc. v. Shipley, 394 F. App’x 713 (Fed. Cir. 2010). Juniper cited
   O’Toole v. Northrop Grumman Corp., 499 F.3d 1218 (10th Cir. 2007), but the object of
   judicial notice in O’Toole was historical data actively available on the defendant’s website,
   not information coming from an internet archive.
           16
             See e.g. Pohl v. MH Sub I, LLC, 332 F.R.D. 713, 716 (N.D. Fla. 2019); In re Methyl
   Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., No. 07 CIV. 10470, 2013 WL 6869410, at *4
   (S.D.N.Y. Dec. 30, 2013).
           17
           My Health, Inc. v. Gen. Elec. Co., No. 15-CV-80-JDP, 2015 WL 9474293, at *4
   (W.D. Wis. Dec. 28, 2015); see also Nassar v. Nassar, No. 3:14-CV-1501-J-34MCR, 2017
   WL 26859, at *5 (M.D. Fla. Jan. 3, 2017).
           18
             Ward v. Am. Airlines, Inc., No. 4:20-CV-00371-O, 2020 WL 8300505, at *1 (N.D.
   Tex. Oct. 16, 2020).
           19
                Valve Corp. v. Ironburg Inventions Ltd., 8 F.4th 1364 (Fed. Cir. 2021).

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   examiner and whether the exhibit could be prior art. There, the Federal
   Circuit held that judicial notice of the Wayback Machine could be used to
   establish that an otherwise authenticated exhibit was publicly accessible on
   the webpage’s archive date as determined by a patent examiner who was
   “trained and required to determine publication dates.” 20 Here, the Wayback
   Machine content containing the auction terms has not been otherwise
   authenticated.
           Beyond the context of judicial notice, our sister circuits have allowed
   district courts to rely on archived webpages where someone with personal
   knowledge of the reliability of the archive service has been authenticated
   pursuant to Rule 901. 21 This reliance on personal knowledge indicates that
   exhibits derived from these sources are not inherently or self-evidently
   reliable in the same way as documents designated as self-authenticating by
   Rule 902.
           Here, there was no testimony to authenticate the archived webpage. 22
   Our sister circuits’ decisions that the Wayback Machine is not self-
   authenticating are persuasive in the context of judicial notice. In sum, the
   district court erred in taking judicial notice of the terms because a private
   internet archive falls short of being a source whose accuracy cannot
   reasonably be questioned as required by Rule 201.

           20
                Id. at 1374–75.
           21
              See United States v. Gasperini, 894 F.3d 482, 490 (2d Cir. 2018); Specht v. Google
   Inc., 747 F.3d 929, 933 (7th Cir. 2014); United States v. Bansal, 663 F.3d 634, 667–68 (3d
   Cir. 2011).
           22
               The Wayback Machine’s “Using The Wayback Machine” webpage instructs
   users on how to request affidavits to authenticate Wayback Machine pages as “certified
   records for use in legal proceedings.” See Internet Archive, Using the Wayback Machine,
   http://help.archive.org/hc/en-us/articles/360004651732-Using-The-Wayback-Machine
   (last visited January 20, 2022).

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                                                 V.
          Finally, we turn to whether these errors affected Weinhoffer’s
   substantial rights. 23 The district court relied on Exhibit 41, judicial notice of
   the Wayback Machine, and Martin’s testimony as the primary bases for its
   decision. While the testimony of Warren Davie may have further supported
   the district court’s decision, it affirmatively appears that incompetent
   evidence induced the district court to make an essential finding regarding the
   auction terms that it otherwise would not have made. 24 Accordingly, the
   errors were not harmless and they affected Weinhoffer’s substantial rights. 25
                                                VI.
          We REVERSE the judgment of the district court and REMAND
   the case for further proceedings consistent with this opinion.

          23
               Bocanegra v. Vicmar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003).
          24
               S. Pac. Transp. Co., 973 F.2d at 448.
          25
               Carlson v. Bioremedi Therapeutic Sys., Inc., 822 F.3d 194, 202 (5th Cir. 2016).

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