Court Opinion

ID: 8925245
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:37:46.294852+00
Date Added: 2024-06-11T17:09:23.360796
License: Public Domain

REINHARDT, Circuit Judge,
concurring and dissenting:
I concur fully in sections IV and V of the majority’s opinion. I also agree that the district court erred in refusing to admit the audit reports under Rule 703 and that the reports were admissible under that rule to show the basis for the auditor’s opinion. I dissent from the majority’s inexplicable decision to remand the case to the district court so that it may reconsider its alternative holding that if the audit is admissible the appellants shall prevail with respect to certain specified claims.1
Appellants specifically moved, inter alia, for admission of the audit reports under Rule 703. There is no question that if the audit reports qualified under that rule, as we all agree they did, they would be admitted for the particular, limited purpose permitted under the rule. That was apparent to the attorneys making the motion, those opposing the motion and also, we must assume, to the district judge. As the majority acknowledges, the appellants argued in the district court that the audit reports were admissible under Rule 70S “as a basis of the expert’s testimony.” (Majority Opinion, p. 1258.) The district judge held that the reports were not admissible under that rule, but that if they were the appellants would prevail. The majority says that the district judge held that the audit reports were not “fully admissible” under Rule 703. The district judge held no such thing. Instead, she held only that they were not admissible under a rule that contemplates admission for a limited purpose — to establish the basis of the expert’s opinion. Thus the majority’s decision to remand so that the district court may determine what to do now that we have held that the audit reports are admissible for the very purpose contemplated by Rule 703 is, in my view, wholly unwarranted. The district court has already made that determination in its alternative decision, and there is not even a colorable basis for reversing it. In offering the district court a chance to reconsider its alternative decision, when there is no legal reason for a remand, the majority, in my opinion, exceeds its authority.
I also dissent from the majority’s conclusion that the audit reports are inadmissible under Rule 1006. The audit here was a normal, run of the mill trust fund audit conducted by Touche Ross, one of the Big Eight accounting firms. The strictures the majority suggests are applicable to the admissibility of such audits would render trust fund actions against delinquent or dishonest employers impractical. I believe, however, that despite these implications the opinion will be readily distinguishable and of limited future applicability because of its dependence on the factual assump*1265tions and speculative hypotheses set forth in footnote 9.
The majority’s expectations with regard to the specific knowledge possessed by a supervising auditor run counter to the purpose of permitting testimony by supervisors. Followed to its logical conclusion, the majority’s approach would require auditing firms to offer as witnesses all of the numerous current and former employees who participated in the audit. Such is clearly contrary to the well-established law in this circuit and elsewhere. See, e.g., United States v. Soulard, 730 F.2d 1292 (9th Cir.1984) (IRS agent permitted to testify on basis of bank deposit analysis conducted by others); In re Japanese Electronic Products, 723 F.2d 238, 277 (3d Cir. 1983) (economic consultant may reasonably rely upon reports by his own consulting firm); American Universal Insurance Co. v. Falzone, 644 F.2d 65, 66 (1st Cir.1981) (fire marshal permitted to testify on basis of report prepared by a team of investigators under his supervision); United States v. Morrison, 531 F.2d 1089, 1094-95 (1st Cir.1976), cert. denied, 429 U.S. 837, 97 S.Ct. 104, 50 L.Ed.2d 103 (1976) (FBI gambling expert permitted to testify on the basis of an analysis of the betting slips and records of an illegal gambling operation that he supervised and validated but which was performed by others); cf. Navel Orange Administrative Committee v. Exeter Orange Co., 722 F.2d 449, 453 (9th Cir. 1983) (the head of an administrative agency may testify on basis of agency investigation that he did not participate in). Again, however, the majority opinion should be limited to the peculiar, if not necessarily accurate, “facts” upon which it relies. See Majority Opinion footnotes 9 and 10.
When an expert testifies on the basis of a study conducted by someone else, there is no requirement that he have personal knowledge of the details surrounding its undertaking. Similarly, when the expert is the supervisor of the study, there is no reason to exclude a study which forms the basis of his expert testimony simply because the expert is himself unfamiliar with certain details surrounding the actual research done. It therefore follows that the questions raised by the defendants regarding alleged imperfections in the audits, which they claim that the supervisor could not adequately explain because he did not conduct the audits himself, should be directed to the weight and sufficiency to be accorded the audits by the factfinder rather than to their admissibility. There are many ways in which the defendants could, at trial, have pursued the question of the accuracy of the audits. For example, defendants have suggested no reason why they could not have called the individuals who performed the actual work as witnesses, if they were not satisfied with the supervisor’s responses to their questions. Alternatively, the defendants could have ordered their own audit of the records, or they could have called their own expert witness to dispute the findings of the Touche Ross audit.
Finally, I would note that while the majority holds that the audit reports are based on inadmissible hearsay because the auditors did not limit themselves to looking at records but obtained certain preliminary information by talking to employer and union representatives, the defendant vigorously argued in the district court that the audits were inaccurate because the auditors did not talk to enough people. My disagreement with the majority as to how the oral information obtained by the auditor should be categorized is hardly a matter worth pursuing here. My colleagues and I simply read the record and analyze the facts differently. Nevertheless, in light of the arguments the employer’s counsel made below, the irony of a reversal on the hearsay ground will surely not escape him.
It would be sufficient to find the audit reports admissible under either Rule 703 or Rule 1006. I express no view concerning the applicability of Rule 803(6) except to note that it is patently clear that the audits were not prepared for the purpose of litigation. Until the audit was performed, the trust fund could not know with any certain*1266ty that it was owed any monies, let alone that the defendant would refuse to pay.
I would affirm the district court’s alternative decision, but would reverse and remand the remaining portions of its original decision for the reasons given by the majority in sections IV and V of its opinion.

. The district court made alternate findings of fact and conclusions of law "in the event that the court’s ruling on the admissibility of the audit and the Section 302 defense are reversed on appeal.”