Sunday, March 9, 2008
The Tenth Circuit's recent opinion in United States v. Ary, 2008 WL 565437 (10th Cir. 2008), contains a combined application of the business records exception to the rule against hearsay and the rule regarding hearsay within hearsay. In Ary, Max L. Ary was the President and Chief Executive Officer of the Kansas Cosmosphere and Space Center, a space museum in Kansas, from 1976 until his resignation in 2002. After Ary's departure, it was discovered that several artifacts from the museum were missing and that they were sold at an auction. Prosecutors believed that they could trace those sales back to Ary, which led to him being charged with wire fraud, theft of government property, transportation of stolen property, and money laundering.
After trial, Ary was convicted, based in part upon Cosmosphere's computer and paper inventory records. Ary subsequently appealed, claiming, inter alia, that these records constituted inadmissible hearsay. The prosecution countered that these records were admissible under Federal Rule of Evidence 803(6), which states, inter alia, that records kept in the course of regularly conducted business activity are admissible if certain conditions are "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."
The Tenth Circuit agreed with the prosecution. It noted that "[t]he government presented the testimony of Stephen Garner, Sharon Olson-Womack, and James Remar who all served as curators at the Cosmosphere....These witnesses established that the inventory records were prepared in the normal course of business." The problem, however, was that these curators did not create these records solely from information at the musem; instead, they sometimes had to track down invoices and documentation that came with artifacts when they were purchased.
The Tenth Circuit was thus presented with "hearsay within hearsay" under Federal Rule of Evidence 805 because the museum records and the invoices each constituted a layer of hearsay. The court, however, found that the invoices also constituted business records under Federal Rule of Evidence 803(6) because "[o]ne who provides a sales invoice is under a business duty to provide accurate information....Therefore no link in the trustworthiness chain was broken. Both the records created by the curators, and the documents upon which they relied, f[e]ll into the business records exception to the hearsay rule."
I think that the court's decision was correct as it was presented with the rare scenario where hearsay within hearsay was admissible because both layers met applicable exceptions.