Saturday, September 13, 2008
Taking The Bait: 7th Circuit Finds That A "Bait Money" List Is Admissible Under The Business Records Exception
I agree with the Seventh Circuit's application of the business records exception to the rule against hearsay to a "bait money" list in United States v. LeShore, 2008 WL 4173086 (7th Cir. 2008). LeShore dealt with the robbery of the First Source Bank in Fort Wayne, Indiana, by men wearing white cloth masks. The defendant James LeShore was later linked to this robbery in part through the recovery of "bait money" from a bag that was in his possession.
The term "bait money" refers to a packet of bills the serial numbers of which a bank pre-records. The bank does not circulate the bait money, and the only way it leaves the bank is if it is stolen; consequently, if a bill from a bait money list turns up, it was most likely stolen at some point. In order to prove that the money recovered from LeShore's bag was "bait money" from the bank, the prosecution introduced into evidence a bait money list of all the "bait money" that was in the bank at the time of the subject robbery.
On LeShore's appeal, the Seventh Circuit found that the trial court did not err in admitting this evidence. It first noted that "[a] bait money list is a writing offered to prove the truth of the matter asserted-that the money in evidence was part of a bait money pack," making it classic hearsay under Federal Rule of Evidence 801. The court then, however, found that the bait money list qualified for admission as a business record 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...."
LeShore countered, among other things, that:
"even though the bank regularly kept this record, it was irregularly compiled (in this case, remade): a new list was made only after the theft (or loss) of an existing bait money packet. By its very nature, therefore, LeShore argue[d], a bait money list cannot be regularly compiled. Compilations are generated only when a robber gets away with the old packet."
The Seventh Circuit, however, rejected this argument, finding that:
"This argument overstates the spirit of both the rule and the exception. The chief concern with hearsay evidence is that it lacks sufficient indicia of reliability. Even though the bank did not compile its bait money list regularly, it verified the list three times per year. The Advisory Committee indicated that regular verification is one of the indicia of reliability that gave business records the status of a freestanding exception in the first place....Indeed, all of the factors suggested by the Advisory Committee as central to the justification for the exception are met in this case: systematic checking, regularity and continuity (giving rise to precision), actual reliance by the business, and compilation and verification by someone whose duty it is to do so."
I agree with the Seventh Circuit's explanation of the spirit of the business record exception. I think that the provision of the Advisory Committee Note cited by the court is the one that states that "[t]he element of unusual reliability of business records is said variously to be supplied by systematic checking, by regularity and continuity which produce habits of precision, by actual experience of business in relying upon them, or by a duty to make an accurate record as part of a continuing job or occupation." Based upon the facts cited by the court, it seems like all of these elements were satisfied. The ruling also seems consistent with precedent from other circuits. See, e.g., United States v. Davis, 542 F.2d 743, 745-46 (8th Cir. 1976) ("The bank's bait money list was introduced by the government over the objection of Davis through the testimony of an auditor of the Little Rock bank. The document was accepted as a business record in accordance with Fed.R.Evid. 803(6).").
Readers who are aware that the business records exception generally does not allow for the admission of accident reports might wonder how this situation is different. Well, an accident report is only made after an accident, meaning that there are reliability concerns because the business could lie in the report to understate its liability and/or overstate the liability of someone outside the business, especially if that report could be admissible in the trial over that accident. In the "bait money" situation, however, while the bank re-makes its "bank money" list after a robbery, it is the list in existence at the time of the robbery that the bank seeks to introduce, obviating any reliability concerns.