Thursday, October 7, 2010
Federal Rule of Evidence 803(8)(C) provides an exception to the rule against hearsay for
Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth...in civil actions and proceedings and against the Government in criminal cases, factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.
In its opinion in Beech Aircraft Corp. v. Rainey, 488 U.S. 153 (1988), the Supreme Court found that Rule 803(8)(C) covers not only factual findings but also factually based conclusions and opinions contained in public reports. But does the Rule also cover legal opinions in such reports? That was the question addressed by the recent opinion of the Ninth Circuit in Sullivan v. Dollar Tree Stores, Inc., 2010 WL 3733576 (9th Cir. 2010).
In Sullivan, Christina Sullivan, the Plaintiff, was the full-time Store Manager of the Pasco Factory 2-U store. Factory 2-U, however, eventually filed for Chapter 11 bankruptcy, and a bankruptcy court approved the sale of Factory 2-U's existing leasehold on the Pasco store to Dollar Tree. Sullivan thereafter filled out an application for employment with Dollar Tree, and Dollar Tree hired her as an assistant manager of the soon-to-be-opened Dollar Tree store at the same Pasco location.
From September 2004 until May 2005, Plaintiff worked as assistant manager at the Pasco Dollar Tree without incident. In May 2005, Plaintiff's mother experienced serious health problems, and Plaintiff provided assistance and care for her. Dollar Tree granted Plaintiff some amount of unpaid leave but less than Plaintiff requested. Plaintiff either quit or was fired in late May or June 2005.
Plaintiff eventually contacted the [Department of Labor] [("DOL")], which initiated an investigation of whether Dollar Tree had violated the [Family and Medical Leave Act [("FMLA")]. The DOL concluded that Dollar Tree's actions had violated the FMLA and informed the parties of its conclusion. During the negotiations that followed, Dollar Tree offered Plaintiff reinstatement to her former position at the Pasco store, a partial payment of $5,000 toward lost wages, and certain other benefits such as accrued sick leave. Although Plaintiff had sought more than $20,000 in lost wages, she accepted the offer and began work again on April 14, 2006.
After her reinstatement, Plaintiff continued working at the Pasco Dollar Tree store until she quit voluntarily in December 2006. Soon thereafter, Plaintiff filed [an] action in federal court seeking the full amount of her lost wages.
A key issue in the action was whether Dollar Tree was a successor in interest to Factory 2-U for FMLA purposes, and the DOL report stated in relevant part that
Dollar Tree Stores, Inc., a covered employer, is considered a "successor in interest" to the covered employer Factory 2-U Stores, Inc. The circumstances of the transition that occurred between the two companies coincide with six out of eight factors that determine a "successor in interest." These factors are: 1) the same retail business operation continued; 2) the same rental space was used; 3) most of the same personnel continued to work; 4) the store continued to employ retail salespeople who worked during regular hours; 5) the same supervisory personnel continued with the opening of the Dollar Tree store; and 6) the products continued to include clothing along with other personal, gift and household items.
The district court found that this portion of the report was inadmissible hearsay because Federal Rule of Evidence 803(8)(C) does not cover legal conclusions, found that Dollar Tree was not a successor in interest under the FMLA, and granted summary judgment to Dollar Tree.
Sullivan thereafter appealed, and the Ninth Circuit noted that in Rainey, the Supreme Court found that Federal Rule of Evidence 803(8)(C) covers factually based conclusions and opinions but "express[ed] no opinion on whether legal conclusions contained in an official report are admissible as "findings of fact" under Rule 803(8)(C). The court then noted that
Only one circuit court has addressed that open question at any length. In Hines v. Brandon Steel Decks, Inc., 886 F.2d 299, 302 (11th Cir.1989), the Eleventh Circuit held that "Rule 803(8)(C) does not provide for the admissibility of the legal conclusions contained within an otherwise admissible public report." "Legal conclusions are inadmissible because the jury would have no way of knowing whether the preparer of the report was cognizant of the requirements underlying the legal conclusion and, if not, whether the preparer might have a higher or lower standard than the law requires."...That court "caution[ed], however, that the amorphous line between ‘factual’ and ‘legal’ conclusions may obscure a practical analysis under this rubric."...The Fourth Circuit has agreed, albeit without analysis. See Zeus Enters., Inc. v. Alphin Aircraft, Inc., 190 F.3d 238, 243 (4th Cir .1999) (“The NTSB order involved no factual determinations and was strictly a legal ruling. As such, the NTSB order was not admissible under Rule 803(8)(C).").
The Ninth Circuit decided to agree with these courts, concluding that
Pure legal conclusions are not admissible as factual findings. In the context of a summary judgment motion, a conclusion of law by a third-party investigator does not, by itself, create a genuine issue of material fact for the obvious reason that a legal conclusion is not a factual statement and for the reasons explained by the Eleventh Circuit.