Friday, September 13, 2013
Mutual Quarrel: Supreme Judicial Court of Massachusetts Finds Statistical Evidence From Computer Database Inadmissible
Federal Rule of Evidence 803(17) provides an exception to the rule against hearsay for
Market quotations, lists, directories, or other compilations that are generally relied on by the public or by persons in particular occupations.
Massachusetts does not have state rules of evidence modeled after the Federal Rules of Evidence, but it does have General Laws c. 233, § 79B, which provides an exception to the rule against hearsay for
Statements of facts of general interest to persons engaged in an occupation contained in a list, register, periodical, book or other compilation, issued to the public, shall, in the discretion of the court, if the court finds that the compilation is published for the use of persons engaged in that occupation and commonly is used and relied upon by them, be admissible in civil cases as evidence of the truth of any fact so stated.
So, when does this rule apply, and when does this rule apply? Let's take a look at the recent opinion of the Supreme Judicial Court of Massachusetts in N.E. Physical Therapy Plus, Inc. v. Liberty Mut. Ins. Co., 2013 WL 4787512 (Mass. 2013).
In N.E. Physical Therapy Plus,
After being billed by the plaintiff, N.E. Physical Therapy Plus, Inc. (NEPT), for certain medically necessary chiropractic services provided to the passenger of its insured, the defendant, Liberty Mutual Insurance Company (Liberty Mutual), maintained that the cost of those services was unreasonably high and thus refused to pay the full amount invoiced. At the ensuing trial on the dispute, Liberty Mutual sought to introduce statistical evidence from a commercial database to show that NEPT's charges exceeded the eightieth percentile of reported charges for the same procedures and were thus unreasonable.
The trial court deemed this evidence inadmissible because it was unreliable, prompting Libert Mutual's appeal. In addressing the issue, the Supreme Judicial Court of Massachusetts noted that
Two primary rationales give rise to this exception to the hearsay rule [contained in § 79B]. The first is that, as a practical matter, it would be inconvenient, if not impossible, to issue summonses for all of the authors and compilers of any given publication to testify at trial....The second is that “the trustworthiness of such lists is assured through general reliance on them by those in a particular profession, and the consequent motivation of the compiler to foster this reliance by his accuracy."...
Liberty Mutual asserted
that the judge erred in considering the reliability of the Ingenix data as a factor in his admissibility analysis. According to Liberty Mutual, if a publication satisfies the three statutory elements enumerated above it is thereby admissible, since the reliability of the publication is already sufficiently assured by the fact that it is commonly used and relied on by persons in a particular occupation....
The Massachusetts Supremes disagreed, concluding that
Such a reading of the statute...disregards both the discretion explicitly afforded the judge in the language of § 79B, and the judge's traditional role as gatekeeper of admissible evidence....
Previous decisions construing § 79B have recognized and emphasized that the statute affords a trial judge discretion to determine the admissibility of an offered publication....If the Legislature had intended evidence to be admissible, without more, upon satisfaction of the elements enumerated in the statute, it would not have included the language providing judges with discretion to determine admissibility. Where the Legislature has included such language, we are not free simply to ignore it....
Moreover, reading § 79B to preclude a judge's consideration of the reliability of evidence offered under that statute produces an absurd result insofar as, on that view, a judge would be without authority to exclude obviously flawed and unreliable data simply because it is relied upon in a given industry. Such a reading, in addition to ignoring the clear statutory language, lends itself to obvious abuse by a given industry where the use of manipulated and flawed data is in its interest....
A more straight-forward reading of § 79B recognizes that the judge has discretion as to the admissibility of the evidence, even where the evidence satisfies the preliminary statutory requirements.
The court then concluded that the trial court did not abuse its discretion in deeming the evidence unreliable and thus inadmissible.