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RULE 803(6) THE

BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE

By
Edward X. Clinton, Jr.
The Law Offices of Edward X. Clinton, P.C.
30 North LaSalle Street, Suite 3400
Chicago, IL 60602

Obtaining the admission of business records is a often a


critical component of any trial. Under Rule 803(6) if a
document qualifies as a business record, it is not hearsay. The
rule applies whether or not the declarant is available as a
witness. The Rule presupposes that a business will have strong
incentives to keep accurate records. Timberlake Construction
Co. v. U.S. Fidelity and Guaranty Co., 71 F.3d 335 (10th Cir.
1995). I will discuss several recent decisions discussing the
admission of business records.
I. The Rule
The Rule defines a business record as "a memorandum,
report, record, or data compilations, in any form, of acts,
events, conditions, opinions, or diagnoses, made at or near the
time by, or from information transmitted by, a person with
knowledge." Rule 803(6) is not limited to businesses. The Rule
specifies that "the term 'business' as used in this paragraph
includes business, institution, association, profession,
occupation, and calling of every kind, whether or not conducted
for profit." Rule 803(6).

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A business record is admissible if it is "kept in the
course of a regularly conducted business activity, and if it was
the regular practice of that business activity to make the
[record]." Id. A business record is not admissible where "the
source of information or the method of circumstances of
preparation indicate lack of trustworthiness." Rule 803(6).
The Ninth Circuit summarizes the Rule's requirements as
follows: "a business record is admissible when (1) it is made
or based on information transmitted by a person with knowledge
at or near the time of the transaction; (2) in the ordinary
course of business; and (3) is trustworthy, with neither the
source of information nor method or circumstances of preparation
indicating a lack of trustworthiness." The Monotype Corporation
PLC v. Int'l Typeface Corp., 43 F.3d 443, 449 n.6 (9th Cir.
1994).
II. Regularly Conducted Business Activity
The key foundational inquiry is whether the document was
prepared in the course of "a regularly conducted business
activity." The document must concern business activity. In
Hargett v. National Westminster Bank, 78 F.3d 836 (2d Cir.
1996), plaintiff, an african-american, was terminated from his
position as an executive of the defendant bank after he
allegedly retained a stripper to perform at an office meeting.
Plaintiff alleged that he was terminated by reason of his race.
At trial, he sought to introduce a handwritten note allegedly

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prepared by a co-employee of the defendant bank in which the co-
employee admitted that he had procured the services of the
stripper. The note was unsigned. The district court denied
plaintiff's offer of admission because plaintiff could not
establish a foundation for its admissibility as a business
record. Indeed, it is hard to imagine that the letter was "a
record of regularly conducted activity." Moreover, plaintiff
could not offer testimony concerning when and where the
handwritten letter was prepared.
The business activity must also be regular. In The
Monotype Corporation, the defendant and plaintiff entered into a
licensing agreement to allow plaintiff to distribute several of
defendant's typefaces. Plaintiff developed several typefaces
independently and began selling them to purchasers. Defendant
claimed that plaintiff's typefaces were copies of its typefaces.
Plaintiff sued to bar defendant from making such claims to
plaintiff's customers, including Microsoft. At trial, defendant
sought to admit a report prepared by an employee of plaintiff's
customer Microsoft concerning the similarities in several
typefaces sold by plaintiff and defendant. The report was not a
business record because it was not Microsoft's regular practice
to prepare such reports. Id. at 449-50 (also excluding an
electronic mail message which was a one-time event).
III. The Chain Of Knowledge
The proponent must establish a chain of knowledge.

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According to Weinstein's Evidence, "Each participant in the
chain producing the record -- from the initial observer-reporter
to the final entrant -- must be acting in the course of the
regularly conducted business." 4 Jack B Weinstein & Margaret A.
Berger, Weinstein's Evidence P803(6) [04] (1994). In United
States v. Warren, 42 F.3d 647 (D.C. Cir. 1994), the defendant
was found in a room containing drugs and a handgun. The
defendant sought to introduce a statement from a police report
that two other occupants of the apartment were dealing drugs and
carried handguns. The police report did not qualify as a
business record because the defendant could not show that the
report's author had personal knowledge concerning the activity
of the other occupants of the apartment or had based the
statement on information provided to him by a person with
personal knowledge acting in the regular course of business.
Id. at 656.

IV. The Custodian's Knowledge

The custodian of business records need not have detailed


knowledge concerning who prepared a particular business record.
The custodian need only show that he is "sufficiently familiar
with the business practice" of the business and show that the
record was made pursuant to that practice. Phoenix Associates
III v. Stone, 60 F.3d 95 (2d Cir. 1995). In Phoenix Associates,
the plaintiffs claimed that they had an oral contract with

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defendant. At trial, plaintiffs sought to introduce a record of
a wire transfer to substantiate the claimed oral contract.
Plaintiff's witness, its records custodian, testified that
plaintiff's accounting department regularly compiled records of
every wire transfer it received or issued. The district court
denied plaintiff's offer of the exhibit on the ground that the
records custodian worked for both the plaintiff and another
company which made the wire transfer. The Court of appeals
reversed. The custodian's source of employment was irrelevant
"as long as his testimony can supply a sufficient foundation."
Id. at 101. Moreover, the custodian was not required to
demonstrate personal knowledge of the actual creation of the
document. Nor was he required to identify the specific employee
who prepared the document. The Rule required only that the
proponent prove that the business entity's regular practice was
to obtain the information from the person who created the
document. Id.
V. Is The Document Trustworthy?
The Rule requires the court to determine whether the source
of the information or the method or circumstances of the
preparation of a document cast doubt on its trustworthiness. In
Hoselton v. Metz Banking Co., 48 F.3d 1056 (8th Cir. 1995),
plaintiffs, minority shareholders in defendant's business,
claimed that defendants breached their fiduciary duties when
they were excluded from a sale of the business to a third party.

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Notes taken by plaintiffs' accountant were properly admissible
because they were prepared in the regular course of the
accountant's activity. The notes appeared to be trustworthy
because the accountant had professional duties to his clients
which would give him strong motivation to make accurate notes.
Id. at 1061.
Information provided by the customers of a business can
create problems under the Rule because many businesses do not
verify information received from customers. Such information
may be admissible under Rule 803(6) if the proponent can show
that "the business entity has adequate verification or other
assurance of accuracy of the information provided by the outside
person." United States v. McIntyre, 997 F.2d 687 (10th Cir.
1993), cert. denied, 114 S.Ct. 736 (1994). In McIntyre, the
court listed two ways to demonstrate reliability: (1) proof
that the business has a policy of verifying patrons' identities
by examining their credit cards and other forms of
identification; or (2) "proof that the business possesses
'sufficient self-interest in the accuracy of the [record]' to
justify an inference of trustworthiness." United States v.
Cestnik, 36 F.3d 904, 908 (10th Cir. 1994) (quoting McIntyre,
997 F.2d 687, 700 (10th Cir. 1993). In McIntyre, the court held
it was improper to admit a hotel's guest registration cards
because it was unclear whether the hotel had procedures to
verify the accuracy of the cards. 997 F.2d at 701.

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VI. Documents Prepared In Anticipation of Litigation
Documents prepared in anticipation of litigation are
usually not admissible because they were not prepared in the
regular course of business. Timberlake Construction Co., 71
F.3d 335; Fed. R. Evid. 803(6) Advisory Committee Note. In
Timberlake Construction, the plaintiff claimed that the
defendant insurer wrongfully denied insurance coverage. At
trial, plaintiff introduced several letters written by
plaintiff's president and by plaintiff's attorney containing
legal conclusions claiming the existence of insurance coverage.
The court of appeals reversed on the ground that the letters
were written in anticipation of litigation and therefore did not
fall within Rule 803(6).
However, an auditor's report prepared in anticipation of
litigation may also qualify as a business record. In United
States v. Frazier, 53 F.3d 1105 (10th Cir. 1995), the defendant
was convicted of falsely describing his use of government funds
on official forms. At trial, the Government admitted the report
of a government auditor as a business record. The defendant
objected that the report was prepared in anticipation of
litigation. The court found that the report was trustworthy
because the auditor prepared it pursuant to a contract with the
government, the auditor had ten years experience in preparing
that type of audit report and the auditor was a "neutral party"
who had "nothing to gain" from litigation against the defendant.

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Id. at 1110.
VII. Laying A Foundation
The lawyer seeking to admit the business record must,
however, lay a foundation that the record was, in fact a
business record. A recent Seventh Circuit case discusses the
requirement that a foundation be laid. In United States v.
Adrianoros, 578 F.3d 703 (7th Cir. 2009), the Government obtained
the admission of a summary of telephone and bank records of the
illegal activity. The Government called a policeman to testify
that he obtained records by serving a subpoena. The Government
sought to admit the records under FRE 1006, which allows a party
to present, and enter into evidence, a summary of voluminous
writings, recordings or photographs. However, the Seventh
Circuit held that the records were improperly admitted because
there was no testimony to establish that the records were kept
in the course of regularly conducted business activity and there
was no certification by the custodian of the records. Thus, no
foundation was laid.
A foundation must even be laid in the summary judgment
context. The party seeking admission of the business record
need not have secured the deposition testimony of the records
custodian. The proponent of the document must establish
sufficient indicia of reliability. Thanongsinh v. Board of
Education, 462 F.3d 762 (7th Cir. 2006).
VIII. Specific Types of Documents

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1. Laboratory Reports
It is well established that a laboratory report identifying
a substance as a narcotic is admissible as a business record
because such reports are routinely prepared by government lab
technicians. United States v. Roulette, 75 F.3d 418 (8th Cir.
1996). Additionally, in Roulette, the defendant argued that
under the Confrontation Clause, the government should be
required to provide proof of the unavailability of the lab
technician when admitting the report. The court disagreed
reasoning that the exception to the hearsay rule was "firmly
rooted." Id. See also Sherman v. Scott, 62 F.3d 136, 140-41
(5th Cir. 1995).
2. Computer Records
Computer business records are admissible if (1) they are
kept pursuant to a routine procedure designed to assure their
accuracy, (2) they are created for motives that tend to assure
accuracy (e.g., not including those prepared for litigation),
and (3) they are not themselves mere accumulations of hearsay."
United States v. Hernandez, 913 F.2d 1506, 1512 (10th Cir.
1990), cert. denied, 499 U.S. 908 (1991). Computer records are
thus treated no differently than other business records.
VIII. Conclusion
The business records exception is commonly used to admit
documents which contain hearsay declarations. The rule
presupposes that a business has strong incentives to keep

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accurate records. Thus, it is difficult to resist the admission
of a business record, unless the record was prepared in
anticipation of litigation or its trustworthiness can be
legitimately questioned.

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