By admin
In diversity suit over enforcement of Uruguayan garantia solidaria, Seventh Circuit rules that witness not timely reported on trial expert list could not offer lay opinion on alleged impairment of collateral’s value based on witness’s generalized familiarity with international tire trade where he lacked personal knowledge of relevant matters as required by Federal Rules of Evidence
Titan International, Inc. (Defendant) is an international tire maker based in Illinois. In June 1998, Defendant bought a controlling interest in Fabrica Uruguaya de Neumaticos S.A. (FUNSA), a tire manufacturer based in Uruguay. At that time, FUNSA had an existing line of credit in the amount of $5 million from Banco de la Republica Oriental del Uruguay (the bank).
FUNSA property and equipment secured the line of credit. In April 1999, Defendant asked for additional credit from the bank to fund FUNSA’s operations. The bank agreed to increase FUNSA’s line of credit by $1 million if Defendant would guarantee the increase. On April 19, 1999, Defendant executed a document called Garantia Solidaria (guarantia). Defendant agreed to serve as a surety for any debt owed to the bank by FUNSA, up to $1 million. The bank, accordingly, increased FUNSA’s line of credit; a pledge of FUNSA’s plant and equipment (the collateral) secured this new debt as well as Defendant’s guarantia.
On March 4, 2002, FUNSA declared bankruptcy under Uruguayan law. As of the date of the bankruptcy filing, FUNSA owed more than $4 million to the bank. On December 31, 2003, the bank transferred its FUNSA indebtedness to Plaintiff. This deal included all of its rights in the collateral and all of its rights against Defendant under the garantia.
The parties sought buyers for the collateral both before and after the bank transferred it to Plaintiff, but the parties could never agree on the terms of a sale. In March 2004, Plaintiff obtained a third party appraisal of the collateral. The appraiser valued the collateral at between $1.5 million and $2.3 million. On May 6, 2004, Plaintiff sold its interests in the collateral, along with a number of other outstanding notes, to a third party for $2 million. Plaintiff, however, failed to notify Defendant of this sale in advance. The third party later foreclosed on the collateral, another party bought it at public auction pursuant to Uruguayan bankruptcy law for $1 million.
With about $2 million of FUNSA’s debt left unpaid, Plaintiff then pursued other avenues of collection. First, It demanded that Defendant pay it $1 million, the amount of FUNSA’s debt that Defendant had guaranteed. Defendant, however, refused to pay under the garantia. It contended, inter alia, that Plaintiff’s failure to provide pre sale notice had impaired Defendant’s rights in the collateral that secured the debt. As a result, Plaintiff filed this federal diversity action to enforce the garantia agreement.
During discovery, the district court issued a scheduling order that required the parties to disclose all of their expert witnesses by February 3, 2006. Defendant did not disclose any expert witnesses prior to that date. On February 21, however, nearly three weeks after the expert witness disclosure deadline and days before fact discovery was set to end, Defendant served Plaintiff with two expert notices. In one, a Ricardo Olivera offered an opinion on the interpretation of Uruguayan law. In the other, a Mark Haron offered an opinion on the value of the FUNSA collateral based on his experience buying and selling tires and equipment on the worldwide tire market. Defendant did not disclose any other experts at this time.
Plaintiff moved to strike both experts’ reports as untimely disclosed. On April 21, 2006, the district court granted Plaintiff’s motion to strike Defendant’s proffered expert declarations because the delay was neither justified nor harmless. Two months later, Plaintiff moved for summary judgment. It contended that Defendant had presented no credible evidence that the value of the collateral was, in fact, greater than the price for which it had been sold; accordingly, Plaintiff claimed, Defendant could not show that its interests in the collateral had been impaired.
On June 27, 2006, Defendant filed its opposition to Plaintiff’s motion for summary judgment. As evidence of the value of the collateral, it attached an affidavit from Maurice Taylor. He was the Defendant’s President and chairman at the time that Defendant filed his affidavit. Paragraphs 8 and 9 of his affidavit asserted his opinion that the value of the FUNSA collateral exceeded $10 million. Plaintiff moved to strike paragraphs 8 and 9 of this affidavit as undisclosed expert testimony, and the district court granted its motion.
On October 19, 2006, the district court gave summary judgment to Plaintiff It held that Defendant had failed to put forth any competent evidence that either the bank or Plaintiff had impaired the value of the collateral or otherwise increased the risk to Defendant under the garantia. Defendant timely appealed.
The U.S. Court of Appeals for the Seventh Circuit affirms in a July 10 opinion. The Court explains its thinking. “We generally review for an abuse of discretion the district court’s decision to exclude expert testimony. Mannoia v. Farrow, 476 F.3d 453, 456 (7th Cir. 2007). When this decision is based on an interpretation of the Federal Rules of Evidence, however, we review de novo the court’s interpretation of the law. The district court’s classification of a witness as lay or expert is a legal interpretation that we review de novo. See United States v. Davis, 471 F.3d 783, 788 (7th Cir. 2006) (“�Legal conclusions made by the trial court in reaching the decision to admit expert testimony are reviewed de novo.’); United States v. Gray, 410 F.3d 338, 347 (7th Cir. 2005) (“�[O]ur review of whether [the witness] was properly qualified as an expert is de novo and our review of the decision to admit the testimony is for an abuse of discretion.’).”�
“Here, the district court classified Maurice Taylor’s affidavit as expert testimony under Federal Rule of Evidence 702, and therefore it was inadmissible because Defendant had not disclosed Taylor as an expert witness. Defendant contends that Taylor’s testimony should have been characterized as lay opinion testimony under Rule 701, not as expert testimony under Rule 702, and, therefore, it was not required to disclose Taylor as an expert witness prior to the scheduled date.”�
“Rule 701 provides: “�If the witness is not testifying as an expert, the witness’s testimony in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness, (b) helpful to a clear understanding of the witness’ testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.’”�
“Defendant contends that Taylor’s testimony was based on his “�extensive experience purchasing and selling used Tire and Wheel manufacturing equipment on the world market,’ … but not on any specialized or scientific techniques or processes of reasoning that can be mastered only by specialists in the field. In Defendant’s view, therefore, Taylor’s opinion was based on his own perceptions of, and experience in, buying and selling the equipment in question. According to Defendant, Taylor’s testimony was “�quintessential Rule 701 testimony’ regarding “�the value of his property.’ United States v. Conn, 297 F.3d 548, 554 n. 2 (7th Cir. 2002) (quoting Asplundh Mfg. Div. v. Benton Harbor Eng’g, 57 F.3d 1190, 1198 (3d Cir. 1995)).”� [Slip op. 3].
“In support of its position, Defendant relies on a number of cases from other circuits that permit business owners or officers to testify without being qualified as experts. See Asplundh, supra at 1198 (noting that a maintenance supervisor was competent to testify as to the cause of an accident when he had personally inspected the damaged parts); Lightning Lube v. Witco, 4 F.3d 1153, 1174 (3d Cir. 1993) (holding that the owner of a small business may testify as a lay witness regarding the projected future profits of his business); State v. Brown, 836 S.W.2d 530, 549 50 (Tenn. 1992) (holding that a nurse may testify as a lay witness about the nature of injuries she personally observed).”�
“The Advisory Committee notes to Rule 701 explain, however, that a business owner or officer is allowed to testify without being qualified as an expert only because that testimony is tied to his or her personal knowledge: “�[M]ost courts have permitted the owner or officer of a business to testify to the value or projected profits of the business, without the necessity of qualifying the witness as an accountant, appraiser, or similar expert. See, e.g., Lightning Lube, Inc. v. Witco Corp. 4 F.3d 1153 (3d Cir. 1993) (no abuse of discretion in permitting the plaintiff’s owner to give lay opinion testimony as to damages, as it was based on his knowledge and participation in the day to day affairs of the business). Such opinion testimony is admitted not because of experience, training or specialized knowledge within the realm of an expert, but because of the particularized knowledge that the witness has by virtue of his or her position in the business. The amendment does not purport to change this analysis.’”�
“This case does not present such a circumstance. Taylor purported to value the collateral by applying his generalized knowledge of the worldwide tire market, gained through his experience in the worldwide tire business, to a proffered list of specific items owned by a third party. Taylor’s only connection to the items in question is the fact that he is an officer of a company that, at one time, held a controlling interest in a company that, at one time, owned the collateral.”�
“Defendant, however, had no ownership interest in FUNSA at the time that Taylor made his purported valuation. Furthermore, Defendant identifies no evidence that Taylor participated in FUNSA’s initial purchase of the particular items in question, and his affidavit belies any contention that he based his valuation opinion on personal knowledge of the collateral. Indeed, in his deposition, Taylor specifically disclaimed any personal knowledge of the particular items that were included in the sale.”�
“Taylor’s position therefore was not akin to the owner of a small business testifying to the value of that business. His attempt at valuation was not based on any knowledge obtained through his special relationship with the items in question; instead, he simply looked at a list of items provided by Plaintiff, and he estimated their value based on his extensive experience purchasing and selling the type of goods at issue. This is the kind of testimony traditionally provided by an expert: “�[I]t could have been offered by any individual with specialized knowledge of the [tire] market.’ Conn, supra at 555. In fact, Taylor’s testimony on this issue was essentially the same as that of Defendant’s originally retained valuation expert, Haron, whose statements already had been excluded by the district court because they were untimely disclosed.”� [Slip op. 4]
“Rule 701 recently was amended “�to emphasize that lay opinion testimony is limited to those observations of a lay witness that are not based on scientific, technical, or other specialized knowledge within the scope of Rule 702. Conn, supra at 553 (quoting Fed. R. Evid. 701). The amendment was designed to avoid this very situation “� to prevent parties from “�proffering an expert in lay witness clothing.’ Fed. R. Evid. 701 (advisory committee notes). We have noted: “�Before the 2000 amendment to Rule 701, some courts had become more lenient in the admission of lay opinion on subjects appropriate for expert testimony. The amendment was designed to make clear that courts must scrutinize witness testimony to ensure that all testimony based on scientific, technical or other specialized knowledge is subjected to the reliability standard of Rule 702.’ Conn, supra at 553.”�
“Testimony based solely on a person’s special training or experience is properly classified as expert testimony, and therefore it is not admissible under Rule 701. Id. at 554 55. Taylor’s valuation attempt was based on his special experience in the tire industry, not on his personal knowledge of the goods in question; therefore, it falls within the purview of Rule 702.
Accordingly, we conclude that the district court properly classified paragraphs 8 and 9 of Taylor’s affidavit as expert testimony.”� [Slip op. 5] Because Defendant failed to disclose Taylor as an expert witness prior to the disclosure deadline, the district court did not abuse its discretion when it kept out his testimony.
Citation: Compania Administradora De Recuperacion De Activos Administradora De Fondos De Inversion v. Titan International, Inc.,533 F.3d 555; 76 Fed. R. Evid. Serv. 1220 (7th Cir. 2008).
Filed in: 2008 International Law Update, Issue8
By admin
Ninth Circuit finds that Immigration Judge improperly failed to consider asylum applicant’s own testimony as a means of authenticating a foreign government document; asylum applicant may resort to any recognized procedure for document authentication, including the procedures permitted under FRE 901, and is not restricted to recognized procedures for authenticating foreign public documents
Petitioner, Vladimir Vatyan, a citizen of Armenia, applied for asylum and other forms of relief from deportation in the United States. According to his asylum application, he was born in Azerbaijan but forcibly deported to Armenia during the social unrest that followed the collapse of the Soviet Union. Petitioner claimed that like other ethnic Armenians who had lived in Azerbaijan, he was marginalized and had difficulty finding work. He alleged that his son was conscripted into the military and died under mysterious circumstances suggesting murder, although the Armenian government labeled the death a suicide and refused Petitioner’s request to investigate further.
Finally, Petitioner claimed that his objections to the military’s handling of his son’s death and other injustices made him a target of the Armenian government, which allegedly imprisoned him for several months.
At his hearing before the Immigration Judge (IJ), Petitioner sought to introduce into evidence several documents, including: (1) a 1999 letter, purportedly from the Armenian Ministry of Internal Affairs and National Security, stating that Petitioner’s son had committed suicide and that there would be no further investigation into the son’s death; (2) a 1999 death certificate for Petitioner’s son; and (3) a 2000 letter, also purportedly from the Ministry of Internal Affairs, that “certified” Petitioner’s imprisonment from January to April 2000.
The government objected to the documents as not properly certified under the authentication standards for foreign public documents set forth by 8 C.F.R. § 287.6(c), and thus inadmissible. The IJ, acknowledging the Ninth Circuit’s holding in Khan v. INS, 237 F.3d 1143, 1144 (9th Cir. 2001), that a foreign public document may be authenticated in an immigration proceeding either under § 287.6(c) or through “any recognized procedure,” asked Petitioner’s counsel whether the documents had been authenticated in any other way. When counsel responded that Petitioner would authenticate the documents through his own testimony, the IJ rejected this proposed authentication method and granted the government’s motion to exclude the documents, stating that they have not been properly authenticated either under 8 C.F.R. § 287.6, or in any other recognized manner under the Federal Rules of Civil Procedure as is outlined in Khan v. INS, 237 F.3d 1143.
At the conclusion of the hearing, the IJ found that Petitioner lacked credibility. The IJ based his finding on, among other things, discrepancies between the dates of imprisonment Petitioner claimed on his asylum application and the dates he had given during his testimony at the hearing. The IJ also found discrepancies in Petitioner’s story of how he secured his release from the prison. The IJ concluded that these and other inconsistencies made him question whether Petitioner ever was in the custody of the internal affairs prison. The IJ did not consider Petitioner’s documentary evidence, which purported to certify the fact of his imprisonment. Based on the adverse credibility finding, the IJ denied relief. The Board of Immigration Appeals summarily affirmed the IJ’s decision, and Petitioner filed a petition for review in the Ninth Circuit.
The U.S. Court of Appeals for the Ninth Circuit grants the petition and remands.
The Ninth Circuit has recognized in Khan that documents may be authenticated in immigration proceedings through any recognized procedure, such as those required by INS regulations or by the Federal Rules of Civil Procedure. In this case, the Court acknowledges the reasonableness of the IJ’s refusal, based on his reading of Khan, to allow Petitioner to authenticate the proffered documents through his own testimony. Established authentication methods for foreign public documents generally require a government certification. See 8 C.F.R. § 287.6(c) (requiring a “certificate . . . signed by a foreign officer so authorized by the signatory country”); Fed. R. Civ. P. 44(a)(2) (requiring “a final certification as to the genuineness of the signature and official position (i) of the [foreign official attesting to the document], or (ii) of any foreign official whose certificate of genuineness of signature and official position relates to the attestation or is in a chain of certificates of genuineness . . .”); see also Fed. R. Evid. 902(3).
However, the majority of the Court places considerable weight on the practical difficulties of applying the established procedures for authenticating foreign public documents in the context of an immigration proceeding. Requiring an asylum petitioner to obtain a certification from the very government he claims has persecuted him (or has failed to protect him from persecution) would probably create an insuperable barrier to admission of authentic documents. To enlist an expert to testify as to the authenticity of the document at issue would create an undue burden on the asylum seeker and in most cases be impracticable.
The Court then discusses the scope in the Federal Rules of Civil Procedure and the Federal Rules of Evidence of alternative methods of authenticating foreign public documents: Fed. R. Civ. P. 44(a)(2) allows the court to admit an attested copy of a foreign public document without final certification when the party offering the evidence demonstrates that it was unable to satisfy the basic requirements of the rule through reasonable efforts, and all parties have been given a reasonable opportunity to investigate the authenticity and accuracy of the foreign official record. Similarly, if the party offering the evidence is unable to self authenticate it pursuant to Federal Rule of Evidence Rule 902, the party can still attempt to authenticate it under the general provision of Rule 901. The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims.
The Court concludes that the IJ made a legal error in refusing to weigh Petitioner’s testimony regarding the authenticity of the documents, and requiring Petitioner to produce an official certification as a mandatory prerequisite to authentication. The majority emphasizes that it has made no judgment regarding the credibility of Petitioner’s testimony or the weight to be assigned to it in evaluating the authenticity of the proffered documents, nor was it altering the highly deferential standard of review for an IJ’s factual findings.
Finally, the majority concludes that the IJ’s error was not harmless. One reason for the IJ’s adverse credibility finding was his doubt that Petitioner had been imprisoned at all. Had the IJ considered Petitioner’s testimony as a means of authenticating official documentation of his imprisonment, such documentation may have been admitted into evidence, and the IJ could then have drawn a favorable conclusion as to Petitioner’s credibility. Because the Court finds that this error was not harmless, it grants the petition for review and remanded the case.
One judge on the Ninth Circuit panel dissents, rejecting the majority’s conclusion that the IJ had rejected the documents because they had not been properly certified. The dissent points out that the IJ had acknowledged the availability of alternatives to official certification to authenticate documents, had in fact heard petitioner’s testimony regarding the authenticity of the documents, and determined that the petitioner was not a credible witness. The dissenting judge concludes that remanding this matter is an empty and pointless exercise.
Citation: Vatyan v. Mukasey, No. 04 72386 (9th Cir. November 27, 2007).
Filed in: 2007 International Law Update, Issue11
By admin
In breach of implied contract and trademark infringement litigation, English Court of Appeal rejects defendant’s claim that trial court erred in refusing to bar admission of twenty years of interparty correspondence in courts of Taiwan and New Zealand under “without prejudice” rule
In March 1974, senior executives from Prudential Assurance Co, Ltd. (Prudential UK) and Prudential Insurance Co. of America (Prudential USA) met in London and agreed on the use of the name “Prudential” in relation to the business of insurance in various territories. For example, Prudential UK would not use the “Prudential” name or mark in the United States and Prudential USA would not use that name or mark in Europe or in certain countries of the Commonwealth. By pursuing a policy of discussing and resolving problems as they turned up, the two companies coexisted without undue conflict until the mid-1990s.
Prudential UK filed an action in England against Prudential USA for acting in breach of the legally binding agreement, and for infringing trademarks to which Prudential UK was allegedly entitled in the UK and Europe. Plaintiff also filed similar proceedings in Taiwan and New Zealand.
In response, defendant applied for orders that, in the Taiwan and New Zealand proceedings, plaintiff withdraw from evidence all the relevant inter-party correspondence between 1974 and 1995. It sought a declaration that the “without prejudice” rule protected all or similar evidence from use in any contentious proceedings, domestic or foreign.
The trial judge, however, found that the evidence to which defendant objected was not subject to the privilege rule. Defendant appealed that decision, claiming that the application of the “without prejudice” doctrine in this case rested on an implied contract. The English Court of Appeal (Civil Division), however, dismisses the appeal.
Before resolving the applicability of the “without prejudice” rule, the Court points to the difficulties involved in enforcing a rule of this type in foreign proceedings. “In my view the position is different in those cases in which the only justification for restraining the use of ‘without prejudice’ material is public policy. ….”
“In those cases there is no contractual basis upon which to order an extra-territorial restraint. The question in those cases is whether the English court, by ordering a person not to make use of ‘without prejudice’ material in foreign proceedings, should seek to impose on the conduct of the foreign proceedings a restraint which is justified only by its own perception of what public policy requires. In my view, it is plain that that question must receive the answer ‘No’.”
“In that context it is important to keep in mind that the rule in England — in so far as it is based on public policy — has evolved in response to the need to balance two different public interests, ‘namely the public interest in promoting settlements and the public interest in full discovery between parties to litigation’ [Cite]. The latter interest is a reflection of the principle that trials should be conducted on the basis of a full understanding, by both parties and the court, of the facts relevant to the issues in dispute.”
“The ‘without prejudice’ rule has to be seen as encroaching upon that principle. The justification for such encroachment, in the eyes of the English courts, has been the greater public interest in promoting settlements. But it would be insular not to recognise that courts in other jurisdictions might think — or might be required by legislation to accept — that a different balance should be struck; and arrogant to seek to impose on the conduct of litigation in other jurisdictions a rule which is based on our own perception of where the greater public interest lies.” [¶ 23]
In rejecting defendant’s privilege claim, the Court agrees with the trial judge’s placing of decisive importance on the failure of the documents to bear the customary “without prejudice” notation.
“I find it impossible to say that, when the chairman and chief executive officer of Prudential USA and the chief general manager of Prudential UK met in early March 1974 to exchange views ‘on a wide range of subjects’ and ‘with a view to removing the prospect of any future disputation between us’ as to ‘the areas in which each of our companies would be free to use the name Prudential’, they must be taken to have done so on the basis that neither company would be entitled to refer to those discussions in any litigation anywhere in the world at any time in the future.”
“Had that been their intention I would have expected them to say so — at the meeting and in the careful and detailed letters which they wrote immediately following that meeting and in the subsequent months. Further, I would have expected the in-house lawyers to say so, at the earliest opportunity. And, if that was not the basis upon which discussions took place in early March 1974, I find it impossible to identify some subsequent point at which the position changed.” [¶ 26]
Citation: Prudential Assurance Co. Ltd. v. Prudential Insurance Co. of America, Court Of Appeal (Civil Division),[2003] E.W.C.A. Civ. 1154, [2003] All E.R. (D) 546 (July 31), (Approved Judgment).
Filed in: 2003 International Law Update, Issue9
By admin
Highest court of Australia, agreeing with privilege law of United Kingdom, Canada, United States and European Union, holds, as matter of first impression, that its Trade Practices Act does not authorize competition agency to compel production of documents covered by solicitor-client privilege
The Australian Competition and Consumer Commission (the ACCC) served notices on solicitors, Meerkin & Apel (the Firm), pursuant to Section 155 of the Trade Practices Act 1974 (Cth) (the Act). It demanded that the Firm turn over certain documents obtained by them in the course of acting as solicitors for the Daniels Corporation International Pty. Ltd. (Daniels). The Firm and Daniels objected, claiming that legal professional privilege protected certain documents and that Section 155 of the Act did not empower the ACCC to compel the production of documents sheltered by that privilege. As a result, the Firm handed over the unprivileged documents but declined to deliver the rest.
Section 155(1) of the Act provides in part that, if the ACCC has reason to believe that a person in possession of documents pertaining to a matter that amounts to, or may constitute, a violation of the Act, “a member of the Commission may, by notice in writing served on that person, require that person: . . . (b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents”. In addition, Section 155(5) of the Act declares that “a person shall not: (a) refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it”.
The ACCC then took the matter to the Federal Court of Australia, which ruled for the agency. Defendants then obtained preliminary review in the Full Court limited to the privilege question. The Full Court also decided in favor of the ACCC. It ruled that Section 155 did entitle the ACCC to get a court order that defendants turn over relevant documents otherwise within the solicitor-client privilege. The Firm and Daniels sought appellate review.
In a per curiam ruling, the Australian High Court allows the appeal, overturning the order of the Full Court. In a case of first impression, the Court declares that Section 155 of the Trade Practices Act of 1974 (Cth) does not require the production of documents to which legal professional privilege has attached. The High Court remands the matter to the Federal Court to determine which, if any, of the documents specified in the notices are covered by legal professional privilege.
The Court first summarizes the characteristics of the privilege. “It is now settled that legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings. It may here be noted that the ‘dominant purpose’ test for legal professional privilege was recently adopted by this court [Cite] in place of the ‘sole purpose’ test which had been applied [Cite].” [N/A]
“Being a rule of substantive law and not merely a rule of evidence, legal professional privilege is not confined to the processes of discovery and inspection and the giving of evidence in judicial proceedings. Rather, and in the absence of provision to the contrary, legal professional privilege may be availed of to resist the giving of information or the production of documents in accordance with investigatory procedures of the kind for which Section 155 of the Act provides.” [N/A]
“Legal professional privilege is [also] … an important common law right or, perhaps, more accurately, an important common law immunity. It is now well settled that statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect. That rule …is a rule which … has been strictly applied by this court since [1990].” [N/A]
On the practical level, the Court stresses the relative rarity of invocations of privilege in the course of the ACCC’s administration of the Act. Moreover, it suggests that what is generally called in the U.S. the “crime or fraud” exception tends to lessen any obstructive impact the privilege might be thought to have on law enforcement.
“A communication the purpose of which is to ‘seek help to evade the law by illegal conduct’ is not privileged. That being so, it is difficult to see that the availability of legal professional privilege to resist compliance with a notice under Section 155(1) of the Act would result in any significant impairment of the investigation of contraventions of the Act, much less in the frustration of such investigations. … So to say, however, does not obviate the need to construe Section 155 of the Act.” [N/A]
The Court cannot read the general language of Section 155(1) as authorizing the production of documents protected by legal professional privilege. “It is an elementary rule of statutory construction that courts do not read general words in a statute as taking away rights, privileges and immunities that the common law or the general law classifies as fundamental unless the context or subject matter of the statute points irresistibly to that conclusion.”
“Nothing in the context or subject matter of Section 155 points to the parliament intending the commission to have power to require the production of documents that are the subject of legal professional privilege. In that respect, the right of legal professional privilege is in a different category from the [statutory] immunity against self incrimination, an immunity which Section 155 expressly abolishes…” [N/A]
“Courts do not construe legislation as abolishing, suspending or adversely affecting rights, freedoms and immunities that the courts have recognised as fundamental unless the legislation does so in unambiguous terms. In construing legislation, the courts begin with the presumption that the legislature does not interfere with these fundamental rights, freedoms and immunities unless it makes its intention to do so unmistakably clear.”
“The courts will hold that the presumption has not been overcome unless the relevant legislation expressly abolishes, suspends or adversely affects the right, freedom or immunity or does so by necessary implication. They will hold that the legislature has done so by necessary implication whenever the legislative provision would be rendered inoperative or its object largely frustrated in its practical application, if the right, freedom or immunity were to prevail over the legislation.” [N/A]
“In the United Kingdom, Canada, the United States of America and the European Union, documents to which legal professional privilege attaches are exempted from production in like circumstances. It is therefore difficult to accept that a different regime is now essential in Australia. If it is, it is not unreasonable that the [ACCC], which has access to government, should be obliged to seek an amendment of its Act to secure from the parliament the addition of such a power, either expressly or by unmistakable implication. [N/A]
Citation: Daniels Corp. International Pty. Ltd. v. Australian Competition and Consumer Commission, 192 A.L.R. 561 (Aust. High Ct., November 7, 2002).
Filed in: 2003 International Law Update, Issue5
By admin
In challenge to admission of foreign hotel records in drug smuggling case, Fourth Circuit finds handwritten endorsements on documents by employees and testimony by foreign Customs Agent insufficient foundation for admissibility under 18 U.S.C. Section 3505
Donald Wardrick and Porteal Groom were busy transporting heroin into the United States. They would recruit young people to take empty suitcases with them to a certain hotel in Pakistan. A named individual would then exchange their empties with baggage full of drugs. Wardrick and Groom would foot the transportation and subsistence expenses of their apparently unwitting couriers.
All went smoothly until Pakistani officials detected and searched the bulging suitcases. Upon their arrest, the couriers provided the names of Wardrick and Groom. The officials then contacted the DEA. The latter set up a successful “controlled delivery” in Maryland that led them to Wardrick, Groom and associates. Federal authorities then had Wardrick and Groom indicted for drug violations.
At the trial, the government offered into evidence some hotel registries and charge records showing that the couriers had stayed at the designated hotels in Pakistan. Defendants claimed a lack of proper certification but the trial judge let the records in. From their convictions, defendants took an appeal. In a per curiam opinion, the U.S. Court of Appeals for the Fourth Circuit affirms.
The Court points out that, under 18 U.S.C. Section 3505, foreign records of a regularly conducted activity are admissible if, inter alia, a person with personal knowledge has certified them as the records they purport to be. Here, each foreign hotel custodian had written the word “attested” and had signed his name on each page of the records.
In addition, the government offered the testimony of Pakistani Customs Agent Mughal who testified about each of the certification requirements. Despite having discussed the matters with hotel employees, however, Agent Mughal did not have enough knowledge to testify about internal record-keeping procedures at the hotels. His testimony does not reveal the “thorough understanding”� of a record-keeping system that courts require before an “outsider”� can authenticate business records.
Since Agent Mughal was not a “qualified witness”� who could provide a foreign certification under Section 3505, the judge below had mistakenly let in the hotel records. The Court sees this error as harmless, however, in light of much other evidence showing that the drug couriers stayed at Pakistani hotels designated by Wardrick.
Citation: United States v. Wardrick, No. 96-4831 (4th Cir. April 13, 1998) (unpublished).
Filed in: 1998 International Law Update, Issue 6
By admin
In drug smuggling prosecution, Fifth Circuit finds foreign business and financial records admissible as similar to domestic business records under Federal Rule of Evidence 803(6)
Formerly based in Matamoros, Mexico, Juan Garcia Abrego and his assistants had been smuggling “tremendous quantities” of drugs into the U.S. for over twenty years. U.S. law enforcement had seized more than 13 tons of Garcia Abrego’s cocaine — but that was only a small fraction of Garcia Abrego’s shipments. Authorities arrested him in Mexico in 1996 and put on trial in the U.S. for drug trafficking and conspiracy.
At trial, the trial judge let in foreign financial records showing that defendant had transferred approximately $30,000,000 from Mexico through the U.S. to Switzerland and the Cayman Islands. In particular, he claimed that the government failed to give proper statutory notice that they would use foreign records.
Upon defendant’s conviction and imprisonment, the district court also imposed a fine of more than $128,000,000 and forfeiture of $350,000,
000. Defendant then noted an appeal. The U.S. Court of Appeals for the Fifth Circuit affirms.
The Court first analyzes the statutory language providing for notice. Under 18 U.S.C. § 3505(b), “At the arraignment or as soon after the arraignment as practicable, a party intending to offer in evidence … a foreign record of regularly conducted activity shall provide written notice of that intention …” Though the government gave notice about six months after the indictment, the records may still be admissible.
“First, subsection (a) of § 3505, which establishes the requirements for admissibility under the section, makes no reference to subsection (b), which establishes the notice requirement. This would indicate that compliance with the notice requirement is not a precondition of admissibility.” [Slip op. 105-106]
Neither did the foreign bank records violate the Confrontation Clause. The Court points out that the drafters based Section 3505 on Fed.R.Evid. 803(6). Business records let in under Section 3505 are at least as reliable as evidence admitted under a “firmly rooted” hearsay exception. Therefore, the district court did not abuse its discretion in holding the foreign bank records admissible.
Citation: United States v. Garcia Abrego, No. 97-21030 (5th Cir. May 6, 1998).
Filed in: 1998 International Law Update, Issue 5
By admin
In case of first impression, First Circuit approves admission of English deposition of prosecution witness as evidence against accused despite claim of incompatibility with Confrontation Clause
David McKeeve and his business partner, both UK citizens, ran a Scottish company through which they acquired U.S. computer equipment for the Libyan Government. Even though McKeeve was aware of the U.S. restrictions on trade with Libya, he bought the equipment in Massachusetts. The U.S. Customs Service held the shipment at port though “Cyprus”� was the stated destination. It is allegedly a notorious clearinghouse for goods being shipped to embargoed countries.
McKeeve was convicted of violating the International Emergency and Economic Powers Act (IEEPA) [50 U.S.C. §§ 1701-1706 (1994)] and related Executive Orders and regulations. His conviction rested in part on the deposition testimony of Alex Redpath, the British shipping agent, taken in the UK. Redpath testified that McKeeve had told him to forward the computer equipment from Cyprus to Libya. McKeeve’s main argument on appeal was that use of the foreign deposition against him had violated the Confrontation Clause.
The U.S. Court of Appeals for the First Circuit affirms. Redpath had given his deposition before a British magistrate in a Court in Birmingham, England. McKeeve monitored the proceedings through a live telephone link. A solicitor prepared a transcript of the deposition.
“When the government conducts a [Fed.R.Crim.P.] Rule 15 deposition in a foreign land with a view toward introducing it at trial, the Confrontation Clause requires, at a minimum, that the government undertake diligent efforts to facilitate the defendant’s presence. … We caution, however, that although such efforts must be undertaken in good faith, they need not be heroic, and the possibility of using a deposition does not evaporate even if those efforts prove fruitless. In that event the district court must determine, on a case-specific basis, whether reasonable alternative measures can preserve adequately the values that underpin the defendant’s confrontation rights. In cases where actions by, or the laws of, a foreign nation effectively preclude the defendant’s presence, furnishing the defendant with the capability for live monitoring of the deposition, as well as a separate (private) telephone line for consultation with counsel, usually will satisfy the demands of the Confrontation Clause.”� [slip op., 12-13]
Such extrajudicial statements are admissible as long as they possess sufficient indicia of reliability. Fed.R.Evid. 804(b)(1) provides a hearsay exception for the former testimony of an unavailable witness. Based on this “firmly-rooted”� hearsay exception, the Court finds no violation of the Confrontation Clause by admitting the foreign deposition testimony. To pass muster under Rule 804(b)(1), the witness must be unavailable, and the deposition must constitute former testimony.
“The standard test for unavailability is whether the witness’s attendance could be procured “�by process or other reasonable means.’ Fed.R.Evid. 804(a)(5). In a criminal context, however, Confrontation Clause concerns color the Rule 804 availability inquiry and heighten the government’s burden. … Thus, the prosecution must actively attempt to secure the witness’s presence at trial. … Here, … the government made an assiduous effort to convince Redpath to attend the trial … The remaining question is whether Redpath’s deposition amounted to “�former testimony’ within the purview of Fed.R.Evid. 804(b)(1). … To be sure, the deposition did not comport in all respects with American practice, but that circumstance alone does not render the testimony not “�in compliance with law’ and therefore beyond the reach of Rule 804(b)(1). … “�[U]nless the manner of examination required by the law of the host nation is so incompatible with our fundamental principles of fairness or so prone to inaccuracy or bias as to render the testimony inherently unreliable, … a deposition taken … in accordance with the law of the host nation is taken “�in compliance with law’ for purposes of Rule 804(b)(1).’”� [slip op., 16-18]
Among the indicia of reliability cited by the Court are the administration of the oath, oversight by a judicial officer, unlimited direct and cross-examination, as well as linguistic compatibility.
Citation: United States v. McKeeve, No. 96-2273 (1st Cir. December 5, 1997).
Filed in: 1998 International Law Update, Issue 1
By admin
In prosecution for exports of banned U.S. technologies to Libya, Second Circuit holds that Malta Customs documents are inadmissible under exceptions to hearsay rule if government did not follow procedure for admission of foreign documents under 1984 Crime Control Act
A federal jury convicted Thomas Doyle and Robert Vance of illegally exporting fuel pumps to Libya. They appeal their convictions for conspiracy and selling U.S. equipment to Libya in violation of the trade embargo against Libya [International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, 1702, 1705(b); 31 C.F.R. Part 550].
The background facts are as follows. A 1986 Executive Order of the U.S. President [Exec. Order No. 12,543, 51 Federal Register 875 (1986)] prohibited trade with Libya. Libya’s national oil company nevertheless sought to purchase spare parts for American-made oil field technologies. Doyle, who had connections within U.S. army intelligence, and his nephew Vance, sold fuel pumps and other parts to a German company, declaring them as “auto spares” in the shipping papers. The German company, in turn, sold them to Libya. Some of the items were shipped to Libya with a stopover in Malta.
The U.S. Government requested, and the district court issued, international letters rogatory to the Maltese government as part of the investigation. One letter asked for official Maltese records dealing with the defendants’ shipments of fuel pumps to Libya. In response, a Maltese government official signed and certified several customs documents as authentic. The Malta Customs Department had generated some of the documents. Private companies had filed others with the Department. A Senior Malta Customs Official appended a sworn statement of authenticity. The U.S. Consul on Malta received and transmitted the documents to U.S authorities. The government introduced them as “foreign government public documents” at trial.
The U.S. Court of Appeals for the Second Circuit reverses and remands because of erroneous instructions to the jury. The Court, however, also discusses various evidentiary issues in its opinion.
The Appellants challenge, among other things, the admission of the Malta Customs documents as authentic under Federal Rule of Evidence 902(3) [self-authentication of government records]. They particularly object to the documents generated by private parties and filed with the Malta Customs Department. Their complaint was (1) that Rule 902(3) applied only to the authentication of government documents, and (2) that the documents were also hearsay.
The Court explains. “The requirement that the document be ‘certified as correct’ means only that the authenticating official certify that the copy delivered to the court is an accurate copy of the government record. To satisfy Rule 903, the official does not need to attest to the truth or trustworthiness of the facts contained in the document; accuracy of its contents is the concern of other Federal Rules, such as the many rules concerning hearsay in Rules 801, et seq. The only concern of Rules 901, et seq. is assuring that evidence is what it purports to be. The certification of the Maltese officials was clearly adequate to show that these were the records of the Customs Department. We therefore rule that all documents delivered to the district court by Malta were properly self-authenticated pursuant to Rule 903(3) and (4).” [71-72]
As for the hearsay issue, the documents could be admissible under Rule 803(6), the hearsay exceptions for business records, or Rule 803(8), the exception for government records. The government did not lay a proper foundation, however, for the business records provision. For example, the Maltese Senior Customs Official could not testify as to the record-keeping practices of the private businesses involved.
The Rule 803(8) question is a closer one. “Rule 803(8)(B) can encompass statements of non-governmental parties who act as agents for the government under duties imposed by law. … The Senior Inspector’s sworn statement stated that the documents he delivered ‘set forth matters which are required by the laws of Malta to be recorded and filed.’ In this case, however, there was no showing of procedures that assure the documents are reliable, of any standards applied to the recordation of the documents, or of any monitoring by Malta of their accuracy. Malta may, in some fashion, punish the making of false statements to the customs agency, but the Government has pointed us to no authority saying that it does so. Furthermore, we doubt that a legal ‘request’ for filing records with a government agency would alone qualify the records for the hearsay exception without some showing that the records were reliable, such as a showing that the private party was acting as an agent of the government.” [slip op., 77-78]
[The Crime Control Act of 1984 sets forth a procedure for establishing a foundation for foreign documents for purposes of complying with the business records exception. The Government, however, did not provide a foreign certification based on the Act, and did not notify the Appellants or the court of its intention to rely on this procedure.]
The Court concludes that the admission of privately-generated, business records without further foundation, even though in the possession of a foreign government agency, is improper. If there is other evidence that the documents recorded with the Maltese Customs Department are verified or otherwise reliable, they may be admissible.
Citation: United States v. Doyle, No. 96-1542 (2d Cir., December 4, 1997).
Filed in: 1998 International Law Update, Issue 1
By admin
Eleventh Circuit rules that U.S. privilege against self-incrimination does not apply to alleged alien war criminal liable to prosecution in foreign nations
Vytautas Gecas is a Lithuanian citizen who has lived in the U.S. as a resident alien for 34 years. During 1992-93, allegations arose that Gecas had taken part during World War II in the persecution of persons on account of their race, religion or political opinion. This type of behavior, if proved, would make Gecas deportable under 8 U.S.C. § 1251(a)(4)(D) (1994).
When the Office of Special Investigations directed an administrative subpoena at Gecas to answer questions about these matters, Gecas invoked the Fifth Amendment right not to testify. The government then got an enforcement order from a district court. Gecas appealed and a divided three-judge panel reversed. The government successfully petitioned for rehearing en banc. A six-judge majority of an eleven-judge panel disagrees with the regular panel and orders Gecas to answer the questions posed.
For the privilege to apply to foreign proceedings, the Court notes, Gecas must establish two points. First, he must prove that the information he would disclose by testifying would incriminate him under the foreign law of one or more countries. Second, he must have a real and substantial fear of foreign conviction and not a merely speculative possibility of same. Using the procedures of Fed. R. Civ. Pro. 44.1, the district court found that Gecas’ testimony would incriminate him under the laws of Israel, Germany and Lithuania.
[Israel clearly prosecutes war criminals committed outside that country under its Nazi and Nazi Collaborators (Punishment) Law of 1950. Though the issue is close, the Court also decides that German murder jurisdiction extends to the prosecution of non-citizens who committed war crimes outside German territory. Finally, the Court concludes that Lithuania could prosecute Gecas under its Genocide Law.]
Moreover, the lower court’s factual finding that there is a real and substantial danger of such prosecutions in these countries was not clearly erroneous. Important factors in this equation are whether the foreign governments would learn of his testimony, whether there is an existing or potential foreign prosecution of Gecas and whether, on any of the charges, the U.S. could extradite Gecas to one or more of the three countries. The main goals of the OSI are to work with foreign prosecutors to expel war criminals from the U.S. and to assist in their prosecution abroad. Moreover, the U.S. has extradition treaties with all three nations.
Finally, as a matter of first impression, the Court holds that such a real and substantial fear of foreign prosecution may trigger Fifth Amendment protections. On the other hand, a careful examination of the long history of the problem of forced self-incrimination leads the Court to conclude that the Fifth Amendment does not apply to foreign court proceedings involving foreign citizens. A proceeding becomes a “criminal case” only when a witness faces conviction based on his compelled testimony in a jurisdiction subject to the Fifth Amendment. Nor does the cooperation between the OSI and foreign governments make those sovereign states into mere “agents” of the U.S. to whose proceedings the Fifth might apply.
Citation: United States v. Gecas, No. 93-3291 (11th Cir. August 26, 1997)(en banc).
Filed in: 1997 International Law Update, Issue 10
By admin
Supreme Court of Canada holds that reference by witness to fact that defendant might carry insurance does not warrant automatic discharge of jury but may justify range of discretionary remedies designed to cure jury prejudice
In May 1986, while playing rugby at a British Columbia high school match, a scrum collapsed, causing 18-year-old Mark Hamstra to become paraplegic. He and his father filed a damage action against the B.C. Rugby Union (BCRU), a voluntary non-profit entity, Brian Rigby, its game representative, and the local school district for failure properly to supervise the scrum.
During the eighth day of the jury trial, defense counsel’s cross-examination of one of the players brought out a reference to how an insurance adjuster had unfairly recorded the player’s account of the incident. Neither side objected nor did the trial judge comment. On day 14, plaintiff’s counsel was cross-examining a defense expert on rugby on whether he was worried about the financial impact of the suit upon BCRU when the witness replied: “No. I assume some insurance company is going to pay for it.”
At this point, the judge merely cautioned the jury to disregard the reference to insurance. Later, however, he granted BCRU’s motion to dismiss the jury on the grounds that his warning was unlikely to remove the prejudicial effect of the evidence from the jurors’ minds. He gave plaintiffs the option to have a new jury trial or to have the judge complete the present proceeding and they chose the latter. The trial judge ultimately dismissed the plaintiffs’ case.
The B.C. Court of Appeals reversed and ordered a new trial on the grounds that the trial judge should not have dismissed the jury. The Supreme Court of Canada allows the appeal and remands for the lower appellate court to rule on remaining issues.
The Court first overrules its own 1951 precedent that the mention of insurance coverage should automatically lead to a mistrial and discharge of a civil jury. In today’s world, persons who serve on juries know about compulsory automobile insurance and the prevalence of insurance in many other areas of human endeavor. Instead, the decision of what action to take should lie in the sound discretion of the trial judge. Thus, there may be cases in which the judge concludes that no other alternative would satisfy the demands of justice than the jury’s dismissal. On the other hand, a prompt and adequate warning to the jury might often be adequate under different circumstances.
In this case, the Court holds, the trial judge did not err. He did not base his action on an automatic approach to the issue but on his discretion. After hearing arguments by both sides, he reluctantly concluded that the reference to insurance may have caused the jury to believe that such coverage did exist and that this belief could prejudice BCRU during jury deliberations. Thus, there was no occasion for the Court of Appeal to order a new trial on this ground.
Citation: British Columbia Rugby Union v. Hamstra, 145 D.L.R.4th 193 (Sup. Ct. Can. 1997).
Filed in: 1997 International Law Update, Issue 8