A Sweet Lesson in Hearsay
United States v. Univar USA Inc., Part 1
This is another penalty case. It has two distinctly different discussions. The first has to do with several disputes concerning the admissibility of evidence. The second has to do with whether the importer exercised reasonable care. This is a 69-page opinion, so we will only hit the highlights, starting with the evidence questions.
The government’s claim in this case is that Univar imported saccharine from China allegedly transshipped through Taiwan and misrepresented the correct country of origin. As a result, Univar would have illegally avoided paying antidumping duties.
Defendant Univar made a motion for summary judgment arguing that the case should be dismissed as a matter of law. The Rules of the Court of International Trade require that the parties submit statements of facts about which there is no dispute to be tried. These statements must be supported by a citation to admissible evidence. See USCIT Rule 56(c). Regarding evidence, the defendant moved to exclude several categories of evidence from the court’s consideration. By and large, the question is whether this evidence was inadmissible hearsay.
Hearsay is an out of court statement that is introduced to prove the truth of the matter asserted in the statement. Fed. R. Evid. 801(c). Thus, if I send an email to my friend saying that the light was green when I drove through, it would be improper to use that email as evidence of the color of the light. There are several exceptions to this rule. For example, if that were my dying declaration or it were against my own interest to make that statement, the email would be admissible.
The first group of documents to which Univar objected were emails sent by Univar employees to its agents or third parties. The government was using these emails, among other things, to show what Univar knew about the merchandise as a means of assessing its culpability for the alleged misrepresentations. In other words, the email was not used to show the origin of the saccharine. Rather, it was used to show the impact of the incorporated statements on Univar with respect to its business practices. In other words, if an email chain indicates to an importer that there is reason to doubt the truthfulness of the country of origin statement from the supplier, the email may not be admissible to prove the country of origin. It is, however, admissible to show that the company had reason to doubt the information it was reporting. The Court reached a similar decision with respect to emails to Univar from its agents and employees.
The third group of contested documents were internal Univar documents including trip reports, letters and PowerPoint decks. Under FRE 801(d)(2)(D), these documents are not hearsay because they are offered by an opposing party and were made by agents or employees. Moving on.
The fourth group of documents is a mixed bag including an appearance by a Rabbi hired to determine whether the saccharine is kosher, sections of Taiwan’s customs laws, and an affidavit from a Special Agent. The statement of the rabbi (more on this in the next post) was not introduced to prove the truth of his statement but rather how it should have impacted Univar’s compliance stance. Testimony about the existence and content of an exclusivity agreement was excluded both as hearsay and under the “best evidence rule,” which states that a document is the best evidence of the contents of the document and should be introduced rather than relying on testimony about the document.
Univar objected to the introduction of other documents. The Court engaged in a detailed analysis of each and applied the relevant evidence rules. It is worth a read because evidence questions do not come up all that often in customs cases. Nevertheless, I am going to move on to the substance.
That will be the next post.
This is another penalty case. It has two distinctly different discussions. The first has to do with several disputes concerning the admissibility of evidence. The second has to do with whether the importer exercised reasonable care. This is a 69-page opinion, so we will only hit the highlights, starting with the evidence questions.
The government’s claim in this case is that Univar imported saccharine from China allegedly transshipped through Taiwan and misrepresented the correct country of origin. As a result, Univar would have illegally avoided paying antidumping duties.
Defendant Univar made a motion for summary judgment arguing that the case should be dismissed as a matter of law. The Rules of the Court of International Trade require that the parties submit statements of facts about which there is no dispute to be tried. These statements must be supported by a citation to admissible evidence. See USCIT Rule 56(c). Regarding evidence, the defendant moved to exclude several categories of evidence from the court’s consideration. By and large, the question is whether this evidence was inadmissible hearsay.
Hearsay is an out of court statement that is introduced to prove the truth of the matter asserted in the statement. Fed. R. Evid. 801(c). Thus, if I send an email to my friend saying that the light was green when I drove through, it would be improper to use that email as evidence of the color of the light. There are several exceptions to this rule. For example, if that were my dying declaration or it were against my own interest to make that statement, the email would be admissible.
The first group of documents to which Univar objected were emails sent by Univar employees to its agents or third parties. The government was using these emails, among other things, to show what Univar knew about the merchandise as a means of assessing its culpability for the alleged misrepresentations. In other words, the email was not used to show the origin of the saccharine. Rather, it was used to show the impact of the incorporated statements on Univar with respect to its business practices. In other words, if an email chain indicates to an importer that there is reason to doubt the truthfulness of the country of origin statement from the supplier, the email may not be admissible to prove the country of origin. It is, however, admissible to show that the company had reason to doubt the information it was reporting. The Court reached a similar decision with respect to emails to Univar from its agents and employees.
The third group of contested documents were internal Univar documents including trip reports, letters and PowerPoint decks. Under FRE 801(d)(2)(D), these documents are not hearsay because they are offered by an opposing party and were made by agents or employees. Moving on.
The fourth group of documents is a mixed bag including an appearance by a Rabbi hired to determine whether the saccharine is kosher, sections of Taiwan’s customs laws, and an affidavit from a Special Agent. The statement of the rabbi (more on this in the next post) was not introduced to prove the truth of his statement but rather how it should have impacted Univar’s compliance stance. Testimony about the existence and content of an exclusivity agreement was excluded both as hearsay and under the “best evidence rule,” which states that a document is the best evidence of the contents of the document and should be introduced rather than relying on testimony about the document.
Univar objected to the introduction of other documents. The Court engaged in a detailed analysis of each and applied the relevant evidence rules. It is worth a read because evidence questions do not come up all that often in customs cases. Nevertheless, I am going to move on to the substance.
That will be the next post.
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