E-Discovery Update - by Fios Inc. - Defining A Standard for Admitting Electronic Evidence at Trial

By Conrad J. Jacoby, Published on February 15, 2006

While many attorneys and their clients focus on the importance of preserving electronic files and data to minimize the risk of evidence spoliation, far fewer give the same attention to the seemingly straight-forward process of validating these materials for admission into evidence. One inadvertent result is that while standards for resolving electronic evidence spoliation allegations have been constantly tested and improved through a combination of articulate judicial decisions, specific procedural rules, and extensive commentary by legal scholars, far fewer written opinions have squarely addressed the standards for the admissibility of electronic evidence, leaving a much smaller pool of resources from which to draw guidance.

A recent Ninth Circuit case demonstrates the degree to which standards for the admissibility of electronic evidence admissibility remain unsettled and open to significant variation. In re Vinhnee, 2005 WL 3609376, 06 Cal. Daily Op. Serv. 146, 2006 Daily Journal D.A.R. 169 (B.A.P. 9th Cir. Dec 16, 2005), stands (among other things) for the proposition that a sponsoring party cannot rely upon judicial notice to fill gaps in the explicit foundation that it uses to authenticate electronic materials it wishes to introduce as evidence. American Express, in presenting a case against a debtor who didn't answer the complaint, much less appear at his own trial, was precluded from using duplicate account statements generated by its computerized accounting system to establish the debtor's obligations because the company offered only superficial testimony regarding the origins and reliability of these statements.

After the company's corporate witness provided boilerplate testimony intended to meet the current four-part test for admitting business records under the hearsay exception (Fed.R.Evid. 803(6)), the trial court instead analyzed the duplicate statements in light of a substantially stricter eleven-factor foundational test propounded by Professor Edward Imwinkelried in his treatise, Evidentiary Foundations (5th Ed. 2002). Imwinkelried suggests that electronic corporate records should be vigorously authenticated and assumed unreliable in the absence of proper foundation. Using this analysis, the trial court found that both the corporate witness and a supplemental submission failed to provide sufficient substantive information about the computer system used to generate account statements, about how the duplicate statements were generated, and the means by which American Express ensured the accuracy and reliability of its computer databases. For these reasons, and even without evidentiary objection from the absent debtor, the court declined to accept these materials into evidence, fatally weakening American Express' case.

The outcome in Vinhnee may have been determined by an unfortunate combination of under-prepared counsel and a judge insisting on a detailed prima facie case, but the opinion serves as an excellent starting point for trying to identify baseline requirements for admitting electronic evidence. As the appellate panel noted, electronic data can be altered-intentionally or unintentionally-with comparative ease. Unlike paper records that are stored in a fixed metal filing cabinet or cardboard box, electronic information is stored in a matrix of computer hardware and software that constantly changes as software is patched and updated and hardware is upgraded and replaced. It is not unimportant to demonstrate security procedures and security and data validation features in corporate computer systems when sponsoring electronic documents. Certainly, bare statements like "There's no way that the computer changes numbers" (Vinhee, footnote 9) are unlikely to satisfy most courts making evidentiary decisions.

Conversely, however, validating electronic materials should not require elaborate foundational testimony in most circumstances. Computer systems, even the highly complex networks and servers found in many large corporations, are a common part of modern life and have been accepted by society-if not necessarily by all courts-as generally reliable and accurate information repositories. Requiring an exhaustive foundation for common reports and products of modern information management systems seems not only inefficient, but almost a repudiation of modern technology. Authenticating digital files and data should not involve Daubert-style motion practice.

An adequate foundation for the admissibility of electronic records should seek to find a reasonable balance between these extremes of superficiality and detail. Foundation should reflect factors such as the novelty of the material being presented and the complexity of the factual dispute. A fact-finder can competently rely upon an automotive mechanic instead of a mechanical engineer to describe the cause of common car problems, though that same mechanic may well lack competence to discuss possible defective design issues within the same vehicle.
The business records exception to the hearsay rule (e.g., Fed.R.Evid.803(6)) remains a valid starting point for validating electronic records. The four criteria within the rule-requiring that business records be: (1) made by or based on information from a person with appropriate knowledge; (2) made pursuant to a regular practice of the business activity; (3) kept in the ordinary course of business; and (4) generally considered trustworthy based on the source, method, or circumstances of their preparation-offer a court considerable discretion in testing the degree to which a given electronic document falls within these parameters. Additional tests, such as the eleven-factor test explicitly used by the Vinhnee trial court, can provide a helpful road map for courts struggling to understand unfamiliar technology, but these tests should be used sparingly if testimony provides an otherwise reasonable foundation for the trustworthiness of the electronic evidence. Flexibility would also suggest that other resources and approaches, including (in extreme situations) court-appointed experts, should be recognized as equally valid ways for a court to determine the admissibility of complex and uncommon digital evidence.

Analyzing the Vinhnee opinion as a case study demonstrates how minor adjustments to the proffered foundation testimony might have led to a very different result. For example, the sponsoring witness apparently failed to state his job title or relevant training and experience, providing no context for weighting his testimony. The witness did not apparently state whether duplicate computer printouts (like those at issue) were commonly used within the company and whether such duplicate printouts had previously been admitted into evidence in other legal proceedings. The witness did not provide testimony that the computer system from which the duplicate records were generated required user names and passwords to access its data, and it is unclear the extent to which the witness was able to describe the specific circumstances under which the electronic statements at issue were prepared. A competent lay witness-even an entry-level file clerk-would have no trouble answering each of these questions, creating a strong basic foundation that establishes prima facie trustworthiness.

Sponsoring non-standard electronic materials, such as custom reports or raw data segregated specifically to meet litigation demands would, logically, require greater foundation. Indeed, custom views of information stored in business databases may not qualify for admission under the business record exception to the hearsay rule (though the underlying data would certainly meet those criteria). Such litigation-tailored digital materials could appropriately be authenticated by more detailed foundation testimony that provides the type of validating information discussed by Professor Imwinkelried in his multi-factor test.

In the end, foundation for electronic files and data must always be more than empty incantations of general accuracy and reliability. A court (and opposing counsel) always deserves enough information that it can feel comfortable that evidence is sufficiently trustworthy to be admitted for its substance. By the same token, however, courts should not automatically exclude electronic evidence unless it is exhaustively documented.

Applying such a standard runs the risk of creating a multi-tiered system in which highly relevant electronic information may not be brought before a fact-finder because of the substantial cost of sponsoring it. Such a legal environment unnecessarily reduces the universe of relevant information on which a fact-finder must base a legal decision and would not seem to be the best recipe for justice.