Kadant Johnson, Inc v. D'Amico et al
Filing
620
ORDER & REASONS denying 526 Motion in Limine to exclude product evaluation and field service reports. Signed by Judge Helen G. Berrigan on 06/15/2012. (Reference: 10-2869)(kac, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
KADANT JOHNSON INC.,
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VERSUS
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JOSEPH V. D’AMICO, LOUISIANA
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STEAM EQUIPMENT, LLC and
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UTILITIES OPTIMIZATION GROUP, *
LLC
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CIVIL ACTION NO. 10-CV-02869
C/W 11-CV-0036
(REFERS TO CASE NO. 10-CV-02869)
JUDGE: HELEN G. BERRIGAN
MAG. JOSEPH C. WILKINSON, JR.
ORDER AND REASONS1
Before the Court is a Motion In Limine to Exclude Product Evaluation and Field Service
Reports (“Motion to Exclude”) by Defendants Joseph V. D’Amico, Louisiana Steam Equipment,
LLC (“LSE”), LSE Systems, Inc., and Utility Construction Group, Inc. (“Defendants”). (Rec.
Doc. 526). Under the Federal Rules of Evidence, Defendant claims that Kadant Johnson’s
(“Plaintiff”) evidence is irrelevant under Rule 401, double hearsay under Rule 801, creates unfair
prejudice under Rule 403, and lacks proper authentication under Rule 901. After viewing
memoranda of counsel, the record, and the law, the Court DENIES the Motion to Exclude.
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Jack Schinasi, a first year student at Tulane University Law School, and Adreanne
Stephenson, a first year student at the University of Notre Dame Law School assisted in the
preparation of this Order and Reasons.
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BACKGROUND
The three exhibits Defendants seek to exclude are two product evaluation reports and one
field service report (collectively, “the reports”). (Ex. 578, 584, 679). The reports were
generated following complaints by customers who were dissatisfied about the performance of
these parts, which they claimed were purchased from LSE and manufactured by Plaintiff. The
goal of the reports was to determine who had manufactured them – the Plaintiff or some other
manufacturer – and to improve performance. The reports also include first hand documentation
and analysis of the products by field service employee John Hotovy (“Mr. Hotovy”) and Director
of Product Technology Alan Ives (“Mr. Ives”), authors of the reports and employees of Plaintiff.
Id. This documentation includes pictures of the parts both on-site and at Plaintiff’s Research
Center, as well as written accounts and discussions with customers and other employees of
Plaintiff. Id.
LAW AND ANALYSIS
I. RELEVANCE
First, Defendant argues that the reports should be excluded because they are not relevant.
(Rec. Doc. 526-2 at 1). Rule 401 of the Federal Rules of Evidence defines “relevant evidence”
as that which has “any tendency to make the existence of any fact that is of consequence to the
determination of the action more probable or less probable than it would be without the
evidence.” This rule is to be liberally construed by the court. Pick v. American Medical
Systems, Inc., 958 F.Supp 1151, 1162 (E.D. La. 1997). The reports at issue are relevant in
showing whether Defendants marketed and sold Plaintiff’s products as their own, and therefore
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goes to the Plaintiff’s breach of contract claim.2 (Ex. 578, 584, 679). Accordingly the reports
are not excluded on 401 grounds.
II. HEARSAY
Second, Defendants argue that the reports should be excluded because they contain
inadmissible hearsay. (Rec. Doc. 526-2 at 3). Rule 801 of the Federal Rules of Evidence defines
hearsay as an out-of-court statement of someone other than the declarant that is offered to prove
the truth of the matter asserted. Rule 802 of the Federal Rules of Evidence provides that hearsay
is not admissible unless it meets an exception provided by the Federal Rules of Evidence, or a
rule prescribed by the Supreme Court.
Exceptions to the rule against hearsay include “records of regularly kept activity,” as
prescribed by Rule 803(6). This exception has five elements: (1) the record must have been
made at or near the time of the event in question by someone with knowledge, (2) the record
must have been kept in the course of a regularly conducted activity of a business, (3) making the
record must have been a regular practice of that activity, (4) the conditions must be shown by the
testimony of the custodian or another qualified witness, and (5) neither the source of information
nor the method or circumstances of its preparation may indicate a lack of trustworthiness. Fed.
R. Evid. 803(6).
Here, Defendants argue that the reports are hearsay on two levels. (Rec. Doc. 526-2 at
3). On the first level, Defendants argues that the reports themselves are hearsay under Rule 801
not falling under a hearsay exception. (Rec. Doc. 526-2 at 3). On the second level, Defendants
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Plaintiff asserts that the reports are also relevant for proving their Lanham Act and
unfair competition claims, but these claims were dismissed as a result of the June 8, 2012
settlement between the parties.
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assert that the reports reference customers’ complaints, which they argue constitute out-of-court
statements introduced for the truth of the matter they assert, that is, that the products at issue are
defective. (Rec. Doc. 526-2 at 4-5). Indeed, the reports do reference such customer
communications. (See, e.g., Ex. 679 at KJ-AE004553).
With regard to the first level, the Court is persuaded that the reports fall under the Rule
803(6) exception to the hearsay rule, as long as the reports are properly authenticated in
accordance with that rule at trial. First, the reports were made at or the near the time of the
equipment failure by those with personal knowledge – Mr. Ives and Mr. Hotovy, who were
employed by Plaintiff to analyze such failures. (Rec. Doc. 568 at 4). Second and third,
Defendants do not allege that analyzing customer complaints in general and producing reports
about those complaints was not a regular activity of Plaintiff’s business. The fourth factor will
be met if the proper “custodian or another qualified witness” authenticates the reports at trial.
Fed. R. Evid. 803(6)(d). Fifth, there is no indication of a lack of trustworthiness in the collection
or analysis of the information presented.
The Court is unpersuaded that the second level of hearsay is in fact hearsay. The
customer complaints were not used for the truth of the matter they asserted – that is, that the
products they were complaining of were defective. Rather, they merely triggered the production
of the reports.
III. UNFAIR PREJUDICE
Defendants claim that if the reports are admitted into evidence for use at trial, Defendants
“would be severely prejudiced as the Plaintiff’s characteristics [sic] and conclusions regarding
Defendant’s purported products (which Defendants acknowledge may not even be their
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products) may potentially stand in place of the Court’s decision with regards to the issues
presented by this dispute.” (Rec. Doc. 526-2 at 7.) Rule 403 of the Federal Rules of Evidence
allows the Court to exclude evidence if the probative value is substantially outweighed by a
danger of unfair prejudice, confusing issues that may mislead the jury, undue delay or needlessly
presenting cumulative evidence. At this time, none of Defendants’ arguments persuade the
Court that admitting the reports would unfairly prejudice Defendants. Accordingly, Defendants’
Rule 403 argument is deferred to trial.
IV. AUTHENTICATION
Defendants argue that the reports lack proper authentication because Plaintiff has not
proven that the allegedly defective products were Defendants’, and Plaintiff has not properly
established the condition of the products. (Rec. Doc. 526-2 at 1, 7-8). This argument is also
deferred to trial.
Accordingly,
IT IS ORDERED that the Defendant’s Motion in Limine to Exclude Product Evaluation
and Field Service Reports is DENIED.
New Orleans, Louisiana, this 15th day of June, 2012.
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HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE
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