City of Huntington, West Virginia v. AmerisourceBergen Drug Corporation et al

Filing 1288

MEMORANDUM OPINION AND ORDER granting McKesson Corporation's 1045 MOTION in Limine to Exclude Evidence Regarding a Former Employee's Plea. Signed by Senior Judge David A. Faber on 4/26/2021. (cc: counsel of record who have registered to receive an electronic NEF) (jsa)

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
THE CITY OF HUNTINGTON,
Plaintiff,
v.

CIVIL ACTION NO. 3:17-01362

AMERISOURCEBERGEN DRUG
CORPORATION, et al.,
Defendants.
________________________________
CABELL COUNTY COMMISSION,
Plaintiff,
v.

CIVIL ACTION NO. 3:17-01665

AMERISOURCEBERGEN DRUG
CORPORATION, et al.,
Defendants.
________________________________
MEMORANDUM OPINION AND ORDER
Pending before the court is McKesson Corporation’s Motion in
Limine to Exclude Evidence Regarding a Former Employee’s Plea.
See ECF No. 1045.

That motion is fully briefed and ripe for

decision.
I.
From 2008 to 2014, David Gustin served as a Director of
Regulatory Affairs (“DRA”) for McKesson’s North Central Region,
which included portions of Ohio, West Virginia, and Kentucky.

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Gustin left his position as a DRA in 2014, and retired from
McKesson in 2016.
On July 6, 2020, in the United States District Court for the
Eastern District of Kentucky, Gustin pleaded guilty to a onecount information charging him with knowingly failing to file
suspicious order reports, in violation of 21 U.S.C. § 842(a)(5).
Under the plea agreement, in exchange for Gustin’s guilty plea to
the misdemeanor, the government agreed to dismiss a 2019
indictment charging him with conspiracy to distribute controlled
substances, in violation of 21 U.S.C. § 846.

Gustin was

sentenced to two years of probation on the misdemeanor and the
indictment was dismissed.
In its motion, McKesson asks the court to exclude: (1)
Gustin’s plea agreement and the information to which he pled
guilty; and (2) Gustin’s 2019 indictment.
the documents are inadmissible hearsay.

According to McKesson,

Plaintiffs argue that

Gustin’s plea agreement and the criminal information are
admissible under Federal Rule of Evidence 803(8).

Plaintiffs

stated that they did not plan to seek to introduce evidence of
the indictment.

See ECF No. 1129 at 4 n.9.

In its reply,

McKesson also asks the court to exclude the misdemeanor
judgment.1

1

Mr. Gustin was sentenced on October 15, 2020, after
McKesson filed its opening brief.
2

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II.
Hearsay evidence is inadmissable unless a hearsay exception
applies.

See Fed. R. Evid. 802.

The parties seem to agree that

the plea agreement, criminal information, and judgment are
hearsay.

But that is where any agreement ends.

McKesson

contends that Federal Rule of Evidence 803(22) controls while
plaintiffs argue that Federal Rule of Evidence 803(8) does.
A.

Rule 803(22) and 803(8)
Federal Rule of Evidence 803(22) addresses when a judgment

of a previous conviction should be admitted as an exception to
the hearsay rule.

The rule holds that “[e]vidence of a final

judgment of conviction” is not excluded by the rule against
hearsay “if:

(A) the judgment was entered after a trial or

guilty plea, but not a nolo contendre plea; (B) the conviction
was for a crime punishable by death or by imprisonment for more
than one year; (C) the evidence is admitted to prove any fact
essential to the judgment; and (D) when offered by the prosecutor
in a criminal case for a purpose other than impeachment, the
judgment was against the defendant.”

Fed. R. Evid. 803(22).

Plaintiffs argue that the plea agreement and the information
are admissible under Federal Rule of Evidence 803(8)(A)(iii)
which provides:

“The following are not excluded by the hearsay

rule, even though the declarant is available as a witness: . . .
A record or statement of a public office if: . . . (A) it sets

3

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out: . . . (iii) in a civil case . . . factual findings from a
legally authorized investigation.”
Rule 803(22) presumably governs the admissibility of
Gustin’s Judgment in a Criminal Case, his plea agreement, and the
criminal information to which he pled guilty.2

And, because Mr.

Gustin pleaded guilty to a misdemeanor not punishable by
“imprisonment for more than one year,” that evidence is not
admissible.

Regarding the admissibility of judgments from other

cases, the United States Court of Appeals for the Fourth Circuit
stated:

“We note at common law a judgment from another case

would not be admitted. . . .

We also note that when the drafters

of the Federal Rules of Evidence wanted to allow the admission of
judgments or their underlying facts, they did so expressly.”
Nipper v. Snipes, 7 F.3d 415, 417 (4th Cir. 1993).3

2

The court is mindful of the observation of the United
States Court of Appeals for the First Circuit that “it is not
obvious that Rule 803(22) can be interpreted to bar any evidence”
and that “[e]vidence of a final judgment that does not fall
within this exception to the hearsay rule could be admissible,
either because it is not being offered for the truth of the
matter asserted or because it falls within some other hearsay
exception.” Olsen v. Correiro, 189 F.3d 52, 62 (1st Cir. 1999).
However, in this case, the court has not excluded the evidence
based solely on the inapplicability of Rule 803(22). It has also
considered plaintiffs’ invocation of Rules 803(8) and 807 to seek
admission.
3

At least one court has taken the position that Federal
Rule of Evidence 803(22) would not allow for the admission of Mr.
Gustin’s plea agreement even if the requirements of the rule were
otherwise satisfied. See Evanston Ins. Co. v. Desert State Life
Mgmt., 484 F. Supp.3d 987, 1006-10 n.6 (D.N.M. 2020) (“The cases
Evanston Insurance cites in support of its position that plea
4

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In Nipper, the court considered whether judicial findings of
fact entered in another case were properly admitted under the
Federal Rule of Evidence’s public records exception.

See id.

The court noted that:
Rule 803(8)(C),4 on its face, does not apply to
judicial findings of fact; it applies to “factual
findings resulting from an investigation made pursuant
to authority granted by law.” Fed. R. Evid. 803(8)(C).
A judge in a civil trial is not an investigator, rather
a judge. In fact, a review of the advisory committee
note to Rule 803 makes plain that the drafters intended
this portion of the rule to relate to findings of
agencies and offices of the executive branch. See
Advisory Committee’s Note, 56 F.R.D. 183, 311-313; see
also Zenith Radio Corp. v. Matsushita Elec. Indus. Co.,
505 F. Supp. 1125, 1185 (E.D. Pa. 1980) (“[A] review of
the advisory committee note makes it clear that
judicial findings are not encompassed; not only is
there not the remotest reference to judicial findings,
but there is a specific focus on the findings of
officials and agencies within the executive branch.”).
There is not the slightest hint, from either the text
of the rule or the advisory committee note, that the
rule applies to judicial findings of fact.
Id.
The criminal information, plea agreement, and judgment are
not “factual findings from a legally authorized investigation,”
agreements fall within rule 803(22)’s heartland are not
convincing.”). According to that court, “[t]he rule’s title,
‘Judgment of a Previous Conviction’ and its explicit limitation
of the hearsay exception to ‘[e]vidence of a final judgment of
conviction,’ suggest there is little room for a court to admit
documents other than a Judgment in a Criminal Case.” Id.
(quoting Rule 803(22)). The court need not reach this issue
because the requirements for admission of hearsay under Rule
803(22) have not been met.
4

At the time Nipper was decided, the current 803(8)(iii)
was 803(8)(C).
5

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and, therefore, they do not fall under the public records
exception to the hearsay rule.

Fed. R. Evid. 803(8).

plaintiffs fail to offer any authority that they are.

And
First, “a

criminal information is a charging document not supported by
evidence.”

Levinson v. Westport Nat. Bank, Civil Action Nos.

3:09cv269(VLB), 3:09-cv-1955(VLB), 3:10-cv261(VLB), 2013 WL
2181042, at *1-2 (C.D. Cal. May 20, 2013) (holding that although
criminal informations might be relevant evidence they did not
qualify as exceptions to the rule against hearsay under Federal
Rules 803(8), 803(22), or 807).
And “[a] plea agreement is essentially a contract between an
accused and the government.”

United States v. Johnson, 915 F.3d

223, 233 (4th Cir. 2019) (internal citations and quotations
omitted).

Finally, a judgment in a criminal case is the document

that memorializes the final adjudication of the district court.
See Fed. R. Crim. P. 32(k)(1) (“In the judgment of conviction,
the court must set forth the plea, the jury verdict or the
court's findings, the adjudication, and the sentence.

If the

defendant is found not guilty or is otherwise entitled to be
discharged, the court must so order.

The judge must sign the

judgment, and the clerk must enter it.”).
Plaintiffs’ argument that “the 2020 criminal information and
the related plea agreement are a result of investigations and
findings by an agency of the executive branch, the U.S.

6

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Attorney’s Office,” see ECF No. 1129 at 5, does little to advance
their argument because, as noted above, the documents themselves
do not set out factual findings from a legally authorized
investigation by the executive branch.

At a plea hearing, while

a court makes certain findings, see generally Fed. R. Crim. P.
11, the parties do not.

And “judicial opinions and judicial

fact-finding do not fall under the public records exception to
the hearsay rule.”

Cardinal v. Buchnoff, No. 06CV0072-MMA(BLM),

2010 WL 3339509, at *2 (S.D. Ca. Aug. 23, 2010) (noting that
courts have concluded Rule 803(8) covers only factual findings by
executive branch and officials, not judicial fact-finding).
In any event, the court agrees that the “more general
reference in Rule 803(8) cannot trump the more specific
limitation on the admission of judgments of conviction.”

United

States v. Nguyen, 465 F.3d 1128, 1132 (9th Cir. 2006) (noting
that allowing the admission of misdemeanor judgments

under “Rule

803(8) would swallow whole Rule 803(22)’s prohibition against the
admission of misdemeanor convictions”).

As another court noted,

if a judgment of conviction is admissible under Rule
803(8), then Rule 803(22) would be superfluous. The
drafters of the Federal Rules of Evidence expressly
excluded certain types of convictions from the reach of
Rule 803(22), and it would produce an illogical result
to find that the limits of Rule 803(22) could be so
easily contravened by resorting to Rule 803(8).
United States v. Gant, No. 11-CR-2042-LRR, 2012 WL 12895683, at
*3 (N.D. Iowa July 14, 2012).

7

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For all these reasons, the court concludes that the
Information, Gustin’s plea agreement, and his judgment of
conviction are not admissible under either Rule 803(22) or
803(8).
B.

Rule 807
In the alternative, plaintiffs argue that Gustin’s

information and plea agreement are admissible pursuant to Federal
Rule of Evidence 807, the residual hearsay exception.

Rule 807

was amended in 2019 and provides in relevant part:
(a) In General. Under the following conditions, a
hearsay statement is not excluded by the rule against
hearsay even if the statement is not admissible under a
hearsay exception in Rule 803 or 804:
(1) the statement is supported by sufficient
guarantees of trustworthiness--after considering the
totality of circumstances under which it was made and
evidence, if any, corroborating the statement; and
(2) it is more probative on the point for which it
is offered than any other evidence that the proponent
can obtain through reasonable efforts.
Fed. R. Evid. 807(a).

“The hallmark of Federal Rule of Evidence

807 is that the hearsay statement sought to be admitted is
trustworthy.”

United States v. Lucas, 836 F. App’x 142, 145 (4th

Cir. Dec. 4, 2020).
The Fourth Circuit has long recognized that the residual
exception is “meant to be invoked sparingly,” and that the
legislative history “puts it more strongly,” stating:

“‘It is

intended that the residual hearsay exceptions will be used very

8

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rarely, and only in exceptional circumstances.’”

United States

v. Heyward, 729 F.2d 299-300 (4th Cir. 1984) (quoting Fed. R.
Evid. 803 Senate committee note) (other citations omitted); see
also United States v. Ealy, No. 1:00CR00104, 2002 WL 1205035, at
*3 (W.D. Va. June 3, 2002) (“The residual hearsay exception is
intended to be used rarely and only in exceptional
circumstances.”).

Likewise, the “significantly streamlined” Rule

807 “is [still] intended to be a last resort.”

United States v.

Smith, Criminal Action No. 19-324(BAH), 2020 WL 5995100, at *5
(D.D.C. Oct. 9, 2020); 30B Charles Alan Wright et al., Federal
Practice & Procedure § 7066 (2021) (“All explicit signs of a
desire to ‘expand’ the use of the residual exception have been
removed from the final Advisory Committee Note. . . .

[T]he 2019

Amendments do not explicitly signal a desire to expand use of the
residual exception.”).
Under his plea agreement, Mr. Gustin “admits” to certain
conduct spanning three single-spaced pages.

That conduct, as

outlined in his plea agreement, goes far beyond a simple
admission of the essential elements of the crime charged.
Regarding the applicability of the residual hearsay
exception, plaintiffs state:
Mr. Gustin’s 2020 criminal information and plea
agreement are also admissible under Fed. R. Evid. 807.
Rule 807, referred to as the residual hearsay
exception, allows for a hearsay statement to be
admitted even if it does not fall under any of the
exceptions found in Rule 803 if the statement is
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supported by sufficient guarantees of trustworthiness
and is more probative on the point for which it is
offered than other evidence the proponent can obtain.
See Fed. R. Evid. 807. The Ninth Circuit has also
ruled on this issue finding that a plea agreement is
admissible under Rule 807. See In re Slatkin, 525 F.3d
805, 812 (9th Cir. 2008).
In this case, Plaintiffs have established the
sufficient guarantees of trustworthiness surrounding
Mr. Gustin’s 2020 criminal information and plea
agreement through Mr. Gustin’s admissions against his
own interest, the congressional findings, and
McKesson’s own admissions of CSA violations.
Additionally, the plea agreement satisfies the second
prong of Rule 807 because it is highly probative
evidence on the points [for] which it is offered and
because Plaintiffs have not been able to obtain
additional testimony concerning these events from Mr.
Gustin himself.
ECF No. 1129 at 6.
Plaintiffs have not met their heavy burden to show that the
residual hearsay exception should apply.

First, as noted above,

the plea agreement recitation of facts is very detailed and
plaintiffs’ reference to Congressional findings and McKesson’s
own admissions fails to satisfy the court that there is
sufficient corroboration for all of the admissions in the plea
agreement.
In addition, as McKesson points out, plaintiffs fail to
sufficiently explain why this evidence is more probative on the
point(s) for which it is offered than any other evidence that
plaintiffs can obtain through reasonable efforts.

For example,

if McKesson has already admitted to the same conduct, how is the
Gustin evidence more probative?
10

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Finally, given that the residual clause is to be used as a
last resort, the court is “uncomfortable admitting all parts of
plea agreements under the residual clause.”

Evanston Ins. Co.,

484 F. Supp.3d at 1006-10 n.6 (“In the court’s opinion, the
residual hearsay exception should be reserved for situations . .
. where the credibility of the evidence is entirely beyond
dispute even though all other hearsay rules prevent the
evidence’s admission.

Plea agreements, as noted above, are not

as inherently trustworthy. . . .”).
For all these reasons, the court concludes that, at this
juncture, plaintiffs have failed to show these documents are
admissible under Rule 807.

Plaintiffs are not prohibited from

trying again, but any motion seeking admission under Rule 807
should be filed early enough to allow McKesson an opportunity to
respond in writing and give the court sufficient time to consider
the merits.5

5

Plaintiffs contend that McKesson should not have filed
this motion because Judge Polster’s order of December 26, 2019,
already decided the issue. Plaintiffs are incorrect as Judge
Polster’s order was entered prior to the filing of the 2020
Information, the plea agreement, or the misdemeanor judgment.
Judge Polster held that “evidence of criminal investigative
reports” is admissible “unless the source of information lacks
trustworthiness.” See Exhibit A to Plaintiffs’ Opposition (ECF
No. 1046). However, the court’s ruling herein does not
contradict of Judge Polster’s ruling because there are no
criminal investigative reports for which plaintiffs seek
admission.
11

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III.
For all these reasons, the motion in limine is GRANTED.

The

Clerk is directed to send copies of this Memorandum Opinion and
Order to those counsel of record who have registered to receive
an electronic NEF.
IT IS SO ORDERED this 26th day of April, 2021.
ENTER:

David A. Faber
Senior United States District Judge

12