Deere & Company v. FIMCO, INC.
260 F. Supp. 3d 830 (2017)
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Rule of Law:
Hearsay evidence that does not fall under a specific exception, such as survey results detailing memory or belief, may still be admissible under the residual hearsay exception (Federal Rule of Evidence 807) if it possesses equivalent circumstantial guarantees of trustworthiness and satisfies the rule's other requirements.
Facts:
- Deere & Company ('Deere') uses a signature green and yellow color scheme on its agricultural equipment.
- FIMCO Inc. ('FIMCO') also manufactures and sells agricultural equipment using a green and yellow color scheme.
- Deere retained an expert investigator, William Shanks, to survey salespeople at dealerships that sell FIMCO equipment.
- During the survey, Shanks initiated a conversation where salespeople consistently associated the green and yellow colors with 'John Deere'.
- In follow-up conversations, those same salespeople told Shanks that customers who purchase agricultural equipment are not actually confused and can distinguish between Deere and FIMCO products.
- Shanks included the findings about the association with Deere in his formal expert report but did not include the salespeople's statements about the lack of actual customer confusion, though he recorded them in his contemporaneous notes.
Procedural Posture:
- Deere & Company sued FIMCO Inc. in the U.S. District Court for the Western District of Kentucky for federal trademark infringement.
- FIMCO filed a counterclaim against Deere, seeking a declaration of non-infringing use.
- During pretrial litigation, Deere filed a motion in limine seeking to exclude from trial portions of notes taken by its own expert, William Shanks.
- FIMCO also filed a motion in limine to exclude certain evidence from Deere.
- The District Court considered the pending motions in limine to determine the admissibility of evidence before the scheduled bench trial.
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Issue:
Does survey evidence containing statements of memory or belief, which is inadmissible under the state-of-mind hearsay exception (FRE 803(3)), nevertheless become admissible under the residual hearsay exception (FRE 807) if it meets the rule's requirements for trustworthiness, materiality, and probative value?
Opinions:
Majority - Thomas B. Russell
Yes. Survey evidence that is inadmissible under a specific hearsay exception can be admitted under the residual exception (FRE 807) if it satisfies the rule's five requirements. The court first determined that the salespeople's statements about a lack of customer confusion were statements of memory or belief, making them inadmissible hearsay under the state-of-mind exception, FRE 803(3). However, the court then analyzed the evidence under the residual exception, FRE 807. It found the evidence possessed sufficient circumstantial guarantees of trustworthiness because: (1) the salespeople were unaware of the litigation, minimizing the risk of insincerity; (2) the questions were not leading; and (3) the expert's own act of recording statements unfavorable to his client, Deere, was a powerful indicator of reliability. The evidence was also material, as 'likelihood of confusion' is a central issue in trademark infringement cases. Furthermore, it was more probative than other reasonably obtainable evidence, as subpoenaing all twenty salespeople from across the country would be an unreasonable effort. Finally, admitting the evidence served the interests of justice by providing the factfinder with a complete picture and ensuring fairness, and Deere had adequate notice of the evidence. Because all five requirements of Rule 807 were met, the evidence was deemed admissible.
Analysis:
This opinion provides a significant and detailed application of the residual hearsay exception, FRE 807, a rule courts are generally reluctant to use. It establishes a clear framework for admitting survey evidence that falls outside traditional exceptions, emphasizing fairness and the complete context of an investigation. The ruling underscores the principle that a party cannot use its own expert's findings as both a sword (admitting favorable parts) and a shield (excluding unfavorable parts). This case will serve as persuasive authority in trademark litigation for parties seeking to introduce contextual or otherwise excluded portions of an opposing expert's survey data, reinforcing that the pursuit of truth can justify the use of this 'catch-all' exception.
