Palmer v. Hoffman
318 U.S. 109 (1943)
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Rule of Law:
Documents created by a business in anticipation of litigation are not admissible under the business records exception to the hearsay rule because they are not made in the regular course of business for the systematic conduct of the enterprise itself.
Facts:
- A train operated by petitioners collided with a vehicle at a grade crossing in Massachusetts, resulting in the death of respondent Palmer's wife.
- Two days after the accident, the train's engineer was interviewed by an assistant superintendent of the railroad and a representative of the Massachusetts Public Utilities Commission.
- During this interview, the engineer made and signed a statement concerning the accident.
- The engineer died before the trial began.
Procedural Posture:
- Respondent Palmer sued petitioners (representing the railroad) in the U.S. District Court in New York based on diversity of citizenship.
- The complaint alleged common law negligence and causes of action under a Massachusetts statute.
- At trial, petitioners offered into evidence the deceased engineer's statement, but the district court sustained respondent's objection and excluded it.
- The jury returned a verdict in favor of respondent Palmer, and the District Court entered judgment on the verdict.
- Petitioners appealed to the U.S. Circuit Court of Appeals for the Second Circuit.
- The Circuit Court of Appeals, with one judge dissenting, affirmed the district court's judgment.
- The U.S. Supreme Court granted petitioners' writ of certiorari.
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Issue:
Does a signed statement by a since-deceased employee, detailing the circumstances of an accident and prepared for the employer's use in potential litigation, qualify as a record made 'in the regular course of business' under the federal business records exception to the hearsay rule?
Opinions:
Majority - Mr. Justice Douglas
No. A statement prepared by an employee after an accident, primarily for use in potential litigation, does not qualify as a record made 'in the regular course of business' under the federal business records statute. The court reasoned that the purpose of the business records exception is to permit the admission of records that are inherently trustworthy because they are created for the systematic, day-to-day operation and management of the business, such as payrolls or accounts receivable. The engineer's statement, in contrast, was not made for the systematic conduct of the railroad business itself but was primarily created for litigating purposes. Allowing such documents would pervert the rule, as any business could create a system for recording its self-serving version of accidents to avoid cross-examination, undermining the trustworthiness rationale that is the foundation of the exception. The primary utility of these reports is 'in litigating, not in railroading.'
Analysis:
This decision significantly narrows the scope of the federal business records exception (now FRE 803(6)) by establishing the 'anticipation of litigation' doctrine. It clarifies that 'regular course of business' refers to the inherent nature of the business's operations, not just any regularly followed procedure. The primary purpose for which a document is created is now a critical factor in determining its admissibility, emphasizing the exception's grounding in the document's trustworthiness. This precedent forces courts to scrutinize the motivation behind a record's creation, preventing parties from shielding self-serving statements, prepared with an eye toward a lawsuit, from the rigors of cross-examination under the guise of a business record.
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