HAROLD H. GREENE, District Judge.
Pretrial Order No. 16 establishes a procedure for deciding, in advance of the trial, questions relating to judicial notice and the purposes for which judicial notice will be
The basic issue regarding the test care materials is whether, notwithstanding their appearance as hearsay documents, they may be admissible for the truth of the matters stated
I—Admissions by Government Officials
Three of the test case documents are statements made by officials of Executive Branch agencies of the United States government (other than the Department of Justice)
The government in response does not argue that the statements were made outside the scope of the employment of these officials. Instead it contends that for purposes of the party-opponent admissions rule the "plaintiff" in this case should not be deemed to encompass the Executive Branch in its entirety, but should be limited to the Department of Justice.
The government acknowledges, as it must, that in the Court's Opinion of September 11, 1978,
In its September 11, 1978, Opinion the Court noted that this action was instituted on behalf of the United States under the antitrust laws, which "constitute a means for protecting the economic interests of the citizens of this country, not infrequently on a national scale," and that the "theory of the government's case and the relief requested are national in scope and they are likely to involve the documents and activities of a great number of government departments."
In the view of the Court, the concerns and activities of the government generally are implicated by this antitrust suit, not merely those of the Department of Justice, and that is true irrespective of whether the particular issue involves rules of discovery or rules of evidence. In either context, it "makes no sense to hold that the Department of Justice, which essentially is a law office, alone comprises the United States."
But, it is argued, any definition of the plaintiff as comprising the government generally in the present context would contradict the rationale of Rule 801(d)(2). Citing McCormick
First, the admissibility of an admission by a party-opponent is a consequence, not of trustworthiness or lack of burdensomeness, but of the adversary system of litigation. The Advisory Committee Notes on the Federal Rules of Evidence explained that
See also McCormick, Evidence, § 262;
A second and related reason for rejecting the government's position is that its arguments would apply with equal force to any large organization with many individuals speaking and acting on its behalf. Were the Court to accept the government's reasoning, all such organizations would effectively have to be exempted from the purview of the rule on party-opponent admissions. The unambiguous language of Rule 801(d)(2) clearly does not contemplate such a result.
Finally, the underlying theoretical premise of the government's argument is troubling and cannot be accepted. Its argument in effect is that, whenever the purpose of a rule — whether of pleading or of evidence — would be better effectuated by altering the configuration of a party to which it is applicable, then the definition of that party must be changed in midstream. Carried to its logical conclusion, this position would force the courts to change the shape and size of parties, particularly in complex litigation, depending upon the part of the case being tried and the principles of law and procedure that may be relevant at any given moment. These chameleon-like shifts in the identity of the parties would upset the orderly conduct of such litigation.
For these reasons, the Court rejects the proposition that the plaintiff in this case for the purposes of the rules of evidence is the Department of Justice; it holds, as it did on September 11, 1978, that the plaintiff is the United States;
II—Decisions by Regulatory Commissions
Among the test case materials which the government proposes to offer as evidence for the truth of the matters asserted therein are portions of orders and decisions in six FCC dockets (Nos. 8963, 19528, 19896, 19919, 20097, 20288) and in one state regulatory proceeding (Colorado P.U.C. Docket No. 881). The government contends that these materials, though hearsay, are admissible into evidence under the "public records" exception to the hearsay rule codified in Rule 803(8)(C), which excepts from the hearsay rule
In view of the disparate character of the different dockets, both procedurally and substantively, it is not feasible to make a blanket finding of admissibility or non-admissibility for the materials in this category. For that reason the Court has examined each docket and designated paragraphs within each docket in light of the requirements of Rule 803(8)(C) and has made determinations on that basis as to whether exclusion is or is not warranted. In its determinations the Court has been guided by the Advisory Committee Notes, prepared by the framers of the Rules, which state that Rule 803(8) "assumes admissibility in the first instance, but with ample provision for escape if sufficient negative factors are present."
A. Factual Findings Resulting from an Investigation Authorized by Law
The Federal Communications Commission is clearly authorized to hold hearings on investigations into newly filed charges, regulations, and practices (section 204 of the Communications Act, 47 U.S.C. § 204) either in response to a complaint or on its own motion (section 403 of the Communications Act, 47 U.S.C. § 403) and the Colorado Public Utilities Commission is similarly authorized to conduct its investigations (Colo.Rev.Stat. §§ 40-3-111, 40-4-101, 40-6-101 et seq. (1973)). Thus, the first part of the Rule 803(8)(C) test is met.
The next issue to be examined is whether the materials constitute "factual findings resulting from an investigation." The legislative history of Rule 803(8)(C) is unfortunately contradictory, some of it indicating that the public records exception to the hearsay rule was intended to be limited to routine reports memorializing past facts observed by the investigator, other history supporting the view that it also embraces so-called "evaluative reports." Thus, the report of the House Judiciary Committee stated that "[t]he Committee intends that ... `factual findings' be strictly construed and that evaluations or opinions contained in public reports shall not be admissible under this Rule." Report of the Committee on the Judiciary, H.R.Rep.No.93-650, 93d Cong., 1st Sess. 14 (1973), U.S.Code Cong. & Admin.News 1974, pp. 7051, 7088. The Senate Judiciary Committee, on the other hand, noting that the "Advisory Committee assumes admissibility in the first instance of evaluative reports," took strong exception to the House Committee's "limited understanding of the application of the rule." Report of the Committee on the Judiciary, S.Rep.No.93-1277, 93d Cong., 2d Sess. 18 (1974), U.S.Code Cong. & Admin.News 1974, p. 7064.
Extrinsic materials indicate that the Rule is most appropriately considered by following the Senate Committee's position.
The Advisory Committee on the Rules found "the willingness of Congress to recognize [a substantial measure of admissibility
Beyond that, the decisions subsequent to the promulgation of the Rule tend towards a more rather than a less expansive definition of "factual findings," and they generally permit the admission into evidence of reports and conclusions that do more than memorialize observed facts. See Chandler v. Roudebush, 425 U.S. 840, 863 n. 39, 96 S.Ct. 1949, 1961, 48 L.Ed.2d 416 (1976) (prior administrative findings with respect to an employment discrimination admissible under 803(8)(C)); United States v. School District of Ferndale, 577 F.2d 1339 (6th Cir. 1978) (HEW hearing examiner's finding that school had been established and maintained as a black school for purposes of segregation admissible); Miller v. New York Produce Exchange, 550 F.2d 762 (2d Cir. 1977) (Commodity Exchange Authority document containing data and conclusions about a commodity squeeze in the cotton-seed oil is admissible); Hackley v. Roudebush, 520 F.2d 108 (D.C.Cir.1975) (administrative record is admissible at a Title VII trial de novo); Melville v. American Home Assurance Co., 443 F.Supp. 1064 (E.D.Pa. 1977), rev'd on other grounds, 584 F.2d 1306 (3d Cir. 1978) (F.A.A. airworthiness directives impugning the mechanical safety of the model of a plane whose crash was at issue admissible); Baker v. Elcona Homes Corp., supra (conclusions of police officer as to color of light that he did not observe personally admissible); contra, Complaint of American Export Lines Inc., 73 F.R.D. 454 (S.D.N.Y.1977) (report of Marine Board of Investigation convened by Coast Guard to examine harbor collision inadmissible).
The rationale for the admissibility of factual findings contained in public records, as explained in the cases cited above, lies in their fundamental trustworthiness.
Rule-making proceedings present a more complicated problem in the scheme of Rule 803(8)(C). Defendants contend that the prospective, policy-oriented, rule-making character of the regulatory decisions at issue here renders them incapable of engendering the factual findings contemplated by the Rule. It is certainly true that, to the extent that a proceeding is clearly rule-making-directed in focus to regulation of future conduct, with any fact-finding at most incidental and used primarily for predictive purposes
The difficulty is that with respect to the great bulk of the test case materials it is impossible to draw a hard-and-fast distinction between rule-making and fact-oriented adjudication. The materials typically mix both elements; they involve the prescription of future behavior through order or rule, but at the same time they contain findings of fact made by the Commission (or an administrative law judge) upon which the issuance of rulings for the future is based. Hence, the Court is required to look beyond the label and to examine more closely the subject matter of the paragraphs designated within each docket to determine which of these constitute findings of facts or conclusions drawn from such findings, on the one hand, and which are more fully oriented towards future conduct or policy, on the other.
1. Simple Findings of Facts
A small number of the designated paragraphs
2. Findings as to AT&T's Methods of Analysis
Related to the simple findings are those paragraphs which describe and examine certain of AT&T's calculations, projections, and analyses of the costs, investments, and expenses associated with different tariffs. To be sure, opinions or conclusions as to the validity of AT&T's analyses are interspersed with the more strictly "factual" recounting of what methods AT&T used, but even as to such conclusions the Commissioners appear to have relied on their own analysis and expertise. See e. g., ¶ 11 of item 177, Docket No. 20288. The Advisory Committee Notes suggest as one factor to be taken into account in determining the admissibility of a conclusory report the "special skill and experience" of the preparer of the report. This is appropriately interpreted as an invitation to take advantage of an investigator's skill in making inferences which will aid the Court in its own fact-finding process.
3. Background Matters
A number of paragraphs fall into the category of "background information": descriptions of past events or of other materials largely culled from other documents on the public record. For example, in a number of dockets the Commission simply summarizes the content of certain AT&T tariffs and the positions of the parties in the pleadings to the proceedings. See, e. g., Docket No. 19919, item 36, ¶¶ 11-15.
Defendants claim that such background summaries are not legitimate "factual findings" and that the government is required to prove these facts through the original documents, citing Rule 1002,
There is no reason for concluding that these summary materials do not constitute "factual findings" of the sort required by Rule 803(8)(C). Certainly, they are not in that category merely because the Commission may have labeled them as "background." That label is simply irrelevant to the "factual findings" issue.
The best evidence rule presents somewhat more of a problem, but in the Court's view the materials in question are admissible notwithstanding that rule. The government has represented that these materials "are only involved collaterally to the principal issues in the case";
4. Matters Relating to Burden of Proof
Many of the designated paragraphs focus on conclusions by the FCC that AT&T did not, in certain instances, meet the burden of proof necessary to justify a particular rate or practice under the Communications Act. These paragraphs do not contain findings by the FCC of the existence or non-existence of any fact or a series of facts, nor do they contain inferences from such findings. Rather, they reflect conclusions by the Commission that the record in a particular docket yielded no definitive answers, and that because the burden was on AT&T to produce those answers, it could not prevail. The inclusion of such conclusions
5. Findings of Unfair Rates and Practices
The government proposes to introduce into evidence a number of paragraphs containing findings of violations of provisions of the Communications Act, or findings of unlawful discrimination, of unreasonable and practices, unjust rates, and the like. Where such conclusions result from other FCC conclusions not constituting factual findings — i. e., FCC findings that AT&T has not met its burden of proof — they are not regarded as "factual findings" under this Rule (since to construe them otherwise would bring the non-findings in through the back door).
6. Mixed Findings of Fact, Law and Future Policy
The remaining paragraphs in these dockets contain a mixture of statements of fact, legal conclusions, predictions of future events, and prospective rulings on the course of AT&T's conduct. It would be difficult, if not impossible, to separate out with respect to these materials those elements that would qualify as "factual findings" from those that are primarily conjectures by the FCC as to how the future will or should unfold. On that basis, these paragraphs
7. Multiple Hearsay
Defendants contend that the test case materials which are "factual findings" within 803(8)(C) must nevertheless be excluded in most instances because they constitute "multiple hearsay" under Rule 805,
Rule 803(8)(C) excepts from the hearsay rule public records containing factual findings "unless the sources of information or other circumstances indicate lack of trustworthiness." The burden is on the party disputing admissibility to prove the factual finding to be untrustworthy. Baker v. Elcona Home Corp., supra, 588 F.2d at 558.
The Advisory Committee Notes list a number of factors which may be of help in determining the trustworthiness or lack thereof of a Rule 803(8)(C) factual finding.
1. Agency Expertise
There is no dispute about the FCC's expertise to find and evaluate facts in light of the standards of the Communications Act. Defendants argue, however, that the expertise of that agency relates to communications rather than to antitrust matters, that the test case decisions follow the standards of the Communications Act rather than those of the antitrust laws, and that for these reasons the factual findings at issue are inherently untrustworthy in an anti-trust context. In elaboration, defendants assert that the FCC applied the "broad public interest standard of the Communications Act, while factual issues in this case must be analyzed under the competition standard of the antitrust laws." Defendants' Memorandum on Admissibility of Test Case Materials, p. 33.
For a number of reasons, the Court concludes that the findings in question are not unreliable or untrustworthy merely because they were made in a context different from the one in which they are sought to be introduced.
First, it is not appropriate to distinguish between Communications Act standards and antitrust standards on the basis that the former are in the "broad public interest" area while the latter serve the interests of "competition." Although technically the Communications Act focuses on public necessity and convenience and the Sherman Act on competition, in a very real sense both the FCC, in its enforcement of the Communications Act, and the courts, in their application of the antitrust laws, guard against unfair competition and attempt to protect the public interest.
Second, the FCC did not close its eyes to the parallel requirements of the antitrust laws in making its findings under the Communications Act. For example, in its Final Decision and Order in Docket No. 20288, the Commission stated that
See also, Chastain v. American Telephone and Telegraph Co., 401 F.Supp. 151 (D.D.C. 1975) (as to matters "such as the reasonableness of [a particular AT&T policy] within the meaning of the Sherman Act, and the policy's effect on competition, the FCC's findings will be received as evidence where relevant." 401 F.Supp. at 157-158).
Third, since the telecommunication laws do differ from the antitrust laws in some significant respects, findings under the former will obviously carry less weight than those made pursuant to the latter, and they certainly carry less weight than facts established by direct evidence.
2. Proceedings Not Involving Hearings
Two of the test case dockets-FCC Docket No. 8963 and Colorado P.U.C. Docket No. 881-involved hearings with live testimony and cross examination, and there is therefore no trustworthiness question in their regard.
Defendants contend that a "paper hearing" is inherently incapable of engendering trustworthy factual findings due to the absence of such safeguards. However, the law is that lack of a formal hearing is not necessarily fatal to the reliability of a factual finding under Rule 803(8)(C) where other indicia of trustworthiness are present. Baker v. Elcona Homes Corp., supra, 588 F.2d at 558; see also United States v. Ferndale, supra, 577 F.2d at 1354-55 (lack of subpoena power and discovery at administrative proceedings insufficient to upset the trustworthiness of that proceeding).
With respect to all of the dockets, AT&T was afforded and took advantage of its "full opportunity for hearing" required by section 205(a) of the Communications Act, 47 U.S.C. § 205(a), allowing it to file written comments with the FCC, and replies to comments made by other parties. See American Telephone and Telegraph Co. v. F. C. C., 572 F.2d 17, 22 (2d Cir. 1977). In affidavits before the Special Masters in this case, defendants conceded that the extensive "paper proceedings" in one docket (No. 19919) did "provide the parties the equivalent protections inherent in a trial type hearing with oral cross-examination." Plaintiff's Reply to Defendants' Memorandum on Admissibility of Test Case Materials, p. 29. AT&T and the other parties also apparently had the right to petition for a trial-type hearing with oral cross-examination, but chose not to exercise that right.
The Court concludes that, since AT&T had the opportunity to argue its position and to reply to opposing positions before the Commission at length, albeit on paper, the materials possess sufficient reliability to prevent lack of a formal hearing in
3. Findings of Unfair Rates and Practices
Inasmuch as they contain elements of legal conclusion in addition to not being the product of oral hearings under antitrust standards, the FCC findings of anticompetitive, unfair, or unreasonable rates and practices present a closer question of reliability than do the types of materials discussed above. Nevertheless, the Court has concluded that they are not untrustworthy and therefore not inadmissible. As already noted, a finding is not outside the scope of the Rule merely because it also includes the conclusions of the finder of facts; it is not inherently unreliable merely because it was made under the matrix of the Communications Act; and it is not untrustworthy merely because the proceeding which produced it was conducted on the basis of documents alone.
Additionally, it is significant that the public agency which made these findings is an independent regulatory commission, apart from the Executive Branch, and operating under stringent procedural guidelines on a public record. See generally, 47 U.S.C. §§ 151 et seq.; American Telephone and Telegraph Co. v. FCC, supra, 572 F.2d at 23.
Nevertheless, especially in view of the existence here of a combination of factors tending toward lack of reliability, it is important to emphasize the limited purpose for which these materials are being received. They are not being admitted as conclusive evidence of the nature of the conduct of the defendants in this case. The Court will make its own findings with respect to that issue, and in doing so it will of course not be bound by the decisions of the Commission, but it will admit other evidence on the issue of whether defendants' rates and practices resulted in the exclusion of competition.
With that caveat, the Court holds that the findings of anticompetitive, unfair, or unreasonable rates and practices reached by the FCC as a result of facts found by that agency in the course of its investigations are admissible under Rule 803(8)(C).
III — Agency Reports
The government has also designated for evidentiary use, to be admissible under the Rule 803(8)(C) exception to the hearsay rule, twenty-nine items relating to a 1939 Report of the Federal Communication Commission on the Investigation of the Telephone Industry in the United States pursuant to P.R. No. 8, 74th Congress (FCC Report). These twenty-nine items include the FCC Report itself, a proposed version of the Report not adopted by the Commission commonly known as the Walker Report, and twenty-seven memoranda prepared by the FCC staff for use in preparing the Walker Report. These reports and memoranda are quite bulky (the FCC Report containing 661 pages, the Walker Report 778 pages, and many of the memoranda reaching similar lengths), and the government has asked that they be admitted in their entirety, without designation of particular paragraphs or sections (as was done for the regulatory agency decisions discussed above). In addition, the government has requested that the Court find admissible a memorandum prepared by the Communications Division of the New York Public Service Commission relating to its Case No. 26894.
The Walker Report, the staff memoranda, and the memorandum prepared for the New York Public Service Commission all have in common that they were never adopted as factual findings by the agencies for which they were prepared. The foreword to the Walker Report states explicitly that the document is a proposed draft, not intended to commit the Commission as to findings of fact. Walker Report, at III. The twenty-seven staff memoranda used in the preparation of the Walker Report are even further removed from final findings of fact by a public agency. The New York Public Service Commission memorandum was attached to an order by the Commission served on all New York telephone companies for the purpose of soliciting comments on the issue of whether the interconnection program of the Rochester Telephone Corporation should be modified or extended to other companies. As such, it merely served as a vehicle by which information could be gathered for eventual factual findings.
Thus, none of these items constitutes findings of fact by the respective agencies as required by Rule 803(8)(C). See United States v. Corr, 543 F.2d 1042, 1050-51 (2d Cir. 1976) (SEC release or announcement notifying public of certain facts was not a determination of facts by the agency obtained after administrative proceedings, and thus was outside of 803(8)(C) hearsay exception).
The FCC Report itself was adopted by the Commission and submitted to the Congress pursuant to P.R. No. 8. Defendants contend that since the Report was the product of a rulemaking proceeding by an administrative agency, employing standards and procedures different from those used in adjudication or in routine investigatory fact finding, it could not be characterized as containing trustworthy factual findings for the purposes of Rule 803(8)(C). As stated above, a finding is not without the scope of Rule 803(8)(C) merely because it resulted from a procedure containing rulemaking elements. However, other features of this Report and the context in which the government proposes to introduce it into evidence combine to compel the conclusion that it may not be admitted.
The FCC Report is over 600 pages long. Although, the Report proposes in some fashion to isolate its descriptive from its recommendatory and conclusory sections, the government has not designated particular paragraphs or sections for evidentiary purposes but requests admission of the entire document. The Report appears to run the gamut from straight factual description to speculative conclusions about the American Telephone and Telegraph Company. Introduction of the Report on that basis would require the Court on its own to sift through hundreds of pages to extract factual findings from conjecture. On that ground alone, the Court would be justified in holding that Report inadmissible. See John McShain, Inc. v. Cessna Aircraft Co., supra, 563 F.2d at 636.
IV — Conclusion
With this Opinion and the contemporaneous order, the Court has now ruled on the admissibility of all test case materials the admissibility of which is still in dispute between the parties. These rulings provide standards which may be applied to the remainder of the judicial notice materials to determine their admissibility without further intervention by the Court. To facilitate these determinations, the Special Masters will supervise the labeling of the judicial notice materials which the parties wish to introduce into evidence, as either admissible or inadmissible, in accordance with the standards set out above. To the extent that disputes arise as to how the standard should be applied to particular items, they will be resolved by the Special Masters by September 15, 1980. The rulings of the Special Masters may be appealed to the Court, and the Court will also consider in advance of trial