Residual Value: Nevada Case Reveals Potential Usefulness of Residual Hearsay Exception to Gender and Race Discrimination Plaintiffs

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Federal Rule of Evidence 807 provides an exception to the rule against hearsay for

A statement not specifically covered by Rule 803 or  804 but having equivalent circumstantial guarantees of trustworthiness, is not excluded by the hearsay rule, if the court determines that (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will best be served by admission of the statement into evidence. However, a statement may not be admitted under this exception unless the proponent of it makes known to the adverse party sufficiently in advance of the trial or hearing to provide the adverse party with a fair opportunity to prepare to meet it, the proponent’s intention to offer the statement and the particulars of it, including the name and address of the declarant.

Rule 807 is a rarely applied rule of last resort upon which litigants can try to rely if all other hearsay exceptions don’t quite cover statements that they seek to admit. As the recent opinion of the United States District Court for the District of Nevada in Taylor v. Fairfield Resorts, Inc./Wyndham, 2009 WL 5195973 (D. Nev. 2009), makes clear, however, it could be a useful rule for gender and race discrimination plaintiffs who can’t point to smoking guns and who can’t find employees willing to testify.

In Taylor, Fairfield hired Shari Taylor, an African-American woman,

as a timeshare sales representative in August 2005….In April 2006, Fairfield transferred her to the Training Department….It was allegedly company policy to promote telemarketers from the Training Department to the Referral Department upon the completion of certain performance requirements….Taylor allege[d] that although she met these requirements in May 2006, she was not promoted to the Referral Department, while a Caucasian-American male who did not meet the requirements was promoted….Based on this, Taylor filed a complaint with the Nevada Equal Rights Commission (“NERC”) on July 24, 2006….Taylor claim[ed] that she was immediately placed on suspension in retaliation for her complaint to the NERC….Once her suspension was lifted, Fairfield placed Taylor in the Referral Department, but, according to Taylor, Fairfield further retaliated against her by both failing to provide her the training necessary to her professional success and creating a hostile work environment, causing Taylor to resign….Taylor claim[ed] this was a”constructive discharge”in retaliation for her NERC complaint.

Taylor thereafter brought retaliation, hostile work environment, and race and gender discrimination claims against Fairfield. Taylor’s problem, though, was that she didn’t have a “smoking gun” in that she didn’t have any specific act or statement by her superiors at Fairfield clearly evincing discrimination or retaliation. Thus, the court ended up granting Fairfield’s motion for summary judgment dismissing Taylor’s retaliation and hostile work environment claims. What Taylor did have, however, was the deposition testimony of her former co-worker, Rochel Collins, including the following exchange:

Q. During your tenure at Fairfield did you observe discrimination based on sex, meaning gender, or Shari Renee Taylor?

A. Yes.

Mr. Rempfer: Objection. Vague….

A. Because I saw that your leads were like way, way older than ours, but you were expected to produce at even a higher level than we were, which I couldn’t understand how you could produce an antiquated lead at a greater rate than a more recent client connection….I noticed they did that to a lot of females, black females, in your group of females. It was such a higher expectation of antiquated leads.

Q Did you observe discrimination based on race, on Shari R. Taylor in regards to continued telemarketing?

Mr. Rempfer: Objection. Legal conclusion….

A. I would say yes, because there wasn’t that many black females. Even the ones that came in, they were watched with like-real quick, until they had maybe just you and maybe the other ones and that was it.

Collins did not testify at the hearing on Fairfield’s motion for summary judgment, but the court found

that the residual hearsay exception applies in this situation. The evidence adduced concerns a material fact, is more probative on the relevant point of race and gender discrimination than other evidence Plaintiff has been able to procure, and contains circumstantial guarantees of trustworthiness. Defendant has not claimed that the transcript is false-which it surely would claim if it believed this to be the case-but only that the transcript is not authenticated by the court reporter. Plaintiff was present at the deposition, and she participated in the questioning as a pro se litigant. She has personal knowledge of the statements made. This is not a recollection of offhand comments or a casual conversation, but of a deposition in a federal lawsuit. Furthermore, she did not attempt to recreate the conversation from scratch, but only affirmed what the reporter has reported by attaching the relevant portions of the transcript. Her affirmation of the statements made at the deposition as shown in the transcript is additionally guaranteed to be trustworthy by the fact that the transcript is in the format with which this Court is familiar and does not appear to have been fabricated. The caption of the case and the names of the representatives, deponent, and court reporter are on the cover sheet, as well as the place, time, and date of the deposition. There is no indication at all that this transcript is not authentic. Finally, it would not serve the purposes of the rules or the interests of justice to exclude this extremely reliable hearsay evidence, especially as against a pro se plaintiff.

Based upon this testimony, the court was able to deny Fairfield’s motion for summary judgment to the extent that it sought dismissal of Taylor’s race and gender discrimination claims. And looking at the facts of Taylor, it seems like race and gender discrimination plaintiffs in similar situations might also be able to rely upon the residual hearsay exception.

The “similar situation” contains two elements: (1) the plaintiff does not have a “smoking gun,” and (2) another employee has made statements accusing the defendant-employer of discrimination but is not willing to testify. In that case, as in Taylor, the other employee’s statements would be offered as evidence of a material fact — discrimination — and would be more probative on the point for which they are offered than any other evidence which the proponent could procure through reasonable efforts. The only question, then, is whether the statements would have equivalent circumstantial guarantees of trustworthiness to statements admitted under other hearsay exceptions because, if they did, as in Taylor, their admission would not violate the interests of justice.

Now, if, as in Taylor, the statements were made under oath, this should not be a problem. But what if the statements were offhand comments made to a discrimination plaintiff? Could the plaintiff then testify regarding these statements? I think that the answer might be “yes.” Federal Rule of Evidence 804(b)(3) provides an exception to the rule against hearsay for

A statement which was at the time of its making so far contrary to the declarant’s pecuniary or proprietary interest, or so far tended to subject the declarant to civil or criminal liability, or to render invalid a claim by the declarant against another, that a reasonable person in the declarant’s position would not have made the statement unless believing it to be true. A statement tending to expose the declarant to criminal liability and offered to exculpate the accused is not admissible unless corroborating circumstances clearly indicate the trustworthiness of the statement.

Now, obviously, this exception is not triggered when an employee makes statements accusing her employer of discrimination. But such a statement is clearly a statement against interest to the extent that the employee could lose her job by making such statements. I thus think that a statement by an employee that her employer discriminates is no less trustworthy than a statement by an individual that he robbed a bank (and, indeed, it might be even more trustworthy because we have less reason to doubt the employee than the self-professed bank robber).

-Colin Miller

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