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MM Steel, LP v. Reliance Steel & Aluminum Co.

United States District Court, Fifth Circuit

December 16, 2013

MM STEEL, LP, et al, Plaintiffs,
RELIANCE STEEL & ALUMINUM CO., et al, Defendants.


KENNETH M. HOYT, District Judge.


Before the Court are a number of motions in limine by the defendants (Docket Nos. 327, 330, 331, 332, 333, 344 and 347) and by the plaintiff, MM Steel (Docket No. 328). Also before the Court are the responses of the parties to the various motions. Having carefully reviewed the parties' submissions, the record and the applicable law, the Court makes the following rulings.[1]


A. Exclusion of Email Evidence from Non-Party ArcelorMittal

The defendants ask the Court to exclude as hearsay two email changes amongst employees of non-party ArcelorMittal-the August 2, 2012 email (Docket No. 327, Ex. 1) and the Sergovic email (Docket No. 333, Ex. 2). MM Steel argues that both emails are admissible as business records under Rule 803(6) and as statements by a coconspirator under Rule 801(d)(2)(E). In the alternative, MM Steel argues the emails should be admitted under the Rule 807 residual exception.

1. Business Record Exception

To bring a record within the ambit of FRE 803(6) requires proof that the record was made in the regular practice of the business. Fed.R.Evid. 803(6)(C). "[T]he rationale underlying this exception to the rule against hearsay is that the inherent reliability of business records is supplied by systematic checking, by regularity and continuity which produce habits of precision, by actual experience of business in relying upon them, or by a duty to make an accurate record as part of a continuing job or occupation.'" United States v. Wells, 262 F.3d 455, 462 (5th Cir. 2001) (quoting Fed.R.Evid. 803(6), Notes of Advisory Committee). "A party seeking to introduce an email made by an employee [of a party] about a business matter under the hearsay exception under Rule 803(6) must show that the employer imposed a business duty to make and maintain such a record." Canatxx Gas Storage Ltd. v. Silverhawk Capital Partners, LLC, 2008 WL 1999234, at *12 (S.D. Tex. May 8, 2008). Because there is no evidence that ArcelorMittal imposed a duty on its employees to send the types of emails at issue, and there is no evidence that sending these types of emails were regular practices of ArcelorMittal, neither email is admissible under Rule 803(6).

Contrary to MM Steel's suggestion, the emails do not become admissible simply by way of a general averment in a business records affidavit which covers thousands of pages of documents. See Rogers v. Oregon Trail Elec. Consumers Co-op., Inc., 2012 WL 1635127, at *10 (D. Or. May 8, 2012) ("Holding emails to some standard under the business records hearsay exception, as opposed to broadly accepting them as admissible business records, is the best approach."). Although the Fifth Circuit has said that a "proper foundation is laid for business records simply by an affidavit that attests to the requisite elements of FRE 803(6), " it cannot be overlooked that the court was considering the exception as applied to a prototypical business record-purchase logs. United States v. Towns, 718 F.3d 404, 408-09 (5th Cir. 2013). Here, however, we are dealing with emails among colleagues. There is no evidence of and the affidavit does not suggest that writing the emails, i.e. making a record of the subject matter discussed in the emails, was a regular practice of ArcelorMittal's business. That deficiency renders the emails inadmissible as business records.

2. Statement of a Coconspirator Exception

Rule 801(d)(2)(E) requires the proponent of admittance of a statement to "prove by a preponderance of the evidence (1) the existence of the conspiracy, (2) the statement was made by a co-conspirator of the party, (3) the statement was made during the course of the conspiracy, and (4) the statement was made in furtherance of the conspiracy." United States v. Ebron, 683 F.3d 105, 135 (5th Cir. 2012) (quoting United States v. Cornett, 195 F.3d 776, 782 (5th Cir. 1999)). Although the statement itself is considered in ascertaining whether a conspiracy existed, it "cannot by itself establish the existence of the conspiracy or participation in it. There must be independent evidence establishing the conspiracy." United States v. Nelson, 732 F.3d 504, 516 (5th Cir. 2013) (internal quotation omitted).

Considering these principles, the Sergovic email is admissible as the statement of a coconspirator. As evidenced by the order denying summary judgment, the Court is of the opinion that there is sufficient evidence to find the existence of a conspiracy, and the ultimate determination must be made by the factfinder. There is also evidence that ArcelorMittal was a coconspirator. The Sergovic email describes the pressure the distributors put to bear on the mill. It also discusses at least one option the mill planned to use to achieve the aim of the conspiracy ("If we quote...we quote high!"). Furthermore, it appears ArcelorMittal actually implemented the strategy by quoting MM Steel prices twenty percent above the market rate. See Docket No. 366, Ex. 8. The statement was made during the course of the conspiracy which allegedly began on September 1, 2010, and continued until MM Steel closed in August 2013. Finally, the email chain cannot reasonably be described as idle chatter, but rather evidences furtherance of the conspiracy. See United States v. Martinez-Medina, 279 F.3d 105, 117 (1st Cir. 2002). As previously noted, the participants discussed how they were going to handle requests for quotes by MM Steel in light of the alleged conspiracy to drive it from the market. The Sergovic email is admissible as a statement of a coconspirator and the motion to exclude it is denied.[2]

The August 2 email is not admissible as a statement of a coconspirator. It is clear that the email was not in furtherance of the conspiracy; instead, it "merely describe[ed] to [the email recipient] what was occurring or what had occurred." Fratta v. ...

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