Evidence Rules Interplay – Authenticating Facebook Posts and YouTube Videos

Evidence Rules 901, 803 and 902 respectively govern authentication generally, the foundation rules for business records, and “self-authenticating” documents at trial.

The Fourth Circuit recently examined the interplay between these rules in the context of a Federal conspiracy trial.  In  United States v. Hassan, 742 F.3d 104 (4th Cir. Feb. 4, 2014), the Fourth Circuit affirmed a jury’s conviction of two defendants based in part on inflammatory, jihad-inspired Facebook posts and YouTube training videos attributed to them.

The Court first held that the threshold showing for authenticity under Rule 901 is low.  All that’s required is the offering party must make a prima facie showing that the evidence is what the party claims it is.  FRE 901(a).  In the context of business records, Rule 902(11) self-authenticates these records where they satisfy the strictures of Rule 803(6) based on a custodian’s certification.  Rule 803(6), in turn, requires the offering party to establish that (a) the records were made at or near the time (of the recorded activity) by – or from information transmitted by  – someone with knowledge, (b) that the records were “kept in the course of a regularly conducted activity or business”; and (c) that making the records was a regular practice of the business. FRE 803(6)(a)-(c).

Applying these rules, the Court held that certifications from Google’s and Facebook’s records custodians established the foundation for the Facebook “wall” posts and YouTube terror training videos.  In addition, the Court found that the prosecution sufficiently connected the two conspiracy defendants to the Facebook posts and YouTube videos by tracing them to internet protocol addresses that linked both defendants to the particular Facebook and YouTube accounts that generated the posts.

Notes: For a more detailed discussion of Hassan as well as an excellent resource on social media evidence developments, see the Federal Evidence Review (http://federalevidence.com/blog/2014/february/authenticating-facebook-and-google-records)

 

Broken Promises In Medical Services Agreement Don’t Equal Fraud – IL Court

An Illinois appeals court recently examined the promissory fraud rule in a medical services contract dispute.

The key principle distilled from the court’s unpublished analysis in Advocate Health and Hospitals Corp. v. Cardwell, 2016 IL App (4th) 150312-U is that where fraud claims are based on false promises of future conduct, the claims will fail.

The plaintiff hospital there sued a former staff doctor for breaching a multi-year written services contract. When the doctor prematurely resigned to join a hospital in another state, the plaintiff sued him to recover about $250,000 advanced to the doctor at the contract’s outset.

The doctor counterclaimed, alleging the hospital fraudulently induced him to sign the contract. He claimed the hospital broke promises to elevate him to a Director position and allow him to develop a new perinatology practice group at the hospital.  Since the promises were false, the doctor claimed, the underlying services contract was void.

Siding with the hospital (it granted the hospital’s summary judgment motion), the Court discussed when a defendant’s fraudulent inducement can nullify a written contract.

In Illinois, to establish fraud in the inducement, a plaintiff must show (1) a false statement of material fact, (2) defendant’s knowledge the statement was false, (3) defendant’s intent to induce the plaintiff’s reliance on the statement, (4) plaintiff’s reasonable reliance on the truth of the statement, and (5) damages resulting from reliance on the statement.

A critical qualification is that the fraud must be based on a misstatement of existing fact; not a future one.  Fraud in the inducement goes beyond a simple breaking of a promise or a prediction that doesn’t come to pass.

Here, the Court found that the hospital’s pre-contract statements all involved future events. The promise of a Directorship for the doctor was merely aspirational. It wasn’t a false statement of present fact.   The Court also determined that the hospital’s representations to the doctor about the development of a perinatology program spoke to a hoped-for future event.

Since the entirety of the doctor’s fraud counterclaim rested on the hospital’s promises of future conduct/events, the Court entered summary judgment against the doctor on his fraud in the inducement counter-claim.

Afterwords:

This is another case that sharply illustrates how difficult it is to prove fraud in the inducement; especially where the alleged misstatements refer to contingent events that may or may not happen.  While a broken promise may be a breach of contract, it isn’t fraud.

For a misstatement to be actionable fraud, it has to involve an actual, present state of affairs. Anything prospective/future in nature will likely be swallowed up by the promissory fraud rule.

Photographer’s Subjective Belief Of Photos’ Value Not Enough to Show Copyright Damages – Seventh Cir. (Deconstructing Bell v. Taylor – Part II)

In Bell v. Taylor, the Seventh Circuit homes in on the photographer plaintiff’s dearth of damages evidence in his copyright suit about two photographs he took of the Indianapolis skyline.

A copyright owner can recover actual damages suffered as a result of infringement and any profits accruing to the infringer.  To establish an infringer’s profits, the plaintiff must show only the infringer’s gross revenue.  The infringer is then required to prove his “deductible expenses and elements of profit attributable to factors other than the copyrighted work.”  17 U.S.C. § 504(b).

Actual damages in the copyright context usually mean loss in fair market value of the infringed work (here, the two photos), measured by profits lost by the copyright holder due to the infringement.  Evidence of prior sales of the infringed work(s) can satisfy the plaintiff’s actual damages burden but his subjective belief as to the fair market value of a photo isn’t enough to prove damages.

The plaintiff failed to prove actual damages since all he offered was his unsupported subjective belief of what the photos were worth.  He was unable to attribute any lost profits to himself or any profits gained by the infringing defendants.  The plaintiff also couldn’t show that any of the infringing defendants attracted more clients by using the plaintiff’s skyscraper photos.

Afterwords:

While the plaintiff was able to establish ownership in the copyrighted photos as well as infringement (he unquestionably took the photos and copyrighted them and all defendants admitted using one or both of them), the lack of damages evidence doomed his claims.  The plaintiff’s unadorned opinion of the photos’ monetary value was insufficient to meet his copyright infringement damages burden.

To survive summary judgment, the plaintiff likely would have had to proven that the defendants gained increased web traffic as a direct result of using the photos and that the increased traffic translated into measurable profits for the defendants.  Since the plaintiff couldn’t do this, he couldn’t establish copyright infringement damages to the extent his claims would beat a summary judgment motion.