Salvation by Summary 2020

A new decision from the Fifth Circuit repeats an old rule: summary evidence wins cases. See Wealthmark Advisors Inc. v. Phoenix Life Ins. Co., No. 19-50175 (5th Cir., February 21, 2020). Wealthmark Advisors reminds us that Rule 1006 of both the Federal and Texas Rules of Evidence empowers lawyers to use summaries.

Lawyers must use summary evidence whenever possible. A gusher of nearly unmanageable electronic evidence distinguishes 21st-century trial practice from past eras. This gusher heightens the importance of Rule 1006 summaries as one of a trial lawyer’s tools to manage the evidence and try the best case possible. As I wrote more than a dozen years ago, “[t]hanks to technology and the vanishing jury trial, every complex case risks becoming a quagmire of disorganized data.” Salvation by Summary, Texas Lawyer, Sept. 17, 2007.

The twelve years since then have seen the continued proliferation of electronic evidence. In those same dozen years, moreover, the institutional forces threatening trial lawyers with extinction have gained momentum. As the New York Times reported in August 2016, when New York federal judge Shira A. Scheindlin resigned from her Manhattan bench that year after more than two decades, “she said the decrease in trials was one consideration for her departure. ‘Trials are way, way down,’ she said. ‘The building’s quite dead.’” The lack of experience among younger or inexperience lawyers can compound the anxiety inherent in in trial practice. As Judge Mark Bennett of the Northern District of Iowa put it this way, according to the December 2013 issue of Iowa Lawyer: “Inexperience breeds fear and, thus, the fear of going to trial puts added pressure on the downward spiral of fewer trials.”

This vicious circle of exponential increase in the complexity of evidence combined with dearth of trial experience can lead to a dismal spectacle of ineffective counsel failing to streamline their cases. Even well-financed clients, with major firms representing them, can fall victim to this problem; according to several observers, large firms “never go to trial and are petrified of it” and some “have lost their trial edge.” It brings to mind Dostoyevsky’s observation in Crime and Punishment that for all the discovery and analysis available to lawyers in the age of digital evidence, “The facts aren’t everything. At least half the case is in knowing what to do with the facts.”

Enter Rule 1006.

Wealthmark Advisors: summary evidence can overcome the best-evidence rule

Wealthmark Advisors presents a textbook instance of how a litigant can use summary evidence. The case arose out of a contract dispute between the issuer of annuities (Phoenix Life) and one of the agents that sold them (Wealthmark Advisors). One of Wealthmark Advisors’ sales representatives became the subject of claims of that he misrepresented the annuities to his customers. Those allegations culminated in a regulatory enforcement action by the Minnesota Attorney General. Phoenix Life “stepped in,” according to the Fifth Circuit, “and settled the case.” Part of the settlement included rescinding the annuity sales to the apparently defrauded customers. The rescission triggered Phoenix Life’s contractual right to have Wealthmark Advisors pay back the commissions Phoenix Life had previously paid Wealthmark Advisors for the problematic sales. (Such a contractual right comes as no surprise; Phoenix Life needed its commission money back if Wealthmark and/or its representatives engaged in fraud or misrepresentation that led to the rescission of sales.)

Thus, in the damages stage of the case, Phoenix Life needed to prove up the commissions it had paid to Wealthmark Advisors and its representative that were subject to refund. To do that, Phoenix Life offered up the summaries of those commission payments. The district court admitted them over Wealthmark Advisors’ objections. The district court signed a final judgment for the amounts against Wealthmark Advisors.

Wealthmark Advisors appealed the judgment, arguing among other things that the district court erred in admitting these summaries. Wealthmark Advisors argued that two of its many objections at trial warranted reversal of the judgment: failure to comply with the best-evidence rule (FRE 1002) and lack of relevance (FRE 402). The Fifth Circuit rejected both arguments and affirmed the judgment.

First, the Fifth Circuit observed that Rule 1006 operates as an exception to the best-evidence rule. This was not a hard call for the Fifth Circuit in this per curiam decision. Just read the best-evidence rule, Fed. R. Evid. 1002, which states: “An original writing, recording, or photograph is required in order to prove its content unless these rules or a federal statute provides otherwise.” (Emphasis added.)

Second, Wealthmark argued that the district court erred in admitting the summaries on relevance grounds, arguing that “they [were] not, and [could not] be conclusive in showing the amounts paid on any particular product sold by Phoenix.” But whether evidence is “conclusive” is not the standard. “Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Fed. R. Evid. 401. As the Fifth Circuit observed in affirming the district court’s overruling of Wealthmark Advisors’ objection, the summary exhibits “had a tendency to show the amount of commissions [the defendant paid, which was of consequence in determining Phoenix’s breach of contract damages. The district court did not abuse its discretion in overruling [the defendant’s] objections to [the summary exhibits].”

Consider the practicalities – why not use summaries when you can?

Trial lawyers should consider the practicalities of the situation as well as the obvious rule. First, summaries save time. Listen to judge, and listen to the jurors: they want to finish. As trial lawyer Murray Fogler observed after serving as a juror, “just because the judge gives you a block of time doesn’t mean you have to take it.... We got it. Really.”

Thanks to technology and the vanishing jury trial, every complex case risks becoming a quagmire of disorganized data.

Second, by saving time, trying cases become easier for the lawyers, too. A non-negligible amount of lawyer anxiety stems from needless exhibits and testimony that, absent a summary, will aggravate everyone involved.

Third, judges have broad discretion – as part of their role in watching the clock – in deciding whether to admit evidence. As Judge William J. Bauer of the Seventh Circuit observed in United States v. Glecier, 923 F.2d 496, 503 (7th Cir. 1991), “Appellants who challenge evidentiary rulings of the district court are like rich men who wish to enter the Kingdom; their prospects compare with those of camels who wish to pass through the eye of a needle. See Matthew 19:24.” In practical terms, a court of appeals will reverse an erroneous evidentiary ruling only if the trial court both abuses its discretion in admitting the evidence and concludes that the ruling affected a substantial right of the party. See Fed. R. Evid. 103(a). This is a difficult standard. If a district court finds your summary useful, chances are the district court will admit it, and chances are quite high that your opponent’s appeal of its admission will fail.

Some appellate lawyers might quibble with this article by pointing out that Wealthmark Advisors was a per curiam unpublished opinion. But trial lawyers should use Wealthmark Advisors not as any new precedent. Instead, they should use it as a reminder of a well-established, but easily forgotten, lesson of how to try a better case. After all, Phoenix Life sealed its victory in Wealthmark Advisors upon the district court’s admission of the summaries. It is all the more fitting that the Fifth Circuit deemed the opinion unworthy of publication in the Federal Reporter. The real ruling comes not from an appellate court, but from a trial court, for trial lawyers.