Edward S. Weisfelner, as Litigation Trustee of the v. The Legal Representative of the Estate of Richard

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
LYONDELL CHEMICAL COMPANY,
et al.,
Debtors.
NOT FOR PUBLICATION
Chapter 11
Case No. 09-10023 (GCM)
(Jointly Administered)
EDWARD S. WEISFELNER, AS TRUSTEE
OF THE LB LITIGATION TRUST,
Plaintiff,
v.
LEONARD BLAVATNICK, et al.,
Defendants.
Adv. Pro. No. 09-1375 (MG)
MEMORANDUM OPINION AND ORDER OVERRULING IN PART AND
SUSTAINING IN PART THE ACCESS DEFENDANTS’ HEARSAY OBJECTIONS TO
CERTAIN EMAIL EXHIBITS
A P P E A R A N C E S:
BROWN RUDNICK LLP
Attorneys for Edward S. Weisfelner,
as Litigation Trustee of the LB Litigation Trust
Seven Times Square
New York, NY 10036
By: 	Sigmund S. Wissner-Gross, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
Attorneys for the Access Defendants
51 Madison Avenue, 22nd Floor
New York, NY 10010
By: 	Richard I. Werder, Jr., Esq.
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MARTIN GLENN
UNITED STATES BANKRUPTCY JUDGE
Before the Court are two letter briefs regarding 210 emails and other documents (the
“Exhibits”) offered as trial exhibits by Edward S. Weisfelner, as Trustee of the LB Litigation
Trust (the “Trustee”). The Trustee’s letter brief (the “Trustee’s Brief,” ECF Doc. # 850) and the
Access Defendants’ 1 letter brief (the “Access Defendants’ Brief,” ECF Doc. # 851) were both
filed on October 13, 2016. The Trustee has also submitted two declarations by Douglas Pike:
one signed on September 21, 2016, concerning pre-merger Lyondell documents (the “Lyondell
Pike Declaration,” ECF Doc. # 850-1), and one signed on October 3, 2016, concerning post-
merger LyondellBasell Industries AF S.C.A. (“LBI”) emails (the “LBI Pike Declaration” and,
together with the Lyondell Pike Declaration, the “Pike Declarations,” ECF Doc. # 850-2).
For the reasons below, the Access Defendants’ objections to the Exhibits are
SUSTAINED IN PART and OVERRULED IN PART.
I. 	BACKGROUND
At a hearing on September 12, 2016, the Trustee’s counsel said he intended to offer into
evidence internal Lyondell and Access emails under the business records exception to the
hearsay rule. The Access Defendants objected to the admission of the emails on hearsay
grounds. The Court (i) permitted the Trustee to submit a declaration of a custodian seeking to
establish that the emails are admissible as business records; (ii) permitted the defendants’
counsel to depose the custodian; and (iii) directed the parties to submit letter briefs by October
13, 2016. The Trustee submitted two declarations by Douglas Pike, Director of Investor
Relations for Lyondell and LBI. (Lyondell Pike Decl. ¶ 1.)
1 	The “Access Defendants” are Access Industries, Inc., Access Industries Holdings LLC, AI International
S.à.r.l, Nell Limited, Len Blavatnik, Lincoln Benet, and Philip Kassin.
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The Access Defendants object to the admission of 121 of the Exhibits, 85 of which are
emails. (Trustee’s Br. at 2; Access Defendants’ Br. at 1.) The exhibits to which the Access
Defendants object fall into the following categories:
x 	33 are emails that either do not contain factual assertions or that the Trustee
represents are not offered for the truth of the matter asserted (the “Non-Assertive
Emails”). 2 (Trustee’s Br. at 2.)
x 	34 are “non-substantive emails that merely transmit internal presentations or
documents without commentary” (the “Transmittal Emails”). 3 (Id.)
x 	35 are not emails. The Trustee describes these documents as “tax returns, annual
reports, [and] financial presentations” (the “Non-Email Documents”). 4 (Id.)
x 	29 are emails that contain assertions of fact the Trustee intends to offer for the
truth of the matter asserted (the “Assertive Emails”). 5 (Id.)
II. 	LEGAL STANDARD
Federal Rule of Evidence (the “Rules”) 803(6) provides that records of regular business
activity are not hearsay if:
(A) the record was made at or near the time by—or from
information transmitted by—someone with knowledge;
(B) the record was kept in the course of a regularly conducted
activity of a business, organization, occupation, or calling, whether
or not for profit;
(C) making the record was a regular practice of that activity;
(D) all these conditions are shown by the testimony of the
custodian or another qualified witness, or by a certification that
complies with Rule 902(11) or (12) or with a statute permitting
certification; and
2 	These exhibits are listed in footnote 7 of the Trustee’s Brief.
3 	These exhibits are listed in footnote 6 of the Trustee’s Brief.
4 	These exhibits are listed in footnote 5 of the Trustee’s Brief.
5 	These exhibits are listed in footnote 8 of the Trustee’s Brief.
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(E) the opponent does not show that the source of information or
the method or circumstances of preparation indicate a lack of
trustworthiness.
“To lay a proper foundation for a business record, a custodian or other qualified witness
must testify that the document was kept in the course of a regularly conducted business activity
and also that it was the regular practice of that business activity to make the record.” United
States v. Komasa, 767 F.3d 151, 156 (2d Cir. 2014) (internal quotation marks and citations
omitted), cert. denied, 135 S. Ct. 1579 (2015); see also United States v. Freidin, 849 F.2d 716,
719–20 (2d Cir. 1988) (“[A]dmissibility under Rule 803(6) requires both that a memorandum
have been kept in the course of a regularly conducted business activity and also that it was the
regular practice of that business activity to make the memorandum.”) (internal quotation marks
and citations omitted; emphasis added). While the custodian “need not have personal knowledge
of the actual creation of the document,” the party offering the document into evidence must
nevertheless prove that “it was the business entity’s regular practice” to create the record.
Phoenix Associates III v. Stone, 60 F.3d 95, 101 (2d Cir. 1995).
“An e-mail created within a business entity does not, for that reason alone, satisfy the
business records exception of the hearsay rule.” Morisseau v. DLA Piper, 532 F. Supp. 2d 595,
621 n.163 (S.D.N.Y. 2008) (citing FED. R. EVID. 803(6)). Accordingly, courts apply a similar
approach to emails as they do to any other business memoranda. See Penberg v. HealthBridge
Mgmt., 823 F. Supp. 2d 166, 187 (E.D.N.Y. 2011) (concluding that “[c]ourts have applied a
similar approach to emails” as to “conventional letters, memos, or notes”) (internal quotation
marks and citations omitted); United States v. Stein, No. S1 05 Crim. 0888 (LAK), 2007 WL
3009650, at *1 (S.D.N.Y. Oct. 15, 2007) (concluding that “it is impossible to determine in the
abstract which of the documents defendants have in mind satisfy the Rule and which do not”).
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Therefore, each email must satisfy each element of the Rule 803(6) test. To be
admissible, an email must have been written “at or near the time” of the occurrence of the facts
described in the email. FED. R. EVID. 803(6). Importantly, Rule 803(6) requires both that the
activity recorded in the email be a “regularly conducted” business activity, and that sending the
email be a regular part of that activity. Id. “[I]t is not enough to say that as a general business
matter, most companies receive and send emails as part of their business model,” In re Oil Spill,
No. MDL 2179, 2012 WL 85447, at *3 (E.D. La. Jan. 11, 2012); the email record must be
“regularly made in furtherance of the employer’s needs.” Penberg, 623 F. Supp. 2d at 187. The
party offering the document into evidence must provide a custodial witness to prove “all” of the
conditions required by Rule 803(6). Finally, the party objecting to admission of the documents
may show that despite satisfaction of the other elements, the emails “indicate a lack of
trustworthiness.” F ED. R. EVID. 803(6).
III. 	ANALYSIS
The Court will not currently address the admissibility of the Non-Assertive Emails
because the Trustee argues that they will not be offered for the truth of the matters asserted. If
there is an objection to relevance when these documents are offered in evidence, the Court will
consider and rule on the objection at that time.
Likewise, the Trustee contends that the Transmittal Emails are not offered for the truth of
the matters asserted. (The documents are offered “regardless of the truth of any statements
therein” (Trustee’s Br. at 6)). Again, if there is an objection to relevance when these documents
are offered in evidence, the Court will consider and rule on the objection at that time. To the
extent the Trustee seeks to rely on the documents attached to the Transmittal Emails for the truth
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of the matters asserted, the Trustee must separately establish a hearsay exception or other basis to
admit the attachments.
Additionally, the Non-Email Documents are outside the scope of the issue raised by the
parties at the September 12, 2016 hearing, and on which the Court requested briefing—namely,
whether the emails the Trustee seeks to introduce are appropriately categorized as business
records. The Court will reserve ruling on the Non-Email Documents until they are offered in
context at trial.
This Order addresses only the issue whether the Exhibits are admissible as business
records. The Court makes no determination at this time whether certain of the Exhibits may be
admissible on other, independent grounds. The issue at hand, therefore, is whether the Assertive
Emails are admissible as records of a regularly conducted business activity. The Pike
Declarations establish that the Exhibits originated from Lyondell’s or LBI’s servers, satisfying
the authentication requirement (which defendants’ counsel has not contested). But the Pike
Declarations do not address whether (i) each email was written contemporaneously with the facts
described therein; (ii) each email describes a regularly-conducted business activity; and (iii) each
email was sent as part of that regularly-conducted business activity. Each of these elements must
be established for each email before it can be admitted into evidence.
Most of the Assertive Emails readily meet the first element—they describe facts or
assertions occurring at approximately the same time as the sending of the email itself. For
example, PX56 concerns a contemporaneous discussion of work to be done for “Stress Scenarios
for our LRP,” sent on October 8, 2006. Likewise, PX61 describes work currently underway for
the “07LRP.” PX77 is a compilation of weekly emails entitled “Houston Refinery Weekly
Update,” describing operations at the Houston refinery for that same week. Records such as
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these, which describe events at about the same time as they occur, satisfy the
contemporaneousness requirement.
The dual hurdles of Rule 803(6)’s regularity requirement are more difficult for the
Trustee to overcome. Although there is no bright-line rule about the frequency with which an
activity must be conducted to qualify as “regular” under Rule 803(6), the Second Circuit has
stated that “records are admissible if witnesses testify that the records are integrated into a
company’s records and relied upon in its day-to-day operations.” Matter of Ollag Const. Equip.
Corp., 665 F.2d 43, 46 (2d Cir. 1981); see also Komasa, 767 F.3d at 156 (affirming admission of
mortgage loan applications that were compiled as part of an automated process); United States v.
Williams, 205 F.3d 23, 34 (2d Cir. 2000) (affirming admission of a cash advance receipt that was
issued and recorded as part of a bank’s regular “practice”).
The Court has reviewed each of the Assertive Emails individually; most do not meet
these standards. Rather than describing each email, one by one, several examples are instructive.
x 	PX56 contains no indication that the documented activity occurs regularly. The
author describes preparations for “our LRP” (presumably a Long-Range Plan) and
upcoming tasks. Although the email references “further discussion in the next
couple weeks,” it is not evident that the tasks recorded in the email are regularly
conducted or part of a recurring business activity. And even if the tasks described
in the email are regular, there is no indication that making the email record was a
regular part of that activity.
x 	PX61 appears to be a one-off question among team members, and suffers from the
same deficiency as PX56. There is no indication that the discussion in PX61 was
performed on a regular basis, or that memorializing it in email is a regular part of
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that activity. A similar analysis applies to several Assertive Emails which include
internal discussion about “LRPs.” While reports prepared on a routine schedule
may very well be admissible as business records, sporadic internal discussions
such as these do not appear to be regularly conducted, incorporated into the day-
to-day records of the company, and relied upon in the same way as the report
itself may be. See Matter of Ollag Const. Equip. Corp., 665 F.2d at 46.
x 	PX136 discusses events that were clearly not within the regular business activity
of Lyondell: Robert Salvin forwarded an e-mail from Dan Smith to all Lyondell
employees describing among other things Leonard Blavatnik’s interest in
“engag[ing] in discussions with Lyondell concerning . . . the merits of an offer to
acquire all of the shares of Lyondell, or a merger, combination or similar
transaction,” along with Salvin’s own commentary: “Interesting news stock is up
$3.50 since.” The email on its face appears to be a unique occurrence, not in the
ordinary course of business, and therefore fails to meet Rule 803(6)’s regularity
requirement.
x 	PX311 is a short exchange between Mario Portela and Robert E. Salvin regarding
debt to EBITDA ratio. Although not specifically tied to the LRP exchanges such
as PX56 and PX61, communications like this one are also not proven to be
“regular.” An email does not become a business record by virtue of merely
discussing the entity’s business.
On the present record, the Court concludes that the Trustee has only established that the
following emails satisfy the requirements of Rule 803(6) and are admissible on that basis:
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x 	PX77: “Houston Refining weekly update.” This is a set of weekly emails that
appear to cover the time period January 2007 through November 2007, sent to a
large distribution group, covering substantially the same topics each week. This
type of weekly report satisfies Rule 803(6)’s regularity requirement.
x 	PX221: “Refining Forum.” This email includes an agenda for a weekly meeting.
Although the exhibit includes only one email (unlike the long set of emails
included in PX77), the email indicates on its face that it refers to a regularly-
occurring meeting. In addition, recording the agenda for such a meeting is likely
to be a regular part of that business activity.
x 	PX628: “Forecast 2008.” This email appears to refer to a recurring forecast: the
discussion includes references to the regularity of the activity, such as “Attached
is the current forecast”; “As in the past”; and “in the future.” These indicia of
repeated activity satisfy the regularity requirements.
Therefore, only PX77, PX221, and PX628 are admissible as business records. The Court
makes no determination at this time whether other of the Exhibits may be admissible on
independent grounds.
IV. 	CONCLUSION
For the reasons described above, the Access Defendants’ objections are SUSTAINED IN
PART and OVERRULED IN PART. Rulings on exhibits that will be offered other than for the
truth of the matters asserted must await their offer during the trial at which time the Court will
rule on any relevance objections.
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The objections to PX77, PX221, and PX628 are OVERRULED. The objections to the
remainder of the Assertive Emails are SUSTAINED unless the Trustee establishes each of the
required elements of the business records exception.
IT IS SO ORDERED.
Dated: October 19, 2016
New York, New York
_____/s/Martin Glenn_______
MARTIN GLENN
United States Bankruptcy Judge
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