Palmer v. Hoffman 318 U.S. 109, 63 S.Ct 477, 87 L.Ed. 645 (1943) Mrs. Palmer was hit by a train and killed. Mr. Palmer sued the train company for negligence. o Palmer alleged that the train did not ring its bell, blow its whistle, or have its light on as were required by law. At trial, the train company (represented by Hoffman) attempted to introduce a transcript of statement the train conductor had with the Mass Public Utilities Commission (a normal part of any train accident investigation). o Palmer objected on the grounds that the out-of-court statement was hearsay. o Hoffman argued that the statement was and exception to hearsay because it was an official business record, and made in the regular course of business. At that time, business records were excluded from hearsay by 28 U.S.C. §695. o The train conductor died prior to the trial and was unavailable to testify. The Trial Judge excluded the train conductor's statement. The Trial Court found for Palmer. Hoffman appealed. The Appellate Court affirmed. Hoffman appealed. The US Supreme Court affirmed. o The US Supreme Court found that the phrase "in the regular course of business" referred to timetables, accounting, and other normal business activities. o However, the train conductor's statement was not a record made for the systematic conduct of a business as a business. While an accident report may affect the business, it is not typical of entries made systematically or as a matter of routine to record events, occurrences, or transactions. Basically, the fact that a company records its employees' versions of their accidents does not put those statements in the class of records made "in the regular course of business." The conductor's statement was not made for business purposes, it was made to prove the Project Wonderful - Your ad here, right now, for as low as $0 truth of the conductor's version of events and assist the company in avoiding tort liability. "Their primary utility is in litigating, not in railroading." Basically, records made in the normal course of business are done for business purposes, not to prove things in court, and so there is no reason to assume that they are not reliable. Statements of employees that could expose the company to tort liability don't have that same 'neutrality' and so are not admissible because they can't be assumed to be reliable. This case was decided before the FRE was implemented. Today it would be covered by FRE 803(6). Btw, if the statement had supported Palmer and he wanted to get the statement into evidence, he could have claimed that it was an admission and therefore admissible under FRE 801(d)(2). Btw, because of this case, documents that are created in anticipation of litigation are now called "Palmer Records" and are not admissible.