A Reminder From The Seventh Circuit On The Importance Of Creating A Record

When the court makes an evidentiary ruling off the record, it is required to enter on the record an explanation of the reasoning behind its decision. See, e.g., United States v. Nolan, 910 F.2d 1553, 1559 (7th Cir. 1990); 28 U.S.C. § 753(b). But what is a party's recourse on appeal if the court failed to meet this requirement and the party didn't object at the time?

None. So explained the Seventh Circuit in United States v. Lawson, No. 14-1233 (7th Cir. Jan. 20, 2015), a case which should serve as an important reminder about preserving off-the-record rulings for appeal in civil and criminal cases alike.

Lawson was indicted for wire fraud, stemming from allegations that he held himself out as a lender to churches and other religious institutions and then collectively scammed them out of $270,000 in fees associated with the loans. Those fees weren't really for processing the loans, however; Lawson frittered them away on personal expenses. At trial, the government sought to introduce evidence that Lawson had not reported the fees as income on his tax return (which he had not filed at all) in order to rebut Lawson's defense that his actions were lawful and well-intentioned. This "other-bad-act" evidence is permissible under Evidence Rule 404(b) to show knowledge or intent, as long as its potential for unfair prejudice does not exceed its probative value, under Rule 403. Lawson's counsel objected to the admission of the evidence, and the court considered the objection in an off-the-record conference.

In a recent important en banc decision, the Seventh Circuit stressed that a district judge must apply both Rule 403 and Rule 404(b) and exclude evidence that either lacks a proper use (Rule 404(b)) or...