What Is A Proffer And How Can It Be Used In Bankruptcy Cases?
Bankruptcy Court is a federal court. For anyone who does not regularly practice in this forum it can be a hair-raising experience. Non-adversarial proceedings in Bankruptcy Court, called contested matters, are governed by the Federal Rules of Civil Procedure (FRCP) and Federal Rules of Evidence (FRE) and often take place quickly (sometimes within days, weeks or months of the filing of a motion) and involve what resemble mini trials. Because of the volume of activity in Bankruptcy Court and the importance placed on a fair, just, equitable and prompt resolution of cases, evidentiary hearings can be problematic when it comes to establishing an adequate record, particularly when an appeal is contemplated. This requires an exceptional effort on the part of counsel to present evidence in an effective and efficient manner, yet sufficient enough to preserve error. In this regard, due to the existence of constraints on time, many Bankruptcy Courts permit counsel to resort to using proffers of witness testimony in their case-in-chief.
A proffer is the term used to describe the process where an attorney presents direct testimony of a witness in summary fashion in lieu of actual testimony. Mostly it is accomplished by the attorney stating for the record what he/she expects the witness would say and then “proffering” that testimony. In some instances, a written proffer is filed in advance of a hearing giving parties-in-interest notice of the intention to present the testimony by proffer. These written statements are sometimes verified by the witness, lending them further credibility. In most instances when a proffer is made, the witness must be present in the courtroom. See, e.g., In re Adair, 965 F.2d 777 (9th Cir. 1992); Lewis v. Zermano (In re Stevinson), 194 B.R. 509 (D. Colo. 1996). Following the proffer, the court will swear the witness in and ask if they accept the proffer as their testimony. The court will then ask if anyone desires to cross-examine the witness. If not, the proffered testimony is accepted into the record as if the witness actually testified.
The concept of an attorney proffer of evidence appears to be a relatively recent phenomenon. There is no provision dealing with proffers in the federal rules. A few courts have addressed the issue of written proffers. Adair, infra. Rule 43(a) of the FRCP, which applies in bankruptcy matter pursuant to Fed. R. Bankr. P. 7043, provides: “In all trials the testimony of witnesses shall be taken orally in open court, unless otherwise provided by an Act of Congress or by these rules, the Federal Rules of Evidence, or other rules adopted by the Supreme Court.” (Emphasis added). Rule 611(a)(1)-(2) of the FRE provides that “[t]he court should exercise reasonable control over the mode and order of examining witnesses . . . so as to . . . make those procedures effective for determining the truth . . . [and] avoid wasting time . . . .” In Adair, infra, and Lewis v. Zermano (In re Stevinson), 194 B.R. 509 (D. Colo. 1996), the courts dismissed due process challenges to the use of proffers finding, under the facts of these cases, use of a proffer was a permissible “mode” of presenting direct testimony under FRE 611 and thus did not violate FRCP 43(a) or the challengers’ due process rights when the witness is available to be called to the stand. Adair, 965 F.2d at 780; Stevinson, 194 B.R. at 513.
There is no authority indicating an absolute right to proffer testimony. Be ready with a live witness in case the court decides otherwise. When the court has limited time available, consider using proffers to save time. Attorneys desiring to present testimony by proffer should be sure that they are presenting testimony on all essential elements as to which their client has the burden. Make sure your witness is aware of your intent to offer their testimony by proffer and agree to its truthfulness. Ask the court to permit the proffer, make the proffer and then ask the court to accept the proffer. You may also want to ask the court to ask if anyone present objects to the proffer of testimony. Finally, remember that the court is the trier-of-fact and a proffer does not afford them the ability to actually observe the witness testifying and assess their credibility. In a situation involving credibility you may want to avoid use of proffers.
Attorneys against whom proffers are offered should carefully review written proffers or listen to the oral proffers to determine if there is a need for cross-examination. Do not accept a proffer is there are questions of foundation to testimony. Expert testimony should not be offered by proffer. If you have advance notice of proffered testimony, seek to take the oral deposition of the witness. Also, consider offering deposition testimony in cross of a proffer.