## Facts

- Frank Lloyd, an electrician on the SS EXPORT COMMERCE, was involved in a violent altercation with Roland Alvarez, the third assistant engineer, while the ship was in port in Yokohama, Japan.
- A U.S. Coast Guard license-revocation proceeding was convened to determine whether Lloyd’s merchant mariner’s license should be revoked; Lloyd testified under oath about the fight, including who was the aggressor.
- Lloyd sued American Export Lines, Inc. (the shipowner and employer) in federal district court, alleging Jones Act negligence and general maritime unseaworthiness for injuries arising from the altercation.
- The shipowner impleaded Alvarez, and Alvarez counterclaimed against the shipowner for Jones Act negligence and unseaworthiness, alleging the shipowner knew of Lloyd’s dangerous propensities and failed to protect Alvarez.
- Lloyd repeatedly failed to appear for depositions and did not appear for trial; the district court dismissed Lloyd’s complaint for failure to prosecute.
- Trial proceeded on Alvarez’s counterclaim. Lloyd could not be produced as a witness and was treated as unavailable.
- The shipowner sought to introduce portions of Lloyd’s Coast Guard hearing testimony as former testimony to support its defense regarding the circumstances of the altercation.
- The district court excluded the transcript, ruling that the requirements of Federal Rule of Evidence 804(b)(1) were not met.
- The jury found for Alvarez on negligence (but not unseaworthiness) and awarded damages.

## Issues

1. Whether Lloyd’s sworn testimony from the Coast Guard license-revocation hearing was admissible as former testimony under Federal Rule of Evidence 804(b)(1) when Lloyd was unavailable at the civil trial.
2. Whether the Coast Guard, for Rule 804(b)(1) purposes, qualified as a “predecessor in interest” to Alvarez and had an opportunity and similar motive to develop Lloyd’s testimony.
3. Whether exclusion of the former testimony required reversal of the negligence judgment and a new trial.

## Decision

- The Third Circuit held that the district court erred in excluding Lloyd’s Coast Guard testimony under Rule 804(b)(1).
- The court interpreted “predecessor in interest” functionally, requiring a sufficient community of interest and a similar motive to examine the witness, not formal privity.
- The Coast Guard investigator’s motive to develop testimony about the altercation (including whether Lloyd was the aggressor) was sufficiently aligned with Alvarez’s interests so that Rule 804(b)(1)’s safeguards were satisfied.
- Because competent evidence central to the disputed events was excluded, the court reversed the judgment and remanded for a new trial.
- A concurring judge agreed with reversal but would have admitted the testimony under the residual hearsay exception rather than expanding “predecessor in interest.”

## Legal Principles

- Under FRE 804(b)(1), former testimony may be admitted if the declarant is unavailable and the prior testimony was given under oath in a proceeding where the opposing party, or its predecessor in interest, had an opportunity and similar motive to develop the testimony.
- “Predecessor in interest” under Rule 804(b)(1) is not limited to strict privity; it may include an earlier examiner with a sufficient community of interest and a similar motive to probe the same core factual dispute.
- Administrative-hearing testimony can qualify as former testimony under Rule 804(b)(1) when the prior proceeding provided oath and meaningful examination directed to substantially the same factual issues.
- Erroneous exclusion of admissible former testimony bearing directly on a central disputed fact may require reversal and a new trial.

## Conclusion

The Third Circuit ruled that Lloyd’s sworn Coast Guard hearing testimony satisfied FRE 804(b)(1) because the earlier proceeding involved a sufficiently aligned interest and similar motive to examine Lloyd on the key facts of the altercation; excluding the testimony was reversible error, requiring a new trial on Alvarez’s claim.


Lloyd v. Am. Exp. Lines, Inc., 580 F.2d 1179 (3d Cir. 1978)