Distinguished jurist and scholar, Judge Richard Posner of the U.S. Court of Appeals for the Seventh Circuit penned a concurrence in United States v. Boyce, 742 F.3d 792 (7th Cir. 2014), in which he launched a scathing attack on the scheme of categorical hearsay exceptions embodied in the Federal Rules of Evidence. After characterizing the existing hearsay regime as bad “folk psychology,” Judge Posner called for the repeal of categorical hearsay exceptions in favor of case-by-case determinations about the “reliability” of particular hearsay statements by trial judges. Prior to adoption of the Federal Rules, evidence experts debated whether a case-by-case or categorical approach to hearsay exceptions was superior. Judge Posner’s concurrence in Boyce resurrects that debate. Recent evidence scholarship highlights differences of opinion regarding the operation and propriety of specific hearsay exceptions within the Federal Rules of Evidence. Not until the gateway question raised in Boyce about the proper structure of the hearsay regime is resolved may the debate proceed concerning which hearsay exceptions belong in a categorical regime fit to serve the twenty-first century.

This Article explores Judge Posner’s proposal through an economic lens, specifically highlighting the costs and benefits of the purely discretionary approach he proposes. On the cost side of the ledger, the article points out the decrease in predictability that a case-by-case reliability approach to hearsay would create and examines the litigation consequences of such decreased information flow. This Article also cautions against the damage to consistency and fairness certain to follow case-by-case consideration of all hearsay. Further, this Article highlights the scant benefits of a discretionary approach to hearsay. The Article concludes that Judge Posner’s proposal represents a bad bargain for the law of evidence and suggests that efforts to reform the hearsay regime would be more effectively focused on modifying existing categorical exceptions or in pursuing a truly new paradigm for hearsay evidence that eliminates amorphous considerations of “reliability” altogether. Thus, the Article urges the rejection of the purely discretionary model for evaluating hearsay evidence once and for all and seeks to stimulate thought about hearsay reforms that move evidence law forward.

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