On November 30, 2015, in Transbay Auto Service v. Chevron USA, the US Court of Appeals for Ninth Circuit, as a matter of first impression, held that when a party acts in conformity with the contents of a document, such an action constitutes an adoption of the statements contained in that document, even if the party never reviewed the document's contents ( (9th Cir. Nov. 30, 2015)).

In 2008, the defendant, Chevron USA made a "bona fide offer" to sell a property that contained a gas service station to the plaintiff, Transbay Auto Service, in accordance with the Petroleum Marketing Practices Act (PMPA). Under the PMPA, a bona fide offer is measured by an objective market standard, and to be objectively reasonable, an offer must approach fair market value.

Several appraisals of the property were performed. First, Deloitte Financial Advisory Services appraised the property at $2.386 million under its highest and best use and at $1.5 million if it continued to be operated as a service station. Thereafter, Transbay agreed to buy the property as an unbranded station for $2.375 million. Transbay sought financing and obtained a physical copy of a second appraisal that was performed on behalf of a prospective lender, which valued the property at $2.52 million. Transbay then approached a different lender, to whom it provided a sealed copy of the second appraisal. The parties disputed whether Transbay even looked at this appraisal prior to submitting it to the lender. Transbay ultimately secured financing from the final lender for $1.782 million and closed with Chevron.

In 2009, Transbay filed suit against Chevron alleging that Chevron violated the PMPA by failing to make a bona fide offer. A jury returned a verdict in favor of Transbay and awarded $495,000 in damages. Chevron filed a motion for a new trial based on the district court's exclusion of the sealed appraisal as evidence. The district court denied the motion and reiterated that there was no evidence Transbay had actually read the appraisal, which was therefore was properly excluded as hearsay.

The Ninth Circuit reversed and held that the appraisal was not hearsay and should have been admitted as an adoptive statement under Federal Rule of Evidence 801(d)(2)(B). As a matter of first impression, the court held that when a party acts in conformity with the contents of a document, such an action constitutes an adoption of the statements contained in that document, even if the party never reviewed the document's contents. The court further held that such an action constitutes adoption even if the third-party never uses or relies on the document.

The court applied the "possession plus" standard to determine adoption. Under this test, a court does not look just at whether a party has affirmatively reviewed a document, but rather whether the surrounding circumstances tie the possessor and the document together in some meaningful way. A party who is only vaguely aware of the contents of a document manifests an intent to adopt those contents by using the document to accomplish an objective or by acting in conformity with the document. In this case, Transbay manifested an adoption or belief in the truth of the appraisal by providing the materials upon which it knew the bank might rely when deciding to make the loan. Transbay was not simply a messenger. Rather, it had a vested interest in supplying the appraisal. Accordingly, there were sufficient foundational facts for a jury to reasonably conclude that Transbay adopted the valuation in the appraisal.