privilege

Communications made during the Course of Settlement or at Mediation - the lack of a

negotiation privilege





Introduction



Communications made during the course of settlement negotiations can be used for

every purpose except proving liability on the claim being negotiated.



FRE 408; comments "an offer for another purpose is not within [the protection of]

the rule." This general principle is found in every common law country (e.g. NADR's

latest summary of privilege and confidentiality opinions runs sixty-two pages of up to

nine cases per page summaries of cases outside the United States).



The statements made are admissible in the case in chief and in later litigation

between the parties. As the House Report on FRE 408 states "Under existing federal law

evidence of conduct and statements made in compromise negotiations is admissible in

subsequent litigation between the parties"



As Senate Report 93-1277 notes, the only escape . if the declarant or his

representative expressly states that the statement is hypothetical in nature or made

without prejudice."



This presentation reviews the law that applies, with example, to communications

made during the course of seeking a settlement, both inside and outside of mediation.



Why



There are four reasons for the privilege, to the extent is exists.



1. A party is not really admitting anything by negotiation, just a desire for peace.

As related in many a settlement agreement, the settlement of a claim is not an admission

of wrong, merely seeking peace.

2. A contract theory where the negotiation discussion, being "without prejudice"

contractually binds the parties to confidentiality.

3. A rule of privilege, that negotiations are privileged.

4. A public interest theory, that the public is served by people reaching settlements

and agreements rather than litigating.



These are the four reasons why the privilege, such as it is, exists.



Overview



FRE 408 has copies in almost every state's rules of evidence, and is used throughout

the federal court system (obviously). It was enacted in order to protect and encourage

negotiation and settlement, but protects "liability for or invalidity of the claim or

its amount." That would seem to be enough, since what evidence is there that doesn't

really go to liability or non liability of a claim and the amount of a claim?



It was intended to be an expansion of the old common law standard which excluded

only the offer to settle itself and the amount of the offer.



However, the rule is not intended to provide immunity. Thus the rule "does not

require the exclusion of any evidence otherwise discoverable" and does not exclude

evidence presented for another purpose, such as "proving bias or prejudice of a witness,

negativing a contention of undue delay, or proving an effort to obstruct a criminal

investigation or prosecution."



The tension is fairly clear. If everything disclosed in negotiation were

excluded, then a party could merely disclose every harmful thing in negotiation and then

demand that the other party not be allowed to use the matters disclosed because those

things had negotiation immunity.



On the other hand, a noted author on bad faith law wrote a striking essay called

Witness for the Prosecution: Me! An attorney can be sometimes called as a witness for

the other side as the witness as to settlement disclosures - or at least can find people

attempting to do that. Such behavior can make attorneys and claims representatives

reluctant to engage in settlement discussions.



History



In modern times most of the cases involve the Department of Justice seeking

information in order to prosecute others. However, the early cases involve civil

litigants making FOIA claims on the Justice Department to seek information (obviously

admissible under Rule 803(8)) .



The first court to really interpret the rule decided that there was full discovery,

with the only limit being the way the material could be used at trial, not what the parties

could find out. The Court basically used the "other purposes" of the law to swallow

the privilege as a discovery privilege.



While there was some hedging (e.g. finding out what other parties had settled other

claims for - a hedge that still exists today in most jurisdictions), the general rule

was constant erosion or denial of any privilege at all. Some courts rejected even that

hedge - especially in cases where the "other claims" and "other parties" were other claims

brought in the same litigation against co-Defendants.



A federal judge then wrote a very widely published article arguing for a settlement

privilege.



Recent History



The bottom line on the recent history is that the article did not have much of

an effect.



In the most egregious example, in a suit against Showtime the Plaintiff was allowed

to introduce into evidence the amount of a settlement offered for an identical claim

with HBO. The settlement did not show the amount of the Showtime claim and did not show

liability by Showtime, only HBO.



What is excluded, what is not considered legitimate under the rule



ú Information or evidence of the settlements of others: OK under the rule.

ú Information or evidence that is sought because of disclosures (e.g. negotiation

statements used to guide further discovery): OK under the rule.

ú Information or evidence of the amount and terms of settlements by co-Defendants

in the same case: OK under the rule (and now commonly included in current mandatory

disclosure/automatic discovery style statues and rules).

ú Evidence of the amount of an offer when it shows bad faith or fraud in negotiation

where there is a duty to negotiate in good faith: OK under the rule. Common in some

litigation (cf. the article cited above).

ú Evidence of a crime with mandatory reporting (child abuse, sexual abuse, elder

abuse): OK under the rule.

ú Evidence of a crime committed in the course of negotiation or disclosed in

negotiation: OK under the rule.

ú Evidence of a wrong committed in the course of negotiation or disclosed in

negotiation (such as bad faith when a duty to act in good faith, threats that do not

rise to criminal levels, fraud): OK under the rule.

ú Evidence that can be used to show the bias of a witness: OK under the rule.



ú That the opposing party made a settlement offer or the amount of the offer: NOT

OK used to show that the opposing party is at fault or that they owe the amount of the

offer. NOT OK.



These elements lead to the four part Wigmore test (cf N.L.R.B. v. Joseph Macaluso,

Inc.).



1. The communication originated in a confidence that it would not be disclosed.

2. The element of confidentiality must be essential to the maintenance of the relation

between the parties.

3. The relation must be one which policy concerns (the opinion or the interests of

the broader community) would preserve.

4. The injury from disclosure must be greater than the benefit to those obtaining

the information.



That is a standards based test, not a rules based test. The real test is whether or

not the public good of complete discovery and ascertaining the truth by all rational

means is outweighed by the public good of keep the particular information secret.



In practice that means a return to the "it is all discoverable, just not all admissible

at trial" with the check list above being the actual rules to apply.



What about negotiations in a mediation?



In theory the various mediation related statutes are stronger. Indeed, a number

of judges have noted that if a party seeks to compel a mediator to testify, the attorney

had best bring a check book so that they can bond out while waiting trial for contempt

of court.



However, the most significant litigation involves cases where the Justice

Department sought and obtained mediation files and records.



The privilege within the walls of mediation is weaker than it appears.



California, Texas, New York, Michigan, Oklahoma, Utah and others (in order of

population) all have state statutes as well. All of them have developed exceptions.



The first, major exception is "otherwise discoverable" information. Again, that

is a reprise to the initial point that disclosure in negotiation does not cloth

information in secrecy and privilege. Otherwise there would be a rush to disclose

everything in a settlement memorandum that would exist purely to outline the contours

of what may never be inquired about again.



The second, major exception is "ongoing crimes" - especially child abuse, elder

abuse and related matters, many of which have mandatory reporting statutes, both state

and federal. As a mediator I know stated "just because he pulled a gun and tried to

shoot his ex-partner in the mediation doesn't make it a privileged attempted murder."



The third exception is that parties can contract to limits of privilege in

mediation. The strongest example is the mediation settlement agreement. Generally

such an agreement may be disclosed in order to be enforced. The Federal Fifth Circuit

has even allowed a verbal settlement agreement made at mediation, which the parties could

not agree on the terms in reduction to writing, to be established by verbal testimony

and enforced by reference to testimony about what the agreement was (and was not).



In theory the parties can also contract to expand the limits of privilege, similar

to the contracts that form the basis of collaborative law where the parties agree that

if they do not settle their current attorneys will not continue and nothing from the

collaborative effort will be available or admissible.



Compare this to "real" Privileges



Comparing the negotiation privilege to a real privilege, such as the Attorney

Client Privilege is a good thing for perspective about what is protected and what is

not.



If you tell your attorney a fact, and the other side asks for that information

in discovery, the attorney can be required to provide the fact (assuming relevance and

such). On the other hand, the attorney is not to testify and is not a witness about

the facts.



Further, mandatory disclosure laws still apply if the information goes to an

ongoing crime, child abuse or elder abuse.



The same rules fit the Priest-Penitent or Clergy Privilege.



Note that the general rule is also that just because a privileged communication

is incidentally overheard, it is still privileged (cf Hawkins v. United States).



However, HIPPA and the rest notwithstanding, the Doctor-Patient privilege has

obvious exceptions. If one thrusts oneself into litigation, then the medical records

become relevant. There is a privilege as to communications, but not the person's

condition, and all of the privilege is waived, more or less, by the filing of suit.



And consider the implicit limits



There are implicit limits that actually swallow up much of the exceptions.



Think about O. J. Simpson and his famous hypothetical that "if" he had, then .



Hypothetical's are not admissions or statements of fact and are thus not subject

to disclosure.



In England this led to the "magic word" approach where the inclusion of the magic

words "without prejudice" led to the communication not being admissible, leaving the

words out was a trap for the unwary and brought the words in.



However, evidence, even if within negotiation, generally comes in to:



ú Show the relationship between the parties (consider Mary Carter Settlements, now

outlawed in many jurisdictions, where parties changed alignment, while trying to hide

that from the jury).

ú Show the bias of witnesses or parties.

ú Explain a settlement agreement.

ú Show a failure to mitigate (the various "offer of settlement" statutes expressly

make the offer to settle an item of evidence).



So, what should you do?



First, do not present facts in negotiation that you are not prepared have become

public.



Second, phrase all representations as hypothetical's and as "without prejudice."



Third, be aware that mandatory reporting and related exceptions do exist.

Fourth, keep only records of the sort that you can accept becoming evidence (or

why mediation centers routinely destroy documents now).





Rule 408. Compromise and Offers to Compromiseÿ



ÿÿÿÿÿÿ(a) Prohibited uses.ÿ Evidence of the following is not admissible on behalf of

any party, when offered to prove liability for, invalidity of, or amount of a claim that

was disputed as to validity or amount, or to impeach through a prior inconsistent

statement or contradiction:ÿ

ÿÿÿÿÿÿ(1) furnishing or offering or promising to furnish--or accepting or offering or

promising to accept--a valuable consideration in compromising or attempting to

compromise the claim; andÿ

ÿÿÿÿÿÿ(2) conduct or statements made in compromise negotiations regarding the claim,

except when offered in a criminal case and the negotiations related to a claim by a public

office or agency in the exercise of regulatory, investigative, or enforcement

authority.ÿ

ÿÿÿÿÿÿ(b) Permitted uses.ÿ This rule does not require exclusion if the evidence is

offered for purposes not prohibited by subdivision (a). Examples of permissible purposes

include proving a witness's bias or prejudice; negating a contention of undue delay;

and proving an effort to obstruct a criminal investigation or prosecution.ÿ

ÿ

The 2006 amendment restyled and made an important change to Rule 408. If the compromise

evidence is being offered in a criminal case, and if "the negotiations related to a claim

by a public office or agency in the exercise of regulatory, investigative, or enforcement

authority," statements made in the course of those negotiations are admissible. This

somewhat controversial amendment may chill discussions seeking to compromise claims made

by public agencies such as the SEC, the FTC, and other bodies. It remains to be seen

whether states will follow suit by amending their compromise rules in the same fashion.ÿ



ÿÿÿThe amended rule also makes clear that evidence compromise evidence is not admissible

to impeach a witness through prior inconsistent statement or contradiction. ÿ







Rule 408. Compromise and Offers to Compromise





(a) Prohibited uses.--Evidence of the following is not admissible on behalf of any party,

when offered to prove liability for, invalidity of, or amount of a claim that was disputed

as to validity or amount, or to impeach through a prior inconsistent statement or

contradiction:

(1) furnishing or offering or promising to furnish--or accepting or offering or promising

to accept--a valuable consideration in compromising or attempting to compromise the

claim; and



(2) conduct or statements made in compromise negotiations regarding the claim, except

when offered in a criminal case and the negotiations related to a claim by a public office

or agency in the exercise of regulatory, investigative, or enforcement authority.



(b) Permitted uses.--This rule does not require exclusion if the evidence is offered

for purposes not prohibited by subdivision (a). Examples of permissible purposes include

proving a witness's bias or prejudice; negating a contention of undue delay; and proving

an effort to obstruct a criminal investigation or prosecution.





CREDIT(S)



(Pub.L. 93-595, # 1, Jan. 2, 1975, 88 Stat. 1933; Apr. 12, 2006, eff. Dec. 1, 2006.)

ADVISORY COMMITTEE NOTES



1972 Proposed Rules



As a matter of general agreement, evidence of an offer to compromise a claim is not

receivable in evidence as an admission of, as the case may be, the validity or invalidity

of the claim. As with evidence of subsequent remedial measures, dealt with in Rule 407,

exclusion may be based on two grounds. (1) The evidence is irrelevant, since the offer

may be motivated by a desire for peace rather than from any concession of weakness of

position. The validity of this position will vary as the amount of the offer varies in

relation to the size of the claim and may also be influenced by other circumstances.

(2) A more consistently impressive ground is promotion of the public policy favoring

the compromise and settlement of disputes. McCormick ## 76, 251. While the rule is

ordinarily phrased in terms of offers of compromise, it is apparent that a similar

attitude must be taken with respect to completed compromises when offered against a party

thereto. This latter situation will not, of course, ordinarily occur except when a party

to the present litigation has compromised with a third person.



The same policy underlies the provision of Rule 68 of the Federal Rules of Civil Procedure

that evidence of an unaccepted offer of judgment is not admissible except in a proceeding

to determine costs.



The practical value of the common law rule has been greatly diminished by its

inapplicability to admissions of fact, even though made in the course of compromise

negotiations, unless hypothetical, stated to be "without prejudice," or so connected

with the offer as to be inseparable from it. McCormick # 251, pp. 540-541. An inevitable

effect is to inhibit freedom of communication with respect to compromise, even among

lawyers. Another effect is the generation of controversy over whether a given statement

falls within or without the protected area. These considerations account for the

expansion of the rule herewith to include evidence of conduct or statements made in

compromise negotiations, as well as the offer or completed compromise itself. For similar

provisions see California Evidence Code ## 1152, 1154.



The policy considerations which underlie the rule do not come into play when the effort

is to induce a creditor to settle an admittedly due amount for a lesser sum. McCormick

# 251, p. 540. Hence the rule requires that the claim be disputed as to either validity

or amount.



The final sentence of the rule serves to point out some limitations upon its

applicability. Since the rule excludes only when the purpose is proving the validity

or invalidity of the claim or its amount, an offer for another purpose is not within

the rule. The illustrative situations mentioned in the rule are supported by the

authorities. As to proving bias or prejudice of a witness, see Annot., 161 A.L.R. 395,

contra, Fenberg v. Rosenthal, 348 Ill.App. 510, 109 N.E.2d 402 (1952), and negativing

a contention of lack of due diligence in presenting a claim, 4 Wigmore # 1061. An effort

to "buy off" the prosecution or a prosecuting witness in a criminal case is not within

the policy of the rule of exclusion. McCormick # 251, p. 542.



For other rules of similar import, see Uniform Rules 52 and 53; California Evidence Code

## 1152, 1154; Kansas Code of Civil Procedure ## 60-452, 60-453; New Jersey Evidence

Rules 52 and 53.



1974 Enactment



Under existing federal law evidence of conduct and statements made in compromise

negotiations is admissible in subsequent litigation between the parties. The second

sentence of Rule 408 as submitted by the Supreme Court proposed to reverse that doctrine

in the interest of further promoting non-judicial settlement of disputes. Some agencies

of government expressed the view that the Court formulation was likely to impede rather

than assist efforts to achieve settlement of disputes. For one thing, it is not always

easy to tell when compromise negotiations begin, and informal dealings end. Also, parties

dealing with government agencies would be reluctant to furnish factual information at

preliminary meetings; they would wait until "compromise negotiations" began and thus

hopefully effect an immunity for themselves with respect to the evidence supplied. In

light of these considerations, the Committee recast the Rule so that admissions of

liability or opinions given during compromise negotiations continue inadmissible, but

evidence of unqualified factual assertions is admissible. The latter aspect of the Rule

is drafted, however, so as to preserve other possible objections to the introduction

of such evidence. The Committee intends no modification of current law whereby a party

may protect himself from future use of his statements by couching them in hypothetical

conditional form. House Report No. 93-650.



This rule as reported makes evidence of settlement or attempted settlement of a disputed

claim inadmissible when offered as an admission of liability or the amount of liability.

The purpose of this rule is to encourage settlements which would be discouraged if such

evidence were admissible.



Under present law, in most jurisdictions, statements of fact made during settlement

negotiations, however, are excepted from this ban and are admissible. The only escape

from admissibility of statements of fact made in a settlement negotiation is if the

declarant or his representative expressly states that the statement is hypothetical in

nature or is made without prejudice. Rule 408 as submitted by the Court reversed the

traditional rule. It would have brought statements of fact within the ban and made them,

as well as an offer of settlement, inadmissible.



The House amended the rule and would continue to make evidence of facts disclosed during

compromise negotiations admissible. It thus reverted to the traditional rule. The House

committee report states that the committee intends to preserve current law under which

a party may protect himself by couching his statements in hypothetical form [See House

Report No. 93-650 above]. The real impact of this amendment, however, is to deprive the

rule of much of its salutary effect. The exception for factual admissions was believed

by the Advisory Committee to hamper free communication between parties and thus to

constitute an unjustifiable restraint upon efforts to negotiate settlements-- the

encouragement of which is the purpose of the rule. Further, by protecting hypothetically

phrased statements, it constituted a preference for the sophisticated, and a trap for

the unwary.



Three States which had adopted rules of evidence patterned after the proposed rules

prescribed by the Supreme Court opted for versions of rule 408 identical with the Supreme

Court draft with respect to the inadmissibility of conduct or statements made in

compromise negotiations [Nev.Rev.Stats. # 48.105; N.Mex.Stats.Anno. (1973 Supp.) #

20-4-408; West's Wis.Stats.Anno. (1973 Supp.) # 904.08].



For these reasons, the committee has deleted the House amendment and restored the rule

to the version submitted by the Supreme Court with one additional amendment. This

amendment adds a sentence to insure that evidence, such as documents, is not rendered

inadmissible merely because it is presented in the course of compromise negotiations

if the evidence is otherwise discoverable. A party should not be able to immunize from

admissibility documents otherwise discoverable merely by offering them in a compromise

negotiation. Senate Report No. 93-1277.



The House bill provides that evidence of admissions of liability or opinions given during

compromise negotiations is not admissible, but that evidence of facts disclosed during

compromise negotiations is not inadmissible by virtue of having been first disclosed

in the compromise negotiations. The Senate amendment provides that evidence of conduct

or statements made in compromise negotiations is not admissible. The Senate amendment

also provides that the rule does not require the exclusion of any evidence otherwise

discoverable merely because it is presented in the course of compromise negotiations.



The House bill was drafted to meet the objection of executive agencies that under the

rule as proposed by the Supreme Court, a party could present a fact during compromise

negotiations and thereby prevent an opposing party from offering evidence of that fact

at trial even though such evidence was obtained from independent sources. The Senate

amendment expressly precludes this result.



The Conference adopts the Senate amendment. House Report No. 93-1597.



2006 Amendment



Rule 408 has been amended to settle some questions in the courts about the scope of the

Rule, and to make it easier to read. First, the amendment provides that Rule 408 does

not prohibit the introduction in a criminal case of statements or conduct during

compromise negotiations regarding a civil dispute by a government regulatory,

investigative, or enforcement agency. See, e.g., United States v. Prewitt, 34 F.3d 436,

439 (7th Cir. 1994) (admissions of fault made in compromise of a civil securities

enforcement action were admissible against the accused in a subsequent criminal action

for mail fraud). Where an individual makes a statement in the presence of government

agents, its subsequent admission in a criminal case should not be unexpected. The

individual can seek to protect against subsequent disclosure through negotiation and

agreement with the civil regulator or an attorney for the government.



Statements made in compromise negotiations of a claim by a government agency may be

excluded in criminal cases where the circumstances so warrant under Rule 403. For

example, if an individual was unrepresented at the time the statement was made in a civil

enforcement proceeding, its probative value in a subsequent criminal case may be minimal.

But there is no absolute exclusion imposed by Rule 408.



In contrast, statements made during compromise negotiations of other disputed claims

are not admissible in subsequent criminal litigation, when offered to prove liability

for, invalidity of, or amount of those claims. When private parties enter into compromise

negotiations they cannot protect against the subsequent use of statements in criminal

cases by way of private ordering. The inability to guarantee protection against

subsequent use could lead to parties refusing to admit fault, even if by doing so they

could favorably settle the private matter. Such a chill on settlement negotiations would

be contrary to the policy of Rule 408.



The amendment distinguishes statements and conduct (such as a direct admission of fault)

made in compromise negotiations of a civil claim by a government agency from an offer

or acceptance of a compromise of such a claim. An offer or acceptance of a compromise

of any civil claim is excluded under the Rule if offered against the defendant as an

admission of fault. In that case, the predicate for the evidence would be that the

defendant, by compromising with the government agency, has admitted the validity and

amount of the civil claim, and that this admission has sufficient probative value to

be considered as evidence of guilt. But unlike a direct statement of fault, an offer

or acceptance of a compromise is not very probative of the defendant's guilt. Moreover,

admitting such an offer or acceptance could deter a defendant from settling a civil

regulatory action, for fear of evidentiary use in a subsequent criminal action. See,

e.g., Fishman, Jones on Evidence, Civil and Criminal, # 22:16 at 199, n.83 (7th ed. 2000)

("A target of a potential criminal investigation may be unwilling to settle civil claims

against him if by doing so he increases the risk of prosecution and conviction.").



The amendment retains the language of the original rule that bars compromise evidence

only when offered as evidence of the "validity," "invalidity," or "amount" of the

disputed claim. The intent is to retain the extensive case law finding Rule 408

inapplicable when compromise evidence is offered for a purpose other than to prove the

validity, invalidity, or amount of a disputed claim. See, e.g., Athey v. Farmers Ins.

Exchange, 234 F.3d 357 (8th Cir. 2000) (evidence of settlement offer by insurer was

properly admitted to prove insurer's bad faith); Coakley & Williams v. Structural

Concrete Equip., 973 F.2d 349 (4th Cir. 1992) (evidence of settlement is not precluded

by Rule 408 where offered to prove a party's intent with respect to the scope of a

release); Cates v. Morgan Portable Bldg. Corp., 708 F.2d 683 (7th Cir. 1985) (Rule 408

does not bar evidence of a settlement when offered to prove a breach of the settlement

agreement, as the purpose of the evidence is to prove the fact of settlement as opposed

to the validity or amount of the underlying claim); Uforma/Shelby Bus. Forms, Inc. v.

NLRB, 111 F.3d 1284 (6th Cir. 1997) (threats made in settlement negotiations were

admissible; Rule 408 is inapplicable when the claim is based upon a wrong that is

committed during the course of settlement negotiations). So for example, Rule 408 is

inapplicable if offered to show that a party made fraudulent statements in order to settle

a litigation..United States v. Austin, 54 F.3d 394 (7th Cir. 1995) (no error to admit

evidence of the defendant's settlement with the FTC, because it was offered to prove

that the defendant was on notice that subsequent similar conduct was wrongful); Spell

v. McDaniel, 824 F.2d 1380 (4th Cir. 1987) (in a civil rights action alleging that an

officer used excessive force, a prior settlement by the City of another brutality claim

was properly admitted to prove that the City was on notice of aggressive behavior by

police officers).



The amendment prohibits the use of statements made in settlement negotiations when

offered to impeach by prior inconsistent statement or through contradiction. Such broad

impeachment would tend to swallow the exclusionary rule and would impair the public

policy of promoting settlements. See McCormick on Evidence at 186 (5th ed. 1999) ("Use

of statements made in compromise negotiations to impeach the testimony of a party, which

is not specifically treated in Rule 408, is fraught with danger of misuse of the

statements to prove liability, threatens frank interchange of information during

negotiations, and generally should not be permitted."). See also EEOC v. Gear Petroleum,

Inc., 948 F.2d 1542 (10th Cir.1991) (letter sent as part of settlement negotiation cannot

be used to impeach defense witnesses by way of contradiction or prior inconsistent

statement; such broad impeachment would undermine the policy of encouraging uninhibited

settlement negotiations).



The amendment makes clear that Rule 408 excludes compromise evidence even when a party

seeks to admit its own settlement offer or statements made in settlement negotiations.

If a party were to reveal its own statement or offer, this could itself reveal the fact

that the adversary entered into settlement negotiations. The protections of Rule 408

cannot be waived unilaterally because the Rule, by definition, protects both parties

from having the fact of negotiation disclosed to the jury. Moreover, proof of statements

and offers made in settlement would often have to be made through the testimony of

attorneys, leading to the risks and costs of disqualification. See generally Pierce v.

F.R. Tripler & Co., 955 F.2d 820, 828 (2d Cir. 1992) (settlement offers are excluded

under Rule 408 even if it is the offeror who seeks to admit them; noting that the

"widespread admissibility of the substance of settlement offers could bring with it a

rash of motions for disqualification of a party's chosen counsel who would likely become

a witness at trial").



The sentence of the Rule referring to evidence "otherwise discoverable" has been deleted

as superfluous. See, e.g., Advisory Committee Note to Maine Rule of Evidence 408

(refusing to include the sentence in the Maine version of Rule 408 and noting that the

sentence "seems to state what the law would be if it were omitted"); Advisory Committee

Note to Wyoming Rule of Evidence 408 (refusing to include the sentence in Wyoming Rule

408 on the ground that it was "superfluous"). The intent of the sentence was to prevent

a party from trying to immunize admissible information, such as a pre-existing document,

through the pretense of disclosing it during compromise negotiations. See Ramada

Development Co. v. Rauch, 644 F.2d 1097 (5th Cir. 1981). But even without the sentence,

the Rule cannot be read to protect pre-existing information simply because it was

presented to the adversary in compromise negotiations.

CROSS REFERENCES

Offer of judgment inadmissible as evidence, exception, see Fed.Rules Civ.Proc. Rule 68,

28 USCA.



LAW REVIEW COMMENTARIES

Admissibility of statements made in plea negotiations. Daniel J. Capra, 211 N.Y.L.J.

3 (May 13, 1994).



Attorneys, tape recorders and perfidy. Stanley S. Arkin, 211 N.Y.L.J. 3 (April 14, 1994).



Impeachment of party by prior inconsistent statement in compromise negotiations:

Admissibility under Federal Rule of Evidence 408. 43 Clev.St.L.Rev. 75 (1995).







41 Admin.L.Rev. 315 (1989).



Protecting the confidentiality of settlement negotiations. Wayne D. Brazil, 39 Hastings

L.J. 955 (1988).



Rule 408: Maintaining the shield for negotiation in federal and bankruptcy courts.

Comment, 16 Pepp.L.Rev. S237 (1989).



Sanctions for government counsel. Michael C. Silberberg, 215 N.Y.L.J. 3 (June 13, 1996).



The state of the art defense and time rule in design and warning defect strict products

liability cases. Renee Dossick, 38 Rutgers L.Rev. 505 (1986).





LIBRARY REFERENCES



American Digest System

Evidence 212 to 214, 219(3).

Key Number System Topic No. 157.



Corpus Juris Secundum

CJS Criminal Law # 1222, Offer of Compromise, Generally.

CJS Evidence # 380, Offers of Compromise or Settlement -- Purposes for Which

Inadmissible; Independent Relevancy of Offer.

CJS Evidence # 382, Offers of Compromise or Settlement -- What Constitutes Offer or Part

of Negotiations.

CJS Evidence # 386, Agreements for Compromise.

CJS Evidence # 388, Admissions by Conduct -- Settlements or Compromises With Third

Persons; Payment of Claims of Third Persons.

CJS Grand Juries # 139, Miscellaneous Grounds for Noncompliance.



RESEARCH REFERENCES



ALR Library



158 ALR, Fed. 609, Admissibility of Evidence of Subsequent Remedial Measures Under Rule

407 of Federal Rules of Evidence.



72 ALR, Fed. 592, Evidence Involving Compromise or Offer of Compromise as Inadmissible

Under Rule 408 of Federal Rules of Evidence.



66 ALR, Fed. 186, Factors to be Considered in Determining a "Reasonable Royalty" for

Purposes of Calculating Damages for Patent Infringement Under 35 U.S.C.A. # 284.

36 ALR, Fed. 564, Construction and Application of Rule 608(B) of Federal Rules of Evidence

Dealing With Use of Specific Instances of Conduct to Attack or Support Credibility.



34 ALR, Fed. 126, Award of Prejudgment Interest in Admiralty Suits.



118 ALR 5th 91, Construction of State Offer of Judgment Rule--Sufficiency of Offer and

Contract Formation Issues.



22 ALR 5th 483, Validity and Effect of "Mary Carter" or Similar Agreement Setting Maximum

Liability of One Cotortfeasor and Providing for Reduction or Extinguishment Thereof

Relative to Recovery Against Nonagreeing...



98 ALR 3rd 1060, Right to Cross-Examine Prosecuting Witness as to His Pending or

Contemplated Civil Action Against Accused for Damages Arising Out of Same Transaction.



59 ALR 3rd 441, Admissibility of Defense Communications Made in Connection With Plea

Bargaining.



15 ALR 3rd 13, Admissibility of Admissions Made in Connection With Offers or Discussions

of Compromise.



26 ALR 2nd 858, Admissibility of Evidence of Unperformed Compromise Agreement.



20 ALR 2nd 304, Admissibility of Evidence that Defendant in Negligence Action Has Paid

Third Persons on Claims Arising from the Same Transaction or Incident as Plaintiff's

Claim.



161 ALR 395, Cross-Examination of Adversary Witness Regarding Compromise or Settlement

of His Claim Against the Party Calling Him, for Purpose of Affecting His Credibility.



148 ALR 1270, Release of or Covenant Not to Sue One Tort-Feasor as Affecting Liability

of Others.



104 ALR 931, Amount Paid by One Alleged Joint Tort-Feasor in Consideration of Covenant

Not to Sue or a Release Not Effective as a Full Release of the Other Joint Tort-Feasor,

as Pro Tanto Satisfaction of Damages Recoverable Against...



74 ALR 1157, Cross-Examination for Purpose of Showing Bias or Hostility on Part of

Witness.



Encyclopedias



4 Am. Jur. Proof of Facts 2d 107, Stockbroker's Violation of Margin Requirements.



32 Am. Jur. Proof of Facts 2d 253, Admission by Conduct or Silence.



15 Am. Jur. Proof of Facts 3d 355, First-Party Insurance Coverage for Medically Necessary

Treatment.



18 Am. Jur. Proof of Facts 3d 323, Punitive Damages Against an Insurer for the Bad-Faith

Handling of a First-Party Claim.



28 Am. Jur. Proof of Facts 3d 87, Proof of Unsuitable and Unauthorized Trading by

Securities Brokers.



35 Am. Jur. Proof of Facts 3d 161, Proving Damages Caused by Securities Brokers'

Excessive, Unsuitable, or Unauthorized Trading.

36 Am. Jur. Proof of Facts 3d 373, Liability for Breach of Employment Severance Agreement.



41 Am. Jur. Proof of Facts 3d 159, Liability of Debt Collector to Debtor Under the Federal

Fair Debt Collection Practices Act.



41 Am. Jur. Proof of Facts 3d 253, Proving Securities Broker's Control Over Customer's

Account in Churning and Unsuitable Trading Cases.



4 Am. Jur. Trials 289, Settling the Case--Plaintiff.



4 Am. Jur. Trials 379, Settling the Case--Defendant.



36 Am. Jur. Trials 1, Broker-Dealer Fraud: Churning.



45 Am. Jur. Trials 1, Determining Preliminary Facts Under Federal Rule 104.



46 Am. Jur. Trials 231, Alternative Dispute Resolution for Banks and Other Financial

Institutions.



48 Am. Jur. Trials 1, Audio Recordings: Evidence, Experts and Technology.



53 Am. Jur. Trials 1, Evaluation and Settlement of Personal Injury and Wrongful Death

Cases.



55 Am. Jur. Trials 483, The Use of Alternative Dispute Resolution in Intellectual

Property, Technology-Related or Innovation-Based Disputes.



57 Am. Jur. Trials 255, Alternative Dispute Resolution: Employment Law.



61 Am. Jur. Trials 95, Defending the Multiple Chemical Sensitivity Claim.



76 Am. Jur. Trials 1, Arbitration Evidence: Putting Your Best Case Forward.



94 Am. Jur. Trials 211, Appealing Adverse Arbitration Awards.



Am. Jur. 2d Evidence # 13, Proceedings to Which Rules Are Applicable.



Am. Jur. 2d Evidence # 17, Proceedings or Situations to Which Rules of Evidence Are

Inapplicable -- Grand Jury Proceedings.



Am. Jur. 2d Evidence # 509, Requisites for Invocation of Rule.



Am. Jur. 2d Evidence # 510, Conduct or Statements During Compromise Negotiations,

Generally.



Am. Jur. 2d Evidence # 511, Conduct or Statements During Compromise Negotiations,

Generally -- How to Determine What is a Compromise Negotiation.



Am. Jur. 2d Evidence # 513, Applicability to Third Party Settlement, Generally.



Am. Jur. 2d Evidence # 515, Admissibility of Otherwise Discoverable Evidence Presented

During Compromise Negotiations.



Am. Jur. 2d Evidence # 516, Admissibility Where Offered for Other Purposes.



Am. Jur. 2d Evidence # 1024, Use and Restrictions on Use.



Am. Jur. 2d Federal Courts # 2486, When to Use; How to Request.

Am. Jur. 2d Federal Tax Enforcement # 370, Evidence; Admissibility of Information

Obtained by IRS Subsequent to Assessment.



Am. Jur. 2d Job Discrimination # 2403, Agreements to Compromise Claims.



Am. Jur. 2d Labor and Labor Relations # 3433, Evidence of Settlement.



Am. Jur. 2d Pollution Control # 33, Evidence.



Am. Jur. 2d Pollution Control # 1423, Evidence.



Am. Jur. 2d Products Liability # 1794, Evidence of Compromise and Offers to Compromise;

Generally.



Am. Jur. 2d Products Liability # 1795, Evidence of Compromise and Offers to Compromise;

Generally -- Admissible for Purposes Other Than Proof of Liability.



. . .



NOTES OF DECISIONS

Generally 1

Actual settlements 13

Admissions of fact 23

Alternative dispute resolution 7

Arbitration 6

Conduct or statements excludable 11, 12

Conduct or statements excludable - Generally 11

Conduct or statements excludable - Miscellaneous conduct or statements

excludable 12

Construction with other laws 3

Criminal proceedings 4

Damages or interest, purposes for which admissible 19

Discovery 25

Disputed claims 8

Final judgments in other proceedings 16

Grand jury proceedings 5

Harmless error 30

Impeachment and rebuttal, purposes for which admissible 20

Miscellaneous conduct or statements excludable 12

Miscellaneous conduct or statements not excludable 17

Miscellaneous purposes for which admissible 21

Offers within section 9

Parties entitled to object 27

Persons authorized to admit 24

Plea bargains 15

Purpose 2

Purposes for which admissible 18-21

Purposes for which admissible - Generally 18

Purposes for which admissible - Damages or interest 19

Purposes for which admissible - Impeachment and rebuttal 20

Purposes for which admissible - Miscellaneous purposes for which admissible

21

Relevance 31

Sanctions 29

Settlement and compromise offers indistinguishable 10

Summary judgment 26

Third-party compromises and settlements 14

Time of determination 28

Waiver 22

1. Generally



When issue is doubtful, better practice is to exclude evidence of compromises or

compromise offers. Bradbury v. Phillips Petroleum Co., C.A.10 (Colo.) 1987, 815 F.2d

1356. Evidence 213(1); Evidence 219(3)



An unaccepted offer of settlement ordinarily is not admissible evidence to show either

existence or amount of liability. Cheyenne River Sioux Tribe v. U.S., C.A.Fed.1986, 806

F.2d 1046, certiorari denied 107 S.Ct. 3184, 482 U.S. 913, 96 L.Ed.2d 673. Evidence 213(1)



Evidence rule excludes only evidence of conduct and statements made solely as part of

settlement negotiations, and not statements and conduct made at meeting which are

unrelated to such compromise negotiations. Trans Union Credit Information Co. v.

Associated Credit Services, Inc., C.A.6 (Ohio) 1986, 805 F.2d 188. Evidence 213(1)



Offers of settlement or compromise, absent extraordinary circumstances, are

inadmissible. Greyhound Lines, Inc. v. Miller, C.A.8 (Mo.) 1968, 402 F.2d 134. Evidence

213(1)



Offer in settlement is ordinarily not admissible for it is deemed to be an indication

only of desire for peace and not an admission. Sternberger v. U. S., Ct.Cl.1968, 401

F.2d 1012, 185 Ct.Cl. 528. Evidence 213(1)



Evidence of unaccepted offers of compromise or negotiations looking to compromise is

inadmissible. Southern Ry. Co. v. Madden, C.A.4 (S.C.) 1956, 235 F.2d 198, certiorari

denied 77 S.Ct. 328, 352 U.S. 953, 1 L.Ed.2d 244 See, also, Texas Eastern Transmission

Corp. v. Federal Power Commission, C.A.5, 1962, 306 F.2d 345, certiorari denied 84 S.Ct.

347, 375 U.S. 941, 11 L.Ed.2d 273. Evidence 213(1)



Rule governing admission of evidence relating to compromise negotiations does not apply

when the claim is based upon wrongful acts that took place during the compromise

negotiations. Becker v. Kroll, D.Utah 2004, 340 F.Supp.2d 1230. Evidence 213(1)



Evidence of settlement between wife and manufacturer of recreational watercraft with

respect to wife's loss of consortium claim was inadmissible to prove manufacturer's

liability on husband's claims. Buckman v. Bombardier Corp., E.D.N.C.1995, 893 F.Supp.

547. Evidence 219(3)



Rule limiting introduction of evidence regarding settlement negotiations is

preclusionary rule, not discovery rule, and is meant to limit introduction of evidence

of settlement negotiations at trial rather than as broad discovery privilege. Computer

Associates Intern., Inc. v. American Fundware, Inc., D.Colo.1993, 831 F.Supp. 1516.

Evidence 213(1); Witnesses 184(1)



All that is needed for application of evidentiary rule excluding offers to compromise

is actual dispute, or at least apparent difference of opinion between parties as to

validity of claim; rule is applicable even if offer to compromise did not result in

completed agreement. Alpex Computer Corp. v. Nintendo Co., Ltd., S.D.N.Y.1991, 770

F.Supp. 161, 20 U.S.P.Q.2d 1782, on reconsideration, vacated in part. Evidence 213(1)



At common law, the use of the prefatory and "magic" phrase "without prejudice" clearly

indicated that the statement was being made in the course of compromise negotiations

and thus was inadmissible; under this rule employment of that common-law phrase is no

longer dispositive but its use may be evidence of the intent of the speaker which may

be relied upon in determining whether the statement was made in compromise. S. Leo

Harmonay, Inc. v. Binks Mfg. Co., S.D.N.Y.1984, 597 F.Supp. 1014, affirmed 762 F.2d 990.

Evidence 213(2)

Settlement discussions are normally understood between the parties to be privileged.

Helene Curtis Industries v. Sales Affiliates, S.D.N.Y.1954, 121 F.Supp. 490, 101

U.S.P.Q. 220, motion denied 131 F.Supp. 119, 105 U.S.P.Q. 113, affirmed 233 F.2d 148,

109 U.S.P.Q. 159, certiorari denied 77 S.Ct. 101, 352 U.S. 879, 1 L.Ed.2d 80, 111 U.S.P.Q.

467, rehearing denied 77 S.Ct. 260, 352 U.S. 945, 1 L.Ed.2d 240, 111 U.S.P.Q. 467.

Evidence 213(1)



Settlement offers as such are not admissible. Inspiration Consol. Copper Co. v.

Lumbermens Mut. Cas. Co., S.D.N.Y.1973, 60 F.R.D. 205. Evidence 213(1)

2. Purpose



Primary reason for excluding evidence of a compromise is to encourage nonlitigious

solutions to disputes. Reichenbach v. Smith, C.A.5 (Fla.) 1976, 528 F.2d 1072. Evidence

219(3)



Policy rationale which excludes an offer of settlement from being admitted in evidence

as an admission arises from the fact that the law favors settlements of controversies

and if an offer of a dollar amount by way of compromise were taken as an admission of

liability, voluntary efforts at settlement would be chilled. Perzinski v. Chevron

Chemical Co., C.A.7 (Wis.) 1974, 503 F.2d 654. Evidence 213(1)



Exclusion of compromise offers is based on rationales that evidence of offer to

compromise is irrelevant because it may be motivated by offeror's desire for peace rather

than from any concession that its position is weak and that exclusion advances public

policy favoring compromise and settlement of disputes. Morley-Murphy Co. v. Zenith

Electronics Corp., W.D.Wis.1996, 910 F.Supp. 450, reversed 142 F.3d 373. Evidence 213(1)



Purpose of rule providing that evidence of conduct or statements made in compromise

negotiations is not admissible to prove liability or invalidity of claim although it

may be admissible on other grounds, including that of proving bias or prejudice of

witness, is to encourage full and frank disclosure between parties in order to promote

settlements rather than protracted litigation. Olin Corp. v. Insurance Co. of North

America, S.D.N.Y.1985, 603 F.Supp. 445, on reargument 607 F.Supp. 1377, motion to vacate

denied. Evidence 213(1)



Purpose of privilege surrounding offers of compromises is to encourage free and frank

discussions with view toward settling dispute; privilege is not designed to shield

otherwise discoverable documents merely because such documents represent factual

matters that might be or are incorporated in settlement proposal. U.S. v. Reserve Min.

Co., D.C.Minn.1976, 412 F.Supp. 705, affirmed and remanded on other grounds 543 F.2d

1210, on remand 431 F.Supp. 1248. Federal Civil Procedure 1600(1)



Federal evidence rule governing offers of compromise aims to foster settlement

discussions in individual lawsuit, and therefore insulates particular parties to

settlement discussion from possible adverse consequences of their frank and open

statements. In re A.H. Robins Co., Inc., E.D.Va.1994, 197 B.R. 568. Evidence 213(1)

3. Construction with other laws



Regardless of whether a settlement offer constituted binding admission under substantive

Mexican law, vendor's settlement offer to broker was inadmissible to recover a real

estate commission on sale of a hotel located in Mexico. Morris v. LTV Corp., C.A.5 (Tex.)

1984, 725 F.2d 1024. Evidence 213(3)



Farm employer was not entitled to jury trial on claims under Migrant and Seasonal

Agricultural Worker Protection Act; statutory damages sought were equitable in nature,

and Act's provision that court could consider evidence of settlement attempts was

contrary to rule that juries are not to consider evidence of settlement attempts when

fixing damages. Calderon v. Witvoet, C.D.Ill.1991, 764 F.Supp. 536, affirmed in part,

vacated in part on other grounds 999 F.2d 1101, 123 A.L.R. Fed. 697. Jury 14(1.4)

4. Criminal proceedings



Evidentiary rule barring admission of settlement evidence applies in both criminal and

civil proceedings. U.S. v. Bailey, C.A.10 (Kan.) 2003, 327 F.3d 1131. Criminal Law 408;

Evidence 213(1)



Defendant's stipulation to admission of document he allegedly submitted to Environmental

Protection Agency (EPA) for settlement purposes was binding in prosecution for

obstructing federal proceeding. U.S. v. Technic Services, Inc., C.A.9 (Alaska) 2002,

314 F.3d 1031. Criminal Law 661



Rule providing that evidence of furnishing or accepting valuable consideration in

compromising claim which was disputed as to either validity or amount is not admissible

to prove liability for or invalidity of claim or its amount and that evidence of

statements made in compromise negotiations is likewise not admissible should not be

applied to criminal cases; clear reading of rule suggests that it applies only to civil

proceedings, specifically language concerning validity and amount of claim, nothing in

rule specifically prohibits receipt of evidence in criminal proceedings concerning

statements made at conference to settle claims of private parties, and public interest

in prosecution of crime is greater than public interest in settlement of civil disputes.

U.S. v. Prewitt, C.A.7 (Ind.) 1994, 34 F.3d 436, denial of habeas corpus affirmed 83

F.3d 812. Criminal Law 408



Evidentiary rule precluding admission of attempts to compromise a claim applied only

to civil litigation and did not bar evidence of a defendant's prearrest attempt to make

a "deal" involving possible criminal charges. U.S. v. Baker, C.A.2 (N.Y.) 1991, 926 F.2d

179. Criminal Law 408



Rule excluding evidence of offers to compromise is applicable to both civil and criminal

proceedings. U.S. v. Skeddle, N.D.Ohio 1997, 176 F.R.D. 254. Criminal Law 408; Evidence

213(1)



The rule of evidence governing settlement negotiations, and the underlying policy

considerations for excluding evidence of conduct or statements made during settlement

negotiations in civil cases, are inapplicable in the context of criminal cases. U.S.

v. Mercado, S.D.N.Y.2003, 2003 WL 21756084, Unreported. Criminal Law 408

5. Grand jury proceedings



The overriding public policy in favor of vesting broad investigatory powers with grand

jury, explicit language of rule 1101(d)(2) of these rules precluding any extension of

this rule to grand jury proceedings, lack of an adequate showing of irreparable injury

together with protection afforded by secrecy of grand jury deliberations mandated denial

of third parties' motion to quash grand jury subpoena duces tecum for production of

records presented to accounting firm to enable it to prepare audit reports for

corporation and which apparently concerned transactions concluded by third parties while

they were trust officers. In re Special November 1975 Grand Jury (Subpoena Duces Tecum

Issued to Peat, Marwick, Mitchell & Co.), N.D.Ill.1977, 433 F.Supp. 1094. Grand Jury

36.4(1)



This rule precluding introduction of compromise and offers to compromise at trial could

not be applied by analogy to grand jury proceeding and provide basis for granting petition

to quash grand jury subpoena. In re Special November 1975 Grand Jury (Subpoena Duces

Tecum Issued to Peat, Marwick, Mitchell & Co.), N.D.Ill.1977, 433 F.Supp. 1094. Grand

Jury 36.3(1)

6. Arbitration



Rule which prohibits use of settlement discussions to prove liability for or invalidity

of claim or its amount did not preclude use of settlement discussions to show party's

practical, prelitigation understanding of contract with respect to application of

arbitration clause. Gestetner Holdings, PLC v. Nashua Corp., S.D.N.Y.1992, 784 F.Supp.

78. Evidence 213(1)

7. Alternative dispute resolution



Settlement offer by claimants trust, which was created under Chapter 11 plan to

administer intrauterine device (IUD) claims against debtor, was not admission of

liability, and thus settlement with wife did not preclude trust from contesting causation

in husband's alternative dispute resolution (ADR) proceeding. In re A.H. Robins Co.,

Inc., E.D.Va.1995, 197 B.R. 541. Bankruptcy 3570

8. Disputed claims



Term "dispute" as used in rule excluding evidence of offers to compromise or compromises

of disputes included clear difference of opinion between parties concerning payment of

two invoices despite claim that the parties were merely having discussions which had

not yet reached the dispute stage. Affiliated Mfrs., Inc. v. Aluminum Co. of America,

C.A.3 (N.J.) 1995, 56 F.3d 521. Evidence 213(1)



For Fed. R. Evidence 408 to bar evidence of payment of a claim, there must have been

an actual dispute, or at least an apparent difference of opinion between the parties,

as to the validity of the claim. Dallis v. Aetna Life Ins. Co., C.A.11 (Ga.) 1985, 768

F.2d 1303. Evidence 215(3)



In action brought by franchisee against franchisor for fraudulent misrepresentation in

connection with purchaser of restaurant franchise, trial court did not abuse its

discretion in admitting evidence concerning franchisor's two offers to convert

franchisee's fish franchise to a chicken franchise, because evidence was cumulative to

other evidence offered by franchisee and because initial offer was made more than three

years before lawsuit was filed, at which time it was not clear that franchisee had claim

against franchisor. Crues v. KFC Corp., C.A.8 (Mo.) 1985, 768 F.2d 230. Federal Civil

Procedure 2011



Entry in debtor's financial statements, "Payable to Bank $7,269,052." was properly

considered on petition for involuntary bankruptcy and entry was not excludable as

evidence of conduct or statements made in compromise negotiations where at time of

negotiation the debtor did not dispute bank's claim but was simply endeavoring to get

more time in which to pay. In re B.D. Intern. Discount Corp., C.A.2 (N.Y.) 1983, 701

F.2d 1071, certiorari denied 104 S.Ct. 108, 464 U.S. 830, 78 L.Ed.2d 110. Bankruptcy

2296



Evidence that, before manufacturer had ever asserted that materials that it received

from supplier were nonconforming, it had offered, based entirely on its own financial

difficulties and not on any defect in materials supplied, to make part payment of

supplier's invoices in full satisfaction of obligation between parties was admissible

in manufacturer's subsequent breach of contract action against supplier,

notwithstanding manufacturer's contention that such evidence had to be excluded as being

in nature of settlement discussion; no evidence was presented that, at time offer was

made, manufacturer was disputing either validity or amount of supplier's invoices, as

required for exclusion of evidence under the settlement discussion rule. Cook

Associates, Inc. v. PCS Sales (USA) Inc., D.Utah 2003, 271 F.Supp.2d 1343. Evidence

213(1)



Statements by officer of company against whom claim of CERCLA liability was asserted,

made during meeting to determine whether case could be settled before suit was commenced,

could not be used in support of summary judgment motion against company, even though

it was claimed that restriction on use applied only to settlement discussions after

commencement of suits. Kleen Laundry and Dry Cleaning Services, Inc. v. Total Waste

Management Corp., D.N.H.1993, 817 F.Supp. 225. Federal Civil Procedure 2545

9. Offers within section

Existence of simple offer of payment conditioned on settlement of any age discrimination

claim could not be seriously considered prejudicial to employer; moreover the rejected

offer, made in context of obviously contested investigation, fit within spirit, if not

letter, of Federal Rule of Evidence barring consideration of offers of compromise.

Ronda-Perez v. Banco Bilbao Vizcaya Argentaria--Puerto Rico, C.A.1 (Puerto Rico) 2005,

404 F.3d 42. Evidence 213(1)



Employer's letter offering reinstatement to employee was not offer of settlement or

compromise, and thus would not be excluded in employment discrimination action under

rule barring admission of statements and conduct made in course of compromise

negotiations, where employer's offer included no request that employee abandon or modify

suit. Lightfoot v. Union Carbide Corp., C.A.2 (N.Y.) 1997, 110 F.3d 898, on remand 1997

WL 543076. Evidence 213(2)



Rule prohibiting evidence of compromise or attempt to compromise did not apply, in

commercial rent dispute for additional rent representing proportionate share of

landlord's operating expenses, to letter by tenant's counsel setting forth tenant's

understanding of how electric cost should be calculated; letter was not offer of

compromise or admission made in compromise negotiations. Sage Realty Corp. v. Insurance

Co. of North America, C.A.2 (N.Y.) 1994, 34 F.3d 124. Evidence 213(2)



Bill that itemizes what sender thinks recipient owes him and demands, even under threat

of legal action, payment is not "offer in settlement" or document in settlement

negotiations so as to be excludable under Rule of Evidence precluding evidence of

compromise and offers to compromise. Winchester Packaging, Inc. v. Mobil Chemical Co.,

C.A.7 (Ill.) 1994, 14 F.3d 316. Evidence 213(2)



Where party is represented by counsel, threatens litigation and has initiated first

administrative steps in litigation, any offer made between attorneys will be presumed

to be offer within scope of evidentiary rule prohibiting admission of evidence of offers

to furnish valuable consideration to compromise a claim, and party seeking admission

of offer under those circumstances must demonstrate convincingly that offer was not

attempt to compromise claim. Pierce v. F.R. Tripler & Co., C.A.2 (N.Y.) 1992, 955 F.2d

820. Evidence 213(2)



In antitrust suit brought by beer wholesaler against brewer and an authorized

distributor, letter from the distributor's president to wholesaler offering to resume

the supply of beer for sale to his traditional, local customers, which proposal was

conditioned on wholesaler agreeing to refrain from making sales "to persons or entities

you have reason to believe will not maintain proper quality control," was properly

admitted into evidence over objection that the letter constituted a settlement offer

and, as such, was inadmissible. Mendelovitz v. Adolph Coors Co., C.A.5 (Tex.) 1982, 693

F.2d 570. Evidence 215(3)



Statements made to farmer by herbicide company's salesman with respect to the company's

position about backing up its product did not constitute an offer of compromise and

settlement that would be inadmissible in evidence against the company. Perzinski v.

Chevron Chemical Co., C.A.7 (Wis.) 1974, 503 F.2d 654. Evidence 213(2)



Sheet of paper, which had been handed to resort owner by representative of society holding

training session at the resort, which listed society's computation of the amount owed

on the contract was not an offer of settlement, especially where resort owner did not

know that any controversy existed until he was handed the sheet, and thus was properly

admitted over objections that it constituted evidence of settlement negotiations. Hiram

Ricker and Sons v. Students Intern. Meditation Soc., C.A.1 (Mass.) 1974, 501 F.2d 550.

Evidence 213(2)



Testimony in action by bank to recover from corporation president as guarantor of

repayment of loans made to corporation, concerning conferences between bank and

president in which president allegedly requested extension of time and agreed to make

full payment with 8 percent interest per annum was admissible as an admission rather

than inadmissible as an offer in compromise. City Bank of Honolulu v. Rivera Davila,

C.A.1 (Puerto Rico) 1971, 438 F.2d 1367. Evidence 222(6)



Admitting, in suit brought by electrical subcontractor against prime contractor to

recover for installation of insulation, testimony of wife of subcontractor's deceased

president concerning equivocal statement made to her by prime contractor's president

during settlement negotiations constituted prejudicial error, in view of fact that

competent evidence supporting subcontractor's claim of oral contract was far from

convincing, and in view of fact that offer of prime contractor's president to pay for

insulation and tape, valued at $3,903.40, in settlement of $29,400 claim of subcontractor

seemed to be attempt at compromise. Megarry Bros., Inc. v. U. S. for Use of Midwestern

Elec. Const., Inc., C.A.8 (N.D.) 1968, 404 F.2d 479. Evidence 213(1); Federal Courts

896.1



In action for personal injuries sustained by plaintiff when shot allegedly by defendant,

while duck hunting, statement by defendant to plaintiff that he would take care of

hospital and doctor bill was not an offer in compromise and its admission in evidence

was not error. Norling v. Carr, C.A.7 (Ill.) 1954, 211 F.2d 897. Evidence 213(1)



Letter from ERISA plaintiff's former attorney to plaintiff's current attorney was not

made in course of compromise negotiations, so as to be inadmissible, where communications

between parties at no time reflected willingness to settle dispute before commencement

of legal action. Steinberg v. Obstetrics-Gynecological & Infertility Group, P.C.,

D.Conn.2003, 260 F.Supp.2d 492. Evidence 213(1)



Transit authority's offer to allow pregnant police officer to return to work if she signed

letter agreeing that she was capable of performing her duties was not "offer to

compromise," and thus letter and events surrounding it were not excluded from evidence

in officer's pregnancy discrimination action against transit authority; letter was

merely expression of transit authority policy, and did not require officer to release

any claims against transit authority. Dimino v. New York City Transit Authority,

E.D.N.Y.1999, 64 F.Supp.2d 136. Evidence 213(2)





Settlement offers given to employee by his employer's long-term disability insurer while

he was still receiving disability benefits did not constitute offers to compromise his

claim and, therefore, were admissible in employee's subsequent ERISA action to challenge

allegedly wrongful termination of his benefits, where insurer had approved employee's

claim for disability benefits in letter sent to employee, insurer did not state in its

written settlement offers that it disputed employee's claim or that it was unable to

continue his benefits, and insurer's settlement offers were mere offers to change form

of employee's disability payment from monthly to lump sum. Walsh v. First UNUM Life Ins.

Co., W.D.N.Y.1997, 982 F.Supp. 929. Evidence 213(2)



Where plaintiff's purpose in attending meeting was to negotiate fair termination of

dealership and defense counsel agreed that the meeting was a settlement conference,

evidence of offer made by defendant fell within rule governing admission of offers of

settlement. Morley-Murphy Co. v. Zenith Electronics Corp., W.D.Wis.1996, 910 F.Supp.

450, reversed 142 F.3d 373. Evidence 213(1)



Unconditional offer of reemployment made not in contemplation of settlement of

employment discrimination case but on assumption that lawsuit will proceed may be offered

in evidence for purpose of establishing limit on recoverable damages, even though no

offer to settle lawsuit may be referred to at trial for purpose of proving validity or

invalidity of claim or its amount. Pierce v. F.R. Tripler & Co., Inc., S.D.N.Y.1991,

770 F.Supp. 118, affirmed in part, reversed in part on other grounds 955 F.2d 820.

Evidence 110

Fact that premises owner paid Occupational Safety and Health Administration fine was

offer of compromise and was inadmissible in wrongful death action brought by worker's

widow; although there was no clear evidence that owner disputed either amount or validity

of citation, it was reasonable for owner not to contest relatively small fine and pay

it rather than spend what would have been substantially larger amount in order to avoid

paying fine. Masemer v. Delmarva Power & Light Co., D.Del.1989, 723 F.Supp. 1019.

Evidence 219(3)



Five letters from local government entities to Department of Justice, written in response

to letter from the agency requesting the entities to voluntarily modify terms of existing

consent decrees based on DOJ interpretation of Fire Fighters Local Union v. Stotts, were

not privileged under Federal Rule of Evidence 408, relating to settlement negotiation

privilege. NAACP Legal Defense Fund and Educational Fund, Inc. v. U.S. Dept. of Justice,

D.C.D.C.1985, 612 F.Supp. 1143. Federal Civil Procedure 1600(1)



In view of fact that insured contemplated that litigation might be necessary when

involved insurers refused to defend or to indemnify claims, and in view of retention

of outside counsel in contemplation of possible litigation, discussions between insured

and insurers constituted "settlement negotiations," within rule that evidence of conduct

or statements made in compromise negotiations is not admissible to prove liability or

invalidity of claim. Olin Corp. v. Insurance Co. of North America, S.D.N.Y.1985, 603

F.Supp. 445, on reargument 607 F.Supp. 1377, motion to vacate denied. Evidence 213(1)



Employer's offer to unconditionally reinstate dismissed employee without prejudice to

employee's claim for back pay was admissible in employee's employment discrimination

suit in view of fact that reinstatement offer was not made to compromise claim for back

pay, which put such evidence outside scope of this rule governing admissibility of

settlement negotiations. Thomas v. Resort Health Related Facility, E.D.N.Y.1982, 539

F.Supp. 630. Evidence 213(2)



Letter from counsel for contractor to then president of charterer of vessel, along with

proposed modification agreement, could be excluded by bankruptcy court as inadmissible

offer to compromise claim, with regard to maritime lien; letter threatened filing of

lawsuit and indicated that refit contract for vessel contained extremely inequitable

provision purporting to waive maritime lien rights. In re SeaEscape Cruises, Ltd.,

S.D.Fla.1994, 172 B.R. 1002. Evidence 213(2)

10. Settlement and compromise offers indistinguishable



Fact that offers of settlement are not specifically mentioned in this rule does not

necessarily sanction their admissibility. Burns v. City of Des Peres, C.A.8 (Mo.) 1976,

534 F.2d 103, certiorari denied 97 S.Ct. 164, 429 U.S. 861, 50 L.Ed.2d 139. Evidence

213(1)



Evidence of conduct or statements made in settlement negotiations was inadmissible in

suit alleging race-based discrimination and retaliation in violation of Iowa Civil

Rights Act (ICRA), Title VII, and. ## 1981. Jones v. Cargill, Inc., N.D.Iowa 2007, 2007

WL 853978. Evidence 213(1)

11. Conduct or statements excludable--Generally



Internal company memoranda prepared as basis for compromise negotiations and intended

to assist in calculation of compromise figures were properly excluded as evidence of

offers to compromise. Affiliated Mfrs., Inc. v. Aluminum Co. of America, C.A.3 (N.J.)

1995, 56 F.3d 521. Evidence 213(2)



Letter written by defendants' attorney as part of settlement attempt was properly

excluded in action alleging racial discrimination in denial of building permit. New

Burnham Prairie Homes, Inc. v. Village of Burnham, C.A.7 (Ill.) 1990, 910 F.2d 1474.

Evidence 213(1)

Acts performed and letters written during attempted settlement negotiations are usually

inadmissible. Edward Valves, Inc. v. Cameron Iron Works, Inc., C.A.5 (Tex.) 1961, 286

F.2d 933, 128 U.S.P.Q. 307, rehearing denied and modified 289 F.2d 355, 129 U.S.P.Q.

131, certiorari denied 82 S.Ct. 55, 368 U.S. 833, 7 L.Ed.2d 34, 131 U.S.P.Q. 498. Evidence

213(1); Evidence 219(3)



Any settlement offer made to former employee was inadmissible in breach of employment

contract action under rule barring evidence of settlements to prove liability for claims

settled. Comenos v. Viacom Intern., Inc., E.D.Mich.1995, 882 F.Supp. 677. Evidence

213(1)



Plaintiff cannot rely on any statements by defense counsel during settlement

negotiations to prove claims at trial. Kemp v. Pfizer, Inc., E.D.Mich.1994, 851 F.Supp.

269, vacated 91 F.3d 143. Evidence 213(1)



Effort to settle or compromise a disputed claim, along with direct suggestions or

overtures of settlement, will not be received in evidence as an admission of liability

on part of party making the offer; and the exclusion extends to all evidence of conduct

or statements made in compromise negotiations. Overseas Motors, Inc. v. Import Motors

Ltd., Inc., E.D.Mich.1974, 375 F.Supp. 499, affirmed 519 F.2d 119, certiorari denied

96 S.Ct. 395, 423 U.S. 987, 46 L.Ed.2d 304. Evidence 213(1)



Whole of evidence of negotiations between parties in an attempt to resolve differences

between them was inadmissible in the later action between the parties. Overseas Motors,

Inc. v. Import Motors Ltd., Inc., E.D.Mich.1974, 375 F.Supp. 499, affirmed 519 F.2d 119,

certiorari denied 96 S.Ct. 395, 423 U.S. 987, 46 L.Ed.2d 304. Evidence 213(1)



Talks between Chapter 13 debtor-lessees and lessor of copying machine were conduct

intended to be part of negotiations toward compromise of lessor's claim against debtors

for lease payments, and thus, evidence of settlement talks was inadmissible at trial

on motion filed by lessor to establish fixed payment on lessor's secured claim. In re

Bondurant, Bkrtcy.N.D.Ala.1995, 180 B.R. 654. Bankruptcy 2925.1; Bankruptcy 3117

12. ---- Miscellaneous conduct or statements excludable



Insurer's offer to settle insured's underinsured motorist (UIM) claim for $1,000,000

was inadmissible, even if it was made pursuant to insurer's duty under Oklahoma law to

evaluate the claim, where it was clearly denoted as offer, and insured's admitted purpose

in attempting to introduce it was to determine whether it was adequate compensation for

her claim. Reeder v. American Economy Ins. Co., C.A.10 (Okla.) 1996, 88 F.3d 892. Evidence

213(1)



District judge did not exceed permissible bounds in excluding as settlement negotiations

correspondence between gift wrap manufacturer and its rewinding contractor concerning

amount owed upon early termination of contract, in which contractor did not assert the

largest item of damages asserted at trial, though contrary ruling would also have been

upheld; were not for reference to lawyers in contractor's letters, letters would be

little more than bills, but it could be inferred that contractor already envisaged

substantial likelihood of legal action when sent first letter and that it was offering

inducement to avoid necessity of "incur[ring] any additional legal cost." Winchester

Packaging, Inc. v. Mobil Chemical Co., C.A.7 (Ill.) 1994, 14 F.3d 316. Evidence 213(2)



Letters from employer's counsel to Equal Employment Opportunity Commission (EEOC), which

stated in part that employee had been laid off not only because of general reduction

in force and dissatisfaction with his performance, but also because employer was "moving

toward mandatory retirement at age 65," were properly excluded from EEOC's age

discrimination action against employer on ground that they were part of compromise

negotiations. E.E.O.C. v. Gear Petroleum, Inc., C.A.10 (Kan.) 1991, 948 F.2d 1542.

Evidence 213(1)

Reports, depositions and other materials relating to independent evaluation of whether

accounting firm followed generally accepted accounting methods in preparing financial

statements for corporation were properly excluded in investor's action against

accounting firm to recover damages for losses sustained in connection with investment

in the corporation; evaluation was prepared by mutual agreement of parties as part of

settlement negotiations. Blu-J, Inc. v. Kemper C.P.A. Group, C.A.11 (Fla.) 1990, 916

F.2d 637. Evidence 213(1)



Statements made by attorneys in course of settling prior related litigation between

parties were inadmissible as statements made in course of settlement negotiations,

though offering party claimed that remarks were not offered to prove liability on claims

extinguished by settlements, where instant claim represented a continuation of feud

between parties arising out of breakup of their business association. Fiberglass

Insulators, Inc. v. Dupuy, C.A.4 (S.C.) 1988, 856 F.2d 652. Evidence 213(3)



Letters written by yacht purchaser's owner's representative were written with objective

of advising purchaser of possible compromise solution before legal action was commenced

for delay in construction of yacht, and were never introduced as substantive proof that

purchaser was responsible for delay, so that use of contents of letters to support finding

that most of delay was attributable to purchaser or his architects violated Federal Rule

of Evidence regarding compromise and offers to compromise. Kritikos v. Palmer Johnson,

Inc., C.A.7 (Wis.) 1987, 821 F.2d 418. Evidence 213(1)



Use of release obtained by motorist from motorcyclist to impeach motorcyclist's

testimony as to whether injury to her leg occurred upon collision with motorist's

automobile or subsequently after motorcycle's gear housing shattered implicitly

required jury to infer some indicia of causation in fact from existence of the release

and, thus, admission of the release was prohibited by Rule of Evidence 408 in products

liability action against motorcycle manufacturer. McInnis v. A.M.F., Inc., C.A.1 (R.I.)

1985, 765 F.2d 240, on remand 625 F.Supp. 943. Witnesses 392(1)



In action brought by motel development company against owner to recover balance due under

contract for construction, furnishing and supplying of a motel and to establish lien

on the property, report of an architect consisting of statements made in course of an

effort to compromise the dispute was properly held inadmissible. Ramada Development Co.

v. Rauch, C.A.5 (Fla.) 1981, 644 F.2d 1097. Evidence 213(1)



In attorney malpractice action concerning alleged malpractice of attorneys in handling

motion for costs and attorney fees brought by guarantors in insurer's prior action for

deficiency judgment, evidence regarding foreclosure proceeding brought on promissory

note and attempt to obtain deficiency judgment was admissible in the malpractice action;

however, proffered testimony concerning settlement efforts in the deficiency judgment

proceeding was properly excluded. United Fidelity Life Ins. Co. v. Law Firm of Best,

Sharp, Thomas & Glass, C.A.10 (Okla.) 1980, 624 F.2d 145. Attorney And Client 129(2)



Chart, which was apparently prepared by a paralegal in defense counsel's office, was

sent to plaintiff during the course of settlement negotiations between the parties, and

thus, was inadmissible and would be stricken from the record. Rubery v. Buth-Na-Bodhaige,

Inc., W.D.N.Y.2007, 470 F.Supp.2d 273. Evidence 213(1)



In action brought by injured worker against insurer for bad faith failure to pay workers

compensation benefits, district court would exclude evidence regarding settlement

negotiations between parties; any argument designed to make jury believe that worker

was willing to accept something less than what he was asking jury to award in damages

on his bad faith claim would have contravened federal evidentiary rules. Niver v.

Travelers Indem. Co. of Illinois, N.D.Iowa 2006, 433 F.Supp.2d 968. Evidence 213(1)



Evidence related to statements made during settlement negotiations, namely, that

defendant threatened and later made good on threat to discontinue business relationship

with plaintiffs on basis of continuation of suit for misappropriation and unfair

competition, was barred by evidentiary rule relating specifically to such settlement

negotiations, since the threatened conduct was not in itself a separate wrong and,

therefore, the evidence could not be said to be offered for a purpose other than proving

or disproving claims that were the subject of the negotiations. Victor G. Reiling

Associates and Design Innovation, Inc. v. Fisher-Price, Inc., D.Conn.2006, 407 F.Supp.2d

401. Evidence 213(1)



Pre-billing worksheets that law firm representing a condominium association provided

to counsel for unit owners, in attempt to document attorney fees that unit owners would

have to pay, in addition to past due condominium assessments, to prevent firm from

foreclosing on unit owners' interest, were in nature of 'settlement documents," evidence

of which was potentially inadmissible in litigation between parties under Federal Rule

of Evidence, and under the Florida statute governing admissibility of evidence of

statements made during settlement negotiations. Agan v. Katzman & Korr, P.A.,

S.D.Fla.2004, 328 F.Supp.2d 1363. Evidence 213(1)





Evidence regarding conversation between copyright infringement plaintiff's president

and defendant's president after suit had been filed, offered by plaintiff as evidence

that infringement was willful, was not excludible as evidence of settlement discussions;

it was clear from conversation that plaintiff's president did not share defendant's

president's willingness to discuss potential settlement. Lee Middleton Original Dolls,

Inc. v. Seymour Mann, Inc., E.D.Wis.2004, 299 F.Supp.2d 892, 70 U.S.P.Q.2d 1115. Evidence

213(1)



Exhibit attached to declaration which explicitly referenced parties' efforts to settle

action and which was designated "for settlement purposes only" was inadmissible under

rule governing evidence of offers to compromise, and could not be considered by district

court in ruling on motion for partial summary judgment. Civic Center Drive Apartments

Ltd. Partnership v. Southwestern Bell Video Services, N.D.Cal.2003, 295 F.Supp.2d 1091.

Evidence 213(1)



Insured's proposed supplemental pleading, alleging that insurance agents acted in bad

faith, under Colorado law, by failing "to make a good faith effort to settle" insurance

action, was futile, as pleading sought to offer evidence of agents' settlement conduct

to prove liability for bad faith, and even if it did not, potential for unfair prejudice

and jury confusion far outweighed probative value of evidence concerning settlement

negotiations. Southwest Nurseries, LLC v. Florists Mut. Ins., Inc., D.Colo.2003, 266

F.Supp.2d 1253. Federal Civil Procedure 864.1



In action brought by landowner against petroleum company under Resource Conservation

and Recovery Act (RCRA), stemming from service station's contamination of groundwater

from underground tank leakage, letters exchanged between parties prior to filing of suit

were intended to be part of negotiations toward compromise, and thus landowner's motion

in limine to exclude letters as evidence would be properly granted. College Park

Holdings, LLC. v. Racetrac Petroleum, Inc., N.D.Ga.2002, 239 F.Supp.2d 1334. Evidence

213(1)



Mediation settlement agreement entered into between insurer and insured with regard to

insured's breach of contract claim was not admissible in insured's action against insurer

for breach of duty of good faith and fair dealing. Greil v. Geico, N.D.Tex.2002, 184

F.Supp.2d 541. Evidence 219(3)



Federal evidence rule, allowing for admission of compromise or settlement for purpose

of establishing bias or prejudice of witness, did not preclude provision of order

approving securities fraud class action partial settlement, removing accountants from

case, which forbade disclosure of settlement in ongoing litigation. Neuberger v.

Shapiro, E.D.Pa.2000, 110 F.Supp.2d 373. Compromise And Settlement 65



Evidence pertaining to fact of consent and final judgment in civil proceeding and

compromise and settlement in Securities and Exchange Commission (SEC) proceedings was

inadmissible as statements and conduct made in course of compromise negotiations. Option

Resource Group v. Chambers Development Co., Inc., W.D.Pa.1996, 967 F.Supp. 846. Evidence

213(1)



Paragraph in defendant's answer stating facts regarding settlement negotiations between

the parties would be stricken; federal rule precludes admission of testimony regarding

settlement at trial and although defendant claimed that this information was pertinent

to its counterclaims, those counterclaims had been dismissed. Northwestern Mut. Life

Ins. Co. v. Wender, S.D.N.Y.1996, 940 F.Supp. 62. Federal Civil Procedure 1126



Fact that railway company first sought county's agreement in closing grade crossings

was not a disclaimer of any property right claimed by railway or of its claimed discretion

to close crossings but was, rather, akin to offer to compromise excluded from evidence,

and district court therefore would not consider it as admission, waiver, or basis of

estoppel in county's action to enjoin railway from closing crossings. Scott County, Tenn.

v. Cincinnati, New Orleans and Texas Pacific Ry. Co., E.D.Tenn.1995, 915 F.Supp. 928.

Estoppel 83(1); Evidence 213(2); Railroads 99(3)



Letter from hospital president making offer to reinstate nurse, on condition that she

sign waiver and release of discrimination claims raised in grievance, and subsequent

letter from president to nurse notifying her that he was upholding her termination, and

containing reiteration and chronology of negotiations and positions of parties, were

inadmissible in nurse's subsequent discrimination suit, under rule precluding evidence

of furnishing or offering or promising to furnish valuable consideration in compromising

disputed claim, and evidence of statements made in compromise negotiations. Penny v.

Winthrop-University Hosp., E.D.N.Y.1995, 883 F.Supp. 839. Evidence 213(1)



Evidence of settlement in related class action arising out of alleged exposure of

employees to dangerous levels of radioactive and hazardous materials was not admissible

at statute of limitations trial in present action brought by former employees, their

spouses, and independent contractors; evidence of events occurring after pivotal date

on which plaintiffs should have been on notice of their claims was irrelevant and even

if it could be construed as relevant, any relevance was outweighed by danger of prejudice

and confusion. Day v. NLO, Inc., S.D.Ohio 1992, 798 F.Supp. 1322, appeal dismissed 3

F.3d 153. Evidence 146; Evidence 213(1)



Documents, that recorded internal company discussions that were made during course of

settlement negotiations, would be inadmissible under Federal Rules of Evidence in

arbitration proceeding in connection with independent oil producers' contract dispute

with oil producing companies, petroleum corporation, and independent oil companies. Hunt

v. Mobil Oil Corp., S.D.N.Y.1987, 654 F.Supp. 1487. Alternative Dispute Resolution 265



Use by counsel of the phrase "without prejudice," coupled with listing of damages claimed

by subcontractor, subcontractors desire to resolve the claims, and a request for the

contractor's earliest response indicated that the letter was sent in the course of

compromise negotiations and thus was inadmissible in subcontractor's action against

contractor for delay damages. S. Leo Harmonay, Inc. v. Binks Mfg. Co., S.D.N.Y.1984,

597 F.Supp. 1014, affirmed 762 F.2d 990. Evidence 213(2)



Testimony of Equal Employment Opportunity counselor who investigated federal employee's

complaint that supervisor who ordered reassignment was hostile to her, and that such

hostility was due to employee's having utilized informal EEO process would be excluded

in employee's discrimination suit, pursuant to evidence rule which bars receipt of

conduct or statements made during compromise negotiations when offered to prove

liability, as the testimony was being offered to establish liability and not merely to

impeach supervisor's testimony. Coles v. Perry, D.D.C.2003, 217 F.R.D. 1. Evidence

213(1)



Employer was prohibited from introducing into evidence employee's interrogatory answers

stating what employee believed to be the amount of damages she sustained as a result

of her allegedly discriminatory employment termination, in that amount of damages stated

may have been motivated by a desire by employee for settlement rather than from a

concession of weakness, and damages sought by employee for mental anguish and emotional

distress were not readily quantifiable. Fiarman v. Western Pub. Co., E.D.Mich.1985, 107

F.R.D. 110. Federal Civil Procedure 1536

13. Actual settlements



Evidence of defendant's earlier civil settlement of some claims with Internal Revenue

Service (IRS) could not be excluded from tax fraud prosecution solely because it

constituted settlement evidence. Manko v. U.S., C.A.2 (N.Y.) 1996, 87 F.3d 50, on remand

1998 WL 391129. Criminal Law 408



Defendants' settlement of civil claim alleging nonpayment of medical equipment would

be inadmissible in related criminal prosecution absent indication that consent judgment

and admissions in settlement documents were being properly offered for some purpose other

than showing liability for claim or its amount. U.S. v. Cooper, D.Kan.2003, 283 F.Supp.2d

1215. Criminal Law 408



Statements made for purposes of settlement negotiations are inadmissible, and this

exclusion has been extended by these rules to completed compromises when offered against

the compromisor. Playboy Enterprises, Inc. v. Chuckleberry Pub., Inc., S.D.N.Y.1980,

486 F.Supp. 414, 206 U.S.P.Q. 70. Evidence 213(1); Evidence 219(3)

14. Third-party compromises and settlements



Admission of letter written by insured to liability insurer, in an effort to settle

dispute as to whether liability policies provided coverage for state court fraud lawsuits

against insured, was warranted, in insurer's action to compel arbitration with respect

to parties' separate deductible agreements; letter could have discussed settlement of

state court action without mentioning the deductible agreements, and it was not offered

to prove that insured was obligated to arbitrate under agreements. Zurich American Ins.

Co. v. Watts Industries, Inc., C.A.7 (Ill.) 2005, 417 F.3d 682, on remand 415 F.Supp.2d

887. Evidence 213(1)



Insured's settlement agreements with products liability insurer and excess insurers were

admissible on insured's claim against broker for negligent failure to report offer of

coverage, to resolve disagreement about what portion of settlements was properly

allocable to defense costs at issue. Westchester Specialty Ins. Services, Inc. v. U.S.

Fire Ins. Co., C.A.11 (Ga.) 1997, 119 F.3d 1505. Insurance 1673



Evidence that government had paid prime contractor on federal project undisclosed sum

to settle claims for damages resulting from governmental delay and disruption on project

was admissible in subcontractor's action against prime contractor under Miller Act to

recover sums allegedly due and owing under subcontract, notwithstanding rule barring

admission of evidence of settlement discussions to prove validity or amount of claim

under negotiation; evidence was offered only to show that subcontractor was not at fault

for any delay on project and that prime contractor had acted in bad faith. Towerridge,

Inc. v. T.A.O., Inc., C.A.10 (Okla.) 1997, 111 F.3d 758. Evidence 213(1)



In regard to issue of value of taxpayer's fir and pine for taxable year, evidence of

value of different taxpayer's fir and pine, as agreed upon with Tax Commissioner in

settlement of deficiency proceedings against that taxpayer, was inadmissible under

Federal Rule of Evidence 408, which provides that evidence of compromise is not

admissible to prove liability for or invalidity of claim or its amount. Hudspeth v.

C.I.R., C.A.9 1990, 914 F.2d 1207. Evidence 219(3)

Federal Rule of Evidence 408, providing that evidence of compromise is not admissible

to prove liability for or invalidity of claim or its amount, applies to cases in which

party seeking to introduce evidence of compromise was not involved in original

compromise. Hudspeth v. C.I.R., C.A.9 1990, 914 F.2d 1207. Evidence 219(3)



Amount of settlement in prior suit against driver who struck child was properly excluded

in products liability suit brought against manufacturer of child's tricycle,

notwithstanding fact that prior inconsistent pleadings in former suit were admitted in

latter as evidentiary admission. Vincent v. Louis Marx & Co., Inc., C.A.1 (Mass.) 1989,

874 F.2d 36. Evidence 219(3)



Remaining defendants in contract action did not demonstrate plain legal prejudice from

settlement dismissing one of two individual defendants, who were principals of defendant

corporations, where agreement provided only that dismissed defendant would not

voluntarily participate in litigation, the dismissed defendant initiated settlement

negotiations and, also, the settlement agreement was not admissible. Quad/Graphics, Inc.

v. Fass, C.A.7 (Wis.) 1983, 724 F.2d 1230. Compromise And Settlement 70; Evidence 219(3)



Where, in suit for injury from exposure to asbestos-containing products manufactured

by defendants, all but one defendant negotiated settlements and remaining defendant

intended to prove at trial that plaintiffs had been exposed to products of the other

defendants, trial court did not abuse discretion in admitting the evidence of settlement

so as to explain why other defendants were not in court and thus to prevent confusion

of the jury, and court duly charged jury that it was not to consider the evidence in

reaching a verdict. Belton v. Fibreboard Corp., C.A.5 (Tex.) 1984, 724 F.2d 500. Evidence

219(3)



In action brought by primary insurer against reinsurer seeking reimbursement for portion

of settlement the insurer made on behalf of insured, evidence concerning reinsurer's

discussions with another insurance company over commutation was inadmissible under this

rule. American Ins. Co. v. North American Co. for Property and Cas. Inc., C.A.2 (N.Y.)

1982, 697 F.2d 79. Evidence 213(1)



In action on contract, evidence regarding settlement negotiations between plaintiff and

third party was inadmissible. U. S. v. Contra Costa County Water Dist., C.A.9 (Cal.)

1982, 678 F.2d 90. Evidence 213(1)



Plaintiffs suing for death of passengers in automobile struck from rear by defendant's

truck were not entitled to have admitted in evidence a compromise settlement which

defendant had made with other parties involved in same accident. Jackson v. Shell Oil

Co., C.A.6 (Tenn.) 1968, 401 F.2d 639. Evidence 219(3)



Where several persons are injured in the same accident a compromise with one cannot be

shown in an action by another. Bratt v. Western Air Lines, C.C.A.10 (Utah) 1948, 169

F.2d 214, certiorari denied 69 S.Ct. 239, 335 U.S. 886, 93 L.Ed. 425. Evidence 219(3)



Rule making inadmissible evidence of offers of settlement, including settlements between

party and non-party, precluded admission of evidence of consent decree reached in

unrelated case at trial on remedies in government enforcement action brought against

builder of housing complexes and related defendants under Fair Housing Act (FHA). U.S.

v. Quality Built Const., E.D.N.C.2005, 358 F.Supp.2d 487. Evidence 219(3)



Rule of inadmissibility of settlements with third parties in patent infringement actions

is not absolute. Century Wrecker Corp. v. E.R. Buske Mfg. Co., Inc., N.D.Iowa 1995, 898

F.Supp. 1334, on reconsideration in part. Patents 312(2)



Settlement allegedly offered prisoner upon whom appendectomy had been performed did not

support second prisoner's claim in civil rights suit under # 1983 of conspiracy to remove

second prisoner's appendix without cause to receive reimbursement from state, for

purposes of defendants' summary judgment motion; settlement offer was not very probative

regarding issue of liability and was not relevant. Meadows v. Huttonsville Correctional

Center, N.D.W.Va.1992, 793 F.Supp. 684, affirmed 991 F.2d 790. Federal Civil Procedure

2491.5



Evidence of patent holder's efforts to compromise claims against other alleged

infringers was not admissible in infringement action to rebut patent holder's claim that

its patent had pioneer status; even if evidence was relevant to question of pioneer

status, its probative value did not outweigh prejudice which would result from jury's

use of evidence of prior settlements to gauge value of patent holder's claim. Alpex

Computer Corp. v. Nintendo Co., Ltd., S.D.N.Y.1991, 770 F.Supp. 161, 20 U.S.P.Q.2d 1782,

on reconsideration, vacated in part. Evidence 146



Evidence of buyers' settlements with other dealers who had owned vehicle was admissible

to assist the jury in understanding as to why only certain dealers in the chain of

ownership were litigants in the buyers' action. Haynes v. Manning, D.Kan.1989, 717

F.Supp. 730, affirmed in part, reversed in part on other grounds 917 F.2d 450. Evidence

219(3)



Policy underlying this rule prohibiting admission of settlement agreements, that of

encouraging settlements, applies with equal force when defendant seeks to introduce

plaintiff's settlement with codefendant as when plaintiff seeks to introduce evidence

of defendant's settlement with third party to establish defendant's liability. Young

v. Verson Allsteel Press Co., E.D.Pa.1982, 539 F.Supp. 193. Evidence 219(3)



Admission of testimony concerning settlement of bank's suit against previous insurer

would violate underlying purpose of this rule which prohibits admission of compromises

and offers of compromise to prove liability for or invalidity of claim or its amount,

and thus evidence pertaining to terms and conditions of settlement, and even fact of

same, were not admissible in action by subsequent insurer for rescission of banker's

blanket bond alleging fraud by bank in procuring bond. Fidelity & Deposit Co. of Maryland

v. Hudson United Bank, D.C.N.J.1980, 493 F.Supp. 434, reversed 653 F.2d 766. Evidence

213(3)



In action brought against driver of other automobile involved in collision by automobile

passenger after she settled her claim against her driver on covenant not to sue,

permitting settlement between passenger and her driver to be divulged to jury, but not

amount, was appropriate procedure. Sharp v. Hall, E.D.Okla.1978, 482 F.Supp. 1. Evidence

219(3)



Decree reflecting terms of patent infringement plaintiff's settlement with codefendants

was not admissible at damages phase of trial against remaining defendant. Pioneer Hi-Bred

Intern., Inc. v. Ottawa Plant Food, Inc., N.D.Iowa 2003, 219 F.R.D. 135. Evidence 219(3)



Former employees bringing sexual harassment action against employer premised in part

on alleged acts of former supervisor were not entitled to discover documents relating

to settlement discussions between supervisor's attorney and employer regarding

supervisor's termination, in light of expectation of privacy inherent in such settlement

discussions, important public policy reasons for encouraging such discussions, and

ability of employees to secure much of requested information by other means. Cook v.

Yellow Freight System, Inc., E.D.Cal.1990, 132 F.R.D. 548. Federal Civil Procedure 1581

15. Plea bargains



Defendants were properly prevented from introducing evidence as to plea bargaining

despite their contention that such evidence would tend to show lengths to which

government went in attempting to obtain vital testimony to prosecute its case. U. S.

v. Verdoorn, C.A.8 (Iowa) 1976, 528 F.2d 103. Criminal Law 408

Where petitioners received whole life insurance at no net cost under premium kickback

arrangement with insurance company agents in which petitioners' premiums for whole life

insurance were returned by agents, who received commissions from insurers exceeding 100

percent of premiums; on their 1989 income tax return, petitioners reported value of 1

year of term life insurance on policies issued under arrangement, which amount was less

than annual premiums paid for policies; Commissioner determined petitioners received

taxable income measured by value of life insurance received, which was equal to premium

paid to insurer; and, at trial, petitioners objected under this rule to introduction

of insurance agent's plea agreement with state, and agent's consent order with state

insurance commissioner regarding arrangement, on ground that these were inadmissible

offers to compromise, Court determined (1) this rule did not preclude admission of

challenged exhibits, since they were not offered to show validity of any underlying

claims, but to show agent's relationship to insurers; (2) petitioners realized income

from premium kickback arrangement, inasmuch as they were compensated with annual

benefits of whole life insurance, and were required to recognize amount equal to premiums

paid for whole life policies; and (3) petitioners were not liable for negligence

additions to tax, since treatment of benefits as policy rebate, rather than kickback,

was reasonable under circumstance. Wentz v. C.I.R., U.S.Tax Ct.1995, 105 T.C. 1,

Unreported.

16. Final judgments in other proceedings



Federal rule of evidence prohibiting introduction of evidence of compromises and offers

to compromise did not preclude bankruptcy court from considering, in adversary

proceeding brought by debtor for determination of his federal income tax liability, a

Tax Court stipulation entered into by debtor regarding value of property which he

inherited from parent; rule of evidence did not apply to final judgments entered in prior

judicial proceedings. In re Cluck, W.D.Tex.1993, 165 B.R. 1005, affirmed 20 F.3d 1170.

Bankruptcy 2830; Stipulations 14(10)

17. Miscellaneous conduct or statements not excludable



Neither letter which accompanied work plan and schedule submitted by provider of

multi-channel video and audio services to apartment complex's president in connection

with work required to replace non-conforming cable wire installed at complex, nor

president's response rejecting plan and schedule, contained indication that plan and

schedule constituted settlement offer, and therefore exhibit containing such documents

did not have to be excluded in considering provider's motion for partial summary

judgment, in complex owner's contract action, on grounds that it was evidence of complex

owner's offer to accept valuable consideration in settlement of their claims. Civic

Center Drive Apartments Ltd. Partnership v. Southwestern Bell Video Services,

N.D.Cal.2003, 295 F.Supp.2d 1091. Evidence 213(2)



Testimony by defense attorney in plaintiff's prior personal injury lawsuit as to nature

of injuries plaintiff alleged he suffered and fact that prior suit was settled, but which

did not disclose amount of settlement or statements made during settlement negotiations,

did not violate prohibition against introducing evidence of settlement negotiations for

purpose of establishing liability of claim or its amount. Rico v. American Family Ins.

Group, E.D.La.2002, 267 F.Supp.2d 554, affirmed 76 Fed.Appx. 527, 2003 WL 22061064.

Evidence 213(1)



Rule excluding evidence of compromise and offers to compromise did not apply to exclude

evidence of cement seller's interoffice memoranda that were internal evaluations and

apparently were not sent to cement purchasers, in suit arising out of cement purchase.

Blue Circle Atlantic, Inc. v. Falcon Materials, Inc., D.Md.1991, 760 F.Supp. 516,

affirmed 960 F.2d 145. Evidence 213(2)



Federal rule of evidence on admissibility of evidence regarding settlement negotiations

was not binding in administrative law judge (ALJ) in hearing to revoke lab's Clinical

Laboratory Improvement Amendment (CLIA) certificate. Elsenety v. Health Care Financing

Admin., C.A.6 2003, 85 Fed.Appx. 405, 2003 WL 23095684, Unreported. Health 278

Wells submissions to the Securities and Exchange Commission (SEC) were relevant and

therefore discoverable in investors' suits against underwriters of initial public

offerings (IPO), securities issuers and officers of issuers, alleging a scheme to

fraudulently drive up the price of stock of companies in the immediate aftermarket of

their initial public offerings; the Wells submissions were drafted precisely to address,

and rebut, the same charges that the investors raised, and a defense claim that the

"production of Wells Submissions may well lead to rediscovery of documents already

produced" was of no moment. In re Initial Public Offering Securities Litigation,

S.D.N.Y.2003, 2003 WL 23021976, Unreported, amended and superseded 2004 WL 60290.

Federal Civil Procedure 1581



Wells submissions to the Securities and Exchange Commission (SEC) are not protected from

discovery in subsequent civil litigation merely because they may contain an offer of

settlement; rather, Wells submissions, regardless of whether they contain settlement

materials, are discoverable so long as they (1) are admissible, because they are relevant

to a claim or defense, or (2) will reasonably lead to the discovery of admissible

evidence; the rule addressing the admissibility of offers of compromise says nothing

about whether such offers are discoverable. In re Initial Public Offering Securities

Litigation, S.D.N.Y.2003, 2003 WL 23021976, Unreported, amended and superseded 2004 WL

60290. Federal Civil Procedure 1581

18. Purposes for which admissible--Generally



Settlement letters are admissible for purpose other than proof of liability or amount,

including establishment of independent violation unrelated to underlying claim which

was subject of correspondence. Carney v. American University, C.A.D.C.1998, 151 F.3d

1090, 331 U.S.App.D.C. 416. Evidence 213(4)



Settlement offers are only inadmissible if offered to prove liability or damages. Coakley

& Williams Const., Inc. v. Structural Concrete Equipment, Inc., C.A.4 (Md.) 1992, 973

F.2d 349. Evidence 213(1)



This rule controls when such evidence is offered to prove liability but does not require

exclusion when evidence is offered for another purpose, and such evidence was properly

presented to rebut defendants' assertion, on default hearing, that they had not been

aware of issues until suit was filed. Breuer Elec. Mfg. Co. v. Toronado Systems of

America, Inc., C.A.7 (Ill.) 1982, 687 F.2d 182, 217 U.S.P.Q. 24. Evidence 213(4)



Inquiry into the conduct of the negotiations which led to subclass settlement was

consistent with the letter and spirit of this rule which expressly provides that it "does

not require exclusion when evidence is offered for another purpose". In re General Motors

Corp. Engine Interchange Litigation, C.A.7 (Ill.) 1979, 594 F.2d 1106, certiorari denied

100 S.Ct. 146, 444 U.S. 870, 62 L.Ed.2d 95. Compromise And Settlement 66.1



By its terms, the rule governing admission of settlement evidence does not require

exclusion of any evidence otherwise discoverable simply because it is presented in the

course of compromise negotiations. ABM Industries, Inc. v. Zurich American Ins. Co.,

N.D.Cal.2006, 237 F.R.D. 225. Evidence 213(1)



This rule operates to exclude such evidence only on issue of amount or validity of claim

which is subject of compromise and, hence, is inapplicable if compromise negotiations

are used for another purpose. B & B Inv. Club v. Kleinert's, Inc., E.D.Pa.1979, 472

F.Supp. 787. Evidence 213(1)

19. ---- Damages or interest, purposes for which admissible



Amount that client at some point had agreed to accept in settlement of underlying matter

could not be relied upon in determining damages award in legal malpractice action, unless

settlement formed new contract, by virtue of evidence rule barring introduction of

settlement offer for purpose of proving amount of liability. Banker v. Nighswander,

Martin & Mitchell, C.A.2 (Vt.) 1994, 37 F.3d 866. Evidence 213(1)



Settlement offers are only inadmissible if offered to prove liability or damages. Coakley

& Williams Const., Inc. v. Structural Concrete Equipment, Inc., C.A.4 (Md.) 1992, 973

F.2d 349. Evidence 213(1)



Evidence of settlement agreement was erroneously admitted for jury's consideration in

determining liability and quantum of damages. Branch v. Fidelity & Cas. Co. of New York,

C.A.5 (La.) 1986, 783 F.2d 1289. Evidence 219(3)



Trial court did not violate Federal Evidence Rule 408, providing that statements made

in settlement negotiations are not admissible to establish party's liability or damages

in dispute that was subject of negotiation, in fixing consequential damages to which

buyer was entitled by reference to parties' stipulation, where any damage liability

stemming from original breach had ended, and buyer argued that further liability for

consequential damages was attributable to seller's failure to honor promise made in

stipulation to assume repairs. Cates v. Morgan Portable Bldg. Corp., C.A.7 (Ill.) 1985,

780 F.2d 683. Evidence 213(1)



Evidence as to amount paid or agreed upon to settle other litigation is not proper basis

for calculating damages for patent infringement consisting of lost reasonable royalties.

Universal Athletic Sales Co. v. American Gym, W.D.Pa.1979, 480 F.Supp. 408, 205 U.S.P.Q.

840. Patents 312(3.1)



This rule does not bar consideration of offer of settlement in determining whether to

grant prejudgment interest. Iberian Tankers Co. v. Gates Const. Corp., S.D.N.Y.1975,

388 F.Supp. 1190. Interest 39(2.20)



Evidence rule barring admission of evidence of settlement to prove liability or amount

of damages precluded nuclear utility which brought suit against the government for breach

of contract to dispose of spent nuclear fuel (SNF) from introducing into evidence

substance of settlement agreement between the Department of Energy (DOE) and another

nuclear utility to demonstrate DOE's "intent" to operate a permanent repository for spent

nuclear fuel (SNF) capable of accepting 3,000 MTUs per year, as rate of acceptance was

closely related to issue of damages. Power Authority of New York v. U.S., Fed.Cl.2004,

62 Fed.Cl. 376. Federal Courts 1113

20. ---- Impeachment and rebuttal, purposes for which admissible



Letters from employee's counsel to Equal Employment Opportunity Commission (EEOC), which

stated that employee had been laid off not only because of general reduction in force

and dissatisfaction with his performance, but also because employer was "moving toward

mandatory retirement at age 65," could be excluded insofar as they were offered to impeach

testimony of some of employer's executives, considering propriety of initial exclusion

of letters on ground that they were made in context of compromise negotiations, and risks

of prejudice and confusion of admitting letters for limited purposes of impeachment.

E.E.O.C. v. Gear Petroleum, Inc., C.A.10 (Kan.) 1991, 948 F.2d 1542. Witnesses 406



Rule precluding documents manifesting attempts to settle litigation did not bar

admission of letters exchanged during settlement negotiations in contract vendee's

breach of contract suit against contract vendor to rebut testimony that vendor never

gave reasons for conditions it had imposed on its consent to vendee's proposed resale

of property; without letters, vendor would not have been able to rebut claim that it

unduly delayed in giving its consent, which ultimately prevented completion of resale.

Freidus v. First Nat. Bank of Council Bluffs, C.A.8 (S.D.) 1991, 928 F.2d 793. Evidence

213(4); Witnesses 406



Testimony concerning terms of settlement agreement was admissible in suit by business

owner alleging that co-owner breached fiduciary duty in contravention of court-approved

settlement, notwithstanding procedural rule governing admissibility of evidence of

compromise; co-owner sought to introduce evidence to establish intent of parties as to

agreement so as to rebut allegation of mismanagement, and it was not offered to disprove

liability for original claim settled in first suit. Catullo v. Metzner, C.A.1 (Puerto

Rico) 1987, 834 F.2d 1075. Evidence 219(3)



Indemnity agreement entered into prior to trial by way of compromise settlement between

Government and private publisher of instrument approach procedures for aircraft was

properly admitted in wrongful death and property damage action brought by aircraft owner

and survivors of crash victims, not to prove liability, but to show nonadverse

relationship of those defendant parties and to attack credibility of their witnesses.

Brocklesby v. U.S., C.A.9 (Cal.) 1985, 767 F.2d 1288, certiorari denied 106 S.Ct. 882,

474 U.S. 1101, 88 L.Ed.2d 918. Evidence 219(3); Witnesses 331.5



Where defendants in breach of contract case introduced evidence of a compromise by which

plaintiff proposed payment of a certain amount to defendants, plaintiff was entitled

to rebut. CCMS Pub. Co., Inc. v. Dooley-Maloof, Inc., C.A.10 (Okla.) 1981, 645 F.2d 33.

Federal Civil Procedure 2015



Although, under this rule, a settlement agreement may be admitted into evidence for the

purpose of impeaching testimony of the party agreeing to the settlement, the district

judge in the instant case, a personal injury and wrongful death action arising from a

single-vehicle traffic accident caused by brake failure, properly ruled that the

settlement agreement in a prior state suit brought against the vehicle owner could not

function to impeach owner's testimony in the instant suit against vehicle manufacturer,

since the owner was at trial and testified to the fact that he had been sued in state

court. Estate of Spinosa, C.A.1 (N.H.) 1980, 621 F.2d 1154. Witnesses 386



With respect to evidence of settlement between plaintiff and a codefendant, usually the

better approach is to permit cross-examination concerning the settlement for the purpose

of impeachment. Reichenbach v. Smith, C.A.5 (Fla.) 1976, 528 F.2d 1072. Witnesses 347



In deciding whether to permit or limit cross-examination of a party concerning a

settlement with a codefendant, the trial court must balance the policy of encouraging

settlements with the need for evaluating the credibility of the witnesses. Reichenbach

v. Smith, C.A.5 (Fla.) 1976, 528 F.2d 1072. Witnesses 347



Evidence that government witness in antitrust prosecution had settled state court civil

suit that had criminal implications was inadmissible to impeach credibility of witness,

and trial court's sustaining of government's objection to cross-examination of witness

with respect to settlement did not unduly restrict cross-examination. U. S. v. Dunham

Concrete Products, Inc., C.A.5 (La.) 1973, 475 F.2d 1241, rehearing denied 477 F.2d 596,

certiorari denied 94 S.Ct. 65, 414 U.S. 832, 38 L.Ed.2d 66. Witnesses 344(1); Witnesses

349



Tapes and transcript of conversations between commodity futures investor and broker,

while falling under the evidentiary rule generally excluding evidence of offers to

compromise, were admissible on rebuttal to impeach the broker's testimony during

cross-examination, despite claim that investor had taped the conversations for

"blackmail" purposes; there was no evidence that the investor used the tapes for an

unlawful purpose or even threatened to use them to blackmail the broker. Commodity

Futures Trading Com'n v. Rosenberg, D.N.J.2000, 85 F.Supp.2d 424. Witnesses 390.1



District court did not abuse its discretion in excluding evidence of settlement entered

between insurance carrier for school district and high school football player who

suffered severe neck injury in products liability action brought by player against helmet

manufacturer where coaches employed by district did not have financial interest in

outcome of trial due to subrogation clause in settlement, evidence of settlement was

not relevant to any issue in case, and probative value of settlement regarding

credibility was small as testimony of coaches was largely undisputed, even though

manufacturer contended that evidence of settlement bore on credibility of coaches who

testified at trial. Arnold v. Riddell, Inc., D.Kan.1995, 882 F.Supp. 979. Evidence 146;

Evidence 219(3)



Admission of letter from plaintiff partner to defendant managing partner in which the

plaintiff offered to sell his interest in three of the partnerships in question to the

defendant was not barred by rule excluding evidence obtained in course of settlement

negotiations; rather, the document was admissible to impeach plaintiff's testimony as

to material fact of how many of his partnership interests he was interested in selling

at the time in question. Stainton v. Tarantino, E.D.Pa.1986, 637 F.Supp. 1051. Witnesses

379(11)

21. ---- Miscellaneous purposes for which admissible



District court, in ruling on summary judgment motion on statute of limitations grounds

in former student's tort action against school, church, principal, and teacher alleging

that he had been sexually abused by a teacher, did not abuse its discretion by considering

student's settlement negotiations with the church for the purpose of proving that at

time of negotiations, student had knowledge of a causal connection between his injuries

and the abuse, precluding application of Nebraska's discovery rule of equitable tolling

of the statute of limitations for tort actions. Kraft v. St. John Lutheran Church of

Seward, Neb., C.A.8 (Neb.) 2005, 414 F.3d 943. Evidence 213(1); Federal Civil Procedure

2545



Settlement-related letters between parties were admissible where not used to establish

liability, but, rather, to interpret parties' settlement agreement. Basha v. Mitsubishi

Motor Credit of America, Inc., C.A.5 (La.) 2003, 336 F.3d 451. Evidence 213(1)



District court could admit, at trial on charges of mail and wire fraud and transmitting

money taken by fraud, arising from sales of counterfeit art works, evidence of prior

settlement with Federal Trade Commission (FTC) arising out of sales, including

stipulation admitting to allegations of FTC complaint and terms of consent decree,

notwithstanding rules prohibiting admission of statement made in course of settlement

to prove liability and admission of other wrongs to show action in conformity therewith,

as evidence served other purposes; evidence showed that defendant was on notice when

he sold forged works after settlement that works were forgeries and that he knew he could

not sell those works without reporting sale to FTC, facts from FTC case provided

background and laid evidentiary foundation for many of government's exhibits, and

stipulation was direct judicial admission to accusation of fraud in conduct underlying

charges. U.S. v. Austin, C.A.7 (Ill.) 1995, 54 F.3d 394, rehearing denied, on remand

929 F.Supp. 1110. Criminal Law 406(1)



Evidence of taxpayer's conduct during previous income tax audit, relating to his claim

of tax exempt status, was admissible in subsequent criminal prosecution for tax evasion

and for failure to file tax returns to show that taxpayer knew what the law was and knew

his legal duty thereunder, to overcome his good-faith misunderstanding of the law

defense, and was not excludable as conduct or statements made in compromise negotiations,

having been offered for purpose other than to establish liability. U.S. v. Hauert, C.A.7

(Ill.) 1994, 40 F.3d 197, certiorari denied 115 S.Ct. 1822, 514 U.S. 1095, 131 L.Ed.2d

744. Criminal Law 370; Criminal Law 408



Seller's statute of frauds defense was closely intertwined with buyers' breach of

contract claims and, thus, documents that were intended, at least in part, to settle

buyers' claims of breach of contract were not admissible, despite buyers' argument that

they sought to introduce documents only to meet statute of frauds. Trebor Sportswear

Co., Inc. v. The Limited Stores, Inc., C.A.2 (N.Y.) 1989, 865 F.2d 506. Evidence 219(3)



Proposed settlement agreement offered at time employment relationship was terminated

as part of severance pay package which would have released employer of all potential

claims against it by employee, including claims for discriminatory acts that occurred

at or before termination, was admissible in former employee's age discrimination action

against employer. Cassino v. Reichhold Chemicals, Inc., C.A.9 (Wash.) 1987, 817 F.2d

1338, certiorari denied 108 S.Ct. 785, 484 U.S. 1047, 98 L.Ed.2d 870. Evidence 219(3)



Evidence of settlement negotiations involving subcontractor, contractor, and owner, was

admissible for purpose of showing owner's understanding of its obligations under its

joint check agreement with subcontractor, and to establish that subcontractor had made

demand upon owner for payment. Bituminous Const., Inc. v. Rucker Enterprises, Inc., C.A.4

(Md.) 1987, 816 F.2d 965. Evidence 213(1)



Indemnity agreement entered into prior to trial by way of compromise settlement between

Government and private publisher of instrument approach procedures for aircraft was

properly admitted in wrongful death and property damage action brought by aircraft owner

and survivors of crash victims, not to prove liability, but to show nonadverse

relationship of those defendant parties and to attack credibility of their witnesses.

Brocklesby v. U.S., C.A.9 (Cal.) 1985, 767 F.2d 1288, certiorari denied 106 S.Ct. 882,

474 U.S. 1101, 88 L.Ed.2d 918. Evidence 219(3); Witnesses 331.5



This rule excluding evidence of compromises and offers to compromise and of statements

made in compromise negotiations, did not preclude evidence of the terms of a settlement

between seller and buyer of catfish feed, in order to prove, in seller's suit against

guarantor, that a portion of the purchase price sued for had already been forgiven in

the settlement. Central Soya Co. Inc. v. Epstein Fisheries, Inc., C.A.7 (Wis.) 1982,

676 F.2d 939. Evidence 213(1)



In action by insured to recover from insurer the amount the insured was compelled to

pay as a result of a personal injury suit based on insurer's alleged bad faith in failing

to settle with the injured person within the policy limits, evidence of injured person's

attempts to obtain a settlement and offer to give a full release was admissible in view

of the testimony of the injured person and her sister and of the duty of the insurer

to keep in continuing contact with the injured person in an effort to bring about a

settlement. Springer v. Citizens Cas. Co. of N.Y., C.A.5 (Fla.) 1957, 246 F.2d 123.

Insurance 3381(4)



Restriction of rule barring admission of evidence of prior settlement negotiations does

not apply when compromise evidence is offered for a purpose other than to prove the

specific details of a negotiated claim; evidence of fraudulent statements by a party

made in order to settle litigation would be admissible, as would evidence of agreements

in general, or a policy of making a particular type of agreement, as long as it does

not extend to the terms of those licenses granted in settlement of litigation. Inline

Connection Corp. v. AOL Time Warner Inc., D.Del.2007, 470 F.Supp.2d 435. Evidence 213(1)



Evidence that employer was required, pursuant to consent decree entered in another case,

to avoid discrimination in hiring of disabled persons, conform hiring to Americans with

Disabilities Act (ADA) requirements and train personnel in ADA compliance, was

admissible over claims that it was inadmissible evidence of other wrongs and of

settlement, for limited purpose of showing that employer was aware that it had

obligations under ADA. Brady v. Wal-Mart Stores, Inc., E.D.N.Y.2006, 455 F.Supp.2d 157.

Evidence 129(5); Evidence 219(3)



Although consultant reports obtained for purpose of promoting settlement of contract

dispute, and based upon statements made in course of effort to compromise, were

inadmissible to prove liability, they were admissible to address other issues.

Mergentime Corp. v. Washington Metropolitan Area Transp. Authority, D.D.C.2005, 400

F.Supp.2d 145, amended and superseded 2006 WL 416177. Evidence 213(1)



Letter from patent infringement plaintiff to defendant offering to drop certain claims

was admissible to prove that plaintiff's continued assertion of claims warranted

imposition of Rule 11 sanctions; letter was being offered for purpose other than to prove

liability for or invalidity of claim. ResQNET.Com, Inc. v. Lansa, Inc., S.D.N.Y.2005,

382 F.Supp.2d 424, appeal dismissed 138 Fed.Appx. 312, 2005 WL 1515410, reconsideration

denied 2005 WL 2241524. Evidence 213(1)



Even though pre-billing worksheets that law firm representing a condominium association

provided to counsel for unit owners were in nature of 'settlement documents," evidence

of which might not be admissible in foreclosure action for purpose of establishing amount

of unit owners' alleged liability for fees, worksheets would not be stricken as exhibits

to complaint filed by unit owners under the Fair Debt Collection Practices Act (FDCPA)

to recover for firm's alleged attempt to collect fees in excess of those which, as

allegedly disclosed by worksheets, were owing; such information appeared to be otherwise

discoverable and was not being introduced for liability/value purposes in underlying

foreclosure action. Agan v. Katzman & Korr, P.A., S.D.Fla.2004, 328 F.Supp.2d 1363.

Federal Civil Procedure 1124



Insurer challenging validity of ordinance that permitted city to investigate and

remediate hazardous waste contamination and hold responsible parties or their insurers

liable for cost of city's abatement activities did not assert claim of liability against

city, and therefore rule barring introduction of evidence of settlement to prove party's

liability did not bar insurer from proffering cooperative agreement between city and

state agency to establish that city's legal status under CERCLA was altered by

cooperative agreement, which allegedly conferred status of potentially responsible

party (PRP) upon city. Fireman's Fund Ins. Co. v. City of Lodi, Cal., E.D.Cal.2003, 296

F.Supp.2d 1197. Evidence 219(3)



Rule of evidence making offer of compromise inadmissible did not preclude defendant

seeking to remove plaintiff's negligence action to federal court from using plaintiff's

pre-suit demand letter detailing damages of $1,325,000 allegedly suffered as result of

motor vehicle accident to establish that plaintiff's claim exceeded amount in

controversy requirement for exercise of diversity jurisdiction; letter was not being

offered as admission of liability or amount of liability, and purpose of rule, to

encourage settlements, was not undermined by use of demand letter in notice of removal.

Archer v. Kelly, N.D.Okla.2003, 271 F.Supp.2d 1320. Removal Of Cases 86(6)



Rule, barring admission of settlement offers to prove liability for or invalidity of

claim or its amount, does not impose absolute ban on admission of statements made during

settlement negotiations, e.g., evidence of settlement offers may be admissible to

challenge claim of undue delay, to prove defendant's knowledge and intent, or for

purposes of impeachment or rebuttal, but on balance, better practice is to exclude

evidence of compromises or compromise offers whenever issue of admissibility is

doubtful. Southwest Nurseries, LLC v. Florists Mut. Ins., Inc., D.Colo.2003, 266

F.Supp.2d 1253. Evidence 213(1)



Letter offer of compromise from subcontractor to contractor, later incorporated into

contractor's amended complaint against mall owner in prior litigation, was not barred

from evidence by the rule governing the admissibility of evidence of compromises, in

the subcontractor's suit against a mall owner; the letter was offered to demonstrate

that the subcontractor had a claim for overtime expenditures that it raised or could

have raised against the contractor, and which the subcontractor subsequently released,

not to demonstrate that the subcontractor's overtime claims were not meritorious, or

were inflated. American Bridge Co. v. Providence Place Group Ltd. Partnership,

D.R.I.2003, 263 F.Supp.2d 330. Evidence 213(1)



Offer to settle case, which was submitted to prove fraud and concealment of breach of

fiduciary duties under ERISA and to defend against claims of undue delay in filing

lawsuit, was admissable, as it was not submitted to prove liability for or invalidity

of claim or its amount. Richard B. Roush, Inc. v. New England Mut. Life Ins. Co.,

M.D.Pa.2001, 166 F.Supp.2d 187, reversed 311 F.3d 581. Evidence 213(1)

Assuming, arguendo, that major league baseball's proposals were settlement materials,

evidence and argument related to baseball's proposed changes to the agreement with cable

television broadcaster was not inadmissible under rule precluding admission of

settlement materials offered to prove liability for "other purpose" of demonstrating

baseball's alleged improper motive for disapproving cable television broadcaster's

requests to preempt certain baseball telecasts in favor of professional football games.

ESPN, Inc. v. Office of Com'r of Baseball, S.D.N.Y.1999, 76 F.Supp.2d 383. Evidence

213(1)



Evidence of offer of compromise made by manufacturer to distributor during settlement

conference in which parties attempted to negotiate dispute over termination of

distribution was admissible when offered by the manufacturer to show the distributor's

rejection of the manufacturer's offer, which had potential implications under fair

dealership law. Morley-Murphy Co. v. Zenith Electronics Corp., W.D.Wis.1996, 910 F.Supp.

450, reversed 142 F.3d 373. Evidence 213(4)



Although evidence of city's settlement of civil suit arising out of police officer's

alleged previous misconduct was not admissible to show city's liability to plaintiff

in that suit or to show city's belief in its liability, it was admissible to establish

police chief's knowledge of officer's previous misconduct. Perri v. Daggy, N.D.Ind.1991,

776 F.Supp. 1345. Civil Rights 1412; Evidence 219(3); Federal Civil Procedure 2011



Patent holder's offers to settle infringement claims against third parties were not

admissible in action against alleged infringer, regardless of whether attempts to

compromise other claims provoked responses from third parties, absent showing that

patent holder's prior claims were baseless. Alpex Computer Corp. v. Nintendo Co., Ltd.,

S.D.N.Y.1991, 770 F.Supp. 161, 20 U.S.P.Q.2d 1782, on reconsideration, vacated in part.

Evidence 213(1)



Prohibition on evidence of offer of compromise did not preclude admission of evidence

of offer to show purchasers' knowledge of options which vendor had given to a third party.

Wiener v. Farm Credit Bank of St. Louis, E.D.Ark.1991, 759 F.Supp. 510, affirmed 975

F.2d 1350. Evidence 213(4)



Admission of testimony of defendant managing partner in which he elaborated on notes

he took after telephone conversation with plaintiffs' counsel during the time when the

parties were discussing settlement was not barred by rule excluding evidence obtained

in course of settlement negotiations since the testimony was offered to elaborate upon

and explain defendant's notes of the telephone conversation. Stainton v. Tarantino,

E.D.Pa.1986, 637 F.Supp. 1051. Evidence 213(1)



Rule, that evidence of conduct or statements made in compromise negotiations is not

admissible to prove liability or invalidity of claim but might be admissible to prove

bias or prejudice of witness, may not exclude evidence showing bad-faith failure of

insurance carrier to settle, but same is not necessarily true where insurer's failure

is failure to defend claims and not failure to settle. Olin Corp. v. Insurance Co. of

North America, S.D.N.Y.1985, 603 F.Supp. 445, on reargument 607 F.Supp. 1377, motion

to vacate denied. Evidence 213(1)



In action for breach of contract, fraud, negligence, and damages, in which defendant

warehouseman contended that plaintiffs delayed selling damaged sugar for animal feed

until after market price fell significantly, evidence regarding settlement negotiations

was admissible to explain delay. California & Hawaiian Sugar Co. v. Kansas City Terminal

Warehouse Co., Inc., W.D.Mo.1985, 602 F.Supp. 183, affirmed 788 F.2d 1331. Warehousemen

34(6)



Affidavit of attorney for plaintiff class did not relate to amount or validity of claim

which was subject of settlement negotiated by individual defendants and, hence, was

admissible for purpose of establishing that individual defendant was not "successful"

in negotiating a settlement and, hence, was not entitled to recover under law of

Pennsylvania on his cross claims against corporate defendant for indemnification. B &

B Inv. Club v. Kleinert's, Inc., E.D.Pa.1979, 472 F.Supp. 787. Evidence 213(4)



Requested discovery of confidential settlement agreement with automobile insurer was

admissible, where agreement would not be offered to prove insurer's liability for bad

faith or unfair trade practices or amount of claim against insurer, but to prove nature

of agreement with attorney and related litigation and results obtained in subject cases.

Young v. State Farm Mut. Auto. Ins. Co., S.D.W.Va.1996, 169 F.R.D. 72. Evidence 219(3);

Federal Civil Procedure 1601



Rule limiting admissibility of evidence concerning settlement negotiations did not

render inadmissible evidence of negotiations between representatives of law firm and

Resolution Trust Corporation (RTC) concerning firm's representation of savings and loan

association, where law firm did not introduce evidence to prove liability, but rather

to reveal what it perceived as RTC's improper retaliatory motive for filing action

against it. Resolution Trust Corp. v. Blasdell, D.Ariz.1993, 154 F.R.D. 675. Evidence

213(1)



Where, at settlement meeting on substantive issues, petitioner's counsel had asked

Commissioner to waive addition to tax for substantial understatement, and Commissioner

later objected to admission of matters concerning settlement meeting; and petitioner

had reserved objections to certain proposed stipulations, but first addressed them only

in reply brief, Court determined (1) under this rule, fact that parties met was admissible

for limited purpose of showing that petitioner asked Commissioner to waive addition to

tax, since evidence was offered for purpose other than to prove liability or claim's

validity; and (2) by waiting until reply brief to address reserved objections, petitioner

failed to preserve them, since it was unreasonable to wait until posttrial reply brief,

when Commissioner's opportunity to respond was eliminated. Gallade v. C.I.R., U.S.Tax

Ct.1996, 106 T.C. 355, Unreported.



Where taxpayers filed motion for determination as to admissibility of expert witness'

testimony and report, which Commissioner of Internal Revenue contended was inadmissible

under this rule, because material was submitted to Commissioner in tax settlement

negotiations, Tax Court determined that this rule bars use of settlement material by

party as admission against other party who submitted material in settlement

negotiations, but that rule has no application where party who submitted material in

settlement negotiations is party who seeks to admit settlement material as evidence at

trial, in light of legislative history, purpose, and rationale of this rule. Hulter v.

C.I.R., U.S.Tax Ct.1984, 83 T.C. 663.

22. Waiver



Patent holder suing for infringement did not waive protection of rule excluding its prior

offers to settle infringement claims against third parties by disclosing terms of

previous settlements when offering to compromise claims against additional infringers;

there was no evidence that patent holder desired to waive protection of exclusionary

rule, and its references to prior settlements were made in attempts to resolve additional

disputes. Alpex Computer Corp. v. Nintendo Co., Ltd., S.D.N.Y.1991, 770 F.Supp. 161,

20 U.S.P.Q.2d 1782, on reconsideration, vacated in part. Evidence 213(1)

23. Admissions of fact



Defendant's admissions, made while negotiating a settlement to a potential civil claim,

that promissory note issued to Portuguese bank was a forgery and that he was liable on

that note were admissible in criminal prosecution to establish that defendant committed

the crime of mail and wire fraud in connection with the solicitation of a loan from the

French branch of the Portuguese bank. U.S. v. Gonzalez, C.A.2 (N.Y.) 1984, 748 F.2d 74.

Criminal Law 408



There is an exception to the rule against admissibility of settlement negotiations where

the evidence relates to admissions of fact as distinguished from hypothetical or

provisional concessions conditioned upon the settlement's completion. Hiram Ricker and

Sons v. Students Intern. Meditation Soc., C.A.1 (Mass.) 1974, 501 F.2d 550. Evidence

213(4)



Unaccepted offers of compromise are not admissible in evidence as admissions, but

admissions with respect to independent facts which are made during course of compromise

negotiations may be received in evidence. Megarry Bros., Inc. v. U. S. for Use of

Midwestern Elec. Const., Inc., C.A.8 (N.D.) 1968, 404 F.2d 479. Evidence 213(1); Evidence

213(4)



There is a distinction between an offer to do something in furtherance of a compromise

which is inadmissible in evidence and independent admissions of fact which may be

admitted. U.S. v. Shotwell Mfg. Co., C.A.7 (Ill.) 1961, 287 F.2d 667, certiorari granted

82 S.Ct. 386, 368 U.S. 946, 7 L.Ed.2d 342, affirmed 83 S.Ct. 448, 371 U.S. 341, 9 L.Ed.2d

357, rehearing denied 83 S.Ct. 931, 372 U.S. 950, 9 L.Ed.2d 975. Criminal Law 408



Facts assumed to be true for purpose of compromise ordinarily are not competent as

admissions against interest, but a distinct admission of fact will not be summarily

excluded simply because it was made in connection with an effort to compromise. Nau v.

C.I.R., C.A.6 1958, 261 F.2d 362. Evidence 213(4)



Correspondence between aluminum company and supplier was admissible for purposes of

satisfying the statute of frauds in breach of contract action brought by company arising

out of supplier's alleged failure to comply with oral contracts, and was not precluded

under evidence rule precluding the introduction of evidence relating to attempts to

compromise a claim which is disputed as to either validity or amount, where the

correspondence appeared to admit to the validity of the alleged contracts and did not

dispute the total amount alleged due. Commonwealth Aluminum Corp. v. Stanley Metal Ass'n,

W.D.Ky.2001, 186 F.Supp.2d 770. Evidence 213(1); Frauds, Statute Of 158(2)



The law favors the settlement of controversies; therefore, evidence of offers to settle

and terms of settlement are not admissible; however, such rule does not necessarily

preclude the admissibility at trial of an unqualified admission of fact not inseparably

related to an offer of settlement. Henry v. Radio Station KSAN, N.D.Cal.1974, 374 F.Supp.

260. Compromise And Settlement 2; Evidence 213(1)



Facts assumed to be true for purpose of compromise are ordinarily not competent as

admissions against interest, but a distinct admission of fact will not be summarily

excluded simply because it was made in connection with an effort to compromise. Nebraska

Drillers v. Westchester Fire Ins. Co. of New York, D.C.Colo.1954, 123 F.Supp. 678.

Evidence 213(1); Evidence 213(4)

24. Persons authorized to admit



Purported admissions in course of compromise negotiations by unauthorized person, such

as parent or wife, do not amount to admission of the party. Sternberger v. U. S.,

Ct.Cl.1968, 401 F.2d 1012, 185 Ct.Cl. 528. Evidence 237; Evidence 248(1)

25. Discovery



District court abused its discretion in denying contractor's motion to unseal motions

and settlement agreement papers pertaining to litigation between bank and developer,

where settlement was filed in district court; having undertaken to utilize judicial

process to interpret settlement and to enforce it, bank and developer were no longer

entitled to invoke confidentiality ordinarily accorded settlement agreements. Bank of

America Nat. Trust and Sav. Ass'n v. Hotel Rittenhouse Associates, C.A.3 (Pa.) 1986,

800 F.2d 339. Records 32



Information regarding settlement negotiations which may not be admissible at trial is

still discoverable so long as that information may lead to discovery of other admissible

evidence. Computer Associates Intern., Inc. v. American Fundware, Inc., D.Colo.1993,

831 F.Supp. 1516. Evidence 213(1)



Documents which had been provided to settlement committee representing state in prison

overcrowding case could be discovered in order to rebut state's claim, in later action

to modify consent decree, that drastic unanticipated increase in prison admission rates

necessitated modification of settlement agreement. Small v. Hunt, E.D.N.C.1994, 152

F.R.D. 509. Federal Civil Procedure 1593



Order improperly directed production of documents withheld on basis of federal rule

rendering inadmissible materials relating to settlement and attempts to settle and

federal district court decision requiring showing that settlement-related material the

discovery of which is sought will be admissible or will lead to admissible evidence to

support discovery, where judge failed to make finding that information which was sought

appeared reasonably calculated to lead to discovery of admissible evidence.

Morse/Diesel, Inc. v. Trinity Industries, Inc., S.D.N.Y.1992, 142 F.R.D. 80. Federal

Civil Procedure 1620



Federal Rule of Evidence 408, which makes evidence of settlement negotiations

inadmissible to prove liability, only applies to admissibility of evidence at trial and

does not necessarily protect such evidence from discovery. Morse/Diesel, Inc. v.

Fidelity and Deposit Co. of Maryland, S.D.N.Y.1988, 122 F.R.D. 447. Federal Civil

Procedure 1274



In involuntary bankruptcy, interrogatories which inquired as to whether revocation of

debtor's tax exemption was appealed and if so, whether case was settled, as to

identification of all documents concerning tax revocation, and as to names and addresses

of individuals representing Internal Revenue Service with whom debtor's attorneys were

negotiating, did not seek disclosure of privileged communications. In re Contemporary

Mission, Inc., Bkrtcy.D.Conn.1984, 44 B.R. 940. Federal Civil Procedure 1514.1



Wells submissions to the Securities and Exchange Commission (SEC) are not protected from

discovery in subsequent civil litigation merely because they may contain an offer of

settlement; rather, Wells submissions, regardless of whether they contain settlement

materials, are discoverable so long as they (1) are admissible, because they are relevant

to a claim or defense, or (2) will reasonably lead to the discovery of admissible

evidence; the rule addressing the admissibility of offers of compromise says nothing

about whether such offers are discoverable. In re Initial Public Offering Securities

Litigation, S.D.N.Y.2004, 2004 WL 60290, Unreported. Federal Civil Procedure 1581

26. Summary judgment



Affidavit of plaintiff's counsel was incompetent to support summary judgment opposition

in products liability action, where affidavit would be inadmissible under evidence rules

because it incorporated statements made in settlement discussions, and, contrary to

plaintiff's assertion, was offered on merits of defense rather than on merely collateral

matter. Liesener v. Weslo, Inc., D.Md.1991, 775 F.Supp. 857. Federal Civil Procedure

2515

27. Parties entitled to object



Railroad appealing from judgment for plaintiff in action by pulpwood dealer against

railroad for damages to pulpwood loader resulting from derailment of train could not

successfully attack action of trial court in admitting evidence of efforts to make

settlement of claim adduced by counsel for railroad on cross-examination. Southern Ry.

Co. v. Vaughn, C.A.5 (Ga.) 1966, 359 F.2d 424. Federal Courts 774

28. Time of determination



It was premature, prior to offer of evidence of settlement, to determine admissibility

of evidence of plaintiff's settlement with third-party defendant as well as evidence

pertaining to commencement of action by plaintiff against third-party defendant. Stacey

v. Bangor Punta Corp., D.C.Me.1985, 620 F.Supp. 636. Federal Civil Procedure 2013

29. Sanctions



Employers' offer to reemploy employee bringing age discrimination action was not

unambiguous offer of unconditional employment, and, thus, mention of employment offer

was prohibited, which justified assessing Rule 11 sanction where employer made repeated

references to offer. Pierce v. F.R. Tripler & Co., Inc., S.D.N.Y.1991, 770 F.Supp. 118,

affirmed in part, reversed in part 955 F.2d 820. Federal Civil Procedure 2795



Plaintiff's reference in opening statement to defendants' refusal to settle, after

plaintiff had earlier referred to offer of settlement, warranted mistrial. Hodge v.

American Home Assur. Co., D.Puerto Rico 1993, 150 F.R.D. 25. Federal Civil Procedure

1971

30. Harmless error



Erroneous admission of evidence regarding settlement between defendant and his

investment partners did not rise to level of plain error, in trial for wire fraud and

money laundering, given that ample other evidence established substance of testimony

regarding settlement, which did not indicate that defendant furnished or offered to

furnish valuable consideration, but rather simply recounted defendant's conduct. U.S.

v. Bailey, C.A.10 (Kan.) 2003, 327 F.3d 1131. Criminal Law 1036.1(3.1)



Even if trial court erred in admitting evidence of communications between subrogee's

counsel and subrogor's counsel during pendency of subrogor's state suit against various

tort-feasors, because evidence was impermissible evidence of compromise negotiations

submitted to prove validity or amount of a claim, error was harmless because other

competent evidence on the record was sufficient to uphold district court's findings of

fact and conclusions of law. Southern Pacific Transp. Co. v. Chabert, C.A.5 (La.) 1992,

973 F.2d 441, certiorari denied 113 S.Ct. 1585, 507 U.S. 987, 123 L.Ed.2d 152. Federal

Courts 897



Court's reliance on parties' joint survey in determining that chemicals were

nonconforming when delivered to carrier by seller was not plain error, even if survey

contained inadmissible evidence of parties' settlement discussions; joint survey

results were cumulative of other survey results upon which trial court relied. HCI

Chemicals (USA), Inc. v. Henkel KGaA, C.A.5 (Tex.) 1992, 966 F.2d 1018. Federal Civil

Procedure 2011; Federal Courts 628

31. Relevance



Settlement negotiations between the parties following filing of condemnation action were

irrelevant to the issue of right of condemnor to immediate possession, so that affidavit

relating to those negotiations could not be considered. Northwest Pipeline Corp. v. The

20' x 1,430' Pipeline Right of Way Easement ' x 1560' Temporary Staging Area,

E.D.Wash.2002, 197 F.Supp.2d 1241. Evidence 213(1)



Insured's confidential settlement agreement with insurer that was product of arbitrated

coverage dispute was discoverable in insured's contract action against insurance broker

alleging that broker had failed to secure adequate coverage; terms of settlement

agreement were relevant, since insured sought what insurer had refused to pay, and once

produced settlement agreement could reasonably be expected to lead to discovery of other

admissible evidence, outweighing confidentiality claim. Atchison Casting Corp. v.

Marsh, Inc., D.Mass.2003, 216 F.R.D. 225. Federal Civil Procedure 1587



Fed. Rules Evid. Rule 408, 28 U.S.C.A., FRE Rule 408



Amendments received to 05-21-07

Copr. c 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.