EvidenceProf Blog

Editor: Colin Miller
Univ. of South Carolina School of Law

Thursday, December 19, 2013

Fly With US: Maine District Court Finds No Heightened Relevance Standard Applies To Settlement Discovery

Federal Rule of Evidence 408 reads as follows:

(a) Prohibited Uses.

Evidence of the following is not admissible — on behalf of any party — either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:  

(1) furnishing, promising, or offering — or accepting, promising to accept, or offering to accept — a valuable consideration in compromising or attempting to compromise the claim; and  

(2) conduct or a statement made during compromise negotiations about the claim — except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory, investigative, or enforcement authority.  

(b) Exceptions. The court may admit this evidence for another purpose, such as proving a witness’s bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

Many litigants have tried to claim that Rule 408 creates a settlement privilege. As far as I can tell, none of them have been successful. In Barclay v. Gressit, 2013 WL 3819937 (D.Me. 2013), the plaintiff did not assert that such a privilege existed but claimed that a party needs to make a heightened showing of relevance before settlement evidence is discoverable. So, how did he fare?

In Gressit, Edward Barclay brought an action against U.S. Airways and Stevan Gressit after Gressit opened up an overhead bin door above Barclay, causing a piece of luggage to fall out and hit Barclay on the head. Before trial, Gressit sought to obtain information pertaining to a settlement agreement recently entered into between the Barclay and U.S. Airways.

Barclay objected that any settlement-related evidence was only discoverable if Gressit could make a heightened showing of relevance. In response, the United States District Court for the District of Maine noted that

Courts are divided on whether the confidentiality concerns inherent in the settlement process warrant a heightened showing of relevance to obtain settlement agreement information. See Tanner v. Johnston, No. 2:11–cv–00028–TS–DBP, 2013 WL 121158, at *2 (D.Utah Jan. 8, 2013) ("Unfortunately, there is country-wide discord about the showing of relevance required to justify disclosure of a settlement agreement.").

The plaintiff sought to rely on Bottaro v. Hatton Assocs., 96 F.R.D. 158 (E.D.N.Y.1982), which created the so-called Bottaro standard, which requires "a particularized showing of a likelihood that admissible evidence will be generated by the dissemination of the terms of a settlement agreement...." The court, however, found that the First Circuit had not addressed the issue and accordingly "decline[d] to require a heightened showing, which is not otherwise required by statute or rule."

Applying the regular relevance standard, the court found that the settlement-related evidence was discoverable because

The settlement agreement clearly is relevant. Assuming, without deciding, that the substantive law of Maine applies in this diversity action, I would be obligated to reduce any verdict against the defendant by the amount paid by U.S. Airways....If, as part of the settlement, the plaintiff entered into an agreement precluding him from collecting from the defendant any portion of the damages attributable to U.S. Airways' share of responsibility, I would be obligated to reduce any judgment against the defendant “by either the amount determined at trial to be attributable to [U.S. Airways'] share of responsibility, if any was found, or, if no such finding [was] made, by the value of the consideration given to the plaintiff for the settlement.”...

Moreover, the court concluded that

The plaintiff's objections that the settlement agreement would not be admissible at trial and that discovery is otherwise premature because the issue of damages would arise only if the defendant were found liable miss the mark. See, e.g., Levick, 2011 WL 1673782, at *3 (“While Rules 403 and 408 may limit the admissibility of the settlement agreement at trial, this does not determine its discoverability. Both rules are silent on the issue of discovery. Instead,...whether a document is subject to discovery is governed by Rule 26(b), which sets the substantially lower standard of relevance [.]”).



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