United States District Court for the Middle District of Tennessee Finds Pre-Existing Documents Used in Settlement Negotiations Not Covered by Rule 408
Federal Rule of Evidence 408(a)(1) 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.
As the recent opinion of the United States District Court for the Middle District of Tennessee in Wanke v. Invasix Inc. and InMode Ltd., 2021 WL 325923 (M.D.Tenn. 2021), makes clear, however, the protection of Rule 408(a) does not cover pre-existing documents that were used during settlement negotiations.
The case involved Fractora, which is described on its website as
a fractional skin resurfacing and subdermal tissue coagulation device that bridges the gap between fractional lasers and surgical procedures. Treatments improve skin appearance by remodeling tissue and collagen.
After receiving a Fractora procedure Heather Wanke sued the defendants, claiming that they “marketed the Fractora improperly, including by encouraging its operation by unqualified personnel and/or in unsafe ways, leading to the device’s inflicting permanent injuries on some patients.” Specifically, Wanke alleged that, after Dr. Paulino E. Goco performed the Fractora procedure on her:
55. Dr. Goco told Heather to expect less than five days downtime[,] so Heather knew something had gone terribly wrong when she remained swollen with puncture mark wounds all over her face at day 3 and 4 of her recovery. She remained housebound at day 7. Her skin looked even worse beginning at day 10—as the swelling subsided, Heather’s smooth, clear skin came to look and feel like orange peel, the skin under her eyes darkened[,] and burns left [claw- and moon-shaped scarring] on her cheeks, upper lip and chin and between her brow[s].
56. Dr. Goco shared Heather’s concern, requiring multiple follow up appointments. In notes from July 12, 2017, Dr. Goco noted “hyperpigmentation.” He repeated a VISIA Facial Assessment Report on Heather that same day. As compared to an assessment taken June 9, 2017, just before the Fractora procedure, Heather’s skin scored 60-90% worse in assessments including “spots,” “wrinkles,” “texture” and “pores.”
57. Heather cried and cried in Dr. Goco’s treatment room. Neither the doctor nor his staff could console her. Dr. Goco became so alarmed at Heather’s distress, he left a personal voice mail message for her after the July 12, 2017 appointment. In it, Dr. Goco acknowledged that Heather would need multiple additional treatments to address the injuries sustained as a result of the Fractora treatment.
Wanke subsequently moved to exclude evidence that was included in her demand letter which kicked off settlement negotiations. The court disagreed, concluding that
Many of the materials for which Wanke claims Rule 408 protection, however, are neither evidence of her offer itself nor statements that she or her counsel made during negotiations. Rather, they are simply preexisting documents that happen to have been included in the packet of exhibits included with her demand letter. It would make little sense to allow a party to render an otherwise admissible and relevant document inadmissible simply by including it with a protected communication. Accordingly, even if, for example, the defendants cannot rely, at trial, on the account of Wanke’s post-procedure actions included in the text of the letter, there is no bar to their relying on Wanke’s otherwise admissible medical records included in the packet, which would be discoverable through ordinary means, whether or not they had been originally turned over as part of a settlement demand.
-CM