Does Rule 408 Apply to Discovery or Just to Admissibility?
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.
It is often said that the rules of evidence are rules of admissibility and not rules of discovery, but the rules might be a bit “flexible” in cases involving settlement negotiations.
In Garner v. Ranka, 2020 WL 601898 (D.N.M. 2020), “Plaintiff alleged all Defendants were liable for Plaintiff’s injuries arising from the implantation of a surgical mesh product intended for treatment of medical conditions of the female pelvis.” During discovery, the one defendant thereafter sought
all documentation and correspondence between you, your attorney’s [sic] and/or agents and any entity, including insurance companies, concerning any settlement agreements entered into by you regarding the use and insertion of the pelvic mesh which is the subject of this lawsuit, including but not limited to any correspondence with agents or representatives of [Ethicon Defendants]. This request including [sic] but is not limited to every policy, settlement agreement, email, and demand letter, letter to or from any insurance company and/or [Ethicon Defendants], and any other communication with any insurance company and/or [Ethicon Defendants], whether electronically stored or not.
In addressing this discovery request, the court held that
Because Rule 408 is a rule of admissibility and not discoverability, it does not prevent a party from discovering evidence relating to settlement offers or statements made during settlement negotiations….On the other hand, Rule 408 embodies a public policy favoring out-of-court settlement of disputes, in which confidentiality is necessary to promote the free and frank exchange of information and encourage parties to make concessions….The Advisory Committee on the Federal Rules of Evidence has expressed two rationales for excluding settlement communications:
(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.
The court then noted that
In light of these policy considerations, some courts have imposed a heightened standard for discovery of confidential settlement communications. These courts have held that the party seeking discovery must demonstrate that (1) the party has a special need for the materials; (2) unfairness would result from a lack of discovery of the materials; and (3) the party’s need for the evidence outweighs the interest in maintaining confidentiality. United States ex rel. Strauser v. Stephen L. Lafrance Holdings, Inc., 2019 WL 6012850, at *2 (N.D. Okla. Nov. 14, 2019); In re Teligent, Inc., 640 F.3d 53, 58 (2d Cir. 2011). This Court need not decide whether to apply this heightened standard, however, because Defendant has failed to demonstrate that the communications are relevant to his defense.
-CM