Commercial Litigation and Arbitration

Letter That Makes No Concession Received in Evidence over Rule 408 Objection (Not Endorsed “For Settlement Purposes Only”)

From Latorraca v. Centennial Techs., 2008 U.S. Dist. LEXIS 91468 (D. Mass. Oct. 9, 2008):

Federal Rule of Evidence 408(a)(2) prohibits the use of "statements made in compromise negotiations regarding [a] claim" as evidence of a party's "liability for...a claim that was disputed as to validity or amount". This Rule is meant to promote the public policy of dispute resolution outside the courtroom. See generally McInnis v. A.M.F., Inc., 765 F.2d 240, 247 (1st Cir. 1985). The First Circuit has defined "compromise" (as used in Rule 408) according to Webster's Collegiate Dictionary to mean "a settlement of differences...reached by mutual concessions". Rodriguez-Garcia v. Municipality of Caguas, 495 F.3d 1, 12 (1st Cir. 2007). Furthermore, the First Circuit has noted that

letters whose contents offer[] no concessions [do] not meet the definition of "compromise" and thus [are] outside the scope of [Rule 408].

Id. at 12, citing Sandlin v. Shapiro & Fishman, 919 F. Supp. 1564, 1569 (D. Fla. 1996). ***

Taniki contends that Attys Gelles and Egan engaged in numerous settlement discussions in the years following the class plaintiffs' motion to attach and that the Gelles letter was prepared and submitted as part of those negotiations. The class plaintiffs respond that the Gelles letter relates solely to discovery matters and was, in fact, written prior to the onset of any settlement negotiations. They claim that the Gelles letter was written in response to a letter sent by Atty Egan to Atty Gelles on December 11, 2006 ("the Egan letter"), which was intended to gather information concerning the Taniki account.

The Egan letter is, indeed, apparently limited to a request for information concerning Pinez's interest in the Taniki account and the source of some deposits made therein. It includes no reference whatsoever to a settlement.

The Gelles letter responds to that plain request for information without reference to a settlement except to conclude: "I suggest that we talk further to discuss how to bring this matter to a conclusion". That statement suggests settlement discussions had not yet begun at the time of the Gelles letter but that Taniki was then interested in initiating such discussions. The Gelles letter, moreover, makes no concession that would bring it within the ambit of Rule 408.

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