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Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Statement Made in Mediation Admitting Liability for Wrong That Is Unrelated to the Subject of the Mediation Is Not Excluded by Fed.R.Evid. 408 or the Federal Alternative Dispute Resolution Act

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From Deluca v. Allied Domecq Quick Serv. Restaurants, 03CV5142(JFB)(AKT), 2006 WL 2713944 (E.D.N.Y. Sept. 22, 2006):

Defendant argued in support of its motion in limine that Fed.R.Civ.P. 408 and the ADRA [28 U.S.C. §§ 651-668] protect communications such as the one at issue here [an alleged admission of a tortious act separate and apart from the one being mediated]. *** The Court disagrees. Significantly, although the ADRA and Rule 408 certainly protect “statements made in compromise negotiations,” it is well-settled that “Rule 408 is inapplicable when the claim is based upon some wrong that was committed in the course of the settlement discussions.” Scott v. Goodman, 961 F.Supp. 424, 437 (E.D.N.Y. 1997); see also Carney v. American Univ., 151 F.3d 1090, 1095 (D.C.Cir. 1998) (holding that correspondence that was part of settlement negotiations “can be used to establish an independent violation (here, retaliation) unrelated to the underlying claim which was the subject of the correspondence (race discrimination)”); Uforma/Shelby Business Forms, Inc. v. NLRB, 111 F.3d 1284, 1294 (6th Cir. 1997) (holding that threats of retaliation that occurred during settlement negotiations admissible when “the evidence serves to prove liability either for making, or later acting upon, the threats”); Resolution Trust Corp. v. Blasdell, 154 F.R.D. 675, 681 (D. Ariz.1993) (same); Sunstar, Inc. v. Alberto-Culver Co., No. 01 C 0736, 2004 WL 1899927, at * (N.D.Ill. Aug. 23, 2004) (holding that Rule 408 “does not appear to cover compromises and compromise offers that do not involve the dispute that is the subject of the suit”) (quoting Bradbury v. Phillips Petroleum Co., 815 F.2d 1356, 1363 (10th Cir. 1987)); Carr v. Health Ins. Plan of Greater N.Y., Inc., No. 99 Civ. 3706(NRB), 2001 WL 563722, at *4 (S.D.N.Y. May 24, 2001) (holding that statements from settlement negotiations admissible “because they are being introduced not to prove liability for claims being settled, but for an entirely separate claim of retaliation”).

Given the age of this case, it is worth noting that there has been intervening development of a federal mediation privilege. Of more practical importance, the parties in Deluca also had a confidentiality agreement that extended beyond 408 and ADRA, and this precluded use of the statement — a reminder of the dispositive effect of such agreements.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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