§ 14.03 Scope of Rule 408

• Jurisdiction: United States

§ 14.03 Scope of Rule 408

Rule 408(a) applies to completed compromises as well as to offers of compromise, covering disputes over the amount of a claim as well as its validity. Some, but not all, courts have extended the rule to cover the mitigation of damages.⁶ The rule applies even when the evidence is tendered by the person making the offer; the rule explicitly states "on behalf of any party."⁷ The rule's "protection extends to legal conclusions, factual statements, internal memoranda, and the work of non-lawyers and lawyers alike so long as the communications were 'intended to be part of . . . negotiations toward compromise.'"⁸ Courts have disagreed about the term "claim."⁹

Inconsistent statements or conduct. Rule 408 was amended in 2006 to explicitly exclude impeachment by prior inconsistent statement or conduct. "Such broad impeachment would tend to swallow the exclusionary rule and would impair the public policy of promoting settlements."¹⁰

Criminal cases. It is not uncommon for parallel civil and criminal suits to result from the same conduct. Since a different provision, Rule 410, governs the admissibility of offers to plead guilty or no contest in criminal cases, one could argue that Rule 408 does not apply to criminal litigation.¹¹ Rule 408 was amended in 2006 to clarify its application in criminal cases, a topic discussed in the next section.¹²

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Notes:

^[6] See Stockman v. Oakcrest Dental Center, P.C., 480 F.3d 791, 798 (6th Cir. 2007) ("The goal of mitigation is the prevention of unnecessary economic loss, and therefore mitigation necessarily goes to the amount of a claim."); Pierce, 955 F.2d at 826-27 ("Evidence that demonstrates a failure to mitigate damages goes to the 'amount' of the claim and thus, if the offer was made in the course of compromise negotiations, it is barred under the plain language of Rule 408."). But see Bhandari v. First Nat'l Bank of Commerce, 808 F.2d 1082, 1103 (5th Cir. 1987) (evidence of failure to mitigate damages is admissible as another purpose); Urico v. Parnell Oil Co., 708 F.2d 852, 854-55 (1st Cir. 1983).

^[7] See Fed. R. Evid. 408 advisory committee's note (2006) ("The amendment makes clear that Rule 408 excludes compromise evidence even when a party seeks to admit its own settlement offer or statements made in settlement negotiations. If a party were to reveal its own statement or offer, this could itself reveal the fact that the adversary entered into settlement negotiations. The protections of Rule...