Federal Rule of Evidence 408 - Interpretation

In United States v. Hays (872 F2d 582 [1989]), Judge Johnson observed: "Federal Rule of Evidence 408 permits evidence of settlement agreements for purposes other than proving liability, such as demonstrating the prejudice of a witness, negativing a contention of undue delay, or establishing the obstruction of a criminal investigation. The Government does not contend that it offered this evidence for any of the permissible purposes contemplated by Rule 408. Rather, the Government urges that evidence of the settlement agreement assisted the jury in its understanding of the breadth of the conspiracy. In our view, this purpose stands at direct odds with the clear mandates of Rule 408... "As the appellants correctly contend in brief, and as the framers of Rule 408 clearly contemplated, the potential impact of the evidence regarding a settlement agreement with regard to a determination of liability is profound. It does not tax the imagination to envision the juror who retires to deliberate with the notion that if the defendants had done nothing wrong, they would not have paid the money back. Accordingly, we cannot say that the admission of the evidence ... did not affect their substantial rights under the plain error standard." (872 F2d at 589.) The Second Circuit Court of Appeals in United States v. Gonzalez (748 F2d 74 [1984]) took an even more expansive view than the Seventh Circuit, holding that Rule 408 never has any application in a criminal proceeding. Indeed, in that case, the court noted that the evidence was offered to prove the ultimate issue before the jury, the guilt of the defendant. Judge Lumbard, in the Court's opinion, declared: "The primary policy justification for Rule 408's exclusion in the civil context does not apply to criminal prosecutions. Rule 408 is premised on the idea that encouraging settlement of civil claims justifies excluding otherwise probative evidence from civil lawsuits. Fed. R. Evid. 408 advisory committee note. However, encouraging settlement does not justify excluding probative and otherwise admissible evidence in criminal prosecutions. The public interest in the disclosure and prosecution of crime is surely greater than the public interest in the settlement of civil disputes. It follows that since nothing in the Rule specifically prohibits receiving in evidence the admissions and statements made at a conference to settle claims of private parties, they are admissible in any criminal proceeding." (748 F2d at 78.)