This post is courtesy of Jack Sargent.
Stockman v. Oakcrest Dental Center (Mar. 16, 2007), SIxth Circuit Case No. 05-1518: In a case of first impression, the U.S. Sixth Circuit Court of Appeals held that a proposed settlement agreement was not admissible to prove or disprove mitigation of damages. The plaintiff sued defendant for age discrimination. In a letter, the defendant offered to re-hire plaintiff. Plaintiff wrote back, saying he accepted the offer, but that certain discriminatory conditions of employment had to be addressed, as well as his claims for backpay. The plaintiff's letter was taken as a counteroffer, so defendant withdrew its offer. The plaintiff wanted to introduce the letters at trial in order to rebut defendant's evidence that the plaintiff failed to mitigate his damages. The district court found the letters admissible, because they fell under Evid.R. 408's "other purpose" exception. The Sixth Circuit reversed, because Evid.R. 408 states that evidence of settlement negotiations are not admissible to show the amount of damages. Mitigation, or lack thereof, is relevant to the amount of damages.
The dissent asserts that when evidence of settlement is permitted solely as rebuttal to evidence of lack of mitigation, then there is definitely "another purpose" involved. The dissent stated that majority's holdings went against the weight of federal court authority.