The opinion of the court was delivered by: Joseph F. Bianco, District Judge
The Court has received the Report and Recommendation, dated February 24, 2006, of the Honorable James Orenstein, United States Magistrate Judge, recommending that this Court grant defendant's motion in limine to preclude plaintiff from making use of certain evidence at trial.*fn1 Both parties timely filed objections. Upon de novo review of the thorough and well-reasoned Report and Recommendation, the parties' objections thereto, and the parties' submissions, the Court adopts the recommendation of Magistrate Judge Orenstein, but writes to address a significant procedural fact that was not brought to the Magistrate Judge's attention by either party - namely, that at the time of the mediation, plaintiff had not alleged retaliation based on defendant's denial of plaintiff's franchise application. Although it does not change the ultimate opinion of this Court, it does change part of the analysis. Specifically, the Court holds that the confidentiality provisions of the Alternative Dispute Resolution Act (the "ADRA"), and the Federal Rules of Evidence do not preclude the admission of the statement made by defendant's associate general counsel during the course of the mediation. The confidentiality agreement signed by the parties, however, is broader than the protections afforded by the ADRA and Fed. R. Evid. 408, and thus the Court, as Judge Orenstein recommended, finds that the evidence should be excluded.
The factual background of this case is described in detail in both the Magistrate Judge's Report and Recommendation, as well as this Court's prior Memorandum and Order. See Deluca, 2006 WL 1662611, at *1-*6. Familiarity with these facts is assumed.
As the Report and Recommendation notes, Deluca filed an EEOC complaint on or about November 2, 2002. In that complaint, Deluca alleged that defendant unlawfully discriminated and retaliated against him because of his age by reassigning him and terminating him. (See Deluca Aff. ¶¶ 7-15, attached as Ex. A to Grace Decl., Docket # 58-3.) Thereafter, plaintiff applied to defendant to be a franchisee. That application was denied at some point in February 2003. (See Tr.*fn2 at 39.)
Then, on March 24, 2003, the parties attended a voluntary EEOC mediation session. At this mediation, plaintiff's counsel made an "offer" to defendant by saying "can't we all just settle this by giving Deluca a franchise?" (See Tr. at 40.) The response by an associate general counsel of defendants, Jack Laudermilk, was that "we're not in the process of giving out franchises to people that are suing us or made complaints." (Deluca Dep. at 177.)
On October 9, 2003, a Complaint in this action was filed. In the Complaint, plaintiff alleges discrimination and retaliation, as he had in his EEOC complaint. The Complaint, however, added a charge of retaliation in connection with defendant's denial of plaintiff's franchise application. That retaliation claim is the sole remaining claim in this case. See Deluca, 2006 WL 1662611, at *13.
Defendant argued in support of its motion in limine that Fed. R. Civ. P. 408 and the ADRA protect communications such as the one at issue here. (See Report and Recommendation at 5-9.) The Court disagrees. Significantly, although the ADRA and Rule 408 certainly protect "statements made in compromise negotiations," it is wellsettled 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").
When the statement was made by Laudermilk, plaintiff had alleged discrimination based on his age, and retaliation based on defendant's pretermination conduct. There was no retaliation claim by plaintiff based on defendant's denial of plaintiff's franchise application. Hence, the statement is not protected, either by Rule 408 or the ADRA. See Carney, 151 F.3d at 1095; see also Pace v. Paris Maintenance Co., 7 Fed. Appx. 94 (2d Cir. 2001) (holding that plaintiff's attempt to introduce a statement from a settlement negotiation offered to support an independent claim of retaliation "might have some force" except for the absence of discriminatory motive). This line of cases correctly carves out an exception to the protection afforded to parties engaged in compromise negotiations. The ADRA and Rule 408 are designed to encourage parties to settle their claims, they are not a "blanket rule of inadmissibility for any and all statements in the settlement context." Carr, 2001 WL 563722, at *4. Thus, the Court finds that neither Rule 408 or the ADRA require that this statement be excluded.
The parties, however, chose to sign a separate confidentiality agreement. This agreement, as Magistrate Judge Orenstein held, "plainly states that `all matters discussed during the mediation are confidential . . . and cannot be used as evidence in any subsequent . . . judicial proceeding.'" (Report and Recommendation at 5.) This agreement by the parties, by its plain language, is broader than the protections afforded under the ADRA and Rule 408. In particular, the confidentiality agreement provided that "all matters" are confidential, and carved out, in the next sentence, an exception to this by not extending the confidentiality "to threats of imminent physical harm or incidents of actual violence that occur during the mediation." (See Confidentiality Agreement, Docket Entry # 58.) Thus, the parties agreed that all matters would be kept confidential except threats of imminent physical harm or actual violence. Plaintiff provides no case law or compelling arguments in support of his contention that this Court should not hold the parties to their agreement.*fn3 The Report and Recommendation, however, cites several reasons and cases that support a court holding the parties to their agreement. Thus, having considered the matter de novo, the Court adopts Magistrate Judge Orenstein's Recommendation that the evidence at issue be excluded based upon the confidentiality agreement signed by the parties.
Further, at oral argument, and in the parties' papers, there was much discussion about the admissibility of certain deposition testimony regarding communications between Laudermilk and defendant's general counsel, Steven Horn. As defendant's papers explain, it does not object to most of the testimony plaintiff seeks to admit or elicit. Laudermilk's and Horn's testimony, however, that relates to, or directly discusses, the statement made by Laudermilk is protected pursuant to the parties' confidentiality agreement for the same reasons the statement itself is protected. Thus, that portion of the Recommendation of Magistrate Judge Orenstein as it relates to the exclusion of deposition testimony about Laudermilk's statement at the mediation is also adopted as the opinion of this Court.
For the foregoing reasons, defendant's motion in limine ...