Court Opinion

ID: 9475047
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:16:12.887498+00
Date Added: 2024-06-11T17:44:29.261811
License: Public Domain

THORNBERRY, Circuit Judge,
dissenting:
The majority overturns the district court’s judgment on a jury verdict because the court mentioned to the jury, in the course of explaining the absence of several settling defendants, the amount of the settlement. I believe that the majority’s result is wrong. Even more significant than the result, however, is the majority’s analysis of Fed.R.Evid. 408, an analysis that undoubtedly will color future cases. Because I believe that the majority has stretched Rule 408 beyond its intended limits, I respectfully dissent.
I.
I have three objections to the majority’s Rule 408 analysis. First, I do not think that the Rule can properly be applied to the trial judge’s unsolicited comments. A judge’s comments from the bench are not “evidence” to which the rules of evidence apply. One cannot speak of the admissibility of a judge’s remarks. The language of Rule 408 makes plain that it does not apply to comments from the bench: the Rule prohibits the use of evidence concerning settlement to prove validity or amount of a claim, but permits use of the evidence if it is “offered for another purpose.” Judges do not “offer” evidence; parties do. In analyzing the court’s comments in this case, we should inquire whether the court abused its discretion in deciding that the value of the comments in avoiding jury confusion outweighed any prejudice to the parties. This test is analogous to, but not controlled by, Fed.R.Evid. 403; I will discuss it further in Part II of this dissent.
Second, even if Rule 408 does apply, I believe that the majority’s use of the Rule on behalf of one not a party to the settlement ignores its purpose. Rule 408 is directed against the practice of using a party’s settlement or offer to settle as an implicit admission of liability. See generally 4 J. Wigmore, Wigmore on Evidence § 1061 (J. Chadbourn rev. ed. 1972) (discussing history and policy of common law rule). Although commentators have advanced several rationales for the common law predecessor to Rule 408, see id,., the Rule itself is rooted in the policy of promoting settlement by privileging settlements and settlement negotiations, see Branch v. Fidelity & Casualty Co., 783 F.2d 1289, 1294 (5th Cir.1986) (noting Rule’s policy of promoting settlement); Fed.R.Evid. 408 advisory committee note (stating that this is “[a] more consistently impressive ground” for the Rule); S.Rep. No. 1277, 93d Cong., 2d Sess. (1974) (“The purpose of this rule is to encourage settlements which would be discouraged if such evidence were admissible.”), reprinted in 1974 U.S. Code Cong. & Ad. News 7051, 7056; 23 C. Wright & K. Graham, Federal Practice and Procedure § 5302, at 173 (1980) (noting that Rule is based on the privilege rationale).1 In light of its purpose of promoting settlement, Rule 408 requires exclusion only when evidence of a settlement is offered against a party to the settlement. See Fed.R.Evid. *1076408 advisory committee note (“While the rule is ordinarily phrased in terms of offers of compromise, it is apparent that a similar attitude must be taken with respect to completed compromises when offered against a party thereto.’’) (emphasis added); E. Cleary, McCormick on Evidence § 274, at 811 (3d ed. 1984) (under privilege rationale, “the rule would be available as an objection to one who made the offer in question”); C. Wright & K. Graham, supra, § 5302, at 174 (noting that “if the party who made the offer is willing to have it introduced, the privilege rationale does not provide any basis for objections by others”). Slip-streamer was not a party to the settlement at issue in this case. Properly understood, therefore, Rule 408 affords Slipstreamer no ground for objecting to introduction of the fact or amount of settlement. The majority’s holding to the contrary substitutes literalism for careful consideration of the Rule’s purpose.
Third, I disagree with the majority’s conclusion that the trial judge disclosed the amount of settlement “to prove liability for or invalidity of the claim or its amount,” and not “for another purpose.” Fed.R. Evid. 408. The court’s comments to the jury, quoted at length in the majority opinion, make plain that the court disclosed both the fact and the amount of settlement to avoid jury confusion — to prevent the jury from “speculating” on why the settling defendants were absent and on whether the plaintiffs had received “substantial monies.” The court’s disclosure of the amount of settlement might not have been necessary to avoid jury confusion, but that was surely its purpose.2
For these reasons, I believe that the majority errs in applying Rule 408 to the district court’s comments.
II.
Although the majority purports to base its decision on Rule 408, its approach — balancing the value of the settlement information against its prejudice to Slipstreamer— seems to draw its inspiration from Rule 403.3 I too would employ a balancing approach in evaluating the district court’s comments, although, as I have noted, I would not apply the rules of evidence to a trial judge’s unsolicited comments. But for several reasons — apart from its misplaced reliance on Rule 408 — I believe that *1077the majority has applied the balancing approach incorrectly in this case.4
To begin with, it seems to me that the majority overstates the prejudice caused Slipstreamer by the court’s disclosure of the amount of the settlement. The majority points to two sorts of prejudice: First, “the fact that the settlement was for a nominal amount suggests that the plaintiffs thought that the settling defendants were not liable for the plaintiff’s injuries and therefore points the finger at Slip-streamer as the one responsible.” Second, “revelation of the amount of the settlement informed the jury that if the plaintiff was to receive any compensation for his injuries, he would have to get it from Slip-streamer.” But both sorts of “prejudice” are inherent in the adversary system. Most of what a plaintiff does, from filing suit through closing argument, is designed to “point the finger” at the defendant as “the one responsible.” The jury surely expects as much. A plaintiff who has sued several defendants may indicate to the jury his belief that one or another defendant is chiefly responsible for his injuries.5 The district court’s disclosure of the amount of the settlement merely told the jury indirectly what the plaintiff could have told them directly. Similarly, the jury frequently knows that if an injured plaintiff is to receive compensation, he must get it from a particular defendant. This is most obviously the case when the plaintiff sues a single defendant, but it is often true in multi-defendant cases as well. For example, when a plaintiff who has sued several defendants dismisses all but one of them, without comment from the court, the jury most likely assumes that the plaintiff has recovered little or nothing from the absent defendants. Yet no one would argue that the dismissal unfairly prejudices the remaining defendant.
The “prejudice” that Slipstreamer suffered in this case is the prejudice inherent in its status as defendant. The jury, a repository of common sense, knows that the plaintiff seeks to point the finger at the defendant as “the one responsible,” and it frequently knows that the plaintiff must recover from the defendant if he is to recover at all. If this is prejudice, it is not the sort of impermissible prejudice that warrants reversal of a judgment on a jury verdict.
I believe that the majority compounds its error in weighing the prejudice to Slip-streamer by discounting the value of a limiting instruction. The majority errs in two respects. First, it implies that the district court had a duty to offer an instruction sua sponte.6 Fed.R.Evid. 105 provides that when evidence is admissible for one purpose but not for another, “the court, upon request, shall restrict the evidence to its proper scope and instruct the jury accordingly.” (Emphasis added.) In the absence of a request, the court is not required to provide a limiting instruction. See e.g., Staniewicz v. Beecham, Inc., 687 F.2d 526, 531 (1st Cir.1982); United States v. Regner, 677 F.2d 754, 757 (9th Cir.), cert. denied, 459 U.S. 911, 103 S.Ct. 220, 74 L.Ed.2d 175 (1982). Slipstreamer did not request a limiting instruction.
Second, the majority indicates that a limiting instruction would not have ameliorated the prejudice to Slipstreamer even if it had been offered. I am less inclined than the majority to conclude that jurors will disregard instructions from the trial judge. If, upon request from Slipstreamer, the judge had instructed the jury: “I have disclosed the fact and amount of settlement solely to explain why the settling defend*1078ants are absent and to prevent you from speculating on the size of the settlement. You may not consider this information in determining whether Slipstreamer is liable for the plaintiffs’ injuries, or, if so, the amount of the plaintiffs’ damages,” I am confident that the jury would have done as the judge told them. I am not so naive as to believe that jurors can simply forget what they have heard, but I do believe that they generally make a conscientious effort to follow instructions. The doctrine of limited admissibility, codified in Rule 105, evinces a similar belief on the part of those who drafted the Federal Rules of Evidence.
Finally, I believe that the majority errs in giving no deference to the district court’s decision that the value of the settlement information in avoiding jury confusion outweighed any prejudice to Slipstreamer. The majority’s mistake may stem from its reliance on Rule 408, which requires exclusion of settlement information if offered to prove liability or amount of damages. But if the majority is actually applying a balancing approach analogous to that provided in Rule 403, as I believe it is, then it should give considerable deference to the district court’s manner of striking the balance, reversing only for abuse of discretion. Cf. Ballou v. Henri Studios, Inc., 656 F.2d 1147, 1153 (5th Cir.1981) (appellate court will reverse trial court’s Rule 403 decision only for “clear abuse of discretion”). I am confident that the district judge in this case did not abuse his discretion in disclosing the fact and amount of the settlement.7
III.
It is true that the verdict in this case is substantial, and a reversal lessens the burden on tort defendants and their insurers. Whatever my concern might be as to large verdicts in tort cases, however, I do not believe that we should stretch Rule 408 beyond its intended limits, as I believe has been done in this case. I fear that this decision, and others like it, will distort the jurisprudence of this court long after the current concern with large jury verdicts has subsided. With deference, I respectfully dissent.

. A second rationale for excluding evidence of settlement or offer of settlement is lack of relevancy; the “offer may be motivated by a desire for peace rather than from any concession of weakness of position.” Fed.R.Evid. 408 advisory committee note; see E. Cleary, McCormick on Evidence § 274, at 811 (3d ed. 1984). The Advisory Committee on the federal rules disfavored this rationale, however, see Fed.R.Evid. 408 advisory committee note (stating that the privilege rationale is a "more consistently impressive ground" for the Rule), and the Senate Judiciary Committee apparently viewed the Rule as resting solely on the privilege rationale, see S. Rep. No. 1277, 93d Cong., 2d Sess. (1974) (noting that the purpose of the Rule is to "encourage settlements which would be discouraged” if evidence of settlement were admissible), reprinted in 1974 U.S. Code Cong. & Ad. News 7051, 7056; see also 23 C. Wright & K. Graham, Federal Practice and Procedure § 5302, at 173 (1980) (noting that Rule 408 rests on privilege rationale).

. The majority relies heavily on Belton v. Fibre-board Corp., 724 F.2d 500 (5th Cir.1984), and McHann v. Firestone Tire & Rubber Co., 713 F.2d 161 (5th Cir.1983). I acknowledge that Belton employs an analysis similar to the majority’s; the court in that case appears without discussion to apply Rule 408 to unsolicited comments by the district court and on behalf of defendants who were not parties to the settlement. But Belton is easily distinguishable on its facts. There, after the district court had properly disclosed the fact of settlement and the jury had returned its verdict, the court informed the jury that the settlement would be deducted from the verdict and sent the jury out to reconsider. When the jury returned with a higher verdict, the court again rejected it. The court disclosed to the jury the amount of settlement and sent it out again. The court accepted the jury’s third and highest verdict. See Belton, 724 F.2d at 502-04. Thus, in Belton the district court virtually insisted that the jury consider the amount of settlement in assessing damages. In this case, by contrast, the district court briefly mentioned the amount of settlement as part of its effort to avoid jury confusion.
McHann is also distinguishable. There, the district court admitted against the plaintiff evidence of the plaintiffs settlement with a third party and excluded evidence offered against the defendant of the defendant’s settlement with a third party. The appellate court held that both settlements should be excluded under Rule 408. See 713 F.2d at 165-67. In McHann, evidence of each settlement was offered against a party to the settlement, and the privilege rationale required exclusion. Slipstreamer was not a party to the settlement in this case.

. Fed.R.Evid. 403 provides: "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury____’’ The Rule does not literally apply to comments from the bench; the trial judge’s remarks are not "evidence” and have no "probative value.” They may be valuable for avoiding jury confusion or for other administrative reasons, however, and it is that value that I believe should be balanced against the danger of unfair prejudice in evaluating the propriety of the court’s remarks.

. I note that Slipstreamer did not invoke Rule 403 or any analogous balancing test either before the district court or before this court.

. For example, the plaintiff in a multi-defendant case could properly make the following jury argument: "The evidence shows that defendant X is principally responsible for the plaintiffs injuries. The evidence shows that defendants Y and Z had little, if anything, to do with causing the plaintiffs injuries.” This argument would “point the finger” at defendant X as “the one responsible."

. The majority notes that “[n]o instruction was given to mitigate” the prejudice to Slipstreamer and adds that "[t]he court did not offer to give" any kind of limiting instruction.

. I note also my disagreement with the majority’s conclusion in Part III(A) of its opinion that the district court erred in holding that Jerry L. Kennon, Jr. had no common law duty to wear a helmet with eye protection. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex.1984), states:
“We reaffirm the rule in § 402A comment n of the Restatement (Second) of Torts that negligent failure to discover or guard against a product defect is not a defense____ This rule serves to protect consumer reliance on product safety." Comment n of the Restatement states:
Contributory negligence of the plaintiff is not a defense when such negligence consists merely in a failure to discover the defect in the product, or to guard against the possibility of its existence. On the other hand the form of contributory negligence which consists in voluntarily and unreasonably proceeding to encounter a known danger, and commonly passes under the name of assumption of risk, is a defense under [section 402A] as in other cases of strict liability. (Emphasis added.)
I believe that any negligence on the part of Jerry L. Kennon, Jr. consisted solely in his failure to guard against the possibility that the windshield was defective.