United States District Court, E.D. Pennsylvania
BRAND ENERGY & INFRASTRUCTURE SERVICES, INC., et al.
IREX CORPORATION, et al.
MEMORANDUM AND ORDER
ELIZABETH T. HEY, U.S.M.J.
court addresses another discovery dispute between Plaintiffs
(“Brand”) and Defendants (“Irex”).
Brand moves to quash a subpoena issued by Irex to former
individual defendant Robert Russo. The subpoena seeks, among
other things, the disclosure and production of the settlement
agreement entered into by Brand and Mr. Russo in November
2016 in this matter. Brand argues that Irex has failed to
make a “particularized showing that the evidence
related to settlement is relevant and calculated to the
discovery of admissible evidence.” Doc. 235 at 4
(citing Dent v. Westinghouse, Civ. No. 08-83111,
2010 WL 56054, at *1 (E.D. Pa. Jan. 4, 2010)). Irex responded
to the motion to quash, and Mr. Russo's counsel submitted
a letter in support of Brand's motion. Docs. 240 &
Rule of Evidence 408 prohibits the use of settlement
negotiations and agreements to prove or disprove the validity
or amount of a disputed claim, or to impeach by a prior
inconsistent statement. F.R.E. 408(a). However, the Rule does
permit the use of such evidence for other purposes including
proving a witness's bias or prejudice. Id.
408(b). The Rule “recognizes the strong public policy
of promoting settlement.” Dent, 2010 WL 56054,
at *1 (collecting cases). Rule 408 applies to both the
finalized agreement and the underlying negotiations.
“Because it is ‘generally believed that
settlement negotiations will be inhibited if the parties are
aware their statements may later be used as admissions of
liability, ' Rule 408 serves to protect the freedom of
discussion during negotiations and encourage
settlement.” BTG Int'l Inc. v. Bioactive
Lab., Civ. No. 15-4885, 2016 WL 3519712, at *8 (E.D. Pa.
June 28, 2016) (Pappert, J.) (quoting Ciolli v.
Iravani, 625 F.Supp.2d 276, 285 (E.D. Pa. 2009)).
subpoena, Irex sought
1. All communications between [Mr. Russo] and Brand
concerning Irex, the Individual Defendants, or any of the
allegations in the Amended Complaint.
2. All communications between [Mr. Russo] and Brand
concerning the settlement, resolution or dismissal of claims
against [Mr. Russo] that were set forth in the Amended
3. All non-privileged documents concerning or reflecting any
agreements to settle, resolve, or dismiss the claims against
[Mr. Russo] that were set forth in the Amended Complaint.
4. All non-privileged documents or things concerning or
reflecting any notes or recordings of communications between
[Mr. Russo] and any third-party concerning Irex, the
Individual Defendants, or the allegations in the Amended
Doc. 235 at 2. According to the letter submitted by Mr.
Russo's counsel, discussions with Irex narrowed the
categories of responsive documents to three categories.
1. The Settlement Agreement between Mr. Russo and [Brand].
2. Communications between counsel for Mr. Russo and counsel
for Brand concerning negotiation of the Settlement Agreement
including drafts of the Settlement Agreement.
3. Communications between Mr. Russo and any third parties
concerning Irex, the individual defendants in the . . .
action or the allegations in the Amended Complaint . . . .
Doc. 243 at 2. Mr. Russo has agreed to produce documents
responsive to the third of these categories. Therefore, the
only documents at issue are the settlement agreement and
communications between counsel concerning negotiation of the
argues that the settlement agreement is admissible for
purposes of determining Mr. Russo's motivations,
potential bias, and reasons for cooperating with Brand.
Specifically, Irex contends it “is entitled to know
before trial the exact terms of Mr. Russo's relationship
with Brand, including, for example, whether the parties
exchanged any money, what information Mr. Russo provided to
Brand, any ...