Free Motion to Strike - District Court of Arizona - Arizona

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MARY JO O'NEILL AZ BAR # 005924 C. EMANUEL SMITH MS BAR # 7473 KATHERINE J. KRUSE AZ BAR # 019167 EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Phoenix District Office 3300 North Central Avenue, Suite 690 Phoenix, Arizona 85012 Telephone: (602) 640-5029 e-mail: [email protected] Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA ) ) ) ) Plaintiff, ) Kelley J. Miles, ) ) Plaintiff-Intervenor, ) ) vs. ) ) The Boeing Company, a Delaware ) corporation, and Boeing Aerospace ) Operations, Inc., a Delaware corporation, ) ) Defendants. ) Equal Employment Opportunity Commission, CV 03-1210 PHX PGR
PLAINTIFF EEOC'S MOTION TO STRIKE OR EXCLUDE EVIDENCE

OFFERED BY DEFENDANTS REGARDING SETTLEMENT DISCUSSIONS

In Defendants' Memorandum of Points and Authorities in Support of their Motion for Award of Attorneys' Fees, Defendants set forth details of a private mediation by the parties in February, 2005, and a settlement discussion late in 2005 regarding the attorneys' fees motion and appeal. Defendants also attached to the Memorandum as Exhibit 1 an affidavit regarding the late-2005 discussion and as Exhibit Two both a letter and a proposed consent decree offered during the mediation process in February, 2005. In setting forth the statements in the Memorandum and offering as Exhibit Two the letter and proposed Decree, Defendants breached the "Agreement to Mediate" entered into by the parties, attached hereto as Exhibit A, and discussed in detail below. In offering the Memorandum and Exhibits One and Two, regarding both the mediation and the settlement discussion in late 2005, Defendants also have violated Federal Rule of Evidence 408.

Case 2:03-cv-01210-PGR

Document 150

Filed 01/06/2006

Page 1 of 7

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Accordingly, Plaintiff, the EEOC, moves to strike the portions of Defendants' Memorandum of Points and Authorities containing statements about the mediation and the later settlement discussion, as well as Exhibits One and Two to Defendants' Memorandum. In the alternative, Plaintiffs request that the evidence of settlement discussions be excluded pursuant to Federal Rules of Evidence 402 and 403. I. In Offering Evidence Regarding the Mediation Discussions in February, 2005, Defendants Violated the Parties' Agreement That the Discussions Were Inadmissable for Any Purpose In February, 2005, the parties to this action participated in a private mediation in an effort to settle this litigation. After the parties met with the mediator, the mediation efforts continued with additional discussions between the mediator and the parties, and between the parties themselves. As a condition precedent to private mediation, the parties entered into an "Agreement to Mediate" attached hereto as Exhibit A. That agreement is signed by a corporate representative of the Defendants, Boeing attorney Peter Rosenbloom, as well as by Ms. Miles (the Plaintiff Intervenor), counsel for all parties, and the mediator. (See Ex. A). Paragraph 6 of the "Agreement to Mediate" is entitled "Confidentiality" and states, in relevant part, "The parties agree that all statements made during the course of the mediation are privileged settlement discussions, are made without prejudice to any party's legal position, and are inadmissible for any purpose in any legal or administrative proceeding." (Ex. A (emphasis added)). In direct violation of this express provision, Defendants set forth, in their Memorandum of Points and Authorities in Support of their Motion for Award of Attorneys' Fees, details of the private mediation, including the amounts of offers and counter-offers. Defendants did not attach an affidavit confirming this information, apparently considering the pleading itself to be sufficient testimony of the facts stated therein. Defendants also attach as Exhibit Two to the Memorandum a letter and a proposed consent decree offered during the additional discussions that occurred as part of the ongoing mediation process. All of the evidence offered in both the pleading and the exhibit constitutes inadmissible privileged settlement discussions pursuant to the language of the parties' Agreement. It was
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a breach of that Agreement to offer any of the evidence; that breach evinces bad faith on the part of Defendants. In offering this evidence, Defendants ignore the Agreement and offer no reason for violating it. Moreover, Defendants cannot provide a reason why the Agreement should be ignored and the evidence considered. Defendants cite an Eleventh Circuit Court of Appeals decision, and a Third Circuit Court of Appeals decision citing the Eleventh Circuit, allowing courts to consider whether Defendants made a settlement offer as one factor in determining whether attorneys' fees should be awarded. However, none of those decisions state that parties can offer confidential settlement discussions in violation of their own prior agreement to keep such discussions confidential. See Quintana v Jenne, 414 F.3d 1306, 1309 (11th Cir. 2005); EEOC v. L.B. Foster Co., 123 F.3d 746, 751 (3rd Cir. 1997) (quoting Sullivan v. School Board of Pinellas Cty., 773 F.2d 1182, 1189 (11th Cir. 1985)). In Quintana, the Eleventh Circuit even expressly concluded that it could not determine whether the fact that the Defendant had made a settlement offer favored either party, because the parties did not provide the amount of the offer. Quintana, 414 F.3d 1306, 1309. Defendants' bad faith in offering details of the mediation discussions held in February 2005 is further shown by the extent of the information Defendants provided. As explained by the decisions on which Defendants rely, the factor the Eleventh Circuit considers is "whether the defendant offered to settle," Quintana, 414 F.3d at 1309 (quoting Sullivan, 773 F.2d at 1189). The Eleventh Circuit considers whether Defendants made an offer, and, if available, the amount of the offer, to determine whether the amount of the offer supports a conclusion that the claim is not frivolous. Id. at 1310. In another case discussing the factor of whether the defendant offered to settle, the Eleventh Circuit reversed a district court's award of attorneys' fees and rejected the district court's reliance, in part, on the amount of judgment that the plaintiff sought. Sayers v. Stewart Sleep Ctr., Inc., 140 F.3d 1351 (11th Cir. 1998). The Court concluded, "We decline to consider the amount of damages sought in determining whether [the defendant] was entitled to attorney's fees." Id. Given that the information about Plaintiffs' monetary and non-monetary offer is both a breach of the parties' Agreement and irrelevant according to Quintana, one of the cases on
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which Defendant relies, it is clear that Defendants offered this information in bad faith. The only purpose for which Defendant offered this information was a bad faith effort to have the Court consider irrelevant information about the amount of plaintiffs' initial settlement demand in determining whether to assess attorneys' fees. Given that the evidence of the mediation discussions in February, 2005 was offered in violation of the parties' express Agreement, that such information was inadmissible for any purpose, and that it was offered in bad faith, the EEOC respectfully requests that the evidence of these discussions, offered both in the Memorandum and Exhibit Two attached thereto, be stricken from the record and not considered in evaluating Defendants' Motion for Award of Attorneys' Fees. II. In Offering Evidence Regarding the Mediation Discussions in February, 2005, and the Discussions Late in 2005, Defendants Violated Federal Rule of Evidence 408 In addition to violating the express terms of the Mediation Agreement, Defendants also violate Federal Rule of Evidence 408 by offering evidence of two settlement discussions in their Memorandum of Points and Authorities in Support of their Motion for Award of Attorneys' Fees, and Exhibits One and Two attached thereto. The two settlement discussions are (1) the mediation discussion in February 25, 2005, and (2) settlement discussions in late 2005 regarding the attorneys' fees and appeal. Rule 408 provides, in relevant part: Evidence of . . . furnishing or offering or promising to furnish . . . a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. . . . This rule . . . does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. Fed. R. Evid. 408 (emphasis added). The authors comments to Rule 408 confirm that the Rule excludes evidence of offers to compromise when offered to prove the validity or invalidity of the claim or the amount of damages. Authors' Comments to Fed. R. Evid. 408. Defendants stated purpose in offering evidence from the settlement discussions is to support their argument that the retaliation claim is frivolous. This is nothing more than an
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effort to prove the invalidity of the claim. None of the decisions cited by Defendants considered the issue of whether offering such evidence violates Rule 408. See Quintana, 414 F.3d 1306; L.B. Foster Co., 123 F.3d 746; Sullivan, 773 F.2d 1182. Moreover, the Third Circuit decision did not even apply the standard, but merely cited it. See L.B. Foster Co., 123 F.3d at 751. The policy reasons underlying Rule 408 are consistent with the conclusion that the evidence of the settlement discussions should be stricken. "[Rule 408] is premised primarily on the notion that without this protection parties would be deterred from entering into settlement discussions with their opponents." Authors' Comments to Fed. R. Evid. 408. Use of evidence of the settlement discussions to assess the merits of the Motion for Award of Attorneys' Fees in this action would have precisely the deterrent effect on future settlement discussions that Rule 408 seeks to avoid. Therefore, the EEOC respectfully requests that all of the evidence about both of the settlement discussions, offered both in Defendants' Memorandum and Exhibits One and Two attached thereto, be stricken from the record and not considered in evaluating Defendants' Motion for Award of Attorneys' Fees. III. In the Alternative, the Evidence of Settlement Discussions Should be Excluded Pursuant to Federal Rule of Evidence 403 Should the Court decline to exclude the evidence of settlement discussions pursuant to the parties' Mediation Agreement and Federal Rule of Evidence 408, the EEOC requests, in the alternative, that the evidence be excluded pursuant to Federal Rules of Evidence 402 and 403. Rule 402 provides: "All relevant evidence is admissible . . . ." It further provides: "Evidence which is not relevant is not admissible." Fed. R. Evid. 402. As explained above, the evidence of the February, 2005 settlement discussions offered by Defendants included the monetary offers of both Plaintiffs and Defendants, and nonmonetary relief sought by Plaintiffs. Only the amount offered by Defendants has any arguable relevance to the issue of whether the retaliation claim is frivolous, based on the standard set forth in the Eleventh Circuit decisions discussed above. Neither the monetary nor the non-monetary relief offered by Plaintiffs has any relevance.

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The settlement discussions of late 2005 likewise have no relevance to the issue of whether the retaliation claim is frivolous, because they do not pertain to any validation of that claim. Rather, they pertain to settlement of the attorneys' fees claim and the appeal. In addition, Federal Rule of Evidence 403 provides, in relevant part: 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 . . . . As stated above, most of the evidence of settlement discussions has no probative value to the issue of whether the retaliation claim is frivolous. Even any nominal probative value of Defendants' settlement offer is substantially outweighed by the danger of unfair prejudice or confusion of the issues that would arise if the Court considers one issue, the parties' settlement discussions, in assessing the entirely separate issue of whether Defendant has proven that they should be awarded attorneys' fees on the basis that one claim was frivolous, unreasonable and without foundation. IV. Conclusion For the reasons set forth above, the EEOC requests that all evidence of settlement negotiations contained in Defendants' Memorandum of Points and Authorities in Support of their Motion for Award of Attorneys' Fees, and in Exhibits One and Two thereto, be stricken pursuant to the parties' Mediation Agreement and Fed. R. Evid. 408. If the alternative, the EEOC requests that this evidence be excluded pursuant to Fed. R. Evid. 402 and 403. Due to electronic filing, any material stricken should be stricken from the electronic case file as well. Therefore, the EEOC respectfully requests that Defendants' current Memorandum of Points and Authorities, and Exhibits One and Two thereto, be stricken in entirety, and that Defendants be ordered to resubmit the Memorandum minus any information regarding the parties' confidential settlement discussions. RESPECTFULLY SUBMITTED this 6th day of January, 2006. MARY JO O'NEILL Regional Attorney C. EMANUEL SMITH Supervisory Trial Attorney
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 s/ Katherine J. Kruse Richard L. Green, Esq. Paul D. Friedman, Esq. O'Steen and Harrison 300 West Clarendon Ave., Suite 400 Phoenix, Arizona 85013 Attorneys for Plaintiff-Intervenor

s/Katherine J. Kruse KATHERINE J. KRUSE Trial Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Phoenix District Office 3300 North Central Ave., Suite 690 Phoenix, Arizona 85012-2504 (602) 640-5029 Attorneys for Plaintiff I certify that on this 6th day of January, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Tibor Nagy, Jr., Esq. Erica Rocush, Esq. Snell & Wilmer, L.L.P. One South Church Avenue, Suite 1500 Tucson, Arizona 85701-1630 Attorneys for Defendants

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