Quilez-Velar et al v. Ox Bodies, Inc. et al, No. 3:2012cv01780 - Document 363 (D.P.R. 2014)
Court Description: MEMORANDUM AND OPINION granting 345 Motion to Compel. Signed by US Magistrate Judge Silvia Carreno-Coll on 9/4/2014.(NBB)
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IN THE UNITED STATES COURT FOR THE DISTRICT OF PUERTO RICO BERARDO A. QUILEZ-VELAR, ET AL., Plaintiffs, v. CIV. NO.: 12-1780(SCC) OX BODIES, INC., ET AL., Defendants. MEMORANDUM AND ORDER Plaintiffs seek to discover the contents of the various settlement agreements reached between the parties to this case and the case with which it was consolidated, Civ. No. 12-1797. Previously, I denied a motion to compel this information because of the parties failure to meet and confer on the matter. See Docket No. 341. Now, Plaintiffs inform the Court that the parties were not able to agree to a resolution, and they renew their motion to compel. See Docket No. 345. For the reasons stated below, the motion is granted. QUILEZ-VELAR v. OX BODIES Page 2 No court of appeals has ruled on the question of when and to what extent a party may compel the disclosure of a confidential settlement agreement between other parties to the litigation.1 The First Circuit, however, has pointed out that there are two conflicting lines of cases on the question. See Mathewson Corp. v. Allied Marine Indus., Inc., 827 F.2d 850, 852 n.2 (1st Cir. 1987) (Selya, J.). The first of these lines stems from Bottaro v. Hatton Associates, where the Eastern District of New York held that a party seeking such information must make a particularized showing of a likelihood that admissible evidence will be generated by the agreements disclosure. 96 F.R.D. 158, 160 (E.D.N.Y. 1982). Bottaro s was based principally on what it reasoned were policy considerations, embodied in the Rules of Evidence, favoring settlements and . . . insulating the bargaining table from unnecessary intrusions. Id. The other line of cases grew out of Bennet v. La Pere, which rejected Bottaro s particularized showing test. 112 F.R.D. 136, 139 40 (D.R.I. 1986) (Selya, J.). Instead, Bennet focused on the 1. That said, the Sixth Circuit has recognized a limited settlement privilege protecting the contents of settlement negotiations. See Goodyear Tire & Rubber Corp. v. Chiles Power Supply, Inc., 332 F.3d 976, 981 (6th Cir. 2003). QUILEZ-VELAR v. OX BODIES Page 3 liberality of discovery under the Rules of Civil Procedure, reasoning that [i]f there is some legitimate relevance to the requested information and if no cognizable privilege attaches, it ought to be discoverable. Id. at 138. Bennet went on to itemize the many ways that disclosure of settlement agreements might lead to discoverable information. See id. at 138 40. More to the point, Bennet implicitly rejected taking an in camera look at the agreements to determine whether, in the court s opinion, they might lead to discoverable information. Instead, Bennet tips the scales strongly in favor of disclosure, noting that only after disclosure will the discovering party know whether anything in the agreements will be admissible. See id. at 139 ( There is, of course, no satisfactory way for the [discovering party] to determine whether it can slip within the integument of the Rule 408 exception unless it gains discovery access to the settlement documents. ). In the years since Bottaro and Bennet were decided, the balance of the precedent has supported Bennet s rule.2 Every case from this circuit considering the question has been 2. I hinted at this fact when, in my order denying the first motion to compel, I warned that I was disinclined to apply the heightened burden that [Bottaro] placed on discovering parties. Docket No. 341. QUILEZ-VELAR v. OX BODIES Page 4 decided in keeping with Bennet s reasoning. See, e.g., Cook v. CTC Commc n Corp., Civ. No. 06-58, 2006 WL 3313838, at *3 (D.N.H. Nov. 13, 2006) (following Bennet); Atchison Casting Corp. v. Marsh, Inc., 216 F.R.D. 225, 227 (D. Mass. 2003) (holding that the broad scope of the discovery rules required disclosure);3 EnergyNorth Nat. Gas, Inc. v. Cent. Indem. Co., Civ. No. 97-64, 2000 WL 33667085, at *1 (D.N.H. March 8, 2000) (following Bennet). Likewise, the district from which Bottaro emerged has lately rejected its reasoning. See, e.g., Rates Tech. Inc. v. Cablevision Sys. Corp., Civ. No. 05-3583, 2006 WL 3050879, at *3 n.3 (E.D.N.Y. Oct. 20, 2006) (holding that Bottaro was in conflict with the Federal Rules of Civil Procedure); see also ABF Capital Mgt. v. Askin Capital Mgt., Civ. No. 96-2978, 2000 WL 191698, at *1 (S.D.N.Y. Feb. 10, 2000) ( Prevailing authority within this Circuit holds that the discovery of settlement-related information is governed by [Rule 26(b)(1)], and that no heightened 3. Atchison Casting does not explicitly follow Bennet, but like Bennet it focuses on the broad scope of the discovery rules and refuses to permit the settling parties to determine whether the agreement is relevant. Atchison Casting Corp. v. Marsh, Inc., 216 F.R.D. 225, 227 (D. Mass. 2003). The case also notes the scant support in the case law for maintaining the secrecy of a settlement agreement that goes to the heart of an action. Id. For these reasons, I think that Atchison Casting is true to Bennet s spirit and reasoning. QUILEZ-VELAR v. OX BODIES Page 5 showing of relevance need be made in order to justify the disclosure of the settlement agreement. ). Based on what I see as a trend in the case law, I too will follow Bennet. Bennet makes a presumption in favor of the agreements disclosure; the party opposing discovery has the burden of establishing some good cause or sound reason for blocking disclosure. 112 F.R.D. at 140. Defendants the parties opposing discovery here fail entirely to meet this burden.4 They write that the prejudicial value of these agreements is immense because jurors will immediately wonder why Defendants would pay any money at all to settle a claim they deny liability for. Docket No. 347, at 4. This confuses discoverability with admissibility. The fact that I am ordering disclosure of the settlement agreements does not mean that Plaintiffs will be able to introduce them at trial; to the contrary, Federal Rule of Evidence 408 makes the agreements presumptively inadmissi- 4. Most of the agreements that Plaintiffs wish to discover have not been filed with the Court, if indeed they exist at all, and so I am not in any position to evaluate their relevance independently. Cf. Atchison Casting, 216 F.R.D. at 227. The one agreement that is on the record, however, is obviously relevant and discoverable, as it contains provisions that might lead to inferences of bias on the part of certain potential witnesses. See Docket No. 319-1, at 11. Thus, even if I followed Bottaro, I would order the disclosure of that agreement. QUILEZ-VELAR v. OX BODIES Page 6 ble. See Bennet, 112 F.R.D. at 139, 141 & n.3.5 Furthermore, without a prior order from this Court, Plaintiffs are prohibited from disclosing the contents of the settlement agreements to any non-parties to this litigation. With these caveats, the motion to compel is GRANTED; all settling parties shall promptly produce to Plaintiffs copies of any settlement agreements.6 IT IS SO ORDERED. In San Juan, Puerto Rico, this 4th day of September, 2014. S/ SILVIA CARREÃ O-COLL UNITED STATES MAGISTRATE JUDGE 5. Plaintiffs are put on notice that before discussing any of the settlements or their contents at trial, they must first move for permission to do so outside of the presence of the jury. Cf. Bennet v. La Pere, 112 F.R.D. 136, 141 n.3 (D.R.I. 1986). 6. To be clear, only finalized agreements and not records of negotiations must be produced.
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