When Jurors Learn About Settlement Offers
New York Law Journal
Recent federal appellate decisions confirm that a litigant’s right to have a jury capable and willing to decide the case solely on the evidence before it is a right of constitutional proportions. Thus, when jurors receive extrinsic prejudicial information the trial result may be gravely tainted. A new trial may have to be ordered. This is reflected in a Fifth Circuit decision weeks ago, United States v. Mix, a criminal case in which extraneous prejudicial information given to jurors was held to violate the defendant’s Sixth Amendment rights to an impartial jury.1 Finding constitutional implications within a criminal case context may not be so surprising.
Is there also a constitutional dimension, however, when the jury considers extraneous prejudicial information in a civil case? A federal appellate decision issued on April 24, Bouret-Echevarria v. Caribbean Aviation Maintenance Corp.,2 suggests that the answer is “yes.” Notably, the U.S. Court of Appeals for the First Circuit held that a jury’s improper knowledge of a confidential settlement offer warranted an evidentiary hearing, even some 18 months after the trial, to determine whether the verdict of no liability for defendants in a helicopter crash case was tainted. At the heart of the decision was the appellate court’s recognition that there may have been a violation of due process with a jury prejudicially influenced by forbidden information.
A ruling that a jury’s extrinsic prejudicial knowledge about a settlement offer can rise to a constitutional due process dimension is remarkable. This article will discuss these new rulings. But first we provide some general background on the inadmissibility into evidence of settlement offers.
Everyone pretty much agrees that, ordinarily, jurors should not be told about settlement offers the litigants may have discussed. Indeed, institutional custom and common understanding in this regard by courts and counsel is likely shaped by set rules governing evidence and trial practice. Thus, Federal Evidence Rule 408 (titled “Compromise Offers and Negotiations”) says evidence of a settlement offer is not admissible to prove liability for or invalidity of the claim or its amount. Thus, conduct or statements made in compromise negotiations, with certain exceptions, are not admissible.
Similarly, state rules generally proscribe such evidence. Thus, New York’s CPLR 4547 (titled “Compromise and Offer to Compromise”), for example, prohibits evidence regarding settlements, attempts to compromise, statements made during negotiations and the like in order to prove either liability or invalidity of a claim or the amount of damages. These rules make sense for logical, practical and policy reasons. After all, as New York Supreme Court and Appellate Division Justice Helen E. Freedman say in her masterful treatise, “New York Objections, “3 “Parties and counsel undertake settlement negotiations for many reasons other than an admission of liability. Thus, such negotiations have no evidentiary value.” Further, says Freedman, “[a]llowing references to settlements or settlement negotiations during any portion of a trial would have a chilling effect on such negotiations.”4
The “chill” factor is no small consideration. Imagine a world in which all settlement overtures, rejections, negotiations, or acceptances from one defendant but not others were admissible willy nilly. Litigants’ freedom to explore, pursue or reject settlements would be hampered. Nor would such a rule favoring admissibility prejudice only one side. In some cases, a defendant’s settlement offer might be viewed by jurors as a kind of admission of fault. Or, perhaps, the amount offered could be deemed too low and insincere. Alternatively, in some cases, plaintiffs might be the ones prejudiced, appearing to be too greedy when rejecting an offer juror may deem to have been adequate. In addition, jurors might view a settlement concluded with one defendant to have been sufficient, thus penalizing the claimant for pursuing suit against still other defendants.
Despite agreement on the rules and common customs, violations nevertheless do occur. Jurors sometimes do get information about settlement overtures. Occasionally, a reference slips in via a lawyer’s opening statement or during a summation. Sometimes, the forbidden matter is deftly attempted during the questioning of a witness. In each scenario, the opposing counsel must be vigilant. He or she should object immediately and ask the court for a curative instruction. Perhaps, a motion for a mistrial also needs to be advanced. The various tactical considerations, proposed arguments counsel should make and supporting case law are well presented in Justice Freedman’s treatise.5
Occasionally, however, jurors get settlement offer information, not from counsel’s tactical efforts, but from extrinsic sources. Then, the jurors’ knowledge arguably falls under a larger umbrella topic, namely, “juror misconduct.” In addition to Justice Freedman’s book, an excellent, concise “how-to” guide on dealing with juror misconduct is presented in the text called “New York Trial Notebook” by Edward L. Birnbaum, Carl T. Grasso and Justice Ariel E. Belen.6 Those writers say that, in general, it is “very difficult” to attack a jury verdict for juror misconduct. If the improper information is demonstrated to have most probably affected the outcome, there may be grounds for a new trial. Depending on the circumstances, a hearing to examine the jurors may be justified.7
There are significant differences between scenarios where jurors learn about the forbidden information from the attorneys as opposed to outside sources. Courts are justifiably loath to upset a jury trial where trial counsel is the source of jurors’ knowledge about settlement attempts. After all, the litigators are obligated to know the rules prohibiting such references. When the line is crossed, intentionally or not, the adversary has an opportunity to note the misconduct and promptly move for a remedy.
The “how-to” books advise moving quickly for a curative instruction by the court to the jury or for a mistrial. If the trial lawyer suspects his adversary might be an offender, he can even move in limine before trial to alert the court to the danger and ask for a specific admonition against the gambit. Harsh consequences to the offender can flow from violating such an in limine ruling.
The point is that counsel-caused prejudicial information can be dealt with by an alert opponent and via some hasty remedial action. The court is in a position to help minimize the prejudice right away. The adversary system thus assumes lawyer vigilance and action. In the digital era, a communications universe populated by emails and loads of email strings, the challenge for lawyers to be alert is increased. Buried within an email string, there may be some reference to settlement offers, discussions or negotiations. Without diligent screening of communications offered into evidence, it is possible that forbidden settlement information sneaks in. Even so, the lawyer at least has an opportunity to prevent or cure the taint.
The situation seems qualitatively different when the settlement information comes to jurors from an extrinsic source. In such cases, the lawyers likely do not know that the jury’s knowledge has been infected. Indeed, an impropriety may never be known since some jurisdictions or local court rules forbid post-trial contacts with jurors without court permission. Such courts are unlikely to allow juror interviews without a demonstrable showing of need. A lawyer’s suspicions, without more, do not suffice. Even in jurisdictions or courts where post-trial juror interviews are permitted, the fact that jurors may have received extrinsic information about settlement offers may be uncovered by the lawyer only a long time after trial.
The recent federal appellate decisions mentioned at the outset illustrate the practical difficulties to uncover juror misconduct, the efforts lawyers must make to obtain relief and the effect of the time lag between the verdict and discovery of the taint. In the criminal case, United States v. Mix,8 the U.S. Court of Appeals for the Fifth Circuit confirmed the principle that the introduction of extraneous prejudicial information into the jury room can violate a defendant’s Sixth Amendment right to an impartial jury and his Sixth Amendment right to confrontation. Even one juror’s prejudice is sufficient to warrant a new trial.9 The case involved charges against Kurt Mix, a BP engineer alleged to have deleted text message strings with his supervisor following the Deepwater Horizon oil spill accident. The messages concerned flow rates to estimate how much oil was leaving the accident site each day.
The prosecution accused Mix of obstruction of justice in deliberately destroying the messages. Mix contended that the deletion was not nefarious. He was trying to delete a candid photograph his supervisor took of him but unthinkingly deleted the entire text string instead. The jury, after initial deadlock and then a special court instruction, found Mix guilty. When Mix’s attorney later contacted jurors without court permission, he learned from them that the jury foreperson announced that she had overheard extrinsic information in the courthouse elevator. This information, she told the jurors, gave her comfort in voting guilty. Specifically, an unknown man on the elevator said that Mix “was not the only person who was being prosecuted” and that “there were going to be other trials” of BP employees.
Mix’s counsel successfully filed a motion for a new trial. The court held a hearing and ascertained that the foreperson had clearly been troubled by the extrinsic information, that other jurors were likely influenced and that the jurors’ failure to report the extrinsic evidence undermined the court’s confidence in their ability to follow other instructions such as the one to disregard extrinsic evidence. The Fifth Circuit affirmed the grant of a new trial. The juror’s reference to non-record evidence was, by definition, an injection of extrinsic information even if it were fabricated.10 The “generic” jury instructions about extrinsic evidence “did not cure the prejudice.”11 The statement by the person in the elevator undermined Mix’s theory that he innocently deleted the text message so the extrinsic evidence was not harmless.12
In the Bouret-Echevarria decision by the First Circuit,13 a helicopter crash killed a passenger. His widow sued the helicopter’s manufacturer and repair company in products liability, but the jury absolved the defendants. Prior to jury deliberations, the widow’s attorney received a confidential settlement offer of $3.5 million from two defendants. The offer, however, was rejected, and plaintiff lost at trial.
Sixteen months later, the widow’s new attorney filed a motion pursuant to Federal Rule of Civil Procedure 60(b)(6) seeking an evidentiary hearing to assess a claim that extraneous prejudicial information—namely plaintiff’s rejection of the significant settlement offer—was improperly injected into the jury deliberations. The affidavits in support of the motion reported that plaintiff’s aviation expert, Luis Irizarry, learned this when he provided expert services in an unrelated aviation case. Irizarry said he met an individual who claimed to be the employer of a juror in the plaintiff’s case.
The employer told Irizarry that his employee (the juror) informed him that the jury declined to award plaintiff any money damages because the jurors knew she had been offered and rejected a $3.5 million settlement. Irizarry told this to plaintiff’s trial counsel who, in turn, informed plaintiff. The plaintiff widow then retained a new attorney and, after some delay, the motion for a Rule 60(b)(6) hearing was filed. The trial judge denied the motion. He held that the 18—month period between entry of final judgment and the motion made the motion “untimely.” Even though Rule 60(b)(6) has no specific time limit, the delay here “pushes against reasonableness.” The judge also held that the evidence of tainted jury deliberations was only hearsay and insufficient.14
The First Circuit panel majority disagreed. It reversed and ordered an evidentiary hearing. It called the trial court’s conclusion that “the value of due process must necessarily be sacrificed for the value of finality” a “flawed ruling” which was an abuse of discretion.15 Quite notable is the appellate court’s recognition that “[i]f a jury is aware of and bases its decision on knowledge of a confidential settlement offer, there has been a violation of due process.”16
Due process “means a jury capable and willing to decide the case solely on the evidence before it, and a trial judge ever watchful to prevent prejudicial occurrences and to determine the effect of such occurrences when they happen.” Indeed, the law’s mechanisms that permit exploration of the influence of extraneous information upon jury deliberations are, in part, a “recognition of the due process implications of a tainted jury.”17 In its footnote 6, the court explained its citation of precedent in a criminal case saying, “We see no reason why this principle for assessing the significance of juror misconduct should not apply here….”18
The foregoing recent decisions show that extraneous prejudicial information learned by jurors can implicate constitutional principles. In criminal cases, the Sixth Amendment may demand a court inquiry and court redress if warranted. In civil cases, jurors’ knowledge of a settlement offer can involve a due process violation that also may justify an evidentiary hearing and extraordinary relief. Given the difficulties, attorneys have in uncovering jurors’ extraneous prejudicial information about settlement offers and the problem of passage of time, having a powerful constitutional arrow in the attorney’s quiver may be a comforting thought.
- United States v. Mix, 2015 U.S. App. LEXIS 11267 (5th Cir. June 30, 2015).
- 2015 U.S. App. LEXIS 6829 (1st Cir. April 24, 2015).
- §3:150, at p. 3—20 (James Publ. 2013).
- Justice Helen E. Freedman, “New York Objections” §3:150, at p. 3—20 (citing Sabin-Goldberg v. Horn, 179 A.D.2d 462, 578 N.Y.S.2d 187 (1st Dept. 1992)); see also §19:150, at pp. 19—36 (circumstances surrounding settlement decisions are totally unrelated to factors a jury must consider in assessing value or determining liability; e.g., a defendant may pay more to settle in order to avoid punitive damages or to settle a group of cases; a plaintiff may take less from a particular defendant because of underlying insurance issues or fear that the defendant will become insolvent).
- Id., at §§3:150 and 19:150.
- See Chapters 19, 36 and 38 discussing various aspects of juror misconduct and Chapter 29, at §29:54 dealing with settlements and offers to compromise. (James Publishing 2014).
- See generally, Birnbaum, Grasso and Belen, “New York Trial Notebook,” §38:56 (citing and summarizing many New York decisions); §19:80 (discussing remedies for juror misconduct); §19:81 (citing cases and describing actions constituting misconduct by jurors); §36:40 (case examples where no mistrial was required); and §29:54 (cases regarding evidence on settlements).
- 2015 U.S. App. LEXIS 11267 (5th Cir. June 30, 2015).
- Mix, Id., LEXIS at *8 (citing and quoting from Parker v. Gladden, 385 U.S. 363, 364—66 (1966) (per curiam)).
- Id., LEXIS at *13.
- Id., LEXIS at *18.
- Id., LEXIS at *24.
- n. 2 supra, 2015 U.S. App. LEXIS 6829 (1st Cir. April 24, 2015).
- Id., LEXIS at *5—*6.
- Id., LEXIS at *30.
- Id., LEXIS at *15 (quoting from Smith v. Phillips, 455 U.S. 209, 217 (1982)).
- Id., LEXIS at *17—*18.
- Id., LEXIS at *18 n. 6.