Scott Dairy Farm, Inc. et al v. Dean Foods Company et al

Filing 1230

ORDER granting 1195 Motion in Limine to preclude plaintiffs from introducing evidence of the settlement between plaintiffs and Dean Foods.. Signed by District Judge J Ronnie Greer on 8/1/2011. (RET)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TENNESSEE
GREENEVILLE DIVISION

IN RE: SOUTHEASTERN MILK
ANTITRUST LITIGATION

THIS DOCUMENT RELATES TO:
Sweetwater Valley Farm, Inc., et al. v.
Dean Foods Co., et al., No. 2:07-CV 208.

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Master File No. 2:08-MD-1000
Judge J. Ronnie Greer

ORDER
This matter is before the Court on “Defendants’ Motion In Limine To Preclude Plaintiffs
From Introducing Evidence Of The Settlement Between Plaintiffs And Dean Foods, Referencing
That Agreement Or Mentioning That Dean Foods Had Previously Been A Party To The Lawsuit,”
[Doc. 1666]. Plaintiffs have responded, [Doc. 1687]. For the reasons which follow, the motion will
be GRANTED.
One of the defendants, Dean Foods Company, and plaintiffs have entered into a settlement
agreement and the Court has granted preliminary approval of the agreement and scheduled a fairness
hearing.1 The remaining defendants seek an order “prohibiting Plaintiffs from introducing evidence
related to the settlement agreement, making reference to the settlement agreement or mentioning that
Dean previously had been a party to the lawsuit, but is no longer, during the trial.” The plaintiffs
oppose the motion, arguing that they should be allowed to present to the jury only the fact of

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Defendants SMA and James Baird have, since the filing of this motion, also entered into a
settlement agreement with the plaintiffs. Although not specifically covered by this motion, this order applies
equally to the settlement agreement between SMA, Baird and Plaintiffs.

settlement, but not evidence of why a defendant settled or for what amount. Plaintiffs argue that the
introduction of such evidence, along with a limited instruction, “is often necessary to avoid jury
confusion about why a particular defendant is not at trial.”
Federal Rule of Evidence 408 prohibits the introduction of evidence of a compromise
settlement or offers to compromise “when offered to prove liability for, invalidity of, or amount of
a claim that was disputed as to validity or amount . . .” Fed. R. Evid. 408(a). The rule does not
require exclusion of such evidence if offered for a proper purpose such as “proving a witness’s bias
or prejudice; negating a contention of undue delay; and proving an effort to obstruct a criminal
investigation or prosecution.” Fed. R. Evid. 408(b). The rule also bars “[e]vidence of a completed
compromise of a claim arising out of the same transaction between a third person and a party to the
suit being litigated . . .” Jack B. Weinstein & Margaret A. Berger, Weinstein’s Federal Evidence,
Section 408.04 (2d Ed. 2011). Although plaintiffs do not dispute these basic rules, they do argue
that some evidence of the settlement with Dean is necessary and admissible for a proper purpose to
prevent jury confusion or speculation about why Dean, “one of the central actors in the conspiracy,”
is not before the Court.
Defendants have the better of this argument. This Court concludes that, rather than avoiding
confusion or speculation, evidence of the settlement would simply invite the risk “that jurors would
view the settlement as an admission of guilt.” McHann v. Firestone Tire & Rubber Co., 713 F.2d
161, 167 (5th Cir. 1983). Indeed, the Court finds that even if the evidence were admissible for some
proper purpose, which it is not, admission of the evidence would raise Rule 403 problems and would
be unfairly prejudicial to the remaining defendants. See Powers v. Bayliner Marine Corp., 855
F.Supp. 1999, 205 (E.D. Mich. 1994).

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Plaintiffs cite a series of cases in support of their position where evidence of a settlement was
admitted after it had become evident during the trial that certain defendants had settled. This is not
a case where Dean or some other defendant has settled in the middle of a trial and their absence must
be explained to the jury nor should there be any reason why the jury should come to the conclusion
that Dean has settled, unless plaintiffs allow that to happen. In fact, plaintiffs’ real motivation for
seeking admission of the evidence is clear from their response where they state that “Plaintiffs
theory of the case requires them to prove that Dean participated in Defendants’ conspiracy. Without
any mention that Dean (or any other settling defendant) was once part of the case, or a preliminary
jury instruction about the fact of the settlement (but not the amount or details), at least some jurors
will be confused about why Dean is not before the Court.” It thus appears that plaintiffs hope to use
evidence of the settlement with Dean to prove that Dean participated in the conspiracy, a purpose
which is not a proper one and which is in fact contrary to the express provisions of the settlement
agreement between Dean and plaintiffs. Plaintiffs do not explain why it is any more necessary for
them to tell the jury why Dean is not before the Court than it is for them to explain why any of the
other alleged coconspirators named, but not sued, are not before the Court. The reasons, whether
because of settlement or simply because plaintiffs did not choose to sue those coconspirators, is
irrelevant.
This Court will handle this situation as it has handled many others which arise in the context
of both civil and criminal cases. It is not at all unusual for some, but not all, of the alleged
coconspirators to be on trial while others have settled or entered guilty pleas. The Court will simply
instruct the jury, both preliminarily and as part of the final instructions, that there is no requirement
in a conspiracy case that all alleged coconspirators be tried in the same proceeding in one trial. The

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jury will also be instructed that they are not to even consider the fact that the claims of plaintiffs
against other coconspirators are not being tried at the same time and should not even discuss it in
their deliberations. In the final analysis, this situation is no different from that which would exist
in a criminal conspiracy case where multiple defendants had been charged in the indictment but only
one is proceeding to trial. The absence of the other coconspirators would not be explained to the
jury by informing the jury that each had previously entered a guilty plea and even in cases where
that coconspirator testified and the fact of the guilty plea became known, the jury would then be
instructed that they could not infer guilt of the defendant on trial from the fact that other
coconspirators had pleaded guilty. Even if plaintiffs in truth seek to admit evidence of the settlement
for some purpose other than as an admission of guilt or liability on Dean’s part, the possibility that
the jury might draw such a conclusion from the Dean settlement is very real and raises a real risk
that the jury might impute liability to the remaining defendants based on the Dean settlement. This
is an improper purpose and plaintiffs will be prohibited from introducing evidence related to the
settlement agreement, making reference to the settlement agreement, or even mentioning that Dean
previously has been a party to the lawsuit, but is no longer. The motion in limine, [Doc. 1666], is
GRANTED.
So ordered.
ENTER:
s/J. RONNIE GREER
UNITED STATES DISTRICT JUDGE

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