[UPDATE: In response to the hedge funds’ motion for sanctions, Compucredit has come out swinging and, you guessed it, asked the Court to sanction the hedge funds for seeking sanctions. Compucredit’s brief weighs in at 52 pages. It is highly fact-specific/case-specific and, on that basis, probably not of broad usefulness to Minnesota civil litigators. On the other hand, for any who have been following the saga of this litigation, it is a worthwhile read.]
The battle between Compucredit and many investors in Compucredit notes, which erupted in late 2010 before U.S. District Court Judge John R. Tunheim has generated more than its fair share of Minnesota Litigator coverage and the war shows no sign of abating.
Most recently, Compucredit filed a brief in response to defendants’ motion to dismiss.
In addition to being of interest to antitrust litigators, the exchange in the papers with regard to the admissibility of statements made in the context of settlement negotiations may be of interest more broadly to civil litigators. The potentially enormous evidentiary value of admissions made in the context of settlement and a policy of according such admissions a privileged status making them immune from use as evidence is an obvious tension that may defy simply applied per se rules.
Compucredit’s brief, however, suggests two possible angles to permit a litigant to plead admissions made in settlement negotiations in a complaint: (1) when the evidence sought to be offered is “fact, not offers to compromise,” and(2) the evideniary rule does not apply to “independently wrongful acts,” (a cited example: engaging in antitrust violations in the context of trying to settle a patent infringement case). Compucredit concludes:
FRE 408 protects offers to compromise because such statements are made from a concern to buy peace, rather than to speak the truth and the interest in encouraging settlement of private disputes. But these policy concerns are inapplicable where, as here, Defendants’ demand is part of an alleged conspiracy to achieve something to which they are not legally entitled: the premature repurchase of their Notes, let alone at above-market prices.