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petitioner are within the ambit of rule 408 of the Federal Rules
of Evidence. Petitioner primarily relies on the second sentence
of rule 408 of the Federal Rules of Evidence, which states
"Evidence of conduct or statements made in compromise
negotiations is likewise not admissible." The exception
contained within rule 408 of the Federal Rules of Evidence for
"evidence otherwise discoverable" mitigates the general rule
where evidence is discoverable from a source independent of the
settlement negotiations. See Hulter v. Commissioner, supra, at
665-666. The purpose of this exception is to prevent parties
from insulating evidence that is obviously damaging to them by
incorporating the evidence in settlement discussions and/or
offers.
In general, rule 408 of the Federal Rules of Evidence states
a broad proscription excluding statements made during settlement
negotiations when offered to prove the validity or amount of a
claim. Specifically, this rule does not distinguish between
offers to settle and admissions of fact made during settlement
negotiations. See Fiberglass Insulators, Inc. v. Dupuy, 856 F.2d
652 (4th Cir. 1988). Accordingly, the issue here is not whether
the statement was one that was made as an offer to settle, but
whether it was made during settlement negotiations.
Thus, we must inquire here, as a factual matter, whether
petitioner's admissions were made during a settlement conference.
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