Bernhard F. and Cynthia G. Manko - Page 31

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               Here, the District Court's judgment was vacated.  Accordingly,         
          following Hudson v. Commissioner, supra at 593, collateral estoppel         
          does not apply to the District Court's conclusions.  Moreover, in           
          vacating the District Court's judgment, the Court of Appeals cast           
          doubt in particular on the finding that no settlement was reached.          
          See Manko v. United States, 87 F.3d at 53.                                  
               The Court of Appeals concluded that rule 408 of the Federal            
          Rules of Evidence does not require exclusion of evidence relating           
          to a civil settlement in a criminal trial, and that the District            
          Court abused its discretion in holding that evidence of the                 
          settlement was inadmissible as a matter of law.  Id. at 55. The             
          Court of Appeals did not rule on whether a settlement between               
          petitioner and respondent existed. To a certain extent, the                 
          District Court's finding on this matter was insulated from review,          
          owing to the court's reliance on rule 408 of the Federal Rules of           
          Evidence and the fact that even if such a finding were erroneous,           
          it might not entitle petitioner to a new trial in the criminal              
          case.  Thus, because the Court of Appeals did not rule on the               
          District Court's finding that no settlement took place, that                
          finding by the District Court cannot be used as the basis for               
          collateral estoppel herein.  See Hudson v. Commissioner, supra at           
          593-594.  Consequently, for the aforementioned reasons, we reject           
          respondent's collateral estoppel argument.                                  







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