Stockman v. Oakcrest Dent ( 2007 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 07a0101p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellee, -
SAMUEL DAVID STOCKMAN, D.D.S.,
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No. 05-1518
v.
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OAKCREST DENTAL CENTER, P.C., LOUIS E. -
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Defendants-Appellants. -
LEONOR, D.D.S., Individually,
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Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 03-70660—Lawrence P. Zatkoff, District Judge.
Argued: June 6, 2006
Decided and Filed: March 16, 2007
Before: SILER, CLAY, and McKEAGUE, Circuit Judges.
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COUNSEL
ARGUED: David T. Croall, PORTER, WRIGHT, MORRIS & ARTHUR, Cincinnati, Ohio, for
Appellants. E. Michael Morris, MORRIS & DOHERTY, Birmingham, Michigan, for Appellee.
ON BRIEF: David T. Croall, PORTER, WRIGHT, MORRIS & ARTHUR, Cincinnati, Ohio,
Clinton Meyering, CALLIGARO & MEYERING, Taylor, Michigan, for Appellants. E. Michael
Morris, MORRIS & DOHERTY, Birmingham, Michigan, for Appellee.
SILER, J., delivered the opinion of the court, in which McKEAGUE, J., joined. CLAY, J.
(pp. 13-20), delivered a separate dissenting opinion.
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OPINION
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SILER, Circuit Judge. Defendants Oakcrest Dental Center (“Oakcrest”) and Dr. Louis
Leonor appeal a judgment of $479,491.63 in favor of Plaintiff Dr. Samuel Stockman. Defendants
allege several trial errors including the erroneous admission of a settlement offer in violation of FED.
R. EVID. 408. Because we agree that the district court abused its discretion in admitting the
settlement offer and the record demonstrates substantial prejudice, we REVERSE the judgment and
REMAND to the district court for a new trial.
1
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 2
I.
In late 1999, Dr. Stockman agreed to sell his dental practice of over forty years to Dr. Leonor
and Oakcrest. The sale was completed in January 2000. Pursuant to a side agreement, Dr. Leonor
hired Dr. Stockman to work as a dentist at Oakcrest. Dr. Leonor’s goal was to use this as an
opportunity to attract and retain Dr. Stockman’s patients. The parties set no time limit or date of
termination. Dr. Stockman began working at Oakcrest four days per week in December 1999, and
Oakcrest sent out mailers announcing the move and invited his old patients to remain with him at
his new location. Few ever came.
When he began working in 1999, Dr. Stockman had opted to be paid $32.00 per hour rather
than receive a percentage of his production. In 2001, Dr. Leonor agreed to increase Dr. Stockman’s
hourly pay to $35.00 per hour and gave Dr. Stockman additional benefits, including malpractice
insurance, paid vacations, and some days off. Not long after, Dr. Stockman asked for a raise to
$55.00 per hour because that was the average pay for dentists in the locale. Dr. Leonor rejected the
amount because, he claimed, Dr. Stockman was not producing and billing the average amount. It
is disputed whether this reason was communicated to Dr. Stockman, though he stated he “had the
impression that Dr. Leonor could not afford” to give him a raise. At the time, only one other dentist,
Dr. Macunivich (“Dr. Mac”), was being paid $55.00 per hour. But his pay was recalculated every
year based upon his prior year’s production.
In October 2001, because of his low revenue production, Dr. Stockman’s work week was
scaled back from four days to three. Dr. Leonor wanted to give the chair occupied by Dr. Stockman
to a higher revenue-producing dentist. He hired two other dentists, Drs. Lavasseur and Long, who
were both in their thirties. However, neither lasted at Oakcrest very long.
By early June 2002, Dr. Leonor reduced Dr. Stockman’s days from three to two, citing Dr.
Stockman’s continued low production. Dr. Stockman went home that day claiming he was ill. Dr.
Leonor called his home and spoke to Mrs. Stockman who informed Dr. Leonor that Dr. Stockman
was in bed with flu-like symptoms. Dr. Leonor expressed his relief that Dr. Stockman had not
suffered a heart attack.
At the time, Drs. Mac and Bailey had produced between 50 per cent and almost 200 per cent
more revenue over the same period, even adjusting for the reduced hours. Based upon this
information, Dr. Leonor concluded that Dr. Stockman ought to be terminated. Dr. Leonor claimed
that he did not have the heart to terminate Dr. Stockman himself because he “liked the guy a lot,”
and had someone else inform Dr. Stockman upon his return to the office. Dr. Leonor hired Dr. Don
Bui, 33, to replace Dr. Stockman.
Dr. Stockman filed suit in the Eastern District of Michigan in February 2003,1 alleging
violation of the Age Discrimination and Employment Act (the “ADEA”), 29 U.S.C. § 621 et seq.,
and the Michigan Elliott-Larsen Civil Rights Act (the “ELCRA”), MICH. L. ANN. § 37.2201, et seq.
He alleged that he was 73 years old at the time and was subject to disparate treatment because of his
age. He alleged he was afforded fewer operatories (rooms in which to do dental work); he was not
given a dedicated and competent dental assistant; and new patients who required more expensive
treatments were steered away from him, thus reducing his potential to generate more revenue per
patient-hour. He also alleged that on three occasions, culminating in a Christmas party in 1999 right
after he joined Oakcrest, Dr. Leonor asked whether Dr. Stockman realized he “[was] the oldest
dentist” at Oakcrest. Dr. Stockman also cited Dr. Leonor’s criticism of certain of his dental practices
because they were older methods.
1
Dr. Stockman filed a charge with the EEOC which was dismissed, and the EEOC issued a right to sue letter.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 3
Two years later and a few weeks before trial, attorneys for Dr. Leonor and Oakcrest sent the
following letter to Dr. Stockman’s attorneys:
Dear Ms. Adams:
I have been authorized by my client to extend an offer of reinstatement of
employment to Dr. Stockman.
The specifics of the offer are as follows: Dr. Stockman would be rehired as an
associate dentist under the terms of his prior employment. His responsibilities would
be identical to those of his prior employment as would be his benefits. Based upon
Dr. Stockman’s testimony in his deposition (see page 96 of the transcript) we will
compensate him on a percentage-based pay plan.
Further, my client is amenable to conducting whatever meetings may be necessary
between Dr. Stockman and office staff to address any concerns that Dr. Stockman
may have a smooth transition to his return to his employment. My client wishes to
convey that, despite its respectful disagreement with Dr. Stockman’s claims of age
discrimination, there is no animosity toward Dr. Stockman and that every effort will
be made to assure professional and hospitable working conditions in the future.
My client would be willing to have Dr. Stockman work immediately.
Please discuss this offer with your client and advise us of his position as soon as
possible.
Two days later, Dr. Stockman’s attorneys responded:
Dear Mr. Chiasson:
This letter is for settlement purposes only and is in response to the offer of
reinstatement set forth in your letter of June 9, 2004.
Dr. Stockman accepts the offer of reinstatement, which he understands to be
unconditional. Your letter states that Dr. Stockman’s responsibilities “. . . would be
identical to those of his prior employment, as would be his benefits.” However, your
letter then modifies the prior terms of Dr. Stockman’s employment by proposing to
pay Dr. Stockman “. . . on a percentage-based pay plan.”
Dr. Stockman will accept a percentage-based pay plan, namely 40%, as
indicated on pages 94-96 of his deposition testimony. Also, to avoid any
misunderstandings, we refer you to the terms of employment contained in the April
5, 2001 Application for Employment. For your convenience, we enclose a copy of
that document.
We note that the offer of reinstatement is accepted based on those terms of
Dr. Stockman’s prior employment which included four days or 32 hours per week
of work. As you know, we have contended that the reduction of Dr. Stockman’s
hours and/or days was discriminatory. Hence, the offer is accepted based on the
presumption that Dr. Stockman will be guaranteed his original terms of employment,
except for the hourly rate of pay.
Next, your letter does not address other conditions of Dr. Stockman’s
employment which we have contended were discriminatory. By way of example, Dr.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 4
Stockman should have the same number of operatories available to him as the
younger dentists at Oakcrest; and should have an experienced assistant available to
him. Nevertheless, Dr. Stockman has accepted the offer of reinstatement, even if he
is only granted one operatory; and even if he is not given an experienced assistant.
However, unless such conditions are changed, the discriminatory workplace
conditions would remain an issue in the case.
Next, as you know, the offer of reinstatement does not resolve all claims in
the case. Among other things, Dr. Stockman is still eligible for back-pay, emotional
anguish damages, liquidated damages and attorneys’ fees and costs. Of course, we
will remain open to discussing settlement of all claims at any time. However, such
discussions remain separate and apart from your offer of reinstatement which has
been accepted by this letter.
Dr. Stockman has a pre-planned visit with his son’s family beginning June
21st, but will be available to begin working on June 28th. Please advise whether Dr.
Stockman should call the Oakcrest office manager to arrange recommencing work.
(Together, “the Letters”). Believing that Dr. Stockman’s reply was a rejection and counteroffer,
Defendants withdrew their offer of reinstatement and Dr. Stockman sought to enforce the contract.
The district court refused to enforce the contract because (1) the offer was clearly an offer of
reinstatement in exchange for settlement of the entire action, and (2) Dr. Stockman’s letter was a
rejection and counteroffer.2 However, the district court denied Defendants’ motion to have the
document precluded from being admitted into evidence at trial under FED. R. EVID. 408. The district
court ruled that the Letters were admissible under Rule 408’s “another purpose” exception, and that
they could be read into evidence if Defendants presented evidence that Dr. Stockman failed to
mitigate his damages.
At trial, Defendants cross-examined Dr. Stockman about job offers he received and refused
in the months following his termination. The Letters were then read into the record over defense
counsel’s renewed objection. While both parties agreed that a limiting instruction was appropriate
at the time, the district court did not give one until the jury charge. The district court also refused
defense counsel’s request to give a “same actor” instruction, which informs the jury that it may infer
a lack of intentional discrimination where the same person accused of discrimination also made the
decision to hire the plaintiff-employee.
The jury found Dr. Leonor and Oakcrest liable for age discrimination and awarded back pay,
front pay, and other damages totaling $479,491.63. The district court denied Defendants’ renewed
motion for a directed verdict or for a new trial in the alternative.
II.
Defendants appeal the adverse Rule 408 ruling and other alleged trial errors, arguing that
they individually and cumulatively justify a new trial. We review a district court’s admission of
evidence at trial for an abuse of discretion. See United States v. Talley, 164 F.3d 989, 998 (6th Cir.
1999). An abuse of discretion exists if we are firmly convinced that the district court made a
mistake in admitting challenged evidence. See United States v. Wiedyk, 71 F.3d 602, 608 (6th Cir.
1996). However, we will only reverse a jury’s verdict if the error was prejudicial. See Polk v. Yellow
Freight Sys., Inc., 876 F.2d 527, 532 (6th Cir. 1989).
2
This order is not appealed.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 5
Here, admitting the Letters was clearly a violation of Rule 408’s plain language.
Furthermore, the evidence at trial favoring Dr. Stockman was insufficient to overcome the prejudice
that inheres in such submissions.
A.
FED. R. EVID. 408 states:
Evidence of (1) furnishing or offering or promising to furnish, or
(2) accepting or offering or promising to accept, a valuable
consideration in compromising or attempting to compromise a claim
which was disputed as to either validity or amount, is not admissible
to prove liability for or invalidity of the claim or its amount.
Evidence of conduct or statements made in compromise negotiations
is likewise not admissible. . . . This rule also does not require
exclusion when the evidence is offered for another purpose, such as
proving bias or prejudice of a witness, negativing a contention of
undue delay, or proving an effort to obstruct a criminal investigation
or prosecution.
Dr. Stockman argues that Rule 408 expressly “does not require exclusion when the evidence
was offered for another purpose.” He contends that the district court correctly ruled that evidence
regarding an alleged failure to mitigate constitutes “another purpose” for admissibility.
We heretofore have never addressed whether admitting settlement terms or negotiations
thereof to prove or disprove mitigation violates Rule 408. Other circuits have found that such
evidence is admissible as serving “another purpose” under Rule 408. See Bhandari v. First Nat’l
Bank of Commerce, 808 F.2d 1082, 1103 (5th Cir. 1987); Urico v. Parnell Oil Co., 708 F.2d 852,
854-55 (1st Cir. 1983); Orzel v. Wauwatosa Fire Dep’t, 697 F.2d 743, 757 n.26 (7th Cir. 1983).
However, instead of following those decisions, we agree with the holding in Pierce v. F.R. Tripler
& Co., 955 F.2d 820, 826-27 (2d Cir. 1992). There, the court addressed a similar question. An
employer whom a former employee had sued for discrimination offered to reinstate the employee
in exchange for dismissal of the suit. Id. at 824. The employee refused and the employer sought to
admit the offer and rejection as evidence of the failure to mitigate. Id. at 826. The court rejected the
employer’s position, holding that “[e]vidence that demonstrates a failure to mitigate damages goes
to the ‘amount’ of the claim and thus, if the offer was made in the course of compromise
negotiations, it is barred under the plain language of Rule 408.” Id. at 827.
Indeed, under both federal and Michigan law, a defendant may raise the defense that the
plaintiff failed to mitigate his damages by seeking and accepting employment. See Skalka v. Fernald
Envtl. Restoration Mgmt. Corp., 178 F.3d 414, 426 (6th Cir. 1999); Rasheed v. Chrysler Corp., 517
N.W.2d 19, 27 (Mich. 1994). The goal of mitigation is the prevention of unnecessary economic loss,
see id., and therefore mitigation necessarily goes to the amount of a claim. Because disproving
mitigation cannot both be a purpose for excluding evidence under Rule 408 – i.e., for “the
amount”of the claim – and at the same time be admissible as “another purpose,” Dr. Stockman’s
position is implausible.
Our reading of the statute is harmonious with those instances which we have recognized as
constituting “another purpose,” outside of those examples in Rule 408, but which do not go to the
validity or amount of a claim.
[T]he exceptions have been used only to admit the occurrence of
settlement talks or the settlement agreement itself for “another
purpose.” See, e.g., Breuer Elec. Mfg. Co. v. Toronado Sys. of Am.,
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 6
Inc., 687 F.2d 182, 185 (7th Cir. 1982) (holding existence of
settlement negotiations admissible to rebut claim that party had no
knowledge of suit); Prudential Ins. Co. of Am. v. Curt Bullock
Builders, Inc., 626 F. Supp. 159, 165 (N.D. Ill. 1985) (holding
occurrence of settlement talks admissible to establish agency
relationship); see also Bank Brussels Lambert v. Chase Manhattan
Bank, N.A., 1996 U.S. Dist. LEXIS 1790, Nos. 93 Civ. 5298 and 93
Civ. 8270, 1996 WL 71507, at *6 (S.D.N.Y. Feb. 20, 1996)
(compelling discovery of terms of agreement only); Small v. Hunt,
152 F.R.D. 509, 511 (E.D.N.C. 1994) (allowing discovery of
settlement materials to show a “change in circumstances”).
Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 981 (6th Cir. 2003). We
have also viewed “another purpose” as including the use of settlement agreements to prove facts
unrelated to the subject matter of the negotiations or where “the claim was based upon some wrong
that was committed in the course of the settlement discussions; e.g., libel, assault, breach of contract,
unfair labor practice, and the like.” See Uforma/Shelby Bus. Forms v. NLRB, 111 F.3d 1284, 1293-
94 (6th Cir. 1997) (internal quotation and citation omitted).
Therefore, the district court erred in finding that Defendants “opened the door” to the
inclusion of the settlement evidence by offering evidence of Dr. Stockman’s failure to mitigate.
Where, as here, a party has raised an issue going to the validity or amount of a claim, that is
insufficient for admitting settlement offers that go to the same issue because to do so violates Rule
408 on its face. To argue otherwise would eviscerate Rule 408’s protection and undermine its clear
purpose. It would be unreasonable to expect a party to ever make a settlement offer if doing so
forced it into choosing between conceding one or more elements of liability or damages or having
the offer admitted against it. See Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575 (1982)
(“Interpretations of a statute which would produce absurd results are to be avoided if alternative
interpretations consistent with the legislative purpose are available.”).
Moreover, the evidence was inadmissible under FED. R. EVID. 403. That rule states,
“[a]lthough relevant, evidence may be excluded if its probative value is substantially outweighed
by the danger of unfair prejudice.” Here, the probative value was nearly non-existent. The offer
was made just before trial, two years after termination, and was contingent on settling the case,
whereas Defendants’ evidence established that Dr. Stockman sought, received, and rejected offers
of equivalent employment in the months following his termination. Thus, the Letters were irrelevant
to all issues of mitigation except for future pay. However, this mere scintilla of probative value was
further reduced by Defendants’ offer to concede the issue. A court must estimate the probative value
of evidence ex ante by “comparing evidentiary alternatives.” See Old Chief v. United States, 519
U.S. 172, 184-85 (1997). Even though a party cannot offer to concede an element of the case against
him so as to preclude certain prejudicial evidence, see id. at 186-87 (holding that a party “is entitled
to prove its case by evidence of its own choice.”), here, the burden of proving a failure to mitigate
future pay rested with Defendants, see Jackson v. Shell Oil Co., 702 F.2d 197, 201-02 (9th Cir.
1983); Rasheed, 517 N.W.2d at 27. On the other hand, the Letters were inherently prejudicial
because a jury could easily have misunderstood that the offer, made on the eve of trial, was an
implicit admission of liability or a sign that Defendants thought they might lose at trial. Thus, even
under “a maximal view of the probative effect of the evidence and a minimal view of its unfairly
prejudicial effect,” United States v. Sassanelli, 118 F.3d 495, 498 (6th Cir. 1997), the district court’s
admission of the Letters under Rule 403 was an abuse of discretion.
Therefore, the admission of the Letters violated FED. R. EVID. 408, and the district court
erred in concluding that Defendants opened the door to such evidence or that it was admissible under
Rule 403.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 7
B.
Defendants contend that the erroneous admission of the Letters caused irreparable damage
to them at trial because of the exceedingly prejudicial nature of the settlement offer. We agree.
Generally, a non-constitutional trial error is harmless “unless it is more probable than not that the
error materially affected the verdict.” United States v. Fountain, 2 F.3d 656, 668 (6th Cir. 1993).
To make that determination, we examine “the entire record to see if the [alleged error] tended to
prejudice the [party].” United States v. Wiedyk, 71 F.3d 602, 607 (6th Cir. 1995). By “prejudice,”
we mean a substantial risk that the jury made a determination of liability on an improper basis – i.e.,
if the rest of the evidence did not clearly support a finding of liability. See United States v. Mendez-
Ortiz, 810 F.2d 76, 79 (6th Cir. 1986). We take great pains not to substitute our own judgment for
that of the fact-finder, but whenever a court undertakes to determine whether a trial error resulted
in prejudice, it inevitably, “to some extent at least, substitutes [its own] judgment of the facts and
the credibility of the witnesses for that of the jury.” Duncan v. Duncan, 377 F.2d 49, 52 (6th Cir.
1967) (citing Lind v. Schenley Indus., Inc., 278 F.2d 79, 90 (3d Cir. 1960)).
1.
“Prior to the Federal Rules of Evidence, a trial court’s failure to exclude evidence of a
settlement agreement was generally considered sufficiently prejudicial to warrant a new trial.”
McInnis v. A.M.F., Inc., 765 F.2d 240, 251 (1st Cir. 1985) (citing Paster v. Pa. R.R., 43 F.2d 908,
911 (2d Cir. 1930)). The prejudice that inheres in offers to settle is patently virulent. “The almost
unavoidable impact of the disclosure of such evidence is that the jury will consider the offer or
agreement as evidence of a concession of liability.” Jack B. Weinstein & Margaret A. Berger,
WEINSTEIN’S EVIDENCE 408-31 (1991). “As the framers of Rule 408 clearly contemplated, the
potential impact of evidence regarding a settlement agreement with regard to a determination of
liability is profound.” United States v. Hays, 872 F.2d 582, 589 (5th Cir. 1989). Here, the Letter
is conciliatory and offers a quid pro quo for Dr. Stockman to relinquish his cause of action. It
therefore begs the question that if Defendants’ case were meritorious, why would they settle and
why would they rehire him if – as Defendants claim in their defense – Dr. Stockman was slow and
unproductive? Thus, the offer suggests that Defendants believed they would lose at trial. “It does
not tax the imagination to envision the juror who retires to deliberate with the notion that if the
defendants had done nothing wrong, they would not have [offered to settle].” Id. Thus, a jury’s
finding of liability because it mistook the evidence for a tacit admission would certainly be a
decision on an “improper basis.” Mendez-Ortiz, 810 F.2d at 79.
2.
The evidence at trial was too insubstantial to overcome the Letters’ prejudicial effect. Under
the ADEA and ELCRA, an employer may not discharge an employee because of the employee’s
age. See 29 U.S.C. § 623(a)(1); MICH. CODE. ANN.§ 37.2202(1)(a). A plaintiff has the burden of
proving that the discrimination was intentional. See Reeves v. Sanderson Plumbing Prods., Inc., 530
U.S. 133, 143 (2000) (ADEA); Dubey v. Stroh Brewery Co., 462 N.W.2d 758, 758-59 (Mich. Ct.
App. 1990) (ELCRA). The standards of proof under ADEA and ELCRA are materially identical,
and so for simplicity’s sake, we proceed under federal precedents for discrimination claims. See
McDonald v. Union Camp Corp., 898 F.2d 1155, 1160 (6th Cir. 1990) (applying federal law to
decide parallel federal and Michigan claims under the ADEA and ELCRA).
An employee may establish a claim by offering either direct or circumstantial evidence of
age discrimination. See Kline v. Tenn. Valley Auth., 128 F.3d 337, 348 (6th Cir. 1997). “Direct
evidence of discrimination is that evidence which, if believed, requires the conclusion that unlawful
discrimination was at least a motivating factor in the employer’s actions. Circumstantial evidence,
on the other hand, is proof that does not on its face establish discriminatory animus, but does allow
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 8
a fact finder to draw a reasonable inference that discrimination occurred.” Wexler v. White’s Fine
Furniture, 317 F.3d 564, 570 (6th Cir. 2003). Here, there was scant evidence at trial – direct or
circumstantial – proving intentional discrimination.
a.
The only direct evidence proffered was that Dr. Leonor, on three occasions culminating at
a Christmas party in 1999, remarked to Dr. Stockman that he “[was] the oldest dentist” at Oakcrest.
There were no witnesses to the first two alleged incidents, and Dr. Stockman could not pinpoint their
location nor context. But Dr. Leonor admitted making the remark at the Christmas party. However,
his statement hardly proves age animus for a few reasons. First, the Christmas party in question
occurred right after Dr. Stockman was hired and before he finalized the sale to Dr. Leonor. Thus,
Dr. Stockman did not have to go to work for someone who made him uncomfortable about his age.
And because Dr. Leonor did not have to hire Dr. Stockman, it is less likely that he was motivated
by animus over Dr. Stockman’s age when he terminated him a mere two and a half years later.3 As
we have noted, where the same person hires the employee and fires him within a short period of
time, especially where the employee’s class has not changed, there is a strong contrary inference of
discriminatory intent. See Buhrmaster v. Overnite Transp. Co., 61 F.3d 461, 463-64 (6th Cir. 1995).
In Burhmaster, we relied upon Lowe v. J.B. Hunt Transp. Inc., 963 F.2d 173 (8th Cir. 1992), for the
proposition that it was “incredible . . . that the company officials who hired [an employee] at age
fifty-one had suddenly developed an aversion to older people two years later.” Id. at 463. We share
this view. Dr. Stockman was already in his seventies and a member of the protected class when he
was hired, and he presented no evidence explaining why Dr. Leonor suddenly harbored antipathy
toward his age after just two and a half years.
Second, the statement lacks the required “animus” in that it does not negatively or
disparagingly refer to Dr. Stockman’s age. See Rowan, 360 F.3d at 548-49 (holding that statement
was not direct evidence of animus because it was not based upon “inaccurate and stigmatizing”
stereotypes). Dr. Stockman claimed he could not recall Dr. Leonor’s tone at the time he made the
statement. No evidence establishes a causal or correlative connection between the remark and the
termination that occurred two and a half years later. “Isolated and ambiguous comments are too
abstract, in addition to being irrelevant and prejudicial, to support a finding of age discrimination.”
Phelps v. Yale Sec., Inc., 986 F.2d 1020, 1025 (6th Cir. 1993) (citation omitted).
b.
Absent direct evidence of discrimination, a plaintiff claiming unlawful termination must
establish a prima facie case showing that: (i) the employee was in a protected group; (ii) the
employee was qualified for the position; (iii) the employee was terminated; and (iv) a comparable
non-protected person was treated better, or, the employee was replaced by a person not in the
protected class. Gantt v. Wilson Sporting Goods Co., 143 F.3d 1042, 1048 (6th Cir. 1998) (citing
Manzer v. Diamond Shamrock Chems. Co., 29 F.3d 1078, 1081 (6th Cir. 1994); see also McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802 (1973). The burden then shifts to the defendant to
proffer a legitimate, non-discriminatory reason for the termination. See id. at 804. Once the
defendant proffers such a justification, while an inference of discrimination may still be drawn from
3
To the extent it could be inferred that Dr. Leonor’s intentions were to hire Dr. Stockman and then get rid of
him after attracting his prior patients, this takes us outside of the realm of direct evidence. See Rowan v. Lockheed Martin
Energy Sys., 360 F.3d 544, 548 (6th Cir. 2004) (observing that evidence that requires an inference is not direct evidence).
For the same reason we reject Dr. Stockman’s contention that Dr. Leonor’s criticisms of his older dental techniques and
his remark about Dr. Stockman’s risk of heart attack were direct evidence. These all fall short of being probative when
viewed in light of Dr. Mac, 65, who had retained many of his former patients after coming to Oakcrest and was by far
the highest producer, and until Dr. Stockman joined, held the dubious distinction of “oldest dentist at Oakcrest.”
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 9
the plaintiff’s prima facie evidence, the mandatory presumption of discrimination drops from the
case. See Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 255 n.10 (1981). The burden shifts
back to the plaintiff to “prove by a preponderance of the evidence that the legitimate reasons offered
by the defendant were not its true reasons, but were a pretext for discrimination.” Reeves, 530 U.S.
at 143.
Assuming that Dr. Stockman established a prima facie case of age discrimination, little
evidence rebutted Defendants’ proffered justification that Dr. Stockman had low productivity. Poor
performance is a legitimate non-discriminatory reason for terminating an employee. See Majewski
v. Automatic Data Processing, Inc., 274 F.3d 1106, 1116 (6th Cir. 2001). Dr. Stockman’s year-
over-year revenue production was far below either Dr. Bailey’s, who was in his mid-forties, or Dr.
Mac’s, who was in his mid-sixties. From February 2000 until September 2001, the average monthly
revenues attributable to each dentist were: Dr Stockman ($10,429.35), Dr. Mac ($23,759.65), and
Dr. Bailey ($17,611.83).4 The rest of the time Dr. Stockman was at Oakcrest, the numbers were: Dr.
Stockman ($10,834.30), Dr. Mac ($25,228.17), and Dr. Bailey ($18,742.64). Dr. Stockman tended
to be slower working, often taking more time to complete procedures which also led to the need for
more operatories for patient-prep while he completed the previous consultation. Thus, the burden
shifted to Dr. Stockman to prove pretext. See Reeves, 530 U.S. at 143.
An employee’s opinion that he did not perform poorly is irrelevant to establishing pretext
where the employer reasonably relied on specific facts before it indicating that the employee’s
performance was poor. See Majewski, 274 F.3d at 1117. “A plaintiff can refute the legitimate,
nondiscriminatory reason that an employer offers to justify an adverse employment action by
showing that the proffered reason (A) has no basis in fact, (B) did not actually motivate the
defendant’s challenged conduct, or (C) was insufficient to warrant the challenged conduct.” Wexler,
317 F.3d at 576 (internal citation omitted). Dr. Stockman argued that his poor performance was due
to inequitable treatment and allocation of resources. Specifically, he claimed that he was (1) never
given a dedicated and competent assistant; (2) only given access to one operatory whereas the other
dentists had two or more and that the office refused to book multiple patients for him to work on
simultaneously; and (3) supposed to see all or most of the new patients, which did not happen, and
the ones he did see were the “table scraps,” i.e., they did not require the most expensive procedures.
First, Dr. Stockman’s assistant of 15 years, Doreen King, whom he praised as very capable,
remained with him for the first nine or ten months of his time at Oakcrest. Yet, there was no
difference in productivity between the time she was there and after she left. Dr. Stockman admitted
that his other assistants quit and were not fired, and he provided no basis for why the assistants Dr.
Leonor hired were unqualified. In any event, the assistants Dr. Stockman did have were dedicated
to him at all times.
Second, Dr. Stockman conceded that he was allowed to use the “spillover” operatories when
needed and could not say when he was ever denied their use except that he was not allowed to
double book – i.e., see more than one patient at a time. However, Donna Brennan testified that she
refused to double book Dr. Stockman because his pace was slow, and patients ended up in other
operatories for so long that it interrupted other doctors’ schedules. Dr. Mac also testified that he
typically operated out of one operatory and used the spillover rooms only occasionally.
These points were never rebutted. Even if deemed non-credible, there was no contrary
evidence. If Dr. Stockman is correct that Oakcrest devoted fewer resources to him in the first place,
this does not prove intentional age discrimination and does not rebut the proffered justification that
4
Because during this latter period, Dr. Stockman was only working three days a week, the report was created
by multiplying his average by 1.33 in order to make a valid comparison.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 10
his low revenue per patient-hour militated against dedicating further operatories or assistants. And
as discussed, supra, the fact that Dr. Mac allegedly received as many or more of these resources than
Dr. Bailey casts serious doubt on any inference that age discrimination motivated Defendants’
priorities.
Third, there is little evidence to prove the patient manipulation that Dr. Stockman alleges.
As an initial matter, Dr. Stockman complains that it was discriminatory for Dr. Leonor to have hired
Dr. Lavasseur and Dr. Long because they took some of his new patient allotment away. Though
they were both far younger than Dr. Stockman, it was firmly established by Dr. Stockman that there
was a general policy of giving the new dentists the new patients in order to fill their schedules.
Therefore, Dr. Lavasseur and Dr. Long saw new patients not because they were younger, but
because they were the new dentists in the office. This explains why Dr. Stockman did not receive
all the new patients, but it does not prove discrimination. A legitimate and bona fide seniority
system does not constitute an unlawful employment practice. See Hazen Paper, 507 U.S. at 609.
Thus, neither office policy nor the ADEA requires that all new patients should have gone to Dr.
Stockman.
Dr. Stockman also provided no evidence or even a theory as to how the “good patients” were
diverted away from him. He claimed that there were meetings where sometimes new patient
assignments were divided up, and yet he chose not to go. Furthermore, repeated testimony
established that new non-referral patients were assigned blindly. In other words, at the time they
were assigned to a dentist, no one knew what treatment a patient would need. This explanation went
uncountered as well.
Dr. Stockman relies heavily on the testimony of Dr. Unsworth, an unaffiliated dentist who
manages his own practice. Dr. Unsworth examined production reports and summaries prepared by
Dr. Stockman’s counsel. He testified that he believed it typical that most of the expensive
procedures would come from new patients, and so he thought it odd that Dr. Stockman would have
seen one fifth of the new patients in 2000, and yet have less than a fifth of the expensive procedures:
In the year 2000, Dr. Stockman received 21 percent of the new patients. You would
expect that if he was receiving 21 percent of the new patients, that he would have a
high percentage down here of procedures that are more expensive, and they’re not,
they’re less, they’re less.
Same thing here. In each of these years, he supposedly is receiving the new patients
and, as I told you, you’re going to receive – you’re going to have a group of patients
who, in a lot of cases, haven’t been to the dentist for 10 to 15 years and they require
root canal therapy, very extensive work.
Dr. Macunovich at that period of time was doing what I would expect Dr. Stockman
to do, as far as the relationship between the expensive procedures and the numbers
of patients. In other words, it just doesn’t jive to me that Dr. Stockman was getting
the new patients and yet he was not receiving the high percentage of expensive
procedures.
However, Dr. Unsworth’s conclusion does not follow from his premises. If most of the
expensive procedures generally come from new patients, then the percentage of Dr. Stockman’s
expensive procedures should correlate strongly with the percentage of the new patients he saw
because he almost exclusively saw new patients. Thus, it should not be surprising that in 2000, his
first year, Dr. Stockman saw 21 per cent of the new patients and had 16 per cent of the expensive
procedures (after allowing for the natural period of delay between initial visits and later procedures,
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 11
and other minor variances); in 2001 it was 20.6 per cent and 20.7 per cent, respectively; and in 2002
it was 16.2 per cent and 15 per cent, respectively.
Even more damaging is that the documents Dr. Unsworth averted to do not establish that Dr.
Stockman saw 21 per cent of the new patients; rather, they say that he had 21 per cent of the total
patient visits. Because there was no evidence stating the average number of visits per new patient,
there is no way to determine what percentage of new patients Dr. Stockman saw without a direct
figure which was also absent. Dr. Unsworth conceded these facts. Furthermore, there was no
evidence that Dr. Stockman’s new patients had a smaller pro rata share of the new procedures. The
variance between Dr. Mac’s numbers (percentage of new patients to expensive procedures) was
explained by the fact that he had pre-existing patients (of which Dr. Stockman had few to none of
his own, and also accounted for Dr. Mac’s higher number of total patient visits). This would have
affected the total number of expensive procedures in the office, causing a concomitant decrease in
Dr. Stockman’s percentage of expensive procedures. Thus, it would be a stretch for a reasonable
person to conclude, based upon the foregoing, that Dr. Stockman only saw the “table scraps.”
Therefore, the comparisons to Dr. Mac and Dr. Bailey severely undercut the allegation of
age discrimination or pretext, and Dr. Stockman’s proffered explanation for his low revenue is
largely unsupported by the evidence at trial, thus raising substantial doubt as to whether admitting
the Letters was harmless error.
3.
When there has been an evidentiary error, we will vacate a jury verdict where the error so
altered the total mix of information submitted to the jury that it was substantially likely to have
affected the verdict. See, e.g., United States v. Wesley, 417 F.3d 612, 622 (6th Cir. 2005); United
States v. Carr, 5 F.3d 986, 993 (6th Cir. 1993); Fountain, 2 F.3d at 668. Here, the Letters’
admission was substantially likely to have affected the verdict because they were of an
“exceptionally prejudicial character” and were admitted prior to the defense’s presentation of its
case. Moreover, given the lack of overwhelming evidence in favor of liability, “[the Letters’]
withdrawal from consideration by the jury cannot be expected to remove the harm.” Carr, 5 F.3d
at 993 (citing United States v. Wells, 431 F.2d 432, 432 (6th Cir. 1970)). Thus, we resolve any
lingering doubt in a case like this in favor of vacatur and remand. Cf. Olitsky v. Spencer Gifts, Inc.,
842 F.2d 123, 127 (5th Cir. 1988) (“We are not persuaded that the erroneous introduction of this
highly damaging statement had no effect on the jury’s verdict. The other competent evidence of . . .
liability is not sufficiently strong to allow such a conclusion.”).
The district court’s limiting instruction does not alter our conclusion. Prejudicial evidence
can overwhelm the efficacy of palliative jury instructions. An instruction can lessen “to some
degree the prejudicial nature of [inadmissible] evidence . . . ; it is not, however, a sure-fire panacea
for the prejudice resulting from the needless admission of such evidence.” United States v.
Haywood, 280 F.3d 715, 724 (6th Cir. 2002) (citing United States v. Garcia-Rosa, 876 F.2d 209,
222 (1st Cir. 1989)). Here, the Letters were read into evidence fairly early during trial which risked
infecting and coloring the balance of the proceedings, especially when no limiting instruction was
read until the jury charge, making it all the more difficult to un-ring the bell. Thus, the district
court’s failure to issue a contemporaneous instruction and its delay in doing so until the jury charge
opened Defendants’ case to the full brunt of the injury. That, coupled with the lack of overwhelming
evidence of liability is of “particular concern” to us and we reverse accordingly. See Wesley, 417
F.3d at 622.
Our holding is further buttressed by the purpose underlying Rule 408, which is “the
promotion of the public policy favoring the compromise and settlement of disputes that would
otherwise be discouraged with the admission of such evidence.” Manko v. United States, 87 F.3d
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 12
50, 54 (2d Cir. 1996) (citation omitted). In Goodyear, we held that the “strong public interest” in
encouraging settlement negotiations justified an expanded privilege protecting them from discovery.
332 F.3d at 980. We observed that
[p]arties are unlikely to propose the types of compromises that most
effectively lead to settlements unless they are confident that their
proposed solutions cannot be used on cross-examination, or under the
ruse of “impeachment evidence,” by some future [] party . . . . Parties
must be able to make hypothetical concessions, offer creative quid
pro quos, and generally make statements that would otherwise belie
their litigation efforts.
Id. Similarly, parties are no more likely to engage in settlement negotiations under the risk of their
admission at trial just because a curative instruction was read during the jury charge. While the
instruction added a veneer of protection, we reject the proposition that any amount of evidence
supporting liability, no matter how little, coupled with a limiting instruction read at any time during
the trial is sufficient to cure the wrongful admission of Rule 408 evidence. To hold otherwise would
render Rule 408 toothless.
III.
The district court abused its discretion in admitting the Letters in violation of FED. R. EVID.
408 and 403 because “it is more probable than not that [their admission] materially affected the
verdict.” Fountain, 2 F.3d at 668. Because we reverse on the Rule 408 issue alone, we do not reach
the balance of Defendants’ claims on appeal.
REVERSED and REMANDED to the district court for a new trial consistent with this
decision.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 13
_________________
DISSENT
_________________
CLAY, Circuit Judge, dissenting. The jury’s verdict should be upheld, inasmuch as the
majority’s view of Federal Rule of Evidence 408 rests on an implausible reading of the Rule which
cannot be reconciled with the intent of the Rule or the case law that was approved by the advisory
committee’s note to Rule 408’s recent amendment. I would hold that the district court did not abuse
its discretion, under the unique circumstances of this case, in admitting the evidence of settlement
negotiations. Furthermore, there was substantial evidence admitted at trial to support the jury’s
verdict. Accordingly, I would affirm the judgment of the district court.
I.
Under the Age Discrimination in Employment Act of 1967, Pub. L. 90-902, 81 Stat. 602(“ADEA”) (codified as amended at 29 U.S.C. § 621 et. seq.), it is “unlawful for an employer . . . to
discharge any individual . . . because of such individual’s age.”1 29 U.S.C. § 623. A plaintiff
alleging a claim under the ADEA is required to mitigate damages. See Skalka v. Fernald Envtl.
Restoration Mgmt. Corp., 178 F.3d 414, 426 (6th Cir. 1999). The defendant, however, bears the
burden of demonstrating that the plaintiff failed to mitigate damages. See Shore v. Fed. Express
Corp., 777 F.2d 1155, 1158 (6th Cir. 1985) (sex discrimination); West v. Nabors Drilling USA, Inc.,
330 F.3d 379, 393 (5th Cir. 2003). An offer from the defendant to rehire the plaintiff in his previous
position is relevant to the issue of mitigation; if the offer is unconditional, a defendant can use the
plaintiff’s refusal to accept the offer as evidence that the plaintiff failed to mitigate damages.
Nagarajan v. Tenn. State Univ., 187 F.3d 637 (Table), No. 98-5169, 1999 WL 551360, at *4 (6th
Cir. July 19, 1999) (unpublished) (citing Ford Motor Co. v. EEOC, 458 U.S. 219, 232 (1982)).
In the case at bar, the substance of the settlement discussions at issue is contained in two
letters (collectively the “Letters”). Defendants sent Plaintiff a letter “extend[ing] an offer of
reinstatement of employment.” J.A. at 564. Plaintiff sent Defendants a letter that “accept[ed]” the
offer of reinstatement, which Plaintiff understood to be unconditional, but interpreted the acceptance
as not resolving all of his claims. J.A. at 565. Defendants claimed that their offer was conditional
upon the release of Plaintiff’s claims; Plaintiff then sought an order to enforce Defendants’ offer of
reinstatement, which the district court denied. The district court construed Defendants’ offer as a
settlement offer, and Plaintiff’s response as a rejection-and-counter-offer. Plaintiff also argued that,
in the event that the Letters did not constitute an agreement, he should be allowed to introduce
evidence of the withdrawn offer to respond to Defendants’ claim that he failed to mitigate damages;
Defendants argued that evidence of the Letters was barred by Federal Rule of Evidence 408. The
district court denied Plaintiff’s motion as premature, stating that, “as a tactical decision,” Defendants
might not argue that Plaintiff failed to mitigate damages. J.A. at 58. After it become clear that
Defendants intended to argue that Plaintiff failed to mitigate damages, the district court held that
Defendants had a choice–they could argue mitigation, in which case evidence of the Letters could
be admitted to rebut the claim that Plaintiff failed to mitigate damages, or in the event they did not
argue mitigation, the evidence of the Letters would be excluded. If the evidence was admitted, the
district court proposed (and Plaintiff agreed to) an instruction limiting the evidence to the issue of
mitigation.
1
Plaintiff also sought relief under Michigan’s Elliot-Larson Civil Rights Act, Mich. Comp. Law § 37.2101 et.
seq. Section 37.2202 makes it unlawful for an “employer . . . [to] discharge . . . an individual . . . because of . . . age.”
For the sake of simplicity, the discussion in this dissent focuses on federal law.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 14
At trial, Defendants put the issue of mitigation into play by arguing that Plaintiff refused to
accept employment offers that were available to him for reasons that were pretextual or
unreasonable. Defendants’ theory of mitigation rested in part on convincing the jury that Plaintiff
was not disposed to continue working as a dentist. As Defendants summarized the evidence at
closing, Plaintiff made “excuses” for not finding employment, and did not have “the attitude of a
man who wants to get back to work.” J.A. at 553.
The district court did not abuse its discretion when it held that, pursuant to Rule 408,
Defendants opened the door by offering mitigation evidence, and hence Plaintiff could offer
evidence that he was willing to accept what he interpreted to be an unconditional offer of
employment. Although Rule 408 bars the admission of “[e]vidence of . . . offering . . . a valuable
consideration in . . . attempting to compromise a claim . . . to prove . . . [the claim’s] amount,” the
Rule “does not require exclusion when the evidence is offered for another purpose.” When a party
seeks to admit evidence of a settlement offer made by an opposing party to rebut the opposing
party’s claim that the party seeking admission of the settlement offer failed to mitigate damages, that
evidence is offered for “another purpose” under Rule 408. The evidence that Plaintiff was
immediately ready to resume employment with Defendants was unquestionably relevant to the issue
of mitigation. This evidence was properly admitted under Rule 408 to demonstrate that Plaintiff was
willing to mitigate damages, and the district court gave an instruction limiting the use of the
evidence to that purpose.
The most analogous case to the matter at hand is Urico v. Parnell Oil Co., 708 F.2d 852,
853-54 (1st Cir. 1983). There, the First Circuit upheld the district court’s admission of settlement
evidence offered for the purpose of mitigation. Id. at 854-55. The case involved an auto accident
where Parnell Oil Co.’s (“Parnell”) truck rear-ended the Uricos’ truck on April 11, 1977. Id. at 853.
The Uricos had leased their truck to a third party; as a consequence, they did not learn about the
accident until June of 1977. Id. In August, when the truck had been repaired, the Uricos demanded
that Parnell’s insurer, Bankers and Shippers Insurance Co. (“B & S”), pay to them the cost of the
repairs to the truck plus $1,000 per week in damages resulting from their loss of the use of the truck.
Id. at 853-54. B & S refused, but offered to pay for the repairs if the Uricos dropped their loss-of-
use claim. Id. at 854. At trial, the Uricos sought to introduce the settlement offer to show that B &
S’s refusal to pay for the repairs resulted in its failure to mitigate damages. Id. at 854-55. The court
reasoned that the Uricos had a clear duty to take reasonable steps to mitigate damages, and the
settlement evidence was admissible to demonstrate that B & S “unreasonably held [the Uricos’]
truck hostage.” Id. Because the evidence was only offered on the issue of mitigation, it is unlikely
that the Urico court would have allowed the evidence to be admitted had mitigation not been at
issue.
Pierce v. F.R. Tripler & Co., the case most strongly relied upon by the majority, is not to the
contrary. 955 F.2d 820, 826-28 (2d Cir. 1992). In Pierce, the Second Circuit upheld the district
court’s refusal to admit settlement evidence for mitigation under Rule 408. Id. at 823. The case
involved an age discrimination suit where Pierce claimed that, in May of 1986, he was passed over
for promotion to the position of General Manager in favor of a younger candidate. Id. In
September, the defendant offered Pierce another financial position, although it was unclear whether
accepting that position required a release of all of Pierce’s claims. Id. at 824. Pierce declined to
accept the offer at the expense of his claims. Id. The district court refused to allow the defendant
to admit this evidence, and the court of appeals affirmed. Id. at 826-28. The court of appeals held
that the evidence went to the “amount” of the damages, and therefore was barred by Rule 408,
although the court engaged in only the most cursory discussion of what constituted “another
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 15
purpose” for which evidence is admissible under the Rule.2 Id. Thus, Pierce is distinguishable on
its facts. In the instant case, the party opposing the admission of settlement evidence had raised the
issue of the duty to mitigate damages by contending that Plaintiff failed to do so. By contrast, in
Pierce, the party opposing the admission of the settlement evidence had not put the duty to mitigate
damages into play. There is something deeply troubling about a defendant using Rule 408
settlement negotiations to place the plaintiff in a lose-lose situation, as occurred in Pierce: Accept
the offer and the plaintiff must sacrifice his claims; decline the offer and the plaintiff has failed to
mitigate damages. Where, as here, the defendant opens the door to mitigating evidence, no such
unfairness occurs.
In addition to being consistent with Urico and the disposition of Pierce, the district court’s
holding–that evidence of the Letters was admissible if and only if Defendants opened the door by
arguing that Plaintiff failed to mitigate damages–is also consistent with the examples of “other
purposes” set forth in the text of Rule 408. Specifically, this holding accords with Rule 408’s
allowance of settlement evidence offered to “negat[e] a contention of undue delay.” The fact that
Rule 408 uses the word “negate” suggests that, while evidence of a settlement may be relevant to
rebut evidence that a party engaged in undue delay, this evidence cannot be admitted unless the door
is first opened by a party raising the issue of undue delay. See Charles Alan Wright and Kenneth
W. Graham, Jr., 23 Fed. Prac. & Proc. § 5312 (supp. 2006) (“[T]he offeror cannot himself raise the
issue of delay as a justification for the admission of the evidence.”). Evidence that a party failed to
mitigate damages is analogous to evidence that a party’s claim is invalid because of undue delay.
Although both types of evidence ultimately go to the “validity” or the “amount” of the claim, neither
type of evidence “does [] so via any inference as to the belief [on the part of the offeror] in [the
claim’s] validity arising from the offer to compromise.” Id. Since using the evidence for this
purpose does not ask the factfinder to engage in impermissible reasoning–“because the defendant
made the offer to settle, he must be liable”–using settlement evidence to negate a contention that the
plaintiff failed to mitigate damages constitutes “another purpose” for which evidence is permissible.
This analogy also demonstrates the flaw in the majority’s simplistic claim that the “plain
language” of Rule 408 excludes evidence that is relevant to the mitigation of damages because this
evidence goes to the “amount” of the claim. According to the majority, “[t]he goal of mitigation is
the prevention of unnecessary economic loss . . . therefore mitigation necessarily goes to the amount
of a claim.” Majority Op. at 5. Although this argument has some surface appeal, a close
examination of Rule 408 demonstrates that this reading of the Rule must be rejected. Rule 408 does
not exclude all evidence of settlement agreements. Under the majority’s reading of Rule 408,
evidence of undue delay would be inadmissible, because it goes to “liability for . . . a claim.” Fed.
R. Evid. 408.
Likewise, the majority’s reading of Rule 408 is inconsistent with most or all of the
formidable body of case law defining other permissible purposes. This body of law has developed
in the thirty-plus years that Rule 408 has been in effect, and these purposes were recently approved
by the advisory committee’s note to the 2006 amendment. See Fed. R. Evid. 408 advisory
committee’s note (2006 amendment). Take, for example, the case of Athey v. Farmers Ins. Exch.,
234 F.3d 357, 362 (8th Cir. 2000), which was cited with approval in the advisory committee’s note
2
The Pierce court also rejected the defendant’s contention that a defendant should always be able to introduce
his own settlement offer. The court reasoned that, were a party allowed to introduce his offers, this rule could “bring
with it a rash of motions for disqualification of a party’s chosen counsel who would likely become a witness at trial.”
Id. at 828. An attorney cannot try a case and testify as a witness because testimony from the offeror would often require
rebuttal testimony from the offeree. The offeror could force the offeree to face the choice of allowing the offeror’s
testimony to go unrebutted or forcing the offeree to forgo counsel of his choice. Id. The advisory committee has
explicitly affirmed Pierce’s rationale to the extent that it forbids an offeror from presenting his own offer. Fed. R. Evid.
408 advisory committee’s note (2006 amendment).
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 16
to the 2006 amendment. In Athey, the plaintiff, Athey, alleged, inter alia, that the defendant
Farmer’s Insurance Co. (“Farmers”) (1) was liable to Athey for breach of contract; and (2) had acted
in bad faith by failing to investigate Athey’s claims and delaying his settlement. Id. at 360. In
support of his bad-faith claim, Athey was allowed to introduce evidence that Farmers had attempted
to require him to release his bad-faith claim as a condition of its offer to settle his breach of contract
claim. Id. at 361, 362. Under the majority’s “plain language” approach, the evidence should be
excluded: Because the settlement evidence clearly “went to” the issue of Farmer’s liability for bad
faith, the evidence would be excluded because the evidence is “offered to prove [Farmer’s]
liability.” See Fed. R. Evid. 408. This reading of the Rule cannot be correct. The district court did
not abuse its discretion in concluding that evidence offered to rebut a claim that Plaintiff failed to
mitigate damages was offered for “another purpose.”
II.
Even though Rule 408 should not have barred the evidence that Dr. Stockman was willing
to return to work for Defendants, such evidence still must clear the hurdle of Federal Rule of
Evidence 403. Under Rule 403, the district court may exclude relevant evidence if “its probative
value is substantially outweighed by the danger of unfair prejudice.” Fed. R. Evid. 403. “It is well
settled that a trial judge’s discretion in balancing the probative value of evidence against its potential
for unfair prejudice is very broad.” United States v. Bilderbeck, 163 F.3d 971, 978 (6th Cir. 1999).
In reviewing the district court’s evidentiary decisions under Rule 403, the trial court must give “‘the
evidence its maximum reasonable probative force and its minimum reasonable prejudicial value.’”
Paschal v. Flagstar Bank, 295 F.3d 565, 576 (6th Cir. 2002) (quoting United States v. Schrock, 855
F.2d 327, 333 (6th Cir. 1988)).
In conducting its analysis under Rule 403, the majority ignores the above rule, trivializing
the probative value of the Letters and ignoring the district court’s efforts to minimize whatever
prejudice might have resulted from their admission. The evidence that Plaintiff “accepted”
Defendants’ offer was relevant on at least three different theories: (1) the evidence was relevant to
future pay; (2) the evidence was directly relevant to whether Plaintiff attempted to mitigate his
damages for the brief time period between the date of the settlement counter-offer and the end of
trial, approximately one month; and (3) the evidence was relevant to whether Plaintiff’s reasons for
rejecting other offers of employment were pretextual or unreasonable. While the majority may be
correct that (1) is of limited probative force, it completely ignores the other two bases of relevance.
The fact that the settlement counter-offer was relevant to the sincerity of Plaintiff’s refusal to accept
other offers of employment is highly significant. During Plaintiff’s cross-examination, and again
at closing, Defendants attempted to demonstrate that Plaintiff did not accept other offers of
employment for reasons that were pretextual or unreasonable. Plaintiff testified on cross-
examination that he declined to pursue several job opportunities, for reasons that included the
philosophy of the dental practice, the fact that one dental office was set up for left-handed dentists,
and the fact that one dental practice was too far from his home. Defendants attempted to impeach
Plaintiff by demonstrating that his professed motives were not his true motives, and argued during
closing that his efforts to mitigate damages were not reasonable, and in truth, Plaintiff did not have
a genuine desire to work. The fact that Plaintiff immediately accepted the “offer” to return to work
for Defendants tends undermine this argument, by supporting an inference that he did desire work,
which lends credibility to his proffered reasons for refusing other employment. Contrary to the
majority’s contention, this testimony is relevant not only to future pay, but to the issue of mitigation
over the entire period subsequent to Plaintiff’s termination. Majority Op. at 7; see Morris v.
Clawson Tank Co., 587 N.W.2d 253, 258 n.5 (Mich. 1998) (trier of fact must determine whether the
plaintiff refused to accept employment of a “like nature” and can consider “the type of work, the
hours worked, the compensation, the job security, working conditions, and other conditions of
employment” in making the determination).
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 17
Moreover, while the majority is correct that there is a possibility of prejudice in admitting
evidence of a settlement offer made shortly before trial, the majority’s analysis fails to consider the
factors ameliorating this potential prejudice. In his closing, Plaintiff addressed the settlement
evidence only in the context of damages, and the district court gave a limiting instruction, stating
that the evidence was “received for, and is only to be considered, for the limited purpose of [the
jury’s] deciding whether plaintiff failed to mitigate his damages, and is not to be considered by [the
jury] in making a determination as to whether the defendants discriminated against the plaintiff on
the basis of age.” J.A. at 558. This factor is relevant to the proper weight of the potential prejudice
in the Rule 403 balance. Fed. R. Evid. 403, advisory committee’s note (1972 proposed rule).
When truly considering the evidence with the maximum reasonable view of the probative
value and the minimum reasonable view of the potential prejudice–rather than ignoring sources of
probative value and factors that decrease the potential prejudice–it cannot be said that the district
court abused its “broad discretion,” even if other jurists would have reached a different outcome if
faced with the issue de novo. Accordingly, the evidence was not inadmissible under Rule 403.
III.
The evidence adduced at trial was certainly sufficient for the jury to find in Plaintiff’s favor.
A plaintiff can succeed on a claim for age discrimination by presenting circumstantial evidence of
age discrimination under the familiar burden-shifting model outlined in McDonnell Douglas Corp.
v. Green, 411 U.S. 792 (1973). Coomer v. Bethesda Hosp., Inc., 370 F.3d 499, 510 (6th Cir. 2004).
In order to establish a prima facie case, a plaintiff must prove that: “(1) he was at least 40 years old
at the time of the alleged discrimination; (2) he was subjected to an adverse employment action;
(3) he was otherwise qualified for the position; and (4) after he was rejected, a substantially younger
applicant was selected.” Id. at 511 (citing Burzynski v. Cohen, 264 F.3d 611, 622 (6th Cir. 2001));
Browning v. Dep’t of Army, 436 F.3d 692, 695 (6th Cir. 2006).
Here, Plaintiff presented evidence at trial that established all the elements of the prima facie
case. Plaintiff was seventy-three years old at the time of his termination; he was terminated; he was
qualified to practice dentistry; and he was replaced by Dr. Bui, who was thirty-three years old.
Because Plaintiff established a prima facie case, the burden shifted to Defendants to proffer a
legitimate, nondiscriminatory reason. Defendants’ legitimate, nondiscriminatory reason was that
Plaintiff was fired because of his low productivity. Under the McDonnell Douglas framework, after
a defendant produces a legitimate nondiscriminatory reason for a plaintiff’s discharge, the burden
shifts back to the plaintiff to show that the defendant’s proffered reason was a pretext for
discrimination. Browning, 436 F.3d at 695.
The plaintiff can make this showing by demonstrating that the defendant’s proffered reason
“(1) has no basis in fact, (2) did not actually motivate the defendant’s challenged conduct, or (3) was
insufficient to warrant the challenged conduct.” See Wexler v. White’s Fine Furniture, 317 F.3d
564, 576 (6th Cir. 2003) (en banc) (quoting Dews v. A.B. Dick Co., 231 F.3d 1016, 1021 (6th Cir.
2000)). “The first type of showing is easily recognizable and consists of evidence that the proffered
bases for the plaintiff’s discharge never happened, i.e., that they are ‘factually false.’ The third
showing is also easily recognizable and, ordinarily, consists of evidence that other employees,
particularly employees not in the protected class, were not fired even though they engaged in
substantially identical conduct to that which the employer contends motivated its discharge of the
plaintiff.” Manzer v. Diamond Shamrock Chems. Co., 29 F.3d 1078, 1084 (6th Cir. 1994) (citation
omitted). Under the second showing, “the plaintiff attempts to indict the credibility of his
employer’s explanation by showing circumstances which tend to prove that an illegal motivation
was more likely than that offered by the defendant. In other words, the plaintiff argues that the sheer
weight of the circumstantial evidence of discrimination makes it ‘more likely than not’ that the
employer’s explanation is a pretext, or coverup.” Id.No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 18
Viewed in the light most favorable to Plaintiff, a reasonable jury could have found that, to
the extent that Plaintiff was less productive than Defendants’ other dentists, his lower productivity
did not motivate Defendants’ decision to terminate him. First, Plaintiff adduced evidence from
which a jury could conclude that Defendants’ purported legitimate reason was an after-the-fact
concoction. Plaintiff testified that he was never informed that his productivity was a problem.
Plaintiff also put forth evidence suggesting that negative comments regarding his productivity were
only added to his personnel file after Defendants made the decision to terminate him.
Second, Plaintiff submitted evidence that tended to prove that Defendants hampered his
productivity by not providing Plaintiff with his fair share of dental resources. Plaintiff presented
evidence that he was not given a second operatory to work out of, and that, after his full-time
assistant left in October of 2000, Plaintiff was not given an experienced and dedicated assistant to
replace her. And, importantly, Plaintiff presented evidence that the new patients needing expensive
procedures were channeled away from him and to the other dentists. Plaintiff proved this point
through the testimony of Theresa LeClerc, who worked at the front desk of the dental office, who
testified that she was given a directive to steer new patients to other new dentists, but was never
given that directive with respect to Plaintiff when he was the newest dentist. Plaintiff also proved
this point by the expert testimony of Dr. Unsworth. Dr. Unsworth testified that, because a higher
percentage of new patients had not been receiving dental care in the past (as opposed to returning
patients, who, by definition, were receiving dental care in the past), new patients as a group tended
to require more expensive procedures than returning patients.3 Dr. Unsworth then compared the
total number of patient visits (including new and returning patients), expressed as a percentage by
dentist, to the total number of expensive procedures, again expressed as a percentage by dentist. The
idea is that, if a dentist was assigned more than his pro rata share of new patients, (and the evidence
showed that it was Defendants’ policy to assign new patients to the newest dentist), then that fact
would be reflected by that dentist having a share of expensive procedures that exceeded his share
of total patient visits. This is because the number of new patients that made up that dentist’s share
of total patient visits would be greater, and hence the percentage of expensive procedures would be
greater. The evidence suggested that Plaintiff was not being allocated a greater-than-pro-rata share
of new patients. For example, in 2000, when Plaintiff was the newest dentist, Plaintiff had 21% of
patient visits, but only 16% of the expensive procedures. Dr. Unsworth testified that had Plaintiff
been assigned the new patients, Plaintiff’s percentage share of expensive procedures would have
been in the range of 40% to 50% of the expensive procedures.
Third, Plaintiff produced evidence of remarks made by Defendant Leonor that, while not
direct evidence of discrimination,4 suggested that Defendant Leonor was highly conscious of
Plaintiff’s age. On at least three and possibly more occasions, Defendant Leoner told Plaintiff that
he was “the oldest dentist that [Defendants] have ever had at Oakcrest.” J.A. at 296. Defendant
Leonor also testified that, in the context of terminating Plaintiff, he asked Plaintiff’s wife about
Plaintiff’s plans to retire–which could allow a factfinder to infer that Defendant Leonor thought that,
because of Plaintiff’s age, it was time for Plaintiff to discontinue his employment.
3
These patients, for example, may not have engaged in preventative care, or may have been induced to come
to the dentist by the onset of a specific ailment.
4
Direct evidence is “evidence which, if believed, requires the conclusion that [age discrimination] was at least
a motivating factor in the employer’s actions.” See Jacklyn v. Schering-Plough Healthcare Prods. Sales Corp., 176 F.3d
921, 926 (6th Cir. 1999). Plaintiff’s evidence does not constitute direct evidence because it requires, at the minimum,
the inference that Defendants’ concerns about Plaintiff’s age were a motivating factor in Defendants’ decision to
terminate Plaintiff. The evidence nonetheless constitutes probative circumstantial evidence tending to show that
Defendants’ purported legitimate reason for Plaintiff’s termination was pretextual.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 19
This non-exhaustive summary of the evidence presented by Plaintiff at trial demonstrates that
Plaintiff presented a cohesive, plausible story for his termination: Defendants did not want to invest
in growing Plaintiff’s practice because of his age, so instead they deprived him of resources and then
terminated him to make way for a dentist who Defendants believed, because of his age, would make
better business sense over the long-term. Were this in fact what happened–and a jury could easily
find that it did–Defendants would have violated the ADEA.
When reviewing the trial court’s denial of a new trial, this Court is not “free to reweigh the
evidence and set aside the jury verdict merely because the jury could have drawn different inferences
or conclusions or because judges feel that other results are more reasonable.” Barnes v. Owen-
Corning Fiberglas Corp., 201 F.3d 815, 821 (6th Cir. 2000) (quoting Duncan v. Duncan, 377 F.2d
49, 52 (6th Cir. 1967)). Instead, the jury’s verdict must be upheld if it could reasonably be reached
by a reasonable jury. Duncan, 377 F.2d at 52. The majority, instead of considering the facts in the
light most favorable to Plaintiff, draws inferences for the benefit of Defendants at every turn.
Despite Plaintiff’s testimony that his performance was hampered by not having a full-time assistant
after October of 2000, the majority concludes that “the assistants Dr. Stockman did have were
dedicated to him at all times.” Majority Op. at 9. This is inconsistent with Plaintiff’s testimony that
he did not have a dedicated and experienced assistant. Dedicated and experienced assistants are
important to maintaining productivity, because they can anticipate the dentist’s needs, thereby
speeding up the dentist’s work. Plaintiff testified that the assistants that were provided to him were
inexperienced, and did not remain with him for long periods of time. Plaintiff also testified that
Defendants were responsible for hiring his assistants, and that he had no part in the hiring process.
The majority next attempts to discredit Plaintiff’s evidence that his restriction to one
operatory impeded his productivity. The majority claims that Plaintiff was not allowed to book two
operatories because he was slow, and that “Dr. Mac[unovich] . . . testified that he typically operated
out of one operatory and used the spillover rooms only occasionally.” Majority Op. at 10. The
majority, again ignoring the record and inappropriately viewing the facts in the light most favorable
to Defendants, avers that “there was no contrary evidence.” Majority Op. at 10. This overlooks
Plaintiff’s testimony that Dr. Bailey and Dr. Macunovich each “had two [operatories] apiece, two
apiece, and I had one.” J.A. at 290. A jury could have chosen to credit Plaintiff’s evidence that Dr.
Macunovich had two operatories, and disbelieved Dr. Macunovich’s testimony that he typically
operated out of one. Moreover, in light of Plaintiff’s evidence that Defendants’ claim that Plaintiff
worked slower was a pretext, a jury could believe that Plaintiff was not allowed to double-book
operatories because of discrimination, rather than because he was slow.
The majority next asserts that, even if Defendants did dedicate fewer resources to Plaintiff,
“this does not prove intentional age discrimination and does not rebut the proffered justification that
[Plaintiff’s] low revenue per patient-hour militated against dedicating further operatories or
assistants.” Majority Op. at 10. This statement demonstrates an utter failure to understand
Plaintiff’s claim: Plaintiff claims that, to the extent that his revenue per patient-hour was low, it was
because Defendants were not devoting resources to him. A jury could have credited this
explanation.
Finally, the majority’s statement that Plaintiff had “no evidence or even a theory as to how
the ‘good patients’ were diverted away from him” is patently false. Majority Op. at 10. The
majority admits that there was a policy in place to give new patients to the new dentists. Yet it
ignores LeClerc’s testimony that, despite the fact that she was instructed to steer new patients to
other new dentists, she was never instructed to direct new patients to Plaintiff. More troubling, the
majority appears to misunderstand the evidence presented by Dr. Unsworth. The majority states that
“it should not be surprising that in 2000 . . . Dr. Stockman saw 21 per cent of the new patients and
16 per cent of the expensive procedures . . . ; in 2001 it was 20.6 per cent and 20.7 per cent,
respectively; and in 2002 it was 16.2 per cent and 15 per cent, respectively.” Majority Op. at 11.
No. 05-1518 Stockman v. Oakcrest Dental Center, et al. Page 20
(emphasis added). Although Dr. Unsworth did state that Plaintiff saw “21 percent of the new
patients,” J.A. at 516 (emphasis added), clearly Dr. Unsworth merely made an error in speaking.
He later stated that the numbers he was referring to were “the total number of patient visits,” and
reading his testimony as a whole, it is clear that Dr. Unsworth was never laboring under a
misunderstanding as to this point.5 As the newest dentist, Plaintiff was supposed to be allocated
more than his pro rata share of new patients–the fact that his percentage of expensive procedures is
approximately equal to or less than his percentage of total patient visits is strong evidence that this
did not occur, given the unchallenged assertion that new patients, as a group, more frequently tended
to require more expensive procedures. Dr. Unsworth testified that, if Plaintiff6 were truly getting the
new patients, he should have had 40% to 50% of the expensive procedures. The majority simply
disregards this testimony.
When the evidence is considered in the light most favorable to Plaintiff, it is clear that a
reasonable jury could find in Plaintiff’s favor. Contrary to the majority’s contention, substantial
evidence supports the jury’s verdict.
IV.
Because this case represents the unusual situation in which evidence of a settlement
agreement was properly admitted, and there was substantial evidence supporting the jury verdict,
I would uphold the judgment below. Accordingly, I respectfully dissent.
5
As the majority realizes, the documents to which Dr. Unsworth referred discussed the total number of patient
visits. Majority Op. at 11.
6
The point is simply that if Plaintiff were assigned the new patients he was supposed to receive, and if new
patients more frequently needed expensive procedures, then Plaintiff’s percentage share of expensive procedures should
exceed his percentage share of total patient visits. Dr. Unsworth testified that this would mean that Plaintiff should have
had about a 40% share of the expensive procedures, to go with his 20% share of total patient visits. The fact that Plaintiff
did not supports the conclusion that Plaintiff was not in fact allocated the new patients; or if he was, he was only
allocated the “table scraps.” See Majority Op. at 11.