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The Court first reiterated that settlement communications are not privileged. Instead, the inquiry must focus on California Code of Civil Procedure section 2017.010--i.e., whether the information is relevant or reasonably calculated to lead to the discovery of admissible evidence.

The Senate amendment provides that evidence of conduct or statements made in compromise negotiations is not admissible. The Senate amendment also provides that the rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations.

The protection given by settlement privilege ensures that admissions made during the course of settlement negotiations are not admitted into evidence. If it were otherwise, parties would rarely, if ever, enter into settlement negotiations.

In an effort to encourage frank settlement negotiations, Rule 408 of the Federal Rules of Evidence prohibits the use settlement offers or statements made in furtherance of negotiating settlements to prove liability, validity of, or the amount of a claim that is in dispute, or to impeach by using statements made in

The protections of Rule 408 are limited to prohibition of the use of settlement discussions to prove the validity, amount, or liability of a claim or to impeach by prior inconsistent/contradictory statement.

Neither Federal Rule of Evidence 408 Nor Evidence Code Section 1152 creates a settlement privilege.The other Circuit courts have yet to rule, and district courts are split, though the Eastern and Southern Districts of California have ruled that a settlement privilege exists. However, those decisions are not binding.

Rule 408 applies in both civil and criminal cases. Evidence of a civil settlement is not admissible in a criminal case. In this case, the government improperly introduced evidence of a settlement the defendant reached in a civil action brought by the defrauded victims of the criminal offense.