Stockman v. Oakcrest Dent

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 07a0101p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

X

Plaintiff-Appellee, -

SAMUEL DAVID STOCKMAN, D.D.S.,

-

-

-

No. 05-1518

v.

,

>

OAKCREST DENTAL CENTER, P.C., LOUIS E. -

-

Defendants-Appellants. -

LEONOR, D.D.S., Individually,

-

N

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.

_________________

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.

_________________

OPINION

_________________

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.