Brent Randall Phillips v. Hon. o'neil/state Bar
CV-17-0122-SA
| Ariz. | Dec 20, 2017Background
- Brent Randall Phillips settled an Arizona Attorney General Consumer Fraud Act (CFA) suit by entering a consent judgment that admitted CFA and federal-regulation violations and imposed restitution, fees, and penalties.
- The consent judgment contained a broad prohibition on using it "as an admission or evidence of any alleged wrongdoing or liability" in other proceedings, with narrow exceptions for enforcement/bankruptcy.
- The State Bar later brought disciplinary proceedings against Phillips based on the same advertisements underlying the CFA suit.
- At the disciplinary proceeding the Presiding Disciplinary Judge (PDJ) allowed the State Bar to introduce the consent judgment’s stipulated facts for impeachment (but not sanctions), despite Phillips’ motion in limine to exclude the judgment entirely.
- The Arizona Supreme Court accepted special action review to resolve whether Arizona Rules of Evidence 408 and 613 bar use of a consent judgment’s stipulated facts to prove liability or for impeachment in subsequent disciplinary proceedings.
Issues
| Issue | State Bar's Argument | Phillips' Argument | Held |
|---|---|---|---|
| Whether Rule 408 bars using a consent judgment’s stipulated facts to prove substantive liability in later proceedings | Consent judgment admissible to prove facts relevant to disciplinary charges; Rule 408 inapplicable or has exceptions | Rule 408 bars use of settlement/consent judgment to prove liability or validity of claim | Rule 408 precludes use of consent judgment to prove substantive facts establishing liability |
| Whether Rule 408 allows using a consent judgment for impeachment (prior inconsistent statement) | Judgment may be used to impeach Phillips’ trial testimony under Rule 613 or as extrinsic evidence of inconsistency | Rule 408 expressly forbids impeachment use; settlement evidence cannot be used to impeach | Rule 408 bars admission of consent-judgment facts for impeachment purposes |
| Whether the disciplinary proceeding is a different claim so Rule 408 doesn’t apply | Disciplinary claim is different from Attorney General’s civil CFA action; Rule 408 limited to "the claim" | Both actions arise from the same nucleus of operative facts (same claim for Rule 408 purposes) | Claims arise from same transaction; Rule 408 applies to bar admission |
| Whether Rule 613(b) or its "justice so requires" clause permits admission despite Rule 408 | Rule 613 allows extrinsic prior inconsistent statements when justice requires, so admission is proper | Rule 408 renders the judgment inadmissible under any other rule, so Rule 613 cannot override it | Rule 613 cannot be used to admit evidence that is otherwise inadmissible under Rule 408 |
Key Cases Cited
- United States v. Gilbert, 668 F.2d 94 (2d Cir.) (consent decrees not admissible under Rule 408 to prove liability)
- Johnson v. Hugo’s Skateway, 974 F.2d 1408 (4th Cir.) (consent judgment admissible for other purposes, e.g., motive, not to prove liability)
- United States v. Austin, 54 F.3d 394 (7th Cir.) (consent decree admissible to show notice/knowledge when offered for purpose other than proving liability)
- Uforma/Shelby Bus. Forms, Inc. v. NLRB, 111 F.3d 1284 (6th Cir.) (Rule 408 inapplicable when claim is based on wrongful conduct during settlement negotiations)
- Broadcort Capital Corp. v. Summa Medical Corp., 972 F.2d 1183 (10th Cir.) (Rule 408 does not bar evidence of settlement discussions about a different claim)
- State v. Acree, 121 Ariz. 94 (1978) (prior inconsistent statements may be substantive unless inadmissible under another rule)