Federal Evidence Review notes the following:In conspiracy to distribute controlled substances prosecution, physician-defendant could not assert that the medical records of his patients were subject to a doctor-patient privilege because the federal courts do not recognize this privilege under FRE 501, in United States v. Bek, 493 F.3d 790 (7th Cir. July 6, 2007) (No. 05-4198)It is easy to overlook that the a physician-patient confidential communications privilege is not recognized in the trial of federal question matters. As adopted by Congress, the Federal Rules of Evidence fail to explicitly allow for this privilege.

AT&T renewed its motion to compel, arguing that the negotiations leading to the license could undermine the expert’s opinion. The magistrate agreed, ruling that “the negotiations could shed light on why the parties reached their royalty agreements and could provide guidance on whether some or all of the licenses could be considered a basis for calculating a reasonable royalty.”After the District Court affirmed the magistrate’s ruling, MTSG filed a petition for mandamus asking the Federal Circuit “to invoke [Fed. R. Evid. 501] to fashion a new privilege in patent cases that would prevent discovery of litigation settlement negotiations related to reasonable royalties and damages.”The Federal Circuit flatly declined the invitation, finding that “[a]dopting a settlement privilege would require us to go further than Congress thought necessary to promote the public good of settlement.”

Also prompting the district court to permit the discovery was the fact that MSTG’s damages expert relied on the testimony of an MSTG executive regarding MSTG’s “business reasons” for entering into the license agreements. Under these circumstances, the district court held it would be unfair for MSTG to then shield those reasons from further examination.The Federal Circuit Decision In analyzing the district court’s rulings, the Federal Circuit first considered Supreme Court precedent on whether a new settlement negotiation privilege should be recognized under Federal Rule of Evidence 501. The court concluded that none of the factors supported creation of a new privilege here, where: the failure to recognize such a privilege did not “frustrate the purposes” of any state legislation; U.S. Congress had never recognized such a privilege; the privilege was not among the list of evidentiary privileges recommended by the Advisory Committee of the Judicial Conference in its proposed Federal Rules of Evidence; recognition of the privilege is not needed to foster settlement; the privilege would be subject to too many exceptions rendering it ineffective; and there were other effective discovery methods to limit the scope of discovery.

Nevertheless, the Court declined to create a new settlement negotiation privilege. The Court analyzed several factors identified by the Supreme Court in determining whether to adopt a new privilege under Fed. R. Evid. 501: state policy and recognition of the new privilege; congressional consideration of the new privilege or related issues; the list of evidentiary privileges recommended by the Advisory Committee of the Judicial Conference in its proposed Federal Rules of Evidence; and whether the new privilege effectively advances the public good. First, the Court found that no state has adopted or recognized a settlement negotiation privilege outside the context of a third party mediator.

For example, in Eagle Precision Technologies, Inc. v. Eaton Leonard Robolix, Inc., 2005 U.S. Dist. LEXIS 47173 (S.D. Cal. Aug. 11, 2005), a California federal trial court engaged in an extended discussion of the subject, ultimately applying state privilege law and concluding that, under Federal Rule of Evidence 501, the law to be applied is that which "provides the rule of decision." What this means in practical terms is not easy to decipher in cases where numerous state and federal claims have overlapping, but different, elements of proof.

In particular, the circuit noted that “Doe Jr. has not made a strong showing of need for the parent-child privilege, and ‘reason and experience’ do not warrant creation of the privilege in the face of substantial authority to the contrary. Fed. R. Evid. 501.” Under Seal, _ F.3d at _ (citation omitted).

Verus and its supporters offered two principal arguments, the first of which was that the court should recognize an “insurance examination privilege.” In cases arising under federal statutes, Federal Rule of Evidence 501 provides that privilege issues are governed by federal common law. When federal courts are asked to recognize a new privilege, they consider such factors as “policy decisions of the States,” whether the privilege will “serv[e] public ends” and the “likely evidentiary benefit that would result from denial of the privilege.”

’” Id. at *12 (citing, Fed. R. Evid. 501 andIn re KBR, 756 F.3d at 762). Rather, the DC Circuit decided that the investigative documents were not subject to disclosure under FRE 612 because “even if the witness consults a writing while testifying, the adverse party is not entitled to see it unless the writing influenced the witness’s testimony” and that “[i]t cannot be the case that just stating the documents were privileged constitutes a testimonial reliance on their contents.”

The SCA privilege did not apply because it was not recognized in Georgia. Federal Rule of Evidence 501 “mandates that state law determine privilege applicability when state law ‘supplies the rule of decision’ for ‘an element of a claim or defense.’” Id. at *2 n.2 (quoting Fed. R. Evid. 501).

C.A. Nos. 2:13-CV-1831 & -3595-DCN, and 2:14-CV-4067-DCN, 2016 U.S. Dist. LEXIS 5364, at *13 (D.S.C. Jan. 8, 2016). Federal courts handling federal question cases apply federal common law to federal issues, but under Fed. R. Evid. 501 apply state law to "a claim or defense for which state law supplies the rule of decision." Taking it a step further, in Hunt v. Schauerhamer, Case No. 2:15-CV-1-TC-PMW, 2016 U.S. Dist. LEXIS 1744, at *6 (D. Utah Jan. 6, 2016), the court handling a § 1983 action applied Utah privilege law to the "discrete issue now before the court concern[ing] the existence and interpretation of a settlement agreement . . . requir[ing] application of the rules of state contract law."