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Antony M. Santos, Esq. 1 It is well established that a Court may stay a civil action pending resolution of a criminal action when the interests of justice requires such action. “A court may decide in its discretion to stay civil proceedings, postpone civil discovery, or impose protective orders and conditions ‘when the interests of justice seem to require such action, sometimes at the request of the prosecution, sometimes at the request of the defense.’” SEC v. Dresser, 628 F.2d 1368, 1375 (D.C. Cir. 1980), quoting United States v. Kordel, 397 U.S. 1, 12, (1970); Horne Brothers, Inc. v. Laird, 177, 463 F.2d 1268, 1271‐1272 (D.C. Cir. 1972). “The Court must make such determinations in the light of the particular circumstances of the case.” SEC v. Dresser, 628 F.2d at 1375. The Court in SEC v. Dresser continued: Other than where there is specific evidence of agency bad faith or malicious governmental tactics, the strongest case for deferring civil proceedings until the completion of criminal proceedings is where a party under indictment for a serious offense is required to defend a civil or administrative action involving the same matter. The non‐ criminal proceeding, if not deferred, might undermine the party’s 5th Amendment privilege against self‐incrimination, expand rights of criminal discovery beyond the limits of Federal Rule of Criminal Procedure 16(b), expose the basis of the defense to the prosecution in advance of criminal trial, or otherwise prejudice the case. If delay of the non‐criminal proceeding would not seriously injure the public interest, a court may be justified in deferring it. SEC v. Dresser, 628 F.2d at 1375‐1376, citing United States v. Henry, 491 F.2d 702 (6th Cir. 1974); Texaco, Inc. v. Borda, 383 F.2d 607, 608‐609 (3rd Cir. 1967); Silver v. McCamey, 221 F.2d 873, 874‐875 (D.C. Cir. 1955) The Ninth Circuit has also held that “a Court may decide in its discretion to stay civil proceedings when the interest of justice seem to require such action.” Keating v. Office of the Thrift Supervision, 45 F.3d 322, 324 (9th Cir. 1995) quoting Dresser, 628 F.2d at 1375 (quoting United States v. Kordel, 397 U.S. 1, 12 N.27,). The Court in Keating held: The decision whether to stay civil proceedings in the face of a parallel criminal proceeding should be made "in light of the particular circumstances and competing interests. involved in the case." [Federal Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir 1989)]. This means the decision maker should consider "the extent to which the defendant's Fifth Amendment rights are implicated." Id. In addition, the decision maker should generally consider the following
1 This material was drafted, as original work‐product or prepared and/or compiled by Antony M. Santos. Otherwise, every effort
has been made to credit original sources where applicable.
A.M. Santos Law, Chtd.
R.M. 1083 (2nd Cir. The sheer scope of the apparent investigation includes every deal ever done by Dunder Mifflin or Black for the past 15 years.3d at 324‐325. Where. and the potential prejudice to plaintiffs of a delay.may cause some inconvenience and delay to the [government]. 501. 514 (W. however. Corbin v. would mitigate against the possibility of such unfair outcomes. That would include hundreds of deals or loans.) (decided April 7. A. the allegations in this civil action pertain to events dating back several years. v. Bridgeport Harbour Place I. see also.Supp 2d 6 (D. and (5) the interest of the public in the pending civil and criminal litigation.Conn. The requested stay of discovery. (3) the convenience of the court in the management of its cases. there is no inconvenient delay in this matter. Black’s motion to stay this matter until expiration of 120 days should be granted.D. Keating.factors: (1) the Interest of the plaintiffs in proceeding expeditiously with this litigation or any particular aspect of it.” Andover Data Services Division of Players Computer.. 1989) (holding that a non‐consenting witness may not be forced to answer potentially incriminating questions in reliance upon a protective order stating that his testimony may not be provided to the government). Santos Law. CMKM Diamonds.N. and the efficient use of judicial resources. Further.2d 1080. under these circumstances.D. A. Statistical Tabulating Corp.D.Nev.R. 149 50 (E. Defendant would like an opportunity to retain criminal defense counsel so as to determine whether or not he may feel at liberty to testify and fully defend himself without invoking his Fifth Amendment Privilege against self incrimination. Further. 876 F. Chtd. the defendant's Fifth Amendment interests or other undue hardship should prevail. 147. (2) the burden which any particular aspect of the proceedings may impose on defendants.. Talco Construction. LLC v.Y. all of the factors considered by the Courts support a stay of this civil action at least until He is afforded a reasonable opportunity to secure the advice and counsel of competent criminal defense counsel. at 903. Here. PLAINTIFF DOES NOT NEED TO PROCEED EXPEDITIOUSLY AND WILL NOT BE PREJUDICED BY A BRIEF DELAY The trial is scheduled for October 28 2013. Mr. The substantially different rules that apply to discovery in civil and criminal cases are important reasons for staying civil discovery in cases where there are parallel criminal proceedings. 153 F. and do not involve any emergent issue. 2002) Depositions of witnesses and other forms of civil discovery will undoubtedly provide information not discoverable in the criminal case and shed light on Defendants’ strategies in defense of the criminal matter. there is no prejudice to the Plaintiffs by a nominal delay for trial. Inc. Id.. the only burden on plaintiff is the inconvenience of delay. courts have held that in the example of “[a] Rule 26(c) protective order.Y. 269 F. Accordingly. Federal Deposit Ins. Ganim. Defendants are each willing to stipulate to extend the deadline for trial thereby alleviating the detriment imposed by Nevada’s Five‐Year Rule. 2 . 2011). Inc.. SEC v. (4) the interests of persons not parties to the civil litigation.D. Corp. provides no guarantee that compelled testimony will not somehow find its way into the government’s hands for use in subsequent criminal prosecution. on the other hand. Clearly. 1977). 1994).. no matter how broad its reach. United States v. ("While a stay. 45 F. Further. 2011 WL 1343004 (D.N. 74 F.
Moreover. Defendants. Otherwise. Plaintiffs answered this motion by stating that no evidence was being supplied to the government and that.. Inc. Hugo Key and Son. Currency.R. 512 (D. May 14. 327 (S. THE BURDEN ON. 2003 U. McGuire.D. or otherwise become unavailable and "assets to dissipate. Black’s Motion for Stay of this action should be granted.D.R. 528 (D. 109 F. Maloney v. Del. United States v. courts may insist that the plaintiff establish more prejudice than simply a delay in her right to expeditiously pursue her claim. LEXIS 753 (S.S. stating that "[w]hile this will undoubtedly cause inconvenience and delay to plaintiffs.‘protection of the defendant's constitutional rights against self incrimination is the more important consideration’") (quoting Dienstag v. at 329. 17 (6th Cir. 1964).N. courts are inclined to grant a stay unless there are countervailing interests that compel the court to proceed expeditiously in the civil action. moved for a stay of the deposition under (former) Rule 30. 328 F. 49 F.D. Mr." Id.N. Bronsen. 39 (S. Downe.D. Defendants alleged that.. 272 (S.) (U.Y. The relief requested herein by Black will not prejudice Plaintiffs in any way other than necessitate a brief delay in the conclusion of this matter. 634 (S. Courts have often granted pre‐indictment stays of civil actions when requested by the Government in order to protect the integrity of the criminal investigations. 383 F.N.R. Bronsen.M. In Dienstag v. 2d 508. 626 F.D. at the very least. Supp. Mr. v. Accordingly.D.D. Secs. A. Cristo Prop. Inc.R. Courts have noted that “in evaluating the plaintiffs’ burden resulting from the stay.D. B. 523. Dist. MR.Y. granted stay during grand jury proceeding). the disclosures in the deposition could be held confidential. absent a stay.Y. Pharaon. 1991) (New York D. defendants in a civil securities fraud case were indicted for violation of provisions of the federal securities laws. while recognizing the negative aspects of delaying the civil proceeding. 2004) (citing In re Adelphia Commons. Attorney granted stay during criminal investigation). Chtd. Tolkow. BLACK WARRANTS A STAY If a defendant successfully demonstrates that he bears the risk of having evidence from the civil trial used against him in the criminal proceeding and/or the risk of being forced to expose the basis of his criminal defense to the government before the criminal trial. SEC v. 36 F. 7 F.D.N. 152 F. AND PREJUDICE TO.Y. a defendant may be forced into "the uncomfortable position of having to choose between waiving [his] Fifth Amendment right or effectively forfeiting the civil suit. The court.. in view of the absence of the necessity to proceed expeditiously with this litigation and the absence of any potential prejudice to Plaintiffs. 1970).Y. 1980) cert denied 449 U.S.Y. 49 F. witnesses to relocate. 1985) (staying all discovery in civil case pending outcome of possible criminal actions). 993 (1980) (sustaining a stay granted in pre indictment forfeiture proceeding). Brock v.. Here. Inc. Perry v. 2003). 36. Texaco. Board of Governors of the Federal Reserve System v.NJ.D.D. Santos Law.N. v Borda. Dist. LEXIS 9736 at 10 (ED.” Walsh Sec.N.2d 607 (3d Cir.D. having been noticed for deposition. Supp. Mgmt. 116 (E. 1993). 3 . 1998). The New York Post Co.S. United States v.S.2d 11. they would be compelled. to assert their Fifth Amendment privilege against self‐incrimination in order to avoid disclosing defenses to the criminal charges. 1993 U. 329 (S.Y. Ltd. Black will be put in the position of having to assert his 5th Amendment privilege and thereby effectively forfeiting defenses in this action. U.A. Lit. 1967) (sustaining a stay of a private antitrust suit pending the resolution of criminal proceedings).S. v.N. 327.D." Volmar Distributors. or to otherwise incriminate themselves. granted the stay until completion of the criminal trial. on the advice of counsel. Pa.R. Prejudice results where the passage of time allows memories to fade.R. 140 F. 1970)). Gordon. protection of defendants’ constitutional rights against self‐incrimination is the more important consideration.
pending in the United States District Court for the District of Rhode Island. If the defendant decides to waive his or her Fifth Amendment rights. 1989). Mr. This action and the impending criminal action contain allegations of alleged similar wrongdoing. Both actions would have common witnesses.N.. which will likewise go to the very heart of the allegations in the pending criminal investigation.N. 1060 (E. This is not only severely prejudicial.R.D. Chtd.I. sources of income.) Moreover. Derderian. 308 (1976). Control Metals Corp. Moreover. The burden on the defendant is also of critical importance. Certain Real Property & Premises.D.2d at 14) (Emphasis added. etc. In Gray. Black is clearly substantial. Under the compelling circumstances A. Supp. Baxter v. at 53. Absent a stay. Without a stay.Supp. Black will be prejudiced by being forced to litigate without the ability to prepare or mount a defense to the serious allegations.D.S. The prejudice suffered by the defendant will far outweigh the inconvenience to the plaintiff. Black may suffer undue prejudice if he is forced to defend this action as he may be required to assert his 5th Amendment privilege thereby permitting the trierof‐fact. in many instances it will result in the automatic entry of judgment against the defendant. There is no reason that Mr. 2007 US Dist Lexis 58427 at 45 (DRI August 3. 57 F. Mr. Mr. a trier of fact may construe the invoking defendant's silence against him.Y. The court eventually granted the plaintiffs' motion to lift the stay. 2007). Black’s business dealings. Black going to the very heart of Mr. There. 626 F. In United States v. the District Court of Rhode Island applied the multi‐factor test and initially issued a stay suspending discovery as to certain defendants who faced prosecution in pending parallel criminal proceedings. 4 . Palmigiano. who were under a threat of being indicted that was more than "fanciful" or "imaginary" was warranted because there existed a "'realistic threat of' incrimination'" beyond "'a mere imaginary possibility'" Id. SEC v. the prejudice to Mr.Inc. U. If the defendant transparently seeks a stay for tactical reasons.Y. Black will be prejudiced due to his inability to devote his full time and attention towards the criminal trial. the Court granted a stay of civil forfeiture proceedings as to all three defendants where an indictment had been issued against only one of the moving defendants. 1987) (staying civil action while Department of Justice considered bringing criminal proceeding). securing and apprising recently retained legal counsel to address the criminal investigation. the Court held that a stay as to the two defendants. Currency. absent a stay. 1972) (SEC granted stay during grand jury proceeding). Black would be required to participate in discovery in this civil action at the same time he is seeking. While this will enable the defendant to rebut the civil charges. warranting at least some form of limited relief.. 751 F. the discovery and trial process allows the prosecuting agency to access information to which it might not otherwise be entitled under the applicable rules of criminal procedure. A good illustration is the case of Gray v. 656 (D. Black’s interest in ensuring his right to fair proceedings should not be the equivalent of the Government’s interest in protecting the integrity of its investigation.M. the decision is irrevocable. affiliations. Santos Law.R. facts and circumstances.S. Initially. 672 F. Both actions stem from allegations made by Plaintiffs and others as to the same issues.. 54. the court is far less likely to grant relief. Mr. but only after these defendants pled guilty to the criminal charges and were no longer subject to further prosecution. in its discretion. at 1063 (quoting U. 425 U. 56 (S. to draw an adverse inference. See Id. There is an unavoidable overlap between the criminal investigation and this action. v. Finally.S. The trial is likely to result in testimony from Mr. Thus. any statements made in a deposition or in court can and will be used by the prosecution in the criminal proceedings.
A STAY WILL ADVANCE PUBLIC INTERESTS AND WILL NOT PREJUDICE THE INTEREST OF PERSONS NOT PARTIES TO THIS LITIGATION In Brock v. 109 F. Likewise.N. Mellon Bank. 2004). Inc. at 529 citing Brock v. 119 120 (E.D.R. Mr.Y. If the civil action is stayed until the conclusion of the criminal proceedings. United States v.R. Walsh Securities.D. 2012. 1018 N. 2004) (citing Cognex Corp. Del.”). Tolkow. Ltd. they may prove useful as the criminal process may determine and narrow the remaining civil issues. A. 75 (WD. Instruments Corp. then it obviates the need to make rulings regarding potential discovery disputes involving issues that may affect the criminal case. Santos Law. 2001 U. 121 (E. at 120‐21 ("the risk of harm to the public interest in correcting improprieties in the management of employee benefit plans does not outweigh the distinct possibility that defendants will be unable to defend both actions to the fullest. Black to defend this action.”). 2001). Del. “the outcome of the criminal proceedings may guide the parties in settlement discussions and potentially eliminate the need to litigate some or all of the issues” in the case.D. pending the outcome of the investigation of the Department of Justice. 218 F. Here.M. June 29. Tolkow. Finally. but rather merely for a brief period of time. resolution of the criminal trial and a stay of the civil action may narrow or eliminate factual issues in the civil case. clarify or otherwise affect various contentions in the civil case. 328 F.”). Gordon. it is in the interest of the Court and judicial economy to grant the relief requested. Hence. 1985) (In granting stay court noted that “the resolution of the criminal case might reduce the scope of discovery in the civil case or otherwise simplify the issues.. 513 (D. Accordingly. 2003) ("By proceeding first with the criminal prosecution. Furthermore. Significantly. 545 F2d 869. the Court’s valuable time and resources may be preserved by the narrowing of issues resolved during the criminal case. Del. Supp. Tolkow. 109 F. Cristo Prop. In re Grand Jury Proceedings (Williams). it would be unfair. C. (D. Brock v.Y.presented here. 116. The criminal action is proceeding and is scheduled for trial on January 24. Maloney v. THE INTERESTS OF THE COURT FAVOR A STAY Judicial efficiency also weighs in favor of granting a stay. 109 F. this action would not be stayed indefinitely. 995 F2d 1013. Black’s Motion to Stay this action should be granted. 328 F. Javier H v. Maloney. 2d 508.Y.. 1976) (affirming a stay of discovery and stating “it might well have been that resolution of the criminal case would moot.D.N.R. Mgmt. 1985). This is not an instance where criminal prosecution is merely conjectural. the Court granted a stay of a civil action alleging violation of fiduciary obligations under ERISA.D.D. unjust and prejudicial to Mr. 1993) (“Although stays delay civil proceedings. the Court makes efficient use of judicial time and resources by insuring that common issues of fact will be resolved and subsequent civil discovery will proceed unobstructed by concerns regarding self‐incrimination").S. In fact. Supp.N. A Superseding Indictment was issued. Garcia Botello. v. 7 F. here.”). LEXIS 25555. 873 (3rd Cir.11 (11th Cir. a stay would not harm the public interest and would enable Mr.D. Sup. courts can alleviate concerns about indefinite stay by “allowing the parties to petition the Court to lift or modify the stay if there is a change in circumstances warrant it. 116 (E. 1985).Y. Black to require him to actively participate in this trial while at the same time he prepares to address the criminal investigation. 116. 72. D. The Court found that a stay would cause no serious damage to the public interest and would enable the defendants to defend the civil case vigorously without fear of subsequent prosecution. 2d at 513 (D.R. 5 . Id.N. Nat’l. v. Chtd. Dist.
307 F2d 478 (5th Cir. In re Ivan Boesky Securities Litigation. (3) afford said counsel the opportunity to review the scope and circumstances of the pending criminal investigation and review documents germane thereto. There is no harm to the public by a brief stay. it is respectfully requested that Defendant Black’s Motion to Stay this action until expiration of at least 120 days be granted so that Defendant may be afforded the opportunity to (1) secure criminal defense counsel. Thus.M. Eastland. 1962). 49 (S.Significantly. the interests of the public. the parties and the Court strongly weigh in favor of staying this action. This seems so necessary and wise that a trial judge should give substantial weight to it in balancing the policy against the right of a civil litigant to a reasonably prompt determination of his civil claims or liabilities. 128 F. the government. A. 1989) (“The public interest in the criminal case is entitled to precedence over the civil litigant. Moreover. and (4) afford said counsel the time and opportunity to advise Mr. preserves judicial resources and affords Mr. Black the opportunity for a fair trial in both the civil and criminal cases. Chtd. (2) confer with same. As stated by the Fifth Circuit in Campbell v. over 5 years ago. 6 . Accordingly. the allegations in the civil action pertain to events that allegedly occurred in 2006.D.R. 47. No emergent relief is sought by the Plaintiffs.Y. Black as to whether or not he should avail himself of his Fifth Amendment Rights at trial in the instant matter. The compelling public interest in facilitating enforcement of the criminal laws and the fundamental differences between civil and criminal proceedings give rise to the need for a stay of this civil action.N.”). E. Administrative policy gives priority to the public interest in law enforcement. See also. the interests of non‐parties are served by a stay of discovery that avoids prejudice to the criminal case. CONCLUSION Based on the foregoing.D. Santos Law. Defendant Black’s motion should be granted. The very fact that there is a clear distinction between civil and criminal actions requires a government policy determination of priority: which case should be tried first.
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