Parallel Proceedings in Florida’s Courts: Fifth Amendment Considerations
Parallel Proceedings in Florida’s Courts: Fifth Amendment Considerations
Published January 2008, Florida Bar Journal
Crime victims rightfully demand justice. Justice, however, is not limited to Florida’s criminal courts. Often, the same unlawful conduct prompting criminal prosecution also gives rise to civil liability. The civil court system not only provides an additional means of obtaining justice and closure; it also enables victims to become financially whole. A well-known example is the case of O.J. Simpson. Although acquitted of murdering his ex-wife in 1995, a jury found Simpson liable for wrongful death in 1997, and ordered him to pay $33.5 million to the victims’ families. A more recent example involves nearly 300 persons who were injured themselves or who lost family members in a massive Rhode Island night club fire in 2003. Following the criminal sentencing of certain persons responsible for the tragedy, victims filed a civil lawsuit alleging negligence and carelessness against these and other defendants.
In many instances, criminal proceedings conclude before the commencement of the civil suit. This is not always the case, however, and civil litigation and criminal proceedings often overlap. Special considerations arise in these parallel proceedings, particularly when the civil case moves forward at the same rate or more quickly than the criminal matter. When this occurs, Defendants in the civil litigation must make an extremely difficult choice — participate in the civil matter and waive their Fifth Amendment right against self-incrimination forever, or remain silent, and in all likelihood, face the probability of a sizable adverse judgment.
This dilemma is not without a solution, and courts can alleviate any prejudice by temporarily suspending discovery or briefly continuing the civil case. The standards by which Florida’s state and federal courts consider these requests are not, however, uniform. Florida’s appellate courts have not developed well-defined guidelines. The Eleventh Circuit applies a more rigid test which affords relief only if waiving the Fifth Amendment protection would result in a certain loss of the civil case. This standard contrasts the multi-factor balancing test employed by other federal and state courts.
The multi-factor test enables courts to take additional matters into consideration when analyzing whether to stay or limit pre-trial activity in a civil case. As set forth below, civil practitioners representing defendants in parallel proceedings must remain cognizant of the applicable standards when seeking relief. State court practitioners may urge application of the multi-factor balancing test. Federal practitioners faced with the less flexible standard must focus on how asserting the Fifth Amendment privilege guarantees the loss of the civil proceeding.
B. Fifth Amendment Considerations In Florida State Courts
The Fifth Amendment to the United States Constitution provides that no person “shall be compelled in any criminal case to be a witness against himself.” It protects witnesses against making disclosures which they reasonably believe might incriminate them in future proceedings. The invocation of the Fifth Amendment does not, however, preclude the fact finder in a civil matter from drawing an adverse inference. Moreover, litigants cannot make “blanket” assertions of the privilege; rather, they must invoke it on a question-by-question basis. Once a witness waives the privilege, however, it is gone forever.
The potential impact of invoking the Fifth Amendment in civil proceedings depends upon the status of the party invoking the privilege. Litigants pursuing affirmative relief face an uphill battle. Courts are hesitant, and rightfully so, to permit civil plaintiffs to avoid discovery obligations or trial through invocation of the Fifth Amendment. In fact, “[w]hen a plaintiff in a civil action invokes the Fifth Amendment privilege, courts often dismiss the plaintiff’s action or strike plaintiff’s pleadings.” Conversely, “where a defendant has invoked the Fifth Amendment privilege against self-incrimination he will usually not suffer a similar detriment because a defendant is not generally seeking affirmative relief and is before the court involuntarily.” Defendants in the latter situation quite naturally seek stays of discovery or trial “so that the defendant’s assertion of this constitutional right does not preclude him from defending a civil suit.”
Florida’s appellate courts have not comprehensively addressed and resolved the issue of whether to grant a continuance or limit pre-trial discovery when a defendant faces a parallel criminal prosecution. In Kerben v. Intercontinental Bank, 573 So. 2d 976 (Fla. 5th DCA 1991), the 5th DCA granted certiorari to quash an order granting an indefinite stay of a civil proceeding pending the outcome of a criminal matter involving a nonparty witness. The underlying civil action involved an attorney’s claim against a bank for allegedly honoring dozens of checks forged by a former legal assistant. The legal assistant was a defendant in the civil lawsuit, but had partial final judgment entered against her in September 1998. The defendant bank deposed the legal assistant, who asserted her Fifth Amendment privilege throughout. The defendant then filed a motion to stay or abate, arguing that, because the assistant was a key witness in the civil lawsuit, the ongoing criminal proceeding would impede its ability to defend against the underlying accusations. The trial court granted the motion, staying the case “until the impediments for proceeding . . . have been alleviated.”
The plaintiff argued that an indefinite stay pending resolution of charges against a non-party witness departed from the essential requirements of law. The appellate court agreed. The court noted that “[t]here is a dearth of authority dealing with the use of a stay based on invocation of the privilege against self-incrimination by a witness in a civil lawsuit.” The court rejected the defendants’ claim that they would be “prejudiced” without the stay, noting that the assistant’s testimony would not likely resolve the issue of whether the signatures were genuine and that the absence of the witness did not “make this lawsuit impossible for either party to try.” Id. The court also found prejudice to the plaintiff due to the indefinite nature of the stay. The court concluded that “[t]o abate this action indefinitely based solely on the ground that a key witness is “unavailable” to the defendant is an abuse of the trial court’s broad discretion and departs from the essential requirements of law.”
In Rappaport v. Levy, 696 So. 2d 526 (Fla. 3d DCA 1997), the Court of Appeal for the Third District reversed an order staying a civil action where the defendant had yet to assert the Fifth Amendment privilege during a deposition. The underlying civil action in that case involved a wrongful termination claim. The defendants claimed the termination was justified based upon the plaintiff’s improper use of medication and theft of money. The defendants lodged a criminal complaint in connection with this conduct. Following several agreed stays of discovery, the defendants noticed the civil case for trial. The plaintiff moved to strike the notice. The defendants argued that the plaintiff’s parallel criminal proceeding thwarted their attempts to complete discovery and conduct the trial. In the meantime, the criminal proceedings against the plaintiff were dismissed and the state appealed the dismissal. That proceeding remained pending at the time of the court’s opinion.
The trial court issued an order denying the motion to strike, lifting the previous stays of discovery and allowing both sides to take depositions. The court stayed the trial, however, until the plaintiff was “in a position where he can testify at trial without compromising his Fifth Amendment Privilege.” The Third District Court of Appeal reversed the ruling as premature because the plaintiff had not yet asserted his Fifth Amendment right during a deposition. The court then noted that if the plaintiff testified at a deposition without invoking the right, the matter would be moot. If the plaintiff did invoke the privilege, “the trial court can enter a ruling based on a properly developed record.”
The 4th DCA most recently confronted, but did not resolve the issue in McCreery v. Wilhelm’s Rattan, Inc., 882 So. 2d 498 (Fla. 4th DCA 2004). There, the defendant in a civil action involving a car accident faced criminal charges stemming from the same alleged misconduct. The defendant applied for, and received, a stay of the civil proceedings pending the outcome of the criminal matter. The trial court denied the motion and the defendant petitioned for a writ of common law certiorari. The appellate court stated that the refusal to grant a continuance of a civil matter where the defendant faced pending felony charges “may well have been a departure from the essential requirements of law.” The court, however — without elaborating — ultimately dismissed the certiorari petition because the petitioner “failed to demonstrate that he has no adequate remedy on final appeal.”
In Klein v. Royale Group Ltd., 524 So. 2d 1061 (Fla. 3d DCA 1988), the trial court stayed a civil matter pending resolution of a parallel criminal proceeding involving a defendant. The trial court denied a motion to dissolve the stay some nine months later and the plaintiff filed a petition for certiorari. Although the appellate court found that the trial court acted within its discretion to grant the stay in the first instance, [i]t appears that there comes a time when a stay becomes unreasonable under all circumstances. Thus, the court granted the petition and ordered the stay dissolved.
C. Eleventh Circuit Standard
Unlike Florida’s state courts, the Eleventh Circuit follows a narrower standard which makes it very difficult to obtain a continuance or stay of discovery. The Court explicitly recognized this, stating “the standard set by the Eleventh Circuit as to when a stay is mandated to prevent unconstitutional infringement is more narrow and less subjective.” Florida’s district courts have noted that “the Constitution does not require a stay of civil proceedings pending the outcome of related criminal proceedings.” Instead, courts must stay civil proceedings pending resolution of parallel criminal proceedings “only when ‘special circumstances’ so require in the ‘interests of justice.'” Such circumstances exist, and the Fifth Amendment is violated “when a person, who is a defendant in both a civil and a criminal case, is forced to choose between waiving his privilege against self-incrimination or losing the civil case on summary judgment.” Unless such a result would certainly occur, “defendants may exercise their Fifth Amendment rights by not presenting evidence which would implicate them in their criminal proceedings.” Stays or continuances, if warranted, may not be granted “for an indefinite period of time.”
The Eleventh Circuit did not always apply this rigid, less subjective test, and in a somewhat different procedural context, permitted a stay sought by a plaintiff invoking his Fifth Amendment rights in Wehling v. CBS, 608 F. 2d 1084 (5th Cir. 1979). There, plaintiff Wehling, the owner of proprietary trade schools in Texas, brought a libel action against CBS following a broadcast accusing him of defrauding his students and the federal government. CBS sought discovery regarding Wehling’s operation of the schools, but Wehling invoked the Fifth Amendment throughout his deposition. By refusing to answer questions, Wehling “deprived CBS of information concerning the accuracy of its broadcast and thus thwarted discovery of issues at the heart of plaintiff’s lawsuit.” The district court dismissed Wehling’s lawsuit with prejudice after he refused to answer the deposition questions.
On appeal, Wehling argued that the dismissal of his lawsuit based upon his assertion of the Fifth Amendment privilege impermissibly “penalized him for exercising a fundamental constitutional right.” The Fifth Circuit sympathized with CBS’s position but reversed the District Court, stating that “[d]ismissing a plaintiff’s action with prejudice solely because he exercised his privilege against self-incrimination is constitutionally impermissible.” The Court observed that Wehling was not asking to proceed to trial without providing the sought-after discovery, but rather only asked for a stay “until all threat of criminal liability has ended.” The Court found dismissal inappropriate because: (a) the Federal Rules of Civil Procedure did not warrant dismissal with prejudice for resisting discovery based upon a valid assertion of privilege; and (b) a party may not be penalized for asserting the Fifth Amendment, and dismissal with prejudice based upon that assertion was indeed “costly.”
The Court concluded that “[w]hen plaintiff’s silence is constitutionally guaranteed, dismissal is appropriate only where other, less burdensome, remedies would be an ineffective means of preventing unfairness to defendant.” The Court specifically observed that “[i]nstead of arbitrarily adopting a rule favoring CBS, the court should have measured the relative weights of the parties’ competing interests with a view toward accommodating those interests, if possible” and that the “balancing-of-interests approach ensures that the rights of both parties are taken into consideration before the court decides whose rights predominate.”
Applying this test, the Court approved a three-year stay of discovery, noting that “[a]lthough a three-year hiatus in the lawsuit is undesirable from the standpoint of both the court and the defendant, permitting such inconvenience seems preferable at this point to requiring plaintiff to choose between his silence and his lawsuit.” The Court also noted that if CBS could, at a later time, demonstrate prejudice as a result of the delay, “the court would be free to fashion whatever remedy is required to prevent unfairness to defendant.”
The Eleventh Circuit reversed course in Anglada v. Sprague, 822 F. 2d 1035 (11th Cir. 1987). There, a lawsuit was brought against the defendants for defaulting on a promissory note in which “they personally guaranteed the mortgages.” Less than a year after the lawsuit commenced, criminal charges were brought against the same defendants for mortgage fraud and grand theft. The district judge denied the defendants’ motion to stay the civil proceedings pending the conclusion of the criminal proceedings. The jury decided in favor of the plaintiffs and the defendants appealed. On appeal, the Eleventh Circuit held that a stay is not warranted unless an indication existed “that the invocation of the Fifth Amendment would have necessarily resulted in an adverse judgment.” When asserting the Fifth Amendment privilege, it is “unacceptable” for a defendant to make a “blanket” refusal to answer all questions, rather he or she must assert the privilege on a question-by-question basis. To allow otherwise would force the “court to speculate as to which questions would tend to incriminate.” Additionally, the court found a stay was not necessary in this situation because other remedies were available, including requesting a closed hearing, requesting a sealed record, and “presenting evidence other than through their own testimony.”
More recently, in Baez v. Seminole County School Board, the plaintiff requested a sixty-day stay in discovery of a civil matter pending the outcome of criminal proceedings. She argued that if forced to participate in discovery of the civil matter, because some allegations against her overlapped with those in the criminal matter, her right to due process would be undermined. However, the court feared that the defendant would continue to claim the Fifth Amendment privilege if the case was appealed. Thus, the court found “[i]t would be detrimental to the progress of this litigation, and prejudicial to the plaintiff, to stay this case for the time required to resolve the underlying criminal proceeding.” Moreover, the defendant merely contended that her rights “might be undermined,” and not that she would be subject to certain loss if the motion for stay was not granted.
As these cases make clear, courts have discretion to stay a parallel civil action only when refusing to do so would result in certain judgment against the invoking party. As set forth below, however, this standard unnecessarily omits consideration of other potentially critical factors.
D. Multi-Factor Test Applied by Other Jurisdictions
Many jurisdictions outside Florida apply a multi-factor test in deciding whether to grant a temporary stay. These factors have been the subject of discussion for many years. The key criteria include: “1) the extent to which the issues in the criminal and civil cases overlap; 2) the status of the case, including whether the defendants have been indicted; 3) the plaintiff’s interest in proceeding expeditiously weighed against the prejudice to plaintiff caused by a delay; 4) the private interests of and burden on defendants; 5) the interests of the court; and 6) the public interest.”
Addressing the first factor, courts note that “the strongest case for deferring civil proceedings until after 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.” This is so, in part, “because of the danger that the government may use civil discovery to obtain evidence and information for use in its criminal prosecution, thereby circumventing the Fifth Amendment right against self-incrimination.” This could also be true even where government agencies are not prosecuting both the civil and criminal matters. The scope of discovery in civil matters is purposefully broad, and a civil litigant may be called upon to produce scores of documents or testimony which might adversely impact the defense of the criminal case. Thus, cases involving substantially overlapping allegations weigh heavily in favor of a stay.
The second factor, the status of the case, may also have a substantial bearing upon whether a stay is appropriate. Elaborating upon this factor, federal district courts have observed that “the potential harm to civil litigants arising from delaying them is reduced due to the promise of a fairly quick resolution of the criminal case under the Speedy Trial Act.” Some district courts focus upon whether a criminal proceeding has actually commenced. Others find that the threat of criminal prosecution is sufficient to trigger the need for a stay.
Addressing the third factor, courts have noted that “in evaluating the plaintiff’s burden resulting from the stay, courts may insist that the plaintiff establish more prejudice than simply a delay in her right to expeditiously pursue her claim.” Prejudice results where the passage of time allows memories to fade, witnesses to relocate, or otherwise become unavailable and “assets to dissipate.” Prejudice also results where a defendant seeks to gain a tactical advantage by seeking a stay. However, the balancing test allows courts to take these factors into consideration in deciding whether a stay or continuance of discovery is appropriate in the first instance and if so, allows judges to fashion a remedy to alleviate any potential prejudice. As noted above, indefinite stays of discovery or trial are rarely appropriate.
The fourth factor, the burden on the defendant, is also of critical importance. Initially, a jury may construe the invoking defendant’s silence against them. This is not only severely prejudicial, in many instances it will result in the automatic entry of judgment against the defendant. If the defendant decides to waive his or her Fifth Amendment rights, the decision is irrevocable. While this will enable the defendant to rebut the civil charges, any statements made in a deposition or in court can and will be used by the prosecution in the criminal proceedings. Moreover, 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. If the defendant transparently seeks a stay for tactical reasons, the court is far less likely to grant relief. But in many cases, the prejudice suffered by the defendant involved in a parallel criminal proceeding will far outweigh the inconvenience to the plaintiff, warranting at least some form of limited relief.
The interests of justice and interests of the court are additionally important considerations. On one hand, stays can often be “relatively indefinite, because there is no way to predict when the criminal investigation would end.” This uncertainty weighs against a stay because “It is unrealistic to postpone indefinitely the pending action until criminal charges are brought or the statute of limitations has run for all crimes conceivably committed.” On the other hand, “[i]f the civil action is stayed until the conclusion of the criminal proceedings, then it obviates the need to make rulings regarding potential discovery disputes involving issues that may affect the criminal case.” In fact, “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. Finally, courts can alleviate concerns about indefinite stays by “allowing the parties to petition the Court to lift or modify the stay if there is a change in circumstances warranting it.”
The public interest is likewise often enhanced by a stay of the civil litigation pending the outcome of the parallel criminal proceeding. For example, courts may deny stays in civil matters prosecuted by government agencies “intended to protect the public by halting the distribution of mislabeled drugs. . . or the dissemination of misleading information to the investing public.” Where the potential harm to the public is lacking, a stay of the civil matter is often beneficial because it allows the criminal proceedings to quickly reach their conclusion. This is particularly true in cases of substantial factual overlap.
Against this background, practitioners must be mindful of their forum and the nature of the request when attempting to navigate or avoid parallel proceedings. Florida’s state courts may be more willing to consider the multi-factor approach adopted by other states and federal circuits. This test has distinct advantages, recognizing that all parallel litigation is not the same and that certain factors justifying relief in one situation may not compel the same result in another. The test also allows courts to consider public and private interests, and to grant a stay or continuance in the absence of any demonstrable prejudice to the plaintiffs.
Regardless of forum, a careful application of the relevant criteria will enable courts to make informed decisions. Regardless of whether the matter is in state or federal court, the more narrowly tailored the request, the greater the odds of success. Keeping this in mind, practitioners are well served to tailor their requests so as not to seek indefinite stays of discovery or trial proceedings.
. Id. at 527-28. See also Eller Media Co. v. Serrano, 761 So. 2d 464, 466-467 (Fla. 3d DCA 2000) (affirming denial of defendant’s motion to stay civil case pending outcome of criminal proceedings where the defendant had yet to formally invoke the privilege; plaintiffs would have been prejudiced because statute of limitations would have run on case before criminal trial date, precluding them from adding additional parties identified by defendant).
Special circumstances that may necessitate granting a stay include the following: (1) if the government brought the civil action solely to obtain evidence for its criminal prosecution; (2) if the government failed to advise the defendant in the civil proceeding that it contemplates his criminal prosecution; (3) if the defendant is without counsel or reasonably fears prejudice from adverse pretrial publicity or other unfair injury; or (4) any other special circumstances indicating unconstitutionality or even impropriety.
Hilliard v. Black, Case No. 1:00cv80 MMP, 2000 U.S. Dist. LEXIS 20329, at *8 (N.D. Fla. Nov. 9. 2000).