NBA-CLS Newsletter Online: Asserting the 5th Amendment’s Protections In Commercial Litigation

Asserting the 5th Amendment’s Protections In Commercial Litigation

By Brian A. Jackson, Esq.[1]

Today, virtually any regulatory infraction can result in a criminal investigation, and counsel should assume the worst when preparing for the representation. For civil and commercial litigators who must defend lawsuits brought against businesses or who must respond to administrative enforcement proceedings initiated by regulatory agencies, a critical determination that must be made early in the representation is whether the matter has or will raise the specter of a criminal investigation. If so, all the customary precautions that protect companies and corporate officials must be engaged.

One of the most fundamental precautions is a strategy to prevent the client from providing compelled testimony during a parallel civil or administrative proceeding. Often, aggressive plaintiffs’ lawyers will move to serve deposition notices seeking to draw out critical facts long before a criminal investigator can convince a prosecutor to issue grand jury subpoenas to flesh out the very same information.

Such parallel proceedings present the lawyer and client with a weighty dilemma, the import of which could yield far reaching implications: should a person who is deemed a witness in civil litigation, but who may also be the subject of a criminal investigation, submit to a deposition or trial subpoena to testify in a civil proceeding? This undesirable convergence of civil liability and criminal culpability must be carefully considered by counsel, especially when compliance with the deposition notice or trial subpoenas may create a risk of disclosing information that may be deemed incriminatory by criminal investigators.

The fundamental constitutional protection available to those who find themselves in this unfortunate dilemma is the Fifth Amendment of the U.S. Constitution, which provides that “[n]o person … shall be compelled in any criminal case to be a witness against himself.” U.S. Constitution amend. V. Courts have consistently interpreted this provision to be a means to “protect a person…against being incriminated by his own compelled testimonial communications.” Fisher v. United States, 425 U.S. 391, 409 (1976). To be afforded the amendment’s protections, the statement offered by the witness must be: (1) compelled, (2) testimonial in nature, and (3) must serve to incriminate the witness in a criminal proceeding. If these elements are met, the protection affords the witness the right “not to answer questions put to him in any proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings.” Lefkowitz v. Turley, 414 U.S. 70, 77 (1973).

Despite the protections, the invocation of the 5th Amendment in a civil proceeding or deposition should not be casual or without careful analysis of the assorted practical implications. The mere assertion of the provision often raises the interests of prosecutors and judges who preside over civil cases and who must necessarily make credibility findings. Who among us does not pause to wonder, upon learning that a witness has invoked the Fifth in response to questioning, whether the witness actually has something to hide? Judges and prosecutors also ponder the issue. Accordingly, when considering whether to abide by the commands of the deposition notice or trial subpoena, or whether to temporarily abate or stay the civil proceedings, the lawyer should consider the following:

1. Has a Criminal Investigation Been Opened?

This is a fundamental inquiry, yet one that often is not easy to ascertain. Most state and federal prosecutors are prohibited from disclosing the existence of an investigation during the early stages. Occasionally, investigators or prosecutors are remarkably candid about their activities. More often than not, however, even in response to direct inquiries from counsel, no official confirmation of the opening of an investigation will be provided. Consequently, counsel is left to seek the answer to this question through indirect sources, such as newspaper accounts of the incident underlying the litigation and other public sources that may suggest the existence of an investigation. In any case, if the assertion of the Fifth is challenged at any time, usually by plaintiff’s counsel, the attorney for the corporation or corporate witness may cite these sources, albeit unofficial, as one of the bases for the assertion.

2. Is the Witness a Subject or Target of the Criminal Investigation?

This is a critically important question that can only be answered by the investigators or prosecutors. If counsel learns that the client is a subject or target of the investigation, the client must not submit to a deposition or testify at a civil trial. Any such testimony will later be obtained by investigators and could be used by the prosecution in a criminal proceeding, including, any statements that may incriminate the witness.

3. Should Counsel Attempt to Negotiate an Immunity Agreement?

This question is almost always answered in the affirmative if it is reasonable to believe that the client is a subject of the investigation. Counsel must make the procurement of an immunity agreement a priority in the representation. Unfortunately, prosecutors are usually unwilling to lock themselves into a commitment regarding the status of an individual (e.g., whether the client is merely a witness to a suspected crime or if the government believes the client is deemed a subject or target of the criminal investigation).

4. Who May Assert the Fifth?

Remember: corporate entities are not entitled to Fifth Amendment protections; the privilege is only available to natural persons. See generally, Doe v. United States, 465 U.S. 605 (1988). Moreover, an attorney cannot assert the privilege on behalf of the client, whether a corporation or a natural person. The law requires the person to actually appear at the deposition, trial or other proceeding and to invoke the Fifth in response to each question. U.S. v. Gibbs, 182 F.2d 408, 431 (6th Cir. 1999).

5. May a Witness Who Professes to be Completely Innocent Assert the Privilege, or is the Privilege Available Only to Persons Who May Have Committed Wrongdoing?

The Supreme Court put the issue to rest in the case of Ohio v Reiner, 121 S.Ct. 1252 (2001), when it ruled that the privilege is available even to those persons who claim innocence. Arguably, the only testimony over which the witness may not assert the privilege is testimony that cannot possibly incriminate the witness. Caution should be exercised here, as the scope of potentially incriminating information is very broad than the attorney may know. Very often, despite a rigorous analysis of the facts, counsel is often unaware of the complete facts and allegations that may otherwise be available to criminal investigators handling the case.

6. Does the 5th Amendment Privilege Cover Documents?

Although the privilege normally extends only to testimonial information, it may extend to the compelled production of documents when the act of producing such items by an individual is testimonial in nature. Doe, 465 U.S. at 612. The Court reasoned that by producing documents in compliance with a subpoena, the witness must necessarily admit that the documents exists, that such items are in the possession and/or control of the witness and are authentic. These admissions could well prove to be incriminatory. Under these circumstances, the records of a sole proprietorship are treated as the records of an individual and often are protected from disclosure.

7. Should Counsel Seek a Stay?

Although courts are reluctant to intervene in civil discovery and on going investigations, it has been recognized that a witness should not be required “to choose between his silence and his lawsuit.” Wehling v. Columbia Broadcasting System, 608 F.2d 1084, 1089 (5th Cir. 1979). Accordingly, many courts are sympathetic to the plight of witnesses in such circumstances and rule favorably on requests to stay proceedings when it is clear that the movant is the target of a criminal investigation. Id. at 1086. It remains an open question, however, whether what is stayed is the entire case or merely the discovery portion of the proceeding.

8. Does the Assertion Result in an Adverse Inference?

Counsel should beware of one of the risks of asserting the Fifth at civil trials: the adverse inference that a party opponent may be entitled to claim. There is no constitutional bar to the admission of evidence that a witness has invoked the Fifth; in fact, it is otherwise admissible evidence. However, counsel for the witness should argue that the probative value of such evidence is substantially outweighed by the danger of unfair prejudice. Fed. R. Evid. 403. See also Farace v. Independent Fire Insurance Co., 699 F.2d 204 (5th Cir. 1983) (where the court found that the admission of evidence that the witness asserted the Fifth was unduly prejudicial and should have been excluded). Counsel for corporate officials faced with the unenviable prospect of submitting to trial or deposition testimony while a parallel criminal investigation is ongoing should vigorously resist all attempts to compel the client to testify.

If efforts to win immunity from prosecutors fail, the 5th Amendment should be liberally invoked at all civil or administrative proceeding.

References

[1] Brian A. Jackson, J.D., LL.M. is a shareholder in the New Orleans office of Liskow & Lewis, PLC. He represents corporations and corporate officials in government investigations and commercial litigation.