Chapter 6 Legal Consequences of Asserting the Fifth Amendment in Non-criminal Cases

• Library: The Privilege of Silence: Fifth Amendment Protections Against Self-Incrimination (ABA) (2014 Ed.)

CHAPTER 6 Legal Consequences of Asserting the Fifth Amendment in Non-Criminal Cases The Adverse Inference

In Baxter v. Palmigiano, 425 U.S. 308, 318-20 (1976), the Supreme Court upheld in a prison disciplinary hearing the use of an adverse inference based on the prisoner's Fifth Amendment refusal to testify. While recognizing that neither a judge nor a jury can consider a defendant's Fifth Amendment assertion in criminal cases in reaching their verdicts, Baxter held that prison officials could infer from the inmate's Fifth Amendment assertion that he had committed the disciplinary infraction charged, as long as that was not the sole basis upon which the discipline was imposed.

Because Baxter arose in the context of a proceeding concerning the internal administration of prisons, an arena in which the Supreme Court has consistently shown decision makers substantial deference, the decision could be viewed as a very narrow one. However, the Supreme Court supported its decision by referencing the "prevailing rule" that the Fifth Amendment does not forbid adverse inferences against parties when they refuse to testify in non-criminal cases. Baxter, 425 U.S. at 318 ("Our conclusion is consistent with the prevailing rule that the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them . . . ."). Therefore, Baxter v. Palmigiano has become the leading case cited for the use of an adverse inference in any proceeding other than a criminal trial or sentencing hearing. Almost every federal circuit has recognized the ability of a fact-finder to draw from a Fifth Amendment-based refusal to testify (or to produce documents over which the party has control) the inference that had the invoking party testified, the testimony would have been unfavorable to that party. See also LiButti v. United States, 178 F.3d 114, 120 (2d Cir. 1999) ("[A]n adverse inference may be given significant weight because silence when one would be expected to speak is a powerful persuader.") (citing United States ex rel. Bilokumsky v. Tod, 263 U.S. 149, 153-54 (1923)).

• Hinojosa v. Butler, 547 F.3d 285, 291-92 (5th Cir. 2008) (holding that the lower court abused its discretion in excluding evidence of a party's invocation of the Fifth Amendment during discovery).
• United States v. Stein, 233 F.3d 6, 16 (1st Cir. 2000) (noting, in dicta, that the Massachusetts Board of Bar Overseers was allowed to draw an adverse inference from defendant's Fifth Amendment-based silence).
• Curtis v. M&S Petroleum, Inc., 174 F.3d 661, 674 (5th Cir. 1999) (plaintiffs were entitled to an adverse inference instruction against the defendant corporation arising from the corporate representative's invocation of his Fifth Amendment privilege).
• Evans v. Robbins, 897 F.2d 966, 970 (8th Cir. 1990) (finding that a negative inference may be allowed when the defendant refuses to produce documents on the basis of the Fifth Amendment that were known to be in his possession).
• RAD Servs., Inc. v. Aetna Cas. & Sur. Co., 808 F.2d 271, 277-78 (3d Cir. 1986) (no error for court to allow jury to draw adverse inference against parties who refuse to answer based on the Fifth Amendment when faced with probative evidence against them).
• LaSalle Bank Lake View v. Seguban, 54 F.3d 387, 390 (7th Cir. 1995) ("The rule that adverse inferences may be drawn from Fifth Amendment silence in civil proceedings has been widely recognized by the circuit courts of appeals, including our own, in the two decades since Baxter was decided.") (citations omitted).

The states are more divided on the adverse inference. While most agree that neither the Fifth Amendment nor their equivalent state constitutional provision forbids the adverse inference, many states have enacted rules of evidence preventing it in various circumstances.

• Lentz v. Metro. Prop. & Cas. Ins. Co., 768 N.E.2d 538, 541-45, 437 Mass. 23, 26-32 (2002) (where court finds the witness is acting on behalf of and to further the interests of one of the parties, his assertion of the privilege against self-incrimination may be used as an adverse inference).
• Olin Corp. v. Castells, 428 A.2d 319, 321, 180 Conn. 49, 53 (1980) (the Fifth Amendment privilege against self-incrimination does not "forbid the drawing of adverse inferences against parties to civil actions . . . .").
• But cf. Alaska R. Evid. 512(c); Ark. R. Evid. 512(c); Cal. Evid. Code § 913(a); Del. R. Evid. 512; Haw. Rev. Stat. § 626.1; Haw. R. Evid. 513; Idaho R. Evid. 512; Ky. R. Evid. 511; N.D.R. Evid. 512; Neb. Rev. Stat. § 27-513; N.J.R. Evid. 532; N.M.R. Evid. 11-513; Okla. Stat. Ann. § 12-2513; Or. Rev. Stat. § 40.290; Utah R. Evid. 510.

The adverse inference is available in cases in which the government is a party in the same fashion as it is in civil cases between private litigants, there being no requirement that the government extend immunity to the party with a valid Fifth Amendment privilege to obtain his or her testimony.

• SEC v. Jasper, 678 F.3d 1116, 1126 (9th Cir. 2012) ("As properly instructed, the jury could have concluded that the sum total of [Jasper's] Fifth Amendment invocations supported the adverse inference against him.").
• SEC v. Cherif, 933 F.2d 403, 417 (7th Cir. 1991) (allowing the trial judge to draw an adverse inference from defendant's refusal to submit to an accounting that would allegedly show misuse of funds).
• SEC v. DiBella, No. 3:04 CV 1342 (EBB), 2007 WL 1395105, at *5 (D. Conn. May 8, 2007) (permitting plaintiff's counsel in an enforcement action to read to the jury the questions defendant refused to answer during an investigative deposition taken seven years earlier, and instructing the jury that it may, but need not, draw an adverse inference from the assertions).
• United States v. Bonanno Organized Crime Family of La Cosa Nostra, 683 F. Supp. 1411, 1451 (E.D.N.Y. 1988) (denying the defense argument that adverse inferences should not be drawn because the government is a party and has the power to grant immunity against future prosecutions).

The adverse inference may even be used against a party in a civil case based on a non-party's exercise of the Fifth Amendment privilege against self-incrimination. Where the court finds that the witness asserting the Fifth Amendment privilege is acting on behalf of or to further the interests of another party—often in the case of former employees of a corporate party—courts will generally, but not always, allow an adverse interest against the party.

• LiButti v. United States, 107 F.3d 110, 122-23 (2d Cir. 1997) (suggesting relevant factors to consider in deciding admissibility of non-party's invocation of Fifth Amendment privilege and whether adverse inferences may consequently be drawn against the party).
• Brink's Inc. v. City of N.Y., 717 F.2d 700, 710 (2d Cir. 1983) (refusal of past and present employees to answer questions based on their Fifth Amendment privilege supports an adverse inference against the corporation for which they worked).
• In re Urethane Antitrust Litig., No. 04-1616-JWL, 2013 WL 100250, at *1-3 (D. Kan. Jan. 8, 2013) (court applied the factors from LiButti and determined that the adverse inference was not appropriate in a case where seven former Bayer employees had asserted the Fifth Amendment privilege in a case against Dow Chemical for price-fixing concerning urethane chemical products).
• Brookridge Funding Corp. v. Aquamarine, Inc., 675 F. Supp. 2d 227, 234 (D. Mass. 2009) (although court recognized that an adverse inference may be drawn against a party based on the assertion of the Fifth Amendment privilege of a person who was neither an officer, employee, nor former employee of the corporate party, the court reasoned that the plausible inferences from the witness's assertion of privilege are too varied to allow an adverse inference in the case).
• In re Tableware Antitrust Litig., No. C-04-3514 VRW, 2007 WL 781960, at *5 (N.D. Cal. Mar. 13, 2007) (denying company motion to exclude reference to former CEO's testimony in which he invoked his Fifth Amendment right).

Although the Fifth Amendment does not prohibit an adverse inference against a party asserting the privilege in a non-criminal proceeding, there is no requirement that the fact-finder accept the adverse inference. Indeed, the standard adverse inference jury instruction informs the jury that it may, but need not, infer that a refusal to answer on the basis of the Fifth Amendment means that the answers would have been adverse to the asserting party's position.

• Pyles v. Johnson, 136 F.3d 986, 997 (5th Cir. 1998) ("However, the fact that the Fifth Amendment does not prohibit such inferences does not imply that the fact-finder is required to make them.").
• Farace v. Indep. Fire Ins. Co., 699 F.2d 204, 210-11 (5th Cir. 1983) (refusing to reverse trial judge's decision to exclude evidence regarding a prior invocation of the Fifth Amendment because it had limited probative value).

Given that an innocent person can legitimately invoke the Fifth Amendment privilege, the prejudicial effect of the adverse inference may often exceed its probative value, thereby justifying a court rejecting the ability of a party to either reference the witness's Fifth Amendment invocation or attempt to argue the adverse inference to the jury, as an evidentiary matter.

• Harrell v. DCS Equip. Leasing Co., 951 F.2d 1453, 1464-65 (5th Cir. 1992) (recognizing that "the potential prejudice in revealing [a prior] invocation of the Fifth Amendment is high, because the jury may attach undue weight" given the legitimate reasons for an innocent person to decline to testify).
• United States ex rel. DRC, Inc. v. Custer Battles, LLC, 415 F. Supp. 2d 628, 634 (E.D. Va. 2006) (rejecting adverse inference as to the Fifth Amendment assertion to numerous questions as cumulative and unfairly prejudicial, but permitting the adverse inference as to

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