Related civil litigation

• Pages: 655-687
• Author: Thomas J. Farrell,Brandon D. Minde

RELATED CIVIL

LITIGATION

19-1

CHAPTER 19

RELATED CIVIL LITIGATION

I. GENERAL POINTS

§19:01 Civil Litigation After Criminal Proceedings

§19:02 Civil Litigation Before or During Criminal Proceedings

§19:03 Criminal Prosecutors’ Misuse of Civil Proceedings

II. ORGANIZATIONS AND MULTIPLE DEFENDANTS

§19:10 Need for Individual Counsel

§19:11 Joint Defense Agreements

§19:12 Advancing Counsel Fees

III. COORDINATION BETWEEN CIVIL LITIGANTS AND CRIMINAL INVESTIGATORS

§19:20 Civil Parties and Prosecution Can Share Information

§19:21 Prosecution Can Not Share Grand Jury Material

IV. TAX INVESTIGATIONS

§19:30 Previously Policy Was No Concurrent Investigations

§19:31 Current Policy Is to Coordinate Investigations

V. RESPONDING TO CIVIL DISCOVERY AND PLEADINGS

§19:40 Steps for Avoiding the Civil Action

§19:41 Enter a General Denial

§19:42 Answer by Proxy

§19:43 Seek a Protective Order

§19:44 Move to Stay the Civil Action

§19:45 Invoke the Fifth

VI. TACTICS AND TIPS

§19:50 Using Civil Discovery to Your Client’s Advantage

§19:51 Using a Civil Settlement to Encourage Dismissal

§19:52 Avoid Admissions or Preclusive Findings

§19:53 Avoid Testifying in Civil Proceedings

VII. SETTLING THE PARALLEL CIVIL CASE

§19:60 Cold Comfort Letters

RELATED CIVIL

LITIGATION

Criminal Defense Tools and Techniques 19-2

VIII. FORMS

Form 19-1 Agreement to Indemnify Legal Fees

Form 19-2 Letter Regarding Agreement to Pay Legal Fees

Form 19-3 SEC Form 1662

Form 19-4 Motion to Stay Civil Proceedings

Form 19-5 Protective Order

Form 19-6 Rule 408 Letter Agreement

Form 19-7 Civil Proffer Agreement

RELATED CIVIL

LITIGATION

19-3 Related Civil Litigation §19:02

I. GENERAL POINTS

§19:01 Civil Litigation After Criminal Proceedings

Many civil proceedings await the outcome of a criminal case to use its result (e.g., proceedings to debar

the client or to revoke or suspend a professional license based on the conviction; victims’ lawsuits; shareholder

derivative suits).

   See SEC v. Bil-

zerian   

SEC action); Gilberg v. Barbieri

 

but see SEC v. Monarch Funding Corp., 192 F.3d 295, 305-06



   

See Commonwealth v. Reynolds, 876 A.2d 1088, 1093 (Pa. Cwlth 2005)



However, even after an acquittal, the defendant still might be able to assert the Fifth Amendment privilege

  





See Heath v. Alabama, 474 U.S. 82, 93-94 (1985); but see United States v. Wilson, 413 F.3d 382, 390 (3d Cir.



   

    

Murphy v. Waterfront Commission, 



E.g., Booth v. Clary, 83 N.Y.2d 675, 680, 635 N.E.2d 279, 613 N.Y.S.2d 110 (1994) (reviewing

  



§19:02 Civil Litigation Before or During Criminal Proceedings

See United

States v. Kordel

Prosecutions sometimes grow out of civil lawsuits, especially those brought by the government, such as

consumer fraud cases brought by a state attorney general or securities fraud actions brought by the SEC or a state

equivalent, but also from private lawsuits alleging fraud. Upon discovery of facts suggesting both criminal and

regulatory violations, the government may initiate simultaneous civil or regulatory and criminal investigations.



Related civil litigation poses both dangers and opportunities.

Answering pleadings and discovery may cause the client to incriminate himself. The client can invoke the



inference against the client in the civil case. A complete refusal to respond to the civil suit may lead to a default



However, if the client does not have the burden of production and proof in the civil matter, you might use the

civil matter to obtain discovery that you would not be entitled to in the criminal case.

While avoidance or mitigation of any criminal prosecution generally will be your client’s priority, take steps

   

defense of concurrent criminal and civil false claims investigations. Any intentional false claim on the govern-

e.g.

e.g., 31 U.S.C. §3730 et seq.

client and use her solely as a witness does not necessarily protect the client from civil suit. Under the recent Yates

Memorandum, even where there is a corporate wrongdoer, federal civil prosecutors are encouraged to sue the

 