DEFENDANTS' SUPPLEMENTAL BRIEF REGARDING PARALLEL CIVIL AND CRIMINAL PROCEEDINGS At the hearing on July 14, 1994, the Court asked the parties to submit supplemental briefs regarding the applicability to this case of precedent regarding the handling of parallel civil and criminal proceedings. Although those cases are not directly applicable, they provide a useful analogy for the Court in its handling of this case. As the Court recognized, the courts have inherent power to stay civil proceedings as they deem necessary to avoid interference with a criminal investigation. The fundamental principles that courts have invoked to justify a stay of civil proceedings while a criminal investigation is pending also support Defendants' suggestion that this matter be removed from the Court's calendar until the House Banking Committee completes its hearings regarding Madison Guaranty Savings & Loan ("Madison"). DISCUSSION A. The Court May Stay Civil Proceedings That Threaten To Interfere With A Criminal When a civil action and a criminal investigation or proceeding go forward concurrently, problems may arise that require judicial intervention to avoid prejudice to the criminal proceeding. As explained below, in such circumstances, in an exercise of its inherent power to control its docket, the Court may stay the civil case as it deems necessary to avoid interference with a pending criminal investigation. The fact situation in this case is different from the typical fact pattern involving a request for a stay where parallel civil and criminal proceedings are pending, but the circumstances are closely analogous, and the same overarching concern for avoiding interference with a pending criminal investigation is applicable. The typical parallel civil/criminal situation arises where a defendant faces a criminal investigation or prosecution while a civil case involving the same matter is pending. In the typical situation, a criminal defendant seeks to use the civil discovery process to obtain disclosure of the government's evidence. In such a case, the court is confronted with the conflict inherent in providing In Re Ivan F. Boesky Secs. Litig, 128 F.R.D. 47, 49 (S.D.N.Y. 1989). The courts have recognized that several types of problems may result when information regarding a criminal proceeding is disclosed through civil discovery, including the possibility of perjury and manufactured evidence, intimidation of witnesses, and "the possibility that criminal defendants may surprise the prosecution at trial with information developed through the civil discovery, while the defendant's privilege against self-incrimination would effectively block any attempts by the Government to discover relevant evidence from the defendants." Raphael v. Aetna Cas, and Sur. Co., 744 F. Supp. 71, 75 (S.D.N.Y. 1990), citing Founding Church of Scientology, Inc. v. Kelley, 77 F.R.D. 378, 381 (D.D.C. 1977). With those problems in mind, the courts have developed remedial measures, which in some instances include staying the civil case, that are designed to avoid prejudicing the criminal case. While this case does not fit the typical parallel civil/criminal fact pattern, this case does present the same basic problem as those types of cases. First, a criminal investigation is being conducted by the Independent Counsel, who has "full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice." 28 U.S.C. § 594(a). Second, the FOIA requests for documents in this case seek information that is central to the criminal investigation, and are analogous to the civil discovery requests in the parallel civil/criminal situation. Finally, it would be impossible to guarantee the continued confidentiality of the documents if they were released in this case, and disclosure could thus jeopardize the pending criminal investigation. The Supplemental Brief filed by Rep. Leach asserts that there should be no cause for concern about this suit interfering with the Independent Counsel's investigation, because "the Fiske investigation is not truly parallel to this investigation." Supp. Brief at 1 (Heading I). However, the Supreme Court has specifically rejected the argument that "before proceedings in one suit may be stayed to abide the proceedings in another, the parties to the two causes must be shown to be the same and the issues identical." Landis v. North Am. Co., 299 U.S. 248, 254 (1936). Rather, the Court "must weigh competing interests and maintain an even balance." Id. Thus, there is no question that this Court has the power to defer consideration of this matter to avoid interference with the criminal investigation. Rep. Leach admits that "many of the documents [he seeks] may also play a role in the Fiske investigation. . . ." Supp. Brief at 1. The Independent Counsel has expressed strong concern over the possibility of "premature disclosures of contents of the documents or of witnesses' testimony to other witnesses on the same subject (creating the risk of tailored testimony) and of premature public disclosure of matters at the core of the criminal investigation." Letter from R. Fiske to Hon. J. Leach, dated March 7, 1994, attached as Ex. A. It is precisely because of those concerns that the Independent Counsel has specifically requested that Congress defer its requests for documents that relate to portions of his investigation that have not yet been completed. Letter from R. Fiske to Hon. A. D'Amato, dated May 26, 1994, reprinted in 140 Cong. Rec. S6674 (daily ed. June 9, 1994), attached as Ex. B ("Because of the risk of such documents becoming public prior to the completion of our investigation, I would prefer that you defer obtaining those documents at this time."). In H.R. Res. 394, the House of Representatives recognized those concerns. and provided that Congressional hearings are to be "structured and sequenced in such a manner that in the judgment of the Leaders they would not interfere with the ongoing investigation of Special Counsel Robert B. Fiske, Jr." H.R. Res. 394 at ¶ (d), attached as Ex. C. Further, in the Joint Statement announcing the bipartisan agreement regarding Madison hearings, the House Leadership again noted the concern that the Congressional inquiry be structured in a way that would not interfere with the Independent Counsel's investigation, and noted that the Independent Counsel "has specifically asked the bipartisan leadership to refrain from Congressional inquiry into the other aspects of his investigation for now." Joint Statement, "House Hearings on Whitewater," dated June 15, 1994, attached as Ex. D. It is undisputed that this case involves documents that are also a part of the Independent Counsel's investigation. The Independent Counsel has expressly stated his concern that premature release of those materials could jeopardize his investigation, and the bipartisan House Leadership has recognized and respected that concern. Therefore, the same concerns that are present in the typical parallel civil/criminal fact situation provide a strong basis, by analogy, for deferring further consideration of this matter pending completion of the House Banking Committee hearings. B. The Test For Evaluating Requests To Stay Parallel Proceedings. While the test used for determining whether to grant a stay in the typical parallel civil/criminal fact situation is not directly applicable, the test is useful in identifying some of the relevant factors for this Court's consideration. Although the test suggests that the court should consider all of the relevant interests, the primary underlying concern is to prevent unnecessary interference with the pending criminal investigation. The decision in Volmar Distribs.. Inc. v. New York Post Co.,152 F.R.D. 36. 39 (S.D.N.Y. 1993), contains one of the most recent statements of the test for deciding whether to grant a stay when parallel criminal and civil proceedings are pending. In analyzing the stay issue, a court should consider: DC01:37265 83-009 0-95-35 -5. |