Public Citizen v. United States Trade Representative, 5 F.3d 549 (D.C. Cir. 1993)

SEC v. Dresser Industries,

628 F.2d 1368 (D.C. Cir.), cert. denied, 449 U.S. 993 (1980)

United States v. Private Sanitation Industry Association, 811 F. Supp. 802 (E.D.N.Y. 1992)

6

7

6

2

5

7

2,3

3, 4

1

At the hearing on cross-motions for summary judgment on July 14,

1994, the Court asked for memoranda addressing whether a stay of this civil action would be appropriate in light of the investigation being conducted by Independent Counsel Robert Fiske, Jr. Plaintiff's memorandum was requested by Friday, July 15, 1994, and the memorandum of Defendants Resolution Trust Corporation ("RTC") and Office of Thrift Supervision ("OTS") was requested by Monday, July 18, 1994.

As we explain more fully below, a stay of this proceeding would be inappropriate for three reasons. First, Mr. Fiske's investigation is not truly parallel to this case. Second, even if there were parallel proceedings, under the five-part test used by courts to determine if a stay is appropriate, a stay is unwarranted. Finally, as this Court has recently recognized, a Freedom of Information Act lawsuit may proceed to the merits even in situations, unlike this one, in which there is a parallel criminal proceeding.

ARGUMENT

I. THE FISKE INVESTIGATION IS NOT TRULY
PARALLEL TO THIS INVESTIGATION.

This case involves the limited issue of whether Defendants must

produce documents to the Ranking Minority Member of the House Committee with statutory oversight responsibility over them. While many of the documents sought by Plaintiff may also play a role in Mr. Fiske's investigation, many will not. Moreover, Plaintiff assumes that the Fiske investigation will seek a far broader array of

documents from sources - individuals, the pertinent corporations, other government

- 2

More importantly, however, this lawsuit will not require testimony of

witnesses of interest to Mr. Fiske, nor is it likely to induce anyone to invoke the Fifth Amendment. It does not require resolution of the same substantive legal issues or determination of facts that might impact the Fiske investigation. Therefore, in no sense can this proceeding be considered a proceeding that is "parallel" to the Fiske investigation.

The case law in this Circuit fully supports this conclusion. The leading case is SEC v. Dresser Industries, 628 F.2d 1368, 1375-76 (D.C. Cir.), cert. denied, 449 U.S. 993 (1980), which refused to stay an SEC investigation of Dresser despite the pendency of a criminal investigation of that company. The D.C. Circuit made clear that "the Constitution... does not ordinarily require a stay of civil proceedings pending the outcome of criminal proceedings." Id. at 1375 (citations omitted). While a court has "discretion to stay civil proceedings, postpone civil discovery, or impose protective orders and conditions 'when the interests of justice seem to require such action...." the court "must make such determinations in the light of the particular circumstances of the case." Id. at 1375. The court then described the "strongest case" for stay of such proceedings:

1/

"[T]he 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. The non-criminal

Of course, the House or Senate may proceed with hearings that seek such testimony, but the propriety of those hearings is not before the Court. Nor would this Court be empowered to interfere with those hearings. See Application of the United States Select Comrn. On Presidential Campaign Activities, 361 F. Supp. 1270. 1280 (D.D.C. 1973).

- 3

proceeding, if not deferred, might undermine the party's Fifth
Amendment privilege against self-incrimination, expand rights of
criminal discovery beyond the limits of Federal Rule of Criminal
Procedure 16(b), expose the basis of the defense to the prosecu-
tion in advance of criminal trial, or otherwise prejudice the case.
If delay of the non-criminal proceeding would not seriously injure
the public interest, a court may be justified in deferring." Id. at
1376 (citations omitted).

The court in Dresser Industries concluded that a stay of the SEC

investigation in that case was inappropriate because "no indictment has been returned; no Fifth Amendment privilege is threatened; Rule 16(b) has not come into effect; and the SEC subpoena does not require Dresser to reveal the basis for its defense." Id. at 1376. See also United States v. Private Sanitation Ind. Ass'n, 811 F. Supp. 802, 806 (E.D.N.Y. 1992) ("a stay is most appropriate where the subject matter of the parallel civil and criminal proceeding or investigation is the same and where the government is prosecuting both proceedings.")

This case presents an even less compelling basis for a stay than Dresser Industries. In addition to all the elements listed by the D.C. Circuit in Dresser, neither of the parties to this proceeding are either investigating or being investigated as part of the Fiske investigation. Since the proceedings are not truly parallel, a stay would be inappropriate.

II. THE FIVE CONSIDERATIONS NORMALLY USED
TO EVALUATE STAY REQUESTS COUNSEL
AGAINST A STAY OF THIS ACTION.

Even if (contrary to fact), this case could be deemed truly parallel to the Fiske investigation, the five part test now used by courts in exercising their discretion

to consider stay requests would counsel against staying this case pending the

-2

More importantly, however, this lawsuit will not require testimony of

witnesses of interest to Mr. Fiske, nor is it likely to induce anyone to invoke the Fifth Amendment. t. It does not require resolution of the same substantive legal issues or determination of facts that might impact the Fiske investigation. Therefore, in no sense can this proceeding be considered a proceeding that is "parallel" to the Fiske investigation.

The case law in this Circuit fully supports this conclusion. The leading case is SEC v. Dresser Industries, 628 F.2d 1368, 1375-76 (D.C. Cir.), cert. denied, 449 U.S. 993 (1980), which refused to stay an SEC investigation of Dresser despite the pendency of a criminal investigation of that company. The D.C. Circuit made clear that "the Constitution... does not ordinarily require a stay of civil proceedings pending the outcome of criminal proceedings." Id. at 1375 (citations omitted). While a court has "discretion to stay civil proceedings, postpone civil discovery, or impose protective orders and conditions 'when the interests of justice seem to require such action...." the court "must make such determinations in the light of the particular circumstances of the case." Id. at 1375. The court then described the "strongest case" for stay of such proceedings:

"[T]he 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. The non-criminal

1/

Of course, the House or Senate may proceed with hearings that seek such testimony, but the propriety of those hearings is not before the Court. Nor would this Court be empowered to interfere with those hearings. See Application of the United States Select Commn. On Presidential Campaign Activities, 361 F. Supp. 1270, 1280 (D.D.C. 1973).