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20 Litig. 31 (1993-1994)
Pleading the Fifth in Civil Cases

handle is hein.journals/laba20 and id is 179 raw text is: Pleading the Fifth in Civil Cases by Mark W. Williams Jack Smith was the chief financial officer of Company, Inc. Along with Company and other officers and directors, Smith was recently sued in a class action case alleging violations of the securities laws. That wasn't the end of his troubles. The Securities and Exchange Commission also began proceed- ings against Smith. And there was more. The United States Attorney's office for Smith's district sent him a target letter. Does all this seem like piling on? Maybe, but, unfortunately, parallel civil, regulatory, and criminal proceedings are all too common these days. And it is not limited to securities cases. This can happen in environmental, banking, antitrust and forfeiture cases. Such parallel proceedings also often create the following dilemma: Given a choice between the risk of a multi-million dollar judgment (plus administrative sanctions by a govern- ment agency) and the risk of going to jail, which would a per- son in Smith's position choose? Most would pay the judg- ment rather than spend a day in jail or have a criminal record. Despite this, people facing parallel proceedings still for some reason often testify at depositions, answer interrogato- ries, and produce documents. Such conduct can be potentially incriminating and the answers may waive the Fifth Amendment right against self- incrimination. By failing to invoke their privilege against self-incrimination in a timely way in civil cases, people can provide important evidence to prosecutors-thereby helping to build a criminal case against themselves. Worse, they can be convicted and go to jail. How does this happen? Some litigants focus too much on the specter of a large civil judgment. Others ignore their lawyers or receive poor counsel. And the problem is diffi- cult-a real Catch-22. A person ensnared in parallel pro- ceedings faces hard choices: If he does invoke the privilege in a civil proceeding to protect himself in the criminal pro- ceeding, he risks sanctions or adverse inferences being drawn against him in the civil case. If he does not assert the privilege in the civil case, he may waive it, thus hurting his Mr. Williams is an officer and director at Byrne, Ruh & McDermott P.C. in Denver, Colorado. He practices civil and white collar criminal litigation. criminal prospects, because the prosecution will have access to free discovery that it could not have gotten under the restrictive criminal discovery rules. What is the answer? There are few hard and fast rules. Each case must be examined individually. Knowing the basics will, of course, help you make better decisions when the problem comes up. But the most important thing is to think, think, think before you act. In learning the basics, you start with the Fifth Amendment itself. It declares that: No person ... shall be compelled in any criminal case to be a witness against himself ... Look closely at the language. To invoke the privilege, a witness first must be compelled to testify-in a judicial, congressional, or administrative proceeding. The privilege usually comes up in criminal cases, but it can be invoked in civil or regulatory proceedings where the person invoking it has a reasonable apprehension of criminal self-incrimination. The witness need not be faced with the certainty, or even a strong likelihood, of prosecution to invoke the privilege- only the possibility of prosecution. In addition, the testimony need not be directly incriminating as long as it might furnish even a link in a chain of evidence necessary to prosecute the witness. Hoffman v. United States, 341 US. 479 (1951). Even more basic basics: Failure to invoke the privilege waives it. Rogers v. United States, 340 U.S. 367 (1951). And the burden is on the person invoking the privilege to prove that it applies to the particular situation and that he is entitled to invoke it. When does a witness have a reasonable apprehension of self-incrimination? A defendant in a white collar crime case usually discovers he is the subject of a criminal investigation when he receives a target letter from the United States Attorney's Office or when he is indicted and arrested. Those are easy situations. A reasonable apprehension may exist even sooner. A lawyer and her client may see the hand- writing on the wall-based on the facts, their knowledge of reports to the FBI concerning the witness, or the like. And sometimes an investigation may be ongoing without the wit- LITIGATION Spring 1994 3 1 Volume 20 Number 3

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