Judge: Cherol J. Nellon, Case: 21STCV13453, Date: 2023-08-10 Tentative Ruling

Case Number: 21STCV13453    Hearing Date: December 4, 2023    Dept: 14

Instant Motion

            Defendants now move this court for an order staying this case, on the grounds that they are under investigation by the EPA and have been charged with a felony by the Los Angeles District Attorney.

Decision

            The motion is GRANTED, in part. The case is STAYED, with the sole exception that the parties may continue to seek non-party discovery.

Discussion

            In ordinary civil actions with parallel criminal proceedings, this court would be called upon to exercise its discretion as set forth in Fuller v. Superior Court (2001) 87 Cal.App.4^th 299, 307-308. A stay of the case is generally appropriate where the criminal case arises out of the same transaction as the civil case and the applicable criminal statute of limitations is likely to run comparatively soon. See Pacers, Inc. v. Superior Court (1984) 162 Cal.App.3d 686, 690 (case involving battery of federal officers stayed where federal statute would run out in just less than two years). A stay order may be less appropriate where (as here) the party invoking the privilege is not the only defendant and the length of the stay is unknown. See Avant! Corp. v. Superior Court (2000) 79 Cal.App.4^th 876, 886-887 (providing a list of generic factors to be analyzed).

            However, this is not an ordinary case. This is an enforcement action brought by two prosecutorial bodies on behalf of the People of the State of California. It is not clear whether different rules of priority apply here than they would in a case with private party plaintiffs.

            Additionally, the precise parameters of this case are largely unexplored, as are the parameters of the other criminal action or actions. Facially, the only overlapping claim is the one for public nuisance. But the extent of the overlap seems nearly impossible to determine.

For these reasons, discussed in more detail in its prior order, the court requested supplemental briefing from the parties on three questions: (1) whether any authority suggests that an enforcement action should be treated differently, in this specific context, than any other civil action would be, (2) whether any discovery could be conducted without Fifth Amendment implications, or was at risk of being lost if not conducted now, and (3) what physical acts are at issue in the criminal case and whether there was a projected timeline for that case.

            That briefing has now come in. Plaintiffs could cite to no case or statute that requires this court to deviate from the usual Fuller analysis which it would apply to any other case. And there is no further indication of how broad or narrow the criminal case may be, or what timeline it might follow. That leaves the court to “weigh the parties' competing interests with a view toward accommodating the interests of both parties, if possible” in light of the discussion about discovery. See Fuller, supra, 87 Cal.App.4^th at 307-308.

            Plaintiff’s position that discovery can just go forward, with Defendants making their objections and the court making rulings, is a bit sanguine. It is true that the corporate defendants have no Fifth Amendment rights and could be compelled at least to produce documents, even where the corporation is solely owned and operated by one person. Braswell v. U.S. (1988) 487 U.S. 99. But whether such a corporation could be compelled to answer interrogatories or other discovery processes is an open question. Id. at 118 fn.11. And then there are the complexities of evaluating the Fifth Amendment objections that will surely be raised by the individual Defendants.

In a civil context, the party asserting a Fifth Amendment objection must, on a question-by-question basis, demonstrate a “nexus” between the information requested and the risk of criminal prosecution. Siry Investment, L.P. v. Farkhondehpour (2020) 45 Cal.App.5^th 1098, 1125 (defendant compelled to answer because he failed to demonstrate a nexus between his criminal indictments for currency transactions in 2012-2014 and his financial data from the same time period). This nexus must give rise to a “reasonable belief” or “reasonable fear” that his testimony will require him to incriminate himself. Blackburn v. Superior Court (1993) 21 Cal.App.4^th 414, 431. “[T]he trial court [must] clearly state for the record the basis for its conclusion whether the claim of privilege (or, stated differently, the fear of incrimination) is reasonably asserted and valid with respect to each question propounded.” Warford v. Medeiros (1984) 160 Cal.App.3d 1035, 1048.

If the court were to undertake that sort of detailed evaluation at the discovery stage, this case would greatly impact this court's calendar. And, ultimately, without knowing more about the criminal prosecution, the exercise might well prove futile. The court might not be able to make a reasoned ruling without more information, and counsel would have wasted their time, and their clients’ money, all for naught. In turn, the lack of information might hinder either party from filing for summary judgment or (more likely) meaningfully opposing it. No one would be served by a Code of Civil Procedure § 437c(h) denial of summary judgment based on Fifth Amendment failures to answer questions.

By far the more sensible approach here is to avoid the Fifth Amendment discovery morass altogether, and to avoid any substantive consequences that may result. This is especially true in light of the fact that at least two of the three other cases in this orbit appear to have settled.

            There is one activity which the parties might safely continue: non-party discovery. As Plaintiffs point out, there are no Fifth Amendment issues at play there, and Defendants offer no objection to that sort of discovery in their supplemental briefing. In the absence of any reason to forbid that sort of discovery, it should be permitted. Counsel ought to prepare their case while it is fresh, as much as possible.

Conclusion

            The pending criminal proceeding will clearly impede discovery proceedings in this case, raising complex constitutional issues and resulting in expenditure of time and money that may be best used elsewhere. It is best that court and counsel avoid such an obstacle course rather than try to run it. Therefore, the motion is GRANTED, in part. The case is STAYED, with the sole exception that the parties may continue to seek non-party discovery.