When Criminal Defense and Civil Litigation Collide—Taking the Fifth in Civil Litigation

February 2, 2016

Thomas KlebestreifenBy: Sara Kropf

Most criminal defense lawyers would have no idea how to draft an interrogatory. That’s ok; it doesn’t come up in their practices. And most lawyers who handle civil cases would have no idea how to advise a client whose testimony may implicate criminal liability. That’s a real problem.

It’s a real problem because once a witness testifies and does not assert the Fifth Amendment, then it is usually too late. You can’t unring that bell.

A high-profile trial involving General Motors in the Southern District of New York has raised some of these issues. The lead plaintiff was forced to hire criminal counsel to help.

The Fifth Amendment

Here’s the text of the Fifth Amendment with the relevant part highlighted. If you haven’t read it since law school, read it again:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

The Supreme Court has made clear that the Fifth Amendment protects the innocent just as much as the guilty, explaining that

[O]ne of the Fifth Amendment’s basic functions … is to protect innocent men … who otherwise might be ensnared by ambiguous circumstances. . . .[T]ruthful responses of an innocent witness, as well as those of a wrongdoer, may provide the government with incriminating evidence from the speaker’s own mouth.

Ohio v. Reiner, 532 U.S. 17, 21 (2001).

A person can assert the Fifth Amendment even when there is no ongoing or even expected criminal investigation. Rather,

when a witness can demonstrate a fear of prosecution, which is more than fanciful or merely speculative, he has a claim of privilege that meets constitutional muster.

In re Grand Jury Proceedings: Samuelson, 763 F.2d 321, 324 (8th Cir. 1985).

Waivers of Fifth Amendment rights are frowned upon, so the courts try to be as lenient as possible in most instances. The Second Circuit, for example, has noted that

when time passes and circumstances change between a waiver and a subsequent appearance, the initial waiver may not be applied to the subsequent event.

In re DG Acquisition Corp., 151 F.3d 75, 83 (2d Cir. 1998). Waiver of the right at one stage of a proceeding may not be a waiver of the right at other stages of the proceeding.

But there is always the risk that a court will conclude that once your client has testified as to a subject matter, he has waived his rights as to any future testimony as to that subject matter. This is why it’s not uncommon for civil litigation counsel to bring in experienced criminal defense counsel to advise a witness or an employee about her Fifth Amendment rights before testifying.

Counsel has to be attuned to any conflicts and bring in separate counsel when necessary. For example, I was asked to represent a witness in a civil case where the company’s counsel was representing him in the litigation itself. The company’s counsel realized that the witness’s Fifth Amendment rights could be implicated in his testimony, so they found him his own counsel to advise on these limited issues. That was the right thing to do. It was in the company’s interest to have him testify so company counsel couldn’t independently advise him not to testify because of potential criminal liability.

The GM Case

The GM case presents an interesting twist on this issue. The underlying litigation was about whether a faulty ignition switch on Robert Sheuer’s Saturn Ion caused an accident in May 2014. The trial was supposed to resolve the cause of the accident, as well as  the measure of damages Mr. Scheuer suffered because of it. He claimed that he suffered emotional distress from the accident because he lost his house during its aftermath.

Mr. Scheuer testified on the stand that he became unemployed as a result of the accident. Shortly after the accident, he had bought and moved into a new home, but then was evicted. He claimed that he was evicted because his unemployment meant that he was ineligible for a loan through his retirement savings account.

Mr. Sheuer’s wife, Lisa Scheuer, had testified earlier that her husband’s injuries from the accident and attendant memory problems likely led him to lose a check from the retirement plan that was to be used to buy the house.

GM’s lawyers confronted Mr. Scheuer on the stand with evidence that he had texted a real estate agent with a pay stub for over $400,000 as proof that he had the means to buy the house. GM claims this pay stub was altered and that this falsification led to the eviction, not the accident. When confronted with this evidence on the stand, Mr. Scheuer claimed that his memory problems meant he couldn’t remember what had happened.

GM’s lawyers filed a motion asking that Ms. Sheuer be recalled to the stand, so they can question her about the allegedly falsified stub, and that they be permitted to call the real estate agent who received the text as a witness. (GM also wanted to call as a witness an expert to testify to the authenticity of the impeachment evidence.)

According to GM’s motion, the real estate agent approached GM with the information about the pay stub during the trial, which is why it wasn’t disclosed during discovery by GM. GM’s motion also notes that this evidence should have been disclosed by Mr. and Ms. Sheuer during discovery.

Bring in the Cavalry–and the Case Is Dismissed

According to news reports, Mr. and Ms. Scheuer both hired (separate) criminal counsel to advise them about their next steps following GM’s motion. These lawyers could advise them about their criminal exposure, whether they still can assert their Fifth Amendment rights and whether they should assert them.

The very next day Mr. and Ms. Scheuer voluntarily dismissed their lawsuit. We can’t know what was behind the decision but it’s hard not to  speculate that the potential for perjury played a big part in the decision.

The Scheuers’ civil lawyers must be crushed by this result, having taken the case through discovery and to trial. It’s a good lesson that we have to investigate our own clients as thoroughly as we investigate the opposing party.

The outcome is no doubt disappointing to the Scheuers, and it leaves still unresolved whether GM was at fault for the crash. But this case shows how important it is to hire separate criminal counsel to advise a client about criminal exposure. These rights are much too important to get lost amid the dollar signs in civil litigation.

Published by Kropf Moseley

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