By Samantha A. Huettner
The 5th Amendment is an old friend and a good friend. One of the great landmarks in men’s struggle to be free of tyranny, to be decent and civilized.
— William O. Douglas, “An Almanac of Liberty,” 1954
The practice of civil law does not often require attorneys to reach for a copy of the United States Constitution. But where a client’s actions can have both civil and criminal consequences, civil attorneys must understand the principles surrounding the Fifth Amendment privilege against self-incrimination, often called “the right to remain silent,” in order to safeguard the client’s civil defense and avoid compromising a potential or ongoing criminal defense. In such cases, civil attorneys must help clients navigate several issues, including (1) how and when to assert the privilege; (2) possible waiver of the privilege and the use of testimony in a civil lawsuit in pending or future criminal proceedings; and (3) the potential for an adverse inference based on the privilege’s invocation. Attorneys counseling clients in these cases should consider the following.
A. You can “take the Fifth” in civil litigation
The Fifth Amendment to the United States Constitution provides, in part, that no person “shall be compelled in any criminal case to be a witness against himself.” U.S. Const. amend. V. The Indiana Constitution echoes this guarantee, providing that “[n]o person, in any criminal prosecution, shall be compelled to testify against himself.” Ind. Const. art. 1 § 14. Although by its terms applicable only to criminal proceedings, courts have long held that this privilege “not only protects the individual against being involuntarily called as a witness against himself in a criminal prosecution but also privileges him not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings.” Lefkowitz v. Turley, 414 U.S. 70, 77 (1973). The privilege protects defendants against being forced to make incriminating disclosures at any stage of the proceeding if they could not be compelled to make such disclosures as a witness at trial. In Re Folding Carton Antitrust Litigation, 609 F.2d 867, 871 (7th Cir. 1979). The privilege is applicable in response to specific inquiries that call for an admission of crime or objectively create “some tendency” to subject the individual to criminal liability. Kastigar v. United States, 406 U.S. 441, 444 (1972). This means that every stage of litigation, from pleadings to trial, presents an opportunity invoke the Fifth Amendment.
B. How to take the Fifth
The words necessary to invoke the Fifth Amendment privilege generally go something like this: “Based on the advice of counsel, I assert my rights under the Fifth Amendment of the United States Constitution and respectfully decline to answer the question.” How and when to invoke the privilege is more complicated. Although the Fifth Amendment can be raised at any stage of the litigation, as discussed below, it is “deemed waived unless invoked.” Rogers v. United States, 340 U.S. 337, 341 (1951). This means that a defendant intending to assert the privilege should do so at the earliest opportunity. A defendant may assert his Fifth Amendment rights in the following non-exclusive ways:
Pleadings. A defendant may assert his Fifth Amendment privilege in his answer to a civil complaint. In fact, if he fails to, he may waive it. See ACLI International Commodity Service, Inc. v. Banque Populaire Suisse, 110 F.R.D. 278, 287-88 (S.D.N.Y. 1986) (finding that defendant did not waive his Fifth Amendment privilege by failing to assert it in his answer only because his answer was not verified).
Written discovery. A defendant may assert his Fifth Amendment privilege in written discovery, refusing to answer a particular interrogatory or produce a document. In such circumstances, the defendant’s attorney should prepare a privilege log as to why certain documents cannot be produced and why certain interrogatories cannot be answered, as courts generally disfavor blanket objections. Ind. Trial Rule 26(B)(1).
Deposition. A defendant can assert his Fifth Amendment privilege during a civil deposition. As with any other privilege, the deponent cannot make a blanket assertion of his Fifth Amendment privilege; rather, he can raise it only in response to questions that pose a danger of incrimination. United States v. Jordan, 508 F.2d 750 (7th Cir. 1975). Attorneys defending these depositions should use common sense when counseling clients whether to invoke the privilege. In one notable case out of Nevada, a plaintiff received summary judgment after a defendant took the Fifth in response to nearly every deposition question, including “What’s your father’s name?” Francis v. Wynn Las Vegas, LLC, 262 P.3d 705 (Nev. 2011). In granting summary judgment the trial court criticized this as “the most ridiculous exercise of the Fifth Amendment I think I have ever seen.” The appellate court agreed and affirmed.
Ind. Trial Rule 26(C) protective order. A defendant may also seek an Ind. Trial Rule 26 protective order to limit discovery and/or deposition questioning and avoid questions that may elicit incriminating information. Ind. Trial Rule 26(C).
Trial. A defendant may assert his Fifth Amendment privilege at trial and refuse to answer a question.
C. How to waive the Fifth
The United States Supreme Court has held that the Fifth Amendment privilege is a fundamental right that “must not be interpreted in a hostile … spirit,” and that courts must “indulge every reasonable presumption against waiver.” Ullmann v. United States, 350 U.S. 422 (1965). Nevertheless, as with any other privilege, a civil litigant can waive his Fifth Amendment privilege. The Fifth Amendment privilege can be waived where a civil litigant voluntarily testifies to incriminating facts. Harris, 266 F.3d 750. After a defendant has voluntarily revealed a certain amount of incriminating information, the reasoning goes, requiring him to make further disclosure may not significantly endanger the interests that the privilege protects. McCormick, Evidence § 140 at 345 (3d ed. 1984). As the United States Supreme Court succinctly explained in Rogers v. United States, the leading case on waiver in this context, “[d]isclosure of a fact waives the privilege as to details.” 340 U.S. 367 (1951). Thus, “if the witness himself elects to waive his privilege, as he may doubtless do, since the privilege is for his protection and not for that of other parties, and discloses criminal connections, he is not permitted to stop, but must go on and make a full disclosure.” Id. (citing Brown v. Walker, 161 U.S. 591, 597 (1896); see also United States v. St. Pierre, 132 F.2d 837, 840 (2d Cir. 1942) (“The privilege against [compulsory self-incrimination] is to suppress the truth, but that does not mean that it is a privilege to garble it … .”)
As Lois Lerner, former director of the IRS Exempt Organizations division, discovered during her May 2013 congressional hearing on an investigation into IRS practices, sweeping disclaimers of wrongdoing may also form the basis of waiver argument. In her opening remarks to the House Oversight and Government Reform Committee, Lerner stated, in part, “I have not done anything wrong. I have not broken any laws. I have not violated any IRS rules or regulations, and I have not provided false information to this or any other congressional committee.” “The IRS: Targeting Americans for Their Political Beliefs: Hearing before the H. Comm. on Oversight & Gov’t Reform,” 113th Cong. 22 (2013), available at http://oversight.house.gov/wp-content/uploads/2014/02/2013-05-22-Ser.-No.-113-33-FC-The-IRS-Targeting-Americans-for-Their-Pol-Beliefs.pdf (statement of Lois Lerner). Lerner then asserted her Fifth Amendment rights and declined to answer questions. Given her previous denial of guilt, a firestorm erupted around the issue of whether Lerner waived her Fifth Amendment rights in her opening remarks, and a full House of Representatives voted 231-187 to find Lerner in contempt of Congress for refusing to testify. Lerner. H.R. Res. 574, 113th Cong. (2014) (enacted). While the U.S. Attorneys’ Office ultimately declined to present the contempt citation to a federal grand jury, whether Lerner waived her Fifth Amendment privilege with her denial of guilt and factual assertions is an open question.
The Second Circuit in Klein v. Harris established a widely accepted test for testimonial waiver that several other circuits have adopted. 667 F.2d 274 (2d Cir. 1981). Under the Klein waiver analysis, one waives his privilege against self-incrimination when (1) the trier of fact is left with or prone to rely on a distorted view of the truth; and (2) the party has reason to believe that his actions would be interpreted as waiver. Id. In order for a party to have reason to believe that his actions would be interpreted as waiver, the party’s statement must be “testimonial” or “incriminating.” Id. “Testimonial” means voluntarily made under oath in the context of the same judicial proceeding. Id. “Incriminating” means not merely dealing with collateral matters to the circumstances surrounding the commission of the crime. Id. Waiver extends only to the particular proceeding in which the right is invoked; however, sworn testimony given in earlier proceedings may sometimes be used against the party in a later proceeding, criminal or civil, as a party admission. Ullmann, 350 U.S. 422. Waiver is an extraordinarily fact-sensitive inquiry and depends on the unique facts and circumstances of a particular case. Counsel should carefully assist clients with discovery responses and carefully prepare them for deposition and trial testimony to avoid a waiver issue.
D. A plaintiff’s recourse: the adverse inference
When a defendant asserts the Fifth Amendment, it deprives the plaintiff of potential evidence. The plaintiff, however, has a significant remedy at his disposal: the adverse inference. National Acceptance Co. of America v. Bathalter, 705 F.2d 924, 926 (7th Cir. 1983). In other words, although a defendant’s refusal to testify in a civil case cannot be used against one asserting the privilege in a subsequent criminal proceeding, the privilege against self-incrimination does not prohibit the trier of fact in a civil case from drawing adverse inferences from a witness’s refusal to testify. Gash v. Kohm, 476 N.E.2d 910, 913 (Ind. Ct. App. 1985), trans. denied. The potential for an adverse inference means a defendant must choose between the lesser of two evils: offer potentially incriminating testimony and risk criminal proceedings, or compromise a civil lawsuit and invoke the Fifth Amendment.
E. Minimize risk with a stay
To minimize these risks, attorneys should consider requesting a stay of discovery, or even the entire civil lawsuit, pending the outcome of an ongoing criminal proceeding. The Indiana Court of Appeals has explained that “[e]ven where a privilege as important as the Fifth Amendment privilege against self-incrimination is implicated in civil proceedings, trial courts have taken steps to ensure that the litigation proceeds in a manner consistent with the interests of justice.” State v. Int’l Bus. Machs. Corp., 964 N.E.2d 206, 211-12 (Ind. 2012). While a trial court has the inherent power to stay its proceedings, a stay of civil proceedings pending the outcome of criminal proceedings is not constitutionally required. Jones v. City of Indianapolis, 216 F.R.D. 440, 450 (S.D. Ind. 2003). Ultimately, the question “is whether the court should exercise its discretion in order to avoid placing the defendant in the position of having to choose between risking a loss in his civil case by invoking his 5th Amendment rights or risking conviction in his criminal case by waiving his 5th Amendment rights and testifying in the civil proceedings.” Id.
Courts balance five factors in deciding whether to stay civil proceedings where a similar criminal action is brought before the completion of the civil proceedings: (1) the plaintiff’s interest in proceeding expeditiously with the litigation or any particular aspect of it and the potential prejudice to the plaintiff of a delay; (2) the burden that any particular aspect of the proceedings may impose on the defendant; (3) the convenience of the court in the management of its cases and the efficient use of judicial resources; (4) the interests of persons not parties to the civil litigation; and (5) the interest of the public in pending civil and criminal litigation. Fry v. Schroeder, 986 N.E.2d 821 (Ind. Ct. App. 2013).
The stakes are high and the law is fact-sensitive in this arena of commingled civil and criminal law. Civil attorneys advising clients on their Fifth Amendment rights, and the decisions they must make with respect to those rights, should proceed circumspectly and pause often to analyze and ensure they are appropriately balancing the interests at stake.•
Ms. Huettner is an associate attorney at Clendening Johnson & Bohrer in Bloomington where she assists clients with their litigation, business, and personal legal needs. She is the publications chair of the DTCI’s Trial Tactics Section and is a 2011 graduate of the Indiana University Maurer School of Law. The opinions expressed in this article are those of the author.