From time to time I encounter cases where a party is subject to both criminal and civil proceedings arising from the same circumstances.  Examples include drunk drivers involved in car accidents, security guards involved in physical altercations and professionals who mishandle client funds.  This causes concern as to whether the person’s Fifth Amendment rights against self-incrimination will be invoked and what impact that invocation would have on the civil proceeding.  Most often, the criminally charged party wishes to stay the civil matter pending the outcome of the criminal matter.  The other parties to the civil suit typically resist and, until last week, there was little guidance from the Supreme Court of Nevada as to how to balance these interests.

Aspen Fin. Servs. v. Dist. Ct., 128 Nev. Adv. Op. 57 (Dec. 6, 2012) provided this guidance.  The case arose from certain real estate investments which failed.  During the civil lawsuit

[t]he Aspen defendants filed a motion with the district court to stay any depositions and written discovery that would require their employees and officers or Guinn to make testimonial statements. The Aspen defendants asserted that the Federal Bureau of Investigation (F.B.I.) had initiated a criminal investigation into their activities at the behest of the Gragson plaintiffs. They further asserted that they had been served with a federal grand jury subpoena seeking information about various subjects, including the loans for the Milano property. In addition, the Aspen defendants argued that the Gragson plaintiffs had been, and would continue, funneling discovery obtained in the civil proceeding to the F.B.I. After an extensive hearing, the district court issued a written order summarily denying the motion without prejudice.

Id.  The court noted the difficult choice confronting a party to both civil and criminal proceedings.

Here, if discovery is not stayed, Guinn, in particular, will face a difficult choice when the Gragson plaintiffs depose him. He can either waive his Fifth Amendment privilege and risk revealing incriminating information to criminal investigators, or he can assert his privilege and forego the opportunity to deny the allegations against him under oath, thereby effectively forfeiting the civil suit.

Id. (citations and quotations omitted).

After surveying the methodologies used in various jurisdictions to determine how respond to a request for a stay of a civil lawsuit in these circumstances, the Supreme Court adopted a framework used by the Ninth Circuit.

[C]ourts should analyze ‘the extent to which the defendant’s fifth amendment rights are implicated as well as the following nonexhaustive factors:(1) the interest of the plaintiffs in proceeding expeditiously with [the] litigation or any particular aspect of it, and the potential prejudice to plaintiffs of a delay; (2) the burden which any particular aspect of the proceedings may impose on defendants; (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 the pending civil and criminal litigation.

Id. (quoting Keating v. Office of Thrift Supervision, 45 F.3d 322 (9th Cir. 1995)).  Applying these criteria to the operative facts, the court ultimately concluded a stay was not appropriate.

Aspen Fin. Servs. expands upon the Supreme Court of Nevada’s Francis v. Wynn Las Vegas, LLC, 27 Nev. Adv. Op. 60, 262 P.3d 705 (2011) decision considering Girls Gone Wild founder Joe Francis’ invocation of his Fifth Amendment rights during deposition.  Francis recognized that Fifth Amendment rights may be invoked in civil litigation, however “a claim of privilege will not prevent an adverse finding or even summary judgment if the litigant does not present sufficient evidence to satisfy the usual evidentiary burdens in the litigation.”  Id. at 711 (citation and quotation omitted).

Together, Francis and Aspen Fin. Servs. do significantly clarify Nevada’s law concerning the application of Fifth Amendment privilege to civil matters.  These clarifications do, however, raise significant concerns as how discovery will be conducted where parallel civil and criminal proceedings occur and the need for motion practice to invoke a stay.

As originally posted on http://www.compellingdiscovery.com/?p=873 on 12/12/12

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On Monday, our United States Supreme Court promised plenty of work for our brothers and sisters on the nation’s border states practicing governmental liability law.  In Arizona v. United States, 567 U.S. ___ (2012), among other rulings, the 5-3 (9-0 on Section 2(B)) Court upheld Arizona’s controversial Show Me Your Papers provision, which requires local law enforcement to check the immigration status of people they stop for another reason.

Rejecting the United States’ position that federal law pre-empts the Arizona statute in this effect, the Majority broadly reasoned that this particular law complimented, rather than stood as an encroachment, into the federal immigration power.  The Court also reasoned that as a facial challenge to a pre-effect law, it had before it neither a factual record, nor the “benefit of a definitive interpretation from the state courts” upon which to address any Fourth Amendment or other preemption concerns.

The law requires state officers to make a “reasonable attemptto determine the immigration status” of any person they stop, detain, or arrest on some other legitimate basis if “reasonable suspicion exists that the person is an alien and is unlawfully present in the United States.”  Pretermitting the obvious – that every stop will take longer once reasonable suspicion kicks in, the Court also chose not to deal with 2(B)’s vagueness, nor its obvious invitation to practice racial profiling.  This comes as no surprise, given the Court’s getting the Solicitor General at Oral Argument to concede that, at least at this stage, the case does not involve a racial profiling element.

The Court has turned loose to the lawyers and the courts the responsibility to create this definitive interpretation of how this law impacts the Fourth Amendment and other rights of United States citizens.  Arizona will see plenty of litigation over the certain-to-be future interplay at the in section of 2(B) and the Fourth Amendment.

Somewhat lost in the shuffle, is the Obama Administration’s having cancelled some agreements allowing Arizona Police Departments to enforce federal immigration laws. The Administration has set up a hot-line and email address for the public to report civil rights concerns.  It is unclear what impact this will have on the overall landscape.  It seems unlikely the Feds would pull such agreements nation-wide.

 

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Is Google Googling You?

Posted on March 9, 2012 01:40 by Chad Godwin

If you use the Google search engine (and I’m guessing that includes pretty much everyone) you may have noticed a text box appearing on the screen during the past couple weeks, imploring you to read Google’s new privacy disclosures, along with the caveat “this stuff matters.”  That text box stopped appearing on March 1, when Google introduced its new privacy policy.  According to Reuters, at the beginning of the year, Google began reporting that it was simplifying its privacy policy, consolidating 60 guidelines into a single policy that applies to all its services, including YouTube, Gmail and the social network Google+. 

According to the title of a Washington Post article, the “New privacy policy lets Google watch you – everywhere.”  More specifically, the new policy allows Google to track users’ activities by consolidating information it gathers on them across all of the company’s platforms.  Users cannot opt out of the new policy if they want to continue using Google’s services.  A company representative, Alma Whitten, noted that until now, the company has been restricted in their ability to combine YouTube search histories, for example, with other information on a user’s account (email activity).  Although the company claims that it does not sell or trade personally identifiable user information, it now shares usage habits and historical data across all platforms and uses the information to match ads to your online behavior .  Moreover, the fact that Google is gathering so much user specific information on individuals creates the potential for additional privacy implications in the future.  

The National Association of Attorneys General sent a letter to Google signed by 36 members expressing concern about the new policy.  In part, the letter noted:

Consumers have diverse interests and concerns, and may want the information in their Web history to be kept separate from the information they exchange via Gmail. Likewise, consumers may be comfortable with Google knowing their search queries but not with it knowing their whereabouts, yet the new privacy policy appears to give them no choice in the matter, further invading their privacy.

EU Justice Commissioner Viviane Reding stated that data protection agencies in European countries have concluded that Google’s new privacy policy is in breach of European law.  Given the amount of attention the new privacy policy has generated, it appears as though it’s only a matter of time before the company faces its first significant legal challenge to the policy.  Until then, the digital footprint of all internet users will undoubtedly continue to grow.

Chad Godwin

Attorney

Carr Allison


 


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The U.S. Equal Employment Opportunity Commission ("EEOC") recently announced the adoption of a four-year strategic plan that focuses on, among other things, continued efforts to address "systemic discrimination" in the workplace.  

Not surprisingly, the EEOC's strategic plan sets forth a primary objective (which the EEOC acknowledges will exhaust the majority of its resources) to combat employment discrimination through administrative (e.g., investigation and conciliation) and litigation enforcement mechanisms with regard to private employers, labor organizations, employment agencies, and state and local government employers and through adjudicatory and oversight mechanisms Congress has given the EEOC with regard to federal employers.  

Based upon the EEOC's admittedly limited resources, the strategic plan states a need "to think strategically about how best to target its efforts to ensure the strongest and broadest impact possible in its efforts to stop unlawful employment discrimination."  In this regard, the strategic plan asserts that a top priority will be to continue the EEOC's 2006 "Systemic Initiative" designed to identify, investigate and litigate cases of alleged systemic discrimination (which the EEOC describes as "pattern or practice, policy, and/or class cases where the alleged discrimination [often by a single charging party] has a broad impact on an industry, profession, company, or geographic area").  

We look forward to gaining insight on how the EEOC intends to marshal its resources over the next several years - such as through the use of Commissioner charges, directed investigations, and empirical data - to address allegedly discriminatory policies or other instances of "systemic discrimination" from EEOC Commissioner Victoria A. Lipnic during DRI's 35th annual Employment & Labor Seminar, to be held May 2-4, 2012 in Chicago, IL.  If you have not already registered for this event, please access the registration information here and secure your spot today. 


 

 

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The Supreme Court of the United States will reconsider the issue of affirmative action in higher education for the first time since its 2003 decision in Grutter v. Bollinger.  In Grutter the Court held that, “The Equal Protection Clause does not prohibit the [University of Michigan] Law School’s narrowly tailored use of race in admissions decisions to further a compelling interest in obtaining the educational benefits that flow from a diverse student body.”  Today, the Court agreed to hear the appeal of Abigail Fisher, a white student, who alleges she was denied admission to the University of Texas because of the color of her skin.  At issue in the Fisher case is whether the Court’s decisions interpreting the Equal Protection Clause of the Fourteenth Amendment, including Grutter, permit the University of Texas at Austin’s use of race in undergraduate admissions decisions.

The Texas case will be argued in the fall and the changed makeup of the Supreme Court could foretell a different outcome.  Chiefly, Justice Sandra Day O’Connor, who wrote the majority 5-4 decision, has been replaced by Justice Samuel Alito.  Further, Justice Elena Kagan has been recused from the case.  Her recusal is likely a result of the Justice Department’s participation in the case in the lower courts at the time when she served as solicitor general.

What impact, if any, will the changed makeup up of the Supreme Court have on its decision?  Is there a compelling interest in obtaining educational benefits from a diverse student body?  Could a reversal of the Court’s decision in Grutter result in resegregation in public colleges and universities?

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Supreme Court Update

Posted on November 10, 2011 05:50 by David Axelrad

The Supreme Court heard argument on November 7 in Zivotofsky v. Clinton, No. 10-699, a case involving the “political question” doctrine and the scope of the President’s authority over the conduct of foreign relations.

In 2002, as part of the Foreign Relations Authorization Act, Congress enacted Section 214, entitled “United States Policy with Respect to Jerusalem as the Cpaital of Israel.”  Subsection 214(d) provides that, for purposes of issuing a passport to a United States citizen born in Jerusalem, the Secretary of State, upon request, must record the citizen’s place of birth as “Israel.”  In a statement issued at the time he signed the bill, the President took the position that Section 214 is merely advisory because, if it is instead directory, Section 214 would impermissibly infringe upon the President’s constitutional authority to formulate the United States’ position on the recognition to be given to foreign states.

Menachem Zivotofsky, who was born in Jerusalem in 2002 to U. S. citizens, applied through his mother for a passport, requesting that the place of birth be listed as “Jerusalem, Israel.”  The State Department responded that its policy precluded listing “Israel” as Zivotofsky’s birthplace, and issued a passport listing the place of birth as “Jerusalem.”  Menachem, through his parents, then filed an action for declaratory and injunctive relief, seeking an order compelling the State Department to comply with Section 214(d).  Both the district court and the Court of Appeals held that the issues presented by Zivotofsky’s action raised non-justiciable political questions. The Supreme Court granted certiorari to consider both the political question and whether Section 214 is an unconstitutional infringement of the President’s authority.

During oral argument, Zivotofsky’s attempt to defend Section 214 met with skepticism.  Zivotofsky took the position that Congress has authority to legislate in the area of foreign policy, and that Congress acted appropriately in concluding the designation on a passport of “Jerusalem, Israel” as an American citizen’s birthplace would do no harm to U. S. foreign policy.

However, Chief Justice Roberts, and Associate Justices Kennedy, Ginsburg, Scalia, Sotomayor and Kagan, all expressed doubt that Congress could legislate in this area without encroaching upon the President’s authority to conduct the foreign relations of the United States.  As Justice Sotomayor put it:

“[W]hat entitles Congress to trench on a presidential power that has been exercised virtually since the beginning of the country?”

The Court was more receptive to the Solicitor General’s argument that the President’s authority over foreign affairs, including the extent to which foreign governments are recognized, is exclusive, and that Section 214 necessarily infringes upon that authority.  Justice Breyer suggested that the Court might want to abstain from entering this controversy between the legislative and executive branches by upholding the Court of Appeals’ conclusion that this case involves a non-justiciable political question. However, Justices Kennedy and Sotomayor suggested that the Court should reach the merits of the controversy in order th eliminate uncertainty concerning the allocation of responsibility for the conduct of foreign affairs.

A decision in this case is expected by the end of the current Supreme Court term.

David Axelrad is an attorney with Horvitz & Levy in Los Angeles.  Contact David here.

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Ad Age recently posted an article addressing the meteoric rise and overwhelming dominance of the smartphone.  At the end of this holiday season, over 50 percent of mobile phone users will be using a smartphone.  A year from now, that figure is projected to almost double, to 90 percent of mobile users.  Moreover, smartphone capabilities are growing almost as fast as their market saturation.  I regularly use my phone as a search tool, GPS, communications device (most of which centers on e-mail) and social hub, and I do not consider myself to be a “power user.”  Despite the amazing smartphone developments of the past 5 years, there are more on the horizon.  If the experts are right, we will soon be using our phones in place of our wallets, for identification and point of sale purchases.  Phones could be used to unlock and start our cars and to open our garage doors and set our home thermostats.  This week, conference attendees will be using the DRI smartphone App to keep track of their schedule and contact other attendees.  However, like most any “smart” device, the more we use our phones the more data we generate regarding our whereabouts, activities and lifestyles.

Attorneys used to subpoena cell phone records to see if litigants were on their phones at the time of an injury or during an auto accident.  Already, Historical Cellular Reconstruction (HCR) can be used to provide the history of a phone’s probable location, regardless of whether a user was actually on their phone.  HCR is not based on GPS data, but upon data and information maintained by the cellular provider related to a particular cell phone’s connection to a given cell tower.  Although HCR does not result in pinpoint precision, it can often place a phone within a very small vicinity.  If a user’s cell phone is turned on and the GPS is in operation, the precision increases dramatically.

Now attorneys look for information and material addressing whether a litigant was texting, surfing the web, on Facebook or taking one of virtually countless actions on their cell phones during the time of a given event, or in the hours and days leading up to a significant event.  Lawyers can use cell phone records to compare the location of a litigant to their claimed location.  This is particularly relevant where litigants, such as commercial drivers, are required to routinely log their position.  Records may indicate that an allegedly injured party went to an amusement park, or that an allegedly incapacitated person made a purchase.  The possibilities already seem endless, and as smartphone services continue to expand, so will the potential for using the resulting data in litigation.  As more and more opportunities are created by smartphone data, attorneys need to remain mindful of the fact that there may be data available that will impact their case.  

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The Supreme Court heard oral argument on two consolidated cases, Florence v. The Board of Chosen Freeholders of the County of Burlington.  Two well-known and experienced members of the United States Supreme Court appellate bar, Thomas C. Goldstein and Carter Phillips, squared off as the Court considered whether the Fourth Amendment permits a jail to conduct a suspicion-less search whenever an individual is arrested, including for minor offenses.  DRI, which has an active committee for lawyers engaged in representing local governments, filed an amicus brief in support of the county jails.  Written by Mary Massaron Ross, the brief focused on the difficult problems of administration that would arise with a “reasonable suspicion” rule as urged by the class action plaintiffs and reminded the Court of past precedent adopting a bright line rule for Fourth Amendment searches in some categories of cases.  DRI argued that a bright line rule was necessary to give guidance to jailers, to facilitate their efforts to ensure that contraband is not introduced into jail, to help with prison security by identifying those with gang tattoos, and to ensure that lice and other health issues are identified and addressed. 

From the inception of Mr. Goldstein’s argument for the plaintiffs, he faced difficult questions from members of the Court seeking a clear rule for when a search would be constitutional.  Justice Ginsburg asked the first question, wanting to know whether Mr. Goldstein’s reasonable suspicion rule would apply to all arrestees or whether he proposed a distinction between felons and serious offenders.  Mr. Goldstein responded that his rule would apply to everyone but then backed away somewhat when he faced additional questions, noting that reasonable suspicion would exist categorically for those arrested for more serious offenses.  After a barrage of questions on the scope of his proposed rule and what kinds of offenses it would categorically apply to, Mr. Goldstein attempted to define the constitutional limits of jailers’ conduct by saying that reasonable suspicion would not be required for “anything other than looking at a close inspection of the person at arm’s length.”  He insisted that “just observing in a shower room… does not implicate a reasonable expectation of privacy.”  Mr. Goldstein also faced multiple questions about what would be permitted under his approach, whether constitutionality would depend on whether the search was merely visual, whether showering in the presence of officers would be permitted, whether the distance of the officers made a difference, and whether it mattered where the search took place. 

Justice Kennedy, often the swing vote in close votes on constitutional cases, said, “But it seems to me that you risk compromising your individual dignity if you say we have reasonable suspicion as to you, but not to you…You are just setting the detainees up for a classification that may be questioned at the time, and will be seen as an affront based on the person’s race, based on what he said or she said to the officers coming in.”  Justice Kennedy further observed that the reasonable suspicion rule “imperils individual dignity in a way that the blanket rule does not.”  Mr. Goldstein told Justice Kennedy that the county defendants did not have a blanket rule either because they only do a visual search unless they have reasonable suspicion.

Other justices had problems with Mr. Goldstein’s effort to draw a line between permissible and impermissible conduct based on the distance of the officers, including Justice Sotomayor.  She said at one point, “That is a line that doesn’t make sense to me.”  She also questioned him about his effort to differentiate between visual searches from several feet away and visual searches involving a requirement that the individual open or expose private parts of the body.  Justice Sotomayor also questioned Mr. Goldstein about whether corrections officials could be expected to investigate the nature of the offense on intake.  Justice Kennedy likewise had questions about whether rap sheets were immediately available at the time of intake.  And Justice Roberts followed up to ask whether there was anything in the record to “show how much additional time it would require to look at each one, to look at their record, to determine which category they should fall into to strip search or not, as opposed to having a blanket rule.”  Justice Scalia suggested an originalist view, noting that “at the time the Fourth Amendment was adopted, this --- this was standard practice, to strip search persons who were admitted to prisons.”

Carter Phillips began his argument by noting that the scope of the claims had been somewhat confused in the record and cautioning the Court regarding analyzing the set of issues involved in the class certification and the second set of issues involved in the plaintiffs’ claims.  He also urged the Court to focus on the policies in effect in 2005, which was the basis on which Mr. Florence was arrested, rather than looking at later-enacted changes to the policies.  Mr. Phillips urged the Court to adopt a blanket rule permitting even a more intrusive body cavity search without reasonable suspicion.  He noted that the detainees were being introduced into the general jail population in both counties, thus he did not have to defend a rule pertaining to those arrested and held in separate holding areas. 

Justice Breyer and Justice Alito both questioned whether this type of search could be performed on any individual including those arrested on minor offenses.  Justice Breyer pointed to the ABA’s position, which was that reasonable suspicion would be required for detainees arrested for minor offenses, not including drugs or violence.  Mr. Phillips responded by pointing to expert testimony showing that a greater presence of contraband is found among individuals with minor offenses.  Justice Breyer and Justice Sotomayor both pressed Mr. Phillips for empirical evidence that contraband would be a problem if a reasonable suspicion rule were to be adopted.  Justice Ginsburg asked Mr. Phillips if there were any constitutional limits to the type of body cavity search in his view.  And he responded no – that the “balance would tip in favor of the… institution under those circumstances.”  Mr. Phillips urged the Court to write an opinion “that recognizes that deference to the prison and to their judgment s what’s appropriate under these circumstances, and that extends all the way to the Bell v. Wolfish line.”  Justice Kennedy suggested during the argument that those arrested on minor offenses and put into the general jail population might “well prefer an institution where everyone has been searched before he or she is put into the population….” 

After Mr. Phillips spoke, Nicole A. Saharsky, on behalf of the United States, argued in support of the counties’ position.  She emphasized that detainees might well hide a gun or contraband on their person at the time of an arrest, or might obtain such items during the time between the arrest and reaching the county jail.  She told the Court that the United States position is to support a policy to “inspect everyone who would be put in the general jail population.”  

On rebuttal, Mr. Goldstein focused on the empirical evidence, which he contended supported the conclusion that a reasonable suspicion standard did not result in security problems in jails or prisons. 

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A South Carolina Senate subcommittee currently is considering a proposed bill that, like Arizona's recently-enacted law, would allow local law enforcement to check the immigration status of anyone they stop or detain.

Because the legislative session is winding down in South Carolina, the bill likely will not be introduced to the full Senate this year. Nevertheless, the subcommittee's timing is interesting, considering the huge amount of negative publicity and controversy that the Arizona law created.

In 2008, South Carolina passed an immigration law that requires all employers, at the time of hire, to use the federal E-Verify system or confirm that the new hire has a valid driver's license from a list of approved states (or is otherwise eligible to receive a driver's license).

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On Friday, March 13, 2009, the NAACP sued HSBC and Wells Fargo alleging that these lenders forced African Americans into subprime mortgages while whites with identical qualifications got loans on more favorable terms (the “NAACP Lawsuits”). The original complaints in the NAACP Lawsuits are available at http://www.naacp.org.
Such claims are commonly referred to as “reverse redlining.” Redlining is the practice of denying credit to specific geographic areas based on the income, race, or ethnicity of its residents. Reverse-redlining, on the other hand, occurs where a lender unlawfully discriminates by extending credit to a neighborhood or class of people on terms less favorable than would have been extended to people outside the particular class at issue.

The NAACP Lawsuits allege that HSBC and Wells Fargo violated the Fair Housing Act, 42 USC § 3601, the Equal Credit Opportunity Act, 15 USC § 1691, and the Civil Rights Act, 42 USC §§ 1981, 1982. Specifically, the NAACP Lawsuits allege that HSBC and Wells Fargo “engaged in institutionalized, systematic racism” in connection with the sale of residential mortgage loans to members of the NAACP. The NAACP Lawsuits further allege that the “pervasiveness of this discrimination has been documented in numerous empirical studies that all confirm that African Americans are substantially more likely to receive higher-rate residential mortgage loans than Caucasian borrowers with the same qualifications.” The NAACP Lawsuits do not seek an award of damages. Instead, the complaints seek various injunctive and declaratory relief barring HSBC and Wells Fargo from continuing their alleged “predatory behavior.”

Counsel for lenders should be aware of claims based on discriminatory lending practices under federal law and, frequently, parallel state law equivalents. At the outset of any litigation, counsel for lenders should analyze the lender’s sales policies and procedures manuals and the lenders’ HMDA data. HMDA, or the Home Mortgage Disclosure Act of 1975, requires financial institutions to maintain and annually disclose data about home purchases, home purchase pre-approvals, home improvement, and refinance applications involving 1 to 4 unit and multifamily dwellings. HMDA was passed to identify discriminatory lending practices by, among other things, requiring lenders to keep records concerning the race of their customers and applicants and the lending decisions they make.

John E. Matter Jr.
Moye White
jake.matter@moyewhite.com

 

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Categories: Civil Rights | Banking | Discrimination

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