A Blog About Current Issues in White Collar Defense
Nevada Case Points to Perils of Assertion of 5th Amendment in Civil Cases
One of the hardest decisions on which a lawyer may be called upon to advise a client in civil litigation is the decision whether to assert the Fifth Amendment privilege. On the one hand, the overlap between pending civil and criminal matters may make it dangerous for the client to make statements that could incriminate him or her in the criminal case. On the other hand, while the assertion of a Fifth Amendment right in a criminal case may not be used against a defendant, the assertion of that right in civil litigation may permissibly lead to an adverse inference against the client in that lawsuit. There are a variety of strategies for dealing with this tension, including seeking a stay of the civil proceeding or a more limited protective order in the civil litigation.
While there are many approaches to dealing with these issues, a recent case in Nevada reinforced the lesson that blanket assertion of the Fifth Amendment may actually harm the client’s interest more than helping it. In Francis v. Wynn Las Vegas, LLC, 262 P.3d 705 (Nev. 2011), the Nevada Supreme Court upheld the lower court’s grant of summary judgment against a defendant on all claims and counterclaims based on the defendant’s overbroad assertion of the Fifth Amendment during his deposition.
In that case, the defendant owed a debt to the plaintiff, a Las Vegas casino, based on his marker. At the time of his deposition, the defendant was a party in the civil litigation and was also being prosecuted by local law enforcement. During the deposition, defendant asserted his Fifth Amendment privilege in response to nearly every question, including whether he was married, whether he lived alone, whether his father was still living and the names of his father and mother. 262 P.3d at 709. After Wynn Las Vegas filed a summary judgment motion, Francis sought to reopen discovery and “gave vague indications that Francis would like to withdraw his privilege. 262 P.3d at 710. The district court denied the request and castigated Francis for his blanket assertion of the privilege:
[Y]ou can’t use the 5th Amendment as a sword and a shield. You can’t sit in a deposition and – what’s your father’s name? Right to remain silent. Do you have a cell phone? Right to remain silent. That’s the most ridiculous exercise of the 5th Amendment I think I’ve ever seen.
Id. The court also refused to permit Francis to withdraw his assertion of the privilege.
On appeal, the state supreme court upheld the district court’s rulings and rejected Francis’ assertions that the court had penalized his exercise of the privilege by not permitting him to withdraw his assertion of the privilege and that the court should have accommodated his privilege by granting his request to reopen discovery. While the Court recognized the importance of protecting the valid assertion of a Fifth Amendment privilege, the Court found that Francis’ overbroad assertion of the privilege was unjustifiable and noted that Francis had not sought any other relief from the district court to protect his privilege (such as requesting that his deposition be sealed). After balancing the prejudice to the plaintiff, the Court found that the district court did not abuse its discretion in the way in which it had balanced the competing interests of the parties.
In Francis, the defendant’s inability to explain why he had conducted no discovery during the discovery period may have doomed him on summary judgment, regardless of his abusive exercise of the privilege against self-incrimination. But the lesson of this case is still one that sounds obvious when you say it out loud: A party in a civil proceeding should only assert the Fifth Amendment privilege when there is a basis to do so, and only as to those questions or other requests which genuinely pose a risk of self-incrimination (as understood in Fifth Amendment jurisprudence).
And while there may be strategic reasons to seek broad protection under the Fifth Amendment, counsel should be prepared to seek alternative means to protect a client’s interest before discovery is completed and before dispositive motions are filed so that the balance of interests will not weigh against the client’s interests in the litigation. Those who instead use a broad-brush approach to the assertion of the privilege will find themselves doing their clients a significant disservice.