Afro-Lecon, Inc. v. U.S.
| Decision Date | 28 May 1987 |
| Docket Number | INC,No. 86-1726,AFRO-LECO,86-1726 |
| Citation | 820 F.2d 1198 |
| Parties | 34 Cont.Cas.Fed. (CCH) 75,291 , Appellant, v. The UNITED STATES, Appellee. Appeal |
| Court | U.S. Court of Appeals — Federal Circuit |
G. Lindsay Simmons and Scott W. Woehr, of Cotten, Day & Doyle, of Washington, D.C., submitted for appellant.
Helene M. Goldberg, Commercial Litigation Branch, Dept. of Justice, of Washington, D.C., argued for appellee. On the brief for appellee were Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director and Thomas W. Petersen, Asst. Director. Also on the brief was Anthony Washington, Gen. Service Admin., of counsel.
Before NIES, Circuit Judge, NICHOLS, Senior Circuit Judge, and BISSELL, Circuit Judge.
Afro-Lecon, Inc. (Afro-Lecon) appeals the final decision of the General Services Administration Board of Contract Appeals (board), GSBCA No. 7508, 86-1 BCA (CCH) p 18,716, denying Afro-Lecon's motion to stay proceedings in its civil action relating to United States contract No. SB2-10-8(a)80C-045 until after the completion of related criminal proceedings against Afro-Lecon and dismissing the civil claim with prejudice. We vacate and remand.
The Small Business Administration awarded a subcontract to Afro-Lecon on February 29, 1980, to supply 18,298 filing cabinets for the General Services Administration (GSA). After disputes developed concerning the contract, the parties entered into a settlement agreement in October 1982 that terminated the contract without termination costs and preserved Afro-Lecon's right to assert claims concerning the delivered portion of the contract.
On June 8, 1983, Afro-Lecon submitted a certified claim, pursuant to this agreement, for costs through October 12, 1982. The basis of the claim was that the GSA delayed issuing purchase orders and bills of lading thereby increasing the company's costs. The contracting officer denied the claim on April 11, 1984, and Afro-Lecon appealed to the board.
The GSA, in preparation of its case before the board, requested discovery of the dates of the delay periods, the costs incurred during these periods, and the causal relationship between the government's actions and the claimed costs. Afro-Lecon did not respond to the satisfaction of the GSA. The GSA then issued a second set of interrogatories and a second document request. Afro-Lecon objected to the second discovery request and the agency then filed a motion to compel discovery, which the board granted on May 9, 1985. The responses provided by Afro-Lecon continued to be unacceptable to the GSA. On July 3, 1985, the board issued an order on accounting, which required Afro-Lecon to provide a detailed account of its claim with a response due by September 4, 1985.
In late July 1985, Afro-Lecon learned that it was the subject of a grand jury investigation regarding the civil claims before the board. On September 4, 1985, Afro-Lecon moved to suspend the civil proceedings because key witnesses such as officers, former employees, and consultants, were advised by counsel not to participate in the response to the order on accounting or in any portion of the civil litigation in order to avoid incrimination in the criminal proceedings. On October 17, 1985, the Assistant U.S. Attorney for the Western District of New York notified Afro-Lecon that the company and its president, Benjamin Okumabua, were potential defendants in a grand jury investigation into whether the company's claims were false, in violation of 18 U.S.C. Secs. 641 and 1001.
On January 17, 1986, the board denied Afro-Lecon's September 4 motion for a stay of the civil appeal and required the company to respond to the order on accounting by February 18, 1986. In early February the grand jury, empaneled in the United States District Court for the Western District of New York, indicted Afro-Lecon and Okumabua for making false claims against the government. On February 15, 1986, Afro-Lecon renewed its motion to stay the civil proceedings in view of the indictment. The board denied the stay and dismissed the company's civil appeal on April 11, 1986. The board, in reaching this conclusion, noted that the refusal of crucial Afro-Lecon witnesses to testify made it impossible for Afro-Lecon to comply with the order on accounting. The board decided, however, that Afro-Lecon, as the party asserting the civil claim, could not use the fifth amendment as a basis to defer civil proceedings.
Before the present appeal of the board's final decision, Afro-Lecon filed a motion in the criminal case to suppress information gathered for the criminal trial through the participation of criminal investigators posing as persons concerned with the civil case and attending various civil discovery meetings. Afro-Lecon also challenged the seizure through civil discovery of twenty-five cartons of relevant records that were then given to the United States Attorney's Office. The motion to suppress has been granted in part and denied in part. United States v. Okwumabua and Afro-Lecon, Inc., No. CR-86-28E (W.D.N.Y. Dec. 26, 1986). According to the government, a criminal trial has not yet taken place in this case.
The question in this case is whether the board properly denied Afro-Lecon's motion to stay the company's civil claim until completion of the criminal trial which concerned the same facts. This turns on whether the board has a right and duty to proceed in these circumstances and whether Afro-Lecon can maintain its civil suit and, at the same time, claim the fifth amendment privilege against self-incrimination. While our review of the decision of the board does not permit reconsideration of the facts de novo, the board's conclusions of law are not binding on this court. 41 U.S.C. Sec. 609(b); American Electronic Laboratories, Inc. v. United States, 774 F.2d 1110, 1112 (Fed.Cir.1985). We conclude that the board, in the exercise of its undoubted discretion, was mistaken in its analysis of the applicable legal standards in this case, and to Afro-Lecon's prejudice. We vacate and remand for additional proceedings consistent with this opinion.
Although the fifth amendment claims per se are not, as we shall show, the only consideration in the analysis of the propriety of parallel proceedings, we address the fifth amendment claims first in view of the emphasis placed on the fifth amendment claims by the parties and the board.
The fifth amendment provides that "[n]o person * * * shall be compelled in any criminal case to be a witness against himself * * *. U.S. Const. amend. V. The board, citing United States v. Rylander, 460 U.S. 752, 103 S.Ct. 1548, 75 L.Ed.2d 521 (1983) and Smith v. Black Panther Party, 458 U.S. 1118, 102 S.Ct. 3505, 73 L.Ed.2d 1381 (1982), vacating 661 F.2d 1243 (D.C.Cir.1981), concluded that in a civil suit, a party placing facts in issue may not rely upon the fifth amendment to avoid disclosure of such facts and still maintain the suit. While noting the summary nature of the reversal by the Supreme Court in Black Panther, the board concluded that the Court "must" have held that there are no circumstances to justify suspension of a civil case involving the same facts as a parallel criminal case when the party making the motion is a private party and the party placing facts in issue. The board also read Rylander to require the dismissal, rather than suspension, of a civil case where the plaintiff, in this case the appellant, refuses to answer interrogatories. We disagree that Black Panther compels the conclusion the board attributes to it and also conclude that Rylander was applied incorrectly.
In Black Panther, the D.C. Circuit reviewed the dismissal below of civil actions brought against the government and some of its officials by the once controversial Black Panther Party and many of its members. The Panthers sought declaratory and injunctive relief, alleging an unlawful and continuing conspiracy to destroy the Black Panther Party. Judge Skelly Wright, writing for the court, found many grounds for reversal, including an insufficient analysis of the claim to first amendment privilege to freedom of association, insufficiently responsive answers to interrogatories, unlawful demands that officers themselves respond to questions, an insufficient analysis of the assertion of the fifth amendment claim against self-incrimination, and insufficient explanation of the dismissal of a portion of the plaintiffs. Black Panther Party, 661 F.2d at 1256-1280, vacated, 458 U.S. 1118, 102 S.Ct. 3505, 73 L.Ed.2d 1381 (1982). Judge Wright's opinion has many holdings and, therefore, many possible meanings. We also note that neither the district court nor the court of appeals conclusively found that Newton was subject to pending criminal charges or that he asserted a valid claim of fifth amendment privilege. Although Judge Wright cited Newton's assertion that he was subject to criminal proceedings, the government disputed this fact and suggested that Newton's claims involved "imaginary" hazards of incrimination. Id. at 1270 n. 157, 1273.
The Supreme Court, in its brief order vacating the decision in Black Panther, provided no indication of which of the various holdings by the court of appeals was incorrect. Smith v. Black Panther Party, 458 U.S. 1118, 102 S.Ct. 3505, 73 L.Ed.2d 1381 (1982), vacating 661 F.2d 1243 (D.C.Cir.1981). It is therefore strained, without further guidance, to draw a very specific holding from the Court's opinion that extends beyond the case itself. In addition, as noted, the threshold analysis of the fifth amendment claim--the existence of a valid claim of self-incrimination--remained in dispute. We therefore decline to accept the interpretation of Black Panther as suggested by the board.
The second case relied on by the board, Rylander, did not concern the issue of parallel criminal and civil proceedings. The Court in Rylander considered the evidentiary effect of a fifth amendment ...
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