Gordon v. Federal Deposit Insurance Corporation
| Decision Date | 30 March 1970 |
| Docket Number | No. 22119.,22119. |
| Citation | 427 F.2d 578 |
| Parties | Milton GORDON, Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Appellee. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Mr. Thomas P. Smith, Hyattsville, Md., with whom Mr. Karl G. Feissner, Hyattsville, Md., was on the brief, for appellant.
Mr. Barron K. Grier, Washington, D. C., with whom Mr. Robert L. Moore, II, Washington, D. C., was on the brief, for appellee.
Before BAZELON Chief Judge, LEVENTHAL, Circuit Judge, and JAMESON,* Senior District Judge.
This civil case involves the issue whether, or how, its conduct should be circumscribed because the same or inter-related matters are involved in a criminal prosecution against defendant. A problem like this is never without difficulty, but the difficulties were compounded in this litigation by the circumstance that under the central calendar system the problem, in different phases, came before three different district judges.1
The matter before us arises on an action by plaintiff-appellee Federal Deposit Insurance Corporation brought in October 1966 for recovery for (a) nonpayment of three promissory notes, in the amount of $26,640.55, executed by defendant-appellant Gordon and delivered to the Five Points National Bank of Miami, (b) nonpayment of overdrafts on Gordon's account with Five Points in the amount of $62,081.67, and (c) nonpayment of a guaranty in the amount of $11,584.62 executed by Gordon and delivered to Five Points. All of the right, title and interest of Five Points in these documents had been assigned to the FDIC earlier in 1966.
The district court initially granted Gordon a three-month stay of the civil proceedings because of the pendency of a criminal prosecution against him in the United States District Court for the Southern District of Florida, which he contended made it inappropriate for him to answer the complaint or otherwise participate in the proceedings. At the end of the three months, the same judge refused to continue the stay.2
A second district judge, without explanation, denied Gordon's motion to strike or deny the FDIC's Request for Admission of Facts, a motion also predicated on the pendency of the criminal indictment. This order, issued December 15, 1967, directed defendant to comply with the Request within 15 days. A Response was filed by Gordon on December 22, 1967, but all Gordon did therein was refuse to admit or deny the facts in the Request because "the matters and things requested involve the circumstances and subject matter of a pending indictment. * * *"
On March 28, 1968, a third district judge granted FDIC's motion for summary judgment on the ground that the Response was not a compliance with the order of December 18, that based "solely" on that order and defendant's failure to comply therewith the matters on which plaintiff requested an admission are deemed admitted by defendant, and that there is therefore no dispute of any material fact and plaintiff is entitled to judgment.
On appeal, plaintiff relies on Gordon v. Miami National Bank, 132 U.S. App.D.C. 124, 406 F.2d 660 (1968), which approved the entry of a district court order declining to stay the proceedings in the civil case because of the pendency of the criminal prosecution. We adhere to that ruling, and accordingly approve the order in this case entered on June 30, 1967. There may be cases where the requirement that a criminal defendant participate in a civil action, at peril of being denied some portion of his worldly goods, violates concepts of elementary fairness in view of the defendant's position in an inter-related criminal prosecution. On the other hand, the fact that a man is indicted cannot give him a blank check to block all civil litigation on the same or related underlying subject matter. Justice is meted out in both civil and criminal litigation. The overall interest of the courts that justice be done may very well require that the compensation and remedy due a civil plaintiff should not be delayed (and possibly denied). The court, in its sound discretion, must assess and balance the nature and substantiality of the injustices claimed on either side.
We cannot say that there was abuse of discretion in denying defendant a total stay of the civil litigation. Defendant seeks to distinguish our prior Gordon case on the ground that the present case involves the FDIC, an arm of the same Government that is prosecuting the criminal case. That factor is not irrelevant, but it is not decisive against proceeding with the civil action. Indeed, it may be influential in the opposite direction. The Supreme Court has recently noted in United States v. Kordel, 397 U.S. 1, 90 S.Ct. 763, 25 L.Ed.2d 1 (Feb. 24, 1970): "It would stultify enforcement of federal law to require a governmental regulatory agency * * * invariably to choose either to forgo recommendation of criminal prosecution once it seeks civil relief, or to defer civil proceedings pending the ultimate outcome of a criminal trial." Here, of course, the Government's need for civil relief, which involves merely the collection of money, is not as strong as that in Kordel, which involved a libel brought by the FDA against certain drugs.3 The Court noted in Kordel that a more "troublesome question" would have been raised in that case if the corporation could show that no one could have answered the interrogatories directed against it without personally incriminating himself.4
However, the fact that the civil case is not stayed does not mean that discovery must proceed in the same way as ordinary civil litigation. The court must not only be concerned with the general consideration of whether the real purpose of the civil discovery is to obtain information that is unavailable directly in a criminal proceeding,5 but with the further question whether to permit any discovery of the type that requires the criminal defendant to testify, for this obviously involves aspects of the privilege against self-incrimination. And so a court properly provides a protective order to prevent discovery, such as interrogatories, which "may well provide proof to the Government from which it may establish the criminal charges against the indicted defendants." Paul Harrigan & Sons, Inc. v. Enterprise Animal Oil Co., 14 F.R.D. 333 (E.D.Pa. 1953); see also note 4, supra; National Discount Corp. v. Holzbaugh, 13 F.R.D. 236, 237 (E.D.Mich. 1952); Note, 66 Mich.L.Rev. 738 (1968).
The principle is applicable not only to discovery under Rules 33 or 34, but also to admissions under Rule 36 since the order requires the criminal defendant to respond on matters of fact. Of course Rule 36(b) contains a protective provision stating:
Any admission made by a party pursuant to such request is for the purpose...
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