US v. Premises Known as 281 Syosset Woodbury Rd.

• Decision Date: 09 September 1994
• Docket Number: No. CV-90-3626.,CV-90-3626.
• Parties: UNITED STATES of America, Plaintiff, v. PREMISES KNOWN AS 281 SYOSSET WOODBURY ROAD, Woodbury, New York, A Parcel of Real Property and All Appurtenances Thereto, Lying in Nassau County, New York, Said Property Being Titled in the Name of Lydia Camiola, Defendant.
• Court: U.S. District Court — Eastern District of New York

862 F. Supp. 847

UNITED STATES of America, Plaintiff, v. PREMISES KNOWN AS 281 SYOSSET WOODBURY ROAD, Woodbury, New York, A Parcel of Real Property and All Appurtenances Thereto, Lying in Nassau County, New York, Said Property Being Titled in the Name of Lydia Camiola, Defendant.

No. CV-90-3626.

United States District Court, E.D. New York.

September 9, 1994.

Sarah J. Lum, Asst. U.S. Atty., Brooklyn, NY, for plaintiff.

Minna J. Kotkin, BLS Legal Services Corp., Brooklyn, NY, for defendant.

MEMORANDUM AND ORDER

GLASSER, District Judge:

This is an appeal by plaintiff United States of America (the "Government") seeking to reverse the discovery order of the Magistrate Judge, entered on the record on November 2, 1993, and November 16, 1993. For the following reasons, the Magistrate Judge's order is reversed.

FACTS

In February of 1990, John Rosario Camiola was arrested in South Carolina on drug trafficking charges. On or about August 2, 1990, Mr. Camiola entered into a plea agreement with the Government wherein he, inter alia, pleaded guilty to possession of cocaine with intent to distribute. Pl.'s Mem., Att. 1 (the "Plea Agreement"), ¶ 3. Mr. Camiola agreed to cooperate with federal officials in their investigation of the distribution of controlled substances and related unlawful activities, Plea Agreement, ¶ 6, and agreed that all assets acquired as a result of illegal trafficking in drugs shall be surrendered to the Government and/or other law enforcement officers, Plea Agreement, ¶ 7. The parties agreed, however, to litigate in a civil forfeiture proceeding a parcel of real property located at 281 Syosset-Woodbury Road, Woodbury, New York (the "Property"), which is held in the name of Mr. Camiola's wife, and the claimant in this action, Mrs. Lydia Camiola (the "Claimant"). Plea Agreement, ¶ 8.

The Property was the subject of an earlier forfeiture action in connection with a prior conviction of Mr. Camiola in 1984, in the Eastern District of Pennsylvania.¹ That action was dismissed by stipulation in 1986. In this action, which was commenced in 1990, the Government contends that from 1986 to 1989, the Property was paid for with proceeds of illegal drug trafficking and was used to facilitate such drug trafficking in 1989 and 1990 and is, therefore, subject to forfeiture pursuant to 21 U.S.C. § 881(a)(6) and (a)(7).² Claimant contends that the Property was purchased for her with the proceeds of a sale of her mother-in-law's home and a bank mortgage and that she had no knowledge of her husband's illegal drug activities prior to his 1990 arrest. Claimant has therefore asserted, among other defenses, the "innocent owner" defense. See 21 U.S.C. § 881(a)(7) ("no property shall be forfeited under this paragraph, to the extent of an interest of an owner, by reason of any act of omission established by that owner to have been committed or omitted without the knowledge or consent of that owner.").

This appeal arises out of Claimant's refusal to answer certain questions posed to her during her deposition. During three days of deposition testimony, Claimant gave testimony regarding conversations she had with her husband prior to his arrest in 1990. There is no dispute that Claimant waived any marital privilege for conversations she had with her husband prior to his 1990 arrest. However, sometime after her husband's arrest, an undercover agent from the Drug Enforcement Agency telephoned Claimant and initiated a conversation regarding the sale of marijuana. After stating that she could put this person in touch with "Carlos," a friend of her husband's who could purchase the drugs and thereby raise money for Mr. Camiola's defense, the following colloquy occurred:

Q. And your role in this was to put Carlos in touch with Jerry?

A. Correct.

Q. And you understood at that time that you were talking about the sale of marijuana?

A. Yes, because my husband had told me and also Carlos —

At this point Claimant's attorney instructed her not to continue and invoked "all marital privileges, as, I assume, I am taking it as this conversation having happened after John Camiola was arrested." Deposition of Lydia Camiola, November 2, 1993 ("Camiola Dep."), at 421-22.³ Claimant testified that this conversation did in fact take place after her husband was arrested and that when the conversation took place no one else was present, nor was anyone listening. Camiola Dep. at 423.

A. The Magistrate's Ruling

The Government sought an order from the Magistrate Judge compelling Claimant to answer questions regarding conversations she had with her husband following his arrest in 1990. During oral argument on November 2, 1993, the Magistrate Judge stated that Claimant's conversations with her husband following his arrest were protected by the privilege against adverse spousal testimony and that she could not be compelled to testify against her husband absent a stipulation from the Government that it would not use her statements against Mr. Camiola in any future criminal proceeding. Transcript of November 2, 1993 ("Nov. 2d Tr."), at 11-13. The Magistrate Judge specifically stated that the joint crime exception is not applicable because of the Second Circuit's holding that there is no joint crime exception in the context of the privilege against adverse spousal testimony. In re Grand Jury Subpoena United States, 755 F.2d 1022 (2d Cir.1985), cert. granted sub nom. United States v. Koecher, 474 U.S. 815, 106 S.Ct. 56, 88 L.Ed.2d 46 (1985), vacated as moot, 475 U.S. 133, 106 S.Ct. 1253, 89 L.Ed.2d 103 (1986). "And what it says is that no subject matter, joint criminal activity or not, is an appropriate subject of inquiry by the Government when the testifying spouse, the wife, doesn't want to be made to testify against her husband." Nov. 2d Tr. at 12.

Upon the Government's motion for reconsideration, the Magistrate Judge seemed to agree with the Government's position that the privilege against adverse spousal testimony is only applicable in criminal actions. Transcript of November 16, 1993 ("Nov. 16th Tr."), at 8-9. The Magistrate Judge stated that although he appreciated that "civil forfeiture has a criminal ring to it,"

I'm not sure that it's particularly relevant because what it seems to me is that that argument applies much more to an invocation of a privilege that Mrs. Camiola would assert to protect herself from some kind of punitive component and, therefore, the Fifth Amendment analogy doesn't ring with great resonance for me upon further reflection.

Nov. 16th Tr. at 8. However, the Magistrate Judge also held that his ruling of November 2, 1993, would stand because "the policy of the privilege against adverse spousal testimony is a privilege of a spouse not to be compelled to be the source of incriminating evidence in a prosecution against her spouse." Nov. 16th Tr. at 8. The Magistrate Judge again noted the Government's unwillingness to grant Claimant use immunity and reasoned that "what the witness is asking for is a protection that is completely coextensive with the limitation of the adverse testimonial privilege to the criminal context." Nov. 16th Tr. at 8-9.⁴ In upholding his previous ruling, the Magistrate Judge also said that the protection Claimant is seeking — that is, protecting her husband from a future criminal action through fruits of her testimony — is consistent with the marital privilege asserted:

In other words, you can use anything I say against him in any civil proceeding, in any tax proceeding, just agree with me that you won't take my words to prosecute my husband. That's what the law has recognized for hundreds of years is appropriate for the Government to do. That's what I think there's a risk of happening here unless the Government will stipulate to the contrary and that's why my ruling stands.

Nov. 16th Tr. at 13.⁵

DISCUSSION

I. Standard of Review

Rule 72 of the Federal Rules of Civil Procedure and the Federal Magistrate's Act, 28 U.S.C. §§ 631-639, provide the standard under which a district court should review a magistrate's order. Under both the Rule and the Statute, the standard depends on whether the issue decided by the magistrate is dispositive. With respect to nondispositive matters, a district court shall "modify or set aside any portion of the magistrate's order found to be clearly erroneous or contrary to law." Fed.R.Civ.P. 72(a) (emphasis added); see also 28 U.S.C. § 636(b)(1)(A) ("A judge of the court may reconsider any nondispositive pretrial matter ... where it has been shown that the magistrate's order is clearly erroneous or contrary to law."). As to matters deemed by Congress to be dispositive, a district court can engage in de novo review. Fed.R.Civ.P. 72(b); 28 U.S.C. § 636(b)(1)(B).

Matters involving pretrial discovery generally are considered nondispositive of the litigation and are subject to the more lenient "clearly erroneous" standard. Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir.), cert. denied, 498 U.S. 846, 111 S.Ct. 132, 112 L.Ed.2d 100 (1990). The Supreme Court has stated that "a finding is `clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948) (quoted in Derthick v. Bassett-Walker Inc., No. 90 Civ. 5427, 1992 WL 249951 at *8 (S.D.N.Y. Sept. 23, 1992)). "A party seeking to overturn a discovery ruling therefore generally bears a `heavy burden.'" Com-Tech Assocs. v. Computer Assocs. Int'l, Inc., 753 F.Supp. 1078, 1099 (E.D.N.Y.1990), aff'd, 938 F.2d 1574 (2d Cir.1991). "Pursuant to this highly deferential standard of review, magistrates are afforded broad discretion in resolving discovery disputes and reversal is appropriate only if their discretion is abused." Derthick, 1992 WL 249951 at *8.

II. The Privilege Against Adverse...