Civil litigation after criminal proceedings

Many civil proceedings await the outcome of a criminal case to use its result. This is particularly common in civil proceedings to revoke or suspend a professional license based on the conviction, victims’ lawsuits, or shareholder derivative suits.

If you are convicted, the plaintiffs will exploit the conviction’s res judicata effect.

On the other hand, if you win an acquittal, the plaintiff must prove the civil case like any other, although you cannot rely on the acquittal as a defense.

However, even after an acquittal, you still might be able to assert the Fifth Amendment privilege against self-incrimination if a criminal prosecution is possible on different charges or by a different jurisdiction. Under the separate sovereign doctrine, the double jeopardy clause of the U.S. Constitution does not bar successive prosecution by a separate state or jurisdiction: either the federal government after a state prosecution or vice versa.

Even if you are protected from prosecution in one state or federal jurisdiction by a final judgment of acquittal or conviction you still may invoke the privilege in a prosecution based upon the same conduct in a different state or federal jurisdiction.

On the other hand, many states have statutes barring prosecution after a different sovereign has prosecuted the same transaction.

Civil litigation before or during criminal proceedings

Especially with financial crimes, civil lawsuits may precede or accompany a criminal investigation.

Prosecutions sometimes grow out of civil lawsuits, especially those brought by the government, such as consumer fraud cases brought by a state attorney general or securities fraud actions brought by the SEC or a state equivalent, but also from private lawsuits alleging fraud. Upon discovery of facts suggesting both criminal and regulatory violations, the government may initiate simultaneous civil or regulatory and criminal investigations. The regulatory agencies may file suit first to seek equitable relief and protect the public from further wrongdoing.

Related civil litigation poses both dangers and opportunities.

Answering pleadings and discovery may cause you to incriminate yourself. You can invoke the privilege to refuse to answer in the civil matter, but the opponent is entitled to ask the fact-finder to draw a negative inference against you in the civil case. A complete refusal to respond to the civil suit may lead to a default judgment that could have serious permanent consequences for your finances and career.

However, if you do not have the burden of production and proof in the civil matter, your attorney might use the civil matter to obtain discovery that he would not be entitled to in the criminal case.

Criminal prosecutors’ misuse of civil proceedings

Courts are willing to set limits to a criminal prosecutor’s use of civil proceedings and discovery to further the criminal prosecution.

For example, in one case the court suppressed statements made in an SEC proceeding because criminal prosecutors manipulated interviews to gather evidence for their investigation. Likewise, in another case the court held that the government deceived the defendant into submitting to a futile naturalization interview as a pretext to secure a criminal indictment; consequently, the court suppressed the statements and dismissed the perjury and false statements indictment.

In a third case, the district court dismissed the indictment on due process and Fifth Amendment grounds where the criminal prosecutors worked with SEC attorneys to conceal their investigation and interest in prosecuting the defendants. The court also determined that the SEC attorneys affirmatively misled the defendants’ civil attorneys as to the lack of any coordination with any prosecutor’s office. However, on appeal, the Court of Appeals reversed the dismissal and suppression rulings and decided that referring the defendant’s counsel to an SEC form that states that information provided to the SEC could be shared with other agencies including prosecutors was sufficient and adequate disclosure.