Fifth Amendment Strategies
In my last post I talked a bit about the impact of the Fifth Amendment in civil RICO cases, but I did not have time to discuss the strategies for dealing with the defendant’s dilemma. First of all, defense counsel should make a Rule 12(b)(6) motion to dismiss for failure to state a claim for which relief can be granted. If the RICO claim is dismissed before any discovery is undertaken, the defendant may avoid the Fifth Amendment dilemma altogether. This may not, however, be the end of the case. A plaintiff will often try to amend his deficient complaint. If that is successful, then the defendant will be faced with responding to discovery, which will likely expose him to criminal indictment. At this stage there are at least three motions to stay the prosecution of the RICO claims that should be considered by defense counsel: (1) motion to stay pending discovery on the non-RICO claims; (2) motion to stay pending mediation or arbitration; and (3) motion to stay pending completion of a parallel criminal proceeding.
A motion to stay pending non-RICO discovery may not be effective if the facts are such that discovery regarding the non-RICO claims will require the defendant to answer potentially incriminating questions. A motion to stay pending mediation or arbitration may be effective, but the defendant usually must have the ability to make the plaintiff an offer he can’t refuse. Although such a settlement will probably cause the defendant significant financial pain, at least he will not have too provide incriminating testimony. Finally, where the civil RICO defendant is a defendant in a parallel criminal prosecution or a target of an ongoing parallel grand jury investigation, a stay of the civil case may be granted in the discretion of the court.
