Slainte Investments Limited Partnership v. Jeffrey

Filing 32

RULING (see attached) granting 27 Defendant's Motion to Assert Fifth Amendment Privilege. Signed by Judge Charles S. Haight, Jr. on March 30, 2015.(Dorais, L.)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT

SLAINTE INVESTMENTS LIMITED
PARTNERSHIP,
Civil Action No.
3:14-cv-1750 (CSH)

Plaintiff,
v.
JOHN B. JEFFREY a/k/a TUCKER
JEFFREY,

MARCH 30, 2015

Defendant.

RULING ON DEFENDANT'S MOTION TO ASSERT
FIFTH AMENDMENT PRIVILEGE
HAIGHT, Senior District Judge:
I. BACKGROUND
On November 21, 2014, Plaintiff Slainte Investments Limited Partnership ("Plaintiff" or
"Slainte") commenced this diversity action against Defendant John B. (a/k/a Tucker) Jeffrey
("Defendant" or "Jeffrey"), alleging that Jeffrey defrauded Slainte out of considerable sums of
money. With respect to discovery, Defendant thereafter filed a self-styled "Emergency Motion for
Protective Order" [Doc. 21] relating to Plaintiff's scheduled deposition of Jeffrey for February 16,
2015. In light of a change in counsel and an issue regarding whether Plaintiff's counsel should be
disqualified in this matter, Defendant requested that his deposition be adjourned.1 The Court
resolved the Motion on February 13, 2015, adjourning Defendant's deposition until March 17, 2015

1

The Court notes that Defendant has filed a separate "Motion to Disqualify Counsel"
[Doc. 28], which the Court will resolve in a later ruling.
1

at 10:00 am. Doc. 25. At that time, the Court specified that the deposition should continue after
March 17 "from day to day and on succeeding days, eight hours per day . . . until the deposition is
concluded." Id., at 4 (¶ 1). The Court informed the parties that it would be available (i.e., "present
in Chambers") during March 17 and the following days "to conduct any hearings or resolve any
disputes that [might] arise during the deposition." Id., (¶ 2). Furthermore, the Court instructed the
parties that if Defendant wished to assert a Fifth Amendment privilege before he began his testimony
"on the basis of circumstances presently known to counsel," his counsel must file and serve a motion
seeking to enforce that privilege. Id., at 4-5 (¶ 4).
Defendant's counsel has heeded the provisions of the aforementioned Order, moving on
behalf of her client for permission to invoke the Fifth Amendment privilege at his deposition. Doc.
27. The Court will resolve that motion herein.2

II. DISCUSSION
A.

Fifth Amendment
The Fifth Amendment of the United States Constitution states, in relevant part, that "[n]o

person . . . shall be compelled in any criminal case to be a witness against himself." U.S. Const.
amend. V. The privilege may be invoked in a variety of settings, including in "any proceeding, civil
or criminal, administrative or judicial, investigatory or adjudicatory . . ." Kastigar v. United States,
406 U.S. 441, 444 (1972).
The United States Supreme Court has held that the Fifth Amendment must be liberally
construed "in favor of the right it was intended to secure." See Hoffman v. United States, 341 U.S.
2

If Plaintiff conducted Jeffrey's deposition on March 17, 2015, the Court's present ruling
will be nunc pro tunc. See n.7 herein, infra.
2

479, 486 (1951). The privilege thus shields a defendant from having to provide testimony that would
support a criminal conviction and "embraces [testimony] which would furnish a link in the chain of
evidence needed to prosecute the claimant." Id. In particular, the Fifth Amendment privilege is
applicable when a witness reasonably "apprehend[s] danger from a direct answer," and also
"protect[s] innocent men . . . who otherwise might be ensnared by ambiguous circumstances." Ohio
v. Reiner, 532 U.S. 17, 21 (2001) (citation and internal quotation marks omitted).
In addition, the person who wishes to invoke the privilege need not prove that he or she is
entitled to do so. Rather, "it need only be evident from the implications of the question, in the setting
in which it is asked, that a responsive answer to the question or an explanation of why it cannot be
answered might be dangerous because injurious disclosure could result." Hoffman, 341 U.S. 486-87.

B.

Defendant's Motion for Leave to Invoke Fifth Amendment Privilege
In the case at bar, Defendant has sought permission from the Court to invoke the Fifth

Amendment privilege in his deposition testimony. Doc. 27. In so doing, Defendant has "advis[ed]
the Court that he intends to assert his Fifth Amendment privilege in response to any questions asked
during his deposition that would elicit answers that may incriminate him, whether directly, in
ambiguous circumstances, or by providing a link in the chain of evidence needed to prosecute him
for a federal crime." Id., at 1. He therefore seeks the Court's permission to invoke said privilege.
Id.
In support, Defendant has pointed to the language in the Amended Complaint [Doc. 17],
alleging that he "developed an elaborate but fraudulent scheme to raise money from friends,
neighbors, and colleagues . . . " and perpetrated "numerous actions in 'furtherance' of this 'scheme.'"

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Doc. 27-1, at 2 (citing and quoting Doc. 17 ("Amended Complaint") ¶¶ 6-7, 11, 13, 17-18, 23, 31).
Furthermore, Defendant emphasizes that the "actions alleged include oral and written
misrepresentations concerning business enterprises that were not legitimate, and misappropriation
of investment funds to personal use." Doc. 27-1 (citing Doc. 17, ¶¶ 7-37). For example, the
Amended Complaint alleges that Defendant "implemented a 'pyramid scheme,'" and engaged in
conduct "in violation of the larceny statute" [Conn. Gen. Stat. § 53a-119(1)-(3)], which "constitute[d]
larceny in the first degree" under Conn. Gen. Stat. § 53a-122. Doc. 27-1, at 2. See also Doc. 17,
¶¶ 33-37. Moreover, Defendant has informed the Court that the Amended Complaint "refers to
contact by an FBI agent, who would have been conducting a criminal investigation."3 Doc. 27-1, at
2 (citing Doc. 17, ¶ 37). The existence of said investigation was thereafter confirmed by an
Assistant United States Attorney, Susan L. Wines. Id., at 4. See also Doc. 27-2, at ¶ 2
("Declaration" of Attorney Meredith Braxton, attesting to conversation with AUSA Wines,
confirming that "there is an active federal investigation of Mr. Jeffrey," the subject of which "is the
same transactions that form the basis of the Amended Complaint").
Defendant clarifies that he does not seek to assert a "blanket" privilege or to be relieved of
his obligation to appear at his deposition. Doc. 27-1, at 3. Rather, he seeks to employ the privilege
as needed to avoid addressing questions that "present potential links in a chain of evidence and/or
ambiguous circumstances that could lead to prosecution." Id., at 4. See also Doc. 27-2 (including

3

Specifically, Defendant Jeffrey claims that Douglas Mueller, the individual who
formed the Plaintiff limited partnership in Texas to invest money on his own behalf and that of his
family [Doc. 17, at 2 (¶ 1)], "was contacted by the FBI regarding the transactions detailed in the
Amended Complaint." Moreover, Assistant United States Attorney Susan L. Wines confirmed the
investigation." Doc. 27-1, at 3-4. See also Doc. 27-2 ("Declaration" of Attorney Meredith Braxton),
¶ 2.
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testimony of Attorney Braxton that she spoke with AUSA Wines regarding the existence of an F.B.I.
criminal investigation in this matter) and n.3 herein, supra.

C.

Plaintiff's Response
Plaintiff has responded to Defendant's motion by "accept[ing] the representation of

defendant’s counsel that at his deposition she will advise him to invoke his Fifth Amendment right
against self-incrimination and that he will follow that advice." Doc. 29 ("Plaintiff's Response"), at
1. Furthermore, Plaintiff " does not dispute that John (Tucker) Jeffrey has a valid factual predicate
upon which to invoke the Fifth Amendment privilege as a reason to not answer questions that will
be posed at the deposition." Id.

Plaintiff's sole concern is the issue of "admissibility of the

[Defendant's] invocation [of the privilege] in these civil proceedings." Id.
Specifically, Plaintiff notes that pursuant to Rule 501, Fed. R. Evid., the rules of privilege
are governed by common law.4 Id., at 1. Pursuant to common law, "[a]lthough a jury in a criminal
case is not permitted to draw adverse inferences based on a defendant's invocation of his Fifth
Amendment rights, '[t]he Fifth Amendment does not forbid adverse inferences against parties to civil

4

Rule 501, Fed. R. Evid., captioned, "Privilege in General," states:

The common law – as interpreted by United States courts in the light of reason and
experience – governs a claim of privilege unless any of the following provides
otherwise:
the United States Constitution;
a federal statute; or
rules prescribed by the Supreme Court.
But in a civil case, state law governs privilege regarding a claim or defense for which
state law supplies the rule of decision.
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actions when they refuse to testify in response to probative evidence offered against them.'" Doc.
29, at 1-2 (quoting 3 Weinstein's Federal Evidence § 513.04[2] and citing Baxter v. Palmigiano, 425
U.S. 308, 318 (1976) and Brink’s Inc. v. City of New York, 717 F.2d 700,708 (2d Cir. 1983)).
Moreover, Plaintiff asserts that "[t]o the degree that the state law of privilege governs under
[Federal Rule] 501 [of Evidence]," Connecticut "applies the same rule as federal courts," allowing
the trial court "discretion to admit into evidence at the time of trial the defendant's invocation of the
privilege [asserted] as to various questions." Doc. 29, at 2 (citing 3 Weinstein, § 513.04[2], at 5136).
Plaintiff argues that the deposition of Jeffrey will comprise Plaintiff's "sole opportunity to
question Mr. Jeffrey about the events which underlie the claim" in this action. Doc. 29, at 2.
Therefore, when Defendant chooses to assert the Fifth Amendment privilege in response to a
question, Plaintiff will "record that fact for the benefit of an inference which may be permissibly
drawn from it." Id.
In sum, Plaintiff does not contest the validity of Jeffrey's invocation of the Fifth Amendment
privilege in response to deposition questions regarding the Amended Complaint's various allegations
of potentially criminal conduct. Id. However, Plaintiff wishes to inform the Court that it "intends
to introduce the deposition as substantive evidence in any subsequent motion or trial." Id. Therefore,
Plaintiff "submits that this court should determine that the defendant has prima facie established facts
which would permit him to refuse to answer questions on the basis of his fifth amendment privilege
against self-incrimination and that he may do so at the deposition on March 17, 2015 on a question
by question basis." Id.

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D.

Analysis
1.

Defendant's Right to Invoke the Fifth Amendment Privilege

The Fifth Amendment provides, in pertinent part, that "[n]o person . . . shall be compelled
in any criminal case to be a witness against himself." U.S. Const. amend. V. "The privilege permits
a person to refuse to answer questions, in formal or informal proceedings, where the answers might
be used to incriminate him in future criminal proceedings." United States v. Ramos, 685 F.3d 120,
126 (2d Cir. 2012) (citing, inter alia, Minnesota v. Murphy, 465 U.S. 420, 426 (1984)).
As the Second Circuit explained in Andover Data Services v. Statistical Tabulating
Corporation, 876 F.2d 1080, 1082 (2d Cir. 1989):
The fifth amendment privilege against self-incrimination is one of our most
fundamental rights as citizens. Moreover, because it is such an important right, the
privilege against self-incrimination can be invoked in any proceeding where the
witness "reasonably believes [that his testimony] could be used in a criminal
prosecution or could lead to other evidence that might be so used.” Kastigar v.
United States, 406 U.S. 441, 444-45 (1972). In keeping with its desire to safeguard
fifth amendment rights, the Supreme Court has explicitly held that a district court
cannot compel a witness in a civil action "to answer deposition questions over a valid
assertion of his Fifth Amendment rights." Pillsbury Co. v. Conboy, 459 U.S. 248,
256-57 (1983); see National Life Ins. Co. v. Hartford Accident & Indem. Co., 615
F.2d 595, 597 (3d Cir.1980) ("It is undisputed that the fifth amendment privilege
against self-incrimination may be asserted in a civil action as well as a criminal
action.").

876 F.2d at 1082 (lateral citations omitted).
Nonetheless, the right not to answer potentially incriminating questions in a civil or criminal
proceeding "is not absolute." Id. Rather, the privilege may only be invoked in a situation where
there is "a real danger that the testimony might be used against the witness in later criminal
proceedings." Id. As Justice Blackmun noted, concurring in Pillsbury Co. v. Conboy, 459 U.S. 248

7

(1983), "[i]t is black-letter law that a witness cannot assert a Fifth Amendment privilege not to testify
if the testimony sought cannot possibly be used as a basis for, or in aid of, a criminal prosecution
against the witness." 459 U.S. at 273 (citation and internal quotation marks omitted).
Moreover, a district court is clearly "precluded from compelling testimony [from an
unwilling witness] in a civil deposition over a valid assertion of the Fifth Amendment privilege,
absent a specific assurance of immunity for such testimony." Pillsbury, 459 U.S. at 264 n.24; see
also Andover Data, 876 F.2d at 1083. In addition, a district court's protective order is no substitute
for the Fifth Amendment privilege. Even a carefully crafted protective order is deemed insufficient
to adequately protect an unwilling witness in a civil action from answering questions that could
potentially incriminate him. Andover Data, 876 F.2d at 1084; see also In re Grand Jury Subpoena,
836 F.2d 1468, 1478 (4th Cir. 1988) ("Uncertainty about the ultimate outcome of a protective order
will mean that no deponent may always effectively rely on a protective order to secure his right
against self-incrimination."), cert. denied, 487 U.S. 1240 (1988).
From Jeffrey's submissions, including the "Declaration" of his counsel, it is clear that he may
validly invoke the Fifth Amendment privilege with respect to potentially incriminating questions at
his deposition. Defendant's counsel has testified by sworn affidavit that she spoke with AUSA
Wines, who informed her that a federal criminal investigation is under way with respect to the
"transactions that form the basis of the Amended Complaint." Doc. 27-2, ¶ 2. Under such
circumstances, it is likely that Plaintiff's deposition questions would potentially elicit incriminating
information from Defendant.
Moreover, not only does Jeffrey have the right to invoke the Fifth Amendment privilege to
particular questions, he must do so if he wishes to rely on the amendment's protection. United States

8

v. Ramos, 685 F.3d 120, 127 (2d Cir. 2012). "As a general matter, the Fifth Amendment privilege
is not self-executing." Id. (citation omitted). "Rather, the privilege must be invoked: an individual
must claim the privilege to be protected by it." Id. "An individual who makes self-incriminating
statements without claiming the privilege is deemed not to have been 'compelled' but to have spoken
voluntarily."5 Id. (citations omitted).

2.

Adverse Inference

The Court next addresses Plaintiff's intended use of Jeffrey's deposition transcripts – upon
motion or at trial – to draw an adverse inference from Jeffrey's invocation of the Fifth Amendment
privilege. "While the Fifth Amendment prohibits adverse inferences where parties refuse to testify
in response to probative evidence against them in criminal cases, there is no such prohibition in civil
actions." S.E.C. v. Dibella, No. 3:04 -CV- 1342 (EBB), 2007 WL 1395105, at * 2 (D.Conn. 2007).
(citing Baxter v. Palmigiano, 425 U.S. 308, 318 (1976)). Therefore, "[i]n a civil matter, a witness's
invocation of his or her Fifth Amendment privilege is admissible and competent evidence, as long
as the probative value of the evidence [is] not substantially outweighed by the danger of unfair
prejudice under Fed. R. Evid. 403."6 Id. (citing, inter alia, Brink's Inc. v. City of New York, 717

5

Defendant is nonetheless cautioned to exercise the privilege with proper care. Each
question should be considered carefully to determine whether the privilege is appropriate – i.e.,
whether the question may potentially elicit information that could be used to implicate him
criminally. Otherwise, Jeffrey may find himself subject to a motion to compel and ultimately
required to pay Plaintiff's reasonable expenses in bringing the motion. See Fed. R. Civ. P.
37(a)(5)(A).
6

Rule 403 of Evidence provides:

The court may exclude relevant evidence if its probative value is substantially
outweighed by a danger of one or more of the following: unfair prejudice, confusing
the issues, misleading the jury, undue delay, wasting time, or needlessly presenting
9

F.2d 700, 710 (2d Cir.1983)) (internal quotation marks omitted). This follows because "silence in
the face of accusation is a relevant fact .... [and] is often evidence of the most persuasive character."
Baxter, 425 U.S. at 319.
At this point in the proceedings, before any deposition transcript or testimony has been
presented for admission into evidence, the Court need not rule on whether a particular adverse
inference will be appropriate. Suffice it to say that the Court recognizes that it possesses broad
discretion in determining whether to admit evidence of a Fifth Amendment invocation by
Defendant. Brink's, 717 F.2d at 710. In exercising such discretion, the Court will apply Federal
Rule 403 of Evidence and give due consideration to "the nature of the proceeding, how and when
the privilege was invoked, and the potential harm for prejudice to opposing parties." United States
v. Certain Real Prop. and Premises Known as: 4003–4005 5th Ave., Brooklyn, NY, 55 F.3d 78, 84
(2d Cir.1995). The Court will also be mindful that a litigant may potentially abuse the Fifth
Amendment privilege if he uses it to hamper discovery and thus "gain an unfair strategic advantage
over opposing parties" by refusing to testify. 55 F.3d at 84. In weighing prejudice to the Defendant,
admission of evidence is not to be deemed as unfair or subject to exclusion under the balancing test
of Rule 403, Fed. R. Evid., "if it is merely damning." Dibella, 2007 WL 1395105, at *3 (citing
Brink's, 717 F.2d at 710).
Lastly, the Court reminds the parties that a district court has the discretion to stay a civil
proceeding against a defendant facing an overlapping criminal prosecution, provided that the Court
makes a particularized inquiry into the circumstances and competing interests in the cases. See, e.g.,

cumulative evidence.
Fed. R. Evid. 403 (emphasis added).
10

Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 99-100 (2d Cir. 2012). In other words,
there may be circumstances for a district court to properly stay a civil proceeding in order prevent
substantial prejudice to a defendant's Fifth Amendment rights. See, e.g., Ironbridge Corp. v. C.I.R.,
528 F. App'x 43, 46 n. 1 (2d Cir. 2013) ("as long as a trial court considers the relevant factors and
acts with moderation to accommodate both a litigant's valid Fifth Amendment interests and the
opposing parties' needs in having the litigation conducted fairly, we will not disturb the measures
used by that court in the exercise of its discretion") (quoting United States v. Certain Real Prop., 55
F.3d at 85). Should Jeffrey eventually be indicted on charges which "overlap" with the accusations
against him in this civil case, the "trial court enjoys great latitude in granting or denying a stay based
on its studied judgment of the particular facts before it." Ironbridge Corp. 528 F. App'x at 46 (citing
Luis Vuitton, 676 F.3d at 99) (internal quotation marks omitted).

III. CONCLUSION
The Court acknowledges Defendant John (a/k/a Tucker) Jeffrey's Fifth Amendment right to
avoid self incrimination in these proceedings. Therefore, Defendant's motion [Doc. 27] for
permission to invoke the Fifth Amendment privilege at his deposition is GRANTED.7 The Court
clarifies that Defendant has the right to invoke the privilege with respect to questions which could
potentially elicit testimony that could incriminate him in criminal matters. Moreover, because the
Fifth Amendment privilege is not self-executing, Defendant must invoke it in order to receive its
protection. Accordingly, Defendant may and must invoke his Fifth Amendment privilege if, as he

7

If Plaintiff has concluded Jeffrey's deposition, Defendant's motion [Doc. 27] is granted
nunc pro tunc, confirming Jeffrey's right to invoke the Fifth Amendment privilege within the context
of his deposition.
11

asserts, he needs protection from having to respond "to any questions asked during his deposition
that would elicit answers that may incriminate him," Doc. 27, at 1.
As to Plaintiff's inquiry regarding "admissibility of the invocation of the privilege throughout
these civil proceedings" [Doc. 29, at 1], the Court recognizes that, unlike in a criminal case, there
is no prohibition in a civil case to prevent an adverse inference if a party refuses to testify in response
to probative evidence against him. Moreover, the Second Circuit has articulated that "all parties –
those who invoke the Fifth Amendment and those who oppose them – should be afforded every
reasonable opportunity to litigate a civil case fully." United States v. Certain Real Property and
Premises Known as 4003-4005 5th Ave., Brooklyn, N.Y., 55 F.3d 78, 83-84 (2d Cir. 1995) (emphasis
in original). "[B]ecause exercise of Fifth Amendment rights should not be made unnecessarily
costly, courts, upon an appropriate motion, should seek out those ways that further the goal of
permitting as much testimony as possible to be presented in the civil litigation, despite the assertion
of the privilege." 55 F.3d at 84 (citation omitted).
Therefore, if or when Plaintiff seeks to admit Defendant's deposition testimony, including
any Fifth Amendment invocations, into evidence, the Court will exercise the proper discretion in
making its ruling. At that time, the Court will "explore all possible measures in order to select that
means which strikes a fair balance . . . and . .. accommodates both parties." Id. (citation and internal
quotation marks omitted). In so exploring, the Court will give "due consideration to the nature of
the proceeding, how and when the [Fifth Amendment] privilege was invoked, and the potential harm
or prejudice to opposing parties," United States v. Certain Real Prop., 55 F.3d at 84 (citation
omitted).

In other words, in weighing the interests of both parties, the Court will examine the

particular context of Defendant's invocation of the Fifth Amendment privilege before granting or
12

denying admission of an adverse inference. At this time, no such evidentiary issue has been brought
before the Court.
The foregoing is SO ORDERED.
Dated: New Haven, Connecticut
March 30, 2015

/s/Charles S. Haight, Jr.
CHARLES S. HAIGHT, JR.
Senior United States District Judge

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