Guzall, et al v. Romulus, City of, et al

Filing 62

OPINION and ORDER Denying 59 Motion to Stay Proceedings, as to Defendant Alan R. Lambert. Signed by District Judge Linda V. Parker. (RLou)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
UNITED STATES OF AMERICA
ex rel MARIANNE D. GUZALL and
MARIANNE D. GUZALL a/k/a
MARIANNA GUZALL,
Plaintiff,

Civil Case No. 13-11327
Honorable Linda V. Parker

v.
CITY OF ROMULUS, ALAN R. LAMBERT,
and BETSEY KRAMPITZ,
Defendants.
____________________________/
OPINION AND ORDER DENYING MOTION TO STAY PROCEEDINGS
AS TO DEFENDANT ALAN R. LAMBERT
On March 26, 2013, Marianne D. Guzall (“Mrs. Guzall”) filed this lawsuit
against Defendants as a qui tam action alleging violations of the False Claims Act,
and as an individual action alleging violations of her rights under federal and state
law.1 Defendants are the City of Romulus (the “City” or “Romulus”), the City’s
former Mayor Alan R. Lambert (“Mayor Lambert”), and the City’s former Chief of
Staff Betsey Krampitz (“Ms. Krampitz”). As relevant to the pending motion, Mrs.
Guzall alleges that her employment with the City was terminated on March 11,
2011, due in whole or in part to her speech on matters of public concern-The United States of America has declined to intervene in the action. (See ECF
No. 8.)

1

specifically Mayor Lambert’s and Ms. Krampitz’s alleged abuse of their positions
and/or power and misuse of funds. (See, Am. Compl. ¶¶ 26, 27.) Presently before
the Court is a motion to stay the proceedings as to Mayor Lambert, only, filed June
18, 2015. Mrs. Guzall filed a response to the motion on June 19, 2015.
In his motion, Mayor Lambert seeks to stay “any and all proceedings against
him in this matter until the conclusion of any underlying criminal proceedings.”
(ECF No. 59 at ¶ 6.) Mayor Lambert does not claim that there in fact are pending
criminal proceedings or indictments issued against him. Instead, he claims that
“[o]n information, this matter [criminal activities involving Mayor Lambert]
continues to be investigated by law enforcement agencies who may recommend
formal charges against [him].” (Id. at ¶ 3, emphasis added.) Mayor Lambert has
informed his counsel that he seeks to invoke his right against self-incrimination as
guaranteed by the United States Constitution and Michigan Constitution. (Id. ¶ 4.)
A court has the broad discretion to stay a civil proceeding when there is a
pending or impending parallel criminal action. See Chao v. Fleming, 498 F. Supp.
2d 1034, 1037 (W.D. Mich. 2007) (citing Landis v. North Am. Co., 299 U.S. 248,
254-55, 57 S. Ct. 163, 166 (1936)). Failure to stay a civil proceeding where there
is a pending parallel criminal action targeting one of the parties to the civil action
could undermine the party’s Fifth Amendment privilege against self-incrimination.

In re Par Pharm., Inc. Sec. Litig., 133 F.R.D. 12, 13 (S.D.N.Y. 1990). Several
factors are relevant to a court’s decision whether to grant a stay, including:
1) the extent to which the issues in the criminal case overlap with
those presented in the civil case; 2) the status of the case, including
whether the defendants have been indicted; 3) the private interests of
the plaintiffs in proceeding expeditiously weighed against the
prejudice to plaintiffs caused by the delay; 4) the private interests of
and burden on the defendants; 5) the interests of the courts; and 6) the
public interest.
Fleming, 498 F. Supp. 2d at 1037 (citing Trustees of the Plumbers & Pipefitters
Nat’l Pension Fund v. Transworld Mech., Inc., 886 F. Supp. 1134, 1139 (S.D.N.Y.
1995)).
“In general, courts recognize that the case for a stay is strongest where the
defendant has already been indicted.” Id. (citing cases). Pre-indictment requests
for a stay usually are denied “because the risk of self-incrimination is reduced at
the pre-indictment stage, and because of the uncertainty surrounding when, if ever,
indictments will be issued, as well as the effect of the delay on the civil trial.”
State Farm Mut. Auto. Ins. Co. v. Beckham-Easley, No. Civ. A. 01-5530, 2002 WL
31111766, at *2 (E.D. Pa. Sept. 18, 2002) (unpublished opinion) (citing Walsh
Sec., Inc. v. Cristo Prop. Mgmt. Ltd., 7 F. Supp. 2d. 523, 527 (D.N.J. 1998) (citing
United States v. Private Sanitation Indus. Ass’n, 811 F. Supp. 802, 805 (E.D.N.Y.
1992)). Some courts have expressed that where a defendant filing a motion to stay
has not been indicted, the motion may be denied on that ground alone. Id. (citing

Private Sanitation Indus. Ass’n., 811 F. Supp. at 805-06; SEC v. Dresser Indus.,
Inc., 628 F.2d 1368, 1376 (D.C. Cir.1980)). However, other courts have expressed
that “a stay should not be categorically denied solely because the defendant has not
yet been indicated.” Fleming, 498 F. Supp. 2d at 1038 (citing Walsh Sec., Inc., 7
F. Supp. 2d at 527) (“It is ‘still possible’ to obtain a stay, even though an
indictment or information has not yet been returned, if the Government is
conducting an active parallel criminal investigation.”))
Regardless of which line of cases this Court would be inclined to follow, in
addition to a lack of evidence of any criminal proceeding or an indictment issued
against him, Mayor Lambert offers no proof of an actual criminal investigation into
his conduct. Instead, his assertion is carefully worded to state that only “on
information” is a criminal investigation ongoing. The lack of evidence of a
criminal proceeding, much less an investigation, is particularly significant where
the misconduct Mrs. Guzall claims to have spoken about, which allegedly led to
her termination, occurred more than four years ago. As time passes, it seems less
and less likely that any criminal proceedings will ensue concerning the conduct at
issue in this case.
Absent evidence of a pending investigation, the Court cannot determine, for
example, who is being investigated or the conduct for which they are being
investigated. As such, the Court has no way of assessing whether there is any

overlap between the civil and criminal proceedings. “If there is no overlap, then
there would be no danger of self-incrimination and no need for a stay.” Fleming,
498 F. Supp. 2d at 1039 (internal quotation marks and citation omitted). The
district court in Fleming therefore found the extent of the overlap to be “the most
important factor” in the court’s analysis of whether a stay is appropriate. Id. The
other factors relevant to deciding whether a stay is appropriate also cannot be
realistically evaluated without this information.
In short, without evidence that there in fact is a parallel criminal
investigation or proceeding, this Court cannot find justification for a stay of these
civil proceedings.
Accordingly,
IT IS ORDERED, that the Motion to Stay Proceedings as to Defendant
Alan R. Lambert is DENIED.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: July 27, 2015
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, July 27, 2015, by electronic and/or U.S.
First Class mail.
s/ Richard Loury
Case Manager