KCI USA, Inc. v. Healthcare Essentials, Inc.
Memorandum of Opinion and Order For the reasons set forth herein, the Court hereby denies Defendants' Joint Motion to Stay (ECF No. 321 ). The Show Cause Hearing shall commence on Thursday, 11/9/2017, at 1:00 p.m. Defendant Ryan Tennebar's presence at the Show Cause Hearing is excused. Defendant Colin Tennebar shall appear with his counsel. Judge Benita Y. Pearson on 11/8/2017. (JLG)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
KCI USA, INC.,
HEALTHCARE ESSENTIALS, INC., et al.,
CASE NO. 1:14CV549
JUDGE BENITA Y. PEARSON
MEMORANDUM OF OPINION AND
ORDER [Resolving ECF No. 321]
Pending is Defendants Ryan H. Tennebar and Colin Tennebar’s Joint Motion to Stay
Show Cause Hearing, Pending Resolution of Criminal Investigation (ECF No. 321).1 For the
following reasons, the Court denies this second motion to stay (ECF No. 321).
This suit originates from Plaintiff’s allegations that Defendants stole Plaintiff’s woundcare vacuums and marketed them as their own. On Plaintiff’s Motion to Show Cause (ECF No.
269), the Court set a Show Cause Hearing for August 16, 2017. See July 17, 2017 non-document
Order. Because Defendant Ryan Tennebar faced sentencing in a parallel criminal matter, the
Court granted Defendant’s first motion to stay the case until the first week of November, 2017.
See ECF No. 317. Defendant Ryan Tennebar has been sentenced in that criminal case, United
States v. Tennebar, No. 1:17-CR-00176-JRA-1 (N.D. Ohio) On October 18, 2017, to forty-eight
Earlier today, the Court granted Colin Tennebar’s oral motion to join Ryan
Tennebar’s motion to stay. See Minutes, Nov. 8, 2017.
(48) months of incarceration and three years’ supervised release. ECF No. 325 at PageID#:
Now, Defendants Ryan Tennebar and Colin Tennebar jointly move to stay the case until
the first week of February 2018, based on the assertion that they are subject to an ongoing
investigation. ECF No. 321. Counsel for the United States has confirmed that an investigation is
ongoing, but no charges are imminent. See ECF No. 325-1.
Nothing in the Constitution “requires a civil action to be stayed in the face of a pending
or impending criminal indictment[.]” F.T.C. v. E.M.A. Nationwide, Inc., 767 F.3d 611, 627 (6th
Cir. 2014) (quoting Chao v. Fleming, 498 F. Supp. 2d 1034, 1037 (W.D. Mich. 2007)). “In the
absence of substantial prejudice to the rights of the parties involved, such parallel proceedings
are unobjectionable under [the] jurisprudence.” Id. at 627 n.10 (citation omitted).
A stay of a civil case “is an extraordinary remedy” that should be granted only when justice so
requires. Id. at 627.
In considering whether a case should be stayed pending parallel criminal proceedings, a
court should consider the following factors:
(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
Id. (quoting Chao, 498 F. Supp. 2d at 1037). “The most important factor is the balance of
hardships.” Id. at 628 (citing Int’l Bhd. of Elec. Workers v. AT&T Network Sys., No. 88-3895,
879 F.2d 824, 1989 WL 7812, at *8 (6th Cir. Jul. 17, 1989)). Courts should also consider “the
extent to which the defendant’s fifth amendment rights are implicated.” Id. at 627 (quoting Fed.
Sav. & Loan Ins. Corp. v. Molianro, 889 F.2d 899, 902 (9th Cir. 1989)).
District courts have broad discretion in determining whether a stay is appropriate. Id.
(quoting Chao, 498 F. Supp. 2d at 1037). The party seeking the stay bears the burden of
demonstrating that there is a “pressing need for delay, and that neither the other party nor the
public will suffer harm from entry of the order.” Id. at 627–28 (citing Ohio Envtl. Council v. U.
S. Dist. Court, Southern Dist. of Ohio, Eastern Div., 565 F.3d 393, 396 (6th Cir. 1977)).
In this case, the factors identified in F.T.C. v. E.M.A. Nationwide, Inc. do not support the
stay. The Court finds that while the Defendants may be the subject of an ongoing criminal
investigation, their collective posture has improved since Defendant Ryan H. Tennebar’s
previous motion to stay when he had a pending criminal indictment against him. At present,
there are no pending criminal charges or indictments against either Defendant that would warrant
a stay. And, as counsel for the government has assured, none are imminent. In other words, the
fact of an ongoing criminal investigation will not obviously implicate Defendants’ Fifth
Amendment privilege, if the Court proceeds with the Show Cause Hearing. Therefore, the first
and second factors do not weigh in favor of a stay.
Plaintiff asserts that the “purpose of the [Show Cause Hearing] is for [Plaintiff] to be
heard about Defendants’ sanctionable discovery abuses, spoliation, and violation of the Court’s
various orders . . . .” ECF No. 325 at PageID#: 5602. To the extent the issues in Defendant
Ryan Tennebar’s criminal case overlaps with those presented in this civil case, such issues
should not implicate his Fifth Amendment privilege, especially given that he is collaterally
estopped from denying facts already set forth in his sworn guilty plea. Id. at PageID#: 5603. As
Colin Tennebar is not facing charges, at present, any forebearance on his behalf would be based
on speculation. Finally, the fifth and sixth factors also do not weigh in favor of a stay, as the
Court’s interest in judicial efficiency, and the public’s interest in conserving resources will not be
benefitted as there is no pending indictment.
For the foregoing reasons, the Court hereby denies Defendants’ Joint Motion to Stay
(ECF No. 321). The Show Cause Hearing shall commence on Thursday, November 9, 2017 at
1:00 p.m. Defendant Ryan Tennebar’s presence at the Show Cause Hearing is excused.
Defendant Colin Tennebar shall appear with his counsel.
IT IS SO ORDERED.
November 8, 2017
/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge
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