Baird v. Daniels et al

Filing 18

ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL RELIEF FROM STAY (Doc. 15 ). Signed by Judge Timothy S. Black on 8/5/2013. (mr1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
TIMOTHY BAIRD,
Plaintiff,

Case No. 1:12-cv-945

vs.
Judge Timothy S. Black
MATTHEW C. DANIELS, et al.,
Defendants.
ORDER DENYING PLAINTIFF’S MOTION
FOR PARTIAL RELIEF FROM STAY (Doc. 15)
This civil action is before the Court on Plaintiff Timothy Baird’s motion for partial
relief from stay (Doc. 15) and the parties’ responsive memoranda (Docs. 16, 17).
I.

BACKGROUND FACTS AND PROCEDURAL POSTURE

Baird moves the Court for partial relief from the stay of this action ordered on
February 7, 2013. (Doc. 14). Specifically, Baird seeks discovery from non-parties
pending the resolution of the criminal proceedings against Defendant Matthew C.
Daniels.
On November 15, 2012, Daniels was indicted by the Grand Jury for the Southern
District of Ohio on multiple counts, including conspiracy, bank fraud, wire fraud, and
mail fraud – all related to the failed development and construction of Kenwood Towne
Place. Daniels claims that the criminal trial will involve issues related to his alleged
diversion of loan proceeds, the same issues alleged in the complaint in this civil matter.
After considering the overlap between the criminal and civil cases, Fifth Amendment
implications, and the public interest, this Court stayed this civil action. (Doc. 14).

Baird now seeks that this Court amend its stay to permit non-party discovery
because: (1) Defendant’s criminal trial has been postponed; (2) permitting non-party
document discovery does not adversely affect Defendant’s interests; and (3) permitting
non-party document discovery at this juncture will facilitate an expeditious resolution
when the stay is fully dissolved. (Doc. 15).
II.

STANDARD OF REVIEW

A stay of civil proceedings due to a pending criminal investigation is “an
extraordinary remedy.” Louis Vuitton v. LY USA, Inc., 676 F.3d 83, 98 (2d Cir. 2012).
However, simultaneous criminal and civil cases involving the same or closely related
facts may give rise to Fifth Amendment concerns sufficient to warrant a stay of the civil
proceedings. Claborn v. State of Ohio, No. 2:11cv679, 2011 U.S. Dist. LEXIS 137629
(S.D. Ohio Nov. 30, 2011). The decision whether to stay civil litigation in deference to
parallel criminal proceedings is committed to the sound discretion of the court.
McCullaugh v. Krendick, No. 5:07cv2341, 2009 U.S. Dist. LEXIS 87849, at *1 (N.D.
Ohio Sept. 9, 2009). The factors that guide this Court’s discretion in such circumstances
are:
(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.
McCloskey v. White, No. 3:09cv1273, 2011 U.S. Dist. LEXIS 19877, at *1 (N.D. Ohio
Mar. 1, 2011).
2

III. ANALYSIS
Baird’s motion for partial relief from stay is analyzed using the same six factor
balancing test identified and applied in the Court’s previous Order. (Doc. 14 at 3).
Although the facts have not materially changed, Baird’s request for limited relief presents
a more precise question than was originally considered. Therefore, the question is: may
the stay be narrowed?
The first factor in granting a stay is whether there is overlap between the criminal
proceeding and the civil case. McCloskey, 2011 U.S. Dist. LEXIS 19877 at 1.
Specifically, this Court has already found that there is significant overlap between the
subject matter and persons involved in the civil and criminal matters. Id. Accordingly,
the Court originally ruled that this factor weighed in favor of stay. Id.
Now, although Baird has limited his new discovery request to non-party
documents, there still remains the potential for significant overlap. It is likely that the
criminal case against Daniels will entail the same collection of non-party information
Baird seeks, i.e., “bank records, credit card records, records of tenants of the Joint
Entities’ projects, and vendor records.” (Doc. 15 at 7). Without any indication of which
non-parties Baird intends to subpoena, this Court cannot assess fully the significance of
potential overlap.
The second factor is the status of the cases. Because staying a civil case pending
resolution of a criminal matter is such an “extraordinary remedy,” courts ordinarily enter
a stay only “when related criminal proceedings are imminent or pending.” Louis Vuitton,
676 F.3d at 98. Here, Daniels’ criminal case is scheduled for a jury trial to commence in
3

approximately two months, on September 30, 2013. See USA v. Daniels, 1:12cr123 (S.D.
Ohio 2012).
While Daniels’ criminal trial was continued from March 18, 2013 to September
30, 2013, a six month continuance does not change the fact that in its original Order this
Court anticipated the same, finding that “while…a stay could last many months, if not
years, should the criminal proceedings generate appeals, the status of the criminal
proceedings weigh in favor of a stay.” (Doc. 14 at 2). Therefore, the status of the case
still weighs in favor of a stay.
The third factor in examining whether to grant a stay is Baird’s interest in the
resolution of the case. The record reflects that this case is an action for not only money
damages, but injunctive relief against Daniels. (Doc. 1 at ¶ 84). This Court agrees that
partial relief of the stay would promote an expeditious resolution of this case.
Specifically, by “allowing the parties to obtain and review [voluminous amounts of]
documents from non-parties while waiting for…Daniels’ criminal case to conclude,” the
parties would have accomplished significant discovery. (Doc. 15 at 6). Accordingly, an
expeditious resolution of the case weighs against the stay. (Doc. 14 at 5-6).
The fourth factor addresses the consequences Daniels may suffer as a result of
granting Baird’s motion. Baird alleges that a partial lift of the stay does not raise any
Fifth Amendment concerns. Specifically, Baird is not seeking to compel Daniels to
testify, respond to interrogatories, or submit evidence or documentation of any kind.
(Doc. 17 at 4). Even if Daniels does have an interest in one of the non-party entities,
there are no constitutional concerns because no testimony is required. (Doc. 16 at 3).
4

Accordingly, the Court finds that the request for non-party documents does not implicate
Fifth Amendment concerns. However, while Baird’s request does not raise any
constitutional concerns, the scope of his discovery request may require Daniels to object
or otherwise take action in response to a subpoena, thereby distracting him and his
resources from trial. Therefore, the risk of distraction and the gravity of a criminal trial
weigh in favor of a stay.
As to the fifth and sixth factors, nothing has changed the analysis since the Court’s
original Order granting the stay.
IV.

CONCLUSION

The Court acknowledges the compelling and well intentioned arguments advanced
by Plaintiff. However, after consideration of each factor, the Court finds that, in toto, the
issues have not materially changed in such a way as to warrant partial relief from the
stay. Therefore, Plaintiff’s motion for partial relief from the stay (Doc. 15) is DENIED.
IT IS SO ORDERED.
Date: 8/5/13

/ s/ Timothy S. Black
Timothy S. Black
United States District Judge

5