Solid Q Holdings v. Arenal Energy et al

Filing 91

MEMORANDUM DECISION AND ORDER granting 83 Motion to Stay pending the resolution of the criminal charges against Mr. Reincke. Signed by Judge David Nuffer on 10/23/18 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
SOLID Q HOLDINGS, LLC,

MEMORANDUM DECISION
AND ORDER GRANTING
MOTION FOR STAY

Plaintiff,
v.

Case No. 2:15-cv-419-DN

ARENAL ENERGY CORPORATION,
RICHARD REINCKE, ERIC JOHNSON,
BRIAN CHAPLIK, GUS SHOUSE,
TOM BUIEL, and CHRIS COTA,

District Judge David Nuffer

Defendants.
Defendant Richard Reincke filed a Motion for Stay (“Motion”), 1 in which he requests
that all proceedings in this action be stayed until after resolution of a pending criminal
prosecution against him (the “Criminal Case”). 2 Because the interests of justice require that this
action be stayed during the pendency of the Criminal Case against Reincke, the Motion 3
is GRANTED.
DISCUSSION
Courts have discretionary authority to stay a case if the interests of justice so require. 4 In
making this determination, courts consider these six factors: 5
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
1

Docket no. 83, filed August 17, 2018.

2

State v. Reincke, Case No. 181900698 (Utah 3rd Dist. Ct., Salt Lake County).

3

Motion, supra note 1.

4

See Trustees of the Plumbers and Pipefitters Nat’l Pension Fund v. Transworld Mech., Inc., 886 F. Supp. 1134,
1138 (S.D.N.Y. 1995).

5

M.D. Diet Weight Loss & Nutrition Clinic, L.C. v. Absolute Weight Loss & Nutrition Ctr., LLC, No. 2:05-cv-605,
2006 WL 2471524, *1 (10th Cir. Aug. 24, 2006).

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. 6
Here, the balance of these six factors favors granting the Motion. First, there is—as
Plaintiff Solid Q Holdings LLC (“Solid Q”) concedes—“significant overlap between the criminal
and civil case.” 7 Second, the status of the case—as Solid Q further concedes—“weigh[s] in favor
of a stay” 8 because Reincke “has already been indicted for the same conduct” at issue here. 9
Third, while Solid Q has an interest in proceeding expeditiously in this case, there is no evidence
that a delay will materially prejudice Solid Q, especially where Solid Q’s principals are the
alleged victims on whose behalf the State is pursuing the Criminal Case, and both cases will
necessarily involve the same witnesses and evidence. 10 Fourth, Solid Q’s interest in proceeding
expeditiously in this case is “trumped by [Reincke’s] interests in avoiding the quandary of
choosing between waiving [his] Fifth Amendment rights or effectively forfeiting the civil
case”; 11 thus—as Solid Q again concedes—“[t]his factor lean[s] … in favor of” Reincke. 12 Fifth,
judicial efficiency favors granting a stay, as both cases seek relief based on Utah securities
statutes, and the “resolution of the criminal case may increase the possibility of settlement of the
civil case due to the high standard of proof required in a criminal prosecution.” 13 And, sixth,
there is no evidence that a stay will cause serious or immediate injury to any public interest.

6

Transworld, 886 F. Supp. at 1139 (citations omitted).

7

Memorandum in Opposition to Motion to Stay (“Opposition”), at 2, docket no. 88, filed August 30, 2018.

8

Id.

9

Transworld, 886 F. Supp. at 1139.

10

See Information, docket no. 83-1, filed August 17, 2018.

11

Transworld, 886 F. Supp. at 1140.

12

Opposition, supra note 7, at 3.

13

Transworld, 886 F. Supp. at 1140.

2

Considering the factors discussed above, and given the totality of the circumstances, the
interests of justice require that this action be stayed as to Reincke until the resolution of the
Criminal Case against him.
ORDER
THEREFORE, IT IS HEREBY ORDERED that the Motion 14 is GRANTED. This
action is stayed as to Reincke pending the resolution of the criminal charges against him in the
Criminal Case. 15
The parties are directed to file a status report every three months. Within 14 days after
resolution of the criminal charges against Reincke, a status report shall be filed, together with a
motion to lift the stay, a proposed schedule for resolution of claims remaining in this case, an
attorney planning meeting report, and a proposed scheduling order. The proposed scheduling
order shall also be emailed in Word format to [e-mail].
Signed October 23, 2018.
BY THE COURT:

David Nuffer
United States District Judge

14

Docket no. 83, filed August 17, 2018.

15

See supra note 2.

3