ACCEPTED
12-15-00216-CV
TWELFTH COURT OF APPEALS
TYLER, TEXAS
9/3/2015 2:56:56 PM
Pam Estes
CLERK
NO. ________________________
FILED IN
IN THE 12th COURT OF APPEALS
TYLER, TEXAS
COURT OF APPEALS 9/3/2015 2:56:56 PM
FOR THE PAM ESTES
TWELFTH DISTRICT OF TEXAS Clerk
IN RE THOMAS LYTLE AND ELLEN LYTLE,
Relators,
v.
THE HONORABLE TERESA DRUM, JUDGE
PRESIDING 294TH JUDICIAL DISTRICT
COURT OF VAN ZANDT COUNTY, TEXAS,
Respondent,
Real Parties in Interest:
David C. Petruska
Sandra L. Petruska
Helmuth K. Gutzke and
Zackiann Gutzke,
Defendants.
APPENDIX TO PETITION
FOR WRIT OF MANDAMUS
PART 2
Barbara L. Emerson, Esq.
Texas State Bar No. 06599400
BELLINGER & SUBERG, LLP ORAL ARGUMENT REQUESTED
10,000 N. Central Expy., Suite 900
Dallas, TX 75231
214.954.9540 – Telephone
214.954.9541 – Facsimile
bemerson@bd-law.com
Filed 2/12/2015 11 :41 :54 AM
Karen L. Wilson
District Clerk.
Van Zand~~Ps'1tyc~~~~~
Holly Spindle
CAUSE NO. 14-00172
THOMAS LYTLE AND ELLEN LYTLE § IN THE DISTRICT COURT
§
v. §
§
DAVID C. PETRUSKA, SANDRA L. § 294TH JUDICIAL DISTRICT
PETRUSKA, COMPASS BANK, §
HELMUTH K. GUTZKE AND §
ZACKIANN GUTZKE § VAN ZANDT COUNTY, TEXAS
PLAINTIFFS' FIRST AMENDED PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COME Thomas Lytle and Ellen Lytle, hereinafter called Plaintiffs, and file
Plaintiffs' First Amended Petition, complaining of and about David C. Petruska, Sandra L.
Petmska, Helmuth K. Gutzke, and Zackiarm Gutzke, hereinafter called Defendants, and for cause
of action would show unto the Court the following:
DISCOVERY CONTROL PLAN LEVEL
1. Plaintiffs intend that discovery be conducted under Discovery Level2.
PARTIES AND SERVICE
2. Plaintiff, Thomas Lytle, is an individual whose address is 1603 VanZandt County
Road 2319, Canton, Texas 75103.
3. Plaintiff, Ellen Lytle, is an individual whose address is 1603 Van Zandt County
Road 2319,Canton, Texas 75103 .
4. Defendant David C. Petruska has appeared in this case and no service of process
is necessary at this time.
5. Defendant Sandra L. Petmska has appeaTed in this case and no service of proc~_ss ....
is necessary at this time.
PLAINTIFFS' FIRST Ai\1ENDED PETITION
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APPENDIX 23
TAB 4
6. Defendant Helmuth K.. Gutzke has appeared in this case and no service of process
is necessary at this time.
7. Defendant Zackiann Gutzke has appeared in this case and no service of process is
necessary at this time.
JURISDICTION AND VENUE
8. The court has jurisdiction over this action to quiet title pursuant to Article V,
Section 8 of the Texas Constitution and Section 26.043(8) of the Texas Government Code.
9. Venue in VanZandt County is proper in this cause under Section 15.011 of the
Texas Civil Practice and Remedies Code because this action involves real property located in
VanZandt County.
10. The damages sought herein are within the jurisdictional limits of this Court.
11 . This suit seeks monetary relief of $100,000 or less and non-monetary relief.
FACTS
12. This is an action to quiet title on real property, hereafter referred to as "the
Property", and for damages for a fraudulent claim filed against real property in violation of
Texas Civ. Prac. & Rem. Code§ 12.002. The Property is described as follows:
Roadway situated in Van Zandt County, State of Texas, on the M. V. Lout
Survey, A-468 and being a part of the called 68.78 acre tract conveyed to
Thomas M. Lytle and Ellen Lytle, by Ricky Lee Hadley, by General
Warranty Deed recorded in Volume 1771, Page 609, of the Van Zandt
County Real Records and a part of the called 1.1 0 acre tract conveyed to
Thomas M. Lytle and Ellen Lytle, by Ricky Lee Hadley, by General
Warranty Deed recorded in Volume 1771, Page 629, of the Van Zandt
County Real Records.
13. Plaintiffs are the rightful owners, entitled to possession of the Property by virtue
Real Property Records of VanZandt County, Texas.
PLAINTIFFS' FIRST AMENDED PETITION
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APPENDIX 24
14. On May 16, 2008, Plaintiffs were wrongfully dispossessed of the Property when a
General Warranty Deed with Vendor's Lien was executed by Helmuth K. Gutzke and Zackiann
Gutzke (collectively, "Gutzke") purporting to convey to David C. Petruska and Sandra L.
Petruska (collectively, "Petruska") an easement on the Property (the "Deed"). Said easement
never existed and was never granted by the Plaintiffs or their predecessors-in-interest.
15. The Deed was filed of record May 20, 2008, as Document No. 2008-004602 in
the Real Property Records ofVan Zandt County, Texas.
16. On May 16, 2008, Plaintiffs were further wrongfully dispossessed of the Property
when Petruska executed a Deed of Trust which purported to convey the easement for the benefit
of Compass Bank. That Deed of Trust was filed of record May 20, 2008 as Document No. 2008-
004603 in the Real Property Records of VanZandt County, Texas.
17. Defendants Petruska purport to have an adverse claim or interest in the Property
that operates as a cloud on Plaintiffs' title to the Property and through pleadings before this Court
continue to assert that on May 16, 2008 they acquired an interest in the Property. The nature of
the interest asserted by Petruska in the Property is an easement on Plaintiffs Property.
18. The claim or interest purportedly conveyed to Petruska is invalid, unenforceable
or without right against Plaintiffs because no easement ever existed. Gutzke did not have any
easement or rights to convey. The Deed of Trust signed by Petruska lists an easement that never
existed and was never granted. In order for Plaintiffs to enjoy title to the Property, the adverse
estate or interest claimed and still claimed by Petruska and as set forth in the Deed and Deed of
Trust must be removed.
PLAINTIFFS' FIRST AMENDED PETITION
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APPENDIX 25
19. At the time of the conveyance from the Defendants Gutzke to Defendants
Petruska, all parties to the transaction knew no such easement existed and knowingly created a
false and fraudulent interest in the Property of Plaintiffs.
20. At the time of the conveyance in the Deed of Trust for the benefit of Defendant
Compass Bank, Petruska knew no such easement existed and knowingly created a false and
fraudulent interest in the Property of Plaintiffs.
21. In executing and causing to have the Deed and the Deed of Trust to be filed,
Defendants knowingly participated in creating a false claim in the Property with the intent to
cause Plaintiffs financial injury by imposing burdens and encumbrances on the real property of
Plaintiffs.
22. Any claim that an easement in the Property existed at any time is invalid and
unenforceable. In order for Plaintiffs to enjoy title to the Property, any claim that an easement
existed or was conveyed by the Deed and Deed of Trust must be removed and declared null and
void.
23. Petruska has taken actions to assert his rights to the easement, including coming
onto Plaintiffs' property and threatening Plaintiff Thomas Lytle with an assault rifle, and
continuing to assert an easement existed in his pleadings before this Court. Plaintiffs have been
forced to retain an attorney who sent a demand for release of any claim for an easement to
Petruska and Compass Bank. While Petruska refused to consent, Compass Bank ultimately
executed a Release of Easement and Petruska continues to seek a declaration that he held a valid
easement and conveyed a valid easement under the Deed of Trust. Plaintiffs have been forced to
incur the cost and expense of seeking to clear title to their property.
PLAINTIFFS' FIRST AMENDED PETITION
\\Bdnt-fs 1\wpprolaw\3191 .002\267954.docx
APPENDIX 26
DECLARATORY JUDGMENT
24. Pursuant to Section 37.001 et seq. of the Texas Civil Practice and Remedies Code,
Plaintiffs request a declaratory judgment that Plaintiffs are the sole and rightful owners of the
Property and declaring all claims to an easement at any time or currently are null and void.
25. Plaintiffs further request that Defendants be required to execute a correction deed
for the General Warranty Deed with Vendor's Lien and Deed of Trust, and file it with the Real
Property Records in Van Zandt County.
CLAIM FOR DAMAGES
26. The alleged conveyance of the easement was a fraudulent interest in Plaintiffs'
Property.
27. Pursuant to Section 12.002(b) of the Texas Civil Practice and & Remedies Code,
Plaintiffs seek recovery of damages, court costs and attorneys ' fees.
ATTORNEYS' FEES
28. Pursuant to Section 37.001 et seq. of the Texas Civil Practice & Remedies Code,
Plaintiffs seek recovery of court costs and attorneys' fees as are equitable and just.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiffs, Thomas Lytle and Ellen
Lytle, respectfully requests that Defendants be cited to appear and answer, and that on the final
trial, the court grant Plaintiffs judgment quieting title to the Property and removing cloud on
Plaintiffs' title; declaratory judgment; damages; attorney fees; award of costs, and any other relief
at law or in equity to which Plaintiffs are entitled.
PLAINTIFFS' FIRST AMENDED PETITION
\\Bdnt-fs l \wpprolaw\3 191.002\267954.docx
APPENDIX 27
Respectfully submitted,
BELLINGER & SUBERG, L.L.P.
By:
BARBARA L. EMERSON
Texas State Bar No. 06599400
10,000 N. Central Expy, Suite 900
Dallas, Texas 75231
Telephone: 214/954-9540
Facsimile: 214/954-9541
bemerson@bd-law.com
ATTORNEY FOR PLAINTIFFS,
THOMAS LYTLE AND ELLEN LYTLE
CERTIFICATE OF SERVICE
The undersigned certifies that a true and correct copy of foregoing has been forwarded to
all counsel via eservice and email on the 12th day of February, 2015 as provided below.
Ralph E. Allen Michael F. Pezzulli
Attorney and Counselor at Law M. Ellen Skinner
100 East Ferguson, Suite 901 Christopher L. Barnes
Tyler, Texas 75702 Pezzulli Barnes, LLP
(903) 593-9727 Telephone 17300 Preston Road, Suite 220
rallen@tyler .net Dallas, TX 75252-5476
(972) 713-1300 Telephone
michael@courtroom.com
Ellen@courtroom.com
Chris@courtroom.com
Barbara L. Emerson
PLAINTIFFS' FIRST AMENDED PEIDION
\\Bdnt-fsl\wpprolaw\3191.002\267954.docx
APPENDIX 28
U.S. v. Little AI, 712 F.2d 133 (1983)
37 Fed .R.Serv.2d 482
~Original Image of 71 2 F.2d 133 (PDF)
KeyCite Ye llow Flag- Negative Treatment
Distinguished by U.S. v. Gieger Transfer Service, Inc., 121
S.D.Miss., August 18, 1997 Action
712 F.2d 133 Nature and subject matter of actions in
United States Court of Appeals, general
Fifth Circuit.
A district court may stay a civil proceeding
UNITED STATES of America, Plaintiff-Appellee, during pendency of a parallel criminal
v. proceeding.
LITTLE AL, a/k/a Texas Ranger, Etc., et al.,
Defendants,
Charles Thomas Pollard, Claimant-Appellant. 31 Cases that cite this headnote
No. 82-2300 I Summary Calendar. I Aug. 15, 1983.
Claimant of vessels that Government sought to have 131 Controlled Substances
forfeited appealed fi·om a summary judgment of the Time for proceedings
United States Dish-ict Court for the Southem DistTict of
Texas, Hugh Gibson, J., in favor of the Government. The Affidavit of counsel of claimant of ownership
Court of Appeals, Reavley, Circuit Judge, held that: (1) interest in vessels for which United States
district court did not abuse its discretion in denying sought forfeiture seeking continuance of
claimant' s motion for a continuance during pendency o:f} forfeitme proceeding during pendency of
claimant's appeal fi·om a criminal conviction that individual's appeal from a criminal conviction
stemmed fi·om his pmt in marijuana importation scheme that stemmed from his part in marijuana
dming which vessels were seized, giving rise to forfeiture importation scheme which resulted in anest of
action, and (2) in absence of any exercise by claimant of individual and seizme of vessels amounted to
right to come forward and show that facts constituting nothing more than blanket assettion of Fifth
probable cause, that is, that reasonable grounds existed to Amendment privilege against compulsory
believe that claimant's vessels were used or intended to self-incrimination in light of lack of explanation
be used for prohibited pmposes, did not actually exist, as to how filing of affidavit in response to
Government was entitled to forfeiture of vessels. forfeiture proceeding would have prejudiced
criminal appeals of claimant, and, as such, did
Affirmed. not present type of circumstances or prejudice
that required a stay. U.S .C.A. Const.Amend. 5;
Fed.Rules Civ.Proc.Rule 56(t), 28 U.S.C.A.
West Headnotes (7) 37 Cases that cite this headnote
[II Federal Courts
Continuance and stay
141 Controlled Substances
Moving for a continuance invokes discretion of Grounds
district comt, and only an abuse of that
discretion will justify reversal. Fed.Rules Under forfeiture statutes, prope1ty is subject to
Civ.Proc.Rule 56(t), 28 U.S.C.A. forfeiture if it was used in any manner to
facilitate sale or transportation of controlled
substances. Tariff Act of 1930, §§ 596, 615, as
4 Cases that cite this headnote amended, 19 U.S.C.A. §§ 1595a, 1615;
Comprehensive Drug Abuse Prevention and
No claim to original U S. Government Works .
APPENDIX 29
TAB 5
U. S. v. Little AI, 712 F.2d 133 (1983)
37 Fed.R.Serv.2d 482
Control Act of 1970, §§ 511 , 5ll(b)(4), 21 511, 5ll(b)(4), 21 U.S.C.A. §§ 881 , 881(b)(4);
U.S.C.A. §§ 881 , 881(b)(4); Conh·aband Seizure Contraband Seizme Act, §§ 1, 2, 4, 49 U.S.C.A.
Act,§§ 1, 2, 4, 49 U.S.C.A. §§ 781, 782, 784. §§ 781, 782, 784.
2 Cases that cite this headnote 47 Cases that cite this headnote
(5(
Forfeitures
Presumptions and Bmden of Proof Attorneys and Law Firms
Any claimant of prope1ty sought to be forfeited *134 Michael A. Maness, Mark Vela, Houston, Tex., for
must establish either that prope1ty is not subject claimant-appellant.
to forfeiture, or that a defense to forfeiture
applies. Tariff Act of 1930, §§ 596, 615, as Frances H. Stacy, Jack Shepherd, Asst. U.S. Attys.,
amended, 19 U.S.C.A. §§ 1595a, 1615; Houston, Tex., for plaintiff-appellee.
Comprehensive Drug Abuse Prevention and
Appeal from the United States District Comt for the
Control Act of 1970, §§ 511 , 5ll(b)(4), 21
Southem District of Texas.
U.S.C.A. §§ 881 , 881(b)(4); Conh·aband Seizure
Act, §§ 1, 2, 4, 49 U.S.C.A. §§ 781 , 782, 784. Before REAVLEY, GARWOOD and JOLLY, Circuit
Judges.
2 Cases that cite this headnote
Opinion
REAVLEY, Circuit Judge:
(6(
Forfeitures This case concerns the forfeitme of three vessels allegedly
Probable or Reasonable Cause used in a scheme to impmt marijuana. Appellant Charles
Pollard, who claims an ownership interest in the vessels,
lfunrebutted, a showing of probable cause alone appeals from the entry of judgment in favor of the
will suppmt a forfeiture . gove1nment. e argues that the district comt punished his
exercise of the privilege against self-incrimination by
31 Cases that cite this headnote refusing to continue the action dming the pendency o~
ollard's appeal from a criminal conviction that stemmed
[from his art in the im mtation scheme. We affmn.
The factual background of the seizure of the three vessels
(7(
Forfeitures appears in detail in United States v. Scott, 678 F.2d 606
Automobiles and other vehicles; means of (5th Cir.1982) cert. denied, 459 U.S. 972, 103 S.Ct. 304,
transpmt 74 L.Ed.2d 285 (1982). We reiterate the *135 essential
facts. The U.S. Coast Guard boarded the unmanned
ln absence of any exercise by claimant of fishing vessel LITTLE AL on April 6, 1981 and
property which Government sought to have discovered over fifteen tons of marijuana aboard. The
forfeited under forfeiture laws of right to come coast guard, based on prior surveillance, stopped the other
forward and show that facts constituting two vessels, TYRANT Ill and DORADO, and arrested
probable cause on issue of whether claimant's their crews and passengers. The twelve men found on
vessels were used or intended to be ·used for board, including appellant Pollard, were convicted of
prohibited purposes did not actually exist, conspiring to impmt and to possess with intent to
Government was entitled to forfeitme of vessels. distribute the marijuana found on LITTLE AL. We
Tariff Act of 1930, §§ 596, 615, as amended, 19 affmned Pollard's conviction, but reversed the
U.S.C.A. §§ 1595a, 1615; Comprehensive Drug convictions of seven of his codefendants.
Abuse Prevention and Control Act of 1970, §§
-- l 1: Nexr © 201 5 Th omson Reutet·s. No claim to original U.S. Governm ent W orks. 2
APPENDIX 30
U.S. v. Little AI, 712 F.2d 133 (1983)
37 Fed.R.Serv.2d 482
The government filed this forfeiture action on October 13, recently:
1981. While the convictions were awaiting appellate
review, the government filed a motion for summary [W]hile the assertion of the Fifth
judgment in the forfeitme action and supported the Amendment privilege against
motion with affidavits by coast guard personnel who had compulsory self-incrimination may
pmticipated in the seizme of the three vessels. Pollard be a valid ground upon which a
filed no opposing affidavits. witness ... declines to answer
questions, it has never been thought
Pollard, however, did invoke the continuance procedme to be in itself a substitute for
under Fed.R.Civ.P. 56(f), which empowers the district evidence that would assist in
comt to continue or deny a summary judgment motion meeting a bmden of production.
when the nonmoving mty cannot present o osing We think the view of the Cowt of
affidavits. Pollard's counsel avened that he could not Appeals [that invocation of the
obtain affidavits from Pollard or his codefendants for fear privilege satisfies a burden of
of "substantial rejudice" to their criminal a eals. The production] would conve1t the
affidavit did not specify the nature of the prejudice or the privilege fi·om the shield against
nature of the evidence that might become available if the compulsory self-incrimination
comt granted the continuance. which it was intended to be into a
sword whereby a claimant asserting
The district court granted summary judgment, noting that the privilege would be fi·eed fi·om
Pollard had not made a sufficient showing of inability to adducing proof in suppmt of a
present facts. The affidavit of Pollard's counsel, in the bmden which would otherwise
court's view, merely evinced reluctance to oppose the have been his. None of our cases
motion dming the pendency of the criminal appeals. suppmt this view.
United States v. Rylander, 460 U.S. 752, 103 S.Ct. 1548,
1552-53, 75 L.Ed.2d 521 (1983). Accordingly, a blanket
1. Denial of the Continuance assertion of the privilege neither excuses the burden under
Ill Moving for a continuance under Rule 56(f) invokes the rule 56(e) of controve1ting the government's affidavits
discretion of the district court, and only an abuse of that nor canies the burden under rule 56(f) of explaining
discretion will justify reversal. American Lease Plans v. either the *136 inability to respond or the benefit to be
Silver Sand Co., 637 F.2d 311, 317- 18 (5th Cir.l981). derived fi·om postponement.
The party seeking the continuance bears the bmden of
demonstrating the need for a continuance. As we have The affidavit submitted by Pollard's counsel amounts to
observed: nothing more than blanket assertion of the privilege. No
explanation appears conceming how the filing of an
Because the bmden on a pmty resisting summary affidavit would have prejudiced the criminal appeals of
judgment is not a heavy one, one must conclusively Pollard or his codefendants. No explanation appem·s
justify his entitlement to the shelter of rule 56(f) by concerning what the affidavits could have disclosed. No
presenting specific facts explaining the inability to explanation appears concerning why affidavits would
make a substantive response as required by rule 56(e) have been any more available after termination of the
and by specifically demonstrating "how postponement criminal appeal.
of a ruling on the motion will enable him, by discovery
or other means, to rebut the movant's showing of the 2
Certainly, a district comt may stay a civil proceeding
1 1 [JJ
absence of a genuine issue of fact." The nonmovant during the pendency of a parallel criminal proceeding. See
may not simply rely on vague asse1tions that additional SEC v. First Financial Group of Texas, Inc., 659 F.2d
discovery will produce needed, but unspecified facts . 660, 668 (5th Cir.l981 ). Such a stay contemplates
"special circumstances" and the need to avoid "substantial
SEC v. Spence & Green, 612 F.2d 896, 901 (5th Cir.l980)
and irreparable prejudice." Jd. The very fact of a parallel
(citations omitted), cert. denied, 449 U.S. 1082, 10 1 S.Ct.
criminal proceeding, however, did not alone undercut
866,66 L.Ed.2d 806 (1981).
Pollard 's privilege against self-incrimination, even though
he pendency of the criminal action "forced him to choose
Pollard does not diminish this bmden by resting his
between preserving hi s privilege against
request for a continuance on the privilege against
self-incrimination and losing the civil suit." Hoover v.
self-incrimination. As the Supreme Comt has noted
1!!S [- .>~ N exr © 2015 Thomson Reuters. No cl aim to original U.S. Governm ent Works. 3
APPENDIX 31
U.S. v. Little AI, 712 F.2d 133 (1983)
37 Fed.R.Serv.2d 482
Knight, 678 F.2d 578, 581 (5th Cir. l982). This case
hardly presents the txne of circumstances or rejudice thaV 2
The district court ordered the forfeiture under four
·e uire a stay. statutes, 19 U.S.C. § 1595a; 49 U.S.C. §§ 781 , 782; and
21 U.S.C. § 881. The procedures under these statutes
are substantially similar; a showing of probable cause
likewise shifts the burden of proof. See 19 U.S.C. §
2. Propriety of Summary Judgment 1615; 49 U.S.C. § 784.
Pollard argues, altematively, that the comt ened by
entering summary judgment even if its procedures did not
infringe the privilege against self-incrimination. In 161 l?J Ifunrebutted, a showing of probable cause alone will
Pollard's view, the government's affidavits do not support a forfeiture. See United States v. One 1975 Ford
demonstrate that the vessels were used or intended to be Pickup Truck, 558 F.2d 755, 756- 57 (5th Ci.r.1977)
used to smuggle marijuana. Pollard argues that the (upholding forfeiture based on unrebutted showing of
affidavits depend upon conflicting inferences that the probable cause). If Pollard had *137 controve1ted facts
court could have drawn and that entry of judgment upon which the probable cause showing relied, summary
contravened the principle of drawing all inferences judgment would have been improper. United States v.
favorable to the nonmoving pa1ty. One 1944 Steel Hull Freighter, 697 F.2d 1030, 1031 - 32
(llth Cir.I983). As the Comt of Appeals for the Sixth
The govemment affidavits do depend on inferences from Circuit, however, has noted:
these facts : (1) the LITTLE AL contained over fifteen
tons of marijuana; (2) coast guard smveillance established While we cannot agree with the
that the TYRANT III had been alongside LITTLE AL government's insistance that
early in the day and that TYRANT III, in turn, had been probable cause is all that is needed
alongside DORADO; ' (3) the fingerprints of two by way of proof to justify a
passengers on board TYRANT III were discovered on forfeitme even in the face of
nautical maps found on board LITTLE AL; (4) the coast overwhelming proof that the cause,
guard had observed someone on board TYRANT III pass though probable, was not
a roll of plastic wrap to someone on board DORADO; and ultimately sustained, it is apparent
(5) no other vessels were observed in contact with to us that a showing of probable
LITTLE AL, TYRANT III or DORADO. cause is sufficient to warrant a
forfeitme and that summary
Under 19 U .S.C. § 1615(3), the contact among the judgment was properly entered in
vessels provides prima facie evidence of " visits" among the absence of any exercise by the
the vessels. claimant of her right to come
forward and show that the facts
constituting probable cause did not
141 lSI If the government bore the bmden of proving by a actually exist.
preponderance of the evidence that the vessels were used
or intended to be used in importing the marijuana, the United States v. One 1975 Mercedes 280S, 590 F.2d 196,
judgment as to these vessels might be in question. The 199 (6th Ci.r. l978); see United States v. One 1974
forfeiture statutes, however, place the government' s Porsche 91 1-S, 682 F.2d 283, 285- 86-(lst Cir.1982).
burden at a lower threshold . It must establish only that
reasonable grounds exist to believe that the vessels were Even drawing inferences favorable to Pollard, we
used or intended to be used for prohibited purposes. 21 perceive no genuine issue of material fact as to probable
U.S .C.A. § 88l(b)(4) (West 1981)/ See United States v. cause. He has not undercut the factual basis shown by the
1964 Beechcraft Baron Aircraft, 691 F.2d 725, 727 (5th govemment.
Cir.1982), cert. denied, 461 U.S. 914, I 03 S.Ct. 1893, 77
L.Ed.2d 283 (1983). The property is subject to forfeiture AFFIRMED.
if it was used "in any manner" to facilitate sale or
transpmtation. ld. Any claimant of the property must
establish either that the prope1ty is not subject to
forfeiture, or that a defense to the forfeiture applies. See All Citations
United States v. $364,960.00 in U.S. Currency, 661 F.2d
712 F.2d 133, 37 Fed.R.Serv.2d 482
319, 325 (5th Ci.r.1981).
"'· rl=;~; Nexr © 2 01 5 Tl1omson Reuters. No cl aim to ori ginal U.S. Government Works. 4
APPENDIX 32
U.S. v. Little AI, 712 F.2d 133 (1983)
37 Fed.R.Serv.2d 482
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
5
APPENDIX 33
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
~Original Image of 625 F.Supp.2d 391 (PDF)
KeyCite Yellow Flag- Negative Treatment
West Headnotes (12)
Distinguished by Klein v. Silversea Cruises, Ltd ., N.D. Tex.,
December 16, 2014
625 F.Supp.2d 391
Ill Action ·
United States District Court,
S.D. Texas, Nature and Subject Matter of Actions in
Laredo Division. General
Cynthia ALCALA, et al., Plaintiffs, Whether to stay civil action pending resolution
v. of parallel criminal prosecution is not matter of
TEXAS WEBB COUNTY, et al., Defendants. constitutional right, but rather one of cowt
discretion exercised in interests of justice; there
Civil Action No. L-08-0128. I May 1, 2009. I exists no general constitutional, statutory, or
Opinion Denying Emergency Motion June 1, 2009. common-law prohibition against prosecution of
parallel criminal and civil actions, even where
such actions proceed simultaneously.
Synopsis
Background: Former employees of county tax assessor's 5 Cases that cite this headnote
office brought § 1983 action against county, assessor, and
other officials within office, alleging that employees had
been required to participate in assessor's political
campaigns and in raffles benefiting assessor as conditions
of employment. Tax assessor and one defendant official 121 Action
moved for stay pending resolution of related criminal \?Another Action Pending
charges against official/movant.
District cowt' s discretionary authority to stay
proceeding pending resolution of parallel
proceeding stems from its inherent authority to
Holdings: The District Court, J. Scott Hacker, United
conh·ol disposition of cases on its own docket.
States Magistrate Judge, held that:
official/movant's interests weighed against grant of
[ IJ Cases that cite this headnote
complete stay;
2
[ 1 former
employees ' interests also weighed against grant
of complete stay;
Action
Pl Cowt's own interests weighed against grant of Nature and Subject Matter of Actions in
complete stay; General
4
[ 1interests of public and third parties also weighed Complete stay of pending civil action unti
against grant of complete stay; and conclusion of related criminal proceeding is
considered an extraordinary remedy.
[SJ per Micaela Alvarez, J., on tax assessor's emergency
motion, indictment of tax assessor in state court for
organized gambling promotion did not warrant complete Cases that cite this headnote
stay of employees' § 1983 action.
Motion granted in part and denied in part.
141 Action
Nature and Subject Matter of Actions in
'o= L-NNexr © 2015 Th omson Reuters. No claim to original U.S. Government Works.
APPENDIX 34
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
General To warrant complete stay of civil action pending
resolution of parallel criminal proceeding,
In civil case, there is strong presumption in post-indictment, defendant must make strong
favor of discovery, and party who moves for showing that two proceedings will so overlap
stay pending resolution of related criminal that either: (1) he cannot protect himself in civil
proceeding has burden to overcome proceeding by selectively invoking his Fifth
presumption. Amendment privilege, or (2) effective defense
of both cases IS impossible. U.S.C.A .
Const.Amend. 5.
5 Cases that cite this headnote
5 Cases that cite this headnote
lSI Action
Nature and Subject Matter of Actions in
General 181 Action
= Nature and Subject Matter of Actions in
District court should stay civil case pending General
resolution of related criminal proceeding only
upon showing of special circumstances, to In § 1983 action against county tax assessor and
prevent defendant from suffering substantial and against official within assessor's office, alleging
irreparable prejudice. that office's former employees had been
required to participate in assessor' s political
campaigns and in raffles benefiting assessor,
9 Cases that cite this headnote assessor's and official's interests weighed
against grant of complete stay pending
resolution of state criminal case against official
for gambling promotion; cases did not
161
significantly overlap since alleged wrong in civil
Action case was mandating of employee participation
Nature and Subject Matter of Actions in and retaliation, not taking/holding of raffle ticket
General money, state was not party to civil action, and
neither defendant would be burdened in civil
Factors in whether stay of civil action is suit through selective invocation of right against
wananted pending resolution of related criminal self-incrimination. U.S.C.A. Const.Amend. 5;
proceeding are: (1) extent to which issues in 42 U.S.C.A. § 1983 ; V.T.C.A., Penal Code §§
criminal case overlap with those presented in 47.03(a)(3), 71.02(a)(2).
civil case; (2) status of criminal case, including
whether defendant has been indicted; (3) private
interests of plaintiff in proceeding expeditiously, Cases that cite this headnote
weighed against prejudice to plaintiff caused by
delay; (4) private interests of and burden on
defendant; (5) interests of courts; and (6) public
interest.
191 Action
Nature and Subject Matter of Actions in
18 Cases that cite this headnote General
In § 1983 action against county tax assessor and
against official within assessor's office, alleging
171
that office' s former employees had been
Action required to participate in assessor's political
Nature and Subject Matter of Actions in campaigns and in raffles benefiting assessor,
General former employees' interests weighed against
: Nexr © 201 5 Th omson Reuters . No claim to origin al U.S. Government Works. 2
APPENDIX 35
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
grant of complete stay pending resolution of resolving case with minimal delay, there was no
state criminal case against official for gambling significant overlap between cases and thus no
promotion; most evidence in civil case would demonstrated risk to defendants' rights, and
consist of witness testimony couched in current employees as well as county also had
memory, and integrity of such testimony was in interest in prompt resolution. 42 U.S.C.A. §
danger of degrading fmther in event of stay of 1983 ; V.T.C.A., Penal Code §§ 47.03 (a)(3),
uncertain duration. 42 U.S.C.A. § 1983; 71.02(a)(2).
V.T.C.A., Penal Code §§ 47 .03 (a)(3),
71.02(a)(2).
3 Cases that cite this headnote
1 Cases that cite this headnote
(12)
Action
\?Nature and Subject Matter of Actions in
(!OJ
Action General
Nature and Subject Matter of Actions in
General Indictment of county tax assessor in state court
for organized gambling promotion, in
In § 1983 action against county tax assessor and connection with raffles in county assessor's
against official within assessor's office, alleging office that benefited assessor's election
that office's former employees had been campaigns and that former employees were
required to participate in assessor's political allegedly forced to patticipate in, did not
campaigns and in raffles benefiting assessor, wanant complete stay of employees' § 1983
federal district court's interests weighed against action against county tax assessor and official
grant of complete stay pending resolution of within her office arising out of forced
state criminal case against official for gambling participation in raffles, although there was some
promotion; there was no significant overlap overlap between the prosecution and the civil
between cases, and district court was unlikely to action; 60-day stay of discovery in § 1983 action
expend significant effmt on claims of privilege was sufficient to pennit assessor to understand
against self-incrimination given defendants' criminal charges against her and respond
admissions as to existence of raffles. U.S.C.A. appropriately to civil suit, plaintiffs in § 1983
Const.Amend. 5; 42 U.S.C.A. § 1983 ; V.T.C.A., action would be prejudiced by complete stay, as
Penal Code§§ 47.03 (a)(3), 71.02(a)(2). they had already waited eight months to begin
discovery, and public had interest in timely
resolution of dispute. 42 U.S.C.A. § 1983 ;
2 Cases that cite this headnote V.T.C.A. , Penal Code§ 71.02(a)(2).
Cases that cite this headnote
(III Action
Nature and Subject Matter of Actions in
General
In § 1983 action against county tax assessor and Attorneys and Law Firms
against official within assessor's office, alleging
that office's former employees had been *393 Albert M. Gutienez, Ill, Matthew Fisher Wymer,
required to pmticipate in assessor's political Gutienez Wymer, P .C., San Antonio, TX, for Plaintiffs.
campaigns and in raffles benefiting assessor,
interests of public and third parties weighed Kyle Cledys Watson, Goode Casseb et al. , Albert Lopez,
against grant of complete stay pending Attorney at Law, San Antonio, TX, Juan Ramon Flores,
resolution of state criminal case against official Murray Edward Malakoff, Yohana Saucedo, Attorney at
for gambling promotion; public bad interest in Law, Alberto J. Alarcon, Hall Quintanilla & Alarcon,
Laredo, TX, for Defendants.
~:,~Nexr © 2015 Thom son Reuters. No claim to origin al U.S. Government Works. 3
APPENDIX 36
Alcala v. Texas Webb Co unty, 625 F.Supp.2d 391 (2009)
statement: "Patricia Barrera, Webb County
Tax- Assessor-Collector, not printed at taxpayer
expense." (Diet. No . 12 at~ 29) (emphasis in original).
MEMORANDUM OPINION AND ORDER
All WCTAC employees, including Plaintiffs, were
J. SCOIT HACKER, United States Magistrate Judge. allegedly recruited by Defendants to sell a specific
number of raffle booklets for each raffle. (!d. at ~~ 22,
Pending before the Cowt is Defendants Mary Ethel 25-28). Plaintiffs assert that patticipation in the selling of
Novoa and Patricia Barrera's "Motion to Stay Civil tickets was mandatory and a condition of employment
Proceedings in this Case" (Dkt. Nos. 45, 56). Defendants with the WCTAC. (!d. at~~ 25, 27). Raffle tickets were
move the Cowt to issue a complete stay of this civil purpmtedly sold openly at the WCTAC during regular
action until the conclusion of Novoa's pending state cowt business hours. (!d. at~~ 20, 30). According to Plaintiffs,
trial. Plaintiffs have filed a response to Defendants' WCTAC employees who were issued tickets were
Motion and are opposed to a stay. (Dkt. No. 46). After required to sell those tickets, both during work hours and
having considered the parties' arguments and the non-work hours, to both WCT AC patrons and to their
applicable case law, the Comt holds that a complete stay own family members. (See id. at ~ 20). Allegedly,
of these civil proceedings is unwarranted. However, the employees themselves had to purchase any tickets that
Cowt will GRANT a limited stay to continue as to were issued to them but remained unsold by the raffle
Defendant Novoa only until May 24, 2009. As such, and deadlines. (!d. at ~~ 27- 28). Plaintiffs aver that
as detailed below, Defendants' Motion (Dkt. Nos. 45, 56) Defendants "enforced participation in the raffles by verbal
is DENIED in part and GRANTED in pmt. threats, intimidation and open hostility, including, but not
limited to, the threat of termination, the threat that
terminated employees would be black-balled fiom other
government and non-government jobs, or other
unspecified retaliation." (!d. at ~ 23). The money
Background WCTAC employees collected fi·om the sale of raffle
tickets was allegedly paid directly to Barrera or one of the
In January of 1993, Barrera took elected office as Webb
Defendant-supervisors. (!d. at ~ 34). Plaintiffs also claim
County Tax Assessor/Collector and cunently serves
that drawings for these raffles occwTed openly at the
Webb County in that capacity. (Dkt. No. 12 at ~ 18).
WCTAC. (!d. at~ 35).
Defendants Novoa, Rosa Hernandez, and Dora Jimenez
are supervisors for the Webb County Tax
Apart from these raffles, Plaintiffs assett that in 2000,
Assessor/Collector' s Office (the "WCTAC"). (!d. at ~~ Defendants began mandating WCTAC employee
13- 15). Each of the ten Plaintiffs, at one time or another,
pmticipation in football pots (or betting pools). (!d. at ~
was an employee with the WCTAC, but either resigned or
36). Supposedly, these pots centered on the outcomes of
was tenninated. football games like the Dallas Cowboys' annual
Thanksgiving Day game and the Super Bowl. (!d.).
According to Plaintiffs, beginning in 1994, the WCTAC Plaintiffs allege that each square (or stake in the pot) cost
began to hold a series of raffles sanctioned by Banera. twenty dollars, and that each WCTAC employee was
(!d. at~~ 19, 21). Allegedly, the "Employee Fund Raffle" required, as a condition of employment, to either purchase
became an annual event used to raise money for the
one square for him or herself, or to sell two squares. (Jd.
WCTAC Christmas party. (Jd. at ~ 19). Plaintiffs also
assert that, by 1996, a separate raffle, the "Rifa Entre
atn 37, 40). Like patticipation in the raffles, Defendants
purpmtedly enforced patticipation in these football pots
Amigos " (or the "Raffle Among Friends"), was being through threats of termination and retaliation. (!d. at~ 39).
held at the WCTAC three times a yem·. (Jd. at~~ 21- 22).
Plaintiffs claim that this patticular raffle was for the Mandating pmticipation in these raffles and football pots
benefit of Banera, as the money derived there from was
is not the only objectionable activity alleged by Plaintiffs
used, in pmt, to fund Banera's re-election campaigns
against Defendants. Plaintiffs claim that mandatory
*394 and to pay for calendars bearing Barrera's name and
re-election campaigning on behalf of Barrera was another
title, which were given away annually to WCTAC condition of employment at the WCTAC. (!d. at ~~
patrons.' (!d. at~ 29). 70- 82). According to Plaintiffs, Barrera required that
WCTAC employees place Ban·era campaign bumper
Apparently, these calendars contained the following stickers on their cars, maintain a Barrera campaign sign
4
APPENDIX 37
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
outside their homes, and volunteer at Barrera campaign
headquarters. (Jd. at~~ 71, 73, 75). These activities were This involves a violation of Texas Penal Code §
supposedly enforced, in pmi, by threats of termination for 71.02(a)(2), which provides that " [a] person commits
failure to comply. Several Plaintiffs claim that they were an offense if, with the intent to establish, maintain, or
indeed fired for refusing to engage in campaign activity participate in a combination or in the profits of a
for Barrera. (Jd. atn71, 76- 77). combination or as a member of a criminal street gang,
he commits or conspires to commit .. . any gambling
After whistle-blowing by then and former WCTAC offense punishable as a Class A misdemeanor .... "
Because Novoa is also charged with engaging in
employees, including by two of the Plaintiffs, the
organized criminal activity, the offense of gambling
Attorney General of the State of Texas began to promotion becomes a state jail felony. Texas Penal
investigate the activities at the WCTAC. (!d. at~~ 43, 53). Code § 71.02(b ). A Texas state jail felony is
On October 11 , 2007, pursuant to a search wanant, the punishable, in part, by "confinement in a state jail for
Attorney General's office conducted a raid of the any term of not more than two years or less than 180
WCTAC, which resulted in the seizure of evidence. (!d. at days" and a fine of not more than $10,000. TEXAS
~~ 44--45; Dkt. No. 45, Ex. B). In *395 the following PENAL CODE§ 12.3 5(a), (b).
months, investigators with the Attorney General
conducted interviews of WCT AC employees, and some
employees were subpoenaed to testifY before a Grand
Jury. (Dkt. No. 1 at ~~ 48, 59, 66). Plaintiffs allege that ... did unlawfully with intent to establish, mairitain, and
WCTAC employees were threatened with retaliation by participate iri a combiriation and iri the profits of a
Barrera and the Defendant-supervisors if they spoke to combination, said combination consisting of defendant
investigators. (Jd. at n 49- 52, 54-57). Those employees, and two or more other persons, commit the Class A
including one Plaintiff, who testified or were suspected of misdemeanor offense of Gambling Promotion, and in
testifYing before the Grand Jury, were purpmiedly furtherance of said combination, DEFENDANT, on or
terminated. (!d. at~~ 67-68). about and between May 24, 2006 and May 24, 2007
pmsuant to one scheme and continuing course of
By early September of 2008, the last of all the conduct, did then and there intentionally and knowingly
above-captioned Plaintiffs had either resigned or had been for gain become the custodian of a thing of value bet or
te1minated from the WCT AC. On September 24, 2008, offered to be bet, to-wit: money for raffle tickets.
Plaintiffs filed the instant federal civil action against (Jd.). While Novoa is accused of acting with two or
Webb County, Texas, Banera (in her individual and more other persons, she is currently the only defendant
official capacities), and the Defendant-supervisors, in this case who has been indicted.
Novoa, Hernandez, and Jimenez (also in their respective Eventually, Banera, Novoa, and the other
individual and official capacities). (Dkt. No . 1). Plaintiffs Defendant-supervisors all filed separate answers to
bring suit, inter alia, pmsuant to 42 U.S.C. § 1983, Plaintiffs' complaint. With respect to Plaintiffs' claims
alleging civil rights violations under the First and regarding raffles at the WCTAC, in her answer, Novoa
Fomieenth Amendments of the United States generally admits that raffles, sanctioned by Barrera, took
Constitution. (Dkt. No. 12 at~ 155). Plaintiffs also allege place. (Dkt. No . 28 at~~ 4, 6-7, 9). She also admits that it
that Defendants violated various state law offenses. was known to WCTAC employees that some of the
money collected from the "Raffle Among Friends" was
The same day Plaintiffs filed their lawsuit, Defendant used for Barrera's campaigns and for "giveaways" to
Novoa was indicted in Webb County on state charges of *396 patrons of the WCT AC. (!d. at ~ 12). However,
gambling romotion 2 and engaging in organized criminal Novoa denies that these raffles constituted "gambling"
activity. 3 (Dkt. No . 45, Ex. C). The indictment charges and that any pmiicipation by WCTAC employees was
that Novoa: mandatory. (Id. at ~~ 4, 9). She also denies that raffle
ticket money collected by the WCT AC employees was
2 More specifically, Novoa is charged with a violation of paid directly to her. (!d. at~ 13).
Texas Penal Code § 47.03 (a)(3), which provides that
"[a] person commits an offense if he intentionally or In the case of Banera, she too admits that raffles occmTed
knowingly ... for gain, becomes a custodian of anything amongst the WCTAC employees. (Dkt. No. 36 at ~ 7).
of value bet or offered to be bet .... " An offense under § Banera also admits that she would, on occasion, conduct
47.03 is a Class A misdemeanor. TEXAS Penal Code§ ceremonial drawings for the "Raffle Among Friends," and
47.03 (b). that part of the monies collected from that raffle "were
utilized to pay for calendars and materials which were
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APPENDIX 38
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
considered to be promotional in nature." (Id. at ~ 9). to stay proceedings stems fi·om its inherent authority to
However, Banera denies that mandatory gambling was a control the disposition of the cases on its own docket
condition of employment at the WCTAC. (Id. at ~ 6). "with economy of time and effort for itself, for counsel,
Barrera also denies that raffle ticket money collected by and for litigants." Landis v. North American Co. , 299 U.S.
the WCTAC employees was paid directly to her. (!d. at~ 248, 254, 57 S.Ct. 163, 81 L.Ed. 153 (1936). These same
8). principles apply where, as in the present case, a state
criminal prosecution and a federal civil action are
Hernandez and Jimenez deny that raffles ever took place involved. See, e.g., St. Martin v. Jones, 2008 WL
at the WCTAC. (Dkt. No. 30 at ~ 5; No. 34 at ~ 2). 4534398 (E.D.La. Oct. 2, 2008); Agueros v. Vargas, 2008
Jimenez also objects to Plaintiffs' framing of this activity WL 2937972 (W.D.Tex. July 21, 2008).
as "gambling" and "sanctioned." (Dkt. No. 34 at~ 2). As
to most of the rest of Plaintiffs' claims, Jimenez has *397 There are several reasons why a court may wish to
invoked her privilege against self-incrimination due to the exercise its discretion and stay a parallel civil case. One
Texas Attorney General's ongoing criminal investigation primary goal of a stay, when a stay is indeed wananted, is
into the WCTAC. (Id. at ~ 5). Jimenez is the only to preserve a defendant's Fifth Amendment right against
defendant to have invoked her Fifth Amendment rights self-incrimination and to resolve the conflict he would
thus far. face between asse1ting this right and defending the civil
action. See SEC v. Dresser Industries, Inc. , 628 F.2d
On January 22, 2009, Novoa and Banera filed this motion 1368, 1376 (D.C.Cir.1980) (en bane), cert. denied, 449
requesting that the Court stay the civil proceedings in this U.S . 993, I 01 S.Ct. 529, 66 L.Ed.2d 289 (1980); see also
case pending completion of the ongoing state criminal Trustees of Plumbers and Pipejitters Nat '/ Pension Fund
action against Novoa. (Dkt. No. 45 at ~ 3). None of the v. Transworld Mech. , Inc., 886 F.Supp. 1134,
other Defendants joined in this motion, nor did they file a 1138(S.D.N.Y.1995); see also Heller Healthcare Fin.,
separate request for a stay. Plaintiffs filed their response Inc. v. Boyes, 2002 WL 1558337, at *3 (N.D.Tex. July 15,
in opposition to the stay on January 26, 2009. (Dkt. No. 2002). Furthermore, a stay may be justified in order to
46). prevent extending criminal discovery beyond the limits of
Federal Rule of Criminal Procedure 16(b), exposing the
defense's theory to the prosecution in advance of trial, or
otherwise prejudicing the criminal case. Dresser, 628
F.2d at 1376; Plumbers and Pipejitters, 886 F.Supp. at
Discussion 1138. The Fifth Circuit has advised that when handling a
motion to stay a civil case, a cowt should be sensitive to
the differences between the civil and criminal rules of
I. Legal Standard
11 1 121 t is not altogether uncommon that a defendant will discovery, noting that "[w]hile the Federal Rules of Civil
Procedure have provided a well-stocked battery of
find himself or herself facing separate civil and criminal
discovery procedures, the rules governing criminal
rosecutions stemming from the same transaction or
discovery are far more restrictive." Campbell v. Eastland,
occurrence. For instance, this occurs quite often in the
307 F.2d 478, 487 (5th Cir.l962). Given these
securities field, where parallel actions may be brought at
differences:
the same time by different agencies of the federal
government. However, the Supreme Cowt has established
that there exists no general constitutional, statutory, or Judicial discretion and procedural
common law prohibition against the prosecution of flexibility should be utilized to
m·allel criminal and civil actions, even where sue harmonize the conflicting rules and
actions proceed simultaneously. SEC v. First Fin. Group to prevent the rules and policies
of Texas, Inc., 659 F.2d 660, 666-67 (5th Cir.1981) applicable to one suit from doing
(citing United States v. Kordel, 397 U.S. 1, 11, 90 S.Ct. violence to those pe1iaining to the
763, 25 L.Ed.2d 1 (1970)). Thus, whether to stay a civil other. In some situations it may be
action pending resolution of a parallel criminal appropriate to stay the civil
rosecution is not a matter of constitutional right, but, proceeding. In others it may be
rather, one of cowt discretion, that should be exercised preferable for the civil suit to
when the interests of justice so require. Kordel, 397 U.S. proceed- unstayed. In the proper
at 12 n. 27, 90 S.Ct. 763; Dominguez v. Hartford Fin. case the trial judge should use his
Set-vs. Group, Inc., 530 F.Supp.2d 902, 905 discretion to nan·ow the range of
(S.D.Tex.2008). A district cowt's discretionary authority discovery.
Vk - l- ·~Nexr © 201 5 Tllomson Reuters. No claim to origin al U S . Governm ent Works. 6
APPENDIX 39
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
ld (internal citation omitted). lee Cream Co., Inc. v. Deerfield Specialty Papers, Inc., 87
F.R.D. 53 (E.D.Pa.1980). In Golden Quality, the comt
131 egardless, "[i]t 'is the rule, rather than the exce tion' held that whether to stay a civil action by reason of a
that civil and criminal cases roceed together." United pending criminal action involved a balancing of the
States ex rei. Gonzalez v. Fresenius Med Care N. Am., ifollowing interests : (1) the p laintiffs interest in
571 F.Supp.2d 758, 761 (W.D.Tex.2008) (quoting IBMv. proceeding expeditiously in the civil case, balanced
Brown, 857 F.Su . 1384, 1387 C.D .Cal.l994 ). And the against the potential prejudice to the plaintiff caused by a
complete stay of a pending civil action until the delay; (2) the defendant's interest and the burden which
conclusion of a related criminal proceeding is considered any particular aspect of the proceedings may impose on
to be an "extraordinary remedy." In re Piperi, 137 B.R. him; (3) the coutt's interest in the management of its
644, 646-47 (Bankr.S.D.Tex.1991) (citing Wei! v. cases and the efficient use of judicial resources; (4) the
Markowitz, 829 F.2d 166, 174 (D.C.Cir.1987)); see also interests of persons not parties to the civil litigation; and
Plumbers and Pi efitters, 886 F .Supp. at 1139. One (5) the public's interest in the ending civil and criminal
reason for this is that a complete stay is tantamount to a litigation. Golden Quality, 87 F.R.D. at 56. Over time,
defendant's "blanket assertion" of the Fifth Amendment, this test has been adopted by other comts and has
which is itself im ro er. SEC v. Incendy, 936 F.Supp. evolved-some factors have been dropped and others
952, 957 (S.D.Fla.1996); see United States v. Little A!, added. Compare Golden Quality Ice Cream Co., Inc. v.
712 F .2d 133 134-136 Q.th Cir.1983); see also First Deerfield Specialty Papers, Inc. , 87 F.R.D. 53, 56
Financial, 659 F.2d at 668-69; see also United States v. (E.D.Pa.1980), with Arden Way Assocs. v. Boesky, 660
Goodwin, 625 F.2d 693 , 70 I (5th Cir.1980). Generally, a F.Supp. 1494, 1497-98 (S.D.N.Y.1987) (citing Golden
party is required to selectively invoke the privilege Quality, 87 F.R.D. at 56), with Volmar Distribs., Inc. v.
against self-incrimination and object with specificity to Ne·w York Post Co., Inc., 152 F.R.D . 36, 39
the information sought from him. First Financial, 659 (S.D .N.Y.1993) (citing Arden Way, 660 F.Supp. at
F.2d at 668. This allows a district coutt to conduct a 1497-98), with Trustees of Plumbers and Pipefitters Nat'/
particularized inquiry, deciding in connection with each Pension Fund v. Transrvorld Mech. , Inc., 886 F.Supp.
specific area that the questioning pmty seeks to explore, 1134, 1139 (S.D.N.Y.1995) (citing Volmar Distribs., 152
whether or not the privilege is well-founded . !d. (quoting F.R .D. at 39; Parallel Civil and Criminal Proceedings,
United States v. Melchor Moreno, 536 F.2d 1042, 1049 129 F .R.D. 201 (Pollack, J.)), with Heller Healthcare
(5th Cir.1976)) (quotation marks omitted). Whether a Fin., Inc. v. Boyes, 2002 WL 1558337, at *2 (N.D.Tex.
party is entitled to the protection of the privilege is for the July 15, 2002) (citing Plumbers and Pipefitters, 886
court to decide, not the invoking party. Jd F.Supp. at 1139).
l41 rsJ As far as the civil case is concerned, there is a strong 161 The test (or a variation thereof) that is generally used
presumption in favor of discovery, and it is the party who today was first articulated by District Judge Denny Chin
*398 moves for a stay that bears the burden o in Trustees of Plumbers and Pipefitters Nat 'l Pension
overcoming this presum tion. Fresenius Medical, 571 Fund v. Transworld Mech., Inc., 886 F.Supp. 1134
F.Supp.2d at 761 (citing United States v. Gieger Transfer (S.D .N.Y .1995). In Plumbers and Pipefitters, the court
Serv., Inc., 174 F.R.D . 382, 385 (S .D.Miss .l997)). A modified the traditional "balancing of the interests" test
district comt should stay the civil case only upon a developed by the Golden Quality coutt by weighing two
showing of "special circumstances," so as to prevent the additional factors as pmt of the analysis: the extent to
defendant from suffering substantial and ine arable which the issues in the criminal case overlap with those
rejudice. First Financial, 659 F.2d at 668 (citing Kordel, presented in the civil case; and the status of the criminal
397 U.S . at 11 - 13, 90 S.Ct. 763); Dresser, 628 F.2d at case, including whether the defendants have been
1377. indicted . ~ Id at 1139. District comts in the Fifth Circuit
who apply the Plumbers and Pipefitters test consider or
In determining whether "special circumstances" wanant a weigh the six following factors : (1 ) the extent to which
stay, a court must measure the relative weights of the issues in the criminal case overlap with those
competing constitutional and procedural interests. See resented in the civil case; (2) the *399 status of the
First Financial, 659 F.2d at 668 ; see also Wehling v. criminal case, including whether the defendant has been
Columbia Broadcasting System, 608 F.2d 1084, 1088 (5th indicted; (3) the private interests of the plaintiff in
Cir.1979); see also LeBouef v. Global X- Ray, 2008 WL roceeding expeditiously, weighed against the prejudice
239752, at *2 (E.D .La. Jan. 29, 2008). Those interests to the plaintiff caused by a delay; (4) the private interests
were mticulated by Dish·ict Judge Louis H. Pollak and of and burden on the defendant; (5) the interests of the
Magish·ate Judge William F. Hall, Jr. in Golden Quality comts; and (6) the ublic interest. See, e.g, St. Martin v.
W2_;L [- : •.Nexr © 20 15 Thom so n Re ute rs. No cl aim to original U S. Govern men t W orks. 7
APPENDIX 40
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
Jones, 2008 WL 4534398, at * 1 (E.D .La. Oct. 2, 2008); the patties, the Court, third miies, and the public will be
United States ex rei. Gonzalez v. Fresenius Med. Care N. weighed against each other. 6 In other *400 words, because
Am., 571 F.Supp.2d 758, 762 (W.D .Tex.2008); Agueros v. factors like overlap and the status of the criminal case
Vargas, 2008 WL 2937972, at *1 (W.D.Tex. July 21 , may substantially impact the interests of the parties, the
2008); Akuna Matata Invs., Ltd. v. Texas Nom Ltd. Comi, third parties, and the public, these two factors
P 'ship, 2008 WL 2781198, at *2 (W.D.Tex. April 14, ·should be analyzed within the framework of those
2008); SEC v. Offill, 2008 WL 958072, at *2 (N.D.Tex. interests. "This balancing-of-the-interests approach
Apr. 9, 2008); United States v. Simcho, 2008 WL ensures that the rights of both [the defendant and the
2053953 , at *3 (N.D.Tex. Mar. 31 , 2008); SEC v. plaintiff] are taken into consideration before the court
AmeriFirst Funding, Inc., 2008 WL 866065, at *2 decides whose rights predominate." Wehling, 608 F.2d at
(N.D .Tex. Mar. 17, 2008); LeBouef v. Global X-Ray, 1088.
2008 WL 239752, at *I (E.D.La. Jan. 29, 2008);
Dominguez v. Hartford Fin. Servs. Group, Inc., 530 6
The Court is well aware that its own understanding of
F.Supp.2d 902, 905 (S .D.Tex.2008); Whitney Nat '/ Bank this six-factor test may differ slightly from that of other
v. Air Ambulance ex rei. B & C Flight Mgmt., Inc., 2007 district courts. However, the Court views as
WL 1468417, at *2 (S .D.Tex. May 18, 2007); Shaw v. problematic the balancing of concepts like "overlap of
Hardberger, 2007 WL 1465850, at *2 (W.D.Tex. May issues" and "status of the criminal case," with concepts
16, 2007); Holden Roofing, Inc. v. All States Roofing, like "defendant's interests," "plaintiffs' interests," and
Inc., 2007 WL 1173634, at *I (S .D.Tex. Apr. 18, 2007); the Court's own interests in this matter. In Golden
Quality, this test was originally viewed as a balancing
State Farm Lloyds v. Wood, 2006 WL 3691115, at *I
of competing interests. Whether there is significant
(S.D.Tex. Dec. 12, 2006); Lewis v. City of Garland, 2005 overlap of the issues between the civil and criminal
WL 2647956, at *2 (N .D.Tex. Oct. 14, 2005); SEC v. case is an important aspect of the analysis- maybe,
Mutuals.com, Inc., 2004 WL 1629929, at *3 (N.D.Tex. even, the most important. But only because it and the
July 20, 2004); Frierson v. City of Terrell, 2003 WL "status of the criminal case" will affect how much
22479217, at *2 (N .D.Tex. Aug. 4, 2003); Librado v. MS. weight to accord to the competing interests and how
Carriers, Inc., 2002 WL 31495988, at* 1 (N .D.Tex. Nov. those interests are ultimately balanced against each
5, 2002); Heller Healthcare Fin., Inc. v. Boyes, 2002 WL other. Simply stated, the overlap of the criminal and
1558337, at *2 (N.D.Tex. July 15, 2002).5 Although not civil cases is not something to "balance," per se, but,
rather, something to consider in determining how the
usually considered by district comis in the Fifth Circuit,
balancing of the various interests in a case will play
another important factor atiiculated by the Golden Quality out. Regardless, while the Court's analysis of this test
comi involves balancing the interests of persons not may be different, its application should yield the same
parties to the civil litigation. result. Arguably, the Court's understanding of this test
aligns more closely with the test applied by the Ninth
The Plumbers and Pipejillers court also dropped one Circuit Court of Appeals, whose test derives directly
factor, the interests of persons not party to the civil from the source- the Golden Quality case. See Federal
litigation, because it was deemed inapplicable by the Sav. and Loan Ins. C01p. v. Molinaro, 889 F.2d 899
court and had not been raised by the parties. Plumbers (9th Cir.1989) (citing Golden Quality, 87 F.R.D. at 56);
and Pipejillers, 886 F.Supp. at 1139 n. 7. see also Keating v. Office ofThrift Supervision, 45 F.3d
322 (9th Cir.l995) (citing Molinaro, 889 F.2d at
902-03); see also Lizarraga v. City ofNogales Arizona,
2007 WL 215616 (D.Ariz. Jan. 24, 2007) (citing
Plumbers and Pipefitters is the genesis of this test. All Keating, 45 F.3d at 324-25).
the cases cited here either cite Plumbers and Pipejillers
directly, or cite a case that cites Plumbers and
Pipejillers.
II. Analysis
The Court agrees that all of these factors are impmiant in After having balanced the above-referenced competing
determining whether the stay of a civil case should be interests and how overlap and the status of the criminal
granted. However, the Comi believes that the two case impacts those interests, the Cowi holds that a
additional factors miiculated rn Plumbers and complete stay of these proceedings is not wan·anted.
Pi efitters-namely, the overlap between the civil and
criminal cases and the status of the criminal case-are not
independent factors for the Cowi to consider. Rather, they
are factors im ortant in determining how the interests of A. The Balancing of Interests
8
APPENDIX 41
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
1. Defendants' Interest 1139 (citing Parallel Proceedings, 129 F.R.D. at 203) ("If
In deciding whether to issue the stay, the Comt first there is no overlap, there would be no danger of
considers the interests of the moving defendants .' As self-incrimination and accordingly no need for a stay.").
previously stated, the Court evaluates those interests As such, a comt should consider whether, by allowing the
primarily by analyzing how overlap and the status of the civil case to continue, the defendant can effectively
criminal case may affect those defendants. defend the civil lawsuit without being pressured into
waiving his Fifth Amendment rights.
Because neither Jimenez nor Hernandez seeks to stay
this case, the Court will not address the propriety of Furthermore, the status of the criminal case is imp01tant
according such relief as to these particular defendants. in evaluating a defendant's interest in obtaining a stay in
the civil proceedings. In fact, status ofthe criminal case is
pivotal to determining the degree of overlap. Analysis
Overlap can be particularly imp01tant to a defendant's centers upon whether the criminal case is pre-indictment
interests.8 For example, a defendant has an interest in in the investigation stage or post-indictment with a set
preventing a parallel civil action from prejudicing his trial date .
criminal defense. As noted above, if a comt does not stay
a parallel civil action, then the civil case might undermine Prior to an indictment, whether the issues will even
the defendant's Fifth Amendment privilege against overlap is a mere "matter of speculation." United States
e.;~: rei. Shank v. Lewis Enters., Inc., 2006 WL 1064072, at
self-incrimination by expanding rights of criminal
discovery beyond the limits of Federal Rule of Criminal *4 (S.D.Ill. Apr. 21, 2006); see SquareD Co. v. Sho·wmen
Procedme 16(b), by exposing the basis of the defense to Supplies, Inc., 2007 WL 1430723, at *4 (N.D.Ind. May
the prosecution in advance of criminal trial, or by 14, 2007). Accordingly, courts generally decline to
prejudicing the criminal case through other means. See impose a stay where the defendant is under criminal
Dresser, 628 F.2d at 1376. Simply stated, a defendant investigation, but has yet to be indicted. In re CFS, 256
may be burdened by liberal civil discovery on the same F.Supp.2d 1227, 1237 (N.D.Okla.2003) (citing Sterling
issues as those in the pending criminal case, where Nat. Bank v. A- / Hotels /nt 'I, Inc. , 175 F.Supp.2d 573,
discovery would be otherwise limited. See Whitney, 2007 576 (S.D.N.Y.2001)); Fresenius Medical, 571 F.Supp.2d
WL 1468417, at *3; see also Campbell, 307 F.2d at 487; at 763 (citing Shank, 2006 WL 1064072, at *3). Indeed, a
see also Dresser, 628 F.2d at 1376. "pre-indictment motion to stay can be denied on this
ground alone." Citibank, NA . v. Hakim, 1993 WL
481335, at* 1 (S.D.N.Y. Nov. 18, 1993).
It is said that self-incrimination is more likely to occur
the more significant the overlap. See Plumbers and 171 Post-indictment is when the degree of overlap between
Pipefitters, 886 F.Supp. at 1139. Whether there is
overlap between the issues in a criminal and civil action a criminal and civil case can most readily be determined.
"demands a common-sense, fact-bound analysis." Fresenius Medical, 571 F.Supp.2d at 762. The criminal
Fresenius Medical, 571 F.Supp.2d at 762 (citing In re indictment helps clarifY the alleged conduct at issue and
Ramu Corp., 903 F.2d 312, 320 (5th Cir.l990)). A can be easily compared against the civil complaint. As
comt must read the criminal indictment and the civil · such, " [t]he ' strongest case' for a stay exists where a patty
complaint side-by-side and determine whether the is indicted for a serious offense and must defend a civil
wrong/iii conduct alleged in both cases is similar. action involving the same matter." 9 Lizarraga v. City of
Plumbers and Pipefitters, 886 F.Supp. at 1139. Comts Nogales Arizona, 2007 WL 215616, at *3 (D.Arizona,
caution, however, that "a mere relationship between
January 24, 2007) (citing Dresser, 628 F.2d at 1377). It is
civil and criminal proceedings and the prospect that
discovery in the civil case could prejudice the criminal important to note, however, that even after an indictment
proceeding does not necessarily warrant a stay." has issued, courts are generally split as to the propriety of
Fresenius Medical, 571 F.Supp.2d at 762 (citing In re granting a stay. In re CFS, 256 F.Supp.2d at 1238; see In
Ramu C01p., 903 F.2d 312, 320 (5th Cir.1990)). re Worldcom, Inc. Sec. Litig., 2002 WL 31729501, at *4
(S.D.N.Y. Dec. 5, 2002 . In summary, to warrant a stay, a
defendant must make a strong showing that the two
A defendant also has an interest in avoiding the quandary proceedings will so overlap that either ( 1) he cannot
of choosing between waiving his Fifth Amendment rights protect himself in the civil proceeding by selectively
and effectively forfeiting the civil case. Plumbers and invoking his Fifth Amendment privilege, or (2) effective
Pipejitters, 886 F.Supp. at 1140. A defendant is more defense of both [the criminal and civil cases] is
likely to face this quandary where the subject matter of 'm ossible. Koester v. American Republic Investments,
*401 both cases overlaps to a significant degree. !d. at Inc., 11 F .3d 818, 823 (8th Cir. l993).
W=>~t t "':JNexr © 2 015 Thom son Reuters. No claim to origin al U.S. Governm ent Works. 9
APPENDIX 42
Alcala v. Texas Webb County, 625 F.Supp.2d 391 (2009)
WCTAC was conditioned on the rmsmg of money
9
A stay is even more appropriate when the federal through the raffle and the participation in various
government has initiated both the civil and criminal campaign activities. The differences between the
proceedings. Brock v. Tolkow, 109 F.R.D. 116, 119 wrongful conduct alleged in the civil and criminal cases
(E.D.N.Y.1985); see Square D Co. v. Showmen demonstrates a lack of significant overlap between the
Supplies, Inc., 2007 WL 1430723, at *4 (N.D.Ind. May two.
14, 2007); see also Sterling Nat. Bank v. A-1 Hotels
lnt'l, Inc., 175 F.Supp.2d 573, 578- 79 (S.D.N.Y.2001). The degree of overlap is further reduced by the fact that
Again, this is quite common in the field of securities the prosecutor in the criminal case, namely the State of
regulation. There is likely to be complete overlap
Texas, is not a party to the civil action. In fact, the
betv::;tl -: N exr © 201 5 Thom son Reuters. No claim to original U.S Governm ent Works. 7
APPENDIX 69