From start to finish, a lawsuit is a difficult, expensive and lengthy process. What most people do not understand is that the lawsuit itself is only the first of two phases. The next phase, the collection phase, can be just as lengthy and just as difficult. The reason is that judgment debtors use a variety of methods to avoid disclosing their assets to creditors. One common method is to invoke the Fifth Amendment privilege against self-incrimination during post-judgment depositions.
While the Fifth Amendment privilege is invoked on a regular basis by judgment debtors, a recent case defeated this privilege in the Eastern District of Missouri by attorneys successfully arguing that the judgment debtor’s absolute invocation of the privilege against self-incrimination was improper during a deposition to discover the debtor’s assets. The plaintiffs in that case accepted an offer of judgment filed by the defendant, which resulted in a judgment in favor of plaintiffs in the total amount of $37.282.01. The defendant thereafter failed to satisfy the judgment. Accordingly, pursuant to Rule 69 of the Federal Rules of Civil Procedure, the plaintiffs noticed up a deposition of the owner of the defendant company, to discover the assets of the defendant which could satisfy the judgment. During the deposition, in response to 142 out of 145 questions, the defendant’s representative refused to answer the questions and stated he was invoking the Fifth Amendment for each question. The only questions he answered were to state his name, that he was familiar with this lawsuit, and his address. After the deposition, the plaintiffs filed a motion to compel, requesting that the defendant be required to fully respond to the deposition questions and pay the plaintiffs their reasonable attorneys’ fees and costs associated with the Rule 69 deposition and the motion to compel.
After extensive briefing by the parties, the Eastern District of Missouri granted the plaintiffs’ motion to compel, stating bluntly: “Defendant’s argument that it was entitled to the absolute invocation of the Fifth Amendment without being required to justify its invocation is clearly not the law.” (emphasis added). The Eastern District further noted that there is no blanket Fifth Amendment right to refuse to answer questions in noncriminal proceedings. In order to invoke the protection, the witness must have reasonable cause to apprehend danger from a direct answer. Accordingly, the privilege must be specifically claimed on a particular question and the matter submitted to the court for its determination as to the validity of the claim. The court must determine whether the claimant is confronted by substantial and real, and not merely trifling or imaginary, hazards of incrimination. Moreover, in evaluating a claim of Fifth Amendment privilege, the court must determine for each question, from the implications of the question in the setting in which it is asked, that a responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious disclosure could result.
The Eastern District ultimately found that the defendant’s blanket invocation of the Fifth Amendment to the 142 questions he refused to answer was contrary to clear precedent. As the Court noted in its decision: “there is nothing in the questions or the setting in which they were asked that suggests the defendant … was confronted by a substantial and real hazard of incrimination … Further, there is nothing before this Court to suggest that the purpose of the examination was anything other than an ordinary Rule 69 deposition for the purpose of discovering assets to satisfy the judgment against defendant.
In granting the plaintiff’s motion to compel, the Eastern District directed the defendant to answer all questions unless a real danger of incrimination was specifically established with respect to each question. The court further cautioned the defendant and its counsel to make any further Fifth Amendment invocations in good faith in accordance with the court’s Order and the relevant law.
As a result of the defendant’s improper conduct during the deposition, the court also granted the plaintiffs’ request for attorneys’ fees and costs associated with the deposition and the motion to compel.