Diaz v. Wash. State Migrant Council
So in this case, the Migrant Council had some board members who were suspected illegal immigrants. Not the best spot to be in when trying to secure funding. Diaz, the executive director, brought this up to the board, who promptly fired him. During the litigation over the retaliation, sought info on the immigration status of the board. He didn’t seek this from the board members, but from the Migrant Council corporate entity. The Council refused to respond, citing a fifth amendment privilege against self incrimination.
Well, no such luck. While the board makes decisions, it is not the corporate entity. Corporate entities have no fifth amendment right against self-incrimination:
The Fifth Amendment is no impediment to the corporation asking a director for information needed for discovery and relying on him or her to respond. See, e.g., United States v. Solomon, 509 F.2d 863 (2d Cir. 1975) (officer and director’s inculpatory statements provided in an internal investigation were not privileged under the Fifth Amendment; no state compulsion was involved); United States v. Shvarts, 90 F. Supp. 2d 219, 222 (E.D.N.Y. 2000) (questions put to defendant in carrying out a private corporation’s own legitimate investigatory purposes do not activate the privilege against self-incrimination), abrogated on other grounds by United States v. Coppa, 267 F.3d 132 (2d Cir. 2001); D.L. Cromwell Invs., Inc. v. NASD Regulation, Inc., 279 F.3d 155, 162 (2d Cir.) (while internal investigation may entail exposure to criminal liability, that in itself is not enough to establish a governmental nexus implicating the Fifth Amendment), cert. denied, 537 U.S. 1028 (2002). The fact that a corporation’s agent has invoked the Fifth Amendment in response to individual questioning does not excuse the corporation from its duty to respond to discovery. See In re Folding Carton Antitrust Litig., 76 F.R.D. 417, 419-20 (N.D. Ill. 1977). Moreover, a corporation’s failure to respond to discovery because its officers and directors in possession of relevant information have invoked their Fifth Amendment privilege may be considered willful and deliberate since it results from a deliberate choice on the part of the officers and/or directors. Id.; see also
Worthington Pump Corp. (U.S.A.) v. Hoffert Marine, Inc., 34 Fed. R. Serv. 2d 855, 1982 WL 308871 at *3 (D.N.J. 1982).
A director may be reluctant to provide the information to the corporation out of the same self-interest that prompts him or her to invoke the Fifth Amendment when deposed. But the Fifth Amendment protects only against state-compelled self-incrimination, it ”does not protect against hard choices.” Solomon, 509 F.2d at 872.
Where an interrogatory is directed at a corporation, “the phrase ‘such information as is available to the party’ has been construed to mean all information available to the corporation’s officers, directors, employees and attorneys.” Chapman & Cole v. Itel Container Int’l B.V., 116 F.R.D. 550, 558 (S.D. Tex. 1987); Gen. Dynamics Corp. v. Selb Mfg. Co., 481 F.2d 1204, 1210 (8th Cir. 1973), cert. denied, 414 U.S. 1162 (1974). Knowledge of officers and employees of a corporation relative to the subject matter of litigation is imputed to the corporation. Gen. Dynamics, 481 F.2d at 1210 (citing Acme Precision Prods., Inc. v. Am. Alloys Corp., 422 F.2d 1395, 1398 (8th Cir. 1970)). A corporation’s failure to obtain and provide all such information is incomplete and therefore must be treated as a failure to respond. Chapman & Cole, 116 F.R.D. at 558 (citing Dollar v. Long Mfg., N.C., Inc., 561 F.2d 613, 616 (5th Cir. 1977), cert. denied, 435 U.S. 996 (1978)).
The Migrant Council’s core argument is that the trial court abused its discretion and violated the Migrant Council’s due process rights “when it ordered the Council to do the impossible: to produce documents and information about the actual immigration status of its current or former volunteer Board members.” Br. of Appellant at 15. The directors presumably have responsive information. But the Migrant Council inexplicably excludes its directors from “the Council” whose duty it is to respond. When asked at oral argument which human actors the Migrant Council has in mind as “the Council” that cannot respond, its lawyers identified themselves and the several corporate contacts who assisted them in drafting responses. Whether a corporation has reasonably responded to discovery is not measured solely by whether the lawyers and corporate administrators tasked with drafting responses have included all of the information they have collected. It is substantially measured by whether corporate directors, officers, employees, and other agents who possess responsive information have provided it to be included in the corporation’s response.
The fact that a corporation’s lawyers and their contacts have been unable to secure cooperation may be an explanation for a corporation’s insufficient response, but it does not excuse it. This is so even where cooperation is lacking because corporate principals are concerned about criminal culpability. If corporate principals’ refusal to cooperate out of concern for self-incrimination excused a corporation from providing relevant information in discovery, then there would be an inverse relation between corporate management’s violation of law and an adverse party’s ability to prove it: the more criminally culpable a corporation’s management, the less its obligation to provide discovery. We may assume that in many cases where corporate principals refuse to cooperate in responding to discovery it is for substantial self-serving reasons. The fact remains that the corporation — whose employees, officers, and directors could provide the needed information — has not provided it.
(emphasis added).
The court goes on to talk about how the Council can’t really balk about the sanction of an adverse inference, because it proposed the darned sanction as a lesser sanction in lieu of default. Further, just because you claim the Fifth (or your board has), that doesn’t mean you’re protected from adverse consequences in a civil proceeding.
All in all, one of the better opinions I’ve seen come out of the COA in a long time, and a very interesting read! Great job to Judge Siddoway and her clerk.
In other news, have you checked out my other blog? The Nursing Home Neglect Report covers issues of elder abuse and neglect and issues of elder care. You can find it at http://www.nursinghomeneglectreport.com.
