Typically, civil law and criminal law are separate practice areas – and most lawyers like it that way. The divide appears as early as law school, when many students take a criminal or civil cluster of courses. As practicing lawyers begin to concentrate in a particular area, they may try to avoid the boundary between criminal and civil law. More and more, however, that boundary is fading.
Today almost every significant criminal case implicates corresponding civil litigation (for example, the murders of Ron Goldman and Nicole Brown, allegedly by O.J. Simpson; Michael Jackson’s death; Bernie Madoff’s Ponzi scheme). Likewise, situations traditionally in the realm of civil litigation have spawned criminal cases or penalties (for example, Volkswagen’s concealment of emissions data, price hikes by pharmaceutical companies, water contamination in Flint, Mich.). For many defendants subjected to a criminal investigation, the consequences of related civil litigation can be just as daunting. Individuals may face fines, penalties, termination, loss of professional licensure, and more.
A lawyer representing a client confronting cases at the crossroads of criminal and civil law should analyze the possible ramifications of an action taken in one arena and how it affects the other. For instance:
What are the consequences in a civil case of asserting Fifth Amendment rights during a criminal proceeding?
What are the consequences in a civil case of entering a guilty plea in a criminal proceeding?
What type of resolution of a criminal case is in the best interest of a client facing civil liability?
What information or discovery in a criminal case can be used in a civil case, and vice versa?
What effect might certain judgments, collections, insurance, and bankruptcy issues have on criminal proceedings?
Each of these points could occupy an entire article by itself. This list is instead meant to illustrate a few of the issues lawyers should consider when faced with a case that straddles the line between criminal and civil law. This article features a hypothetical case study to highlight the civil law issues that criminal defense lawyers should consider and how those issues can affect the criminal case. Likewise, it will address the considerations that civil lawyers face when confronting a case with an ongoing criminal case running parallel or clear potential for such a criminal proceeding arising from the facts of the civil dispute.
Scenario: OWI Causing Injury
Doug is a lifelong Packers fan. He drove to a party at a friend’s house to watch last Sunday’s game. Doug drank to excess during the game and drove home afterwards. On the return trip, his car crossed the centerline of a two-lane road and collided head-on with an oncoming vehicle, driven by Paul.
Police officers came to the scene, had probable cause to suspect Doug of driving while intoxicated, and obtained a warrant to draw Doug’s blood. A blood test showed Doug’s blood alcohol concentration was three times the legal limit. This was the fourth time Doug had been arrested for driving while intoxicated. Paul sustained serious injuries in the crash. As a result, Doug was charged with operating while intoxicated causing injury (fourth offense).
Doug immediately called a criminal defense lawyer. His automobile insurance company was also notified of what happened. Paul called a personal injury lawyer in the days after the crash. At this stage, there are already four lawyers involved in the case: an assistant district attorney (ADA), a criminal defense lawyer, a lawyer for the insurance company, and a plaintiff’s personal injury lawyer.
When Tax Fraud and Civil/Criminal Law Intersect
Tax fraud cases present special challenges and highlight the interplay between criminal and civil law. A civil tax fraud offense under I.R.C. § 6663 and a criminal tax fraud offense under I.R.C. § 7201 have three key differences:
1) Burden of Proof. Criminal tax fraud must be proved “beyond a reasonable doubt.” Civil tax fraud is proved only to a “preponderance of the evidence.”
2) Penalties. Criminal penalties for willfully failing to pay taxes may be tens of thousands of dollars or time in prison. Civil penalties for failing to file a return may be 15 percent of the net tax due for each month, up to a total of 75 percent of the unpaid tax.
3) Statute of Limitation. In criminal cases the statute of limitation generally is three years after the offense is committed. In civil tax fraud cases, there is no statute of limitation and the tax may be assessed at any time.
Tax cases are unique because the conduct can change between a criminal investigation to civil investigation back to a criminal investigation, and vice versa, multiple times during the course of an investigation.
Issues Lawyers Must Consider
Below are some of the issues the lawyers must consider.
What is the duty to report to the insurance company?
Should Doug try to have the same judge on both the criminal and the civil case?
Should any part of either case be stayed?
Investigation and Discovery:
What should the criminal defense investigator do and not do?
What evidence should be obtained and retained?
Does the insurance company have witness statements?
Is there cellphone, video, or other electronic data? Who has it, and how can be it obtained?
Are there confidentiality considerations? Is the media involved?
Should Doug “plead the Fifth?” Will he testify at trial?
Damages and Penalties:
What potential civil and criminal penalties does Doug face? What can he do with his assets?
Is there insurance coverage? What are the limits? What is the insurance company’s duty to Doug? Has Paul’s lawyer pleaded Paul “out of coverage”?
Is Doug collectible? Should he consider bankruptcy?
If the assistant district attorney offers a plea deal, should Doug take it?
What kind of releases should Doug sign or not sign?
Of Special Concern to Criminal Defense Lawyers
Doug hires a criminal defense lawyer, Jessica, to represent him in his criminal OWI case. Jessica advises Doug that everything that occurs in the criminal case will have a direct effect on a future civil action for Paul’s injury claim.
Erika L. Bierma, Creighton 2003, is a senior associate at Stafford Rosenbaum LLP, Madison. Her practice focuses on state and federal criminal defense, juvenile delinquency defense, high school and university discipline, and business litigation.
Jason J. Knutson, U.W. 2000, is a shareholder at Habush Habush & Rottier SC, Madison. His practice focuses on personal injury litigation, complex class action cases, medical malpractice, and environmental torts.
After reviewing the evidence in the case, Doug and Jessica discuss the ramifications of entering a guilty plea versus going to a jury trial. If Doug enters a guilty plea, that admission of guilt can be used in a later civil proceeding. In part because of this advice, Doug decides that he wants to take his case to a jury trial. Jessica counsels Doug about the right not to testify and that anything he says on the stand can be used against him in the civil proceeding. Doug decides not to testify at his criminal trial.
During the criminal trial, Paul may be required to testify and will be subject to cross-examination. Further, the evidence in the criminal case will be similar to that which would be introduced in the civil case. This will help Doug’s future civil defense lawyer assess the strength of Paul’s case, but also makes Paul’s civil case easier to prove because all witnesses have already testified, all physical evidence has been discovered, and the case has already been tested.
Many of the issues that would be of concern to the ADA would also be of concern for criminal defense counsel. However, the prosecutor’s focus will be related to witness statements and evidence (destruction, testing, preservation). When witnesses give multiple statements (for example, to law enforcement officers and insurance company representatives), the prosecutor runs the risk that statements might be inconsistent, which may affect her ability to prove the underlying crime beyond a reasonable doubt.
As a corollary issue, any evidence obtained by the insurer’s investigation into the accident might be inconsistent with the law enforcement agency’s investigation. This also creates potential proof problems for the prosecutor.
On the other hand, if all witness statements and evidence are consistent between the two investigations, that makes the criminal defense counsel’s job more difficult. Specifically, it potentially makes the witnesses’ credibility that much stronger, but a jury would still have to decide what it thinks about the evidence and the individual witnesses. Also, if the physical evidence is consistent throughout both investigations, it is more difficult to challenge. A jury would still have the final say as to what it thinks about the evidence and testimony and ultimately whether the evidence and testimony support each element of the charge.
Doug takes his case to trial, is convicted of operating while intoxicated causing injury (fourth offense), and is sentenced to prison. He is ordered to pay restitution to Paul. Doug’s prison sentence does not change his financial obligations to Paul, whether through restitution or a civil proceeding. Restitution will be paid during Doug’s term of extended supervision once he is released from prison. However, Paul can seek recovery of his civil damages through Doug’s bank accounts, tax refunds, and other monetary assets.
Of Special Concern to Civil Case Lawyers
A few days after the crash, Paul hires Mike, a personal injury lawyer. Paul has already been assigned a victim-witness coordinator through the district attorney’s office and knows that Doug has been charged with a crime and that Doug has hired a criminal defense lawyer. The case has been assigned to Judge Jackson. Paul is understandably angry about the crash and wants to be compensated, but also wants Doug to be punished for what happened. He asks Mike about his options.
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Mike explains that timing is important in cases like this. Generally, there is a three-year statute of limitation for negligence torts in Wisconsin – so Paul can be patient while he waits for his injuries to heal. However, Paul should immediately notify his car insurer of the crash so that he is providing timely notice of his potential claims and so that his insurance company can conduct its own investigation of the crash.
Mike tells Paul that he might consider waiting to hire a personal injury lawyer while the criminal case is pending. He explains that there are three reasons to do this.
First, Doug’s criminal defense lawyer is entitled to wide-ranging discovery in a civil case. It is possible some of that discovery could make the ADA’s job more complicated and could make obtaining a conviction more difficult. Second, when Paul is cross-examined in the criminal case, he could be asked questions about having hired a personal injury lawyer so quickly, which might make him less sympathetic to a jury. Third, Paul’s civil case would likely be stayed pending the outcome of the criminal case anyway.
Mike explains another school of thought is that the personal injury lawyer should be hired right away so that the lawyer can do an immediate investigation and preserve evidence. In the end, Paul decides to hire Mike while the criminal trial is pending.
Mike explains that if Doug is found guilty or pleads guilty to operating while intoxicated causing injury (fourth offense), that verdict or plea will have preclusive effect in the later civil case. In other words, if the ADA proves her case, then Paul will not have to prove it anew in the civil case. That removes uncertainty in Paul’s civil case and potentially saves him time in preparing for the companion proceeding.
During Doug’s criminal trial, Mike updates himself on what transpires but does not personally appear in court. Once the case is over, Mike can order the trial transcripts or other parts of the court file if they will be useful in the civil case. In some situations, the plaintiff’s personal injury lawyer will attend the criminal trial. For instance, he or she might do so when there is no question about liability and the lawyer’s presence is either reassuring to the victim or helpful in developing the damages case in the eventual personal injury matter.
When the time comes for Mike to file a personal injury lawsuit in Paul’s case, Mike explains that they will request it be assigned to Judge Jackson. Because that judge will already have knowledge of the underlying facts of the case, it is most efficient for her to hear the civil case and also helps reduce the risk of inconsistent findings in related matters.
A few months later, Doug is found guilty of operating while intoxicated causing injury (fourth offense) by a jury in the criminal trial and sentenced to prison. Doug asserted his Fifth Amendment right during the criminal investigation and chose not to testify in his own defense at trial. At the criminal trial, Judge Jackson instructed the jury that it cannot draw an inference of guilt from the defendant’s failure to testify about the facts relevant to the case.1
Doug is not entitled to that same jury instruction if there is a civil trial later in his case. Instead, in civil cases, “the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them.”2
For this reason, pleading the Fifth Amendment in a criminal case can have important consequences in later civil cases. In numerous Wisconsin cases, courts have entered judgment against parties who asserted the Fifth Amendment during depositions, sometimes as a discovery sanction and sometimes on summary-judgment motion because of failure to rebut the moving parties’ prima facie case.3
During the criminal investigation of the crash, police officers gathered evidence including witness statements, the “black box” from each vehicle, cellphone data, and traffic camera footage. Because the criminal case is now concluded, Mike can obtain all this information. Even though Paul will not need to prove liability in the civil case, some of this information may be useful if Paul brings a claim for punitive damages against Doug. Some of the evidence may also be important in proving the crash was a cause of Paul’s injuries.
Eventually Mike contacts Doug’s liability insurance company and makes a demand that Paul be compensated for his injury claim. The offer in response from the insurance company is inadequate, so Mike files a lawsuit against Doug. In the lawsuit, Paul brings claims against Doug’s insurance company and against Doug personally for punitive damages.
Doug’s insurance company does not provide coverage for punitive damages, so Doug is advised that he should hire a personal injury defense lawyer to defend that claim because the insurance company lawyer assigned to him will not be handling that part of the case. In the complaint, Mike makes a negligence claim and an intentional tort claim against Doug, and pleads them such that he does not plead Paul out of coverage.4
During civil discovery, Mike learns that Doug has minimal assets, especially after paying for his criminal defense lawyer. After several months, the civil case is resolved. Mike obtains payment for Paul equal to Doug’s liability insurance policy limits and a judgment against Doug personally for an additional amount.
Mike is careful during the course of the case not to release any of Paul’s claims until the time is right. This could mean using a Pierringer5 release for certain parts of the case. Mike explains to Paul that although many judgments can be reduced in bankruptcy, typically punitive damages for intentional acts cannot. As a result, once Mike obtains the judgment against Doug, it should be enforceable. Whether it will be collectible is another matter.
At the criminal trial, Doug was ordered to pay restitution to Paul for the expenses not covered by Paul’s health insurance or other coverage. Additionally, Paul now has a judgment against Doug for the punitive-damages element of the claim. Because Doug is incarcerated he is not earning income, and the few assets he did have were liquidated to pay for his criminal defense and other bills. Fortunately for Paul, the judgment against Doug may run for as long as 20 years and may yet be collectible once Doug returns to work.
This is only one example of how criminal and civil proceedings intersect. There are many other instances when the two areas of law overlap. The criminal defense and personal injury lawyers involved need to be aware how every decision can affect the other proceeding and consult with each other as the investigation progresses, discovery is disclosed, evidentiary hearings are conducted, and the lawyers prepare for trial.
Counsel should not handle their respective matters in isolation because doing so could negatively affect both proceedings. As a civil lawyer, get help from experienced criminal defense counsel. As criminal defense counsel, seek help from an experienced civil lawyer. Collaboration among counsel is imperative for the mutual client.
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1 Wis. Stat. § 905.13. A criminal defendant’s right not to testify is regarded as so significant that the Fifth Amendment “further guarantees that no adverse inferences are to be drawn from the exercise of that privilege,” Carter v. Kentucky, 450 U.S. 288, 305 (1981), and “forbids either comment by the prosecution on the accused’s silence or instructions by the court that such silence is evidence of guilt,” Griffin v. California, 380 U.S. 609, 615 (1965).
2 Baxter v. Palmigiano, 425 U.S. 308 (1976).
3 See, e.g., B&B Invs. v. Mirro Corp., 147 Wis. 2d 675, 434 N.W.2d 104 (Ct. App. 1988).
4 Insurance policies typically contain “exclusions” that limit coverage. Some exclusions apply to certain types of conduct alleged against the insured, for example, intentional acts, criminal activities, and so on. As a result, when possible, plaintiffs’ lawyers will avoid pleading a case in a way that implicates coverage exclusions – or “pleading out of coverage.”
5 A Pierringer release can be given to one defendant while preserving the plaintiff’s right to maintain claims against defendants who have not yet settled. See Pierringer v. Hoger, 21 Wis. 2d 182, 124 N.W.2d 106 (1963). The “Pierringer-ed” defendant’s participation in the case ends, and any remaining defendants are potentially liable only for the amount of damages directly attributed to them.