Opinion
Case No. C05-1631C.
June 19, 2006
ORDER
I. INTRODUCTION
This matter has come before the Court on Defendant Sandifur's motion for a limited stay (Dkt. No. 86). Having carefully considered the papers filed by the parties in support of and in opposition to the motion, the Court hereby DENIES the motion.
II. BACKGROUND
Plaintiff, the Securities Exchange Commission ("SEC"), filed a complaint alleging that Defendants, several former executives and business associates of Metropolitan Mortgage Securities Co. ("Metropolitan"), participated in a fraudulent scheme to mislead investors about the company's financial performance. (Compl. ¶ 1.) Among others, the complaint named Defendant Sandifur and Defendant Thomas.
Defendant Thomas was indicted by the Department of Justice in September 2005. This indictment was in connection with the fraud alleged in the complaint in the instant action. In December 2005, Defendant Thomas and the SEC stipulated to a limited stay of this action as to Defendant Turner only.
Defendant Sandifur, fearing that the DOJ's ongoing criminal investigation into the Metropolitan matter may result in an indictment against him, now moves for a similar limited stay of the SEC action as to himself.
III. ANALYSIS
Defendant Sandifur argues that a stay in this action is necessary because "[t]he facts and issues raised by the [complaint in this action] and those under criminal investigation are too closely related to resolve simultaneously without impairment of Mr. Sandifur's right against self-incrimination." (Mot. 2.)
In general, "[t]he Constitution does not ordinarily require a stay of civil proceedings pending the outcome of criminal proceedings." Keating v. Office of Thrift Supervision, 45 F.3d 322, 324 (9th Cir. 1995). "In the absence of substantial prejudice to the rights of the parties involved, simultaneous parallel civil and criminal proceedings are unobjectionable under our jurisprudence. Nevertheless, a court may decide in its discretion to stay civil proceedings when the interests of justice seem to require such action." Id. (citations omitted).
The case-specific inquiry courts apply to determine whether a stay is appropriate considers the following factors: (1) "the extent to which the defendant's fifth amendment rights are implicated," id. (citing Fed. Sav. Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989)); (2) "the interest of the plaintiffs in proceeding expeditiously with this litigation or any particular aspect of it, and the p