Although a party or witness in civil litigation may invoke the Fifth Amendment, such invocation often comes at a high price, because, in contrast to the criminal context, the finder of fact in a civil case may draw an adverse inference against the party or witness who declines to provide evidence based on the Fifth Amendment privilege against self-incrimination. We discuss below a number of recent decisions from the Southern District of New York addressing when and how the Fifth Amendment can be invoked in civil litigation, and the ramifications to litigants when parties and non-party witnesses avail themselves of that privilege.

Nuts and Bolts

Although the Fifth Amendment is available in any proceeding in which a witness reasonably believes that his or her testimony “could be used in a criminal proceeding or could lead to other evidence that might be so used,” the privilege is not available to every litigant or witness in every circumstance. Andover Data Servs. v. Statistical Tabulating, 876 F.2d 1080, 1082 (quoting Kastigar v. United States, 406 U.S. 441, 444-45 (1972) (internal quotations omitted)). Southern District Judges Jesse M. Furman, Andrew L. Carter Jr. and Laura Taylor Swain each issued decisions within the past year discussing the threshold questions of who can invoke the privilege and under what circumstances.

Fear of Prosecution. Judge Furman's decision, in SPV-LS, LLS v. Herbst, 2016 WL 8711738 (S.D.N.Y. June 6, 2016), recounts the basic requirement that a party who refuses to provide evidence based on the Fifth Amendment “must have reasonable cause to apprehend that answering the question will provide the government with evidence to fuel a criminal prosecution” (id. at *1 (quoting OSRecovery v. One Groupe Int'l, 262 F. Supp. 2d 302, 306 (S.D.N.Y. 2003) (Kaplan, J.)), and that the danger must be real and not speculative. Id. (quoting Estate of Fisher v. Comm'r of IRS, 905 F.2d 645, 649 (2d. Cir. 1990) (internal citations omitted)). Judge Furman instructed that the magistrate judge who was to supervise the deposition in that case, should “scrutinize” each question and the defendant-witness's proffered explanations for assertion of the privilege, noting that innocuous questions that had no connection to a reasonable fear of prosecution should be answered.

Applying these principles in Hansen v. WWebnet, 2017 WL 1032268 (S.D.N.Y. March 16, 2017), Judge Carter denied a motion to compel deposition testimony of a non-party witness brought by both parties to that action. Because the witness had previously pled guilty to the fraud at the center of the plaintiff's claims, both plaintiff and defendant objected to the witness's invocation of the Fifth Amendment, arguing that he could not reasonably fear future prosecution inasmuch as he already had been prosecuted for those activities. After reviewing the transcript of the deposition at which the witness declined to answer questions based on the Fifth Amendment, Judge Carter accepted the witness's assertion that he continued to have a reasonable fear of prosecution despite his guilty plea, because he could still be prosecuted for tax evasion as well as for activities after the period covered by his prosecution. Judge Carter denied the motion to compel, concluding that the responses sought by the parties “could create a link in the chain of evidence needed to prosecute” the witness and thus fell squarely within the parameters of the Fifth Amendment. Id. at *3 (quoting Sharma v. New Opal, 2005 WL 1086459 (S.D.N.Y. May 6, 2005) (Katz, M.J.)).