New York courts recently issued decisions involving the interplay between criminal and civil investigations. In People v. Trump Organization, No. 451685/2020 (N.Y. Sup.Ct. Feb. 17, 2022), the court denied a motion to quash subpoenas issued in a civil investigation while a parallel criminal investigation was occurring.
The attorney general initiated a civil investigation into whether members of the Trump family and the Trump Organization (respondents) have committed persistent fraud in their financial practices and disclosures. The attorney general also stated publicly that she had opened a criminal investigation as well as publicly stating that the attorney general’s office was assisting the Manhattan District Attorney’s office in its criminal investigation into the Trump Organization.
The attorney general issued subpoenas seeking evidence (both documents and testimony) from respondents in connection with the civil investigation. The respondents moved to quash or pause enforcement of the subpoenas until the conclusion of the criminal investigations. According to respondents, “the issuance of civil subpoenas while a criminal investigation is ongoing allows OAG [Office of Attorney General] to extract information from them under the guise of a civil proceeding without OAG’s having to offer them the immunity that a grand jury setting would afford them.”
The trial court noted that neither the attorney general nor the district attorney had subpoenaed the respondents to appear before a grand jury, and there is no evidence that absent the civil investigation, respondents would have been forced to appear before the grand jury in return for immunity. The court held that “respondents have an absolute right to refuse to answer questions that they claim may incriminate them” and pointed to the invocation of that right by Eric Trump (another member of the Trump family) more than 500 times during his deposition.
Respondents argued that United States v. Kordel, 397 U.S. 1 (1970) stated in dicta that certain situations involving parallel civil and criminal proceedings might present constitutional problems, including where the government brought a civil action solely to obtain evidence for its criminal prosecution and failed to tell the defendant that it was contemplating criminal prosecution. The trial court held that that situation did not arise here.
The court then turned to the respondents’ argument that public statements made by the attorney general show the “impropriety” of her investigation. The court held that the attorney general has “promptly and repeatedly” informed respondents that they could be subject to both civil and criminal prosecution. The court also observed that the attorney general’s investigation is not unsubstantiated, based on the court’s in camera review of previously subpoenaed documents. A discussion of other aspects of this decision can be found here.
The appellate court affirmed the trial court’s decision in People of New York v. Trump Organization, No. 2022-00814 (N.Y. App. Div. May 26, 2022). The court of appeals reiterated that the existence of a criminal proceeding does not prohibit civil discovery of related facts, during which a party may exercise its privilege against self-incrimination. Applying a slightly different lens, the court held that the subpoenas did not frustrate any right to testify with immunity. According to the court, “Individuals have no constitutional or statutory right to be called to testify before a grand jury under circumstances that would give them immunity from prosecution for any matter about which they testify.” The appellate court agreed that the public statements of the attorney general did not indicate that the attorney general is using the subpoenas in a civil investigation to obtain testimony in the criminal proceeding.
