Seventh Circuit Addresses When a Civil Suit May Preclude Criminal Conviction

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by: Colin E. Flora

     This week we take a look at a fairly esoteric issue of law that can have serious ramifications on concurrent civil and criminal proceedings if not wisely avoided. We have previously discussed, albeit briefly, an acquittal in a criminal trial does not prevent a subsequent, or even prior, civil suit against the same defendant. We explained:

An additional wrinkle in the [Indiana] Crime Victim’s Relief Act, which may well surprise you, is that it is not essential for the defendant to have even been charged with a crime for a plaintiff to bring and succeed on a claim under the Act. In order to understand why this is the case, let us return to the O.J. Simpson trials. Recall that the jury at his criminal trial acquitted O.J. Simpson but he was later found liable to the Goldman family in a subsequent civil trial. The reason that this could occur upon the same set of facts it that the standard for civil liability and for criminal conviction are quite different. As many of you know, the standard for a criminal conviction is that the state must prove beyond a reasonable doubt to the jury that the person who stands charged committed the crime.  While it is impossible to place an exact percentage of certainty upon the beyond a reasonable doubt standard – as every criminal attorney is well aware – it is certainly something far north of 51%. However, in the civil context the burden is upon the plaintiff to prove the defendants liability by a preponderance of the evidence or sometimes referred to as the greater weight of the evidence. This is often said to be 51% and up.  However, on a hyper-technical note, it does not even require 51% certainty just the most tiny iota above 50% – such as 50.000000000001%.  Anything above 50% and the jury can find for the plaintiff.  A side note, at 50% the evidence is determined to be in equipoise and a plaintiff cannot recover which is different than the comparative fault standard where a plaintiff can recover despite having been 50% at fault.

So, how does the difference in standards between criminal convictions and civil liability make it so that a plaintiff can bring a claim under the Crime Victim’s Relief Act when the defendant has not so much as been talked to by the police?  Well the answer is simple; due to the extremely high standard to prove that a person committed a crime a criminal charge may never be brought, as there is no reasonable chance of success. However, with the civil claim, it is a recognition that the defendant may have committed a crime but that it just cannot be proven beyond a reasonable doubt.  It is also very important to note that due to the dramatic difference in standards an acquittal in a criminal trial has no impact on a subsequent civil case. But on the flipside, a criminal conviction has a dramatic impact on a subsequent civil case. If a person is convicted of a crime then that issue is decided and the defendant’s liability need not be put before a jury in a subsequent civil trial. The reason for this is that at the highest possible standard the evidence proved that the defendant committed the crime whereas on acquittal the only thing determined by the trial is that there was not enough evidence to prove guilt by the highest standard. 

To draw an analogy on this to a common life occurrence: I am 5’8” with an unimpressive vertical. I can easily dunk a basketball on my 6-year-old niece’s basketball hoop, as it isn’t even 5 feet off the ground.  However, there is no chance whatsoever of me dunking on a regulation hoop.  On the other hand, Lebron James can easily dunk on a regulation hoop. As such, without him ever seeing my 6-year-old niece’s hoop, it is safe to say that he can dunk on it as well. Tying this back to burdens of proof: the me in this scenario is like the acquittal in a criminal trial. I may not be able to dunk on an NBA hoop but I still am able to dunk on the 6-year-old’s hoop. My inability to dunk on the NBA hoop tells you absolutely nothing about my ability to dunk on my niece’s hoop. However, Lebron, who is the criminal conviction in this scenario, can easily dunk on the NBA hoop and as such can unquestionably dunk on the lower hoop as well. This is why a criminal conviction can have res judicatory effect on a subsequent civil case while an acquittal cannot.

There, we discussed the Indiana Crime Victim’s Relief Act, which allows a civil claim for what amounts to criminal conduct, along with attorney fees and enhanced damages.

     Today’s discussion draws upon a recent decision from the Seventh Circuit, United States v. Egan Marine Corp., which looks at a different angle of the relationship. What happens if the civil suit comes first and loses? As discussed above, a criminal case can fail and a civil suit can succeed. A criminal suit that succeeds will necessarily establish liability for claims derived on the same grounds in a subsequent civil suit. But, as the Seventh Circuit concluded in Egan Marine Corp., a prior civil suit can directly impact a subsequent criminal trial.

     The case stems from a tragic shipping accident on a river in Illinois. The United States charged the master of a tug pushing a barge containing slurry oil with negligence resulting in the death of a crewman. The U.S. alleged that the captain ordered a crewman to use a propane torch to warm a pump.

After a bench trial, [the district court] found that the prosecution had established, beyond a reasonable doubt, that [the master] gave the order to [the crewman], that the torch caused the explosion, that [the crewman] died as a result, and that the barge released oil as a further result. That such an order, if given, was negligence (or worse) no one doubted; open flames on oil carriers are forbidden by Coast Guard regulations and normal prudence. The court sentenced [the master] to six months’ imprisonment, a year’s supervised release, and restitution of almost $6.75 million. [The corporate owner of the tug] was placed on probation for three years and ordered to pay the same restitution, for which it and [the master] are jointly and severally liable.

     The problem arises because this was not the first time the issues in the case had appeared before a court.

The criminal prosecution was the second trial of these allegations. Two years before the grand jury returned its indictment, the United States had filed a civil suit against [the owner of the tug] seeking damages on the same theory: that [the master] directed [the crewman] to warm the pump using a torch, whose flame caused an explosion, a death, and an oil spill. That case, too, went to a bench trial.  And [a different judge], who heard the evidence, determined that the United States had not proved its claim [by a preponderance of the evidence]. The United States did not appeal from that adverse decision but instead pressed forward with this criminal prosecution.

     In resisting the criminal prosecution, the master and the owner sought to rely on the defense of issue preclusion–classically called collateral estoppel. We have discussed issue preclusion before. Generally speaking, “[i]ssue preclusion, or collateral estoppel, bars subsequent relitigation of the same fact or issue where that fact or issue was necessarily adjudicated in a former lawsuit and that same fact or issue is presented in a subsequent suit. This rule applies even if the second adjudication is on a different claim.” The question in Egan Marine Corp., then, was whether issue preclusion impacts a subsequent criminal prosecution.

     Unfortunately for the United States, while this is a new topic for the Hoosier Litigation Blog, it is not a new topic for federal courts:

The Supreme Court has said that the outcome of a civil case has preclusive force in a criminal prosecution. See Yates v. United States, 354 U.S. 298, 335-36, 77 S. Ct. 1064, 1 L. Ed. 2d 1356 (1957). If the United States cannot prove a factual claim on the preponderance standard, it cannot logically show the same thing beyond a reasonable doubt. The prosecutor maintains that this statement in Yates was dictum, but we do not think that characterization appropriate. It was integral to the Court’s rationale—for although the Justices proceeded to conclude that the civil suit did not block the Yates prosecution under ordinary principles of preclusion, it would not have undertaken that exercise had the Court believed issue preclusion categorically inapplicable to the civil-criminal sequence.

     The court examined what would be the ludicrous result of adopting the argument of the United States:

Every litigant would like multiple chances to win; that’s what the United States is claiming, while it contends that for [the master] and [the owner] any one loss would be dispositive (at least for financial issues). And, by bringing the civil case first, the United States received the benefit of civil discovery, which is more extensive than that allowed in criminal prosecutions by Fed. R. Crim. P. 16—discovery that it could put to use in the criminal case as well as the civil one. We understand why the United States seeks these advantages but do not think it entitled to them, without the detriment of being bound by the civil judgment if it loses. If it fails to show some fact in the civil suit by a preponderance of the evidence, it is precluded from trying to show the same thing beyond a reasonable doubt.

     This leaves one major question: Would the outcome be different if the United States had not been the plaintiff in the civil case? The reason this question remains is because the doctrine requires mutuality. The court summarized: “Standefer[ v. United States] used the word “nonmutual” to refer to the use of preclusion across different persons, so that A’s victory over C in one case would imply B’s victory over C in another.” Whether the outcome would change if the civil suit had simply been an action on behalf of the deceased crewman instead of the United States, was only hinted at, with the court stating, “There is of course a potential for nonmutuality in the civil-criminal sequence—but it is the United States that prefers a situation in which it can win but not lose.”

     The latter portion of the quotation references the fact that it was the United States, not the master and the owner who raised the issue of nonumutuality. The reason the U.S. raised it was because the civil suit had only been brought against the owner, not the master. Consequently, the U.S. argued that, at most, issue preclusion could only apply to the owner, not to the master of the tug. The court disagreed:

But the law of preclusion has long recognized that if A and B are in a contractual relation (“in privity” as judges often say) then they are entitled to the same treatment under normal principles of mutual preclusion. [The master] and [the owner] were in such a relation. Indeed, in the civil suit the United States contended that [the owner] was vicariously liable for [the master]’s acts precisely because of their employment relation. The civil suit was about [the master]’s conduct, which was attributed to his employer, and [the district court’s] core finding . . . was that the United States had not shown that [the crewman] was using a propane torch at all, let alone that in using a torch he was following [the master]’s directive. When a court rejects a claim of vicarious liability based on a worker’s conduct, the worker is as much entitled to the benefit of that judgment as is the employer. Having argued in the civil suit that [the owner] was liable for [the master]’s conduct, the United States cannot now treat [the master] and the corporation as strangers to each other.

     The logic of the case is unassailable. When one tribunal adjudicates the exact issues in the case between essentially the exact same parties, then there should not be a second bite at the apple, provided that the second bite is not under a standard that is lower than the first. Here, the U.S. failed to dunk on the five-foot hoop, and should not be allowed to give it the old college try on a ten-foot basket.

     Join us again next time for further discussion of developments in the law.

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*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, clients or otherwise, should act or refrain from acting on the basis of any content included herein without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.