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Hollinger International, Inc. v. Hollinger Inc.

January 16, 2008

HOLLINGER INTERNATIONAL, INC. PLAINTIFF,
v.
HOLLINGER INC.; THE RAVELSTON CORP. LTD.; RAVELSTON MANAGEMENT, INC.; CONRAD M. BLACK; F. DAVID RADLER; JOHN A. BOULTBEE; DANIEL W. COLSON; BARBARA AMIEL BLACK; AND RICHARD PERLE, DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Maria Valdez

MEMORANDUM OPINION AND ORDER

This matter is before the Court on Plaintiff Sun-Times Media Group, Inc.'s Motion for Entry of Its Proposed Scheduling Order [Dkt. 698]. For the reasons that follow, Plaintiff's motion is denied.

BACKGROUND

The gravamen of the Plaintiff's 44-count Complaint is that Defendants wrongfully diverted cash and assets to themselves through, among other things, obtaining improper management fees, non-compete payments, broker fees, compensation in the form of salary and bonus payments, loans, and below-market transfers and purchases of Plaintiff's assets.

On March 21, 2005, the United States Attorney's Office ("USAO") publicly disclosed its criminal investigation of defendants Black, Radler, and Hollinger, Inc. as well as unidentified "others," in the context of a motion to intervene and for a limited, temporary stay of discovery in SEC v. Black, et al. No. 04 C 7377. On April 18, 2005, Defendants filed a motion to temporarily postpone certain depositions in light of the ongoing criminal investigation. In a Memorandum Opinion and Order dated July 15, 2005 (the "7/15/05 Order"), the Court denied Defendant's Motion.

On August 18, 2005, an indictment was returned against two individuals and one corporation, including civil defendants Radler and Ravelson Corporation Ltd. On August 31, 2005, the Government filed a motion to intervene and stay. In a Memorandum Opinion and Order dated February 20, 2006 (the "2/20/06 Order"), the Court granted the Government's Motion.

On July 13, 2007, following approximately for months of trial, a jury convicted Defendants Black and Boultbee, along with Peter Y. Atkinson and Mark S. Kipnis, of three counts of mail fraud, in violation of 18 U.S.C. §1341, including the deprivation of the tangible right to honest services, in violation of 18 U.S.C. §1346. In addition, the jury convicted Defendant Black of one count of obstructing justice, in violation of 18 U.S.C. §1512(c)(1).

On December 10, 2007, Defendants Black and Boultbee were sentenced. On December 27, 2007, Defendant Conrad Black filed his notice of appeal. On January 4, 2008, Defendant Boultbee filed his notice of appeal.

DISCUSSION

"'[A] district court possess[es] substantial discretion to control its docket," which includes the power to issue a stay of some or all proceedings. Bd. Of Trs. Of Ironworkers Local No. 498 Pension Fund v. Nationwide Life Ins. Co., No. 04 C 821, 2005 WL 711977, at *9 (N.D. Ill. March 28, 2005) (quoting Employers Ins. Of Wausau v. Shell Oil Co., 820 F.2d 898, 902 (7th Cir. 1987)). It is well settled that district courts have the inherent power, in the exercise of discretion, to issue a stay when the interests of justice require such action. Harris v. City of Chicago, 266 F.3d 750, 753 (7th Cir. 2001); SEC v. Dresser Industries, Inc., 628 F.2d 1368, 1375 (D.C. Cir. 1980), cert. denied, 449 U.S. 993 (1980) (citing United States v. Kordel, 397 U.S. 1, 12 n.27 (1970)). Depending on the particular facts of the case, the court may decide to stay civil proceedings, postpone civil discovery, or impose protective orders. Dresser Industries, 628 F.2d at 1375.

When deciding whether to grant a stay, courts consider six factors: (1) the posture of the criminal proceeding; (2) whether the civil and criminal matters involve the same subject; (3) whether the government entity that has initiated the criminal case or investigation is also a party in the civil case; (4) the burden the civil case will have on the defendants if a stay is denied the effect of granting or denying the stay on the public interest; (5) the interest of the civil-case plaintiff in proceeding expeditiously, and the potential prejudice the plaintiff will suffer from delay; and (6) the effect of granting or denying a stay on the public interest. Cruz v. County of DuPage, No. 96 C 7170, 1997 WL 370194, at *2 (N.D. Ill. June 27, 1997); In re Anicom Inc. Sec. Litig. No. 00 C 4391, 2002 WL 31496212, at *1 (N.D. Ill. Nov. 8, 2002). The Court will address each factor in turn.

A. Posture of Criminal Proceedings

The strongest case for granting a stay is where a party under criminal indictment is required to defend a civil proceeding involving the same matter. Dresser Industries, 628 F.2d at 1376-76; Doe v. City of Chicago, 360 F.Supp.2d 880, 881 (N.D. Ill. 2005); United States v. All Meat and Poultry Prods. Stored at Lagrou Cold Storage, No. 02 C 5145, 2003 WL 22284318, at *4 (N.D. Ill. Oct. 3, 2003); Parallel Civil and Criminal Proceedings, 129 F.R.D. 201, 203 (S.D.N.Y. 1989). While the Constitution does not mandate a stay in such circumstances, Dresser Industries, 628 F.2d at 1375, denying a stay might undermine a defendant's Fifth Amendment privilege against self-incrimination.

The Fifth Amendment privilege against self-incrimination does not end once guilt has been adjudicated. Mitchell v. United States, 526 U.S. 314, 324 (1999) (rejecting the Third Circuit's ruling that "'incrimination is complete once guilt has been adjudicated.'"). The Fifth Amendment's protection against self-incrimination applies until "the sentence has been fixed and the judgment of conviction has become final." Id. at 326. Only when "no adverse ...


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