Ongoing criminal action warrants continuation of civil human trafficking case

Metropolitan Press Company

Tuesday May 28, 2024

Page 1

Ninth Circuit:

Ongoing criminal action warrants continuation of civil human trafficking case

It is irrelevant that two cases involve different defendants when the alleged victims and facts overlap, writes Justice Ikuta

By
Kimber Cooley, editor

The Ninth United States Court of Appeals ruled Friday that a stay order was properly granted by a district court judge in a civil case brought by 10 Jane Does under the Protection Act. reauthorization of Trafficking Victim Protection due to a pending federal criminal case, although the charge is against a different defendant.

Circuit Judge Sandra S. Ikuta explained in an opinion for a three-judge panel that both actions are based on the same events and that some of the plaintiffs in the civil action are victims of the scheme in the criminal case.

The panel also concluded that the stay order was appealable due to the length and indefinite nature of the stay, which effectively put the litigants out of court.

Circuit Judges Ronald M. Gould and Danielle J. Forrest joined the opinion affirming the stay ordered by District Court Judge Michael Fitzgerald of the Central District of California.

Related Facts

Civil defendant Daniel Fitzgerald, CEO of ConTec Development, a luxury home development company, who bills himself on social media as the owner of the “largest influencer homes” in Los Angeles and is known for renting residences in Hollywood Hills appealed this suspension. media personalities.

The plaintiffs' complaint alleges causes of action under 18 USC §1595(a), enacted in 2003 to give victims of sex trafficking a civil cause of action to recover damages from perpetrators. criminal traffic violations. Paragraph (b) of §1595 requires courts to stay an action brought under paragraph (a) “for the pendency of any criminal action arising out of the same event of which the plaintiff is the victim.”

Although Daniel Fitzgerald has not been charged in a criminal case, in December 2020, a New York grand jury indicted Peter Nygard, fashion mogul and founder of international women's clothing company Nygard International, headquartered is in Winnipeg, Canada, of racketeering and conspiracy to commit criminal acts. sex trafficking and sex trafficking, among other charges.

According to the indictment, between 1995 and 2020, Nygard “and other known and unknown individuals” engaged in sex trafficking activities, including using “force, fraud and coercion to entice women to engage in commercial sex with Nygard and others.” The indictment described that Nygard would use his homes, including one in Marina Del Rey, to host “pampering parties” during which certain activities would take place.

Allegations against the defendant

The complaint against Daniel Fitzgerald alleges that the defendant was a co-conspirator in Nygard's sex trafficking enterprise and participated in “sex swapping” activities at parties where guests were supposed to bring a “date”. “you” for Nygard in exchange for providing a “date” with Nygard. date” for guests.

The U.S. Attorney's Office for the Southern District of New York decided in October 2022 to intervene and stay the civil action. Judge Fitzgerald also granted this request.

On December 14, 2020, Nygard was arrested in Canada where he remains in custody pending extradition. He was convicted of sexual assault in a Toronto court in November 2023, but has yet to appear in the New York case.

Separate accused

Ikuta looked to the text of §1595(b) to determine the applicability of the mandatory stay, saying:

“Reading these provisions together, the district court 'shall' stay a civil action brought under section 1595(a) if (1) a criminal action or investigation is pending; (2) the criminal action arises “from the same event” as the civil action; and 3° the plaintiff in the civil action is the victim of an act which is the same in the civil procedure and in the criminal procedure.

Daniel Fitzgerald argued that the section imposes a “fourth requirement”: the stay must be issued only if the defendant in the civil case is a named defendant in the criminal action. Disagreeing, Ikuta wrote:

“This argument fails because it relies on the assumption that if a civil action and a criminal action arise from the same event, then the defendants in the civil action and in the criminal action must be the same. But that's not necessarily the case… Here, for example, the government may decide to focus solely on Nygard, whether or not Fitzgerald was involved in the “same event” that gave rise to the indictment of Nygard.”

She reasoned thus: “[g]Because §1595(b)(1) refers only to the identity of victims, not perpetrators, we cannot insert Fitzgerald's proposed fourth requirement into the statute.

Three requirements

Regarding the three demands, Ikuta noted “there is no doubt that criminal action is underway.”

As to the second requirement, the lawyer stated that “we must determine whether one or more of the events which occurred and which gave rise to the claims in the plaintiffs' actions resemble in all relevant respects one or more of the events which gave rise to the charges set out in the indictment.

Dismissing Daniel Fitzgerald's contention that a litigant cannot satisfy the requirement by relying solely on the pleadings, she stated that “courts routinely rely on the pleadings to determine whether the legal actions…are linked.”

In reviewing the complaint and the indictment at issue, Ikuta noted the numerous citations from the indictment in the civil complaint, particularly highlighting the allegations in the complaint that Daniel Fitzgerald is one of the “others” who participated in the forced sexual acts. described in the indictment, including those at Marina Del Rey's parties.

Based on these circumstances, she stated:

“[W]We conclude that the complaint alleges events identical to those which gave rise to the allegations in the indictment….[A]there is a clear connection between the events alleged in the indictment and the events at issue in the complaint.

Third requirement

Regarding the third requirement, she commented:

“The complaint alleges that seven of the plaintiffs, Jane Doe Nos. 1 through 4 and 7 through 9, “are survivors of the…trafficking scheme operated by
[Fitzgerald] and Nygard,'….The complaint also alleges that Jane Doe Nos. 1 through 4, 7 and 9 were traded or forced by Nygard to engage in sexual acts with Fitzgerald during various events that occurred at Nygard's Marina del Rey property .

She said that “[t]therefore, the complaint sufficiently alleges that some of the plaintiffs were victims of some of the same events that gave rise to the criminal action against Nygard.

Ikuta found no error in the order staying the entire civil action, saying that “we find that the word 'action' in §1595(b)(1) reflects its ordinary meaning and encompasses the entire of the civil trial.

Appeal of the order

Ikuta acknowledged that a stay order is generally not a final appealable decision under 28 USC §1291, but noted that the 1983 decision by the U.S. Supreme Court Moses H. Cone Memorial Hospital v. Mercury Construction Corporation Creates an exception to the “final decision” rule in a case involving the stay of an action challenging the arbitrability of a contract in federal court pending resolution of the same issue in state court.

In the opinion written by Justice William J. Brennan Jr. (now deceased), the court concluded that the suspension order was a final decision under the code because the suspension “meant that there would be no no more litigation before the federal forum.”

Ikuta explained that the Ninth Circuit, in the 2007 decision Blue Cross and Blue Shield of Alabama c. Unity Outpatient Surgery Center, Inc., expanded the doctrine to include “long-term and indefinite” stay orders, although the district court could be expected to resume proceedings after its stay order expired. A delay of 18 months described as “long” in Blue Cross.

Regarding the matter before the panel, Ikuta expressed the following opinion:

“Since the district court issued its order in December 2022, the case has been pending for approximately 16 months. The government does not know when Canada might extradite Nygard, the government investigation into the alleged criminal enterprise is ongoing and there is no anticipated start date for the start of criminal proceedings against Nygard. The duration of the district court's stay is therefore indeterminate… It is also long, since it is almost certain that the stay will last more than… 18 months…. Because the district court’s stay order is “lengthy and indefinite,”…it is a final and appealable order under § 1291.”

The case is Doe v. Fitzgerald (U.S. Attorney's Office, Southern District of New York)22-56216.

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