United States District Court, D. Colorado
MICHAEL E. HEGARTY, UNITED STATES MAGISTRATE JUDGE.
September 15, 2016, the parties filed a Joint Status Report
in which they informed the Court that a “federal
indictment against [Defendant] Banks was issued on or about
September 8, 2016, and criminal proceedings associated with
the indictment have been initiated against Banks in the
action styled USA v. Charles Augustus Banks IV, No.
SA:16-CR-00618(1)-FB, in the United States District Court for
the Western District of Texas, San Antonio Division.”
ECF No. 92. Based on this occurrence and in the interest of
judicial efficiency, the Court granted Banks' unopposed
request to stay these proceedings pending resolution of the
criminal case. ECF No. 99. Then, following the parties'
July 24, 2017 status report informing the Court of a judgment
in the criminal case, the Court held a Status Conference on
August 17, 2017 at which the Court informed counsel for the
parties of its intention to lift the stay, or to partially
lift the stay, but agreed to entertain briefing on the
matter. ECF No. 123. On August 25, 2017, Banks filed an
opposed motion to continue the stay. ECF No. 126. The Court
finds Banks fails to demonstrate good cause for his request
and, thus, will deny the motion.
decision to issue a protective order and thereby stay
discovery rests within the sound discretion of the trial
court. Wang v. Hsu, 919 F.2d 130, 130 (10th Cir.
1990). Such protection is warranted, upon a showing of good
cause, to “protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense.”
Fed.R.Civ.P. 26(c). Here, Banks seeks protection from the
burden of discovery while his criminal case is on appeal and
until it is “finally” resolved. A stay of all
discovery is generally disfavored in this District.
Chavez v. Young Am. Ins. Co., No. 06-2419, 2007 WL
683973, at *2 (D. Colo. Mar. 2, 2007). This case was filed
two years ago on September 25, 2015, and has been already
delayed nearly a year pending resolution of Banks'
criminal charges. The Court finds that staying the entire
case further could substantially delay the ultimate
resolution of the matter, with adverse consequences such as a
decrease in evidentiary quality and witness availability.
seeking a protective order under Rule 26(c) cannot sustain
the burden of demonstrating good cause merely by relying on
speculation or conclusory statements. Tolbert-Smith v.
Bodman, 253 F.R.D. 2, 4 (D.D.C. 2008). The movant must
show specific facts demonstrating that the challenged
discovery will result in a clearly defined and serious injury
to the party seeking protection. Id.; see also
Exum v. United States Olympic Comm., 209 F.R.D. 201, 206
(D. Colo. 2002). In this matter, Banks is primarily concerned
that proceeding with this case “will impinge upon [his]
Fifth Amendment rights.” Reply 1. The Court is not
convinced. Duncan argues without rebuttal that Banks pled
guilty to one count of the indictment and the remaining
counts were dismissed. The Court agrees with Duncan that
Banks' “concern that the Government may elect to
‘re-file charges' depending on unknown
‘future events' is speculative at best.”
Resp. 4. Furthermore, Banks' statement that
“Duncan's concerns have been eliminated” by a
deposit of $7.5 million in restitution in the registry of the
District Court for the Western District of Texas (Mot. 1) is
in direct conflict with his admission that the funds
“will be secured in [the] court registry
pending the outcome of Banks'
appeal” (Mot. 6 (emphasis added)). Certainly, if
Banks were to succeed in his appeal, which is focused
primarily on whether the restitution order was proper (Mot.
6), one could not reasonably assume that the funds would
remain “secured” until the resolution of this
the Court finds that, despite Banks' arguments to the
contrary, certain issues exist in this case that do not
overlap with the criminal case. Banks admits that, unlike in
[t]he liability issues in the Criminal Matter involve the
2013 guaranty and subordination agreement, not the
2012 loan. Both the original and superseding indictments only
alleged wire fraud violations associated with the 2013
transaction. Moreover, Banks only pled guilty to a
narrow scheme to defraud related to the 2013 guaranty and
subordination agreement, not the 2012 loan. Indeed, in the
factual basis for Banks' plea (which was accepted by the
Texas court), Banks stated that he ‘engaged in a course
of conduct intended to secure Tim Duncan's signatures on
a Guarantee and Subordination Agreement to Comerica Bank in
order to fund a loan from that bank to Gameday.'The
Government has never asserted that Banks fraudulently induced
Duncan to make the initial $7.5 million investment in Gameday
Mot. 5 (citation omitted). Also, Banks does not rebut Duncan's
argument that this case, unlike the criminal case, involves
categories of damages separate and in addition to the $7.5
million awarded as restitution. See Resp. 3.
also argues he will suffer a financial burden by proceeding
with this case. However, defendants “always are
burdened when they are sued, whether the case ultimately is
dismissed, summary judgment is granted, the case is settled,
or a trial occurs.” Chavez, 2007 WL 683973, at
*2. Here, Banks asserts that he intends not only to defend
against Duncan's claims, but also to bring counterclaims
against Duncan and cross claims against a third party, Jeff
Neal. Banks presents no evidence of a special burden.
Banks characterizes his requested stay as
“brief.” Reply 1. The Court disagrees; without a
showing that the Fifth Circuit Court of Appeals resolves
criminal matters more quickly than the average appellate
court, this Court must conclude that a stay pending the
appeal of a criminal matter in a federal court of appeals is
more aptly characterized as “indefinite.” And,
generally, it is the policy in this district not to stay
discovery indefinitely. This is particularly true in cases
like this one, pending before the Honorable Marcia S.
Krieger, who instructs parties that motions having the effect
of delaying proceedings are “strongly
discouraged” and may “adversely affect the
scheduling of the case or other cases.” MSK Civ. Prac.
Stds., II(a) and (b). Consequently, the general interests of
controlling the court's docket and the fair and speedy
administration of justice require that the present motion to
stay proceedings be denied. See Chavez, 2007 WL
683973, at *3.
the Court will deny Defendant Charles
Banks' Renewed Motion to Continue Stay [filed August
25, 2017; ECF No. 126].
In coming to this conclusion, the Court
makes no findings as to whether or not the criminal matter
“concerns the same alleged harm and the same $7.5
million at issue in this case, ” which appears to be an