Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_13-cv-01770/USCOURTS-caed-2_13-cv-01770-16/pdf.json

Parties Involved:
Morgan Albanese
Defendant
Ameen Hofioni
Counter Defendant
Hutchings Court Reporters, LLC
Counter Claimant
Litigation Services
Counter Claimant
The LIT Group
Counter Claimant
U.S. Legal Support, Inc.
Plaintiff

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

U.S. LEGAL SUPPORT, INC., a Texas 

corporation,

Plaintiff,

v.

AMEEN HOFIONI, et al.,

Defendants.

No. 2:13-cv-01770-MCE-AC

MEMORANDUM AND ORDER

Plaintiff U.S. Legal Support, Inc. (“Plaintiff”) initiated this misappropriation of trade 

secrets case against Defendants Ameen Hofioni (“Hofioni”), Morgan Albanese, 

Hutchings Court Reporters, LLC, Litigation Services, and The Lit Group, before the 

Honorable Judge Lawrence K. Karlton in August 2013. The action was reassigned to 

this Court upon Judge Karlton’s retirement and now proceeds pursuant to this Court’s 

pretrial scheduling order (“PTSO”), ECF Nos. 100, 144. Presently before the Court is 

Hofioni’s Motion to Stay Proceedings Pending Expiration of Criminal Statute of 

Limitations (ECF No. 124), by which Hofioni seeks to stay or limit discovery until the

statute of limitations runs with respect to his related state criminal case. For the reasons 

set forth below, Hofioni’s Motion is DENIED without prejudice.

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 1 Because oral argument would not be of material assistance, the Court ordered this matter 

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BACKGROUND2

Plaintiff contends that Hofioni—a former U.S. Legal employee—misappropriated 

Plaintiff’s assets for personal benefit by purchasing and misusing gift cards with 

Plaintiff’s monies and failing to return to Plaintiff a laptop computer issued to Hofioni 

during his employment. On May 20, 2015, Hofioni was criminally charged in 

Sacramento County Superior Court with one count of embezzlement based on his 

alleged misuse of the gift cards. Defendant has not been charged with conversion of the 

above-mentioned laptop, but, at the time of this Order the criminal proceedings remain

ongoing. 

Both parties have agreed that, due to the pending criminal charges against 

Hofioni, no discovery will be propounded on him with regard to the alleged misuse of the

gift cards. The parties have been unable, however, to reach a similar agreement with 

respect to the purported conversion of the laptop computer. 

As a result, Defendant filed the present motion on October 9, 2015, requesting a 

stay of all discovery against him until on or about July 19, 2016, to preserve his Fifth 

Amendment right against self-incrimination in the ongoing criminal proceedings. In the 

alternative, Defendant requests a protective order barring any party in the present 

litigation from propounding discovery on him regarding either the conversion or misuse 

of Plaintiff funds or the conversion of Plaintiff’s laptop computer. Should the Court 

decline to issue either of these orders, Hofioni asks that he be “permitted to—after 

asserting his Fifth Amendment privilege as needed—bring a motion seeking an order 

mandating that if circumstances should change in the criminal matter (such as resolution 

of the criminal case or expiration of the statute of limitations barring any unresolved 

criminal charge), he submit to a new deposition that would allow him to fully preserve his 

 submitted on the briefs. E.D. Cal. Local Rule 230(g).

2 The following recitation of facts is taken, sometimes verbatim, from Defendants’ Motion. See

ECF No. 124.

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ability to testify at trial on all issues encompassed by the civil case.” Hofioni’s requests 

are DENIED.3

ANALYSIS

The Constitution does not ordinarily require a stay of civil proceedings pending 

the outcome of a criminal case. Keating v. Office of Thrift Supervision, 45 F.3d 322, 324 

(9th Cir. 1995), cert. denied, 516 U.S. 827 (1995). Rather, the decision whether to stay 

civil proceedings in the face of an ongoing parallel criminal action should be made “in 

light of the particular circumstances and competing interests involved in the case.”

Federal Sav. & Loan Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989). Among 

those competing interests is “the extent to which the defendant’s Fifth Amendment rights 

are implicated.” Id. In the Ninth Circuit, the following factors are determinative of 

whether to grant a stay request: (1) the interest of the plaintiff in proceeding 

expeditiously with the litigation or any particular aspect of it and the potential prejudice to

the plaintiff of a delay; (2) the burden which any particular aspect of the proceedings 

may impose on the defendant; (3) the convenience of the court in the management of its 

cases and the efficient use of judicial resources; (4) the interests of persons not parties 

to the civil litigation; and (5) the interest of the public in the pending civil and criminal 

litigation. Id. at 903; Keating, 45 F.3d at 325. A defendant has no right to a stay unless 

he can demonstrate an exceptional situation threatening his Fifth Amendment rights that 

outweighs the pertinent considerations of the burdens on the plaintiff, the court, the nonparties and the public. Keating, 45 F.3d at 324-25. As explained below, on the current 

record, each factor weighs against a stay.

///

 3 The Court addresses below Hofioni’s primary request for a stay as to all discovery directed at 

him. Hofioni’s alternate request that a protective order be issued would have the same effect as a stay 

and is thus denied for the same reasons. If that were not the case, and issuance of a protective order 

would have no impact on the scheduling of this matter, then that petition should more appropriately be 

brought before the magistrate judge. Finally, Hofioni’s call for an order contingent on both him invoking his 

Fifth Amendment rights and the criminal action changing is not ripe. The Court nonetheless denies this 

motion without prejudice, such that Hofioni is free to renew it if circumstances change. 

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A. Plaintiff will be prejudiced by a delay.

A stay of discovery will create a “danger of denying justice by delay.” Blue Cross 

& Blue Shield of Ala. v. Unity Outpatient Surgery ctr., Inc., 490 F.3d 718, 724 (9th Cir. 

2007). The danger of denying justice is present because, among other things, a delay 

“inherently increases the risk that witnesses’ memories will fade and evidence will 

become stale.” Id. (quoting Pagtalunan v. Galaza, 291 F.3d 639, 643 (9th Cir. 2002)).

Indeed, courts in this Circuit frequently refuse to stay civil proceedings despite concerns 

of implicating a defendant’s Fifth Amendment privilege against self-incrimination. See, 

e.g., Edward/Ellis v. New United Motors Mfg. Inc., No. C 07-05452 WHA, 2008 WL 

4712602, at *1 (N.D. Cal. Oct. 22, 2008) (denying stay and noting the risk that 

witnesses’ memories will fade or witnesses will become unavailable if the six-month stay 

is granted). 

In this case, given how central Hofioni’s testimony is to Plaintiff’s claims, the 

requested discovery stay would effectively interrupt all proceedings until at least late July 

2016, nearly three years after the initial complaint was filed.4 This kind of delay 

increases the likelihood of prejudice from witnesses relocating and memories fading.

Sw. Marine, Inc. v. Triple A Mach. Shop, Inc., 720 F. Supp. 805, 809 (N.D. Cal 1989).

Moreover, from a practical perspective, if Hofioni’s request is granted, Plaintiff will

be limited in its ability to proceed with all discovery and thus will be likewise limited in its 

ability to determine the scope of Defendants’ misappropriation and consequent liability. 

As indicated, Plaintiff’s claims all stem from its allegations that Hofioni acquired and used

Plaintiff’s trade secrets for the benefit of his new employer. As such, Hofioni’s conduct is 

vital to Plaintiff’s ability to gather evidence directly related to the principal issues of this 

suit, and granting his motion would significantly curb Plaintiff’s ability to pursue its claims. 

 4 Although currently Plaintiff requests a stay only through mid-July, it is not entirely clear that the 

statute of limitations in the criminal action will have run by that point or that issuing a stay now would not 

indirectly lead to additional stay requests later. If the statute of limitations does not run in July, it would 

seem that Defendant’s Fifth Amendment interests would continue to be a consideration until some 

unknown date, making a stay for only a portion of that period somewhat arbitrary.

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In application then, a stay as to Hofioni would essentially result in a discovery stay, at 

least in part, as to all Defendants. The first factor thus weighs against a stay.

B. The burden on defendant if the stay is denied is minimal and 

speculative.

“[I]t is universally agreed that the mere pendency of a criminal investigation 

standing alone does not require a stay.” Sterling Nat. Bank v. A-1 Hotels Int'l, Inc., 

175 F. Supp. 2d 573, 578 (S.D.N.Y. 2001) (citing Keating, 45 F.3d at 324). In fact, a

stay of proceedings is rare when the motion is based on a speculative impact on Fifth 

Amendment rights of someone potentially under investigation for criminal charges, but 

not yet charged.

The only criminal charges pending against Mr. Hofioni are for the alleged theft of 

Plaintiff’s gift cards. However, Plaintiff has already agreed not to inquire as to those 

allegations, thereby preserving Hofioni’s right against self-incrimination. It follows that 

the Fifth Amendment is only even potentially implicated to the extent there is a possibility 

that the state may charge Hofioni for the theft of the laptop. 

To that end, Hofioni maintains that because the criminal statute of limitations has 

yet to run with respect to the alleged theft of the computer, the district attorney may still 

charge him, thereby implicating his Fifth Amendment rights. However, Hofioni has not 

provided any indication that the district attorney actually intends to pursue new charges. 

Rather, the district attorney’s actions suggest the contrary. Plaintiff filed its initial 

complaint in August 2013, and the district attorney charged Hofioni with conversion as to

gift cards in May 2015. Although the information relevant to the laptop computer had 

been part of the public record and available to the state for over two years, the district 

attorney chose not to charge Hofioni with respect to that issue. Furthermore, it has been 

eight months since the district attorney filed the initial charges against Hofioni, and still 

no new charges have been added. This is a strong indication that Hofioni’s fear is 

largely unfounded. 

///

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Mere speculation and fear of a criminal indictment is insufficient to grant a stay of

civil proceedings. Molinaro, 889 F.2d at 903. Certainly, “[t]he case for staying civil 

proceedings is ‘a far weaker one' when ‘[n]o indictment has been returned [and] no Fifth 

Amendment privilege is threatened.’” Id. (quoting Securities & Exchange Comm’n v. 

Dresser Indus., 628 F.2d 1368, 1376 (D.C. Cir.), cert. denied, 449 U.S. 993, 101 S. Ct. 

529, 66 L. Ed.2d 289 (1980)). As there is no indication that additional criminal charges 

will be filed against Hofioni, and since the parties have reached an agreement with 

regard to discovery going to those charges that actually overlap with the civil allegations, 

proceeding with discovery is unlikely to endanger Hofioni’s Fifth Amendment rights. 

Hofioni’s speculative fear that he may face additional criminal liability is insufficient to 

justify a stay of discovery, and the second factor also weighs against granting his 

motion. 

C. The efficient use of judicial resources supports denying a stay.

The court has an interest in efficiently managing its docket. Lewis v. William 

Michael Stemler, Inc., No. CIV. S-13-0574 KJM E, 2014 WL 1026593, at *5 (E.D. Cal. 

Mar. 14, 2014) (denying motion to stay after noting that any stay undercuts the court’s 

ability to manage its docket). Its interest in managing its own calendar thus presents

another factor weighing against a stay in these proceedings.

Nearly every major deadline set forth in this Court’s PTSO occurs over the next 

six months. Since the current discovery deadline would pass before the stay was lifted,

the Court anticipates that, should the stay be granted, Plaintiff would file another motion 

to yet again extend the cutoff for discovery. Similarly, if Plaintiff is stymied in its ability to 

propound discovery on Hofioni, whose conduct is at the center of Plaintiff’s claims, it 

follows that the May 12, 2016, dispositive motion deadline would likely have to be 

pushed back as well. Of course, if dispositive motions are delayed, the Court will have 

no choice but to delay the dates set for the final pretrial conference and trial and the 

attending filing deadlines. Because these delays would be an inefficient use of judicial 

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resources, the third factor does not favor a stay.

5

 

D. The interests of non-parties and the public weigh against a stay. 

The final factors for the Court’s consideration are the interests of non-parties and 

the public in the pending civil and criminal proceedings. Keating, 45 F.3d at 324. The

public’s interest in a speedy resolution of this civil action is balanced against its interest

in maintaining the “integrity of the criminal case.” Id.; Jones v. Conte, No. C 04-5312 SI, 

2005 WL 1287017, at *2 (N.D. Cal. Apr. 19, 2005). In this instance, the public’s interest 

will be greater served by denying Defendant’s motion. As indicated above, the burden 

on Hofioni’s Fifth Amendment rights is minimal, and it follows that the integrity of the 

criminal case, at least as to this issue, has been preserved. From the public’s 

perspective, then, speedy resolution of the civil matter is paramount and best served by 

permitting this litigation to proceed. 

Finally, the interest of non-parties will also be furthered if litigation continues to 

move forward. During the course of discovery, various non-parties have become 

“important parts of this suit.” See ECF No. 112-1 at 6 (noting multiple non-parties 

produced documents supporting Plaintiff’s allegations against Defendant Hofioni after 

discovery was propounded on those non-parties). Because these non-parties’ business 

documents and e-mail records have also become part of the record in this case, they 

have an interest in the speedy resolution of these civil proceedings so that they may

resume their normal courses of business. Accordingly, the final two factors for the 

Court’s consideration also weigh against granting Defendant’s motion. 

///

///

///

 5 To the extent Hofioni’s motion would result in a need to continue the dates in the Court’s current 

scheduling order, it may be construed as a motion to modify the PTSO. Hofioni’s request is thus denied 

for the alternate reason that he has failed to show good cause for such a modification. See Fed. R. Civ. P. 

16(b); see also Johnson v. Mammoth Recreations, 975 F.2d 604, 608 (9th Cir. 1992) (citations and 

quotation marks omitted). Rule 16(b)'s ‘good cause’ standard primarily considers the diligence of the party 

seeking the amendment.” Johnson, 975 F.2d at 609. Neither the issues surrounding the laptop nor the 

criminal case are new, and Hofioni has failed to show he was diligent in raising the issues addressed here.

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CONCLUSION

For the reasons just stated, Defendant’s Motion to Stay Proceedings Pending 

Expiration of Criminal Statute of Limitations (ECF No. 124) is DENIED without prejudice. 

IT IS SO ORDERED.

Dated: February 16, 2016

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