April 2, 1993
CALVIN HARRIS d/b/a HARRIS ELECTRIC
LINDA HARRIS d/b/a C & L ELECTRIC
Under Contract Nos. 059990-91-B-W001, 059990-91-P-0361, 05990-91-P-1212
PSBCA Nos. 3392, 3393, 3394
APPEARANCE FOR APPELLANTS:
Michael P. Candela, Esq.
APPEARANCE FOR RESPONDENT:
Robert E. O'Connell, Esq.
OPINION OF THE BOARD ON MOTION TO SUSPEND PROCEEDINGS
Respondent's Motion to Suspend Proceedings in these three appeals was docketed March 1, 1993. In it, Respondent asks that further proceedings before the Board be suspended pending review by the United States Attorney, Northern District of California, of possible criminal violations involving the contracts at issue in these appeals and possible criminal prosecution of Appellants. Appellants oppose the motion. For purposes of this motion we make the following findings of fact.
Findings of Fact
1. Calvin Harris d/b/a Harris Electric held two contracts and Linda Harris d/b/a C & L Electric one contract with the Postal Service for providing electrical maintenance, repair and alteration services to the Postal Data Center at San Mateo, California (Appeal File for PSBCA No. 3392 ("AF 3392") Tab 26; AF 3393 Tab 7; AF 3394 Tab 6).
2. By substantially identical letters dated October 19, 1992, the contracting officer terminated each contract, giving as the reason: "Failure to allow U.S. Postal Service representatives to have access to and examine pertinent records, documents, papers or other records involving transactions related to this contract as required by Clause B-14, 'Examination of Records'. . . ." (AF 3392 Tab 39; AF 3393 Tab 17; AF 3394 Tab 18)
3. Each termination was appealed, and Appellant's complaint, addressing all three of the contract terminations, was docketed by the Board on January 21, 1993.
4. Respondent filed an appeal file for each appeal. Among the documents in the appeal files are copies of May 7, 1992 subpoenas served by the Postal Inspection Service for the records of Harris Electric (AF 3392 Tab 31, AF 3393 Tab 11) and C & L Electric (AF 3394 Tab 9) relating to, among others, the contracts at issue in these appeals.
5. On June 15, 1992, Appellants' counsel wrote to the Inspection Service, and, according to the letter, provided some of the documents sought by the subpoenas and objected to the subpoenas' inclusion of what counsel contended were privileged documents (AF 3392 Tab 33; AF 3393 Tab 12; AF 3394 Tab 11). Nothing else in the appeal files relates to the requests for information from Appellants.
6. On March 1, 1993, Respondent filed a Motion to Suspend Proceedings in each appeal, asking that proceedings before the Board be suspended "pending the outcome of a criminal investigation by the United States Attorney for the Northern District of California."
7. The motion is supported by the declaration of an Assistant United States Attorney ("AUSA") from that office in which he states that his office received an investigative report from the Postal Inspection Service "concerning possible violations of Title 18, United States Code, Sections 286, 287, and 1341 (conspiracy to defraud the government with respect to claims; false, fictitious, or fraudulent claims; mail fraud) by Calvin Edward Harris [and] Linda Sue Harris" (Declaration of Lawrence J. Leigh, February 26, 1993 ("Declaration") ¶ 2), and that he was assigned to review the report "to determine whether criminal proceedings should be instituted." (Declaration ¶ 4). The three contracts at issue in these appeals were among those "involved in the Postal Inspection Service investigation." (Declaration ¶ 3). The AUSA, on behalf of the United States Attorney, requests that these appeals be suspended "until a determination is made by the United States Attorney whether to pursue the matter, and that if a criminal proceeding is instituted that the PSBCA proceedings be further suspended until the conclusion of the criminal proceedings." (Declaration ¶ 5).
8. Paragraphs 6 and 7 of the Declaration state:
"6. Based on my preliminary review of the Postal Inspection Service investigation report and my discussions with Postal Service counsel concerning the appeals of the contract terminations, it is my opinion that identical legal issues are involved in the investigation report and the appeals. This request to suspend proceedings is made in the interests of judicial economy and to avoid the necessity to litigate similar and overlapping issues concurrently in two separate forums if a criminal proceeding is instituted.
7. This request is also made in order to avoid the possibility of a conflict over the differences in civil and criminal discovery procedures. If these appeals are not suspended and a criminal proceeding is instituted, the liberal discovery procedures available in Board proceedings could be used to circumvent the stringent restrictions placed on discovery in criminal proceedings."
Discussion
We have discretion to stay our proceedings pending completion of parallel criminal prosecutions when the interests of justice require it. Afro-Lecon, Inc. v. United States, 820 F.2d 1198, 1201, 1202, 1207 (Fed. Cir. 1987); Davis Mail Hauling Co., PODBCA No. 363, 1969 WL 990, June 20, 1969; see United States v. Kordel, 397 U.S. 1, 12 n. 27 (1970); Landis v. North American Co., 299 U.S. 248, 254 (1936). As suspension of proceedings is contrary to our requirement to interpret our rules "so as to secure a just and inexpensive determination of appeals without unnecessary delay," 39 C.F.R. § 955.1 (d)(2), see 39 C.F.R. § 955.19, and the Contract Disputes Act's mandate that boards provide an expeditious resolution of appeals to the fullest extent practicable, 41 U.S.C. § 607 (e), Todd Shipyards Corp., ASBCA No. 31092, 88-1 BCA ¶ 20,509 at 103,682, we will do so only after a careful balancing of the competing interests. See Landis v. North American Co., 299 U.S. at 254-55.
Respondent, as the party seeking the stay, has the burden of demonstrating a compelling need to protect the criminal litigation which overrides any injury to Appellant. E-Systems, Inc., ASBCA Nos. 32033 et al., 88-2 BCA ¶ 20,753 at 104,868; see Landis v. North American Co., 299 U.S. at 255. It must also demonstrate that the issues before the Board are related to those in the criminal proceeding, Luigi Goldstein, Inc. v. United States, 217 Ct. Cl. 733, 734 (1978); Litton Systems, Inc. v. United States, 215 Ct. Cl. 1056 (1978), such that there will likely be an overlap of issues, facts and witnesses in the two proceedings, Holk Development, Inc., ASBCA Nos. 43,271 et al., 93-1 BCA ¶ 25,327 at 126,191, citing E-Systems, Inc., 88-2 BCA ¶ 20,753 at 104,868.
Respondent must present facts and evidence to meet its burden. Fleischzentrale Sudwest GmbH, ASBCA No. 37273, 89-3 BCA ¶ 21,956 at 110,444. A declaration of the prosecutor in the criminal case does not automatically meet Respondent's required showing; "an evaluation of the substantive contents of the [declaration] is required." Id. at 110,445. "The Government's mere statement that the related criminal investigation will be prejudiced is insufficient without a clear showing why." E-Systems, Inc., 88-2 BCA ¶ 20,753 at 104,871.
The reason stated for termination of each of the contracts was specific and narrow: Appellants' violation of the Examination of Records clause in the contracts by failing to allow Respondent access to their records (Finding 2). There is no apparent connection between that alleged failure and the false claims- and fraud-related matters which are the subject of the investigative report being reviewed by the AUSA (Finding 7). The AUSA's conclusions that identical legal issues are involved in the investigative report and these appeals and that proceeding with the appeals would interfere with the criminal process by allowing Appellants greater
civil discovery (Finding 8) are insufficient to meet Respondent's burden to show its entitlement to a stay.
The motion is denied without prejudice to its refiling should progress in the appeals and/or the criminal investigation generate sufficient facts on which the Board could find the necessary relation of the cases and the prejudice to the criminal case that would result from allowing the appeals to go forward. See C3, Inc., 4 Cl.Ct. 790, 792 (1984); E-Systems, Inc., 88-2 BCA ¶ 20,753 at 104,871; Todd Shipyards Corp., 88-1 BCA ¶ 20,509 at 103,684.
Respondent's answers in these appeals are to be filed within 30 days of its receipt of this Opinion.
Norman D. Menegat
Administrative Judge
Board Member
I concur:
James A. Cohen
Administrative Judge
Chairman
I concur:
James D. Finn, Jr.
Administrative Judge
Vice Chairman