Olmsted v. Foundation Partners Group, LLC
2:21-cv-01547
E.D. Cal.May 25, 2022Background:
- Feb 12, 2021 company event in Chico: Olmsted alleges she was heavily intoxicated, later found in Lopez’s hotel room and sexually assaulted; Lopez allegedly showed a video of the encounter to others.
- Nelson saw the video, later emailed HR on June 2, 2021 reporting Lopez; Nelson and Lopez were later terminated by FPG for alleged expense abuses; Olmsted filed a police report on July 27, 2021 and later sued.
- Two related civil actions were filed: Nelson (removed to federal court on diversity grounds) and Olmsted (filed in this District). The court related the cases.
- The Nelsons sought to amend their complaint to allege venue in the Northern District (Monterey County) and moved to transfer; defendants opposed, citing removal venue rules and that operative events occurred in Chico (Eastern District).
- Defendants moved to stay both civil actions pending a potential criminal prosecution of Lopez, asserting he may invoke the Fifth Amendment and his testimony is necessary to FPG’s defense; plaintiffs opposed, noting no indictment and undue prejudice/delay.
- The court denied the Nelsons’ motion to amend/transfer and denied defendants’ motions to stay, concluding removal venue controls and that the Molinaro/Keating factors do not favor a stay absent an indictment or imminent prosecution.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to amend complaint / transfer venue to Northern District | Venue proper in Monterey under FEHA and §1391(b)(2) because plaintiffs worked there | Case was removed from Sacramento; removal-venue governed by §1441, so venue proper in Eastern District | Denied — removal rules govern; FEHA/§1391 transfer arguments inapplicable to removed case |
| Motions to stay civil proceedings pending criminal investigation/prosecution | Plaintiffs: no criminal charges filed; indefinite delay would prejudice plaintiffs; desire for expeditious civil resolution | Defendants: Lopez may invoke Fifth Amendment; his testimony is pivotal to FPG’s defense; stay avoids self-incrimination and preserves defense strategy | Denied — no indictment or imminent prosecution; Fifth Amendment interest weaker; Molinaro/Keating factors weigh against stay |
| Corporate privilege / need for key witness testimony | Plaintiffs: corporation cannot assert Fifth Amendment; delay harms plaintiffs | Defendants: although corporation lacks privilege, Lopez’s invocation would materially prejudice FPG’s defense without stay | Held (as to privilege): Corporations have no Fifth Amendment privilege (Braswell), but that fact alone does not warrant a stay here |
Key Cases Cited
- Swanson v. United States Forest Serv., 87 F.3d 339 (9th Cir. 1996) (trial court has discretion to grant or deny leave to amend)
- Molinaro v. Federal Sav. & Loan Ins. Corp., 889 F.2d 899 (9th Cir. 1989) (civil stays pending criminal proceedings are discretionary; analyze competing interests)
- Keating v. Office of Thrift Supervision, 45 F.3d 322 (9th Cir. 1995) (set of factors to weigh in deciding stay; Fifth Amendment interest important but not dispositive)
- Dresser Indus., Inc. v. Securities & Exchange Comm’n, 628 F.2d 1368 (D.C. Cir. 1980) (parallel civil/criminal proceedings generally permissible; stay appropriate in certain circumstances)
- Polizzi v. Cowles Magazines, Inc., 345 U.S. 663 (1953) (venue for removed actions governed by removal statute, not §1391)
- PT United Can Co. v. Crown Cork & Seal Co., 138 F.3d 65 (2d Cir. 1998) (reaffirming removal-venue principles)
- Peterson v. BMI Refractories, 124 F.3d 1386 (11th Cir. 1997) (same)
- Braswell v. United States, 487 U.S. 99 (1988) (corporations cannot assert Fifth Amendment privilege)
- Clinton v. Jones, 520 U.S. 681 (1997) (defendant’s burden to show stay appropriate; civil proceedings not required to yield to criminal matters)