Tenth Circuit Court of Appeals Denies Attempt to Withdraw Fifth Amendment Invocation


[authors: William M. Regan, Joseph E. Gallo]

The U.S. Court of Appeals for the Tenth Circuit recently addressed the question of when a defendant can withdraw an invocation of the Fifth Amendment right to refrain from making self-incriminating statements.

Defendant Brian Smart was a fund manager accused by the Securities and Exchange Commission of operating a Ponzi scheme. During the SEC’s initial investigation and again later in the litigation discovery process, Smart invoked the Fifth Amendment and refused to answer the SEC’s questions. The SEC moved for summary judgment, asking the District Court to draw an adverse inference against Smart as a result of his Fifth Amendment invocations. Smart moved to withdraw his Fifth Amendment assertion, arguing that he did not realize what the ramifications of that assertion would be. The District Court denied Smart’s motion to withdraw, drew an adverse inference, and awarded summary judgment to the SEC.

The Tenth Circuit held that the District Court did not abuse its discretion in refusing to allow Smart to withdraw his Fifth Amendment assertion. Relying on cases from the Fifth and Second Circuits, the Court emphasized that the decision to allow withdrawal is fact-dependent. In general, courts should be inclined to permit withdrawal where the opposing party would not suffer undue prejudice. On the other hand, courts should not permit withdrawal if “the litigant is trying to abuse, manipulate, or gain an unfair strategic advantage over opposing parties [by invoking the Fifth amendment].”

In this case, the defendant had invoked the Fifth Amendment during a pre-suit deposition, failed to attend his litigation deposition, and ignored attempts by the SEC to reschedule further depositions. The Court also found that because Smart made his Fifth Amendment assertion early in the investigatory process and only attempted to withdraw it after the SEC moved for summary judgment, he had ample time to determine the consequences of his assertion. Given the Defendant’s apparent use of the Fifth Amendment for improper strategic reasons, the Tenth Circuit upheld the District Court’s decision to deny Defendant’s motion to withdraw his Fifth Amendment assertion.

S.E.C. v. Smart., No. 11-4134, 2012 WL 1450424 (10th Cir. Apr. 27, 2012).


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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