U.S. Securities and Exchange Commission v. SAExploration Holdings, Inc.

Background

The U.S. Securities and Exchange Commission brought this civil enforcement action against SAExploration Holdings, Inc., Jeffrey H. Hastings, Brent N. Whiteley, Brian A. Beatty, and Michael J. Scott. Thomas W. O’Neill and Lori E. Hastings were named as relief defendants. By the time of this order, all defendants and relief defendants had been terminated from the case except Brian A. Beatty and Thomas W. O’Neill.

The court had previously stayed the entire civil case while the related criminal case proceeded. After the criminal case against Jeffrey Hastings ended, and after Whiteley and Scott pleaded guilty, the court lifted the stay. Beatty later moved to stay discovery until Whiteley and Scott were sentenced.

Parties’ Positions

Beatty sought a further pause in discovery based on the status of the related criminal proceedings. The Commission opposed the motion, arguing that the United States had not publicly charged Beatty and that Beatty had identified no evidence of an active criminal investigation or a sealed charge against him.

Court’s Analysis

A court may stay, or pause, proceedings as part of its authority to manage its docket. In this circuit, courts consider six factors when deciding whether to stay a civil proceeding because of criminal proceedings: the overlap between the civil and criminal issues; the status of the criminal case, including whether the defendant has been indicted; the parties’ interests in proceeding or avoiding delay; the burden on defendants; the interests of the court; and the public interest.

The court found no reason to delay the case further. Beatty had not been indicted and had not shown any reason to believe that he was under criminal investigation. The court noted that courts generally are more likely to stay a civil proceeding when a criminal investigation has resulted in an indictment, while stays are generally denied when no indictment has issued. The court also relied on the passage of more than twenty-two months since the individuals who were criminally charged had been charged and pleaded guilty, as well as the fact that the civil case had been pending since October 8, 2020.

Disposition

The court denied Defendant Brian A. Beatty’s motion to stay discovery. The clerk was directed to terminate the motion, listed as Docket No. 132. This order addressed the discovery stay only; the opinion did not decide the underlying claims in the Commission’s civil enforcement action.