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Lavine v. Gulf Coast Leaseholds, Inc.

Court of Chancery of Delaware, New Castle County

December 28, 1960

Maurice LAVINE, Plaintiff,
v.
GULF COAST LEASEHOLDS, INC., a Delaware corporation, Leason & Co., Inc., an Illinois corporation, Cecil V. Hagen, Robert G. Behrman, Jr., Wallace M. Davis, Jr., Roy B. Kelly, Ricard R. Ohrstrom, William P. Swearingen, Harold J. Vance, W. R. Kerr, Emma S. Barrett, Joseph C. Belden, Jr., Rocco J. Culotta and Clara Culotta, Curt W. Diemecke and Ivadell B. Diemecke, Inghram Grayson, Ralph G. Hinners, Jr., Lathrop J. Hunt, Ludwig W. Kasuffl, C. K. Miller, Raymond Mooney, Graham J. Picard, Sally Wells Reineck, William C. Schumacher, Richard A. Steen, and Potomac Enterprises, Inc., a Delaware corporation, Defendants.

Page 448

Irving Morris and Joseph A. Rosenthal, of Cohen & Morris, Wilmington, for plaintiff.

Arthur G. Logan of Logan, Marvel, Duffy & Boggs, Wilmington, for defendants, Roy B. Kelly and Cecil V. Hagen.

SEITZ, Chancellor.

This is a stockholder's derivative action. Two of the individual defendants were served with interrogatories and motions to produce documents. They have moved to stay their [39 Del.Ch. 495] answers and the production of documents on the ground that to do so would tend to incriminate them in a pending Federal Court prosecution against them. Plaintiffs resist the motion on the ground, inter alia, that the Federal constitutional privilege is not available to these defendants.

There is no need to engage in an elaborate analysis of the law. I think the cases of Knapp v. Schweitzer,357 U.S. 371, 78 S.Ct. 1302, 2 L.Ed.2d 1393 and Mills v. State of Louisiana, 360 U.S. 230, 79 S.Ct. 980, 3 L.Ed.2d 1193, make it abundantly clear that the Federal privilege against self-incrimination as found in the Fifth Amendment is not available in a State Court action. The reasoning behind this conclusion is fully set forth in the opinion of Justice Frankfurter in the Schweitzer case. It is based primarily on the historic distribution of powers between the Federal and State governments. It thus renders irrelevant any issue as to whether the Federal prosecution is in prospect or pending. No question of joint action by Federal and State officials is here involved.

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