The U.S. Congress reauthorized the Trafficking Victims Protection and Reauthorization Act (TVPRA) in 2022. It “reauthorizes, updates, and expands” federal programs and efforts to address domestic trafficking” to better serve victims. Even the new Act, however, cannot offer immediate help or give the women in a civil lawsuit (Does 1-10) the opportunity to begin their litigation to collect civil damages and gain injunctions. The Ninth Circuit has ruled that ten victims of Daniel S. Fitzgerald’s multiple crimes must wait until the case of Peter Nygard, his co-conspirator whose case has “significant overlap” with Fitzgerald’s, is resolved.

Nygard and Fitzgerald are both Canadians, and Nygard remains in Canada, awaiting extradition to the U.S. One provision of TVPRA says that sex trafficking victims can bring civil actions for damages and attorneys’ fees against perpetrators. But that remedy is not immediate, due to a provision in the TVPRA that says any “civil action filed under the Act shall be stayed during the pendency of any criminal action arising out of the same occurrence in which the claimant is the victim.” After Presiding Judge Michael W. Fitzgerald of California’s Central District Court issued the stay, Daniel Fitzgerald appealed, arguing the stay was not mandatory and those parts of his case that did not involve Nygard should go forward.

A unanimous three-justice panel from the Ninth Circuit Court of Appeal affirmed District Court Judge Fitzgerald’s ruling in part but found error in his conclusion that the government has a lower evidentiary burden than other litigants who are seeking a stay. The panel also said that if a stay is required, the district court has the right to stay the whole matter. The opinion was written by Circuit Judge Sandra S. Ikuta, with concurrences by District Court Judges Ronald M. Gould and Danielle J. Forrest on May 28.

Ikuta’s ruling began with a recitation of the facts. Defendant/appellant Fitzgerald is the owner of a fashion clothing company located in Winnipeg, Canada. In 2020, a grand jury charged him with “racketeering conspiracy, conspiracy to commit sex trafficking, sex trafficking, and transportation for purposes of prostitution.” It said that he used his business to “facilitate and conceal” his racketeering. He was also charged with “using force, fraud, and coercion to cause women to engage in commercial sex with Nygard (the defendant in the other case) and others, and to remain with Nygard against their will.” These activities included mandatory “sex-swaps,” and forced sexual acts at parties.

After detailing why the Ninth Circuit has jurisdiction, Ikuta turned to the propriety of the district court’s ruling. She explained that Nygard’s case has been pending for 16 months and it is unknown when his prosecution will begin. Next, the opinion turned to a key question: Did the district court err when it ordered the stay? This can be answered by first examining the language of the TVPRA. She pointed out the language of the Act that says, “…any civil action filed under the act shall be stayed” while related criminal actions are pending.

Fitzgerald argued that the stay is only mandatory if the other defendant in the civil action is also a co-defendant in the criminal action. The opinion disagreed, saying the argument fails because it assumes that the civil and criminal cases “arise out of the same occurrence,” which is not necessarily the case because at the present time is not clear what Nygard will be charged with and not clear what Does 1-10 will seek from him.

Ikuta then reviewed the three requirements that mandate a stay: (1) There can be no dispute that a criminal action is pending; (2) the criminal and civil actions arose out of the same occurrence, and (3) plaintiffs in the civil action are the same victims as those in the criminal action. All these are satisfied. There is no dispute that Nygard has been charged. The words “same occurrence” mean the acts “resemble (each other) in every relevant aspect, and various pleadings show “events that are identical to the events that gave rise to claims in the indictment” of Fitzgerald and the complaint against Nygard.

The final requirement that the victims be the same in the criminal and civil cases is also met. The opinion concludes, “… the complaint sufficiently alleges that some of the plaintiffs were victims in some of the same occurrences that gave rise to the criminal action against Nygard. Ikuta concluded that since all elements that mandate a stay are present, the district court’s issuance of a stay was confirmed.

There were two more issues in the case regarding the legality of the district court’s ruling. First, the court said that the government has a “lower evidentiary burden” than other litigants when seeking a stay. The Ninth Circuit did not agree, writing that the TVPRA “does not give the government special status when seeking a stay.” In addition, the Ninth Circuit reviewed whether the Act requires a stay by the district court or whether one is optional. The opinion concluded that the word “action” in the Trafficking Victims Protection and Reauthorization Act refers to the “entire case...reflects its ordinary meaning and encompasses the entire civil lawsuit.”

Accordingly, the Ninth Circuit wrote, “the district court properly issued a complete stay of the proceedings.