Nikon Corporation v. GlobalFoundries U.S., Inc.

Filing 56

ORDER DENYING 49 RESPONDENT GLOBALFOUNDRIES' MOTION TO STAY DISCOVERY PENDING APPEAL. Signed by Judge Beth Labson Freeman on 10/26/2017.(blflc1S, COURT STAFF) (Filed on 10/26/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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NIKON CORPORATION,
Plaintiff,

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v.

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Case No. 17-mc-80071-BLF

GLOBALFOUNDRIES U.S., INC.,
Defendant.

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ORDER DENYING RESPONDENT
GLOBALFOUNDRIES’ MOTION TO
STAY DISCOVERY PENDING APPEAL
[Re: ECF 49]

United States District Court
Northern District of California

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On June 6, 2017, Nikon Corporation filed an application in this district pursuant to 28

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U.S.C. § 1782, seeking leave to obtain discovery from third-party GlobalFoundries U.S., Inc. for

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use in foreign proceedings. See Application, ECF 1. Magistrate Judge Susan van Keulen granted

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the application and this Court denied GlobalFoundries’ motion for relief from Judge van Keulen’s

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ruling. See Order re Application, ECF 26; Order Denying Respondent GlobalFoundries’ Motion

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for Relief, ECF 47. GlobalFoundries now moves to stay the ordered discovery pending appeal.

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See Motion to Stay, ECF 49.

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In light of GlobalFoundries’ production deadline of November 15, 2017 and Nikon’s

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impending deadlines in the foreign proceedings, the Court granted the parties’ stipulated request to

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shorten time for briefing and to submit the stay motion for disposition upon the filing of the

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opposition brief. See Joint Stipulation and Order, ECF 52. The opposition brief having been filed

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on October 24, 2017, the motion is ripe for decision.
For the reasons discussed below, the motion to stay is DENIED.

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I.

LEGAL STANDARD

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When addressing a motion to stay pending appeal, a court must consider four factors: “(1)

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whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2)

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whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay

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will substantially injure the other parties interested in the proceeding; and (4) where the public

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interest lies.” Nken v. Holder, 556 U.S. 418, 434 (2009) (internal quotation marks and citation

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omitted). The first two factors are the most critical. Id. Indeed, with respect to the second factor

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addressing irreparable injury, the Ninth Circuit has made clear that “stays must be denied to all

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petitioners who did not meet the applicable irreparable harm threshold, regardless of their showing

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on the other stay factors.” Leiva-Perez v. Holder, 640 F.3d 962, 965 (9th Cir. 2011).
“A stay is not a matter of right, even if irreparable injury might otherwise result.” Nken,

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556 U.S. at 433 (internal quotation marks and citation omitted). “It is instead an exercise of

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judicial discretion, and the propriety of its issue is dependent upon the circumstances of the
particular case.” Id. (internal quotation marks, citation, and brackets omitted). The party seeking

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United States District Court
Northern District of California

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a stay bears the burden of showing that the circumstances justify a stay. Id. at 433-34.

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II.

DISCUSSION
In granting Nikon’s § 1782 application, Judge van Keulen first determined that the

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mandatory statutory requirements were satisfied and then determined that a balancing of the

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discretionary factors set forth in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004)

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favored granting the requested discovery. Order re Application at 1, ECF 26 (“The Court finds

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that the statutory requirements of 28 U.S.C. § 1782 have been satisfied, and that the discretionary

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Intel factors favor, for reasons stated during the hearing, granting the requested discovery in this

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case.”). GlobalFoundries challenges only the latter determination on appeal, asserting that Judge

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van Keulen erred in balancing the Intel factors. The Court evaluates this challenge under the Nken

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factors identified above.

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A.

Likelihood of Success

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The Ninth Circuit reviews Judge van Keulen’s ruling, and this Court’s denial of relief from

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that ruling, for abuse of discretion. See Four Pillars Entertainment Co., Ltd. v. Avery Dennison

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Corp., 308 F.3d 1075, 1078, 1081 (9th Cir. 2002) (holding that “[t]he magistrate judge did not

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abuse his discretion in denying much of the relief sought . . . pursuant to 28 U.S.C. § 1782” and

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that the district judge “did not abuse his discretion in denying reconsideration of that order”).

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Under that standard, reversal is appropriate “only when the district court reaches a result that is
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illogical, implausible, or without support in the inferences that may be drawn from the record.”

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Kode v. Carlson, 596 F.3d 608, 612 (9th Cir. 2010). The Ninth Circuit will “uphold a district

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court determination that falls within a broad range of permissible conclusions, provided the district

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court did not apply the law erroneously.” Id. As discussed at length in this Court’s order denying

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relief from Judge van Keulen’s ruling, Judge van Keulen applied the correct legal standards and

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her ruling was based on factual findings which were supported by the record evidence. See Order

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Denying Respondent GlobalFoundries’ Motion for Relief, ECF 47. Judge van Keulen’s ruling

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therefore was within the broad range of permissible outcomes.
With respect to GlobalFoundries’ argument that this Court should have reviewed Judge

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van Keulen’s ruling de novo rather than for clear error, GlobalFoundries has not explained why

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United States District Court
Northern District of California

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the Ninth Circuit would adopt that view when the vast majority of cases to address the issue have

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gone the other way. See, e.g., In re Application of AIS GmbH Aachen Innovative Sols. & Abiomed

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Europe GmbH, No. 5:16-MC-80094-EJD, 2017 WL 3115228, at *3 (N.D. Cal. July 21, 2017); In

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re Application of Rainsy, No. 16-mc-80258-DMR, 2017 WL 528476, at *1 n.1 (N.D. Cal. Feb. 9,

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2017); Matter of A Petition for Judicial Assistance Pursuant to 28 U.S.C. § 1782 by Macquarie

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Bank Ltd., No. 2:14-CV-00797-GMN-NJK, 2015 WL 7258483, at *3 (D. Nev. Nov. 17, 2015);

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Interbrew Cent. European Holding BV v. Molson Coors Brewing Co., No. 13-CV-02096-MSK-

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KLM, 2013 WL 5567504, at *1 (D. Colo. Oct. 9, 2013). It seems highly unlikely that the Ninth

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Circuit would find all of those decisions unpersuasive and instead agree with the lone out-of-

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circuit decision which supports GlobalFoundries’ position. See In Re Green Dev. Corp. S.A. De

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C.V., No. CCB-15-2985, 2016 WL 640791 (D. Md. Feb. 18, 2016) (applying de novo review to

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magistrate judge’s report and recommendation re § 1782 application without discussion of scope

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of magistrate judge’s authority).

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GlobalFoundries thus has not demonstrated a strong likelihood of success on appeal.

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B.

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Nor has GlobalFoundries established that it will suffer irreparable injury absent a stay.

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GlobalFoundries argues in its brief that “absent a stay, GlobalFoundries will be seriously and

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irreparably harmed by the production of confidential business materials.” Motion to Stay at 4,

Irreparable Injury to Moving Party Absent Stay

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ECF 49. The documents comprise manuals, reference materials, specifications, and the like

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regarding the products of another entity, ASML. GlobalFoundries has not submitted a declaration

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or other evidence showing that these documents nonetheless constitute GlobalFoundries’

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confidential business materials or explaining how disclosure of the documents would harm it.

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Without such evidence, the Court cannot credit GlobalFoundries’ assertion of irreparable harm,

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especially given that any disclosure would be subject to the protective order issued in this case.

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See Protective Order, ECF 34.
GlobalFoundries also argues that its “employees will be required to take time away from

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work searching for documents in order to comply with an overly broad subpoena.” Motion to Stay
at 4, ECF 49. The burden of complying with a subpoena does not constitute irreparable injury.

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United States District Court
Northern District of California

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See Castaneda v. United States, No. CV 07-07241 DDP, 2008 WL 9449576, at *4 (C.D Cal. May

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20, 2008) (“The Court acknowledges that discovery can be burdensome. However, such a burden,

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while regrettable, does not constitute an irreparable injury.”). This is particularly true where, as

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here, the party seeking discovery is required to bear the reasonable costs of such discovery. See

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Order re Application at 2, ECF 26.

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C.

Effect of Stay on Interested Parties

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A stay would substantially injure Nikon’s interests, because Nikon would not receive the

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discovery to which it is entitled under Judge van Keulen’s order until after expiration of January

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2018 deadlines in the foreign proceedings.1 GlobalFoundries argues that “those deadlines are self-

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inflicted,” that is, imposed as a result of Nikon’s voluntary use of procedures involving an

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expedited schedule. Motion to Stay at 4, ECF 49. The fact remains that the deadlines exist, and

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other courts have refused to grant a stay of discovery pending appeal under such circumstances.

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See, e.g., In re ROZ Trading, No. 06-cv-023050WSD, 2007 WL 120844, at *3 (N.D. Ga. Jan. 11,

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2007) (“If this Court grants the requested stay, Petitioner runs the significant risk that the

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arbitration will proceed regardless of the stay, and that Petitioner will be unable to obtain relevant

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documents before the arbitral panel reaches a decision.”).

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While Nikon has not submitted evidence of those deadlines in connection with the motion to
stay, there is no dispute between the parties that the deadlines exist.
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D.

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Finally, the public interest does not favor a stay. The dual purposes of § 1782 are “to

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provide efficient assistance to participants in international litigation and to encourage foreign

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countries by example to provide similar assistance to our courts.” Akebia Therapeutics, Inc. v.

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FibroGen, Inc., 793 F.3d 1108, 1110 (9th Cir 2015) (internal quotation marks, citation, and

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alterations omitted). Those purposes would be frustrated by a stay order which effectively would

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strip Nikon of the assistance to which it is entitled under Judge van Keulen’s order.
GlobalFoundries argues that the public interest favors a stay to ensure that the Ninth

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Public Interest

Circuit has an opportunity to review the grant of Nikon’s § 1782 application on the merits.
However, as discussed above, GlobalFoundries has not identified any irreparable harm which

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United States District Court
Northern District of California

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would result from compliance with Judge van Keulen’s order. While GlobalFoundries clearly

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would prefer that the Ninth Circuit have an opportunity to review its challenges to Judge van

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Keulen’s order before producing the discovery in question, that preference does not implicate the

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public interest.

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E.

Conclusion

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After careful consideration of the four Nken factors, the Court concludes that

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GlobalFoundries has failed to carry its burden of establishing that a stay pending appeal is

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warranted in this case. Importantly, GlobalFoundries has not shown that it would suffer

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irreparable injury absent a stay. Absent such a showing, this Court is without authority to grant a

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stay. See Leiva-Perez, 640 F.3d at 965 (“[S]tays must be denied to all petitioners who did not

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meet the applicable irreparable harm threshold, regardless of their showing on the other stay

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factors.”). Nor has GlobalFoundries shown that any of the Nken factors favor a stay here.

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III.

ORDER
GlobalFoundries’ motion to stay discovery pending appeal is DENIED.

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Dated: October 26, 2017

______________________________________
BETH LABSON FREEMAN

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