In Re Application of James F. Rigby, Jr.

Filing 5

ORDER granting 1 Ex Parte Application for an Order Pursuant to 28 U.S.C. 1782. As provided herein, the requested deposition subpoena may be served along with a copy of the attached Order. Signed by Magistrate Judge Mitchell D. Dembin on 2/19/13. (Dembin, Mitchell)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 13 14 IN RE EX PARTE APPLICATION OF JAMES F. RIGBY, JR., CHAPTER 7 TRUSTEE OF THE ESTATE OF MICHAEL R. MASTRO Applicant. CASE NO. 13cv0271-MMA (MDD) ORDER GRANTING EX PARTE APPLICATION FOR ORDER PURSUANT TO 28 U.S.C. § 1782 [ECF. No. 1] 15 16 17 18 On February 1, 2013, James R. Rigby, Jr., the Chapter 7 Trustee of 19 the Estate of Michael R. Mastro, (“Applicant” or “Trustee”) filed an Ex 20 Parte Application for an Order Pursuant to 28 U.S.C. § 1782 Granting 21 Leave to Obtain Discovery from Michael K. Mastro for Use in Foreign 22 Proceedings. (ECF No. 1). The Applicant seeks permission to subpoena 23 Mr. Mastro for deposition regarding a dispute pending in France. 24 According to the Application, Michael K. Mastro is the son of 25 Michael R. Mastro. An involuntary bankruptcy petition was filed 26 regarding Michael R. Mastro’s business in 2009. In 2011, the Honorable 27 Marc Berreca of the United States Bankruptcy Court for the Western 28 District of Washington found that Michael R. Mastro and his wife had -1- 13cv0271-MMA (MDD) 1 made false and fraudulent representations and fraudulently transferred 2 assets. Judge Barreco ordered the arrest of Michael R. Mastro and his 3 wife in July 2011. They were arrested in France on October 24, 2012. A 4 federal indictment charging them with bankruptcy fraud and money 5 laundering was entered on October 25, 2012. 6 The Application further reports that in November 2012, the 7 Trustee obtained an order from the district court in Annecy, France, 8 authorizing the bailiff of that court to take possession of and inventory 9 all of the documents and property found at the home of Michael R. 10 Mastro and his wife in France. In December 2012, Michael R. Mastro, 11 his wife, and Michael K. Mastro filed a petition in the French court 12 seeking, among other things, return of certain personal property. 13 Michael K. Mastro resides in the Southern District of California. I. LEGAL STANDARD 14 15 A district court may grant an application pursuant to 28 U.S.C. § 16 1782 where: (1) the person from whom the discovery is sought resides or 17 is found in the district of the district court to which the application is 18 made; (2) the discovery is for use in a proceeding before a foreign 19 tribunal; and, (3) the application is made by a foreign or internal 20 tribunal or any interested person. See, e.g., Lazaridis v. International 21 Centre for Missing and Exploited Children, 760 F.Supp.2d 109, 112 22 (D.D.C. 2011). 23 Even if these requirements are met, a district court retains the 24 discretion to deny the request. Intel Corp. v. Advanced Micro Devices, 25 Inc., 542 U.S. 241, 264 (2004); In re Premises Located at 840 140th 26 Avenue., N.E., Bellevue, Wash., 634 F.3d 557, 563 (9th Cir. 2011). The 27 Supreme Court, in Intel, identified several factors that a court should 28 consider in ruling on a request under § 1782: -2- 13cv0271-MMA (MDD) 1 2 3 4 5 6 7 8 9 “(1) whether the material sought is within the foreign tribunal's jurisdictional reach and thus accessible absent Section 1782 aid; (2) the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court jurisdictional assistance; (3) whether the Section 1782 request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or theUnited States; and, (4) whether the subpoena contains unduly intrusive or burdensome requests.” 542 U.S. at 264-65. 10 11 12 13 14 15 16 17 18 19 20 II. DISCUSSION A. Authority to Issue Subpoena Having reviewed the application, the Court finds that the statutory requirements have been satisfied. Mr. Mastro resides in the Southern District of California, there is a pending proceeding in a French court and the Trustee is an “interested party” as he is a party to the litigation in France. B. Discretionary Factors 1. Jurisdictional Reach of Foreign Tribunal The Supreme Court, in Intel, stated that, 26 when the person from whom discovery is sought is a participant in the foreign proceeding ..., the need for § 1782(a) aid generally is not as apparent as it ordinarily is when evidence is sought from a nonparticipant in the matter arising abroad. A foreign tribunal has jurisdiction over those appearing before it, and can itself order them to produce evidence. In contrast, nonparticipants in the foreign proceeding may be outside the foreign tribunal' s jurisdictional reach; hence, their evidence, available in the United States, may be unobtainable absent § 1782(a) aid. 542 U.S. at 264. 27 Mr. Mastro is a party to the French lawsuit so this factor may 21 22 23 24 25 28 weigh against granting the application. The Trustee asserts, however, -3- 13cv0271-MMA (MDD) 1 that French civil procedure does not include a discovery process 2 adequate to the task. (ECF No. 1 at 6). Specifically, the Trustee asserts 3 that French procedure requires that the party seeking discovery needs to 4 identify the precise document sought for production. (Id.). The 5 application does not address the availability of depositions in French 6 civil procedure. Although § 1782 does not have an “exhaustion” 7 requirement, the Court is permitted, in deciding how to exercise its 8 discretion, to consider whether the applicant has availed itself of 9 discovery procedures in the foreign forum. See In re Degitechnic, 2007 10 WL 1367697 at *4 (W.D.Wash. 2007). Here, there is a lack of clarity on 11 the issue of whether the jurisdictional reach of the French court extends 12 to depositions. Due to the lack of clarity, the Court finds that this factor 13 weighs against granting this application. 14 2. Nature and Receptivity of Foreign Tribunal 15 The Trustee has made a sufficient showing that the French courts 16 would be receptive to the introduction of evidence obtained pursuant to 17 § 1782. Consequently, this Court views this factor as favoring the 18 Applicant. 19 20 3. Attempt to Circumvent Foreign Proof-Gathering Restrictions and Policies 21 Applicant claims to be “unaware of any restrictions on proof- 22 gathering that would prohibit obtaining the discovery it seeks through 23 Section 1782.” (ECF No. 1 at 8). As discussed above, however, the 24 Trustee has not addressed the availability of party depositions in the 25 French proceeding. So, while there is no evidence that the Trustee is 26 seeking to circumvent restrictions that may exist in the host court, this 27 factor does not help to convince the Court to exercise its discretion in 28 favor of the Applicant. -4- 13cv0271-MMA (MDD) 1 4. Undue Intrusion or Burden 2 It does not appear that requiring Mr. Mastro to be deposed 3 regarding the petition he filed in France would constitute and undue 4 intrusion or burden upon him. To the contrary, if French procedure 5 allows for depositions, Mr. Mastro might be required to travel there to be 6 deposed. The instant arrangement is far more convenient for him and 7 for the Trustee. 8 C. 9 Final Analysis The Court finds that applying the Intel factors does not clearly 10 suggest how the Court should exercise its discretion in this case. But, 11 considering that our courts generally favor discovery, the Court will 12 authorize the issuance of the requested deposition subpoena. A copy of 13 this Order must be served with the subpoena. 14 15 III. CONCLUSION The application is GRANTED. Applicant may serve Michael K. 16 Mastro with a deposition subpoena. A copy of this Order must be served 17 with the subpoena. Nothing herein prevents Mr. Mastro from asserting 18 any rights he may have to challenge the subpoena after it is served. Any 19 such challenge must be filed as a motion to quash in this docket. 20 21 IT IS SO ORDERED. DATED: February 19, 2013 22 23 24 Hon. Mitchell D. Dembin U.S. Magistrate Judge 25 26 27 28 -5- 13cv0271-MMA (MDD)

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