Stati et al v. State Street Corporation
Filing
55
Magistrate Judge Marianne B. Bowler: ORDER entered. MEMORANDUM AND ORDER Re: Petitioners' Motion to Compel Discovery (Docket Entry # 12 ); The National Bank of the Republic of Kazakhstan and State Street Corporation's Motion to Interven e and Vacate the Ex Parte Order Issued Pursuant to 28 U.S.C. § 1782, or to Stay § 1782 Discovery (Docket Entry # 25 ). The motion to compel (Docket Entry # 12 ) is ALLOWED as to the Rule 30(b)(6) deposition subpoena and DENIED without pr ejudice as to the subpoena duces tecum. The motion to intervene and vacate (Docket Entry # 25 ) is ALLOWED to the extent that NBK and State Street may intervene in these proceedings, DENIED as to the Rule 30(b)(6) deposition subpoena, DENIED without prejudice as to the subpoena duces tecum, and DENIED as to the request for a stay. (Patton, Christine)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
IN RE APPLICATION OF ANATOLIE STATI,
GABRIEL STATI, ASCOM GROUP, S.A.,
and TERRA RAF TRANS TRAIDING LTD.
FOR AN ORDER DIRECTING DISCOVERY
FROM STATE STREET CORPORATION
PURSUANT TO 28 U.S.C. § 1782.
CIVIL ACTION NO.
15-MC-91059-LTS
MEMORANDUM AND ORDER RE:
PETITIONERS’ MOTION TO COMPEL DISCOVERY (DOCKET ENTRY # 12);
THE NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN AND
STATE STREET CORPORATION’S MOTION TO INTERVENE AND
VACATE THE EX PARTE ORDER ISSUED PURSUANT TO 28
U.S.C. § 1782, OR TO STAY § 1782 DISCOVERY
(DOCKET ENTRY # 25)
January 18, 2018
BOWLER, U.S.M.J.
Pending before this court is a motion to compel discovery
for use in foreign proceedings under 28 U.S.C. § 1782 (“section
1782”) filed by petitioners Anatolie Stati, Gabriel Stati, Ascom
Group, S.A., and Terra Raf Trans Traiding Ltd. (“petitioners”)
pursuant to Fed. R. Civ. P. 45 (“Rule 45”).
(Docket Entry # 12).
In March 2015, the court allowed an ex parte application filed by
petitioners seeking leave to serve a subpoena duces tecum with 14
categories of documents and a Fed. R. Civ. P. 30(b)(6) (“Rule
30(b)(6)”) deposition subpoena on State Street Corporation
(“State Street”).1
1
(Docket Entry # 11).
The two subpoenas seek
As set out in a sworn declaration, petitioners did not
receive notice of the allowance of the application until July 31,
2017 owing to a miscommunication. (Docket Entry # 14, n.1).
documents and information relative to accounts and other assets
owned directly, indirectly, legally, and/or beneficially by the
Republic of Kazakhstan (“ROK”).
(Docket Entry ## 1-1, 14-3).
The subpoenas also seek documents and information regarding
accounts held by or on behalf of the National Bank of the
Republic of Kazakhstan (“NBK”), including in NBK’s capacity as
manager of the National Fund of Kazakhstan (“the National Fund”).
Seeking to intervene in these proceedings, NBK and State Street
move to vacate the ex parte March 2015 Order under Rule 45 or
Fed. R. Civ. P. 60.
(Docket Entry # 25).
After conducting a
hearing on January 10, 2018, this court took the motions (Docket
Entry ## 12, 25) under advisement.
BACKGROUND
The underlying arbitral award in excess of $500 million
dollars “rendered by a Stockholm based tribunal” under “the
Energy Charter Treaty” against ROK concerned a dispute about
investments and construction of a liquified petroleum gas plant
in Kazakhstan.
(Docket Entry # 29-1, ¶¶ 1-2, 13-14) (Docket
Entry # 36, ¶¶ 2, 4) (Docket Entry # 4-1, pp. 10-17).
ROK
applied to set aside the award in the Seva Court of Appeal in
Stockholm and amended the claim to include fraud.
# 29-1, ¶¶ 4, 7) (Docket Entry # 36, ¶ 3).
(Docket Entry
The court refused to
set aside the award and the Supreme Court of Sweden denied ROK’s
motion for review.
(Docket Entry # 36, ¶¶ 2-4) (Docket Entry #
2
29-1, ¶¶ 7-8).
The arbitral award is therefore final.
(Docket
Entry # 36, ¶ 4).
Thereafter, petitioners “commenced an action” in the
District Court of Stockholm (“the Stockholm court”) which
rendered an “ex parte provisional sequestration order” allowing
enforcement of the arbitral award and the attachment of ROK’s
assets in Sweden.
7(a)).
(Docket Entry # 14, ¶ 8) (Docket Entry # 36, ¶
Based on this ex parte provisional sequestration order in
the Stockholm court, the Swedish Enforcement Authority issued
attachments of assets “believed to be owned” by ROK, which ROK
and NBK are challenging in an appeal to the District Court of
Nacka (“the Nacka court”) (collectively, “the Swedish
proceedings”).
¶ 7(a)).
(Docket Entry # 14, ¶¶ 8-12) (Docket Entry # 36,
In an October 20, 2017 reply brief filed in the
Stockholm court, ROK argued there is no risk of sabotage to
support the attachments because NBK owned and controlled the
attached assets.2
(Docket Entry # 14, ¶¶ 8-12) (Docket Entry #
36, ¶ 7(a)) (Docket Entry # 36-1).
Petitioners therefore seek
discovery via the document and deposition subpoenas to State
2
As an aside, petitioners’ brevis recitation of ROK’s
statement in the Stockholm court regarding enforcement
proceedings (Docket Entry # 36, ¶ 7(a)) (Docket Entry # 35, p. 9)
is taken out of context and not convincing for reasons pointed
out by NBK and State Street (Docket Entry # 50, n.3) (Docket
Entry # 36-1, ¶ 28). Separately, a risk of “sabotage” refers to
“a danger that the respondent will seek to transfer assets out of
the jurisdiction and/or take other measures to render itself
judgment-proof in Sweden.” (Docket Entry # 14, ¶ 11).
3
Street to use in the Swedish proceedings regarding the
interrelationship and the ownership of the attached assets of
ROK, NBK, and/or the National Fund in the Swedish proceedings.
(Docket Entry # 13) (Docket Entry # 45, ¶ II(B)) (Docket Entry #
35).
They also seek the discovery to use in a Belgian proceeding
in which ROK challenged ex parte attachments issued by the
Brussels Court of First Instance (“the Belgian proceeding”).
NBK
seeks to intervene in the Belgian proceeding and asserts that
attached assets to aid in the collection of the arbitral judgment
against ROK belong to NBK as opposed to ROK.
¶ 7(c)) (Docket Entry # 36-3).
(Docket Entry # 36,
Petitioners also identify
proceedings in Amsterdam District Court (“the Amsterdam court”)
allowing ex parte attachments of ROK property, including assets
held by an “Amsterdam branch of a Belgian subsidiary of the Bank
of New York Mellon, ‘BNY Mellon SA/NV, concerning [a] savings
portfolio of the National Fund’” (“the Netherlands proceeding”).
(Docket Entry # 36, ¶ 7(b)).
As set out in an affidavit by a Vice President and Senior
Counsel of State Street Bank & Trust Company, “State Street
provides services only to the National Bank” of the Republic of
Kazakhstan, i.e., NBK (Docket Entry # 27, ¶¶ 1, 6) (Docket Entry
# 22, ¶¶ 1, 6), although other evidence suggests that NBK, as
trustee, holds assets of the National Fund with ROK retaining
4
ownership of the assets (Docket Entry # 14, ¶ 16) (Docket Entry #
5).
State Street’s NBK accounts “are maintained by three State
Street subsidiaries in London, England” as opposed to in
Massachusetts.3
¶¶ 7-10).
(Docket Entry # 22, ¶¶ 7-10) (Docket Entry # 27,
In February 2014, petitioners sought and obtained
recognition of the arbitral award in the High Court of Justice in
London (“the London court”).
Entry # 29, ¶ 2).
(Docket Entry # 36, ¶ 6) (Docket
In an application to the London court, ROK
sought to set aside the permission granted to enforce the award.
(Docket Entry # 29-1, ¶ 5) (Docket Entry # 29, ¶ 4).
In June
2017, the London court allowed ROK to amend the application to
include fraud allegations.
(Docket Entry # 29, ¶ 6).
(Docket Entry # 29-1, ¶¶ 6, 95)
A trial on the fraud allegations is
set to commence in November 2018.
(Docket Entry # 36, ¶ 6)
(Docket Entry # 29, ¶ 8).
In August 2017, the Luxembourg District Court issued an ex
parte order recognizing and enforcing the arbitral award in
Luxembourg.
(Docket Entry # 36, ¶ 7(d)).
from the order.
ROK filed an appeal
In the meantime, “a Luxembourg bailiff levied
attachments on ROK’s property in Luxembourg.”
(Docket Entry #
36, ¶ 7(d)).
In October 2017, ROK filed an action in the United States
3
State Street and NBK therefore argue that section 1782
does not reach documents located overseas.
5
District Court in the District of Columbia alleging that
petitioners violated the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. §§ 1961 et seq., and engaged in
fraud and a civil conspiracy (“the RICO action”).
# 28-1).
(Docket Entry
In light of the November 2018 trial in the London court
and the pendency of the fraud claims in the RICO action, NBK and
State Street alternatively move to stay the section 1782
discovery until a resolution of these proceedings.
(Docket Entry
# 25) (Docket Entry # 26, ¶ III).
DISCUSSION
Section 1782 “authorizes, but does not require, a federal
district court to provide assistance to a complainant in a”
foreign proceeding.
Intel Corp. v. Advanced Micro Devices, Inc.,
542 U.S. 241, 255 (2004) (“Intel”).
The three statutory
prerequisites to obtain discovery under section 1782 require
that:
(1) the plaintiff seek discovery from a person who
“resides or is found” in this district; (2) the discovery is “for
use in a proceeding in a foreign or international tribunal”; and
(3) the plaintiff is an “interested person.”4
4
28 U.S.C. §
The Eleventh Circuit adds a fourth requirement, namely,
that “the request must seek evidence, whether it be the
‘testimony or statement’ of a person or the production of ‘a
document or other thing.’” Application of Consorcio Ecuatoriano
de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747
F.3d 1262, 1269 (11th Cir. 2014) (quoting In re Clerici, 481 F.3d
1324, 1331 (11th Cir. 2007)); accord Sergeeva v. Tripleton Intl.
Ltd., 834 F.3d 1194, 1198 (11th Cir. 2016).
6
1782(a); Euromepa, S.A. v. Esmerian, Inc., 154 F.3d 24, 27 (2nd
Cir. 1998) (“Euromepa”); In re Barnwell Enterprises Ltd., 265
F.Supp.3d 1, 8-9 (D.D.C. 2017); In re Application of Gazprom
Latin Am. Servicios, C.A., 4:14-MC-1186, 2016 WL 3654590, at *3
(S.D. Tex. July 6, 2016) (person “must reside or be found in the
district, . . . discovery must be for use in a proceeding before
a foreign tribunal[,]” and “application must be made by ‘any
interested person’”), appeal dismissed sub nom., 2016 WL 9959263
(5th Cir. Dec. 15, 2016) (No. 16-20469); Minis v. Thomson,
14-91050-DJC, 2014 WL 1599947, at *1 (D. Mass. Apr. 18, 2014);
see Intel, 542 U.S. at 256–65.
Once these three requirements are
satisfied, the court considers the following “discretionary
factors” commonly referred to as the Intel factors:
(1) whether the person from whom discovery is sought is a
participant in the foreign proceeding; (2) the nature of the
foreign tribunal, the character of the proceedings underway
abroad, and the receptivity of the foreign body to U.S.
federal court assistance; (3) whether the “request conceals
an attempt to circumvent foreign proof-gathering
restrictions or other policies of a foreign country or the
United States[,]”; and (4) whether a request is unduly
intrusive or burdensome.
Minis v. Thomson, 2014 WL 1599947, at *3 (quoting Intel, 542 U.S.
at 264–65); accord Application of Consorcio Ecuatoriano de
Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d
at 1271-72; see In re Barnwell Enterprises Ltd., 265 F.Supp.3d at
9.
Relying primarily on a series of decisions in the Second
7
Circuit including Euromepa, NBK and State Street maintain that
petitioners fail to satisfy the second statutory requirement
because the attachments and attempted executions to satisfy the
arbitral judgment are not adjudicative.5
(Docket Entry # 26, ¶
II(A)(1)) (Docket Entry # 21, p. 6)6 (Docket Entry # 50, ¶ II).
Petitioners contend that NBK and State Street overstate the
holding in Euromepa; the language of section 1782 does not
preclude those seeking to “collect on a judgment”; and the
Swedish, Belgium, and Amsterdam proceedings are adjudicative
because they concern contested factual and legal questions
regarding ROK’s ownership and use of assets and the relationships
between ROK, NBK, and the National Fund.
(Docket Entry # 35).
With respect to the second statutory requirement, a 1964
amendment to section 1782 “broadened” the language “from any
foreign ‘judicial proceeding’ to any ‘proceeding in a foreign or
5
Notably, the plain language of section 1782 does not
limit the discovery to “adjudicative” proceedings. See In re
Clerici, 481 F.3d 1324, 1333 (11th Cir. 2007) (“nothing in the
plain language of § 1782 requires that the proceeding be
adjudicative in nature). Whereas petitioners assert that section
1782’s language does not restrict the use of evidence to “collect
on a judgment,” which is the caption of the adjudicatory
argument, they argue that the European proceedings are
adjudicative in nature. (Docket Entry # 35). NBK and State
Street thus point out that petitioners “do not dispute that §
1782 discovery can only be used for ‘adjudicative proceedings.’”
(Docket Entry # 50, ¶ II). Accordingly, this court will assume
dubitante that section 1782 contains an adjudicatory requirement
in the course of rejecting the argument.
6
Page numbers refer to the page as docketed rather than
the page number of the document itself.
8
international tribunal.’”
In re Babcock Borsig AG, 583 F.Supp.
2d 233, 238 (D. Mass. 2008) (quoting and discussing Intel, 542
U.S. at 258) (emphasis added).
In a pre-Intel decision, the
Second Circuit in Euromepa explained that the second element
focuses “on two questions:
(1) whether a foreign proceeding is
adjudicative in nature; and (2) when there is actually a foreign
proceeding.”
27.
Euromepa, S.A. v. R. Esmerian, Inc., 154 F.3d at
The Euromepa court further noted that, “The seminal case in
this Court regarding the analysis of whether a foreign proceeding
is adjudicative in nature is In re Letters Rogatory Issued by
Director of Inspection of Government
of India, 385 F.2d 1017,
1020 (2d Cir. 1967) (Friendly, J.) (‘India’).”
R. Esmerian, Inc., 154 F.3d at 27.
Euromepa, S.A. v.
The Second Circuit in India,
in turn, interpreted the 1964 amendment expanding “judicial
proceeding” to a “tribunal” and concluded that an Indian IncomeTax Office was not a tribunal within the meaning of section 1782
“because the role of the government in the administrative
proceeding was more akin to a prosecutorial decision to bring a
case rather than to that of a neutral arbitrator.”
Euromepa,
S.A. v. R. Esmerian, Inc., 154 F.3d at 27 (discussing India, 385
F.2d at 1020-21); India, 385 F.2d at 1020-21 (“one useful
guideline” to assess whether a body is a tribunal “is the absence
of any degree of separation between the prosecutorial and
adjudicative functions”) (emphasis added).
9
Here, the courts in the Swedish proceedings and, in
particular, the Stockholm court, are tribunals.
The Stockholm
court is acting as a neutral, adjudicative decision-maker as
opposed to performing a prosecutorial function.
Specifically,
ROK is contesting the proceedings in the Stockholm court on the
basis that there is no risk of sabotage inasmuch as it does not
own “[t]he assigned property” because the property is part of the
National Fund and managed by NBK.
8, 12-15).
(Docket Entry # 36-1, pp. 2,
ROK also argues that it enjoys immunity.
Entry # 36-1, pp. 5-8).
(Docket
ROK provided exhibits as evidence to
support its positions, which presumably the Stockholm court may
consider in adjudicating ownership and other issues.
Such
functions exemplify the adjudicative nature of the Swedish
proceedings.
See generally Application of Consorcio Ecuatoriano
de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747
F.3d 1262, 1270 n.4 (11th Cir. 2014).
The adjudicative nature of the Netherlands and Belgian
proceedings is similar.
(Docket Entry # 36, ¶¶ 7(b), 7(c))
(Docket Entry ## 36-2, 36-3).
As to the former, ROK contests the
recognition given the arbitral award by the Amsterdam court and a
Kazakstan company is seeking to lift the attachments on the basis
that the property is not owned by ROK and the company is a
separate legal entity from ROK.
(Docket Entry # 36-2).
(Docket Entry # 36, ¶ 7(b))
With respect to the latter, NBK is
10
seeking to intervene in the Belgian proceedings and objecting to
the attachments because the assets belong to it rather than ROK.
(Docket Entry # 36, ¶ 7(c)) (Docket Entry # 36-3).
Here again,
the Amsterdam and Belgian courts are acting and functioning as
neutral, adjudicative decision-makers.
In sum, petitioners need
the discovery concerning ownership of assets and the
interrelationship of the foregoing entities for use in these
ongoing, contested, and adjudicatory foreign proceedings.
Relying on Euromepa and other decisions, NBK and State
Street nevertheless contend that enforcement proceedings, such as
the European and London proceedings, to collect on a judgment,
such as the arbitral award, are not adjudicative.
Petitioners
maintain that NBK and State Street overstate the Euromepa
holding.
As correctly reasoned by petitioners (Docket Entry #
35, p. 14),7 the Second Circuit in Euromepa held that a French
Bankruptcy Proceeding was “not an adjudicative proceeding within
the meaning of” section 1782 “for the following reasons”:
The merits of the dispute between Esmerian and Euromepa have
already been adjudicated and will not be considered in the
French Bankruptcy Proceeding. As a matter of French law,
the judgment of the French Supreme Court acts as res
judicata with respect to the merits of the dispute in the
French Bankruptcy Proceeding. Thus, in the French
Bankruptcy Proceeding, nothing is being adjudicated; the
already extant judgment is merely being enforced (to the
extent permitted by the assets of the bankruptcy estate).
Euromepa, S.A. v. R. Esmerian, Inc., 154 F.3d at 28.
7
See footnote six.
11
Euromepa is
distinguishable because in the case at bar there are no prior
rulings on the contested issues of ownership and/or sabotage that
would constitute issue preclusion or leave nothing left to
adjudicate in the Stockholm court, the Netherlands proceeding,
and/or Belgian proceeding.
Another case cited by the NBK and State Street, Jiangsu S.S.
Co., Ltd. v. Success Super. Ltd., 14 Civ. 9997 CM, 2015 WL
3439220, at *3-7 (S.D.N.Y. Feb. 5, 2015), is also distinguishable
because the enforcement or attachment proceeding was not
reasonably contemplated to afford any analysis of its
adjudicatory function.
Although the court stated that, “[A]
post-judgment enforcement proceeding, if that is the sort of
proceeding contemplated by Jiangsu, is exactly the sort of
proceeding for which Euromepa held that § 1782 discovery is
unavailable,” id. at *6, the Euromepa court did not universally
bar discovery in all bankruptcy proceedings, particularly where
issues are being adjudicated.
See Euromepa, S.A. v. R. Esmerian,
Inc., 154 F.3d at 28 (“it is clear that a bankruptcy proceeding
may, in some instances, be an adjudicative proceeding within the
meaning of the statute”) (citing Lancaster Factoring Co. V.
Mangone, 90 F.3d 38, 42 (2nd Cir. 1996)).
Accordingly, at a
minimum, the proceeding in the Stockholm court as well as the
Netherlands and Belgian proceedings are adjudicative in nature
assuming, for purposes of argument, that section 1782 contains
12
such a requirement.
NBK and State Street next argue that petitioners cannot use
section 1782 to obtain documents located overseas at State
Street’s three, London subsidiaries.
(Docket Entry # 26, ¶
II(A)(2)) (Docket Entry # 50, ¶ III).
They submit that the
purpose of section 1782 is to aid foreign litigants to obtain
evidence located in the United States which categorically bars
petitioners from using section 1782 to obtain the overseas
documents.
III).
(Docket Entry # 26, ¶ II(A)(2)) (Docket Entry # 50, ¶
Petitioners correctly maintain that the argument pertains
to the subpoena duces tecum rather than the Rule 30(b)(6)
deposition subpoena.
(Docket Entry # 35); see In Edelman v.
Taittinger, 295 F.3d 171, 177-80 (2d Cir. 2002).
Separately,
petitioners contend that the relevant test is not the location of
the documents overseas but, rather, whether State Street has
possession, custody, or control of the documents.8
(Docket Entry
# 13, ¶ IV(A)(1)) (Docket Entry # 35, ¶ 4(A)(2)).
A split of authority exists regarding whether section 1782
completely bars the use of section 1782 to obtain documents
located overseas.
On the one hand, the language of the statute
only states that, “The district court of the district in which a
person resides or is found may order him . . . to produce a
8
In addressing a relevancy argument, petitioners
acknowledge that, “the assets held by State Street are located in
the United Kingdom . . ..” (Docket Entry # 45, pp. 9, 11).
13
document . . ..”
28 U.S.C. § 1782(a).
The plain language of
section 1782 therefore “requires only that the party from whom
discovery is sought be ‘found’ here; not that the documents be
found here.”9
In re Application of Gemeinshcaftspraxis Dr. Med.
Schottdorf, 2006 WL 3844464, at *5 (rejecting argument that
section 1782 assistance cannot extend to production of documents
located overseas).10
Relying on the additional language in
9
A court may also consider the location of documents
overseas in assessing the fourth, discretionary factor in Intel.
See In re Application of Gemeinshcaftspraxis Dr. Med. Schottdorf,
Civ. M19-88 BSJ, 2006 WL 3844464, at *5 (S.D.N.Y. Dec. 29, 2006)
(“absent any express statutory language, the location of the
documents at issue should at most be a discretionary
consideration”); see also Nikon Corp. v. ASML US Inc.,
MC-17-00035-PHX-JJT, 2017 WL 4024645, at *3 (D. Ariz. Sept. 12,
2017) (“the court may consider ‘whether the requested materials
are located outside the United States’” and considering location
of documents in Netherlands when discussing fourth Intel factor)
(emphasis added), aff’d sub nom., No. 17-16961, 2017 WL 6331090
(9th Cir. Dec. 12, 2017). For example, in the context of
discussing the respondent’s objection to section 1782 discovery
under the fourth Intel factor, i.e., whether a request is
intrusive and burdensome, because “many of the TCL documents are
in Tanzania, not Massachusetts,” the Minis court reasoned that
section 1782(a) discovery “is in accordance with the Federal
Rules of Civil Procedure,” and will thus entail production of
material “under the possession custody, or control of
Massachusetts residents. . . ..” Minis v. Thomson, 2014 WL
1599947, at *4-5. In addition, the Minis court did not address
whether the location of documents overseas presents a
categorical, universal bar to section 1782 discovery. See id. at
4-5. NBK and State Street thus aptly distinguish Minis. (Docket
Entry # 26, n.7).
10
The Gemeinshcaftspraxis decision is the minority view in
the Southern District of New York. See In re Kreke
Immobilien KG, No. 13 MISC. 110 NRB, 2013 WL 5966916, at *4
(S.D.N.Y. Nov. 8, 2013); In re Godfrey, 526 F.Supp.2d 417, 423
(S.D.N.Y. 2007).
14
section 1782 that, “the document or other thing [be] produced, in
accordance with the Federal Rules of Civil Procedure” unless the
order prescribes otherwise, 28 U.S.C. § 1782(a), and that such
rules “cover[] materials located outside the United States,” the
Eleventh Circuit in Sergeeva likewise rejected the argument that
section 1782 does not reach documents located overseas.
Sergeeva
v. Tripleton Intl. Ltd., 834 F.3d 1194, 1200 (11th Cir. 2016)
(“location of responsive documents and electronically stored
information—to the extent a physical location can be discerned in
this digital age—does not establish a per se bar to discovery
under § 1782”).
Juxtaposed against this position are cases relying on
legislative history and policy arguments.
Without deciding the
issue but favoring this latter position, the Second Circuit in
Sarrio summarized the applicable reasoning:
On its face, § 1782 does not limit its discovery power to
documents located in the United States. In finding such a
limitation, the district court relied in part on a Senate
report asserting that the amendments providing for
documentary discovery under the statute were intended to aid
“in obtaining oral and documentary evidence in the United
States.” S.Rep. No. 88–1580, (1964), reprinted in 1964
U.S.C.C.A.N. 3782, 3788 (emphasis added) . . . Professor
Hans Smit, who prepared the final version of the statute[,]
. . . points out that construing the statute to reach
evidence abroad would make United States courts “clearing
houses” for discovery in litigation around the world. Apart
from its demands on federal judicial resources, that
construction would be apt to transform the effect of § 1782
from “assistance to foreign and international tribunals” to
interference with those bodies. Thus, despite the statute’s
unrestrictive language, there is reason to think that
Congress intended to reach only evidence located within the
15
United States.
Application of Sarrio, S.A., 119 F.3d 143, 147 (2d Cir. 1997);
see Norex Petroleum Ltd. v. Chubb Ins. Co. of Canada, 384 F.Supp.
2d 45, 51 (D.D.C. 2005) (summarizing case law); In re Kreke
Immobilien KG, 2013 WL 5966916, at *4; In re Godfrey, 526 F.Supp.
2d at 423–24; see also Kestrel Coal v. Joy Global, 362 F.3d 401,
404-05 (7th Cir. 2004); see generally Dolan v. U.S. Postal
Service, 546 U.S. 481, 486 (2006) (“[i]nterpretation of a word or
phrase depends upon reading the whole statutory text, considering
the purpose and context of the statute”); U.S. v. Dowdell, 595
F.3d 50, 71 (1st Cir. 2010) (“‘[i]t is a well-established canon
of statutory construction that a court should go beyond the
literal language of a statute if reliance on that language would
defeat the plain purpose of the statute’”).
At this juncture, it is not necessary to take a position
because, even if the location is not an absolute bar, this court
will “not prescribe otherwise,” 28 U.S.C. § 1782(a), but, rather,
will apply the possession, custody, or control of documents
requirements in Rule 45(a)(1), as urged by petitioners.
At a
minimum, petitioners will therefore need to satisfy this Rule
45(a)(1) provision to serve the subpoena.
In the event this
court finds the inferences of control lacking, petitioners
request leave to conduct a Rule 30(b)(6) deposition to determine
if State Street personnel in Massachusetts have possession,
16
custody, or control of the documents responsive to the subpoena
duces tecum, which this court will allow.11
n.5) (Docket Entry # 35, n.4).
(Docket Entry # 13,
Pending the outcome of such
discovery, which shall be conducted in an expedited fashion, the
motion to compel is denied without prejudice with respect to the
subpoena duces tecum.
As to the first statutory requirement vis-à-vis the Rule
30(b)(6) deposition subpoena (Docket Entry # 1-1, pp. 8-13), the
three, potential Rule 30(b)(6) deponents petitioners identify
(Docket Entry # 35, p. 19) work and, accordingly, are “found” and
likely reside in this district within the meaning of section
1782.
Petitioners are also interested persons within the meaning
of the third statutory requirement.
Turning to the four,
discretionary Intel factors as they pertain to the Rule 30(b)(6)
subpoena (Docket Entry # 1-1, pp. 8-13), overall these factors
support issuing the subpoena.
The first factor slightly favors
the NBK and State Street because petitioners are participants in
the foreign proceedings.
See Intel, 542 U.S. at 264.
There is
insufficient proof, however, that the foreign tribunals would
oppose the discovery vis-à-vis the second factor.
Coupled with
Intel’s holding that section 1782(a) contains no
11
Petitioners may add the subject category to the existing
Rule 30(b)(6) subpoena or serve State Street with a separate Rule
30(b)(6) subpoena with this subject category. NBK and State
Street did not address the request.
17
“foreign-discoverability requirement,” Intel, 542 U.S. at 253;
Minis v. Thomson, 2014 WL 1599947, at *4, there is little reason
to suspect that the Swedish, Netherlands, or Belgian tribunals
would not be receptive to the discovered evidence.
See Minis v.
Thomson, 2014 WL 1599947, at *4; see generally In re Application
of Chevron Corp., 762 F.Supp.2d 242, 252 (D. Mass. 2010).
This
court also finds that the section 1782 request is not “an attempt
to circumvent foreign proof-gathering restrictions or other
foreign policies.”
Intel, 542 U.S. at 265.
In the context of
the deposition, the 14 areas of inquiry (Docket Entry # 1-1, pp.
12-13) do not appear unduly intrusive or burdensome under the
fourth Intel factor.
Moreover, as indicated at the hearing,
petitioners are willing to take protective measures to maintain
confidentiality.
As explained above, the discovery is intended “for use in a
proceeding in a foreign” tribunal under section 1782.
NBK and
State Street’s argument regarding Fed. R. Civ. P. 69 lacks merit
for reasons explained by petitioners (Docket Entry # 35, pp. 2021).
Petitioners sufficiently complied with LR. 7.1 and 37.1 for
reasons stated by petitioners in their filings (Docket Entry ##
22, 45) and during oral argument and, in any event, LR. 1.3
sanctions in the form of denying the motion to compel are not
appropriate.
In this court’s discretion, a stay is not warranted.
18
The
foreign proceedings in the Stockholm court as well as the
Netherlands and Belgian proceedings are ongoing.
Petitioners
need the discovery forthwith to use in one or more of these
proceedings.
CONCLUSION
In accordance with the foregoing discussion, the motion to
compel (Docket Entry # 12) is ALLOWED as to the Rule 30(b)(6)
deposition subpoena and DENIED without prejudice as to the
subpoena duces tecum.
The motion to intervene and vacate (Docket
Entry # 25) is ALLOWED to the extent that NBK and State Street
may intervene in these proceedings, DENIED as to the Rule
30(b)(6) deposition subpoena, DENIED without prejudice as to the
subpoena duces tecum, and DENIED as to the request for a stay.
/s/ Marianne B. Bowler
MARIANNE B. BOWLER
United States Magistrate Judge
19
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