The Coalition to Protect Clifton Bay and Louis Bacon for an Order Pursuant to 28 U.S.C. 1782 to Conduct Discovery in foreign Proceedings
OPINION AND ORDER....Having considered the factors that the law requires, the Court chooses to exercise its discretion to grant the § 1782 petition. During the October 23 telephone conference, petitioners, Feralio, and the Nygrd parties committ ed to meet and confer to reach agreement on the appropriate scope of the subpoena that would issue upon a grant of the § 1782 petition. At a subsequent on-the-record telephone conference on October 28, the Court issued rulings on the remaining points of disagreement with respect to the scope of the subpoena. The Court also set out a procedure, reflected in an Order to be issued in conjunction with this Opinion, governing production of the subpoenaed material. (Signed by Judge Denise L. Cote on 10/28/2014) (gr)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE APPLICATION OF THE COALITION TO :
PROTECT CLIFTON BAY AND LOUIS BACON
FOR AN ORDER PURSUANT TO 28 U.S.C.
§ 1782 TO CONDUCT DISCOVERY FOR USE IN :
For petitioners the Coalition To
Protect Clifton Bay and Louis Bacon:
Mary Beth Maloney
GIBSON, DUNN & CRUTCHER LLP
200 Park Avenue
New York, NY 10166
For respondent Stephen Feralio:
Steven David Feldman
Sharon Anne O'Shaughnessy
HERRICK, FEINSTEIN LLP
2 Park Avenue
New York, NY 10016
For third-party intervenors Peter
Nygård, Nygård International
Partnership, and Nygård Inc.:
Marc E. Kasowitz
Aaron H. Marks
Kenneth R. David
KASOWITZ, BENSON, TORRES & FRIEDMAN
New York, NY 10019
OPINION AND ORDER
DENISE COTE, District Judge:
On August 13, 2014, the Coalition To Protect Clifton Bay
(commonly referred to as “Save the Bays”) and one of its
directors, Louis Bacon (“Bacon”) (collectively “petitioners”)
applied for an order pursuant to 28 U.S.C. § 1782 to conduct
discovery for use in foreign proceedings.
petitioners seek to obtain from respondent Stephen Feralio
(“Feralio”) material to be used in seven Bahamian proceedings.
Two of those are judicial review proceedings 1 brought by Save the
Bays that name various respondents, including Peter Nygård
The other five are civil proceedings brought by
Bacon against various individuals associated with Nygård.
September 18, 2014, Nygård along with two of his companies -Nygård International Partnership (“Nygård International”) and
Nygård Inc. (collectively “Nygård companies,” and collectively
with Nygård “Nygård parties”) -- moved to intervene in
opposition to the § 1782 petition.
For the reasons discussed
below, the petition is granted.
Since 1986, Nygård has owned a parcel of land in the
Bahamas known as “Nygård Cay.”
Since 1993, Bacon has owned a
A Bahamian judicial review proceeding is apparently used to
challenge the propriety of governmental action or inaction.
parcel of land in the Bahamas known as “Point House.”
Cay and Point House neighbor one another.
At base, the two judicial review proceedings brought by
Save the Bays challenge the Bahamian government’s alleged lack
of oversight over Nygård’s expansions and proposed expansions of
The five civil proceedings brought by Bacon
principally allege defamation on the part of eleven parties who
Bacon claims operate as proxies for Nygård in effecting a smear
campaign against Bacon.
During various periods since May 2011, Feralio worked as a
videographer for Nygård, taping over one thousand hours of
footage, which Feralio still possesses.
Feralio filmed Nygård’s
daily life, both personal and professional, including meetings
between Nygård and Bahamian officials.
He also allegedly aided
in the production of anti-Bacon videos.
Feralio had three contractual agreements with the Nygård
These agreements appear to include ownership and
confidentiality provisions regarding Feralio’s work, as well as
forum selection clauses designating California state court as
the situs for litigating disputes.
Although Feralio has now
agreed to aid petitioners in prosecuting their Bahamian actions,
he is reluctant -- in part because of these contractual
agreements -- to provide discovery in the absence of judicial
Petitioners seek court authorization both to subpoena from
Feralio video recordings and documentary evidence such as
handwritten notes and email correspondence, and to depose
Feralio about his personal knowledge relevant to the Bahamian
Petitioners filed their application on notice to
Feralio, who agreed to accept service -- and can currently be
found -- in the Southern District of New York.
Petitioners anticipated that, with respect to the requested
discovery, third-party rights might be asserted not only by the
parties named in the Bahamian proceedings, which include Nygård,
but also by the Nygård companies.
Petitioners were right:
Nygård parties seek an order (i) granting their motion to
intervene; (ii) denying the § 1782 petition; and (iii) quashing
the subpoena sought by petitioners. 3
At a conference on September 11, counsel for petitioners,
Feralio, and the Nygård parties were heard.
conference Feralio has been reviewing his video records and
Indeed, after petitioners filed the instant § 1782 application
but before the Nygård parties filed their motion to intervene,
the Nygård parties brought suit against Feralio in California
state court alleging breach of contract.
For present purposes, the Nygård parties’ request that the
subpoena be quashed is not relevantly distinct from their
request that the § 1782 petition be denied.
supplying to the Nygård parties on a weekly basis records that
he believes are responsive to the subpoenas.
During an on-the-
record conference call with the same parties on October 23, the
Court ordered Feralio to complete his production by November 21,
2014 at the very latest.
The Nygård parties’ motion to intervene in opposition to
the § 1782 petition was filed on September 18.
On September 24
petitioners served a supplemental memorandum supporting the
petition and responding to the motion to intervene.
became fully submitted on September 29.
Before the Court are the petition for an order pursuant to
§ 1782 to conduct discovery for use in the Bahamian proceedings
and the Nygård parties’ motion to intervene in opposition to the
Because the petition will be granted in the face of
the asserted opposition, the Nygård parties’ ability and
standing to intervene can be assumed.
Cf. In re Grand Jury
Matter, 770 F.2d 36, 39 (3d Cir. 1985) (assuming without
deciding that interested third party had standing to contest
denial of motion to quash subpoena because “the standing
constraints at issue [in that context] do not affect the subject
matter jurisdiction of the federal courts, but rather, involve
prudential limitations on the exercise of our jurisdiction”). 4
Pursuant to § 1782:
The district court of the district in which a
person . . . is found may order him to give his
testimony or statement or to produce a document or
other thing for use in a proceeding in a foreign . . .
tribunal . . . . The order may be made . . . upon the
application of any interested person and may direct
that the testimony or statement be given, or the
document or other thing be produced, before a person
appointed by the court.
28 U.S.C. § 1782(a).
“In ruling on an application made pursuant
to section 1782, a district court must first consider the
statutory requirements and then use its discretion in balancing
a number of factors.”
Brandi-Dohrn v. IKB Deutsche
Industriebank AG, 673 F.3d 76, 80 (2d Cir. 2012).
requirements are “(1) the person from whom discovery is sought
resides (or is found) in the district of the district court to
which the application is made, (2) the discovery is for use in a
foreign proceeding before a foreign tribunal, and (3) the
application is made by a foreign or international tribunal or
any interested person.”
“Once the statutory requirements are met, a district court
Similarly, because, as discussed below, the petition is granted
on the merits, the Court need not reach petitioners’ alternative
argument that the Nygård parties’ requests be denied as a
sanction for improper actions that petitioners allege the Nygård
parties have taken since the time the § 1782 petition was filed.
is free to grant discovery in its discretion . . . .”
In Intel Corp. v. Advanced Micro Devices,
Inc., 542 U.S. 241 (2004), the Supreme Court outlined a number
of factors that a district court should consider in deciding
whether to exercise this discretion.
These have become known as
the “Intel factors,” and are:
First, 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
Second, a court presented with a § 1782(a)
request may take into account 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 judicial assistance.
Third, a district court could consider whether
the § 1782(a) request conceals an attempt to
circumvent foreign proof-gathering restrictions or
other policies of a foreign country or the United
Finally, unduly intrusive or burdensome requests
may be rejected or trimmed.
Brandi-Dohrn, 673 F.3d at 80-81 (citation omitted).
to considering the four Intel factors, “a district court may
deny the section 1782 application where it suspects that the
discovery is being sought for the purposes of harassment.”
Here, the three statutory requirements are not in dispute.
First, the person from whom discovery is sought, Feralio, can
currently be found in the Southern District of New York.
Second, the discovery sought is for use in ongoing foreign
Third, the application is made by interested
Save the Bay is the petitioner in the two judicial
review proceedings and Bacon is the plaintiff in the five civil
Additionally, in this case the Intel factors weigh in favor
of granting the petition.
With respect to the first factor, if
“participant” refers only to the parties before the foreign
tribunal, then the first factor would weigh in favor of granting
the petition here, as Feralio is not a party in the Bahamian
If, however, “participant” refers more broadly to
anyone who might appear before the foreign tribunal as a
witness, then the first factor may weigh against granting the
petition here, as Feralio has agreed in writing that, at the
request of the petitioners, he will make himself available to
testify “in any domestic or foreign judicial or arbitral
proceedings” related to the Nygård parties, which would seem to
include the Bahamian proceedings.
There is nothing in the way of binding precedent on the
meaning of “participant” in the Intel analysis.
however, that the first Intel factor can weigh against granting
a petition when the respondent may appear as a nonparty witness
in the foreign proceedings, in this case that factor does not
weigh so strongly as to end the analysis.
The second Intel factor is not in dispute.
“the nature of the foreign tribunal, the character of the
proceedings underway abroad, [or] the receptivity of the foreign
government or the court or agency abroad to U.S. federal-court
judicial assistance” counsels against a grant of the petition in
As for the third Intel factor -- “whether the § 1782(a)
request conceals an attempt to circumvent foreign proofgathering restrictions or other policies of a foreign country or
the United States” -- the Nygård parties do not point to, nor
has the Court found, any proof-gathering restrictions or other
policies that would be circumvented by granting the petition
The Nygård parties do point to an affidavit representing
that discovery has closed in one of the Bahamian proceedings and
that, for all intents and purposes, there may be no further
discovery in another of the Bahamian proceedings.
representations do not constitute “proof-gathering restrictions
or other policies” for purposes of the Intel analysis.
With respect to the fourth Intel factor -- whether the
request is “unduly intrusive or burdensome” -- the respondent
here, Feralio, does not claim undue intrusion or burden.
Nygård parties cite no authority for the proposition that
intrusion and burden are to be assessed from the perspective of
not only the § 1782 respondent, but also interested third
parties who wish to review the requested materials to assert
rights and objections.
Even were such considerations relevant
to the Intel analysis, the Nygård parties, while they state that
reviewing the requested production is intrusive and burdensome,
have not made a showing that such intrusion or burden is
Accordingly, the fourth factor does not counsel
against granting the petition here.
The Second Circuit has instructed courts to also consider
whether the discovery is being sought for the purposes of
The Nygård parties point out that certain materials
submitted in support of the petition contain allegations that
besmirch Nygård’s character.
Indeed, in connection with this
§ 1782 action petitioners have submitted materials that reflect
poorly on Nygård, and the Nygård parties have submitted
materials that reflect poorly on Bacon.
The Court has already
taken measures to place inappropriate accusations beyond the
That petitioners’ submissions have included
irrelevant allegations, however, does not indicate that the
petition was brought solely or even principally to harass.
discovery that will follow the granting of this petition is of
material created by Nygård’s own videographer, and it is
intended for use in petitioners’ prosecution of the Bahamian
The Nygård parties advance two additional reasons for
denying the petition, neither of them grounded in the factors
the law requires courts to consider in deciding whether to
exercise their discretion.
First, appealing to the court’s
“inherent power to preserve judicial integrity,” the Nygård
parties argue that to grant the petition here would be to
facilitate the discovery of misappropriated material, as they
contend that -- in part because of the contracts between Feralio
and the Nygård parties -- the subpoenaed materials are subject
to strict ownership, confidentiality, and copyright protections.
But Nygård cites no cases, and this Court has found none, where
a § 1782 petition has been denied based on this type of
The admissibility of any of this material will
be resolved by a Bahamian court and is not a matter that this
Court may determine or consider.
Brandi-Dohrn, 673 F.3d at 82
(“[A] district court . . . should not consider the admissibility
of evidence in the foreign proceeding in ruling on a section
1782 application.” (emphasis omitted)).
Second, appealing to the Court’s “inherent power to manage
its docket,” the Nygård parties argue that to the extent
Feralio’s possessory rights are in dispute, that dispute should
be resolved in California state court before this § 1782 action
Whether Feralio might be subject to a breach of
contract action in California, however, has no bearing on
whether the subpoenaed materials are discoverable pursuant to
§ 1782 for use in foreign proceedings.
Having considered the factors that the law requires, the
Court chooses to exercise its discretion to grant the § 1782
During the October 23 telephone conference,
petitioners, Feralio, and the Nygård parties committed to meet
and confer to reach agreement on the appropriate scope of the
subpoena that would issue upon a grant of the § 1782 petition.
At a subsequent on-the-record telephone conference on October
28, the Court issued rulings on the remaining points of
disagreement with respect to the scope of the subpoena.
Court also set out a procedure, reflected in an Order to be
issued in conjunction with this Opinion, governing production of
the subpoenaed material.
New York, New York
October 28, 2014
United States District Judge
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