Passport Special Opportunities Master Fund, LP v. Deloitte Touche Tohmatsu Limited

Filing 14

OPINION & ORDER: For the foregoing reasons, Passport's motion to enforce the subpoena against DTTL is denied. The Clerk of Court is respectfully directed to terminate the motion pending at Dkt. 1. (As further set forth in this Opinion) (Signed by Judge Paul A. Engelmayer on 3/1/2016) (kl)

I.

Background1
Passport, a British Virgin Islands limited partnership, is a pooled investment vehicle. Pet.

¶ 2. ARY is a Pakistani private limited company. Id. ¶ 5.
On June 15, 2008, Passport entered into an investment funding agreement with ARY (the
“Agreement”), under which Passport provided ARY with $5 million as working capital in
advance of ARY’s planned IPO. Id. ¶ 14. Under the Agreement, Passport retained an option to
demand repayment plus accrued profit/markup if the IPO did not timely proceed. Id.
Thereafter, ARY failed to undertake an IPO and defaulted on its repayment obligation.
Id. In response, on September 10, 2009, Passport initiated an International Chamber of
Commerce (“ICC”) arbitration against ARY in Singapore. Id. ¶¶ 15–16. ARY, in turn, obtained
an ex parte injunction from the High Court of Sindh, Karachi, Pakistan, enjoining the arbitration.
Id. ¶ 16. The arbitration nonetheless proceeded, and on February 20, 2012, the arbitral panel
issued an award in favor of Passport. Id.
Passport alleges that, to date, ARY has not satisfied the arbitral award or its contractual
debt to Passport. Id. ¶ 17. Passport further alleges that, in an effort to conceal this debt, ARY
submitted to Deloitte Pakistan, its auditor at the time, a forged letter (the “Letter”) on Passport
letterhead purporting to verify that Passport’s investment was an “advance against share capital.”
Id. ¶¶ 18–19. On the basis of the Letter, Passport alleges, ARY’s FYE June 30, 2012 financial
statement fraudulently mischaracterized Passport’s investment. Id.

1

The Court’s account of the facts are drawn from Passport’s ex parte petition for a subpoena
pursuant to 28 U.S.C. § 1782, Dkt. 3, Ex. A (“Pet.”), as well as the declarations submitted by
Passport, Dkt. 3 (“Blue Decl.”), and DTTL, Dkt. 9 (“Farrell Decl.”); Dkt. 10 (“Pecoraro Decl.”),
in connection with this motion, and their accompanying exhibits. The Court also references
factual representations made by counsel at argument on February 23, 2016. Citations to “Tr.”
refer to the transcript of that proceeding.
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In January 2014, Passport opened an enquiry with the Securities and Exchange
Commission of Pakistan (the “SECP”), asking it to investigate ARY’s purportedly materially
misleading FYE June 30, 2012 financial statement. Id. ¶ 21. ARY, in turn, obtained an order
from a Karachi court temporarily enjoining the SECP proceeding, on the ground that the SECP is
biased against ARY. Id. ¶ 22.
On June 17, 2015, Passport filed in this District an application for ex parte assistance in
aid of a foreign proceeding pursuant to 28 U.S.C. § 1782, seeking leave to serve a subpoena for
the Letter on DTTL (a United Kingdom private company) and Deloitte LLP (a Delaware limited
liability partnership). See generally Pet.; id. ¶¶ 3–4. In it, Passport represented that it intends to
use the Letter to cause the Karachi court’s injunction to be set aside so that the SECP enquiry
may proceed. Id. ¶ 22. Passport stated that it also intends to use the Letter in a civil suit in
Dubai against ARY’s parent company, ARY Digital FZ LLC, and ARY’s CEO, who is
personally liable for the debt owed by ARY to Passport. Id. ¶ 23.
On June 18, 2015, the Honorable Paul A. Crotty, sitting in Part I, granted Passport’s
application, without prejudice to the rights of DTTL and Deloitte LLP to later challenge the
subpoena. Blue Decl., Ex. E.
On June 22, 2015, Passport delivered two copies of the subpoena, addressed to Deloitte
LLP and DTTL, respectively, to Deloitte LLP. Pecoraro Decl. ¶¶ 4–5.
As to Deloitte LLP, it filed, through counsel, objections to the subpoena and informed
Passport’s counsel that the subpoena was defective because it did not describe the documents
sought. Id. ¶ 4. Deloitte LLP also notified Passport that the subpoena to DTTL (which was
similarly defective) had not been received by a person authorized to accept service for DTTL.
Id. ¶¶ 5–6. Deloitte LLP later represented to Passport that it did not possess the Letter or a copy

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of it. See Tr. 3–5. Passport thereafter made no further efforts to enforce the subpoena or to
otherwise obtain the Letter from Deloitte LLP. Tr. 5.
As to DTTL, on November 5, 2015, Passport served the subpoena on DTTL through
outside counsel. Pecoraro Decl. ¶ 2. On November 18, 2015, DTTL served its objections to the
subpoena. Id. ¶ 3; Blue Decl., Ex. L. DTTL objected primarily on the grounds that, like Deloitte
LLP, it did not have the Letter in its possession, custody, or control. Id.
That day, Passport sent a letter to Deloitte Pakistan, requesting that it produce a copy of
the Letter. See Blue Decl., Ex. K. Deloitte Pakistan responded with a letter informing Passport
that Deloitte Pakistan is prohibited under Pakistani law from disclosing, without ARY’s consent,
any information acquired in the course of its professional engagement with ARY. See id., Ex.
M. Deloitte Pakistan stated, however, that it would seek authorization from ARY to release the
Letter. Id. On December 22, 2015, DTTL provided Passport with a copy of a letter from ARY
to Deloitte Pakistan, dated December 12, 2015, in which ARY refused to give such
authorization. See id., Ex. N. Apart from this informal request, Passport has not directly sought
to compel production of the Letter by either ARY or Deloitte Pakistan. Tr. 8–9.2
On January 26, 2016, Passport moved in this Court to compel DTTL’s compliance with
the subpoena, Dkt. 1, and filed a memorandum of law, Dkt. 2. (“Passport Br.”), and a declaration
by its counsel, Blue Decl., in support. On February 9, 2016, DTTL filed an opposition to
Passport’s motion, Dkt. 8 (“DTTL Br.”), and declarations by its outside counsel, Farrell Decl.,
and assistant general counsel, Pecoraro Decl. On February 16, 2016, Passport replied. Dkt. 12
(“Passport Reply Br.”). On February 23, 2016, the Court, sitting in Part I, heard argument.

2

At argument, Passport’s counsel represented that Passport has not used formal legal or political
channels in Pakistan to obtain the Letter from Deloitte Pakistan, for example, by filing an
application with the Pakistani courts or government. Tr. 9.
4

II.

Applicable Legal Standards
A.

28 U.S.C. § 1782

Section 1782 authorizes district courts to order discovery from third parties in the United
States for use in foreign proceedings. See 28 U.S.C. § 1782. Such discovery shall be produced
“in accordance with the Federal Rules of Civil Procedure.” Id. § 1782(a). “Pursuant to § 1782, a
district court is authorized to assist a foreign or international tribunal or a litigant before such a
tribunal by ordering discovery where (1) the person from whom discovery is sought resides or is
found in the district; (2) the discovery is for use in a proceeding before a foreign tribunal; and (3)
the application is made by a foreign or international tribunal or any interested person.” In re
Application of Microsoft Corp., 428 F. Supp. 2d 188, 192 (S.D.N.Y. 2006) (internal quotation
marks and citation omitted).
Once these statutory requirements are satisfied, district courts have “broad discretion over
the issuance of discovery orders pursuant to § 1782.” In re Edelman, 295 F.3d 171, 181 (2d Cir.
2002); see also Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247 (2004) (§ 1782
“authorizes, but does not require, a federal district court to provide judicial assistance to foreign
or international tribunals or to ‘interested person[s]’ in proceedings abroad”); Marubeni Am.
Corp. v. LBA Y.K., 335 F. App’x 95, 96 (2d Cir. 2009) (summary order) (“Once the statutory
requirements are met, a district court is free to grant discovery in its discretion.” (internal
quotation marks and citation omitted)). In Intel, the Supreme Court identified four factors to
guide district courts in exercising this discretion:
(1) Whether the documents or testimony sought are within the foreign tribunal’s
jurisdictional reach, and thus accessible absent § 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 judicial assistance;

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(3) Whether the § 1782 request conceals a[n] attempt to circumvent foreign proofgathering restrictions or other policies of a foreign country or the United States;
and
(4) Whether the subpoena contains unduly intrusive or burdensome requests.
In re Microsoft Corp., 428 F. Supp. 2d at 192–93 (citing Intel, 542 U.S. at 264–65). The Second
Circuit has emphasized that this discretion must be exercised “in light of the twin aims of the
statute: providing efficient means of assistance to participants in international litigation in our
federal courts and encouraging foreign countries by example to provide similar means of
assistance to our courts.” Id. at 193 (internal quotation marks and citations omitted).
B.

Federal Rule of Civil Procedure 45

Federal Rule of Civil Procedure 45 permits a party to command, via a subpoena, the
production of documents that are in the “possession, custody, or control” of a non-party. Fed. R.
Civ. P. 45(a)(1)(A)(iii). The documents, however, need not be in the physical possession of the
non-party from whom discovery is sought. S.E.C. v. Credit Bancorp, Ltd., 194 F.R.D. 469, 471
(S.D.N.Y. 2000). Instead, courts have construed “control” broadly so as to permit discovery
from a non-party with “the legal right, authority, or practical ability to obtain the materials
sought upon demand.” Id. (collecting cases); see also Shcherbakovskiy v. Da Capo Al Fine, Ltd.,
490 F.3d 130, 138 (2d Cir. 2007) (“[A] party is not obliged to produce, at the risk of sanctions,
documents that it does not possess or cannot obtain. . . . However, if a party has access and the
practical ability to possess documents not available to the party seeking them, production may be
required.”).3 “This principle applies where discovery is sought from one corporation regarding

3

Although Shcherbakovskiy involved a discovery request under Rule 34, which pertains to
discovery from parties to a litigation, rather than Rule 45, “[t]he scope of discovery under the
two rules is coextensive.” Credit Bancorp, 194 F.R.D. at 471 n.4; accord Chevron Corp. v.
Salazar, 275 F.R.D. 437, 447 n.8 (S.D.N.Y. 2011) (“[T]he phrase ‘possession custody or control’
carries the same meaning under both Rules.”).
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materials which are in the physical possession of another, affiliated corporation.” Dietrich v.
Bauer, No. 95 Civ. 7051 (RWS), 2000 WL 1171132, at *3 (S.D.N.Y. Aug. 16, 2000).
“[T]he burden is on the party seeking discovery to make a showing that the other party
has control over the materials sought.” Credit Bancorp, 194 F.R.D. at 472 (collecting cases);
accord Alexander Interactive, Inc. v. Adorama, Inc., No. 12 Civ. 6608 (PKC) (JCF), 2014 WL
61472, at *3 (S.D.N.Y. Jan. 6, 2014) (“Where control is contested, the party seeking production
of documents bears the burden of establishing the opposing party’s control over those
documents.”) (collecting cases); In re Nortel Networks Corp. Sec. Litig., No. 01 Civ. 1855
(RMB) (MHD), 2004 WL 2149111, at *2 (S.D.N.Y. Sept. 23, 2004). Accordingly, where
discovery is sought from an entity for documents in the physical possession of another, affiliated
entity, “[i]t is the discovering party’s burden to demonstrate that the requested entity has either
the legal right or the practical ability to obtain the documents in question from their custodian.”
In re Nortel, 2004 WL 2149111, at *2.
III.

Discussion
Because § 1782 provides that discovery for use in foreign proceedings shall be produced

“in accordance with the Federal Rules of Civil Procedure,” 28 U.S.C. § 1782(a), the Court first
considers the threshold question of whether the subpoena satisfies the requirements of Rule 45.
As an initial matter, Passport argues that DTTL waived its objections to the subpoena.
That argument lacks merit, as the record shows that DTTL served its objections within the 14day period required by Rule 45. See Fed. R. Civ. P. 45(d)(2)(B) (objections “must be served
before the earlier of the time specified for compliance or 14 days after the subpoena is served”).
Although Passport delivered a copy of the subpoena, addressed to DTTL, to Deloitte LLP on
June 22, 2015, it did not properly serve the subpoena on DTTL until November 5, 2015. See

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Pecoraro Decl. ¶¶ 2, 4–5. DTTL’s objections, served on November 18, 2015, id. ¶ 3; Blue Decl.,
Ex. L, were thus timely, and the Court may consider them on the merits.
DTTL’s primary objection is that it cannot be required to produce the Letter sought by
Passport because the Letter is not within DTTL’s “possession, custody, or control.” DTTL Br.
7–9. Passport has acknowledged that the Letter is in the physical custody of Deloitte Pakistan.
See Pet. ¶ 7; Blue Decl., Ex. D, ¶ 6. The Court, therefore, must determine whether Passport has
shown that DTTL is nonetheless in “control” of the Letter, as that term has been defined for
purposes of Rule 45.
DTTL argues that Passport has not done so, because it has not shown that DTTL has
either the legal right or the practical ability to obtain the Letter from Deloitte Pakistan. The
Court agrees.
A.

Passport Has Not Shown that DTTL Has the Legal Right to Obtain the
Letter

As to the first type of “control,” DTTL argues that it does not have the legal right to
obtain the Letter because it is a “legally separate and independent entit[y]” from Deloitte
Pakistan. Pecoraro Decl. ¶ 13. Accordingly, DTTL argues, it does not have the legal authority
to obtain, much less compel, from Deloitte Pakistan documents which that firm cannot or will
not voluntarily produce. Id.
In support of this argument, DTTL cites a number of cases that have found that Deloitte
firms do not have the legal right to obtain documents from one another, or to act on one
another’s behalf. DTTL Br. 8 (citing In re Nortel, 2004 WL 2149111, at *1–4; United States v.
Deloitte & Touche USA LLP, 623 F. Supp. 2d 39, 41–42 (D.D.C. 2009) (Deloitte USA did not
possess control over “legally distinct entity” Deloitte Switzerland), aff’d in part, vacated in part,
remanded sub nom. United States v. Deloitte LLP, 610 F.3d 129 (D.C. Cir. 2010); Motorola
8

Credit Corp. v. Kemal Uzan, 02 Civ. 666 (JSR), Dkt. 373, at 4 (S.D.N.Y. Feb. 19, 2003) (record
did not show that Deloitte Touche Tohmatsu and Deloitte USA had the legal right, authority, or
practical ability to obtain materials from Deloitte Turkey)).
For example, in In re Nortel, the court rejected plaintiffs’ efforts to obtain discovery from
Deloitte Canada via a subpoena on Deloitte USA. 2004 WL 2149111, at *4. Although Deloitte
Canada had apparently shared some information with Deloitte USA in the past, the court found
that plaintiffs had not demonstrated a legal right on the part of Deloitte USA to obtain the work
papers at issue, because they “fail[ed] to identify any enforceable obligation on the part of the
Canadian entity to provide such access.” Id. at *2. To the contrary, the court noted, provisions
of Deloitte Canada’s manual and the Verein Agreement, which governed the relationship among
member firms of Deloitte Touche Tohmatsu, “le[ft] to the Canadian firm the discretion whether
to provide documents to another member firm of the verein.” Id.
Passport argues that In re Nortel and the other cases cited by DTTL are irrelevant
because, since they were decided, “Deloitte has changed its global structure.” Passport Reply Br.
4. Passport notes that, at the time of those decisions, Deloitte firms were members of Deloitte
Touche Tohmatsu, a Swiss membership association or verein, and their relationship was thus
governed by the terms of the Verein Agreement. Id. Today, however, Deloitte is no longer a
Swiss verein; rather it is organized under DTTL, a United Kingdom private company limited by
guarantee. Id. Passport argues that because the Verein Agreement does not presently govern the
relationships among DTTL and its member organizations, the decisions on which DTTL relies
are inapposite. Id.
Crucially, however, it is not enough for Passport merely to point out that the cases cited
by DTTL are not dispositive on the issue of whether DTTL, under Deloitte’s current

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organizational structure, has legal control over documents in the possession of Deloitte Pakistan.
Rather, because Passport, as the party seeking discovery, bears the burden of demonstrating that
DTTL has “possession, custody, or control” of the Letter, it must affirmatively show that DTTL
enjoys such authority. See Golden Trade, S.r.L. v. Lee Apparel Co., 143 F.R.D. 514, 525 n.7
(S.D.N.Y. 1992) (“In the face of a denial by a party that it has possession, custody or control of
documents, the discovering party must make an adequate showing to overcome this assertion.”).
Passport has not done so.
Most tellingly, Passport has not, in its briefing or at argument, identified a single way in
which the current global structure of Deloitte materially differs from its prior organization as a
Swiss verein. It has not, for instance, pointed to a governance document or contract that gives
DTTL the “the right to insist on access to [Deloitte Pakistan’s or] other members’ documents.”
In re Nortel, 2004 WL 2149111, at *2. And the record suggests the contrary conclusion: that
DTTL and its member firms enjoy no greater legal authority to access one another’s documents
than they did under Deloitte’s prior organizational structure.
At argument, DTTL’s outside counsel represented that the fact that Deloitte is now
organized around a UK private limited company as opposed to a Swiss verein is irrelevant to the
question of whether DTTL enjoys access to the internal documents of Deloitte’s member firms.
Tr. 36–37. Counsel explained that both organizational structures consist of a conglomeration of
distinct member firms, which operate independently in their own countries and are subject to
their own laws and professional practices. Tr. 29 (“DTTL is a complete distinct entity from all
of the member firms, entirely distinct entity.”); see also Pecoraro ¶¶ 10–11, 13. And under both
configurations, member firms look to an international membership organization, DTTL, which
serves as a “branding entity,” akin to a franchisor, for assuring quality control and management

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of the Deloitte name throughout the world. Tr. 36–37; see also Tr. 29 (“DTTL is an entity
that . . . is branding. We license our name to firms that can show that they meet certain quality
standards. We provide them with policies [and] procedures.”). As such, DTTL’s counsel
explained, while DTTL could conceivably revoke a member firm’s license to use the Deloitte
trade name, it “absolutely cannot” compel member firms, such as Deloitte Pakistan, to turn over
documents from their client files for some purpose unrelated to quality control. Tr. 30–33.
Consistent with this, the Deloitte Pakistan website confirms that, as under the Verein Agreement,
“DTTL and each DTTL member firm are legally separate and independent entities, which cannot
obligate each other.” Deloitte, About Us, http://www2.deloitte.com/pk/en/pages/aboutdeloitte/articles/about-deloitte.html (last accessed Feb. 22, 2016). Passport did not articulate any
concrete basis on which to refute that characterization.
In the absence of evidence that DTTL has greater legal authority to access documents
from Deloitte Pakistan, or indeed any concrete basis to regard the change from the verein system
to Deloitte’s current structure as giving DTTL greater access to the audit documents of an
affiliate like Deloitte Pakistan, the reasoning underlying the holdings in In re Nortel and the
other cases cited by DTTL retains force: As in those cases, the decision whether to produce the
requested document appears to belong solely to a Deloitte firm that is entirely distinct from the
firm from which discovery is sought. Passport has, therefore, not satisfied its burden of showing
that DTTL has the legal right or authority to obtain the Letter.
B.

Passport Has Not Shown that DTTL Has the Practical Ability to Obtain the
Letter

Passport argues that even if DTTL does not have a legal right to obtain the Letter from
Deloitte Pakistan, the subpoena is proper because “it is apparent from the facts . . . that DTTL
has the practical ability” to do so. Passport Reply Br. 1 (emphasis added).
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In In re Nortel, the court provided an overview of the standards to be applied when
assessing the “practical ability” of one entity to obtain documents from another. 2004 WL
2149111, at *3. It explained that, “[i]n answering that question, [courts] naturally focus on the
relationship between the targeted entity and the custodian of the documents, the manner in which
the custodian has handled the documents at issue and similar categories of documents in the
ordinary course of business, and any business or other interests that may impact on the
willingness of the custodian to share the documents with the subpoenaed entity in the current
circumstances.” Id.; accord Credit Bancorp, 194 F.R.D. at 472 (“One of the circumstances
which warrants a finding of control is where a corporate entity has the ability in the ordinary
course of business to obtain documents held by another corporate entity.”).
Applying these standards here, the Court notes, Passport has made “no showing of any
arrangement between [DTTL] and Deloitte [Pakistan] or any mechanism that gives [DTTL] the
practical ability to access Deloitte[] [Pakistan’s] work papers,” such as the Letter. In re Vitamin
C Antitrust Litig., No. 06 MD 1738 (BMC), 2012 WL 5879140, at *8 (E.D.N.Y. Nov. 21, 2012).
It has not, for instance, shown that documents of the type sought “flow[ed] freely” between
DTTL and Deloitte Pakistan, Hunter Douglas, Inc. v. Comfortex Corp., No. 8 Misc. 85 (WHP),
1999 WL 14007, at *3 (S.D.N.Y. Jan. 11, 1999), or that DTTL had access to such documents “in
the ordinary course of business,” Credit Bancorp, 194 F.R.D. at 472. To the contrary, Passport’s
counsel conceded at argument that Passport has no evidence that anyone at DTTL enjoys routine
access, via a corporate database or otherwise, to the internal work papers of Deloitte Pakistan.
Tr. 14.
DTTL, for its part, has squarely represented that it lacks the practical ability to obtain the
Letter. At argument, its outside counsel, James J. Farrell, represented that DTTL cannot

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unilaterally access the Letter or any other internal documents submitted by Deloitte Pakistan’s
clients for auditing purposes. Tr. 27–28 (“So we absolutely have no ability to get the document.
. . . [T]his is pretty standard in accounting firms, would be true in the U.S. [and] is true in
Pakistan. . . . [W]e can’t surreptitiously take it from them . . . . We don’t have any access to do
that.”); Tr. 29 (noting that there are no records of Deloitte Pakistan’s that DTTL is “able on its
own authority to access”). Accordingly, he explained, any access to the Letter by DTTL would
have to be facilitated by Deloitte Pakistan. Passport has not come forward with any factual basis
on which to doubt these representations of DTTL’s representative.
And Deloitte Pakistan has explicitly stated that it will not provide the requested records to
DTTL, because, it asserts, it is prohibited by Pakistani laws and regulations from giving DTTL,
or any other outside person or entity, such access. In a letter to Passport’s counsel, Deloitte
Pakistan’s counsel explained that Pakistani laws and regulations “prevent [Deloitte Pakistan]
from producing any document provided by the client for the purposes of the audit of their
financial statements.” Blue Decl., Ex. M. Deloitte Pakistan’s letter further explained that
“providing any documents to third parties without authorization would result in [Deloitte
Pakistan] being found guilty of professional misconduct . . . as there is an express statutory bar
that prevents [it] from disclosing ‘any information acquired in the course of [its] professional
engagement to any person other than [its] client, without the consent of [its] client or otherwise
required by any law for the time being in force.’” Id. (emphasis in original). It is undisputed that
the Letter was submitted by ARY to Deloitte Pakistan for the purposes of an audit. See Pet. ¶ 7.
The Court has been given no reason to discredit Deloitte Pakistan’s claim that, under Pakistani
law, it is legally prohibited from sharing the Letter with any person or entity other than ARY,

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including Deloitte’s marketing arm DTTL or a Deloitte member firm, without ARY’s consent,
which ARY has refused to provide.
In light of the foregoing, there is no non-speculative basis on which to infer that Deloitte
Pakistan would voluntarily cede the Letter to DTTL. Deloitte Pakistan has squarely refused to
do so, and has explained its refusal. Deloitte Pakistan’s spurning of Farrell’s efforts, on behalf of
DTTL, to obtain a copy of the Letter, reinforces this conclusion. See Tr. 25–28. According to
Farrell, when he reached out to Deloitte Pakistan, Deloitte Pakistan was “adamant [that he] could
not have [the Letter],” and insisted that it could not release the Letter—even to DTTL—without
a court order directed at Deloitte Pakistan or ARY’s consent. Tr. 28. Consistent with this, the
record reflects, Deloitte Pakistan proved similarly unwilling to share the Letter with Deloitte
LLP. See Blue Decl., Ex. B-2, Ex. 12, at 4.
Finally, DTTL represents, through in-house counsel, that it “has never received a copy of
the Letter.” Pecoraro Decl. ¶ 12. Passport concedes that it has no evidence to the contrary, or,
indeed, any evidence that anyone at DTTL has ever seen the letter. Tr. 14; see In re Nortel, 2004
WL 2149111, at *3 (“The absence of any evidence that the sought-after documents ever were
shown to Deloitte USA . . . supports the American firm’s contention that it does not have the
practical ability to obtain the documents [from Deloitte Canada].”).
In the face of this compelling bloc of evidence, Passport offers three arguments why
DTTL, ostensibly, has the practical ability to obtain the Letter. None is persuasive.
First, Passport argues, DTTL has “a proven ability to obtain documents from Deloitte
Pakistan,” including “documents related to Passport and ARY that ARY insists should not be
produced.” Passport Reply Br. 1. In support of this argument, Passport relies exclusively on a
single document—specifically, a letter sent from ARY’s counsel to Deloitte Pakistan on

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December 12, 2015. The letter, a copy of which DTTL sent to Passport, states that Deloitte
Pakistan is “not authorized to release any document pertaining to [ARY] or submitted by [ARY]
to [Deloitte Pakistan] for the purposes of audit or otherwise.” Blue Decl., Ex. N. Passport
argues that it follows from DTTL’s ability to obtain this letter from Deloitte Pakistan that
“DTTL has the ability to obtain documents from Deloitte Pakistan when it chooses to do so.”
Passport Reply Br. 1.
This argument is quite unpersuasive. To begin with, it is well established that “[t]he
exchange of . . . limited information . . . is not evidence of a free flow of documents between . . .
two entities,” such that one entity can be deemed to have “control” over all documents in
possession of the other. Linde v. Arab Bank, PLC, 262 F.R.D. 136, 142 (E.D.N.Y. 2009); see
also Motorola Credit Corp., 02 Civ. 666, Dkt. 373, at 3 (fact that Deloitte Turkey previously
transferred some documents to Deloitte USA “does not necessarily imply that Deloitte USA has
the ability to obtain documents from Deloitte Turkey” under other circumstances).
This is especially true where the documents sought are of a fundamentally different
character from those shared in the past. Such is the case here. The letter to which DTTL
obtained access is an artifact of this § 1782 litigation. It was sent by ARY, to communicate its
refusal to consent to Deloitte Pakistan’s request to release audit records relating to ARY, after
Deloitte Pakistan had resigned as ARY’s auditor. See Blue Decl., Ex. B-2, Ex. 12, at 1 (January
14, 2015 email noting Deloitte Pakistan’s resignation). Accordingly, unlike the Letter itself, the
December 12, 2015 letter is not a document acquired “in the course of [Deloitte Pakistan’s]
professional engagement” for the purposes of an audit. Blue Decl., Ex. M. It makes complete
sense that Deloitte Pakistan would voluntarily share this non-confidential litigation document
with DTTL, as a means of protecting its former client’s audit files against release, while

15

simultaneously refusing to produce those files themselves, the dissemination of which, it has
asserted, could subject it to liability under Pakistani law. DTTL’s possession of the December
12, 2015 letter, therefore, does not, at all, impeach DTTL’s claim that it lacks the practical ability
to obtain the Letter.
This case is also easily distinguished from M.L.C., Inc. v. N. Am. Philips Corp., 109
F.R.D. 134 (S.D.N.Y. 1986), and Bank of New York v. Meridien BIAO Bank Tanzania Ltd., 171
F.R.D. 135 (S.D.N.Y. 1997), on which Passport relies for the proposition that “control” should
be found where the recipient of a discovery request has demonstrated its “ability to easily obtain
[documents] when it was in their interest to do so,” 109 F.R.D. at 138. In M.L.C., the recipient
had demonstrated its ability to obtain the very documents that were the subject of the discovery
request. Id. And in Bank of New York, the company that had physical possession of the soughtafter documents was “fully cooperating with [the recipient’s] requests by searching for and
turning over relevant documents from its files.” 171 F.R.D. at 149. Here, by contrast, DTTL has
never had access to the Letter. And Deloitte Pakistan has refused to make it available (and has
explained that refusal). Further, Passport has no evidence that DTTL has obtained access to a
single internal document of Deloitte Pakistan’s other than the December 12, 2015 litigation
letter. Tr. 18. In this case, therefore, unlike in M.L.C. and Bank of New York, there is no factual
basis for concluding that DTTL could obtain the Letter were it motivated to do so.
Passport next argues that the Court should infer that DTTL has the practical ability to
seek documents from Deloitte Pakistan because statements made by a partner of Deloitte LLP
reflect coordination among Deloitte firms across the globe. Pl. Reply Br. 3. Specifically,
Passport notes that when it informally requested the Letter from Deloitte LLP, a Deloitte LLP
partner responded that “our Pakistan firm” claimed that the Letter was confidential, and that the

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matter “ha[d] been turned over to our U.S. and International legal departments to coordinate with
our firm in Pakistan.” Id. (citing Blue Decl., Ex. B-2, Ex. 12, at 2, 4). The partner later informed
Passport that “our Pakistan firm” had resigned and “we are unable to release” a copy of the
Letter due to Pakistani regulations. Id. (citing Blue Decl., Ex. B-2, Ex. 12, at 1). Passport argues
that these statements “indicate[] that Deloitte employees in the U.S. had the practical ability to
obtain the letter from Deloitte Pakistan simply by asking, but that the only impediment was
‘Pakistani regulations.’” Id. (emphasis omitted).
This argument falls far short. Communications and coordination among members of the
Deloitte empire in connection with subpoenas issued against several of them says nothing about
the availability of a member entity to gain documents of an audit client of another. And the mere
existence of a “close working relationship” between two firms with respect to some matters does
not demonstrate the practical ability of one to obtain documents upon demand from the other.
See Deloitte & Touche USA, 623 F. Supp. 2d at 41 (“Close cooperation on a specific project does
not, per se, establish an ability, let alone a legal right or authority, on Deloitte USA’s part to
acquire documents maintained solely by a legally distinct entity.”). Deloitte LLP’s references to
Deloitte’s “International legal department” and “Global GC,” see Blue Decl., Ex. B-2, Ex. 12, at
1–2, reflect the reality that the Deloitte empire has global reach, but they do not imply an ability
on the part of its marketing arm DTTL to unilaterally access the internal documents of member
firms within the Deloitte umbrella.
Tellingly, the very communications on which Passport relies actually belie its contention
that DTTL is capable of obtaining the Letter. They bluntly state that Deloitte Pakistan refused to
release the Letter following its communications with both Deloitte LLP and DTTL. See Blue
Decl., Ex. B-2, Ex. 12, at 4 (email from Deloitte LLP partner to Passport, dated December 23,

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2013, indicating that “[t]he message [Deloitte Pakistan] sent suggest[s] that, due to local laws
and regulation[s] for client confidentiality they are forbidden from sharing the work product
contained within the file”); see also In re Nortel, 2004 WL 2149111, at *3 (“Further support for
[Deloitte USA’s] contention [that it lacked the practical ability to compel production of
documents by Deloitte Canada] is found in the representation of Deloitte USA that, upon receipt
of plaintiffs’ subpoena, it advised its Canadian counterpart of the request, and that that firm
affirmatively represented that it would not yield the documents.”). This, too, undermines
Passport’s suggestion of DTTL’s ready access to the Letter.
Finally, Passport argues that the fact that DTTL’s inside and outside counsel, in rejecting
Passport’s bid for the letter, did not affirmatively attest that they requested, but were refused,
access to the Letter by Deloitte Pakistan shows DTTL’s practical ability to obtain the document.
Tr. 19 (“I think Mr. Pecoraro’s declaration is remarkable in that he never says, I asked for the
document and was told, No, you can’t have it.”). DTTL’s outside counsel, however, represented
at argument that he, in fact, requested and was definitively denied such access. See Tr. 25–28.
And even if DTTL had not done so, that omission, without more, would not discharge Passport’s
burden to “establish that [DTTL] has the ‘practical ability’ to obtain the document.” In re
Vitamin C Antitrust Litig., 2012 WL 5879140, at *3. Simply put, Passport “ha[s] made no
showing to support [the] conclusion [that Deloitte Pakistan would voluntarily turn over the Letter
to DTTL] and, thus, ha[s] not met [its burden]” as the party seeking discovery. Id. (citing
Golden Trade, 143 F.R.D. at 525 n.7 (“In the face of a denial by a party that it has possession,
custody or control of documents, the discovering party must make an adequate showing to
overcome this assertion.”)).

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