Al-Attabi v. JPMorgan Chase Bank, N.A. et al
Filing
57
OPINION & ORDER re: 53 LETTER MOTION to Stay Compliance with Subpoenas Pending Appeal addressed to Judge Vernon S. Broderick from Linda C. Goldstein dated March 18, 2022. filed by Bank Audi S.A.L.. For the reasons stated above, Bank Audi's request for a stay pending appeal is DENIED. The Clerk of Court is respectfully directed to terminate all open motions on the docket. SO ORDERED. (Signed by Judge Vernon S. Broderick on 5/24/2022) (ks)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
In re: Ex Parte Application of Majed Amir Al- :
Attabi for an Order Pursuant to 28 U.S.C. § :
1782 to Take Discovery for use in Foreign
:
Proceedings Pending in the Republic of
:
Lebanon.
:
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21-MC-207 (VSB) (RWL)
OPINION & ORDER
Appearances:
James Patrick Bonner
Susan M. Davies
Fleischman Bonner & Rocco LLP
White Plains, New York
Counsel for Petitioner
Linda C. Goldstein
Patrick Nicholas Andriola
Tamer Mallat
Dechert LLP
Counsel for Movant Bank Audi S.A.L.
VERNON S. BRODERICK, United States District Judge:
Before me is the letter-motion of Bank Audi seeking to stay enforcement of subpoenas
authorized to be served under 28 U.S.C. § 1782 pending its appeal of my May 17, 2022 Opinion
& Order (the “May 17 Order”), in which I overruled Bank Audi’s objection to Magistrate Judge
Robert W. Lehrburger’s March 8 Order denying Bank Audi’s application to renew its motion to
quash. 1 For the reasons that follow, Bank Audi’s motion is DENIED.
Applicable Law
When deciding whether to issue a stay pending appeal, courts consider four factors: “(1)
whether the stay applicant has made a strong showing that he is likely to succeed on the merits;
1
Terms in this Opinion & Order have the same definitions as used in the May 17 Order. Familiarity with the facts
and procedural history set forth in the May 17 Order will be presumed throughout this Opinion & Order.
(2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the
stay will substantially injure the other parties interested in the proceeding; and (4) where the
public interest lies.” In re Application of Chevron Corp., 709 F. Supp. 2d 283, 300 (S.D.N.Y.
2010) (quoting In re World Trade Ctr. Disaster Site Litig., 503 F.3d 167, 169 (2d Cir. 2007)).
“The necessary level or degree of possibility of success will vary according to the court’s
assessment of the other stay factors.” Id. (internal quotation marks omitted) (quoting
Mohammed v. Reno, 309 F.3d 95, 101 (2d Cir. 2002)); see also Strougo v. Barclays PLC, 194 F.
Supp. 3d 230, 233 (S.D.N.Y. 2016) (“Courts have treated these factors ‘like a sliding scale’ such
that ‘more of one excuses less of the other.’” (citation omitted)). Still, “the movant cannot
prevail by showing a mere possibility of success or harm.” Sutherland v. Ernst & Young LLP,
856 F. Supp. 2d 638, 641 (S.D.N.Y. 2012) (citing Nken v. Holder, 556 U.S. 418, 434 (2009)). 2
Significantly, “[a] stay is an intrusion into the ordinary processes of administration and
judicial review and accordingly is not a matter of right, even if irreparable injury might otherwise
result to the appellant.” Nken, 556 U.S. at 427 (internal quotation marks omitted). Ultimately,
the decision as to whether to grant a stay is committed to the Court’s discretion. Id. at 433–34;
see also, e.g., In re Noguer, 18-MC-498 (JMF), 2019 WL 1034190, at *1 (S.D.N.Y. Mar. 5,
2019); Meyer v. Kalanick, 203 F. Supp. 3d 393, 395 (S.D.N.Y. 2016).
Discussion
A.
Likelihood of Success
2
The Second Circuit reviews “de novo the district court’s determination as to whether the statutory requirements of
§ 1782 are met,” and if satisfied that they have been met, then reviews “the district court’s decision on whether to
grant discovery for abuse of discretion.” Euromepa, S.A. v. R. Esmerian, Inc., 154 F.3d 24, 27 (2d Cir. 1998). Thus,
“assuming no error of law,” appellate review of the decision to grant discovery “is much more deferential.” In re
Application of Chevron Corp., 709 F. Supp. 2d at 304.
2
Bank Audi argues that it is likely to succeed on the merits of its appeal because the May
17 Order erred by not finding that alleged “changed circumstances in the underlying proceeding
moot the petition.” (Stay Mot. 2.) 3 Specifically, Bank Audi argues that, because it withdrew
certain of its defenses in the Lebanon Action after Petitioner served authorized subpoenas, this §
1782 action should have been dismissed “as moot” because the subpoenaed material was sought
as relevant “to rebut” those defenses. (Id.) Having withdrawn the defenses, says Bank Audi, the
subpoenaed materials are “no longer ‘for use’ in the Lebanese proceedings.” (Id.)
Bank Audi misconstrues the law and what is actually at issue here: whether Bank Audi
will be accorded relief from a subpoena and court order issued with proper jurisdiction because
of a later changed circumstances and mootness. As I explained in the May 17 Order, “a court
assesses whether it can grant a § 1782 application by looking to ‘the time the § 1782 application
was filed,’ not based on later ‘revelations regarding the state of the foreign proceedings.’” (May
17 Order 8 (quoting Mangouras v. Squire Patton Boggs, 980 F.3d 88, 101 (2d Cir. 2020)).)
Judge Lehrburger denied Bank Audi’s motion to quash the subpoenas in the January 26 Order,
and Bank Audi has never argued that this § 1782 action was moot either when the original
application was granted or when the January 26 Order was entered. 4 Rather, Bank Audi has
sought, since late February, to make a new motion to quash based on its having withdrawn
defenses in the Lebanon Action. (May 17 Order 5–6.) As I explained, “Rule 60(b) governs
grounds to relieve a party from an order” of a federal court, and “[c]ourts generally deny Rule
60(b) relief when the changed circumstances raised by a party are within the control of the party
seeking relief.” (Id. at 7 (internal quotation marks and citations omitted)). Bank Audi’s letter-
3
“Stay Mot.” refers to Bank Audi’s Letter Motion to Stay Compliance with Subpoenas Pending Appeal. (Doc. 53.)
4
As the Second Circuit noted in Bank Audi’s last appeal, Bank Audi never even “filed objections to” the January 26
Order. (Doc. 48-1.)
3
motion does not even address this portion of the May 17 Order, nor does Bank Audi provide a
sound reason not to follow the case law holding that a court assess whether to grant “a § 1782
application by looking to ‘the time the § 1782 application was filed,’ not based on later
‘revelations regarding the state of the foreign proceedings.’” (May 17 Order 8 (quoting
Mangouras, 980 F.3d at 101).)
Bank Audi’s position on mootness is not supported by Mangouras, the only binding
precedent it cites in support of its argument for the likelihood of success on the merits. (Stay
Mot. 2.) In Mangouras, the Second Circuit heard “cross-appeals” from a § 1782 applicant and
from § 1782 respondents. 980 F.3d at 91. The respondents challenged whether the district court
should have authorized discovery at the outset, and the applicant challenged the district court’s
closing the action, as opposed to “maintaining the case on its active docket to facilitate the use of
the discovery in future foreign proceedings.” Id. As to the applicant, the Second Circuit
dismissed the appeal as moot, because the applicant sought “only to reinstate the application as
an open case,” which required “viewing the § 1782 application itself as a live case,” even though
the “foreign proceedings” on which the application was premised “ha[d] permanently concluded
or will not take place.” Id. at 96.
As to the respondents’ appeal, the Second Circuit found that the discovery should never
have been authorized not due to mootness, but because the district court had erred in analyzing
whether “the requested discovery was ‘for use’ in a foreign proceeding” within the meaning of §
1782. Id. at 100. Specifically, the Second Circuit found that, when the applicant “first filed his
applications . . . neither of the relied-upon proceedings . . . had been initiated,” and that there was
never “more than [a] merely speculative” possibility that one of the foreign proceedings, the
“Querella Criminal proceeding,” would ever be initiated Id. at 100–01. The Second Circuit
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held that, because the district court’s granting of the application as to both foreign proceedings
“was predicated at least in part on its erroneous reasoning as to” whether “the Querella Criminal”
proceeding would be initiated, the entire order had to be “vacat[ed] and remand[ed].” Id. at 102.
“On remand,” however, “the district court” was obligated to “deny the § 1782 application as
moot” because the “proceedings [on which they were premised] have either terminated or will
not occur.” Id.
Bank Audi’s position on mootness cannot be squared with Mangouras decision. First,
unlike the foreign actions in Mangouras, the Lebanon Action is ongoing. Second, the core of
Mangouras’s analysis was about whether the discovery sought could be deemed “for use” in a
foreign proceeding and whether the foreign proceedings were “within reasonable contemplation”
when § 1782 applications were “first filed.” 980 F.3d at 100–01. This has nothing to do with
mootness. Indeed, Bank Audi is not appealing whether the § 1782 application should have been
granted when it was first filed. Third, and relatedly, because Bank Audi does not challenge the
initial grant of the § 1782 application, it has offered no reason to apply Mangouras’s holding on
mootness in a district court to this case. Mangouras only directed the district court to dismiss the
action as moot because it held that the initial grant of the § 1782 application required “vacatur
and remand.” Id. at 102. In other words, mootness in Mangouras depended on finding an
independent ground for vacatur, and Bank Audi has not offered any such ground. Fourth, even if
Bank Audi’s arguments did implicate mootness doctrine concerns, it in no way addresses the
May 17 Order’s reasoning that the “voluntary cessation” exception to Article III mootness would
apply in this case to preserve subject matter jurisdiction. (See May 17 Order 6–7 (citation
omitted).)
B.
The Remaining Factors
5
Bank Audi argues irreparable injury on the grounds of a potential “loss of reputation.”
(Stay Mot. 1 (quoting Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 404 (2d Cir. 2004)).)
Specifically, it argues that, if the discovery Petitioner seeks is publicly filed in the Lebanon
Action, the “Lebanese press” may seize on these documents and “undoubtedly sensationalize”
them due to the Lebanese peoples’ dissatisfaction with banking restrictions put in place due to
Lebanon’s ongoing “financial crisis.” (See id. at 1–2.) Bank Audi worries that the records may
suggest it is failing to comply with certain transfer restrictions for some of its customers, and
further that it will be unable to provide details rebutting this impression due to Lebanese bank
secrecy laws. (Id.) It also argues that the stay is in the public interest because it may make “an
already volatile environment in Lebanon” worse. (Id. at 3.)
As an initial matter, Bank Audi’s position—made only by reference to a self-serving
declaration which itself cites no evidence to support its assertions—are based upon speculation
concerning (1) what the produced records will show; (2) that the produced records will be
publicly filed in the Lebanon Action despite Lebanese bank secrecy laws; and (3) that the press
is going to “sensationalize” the documents and their meaning. (See Doc. 44-1 ¶ 13.) I will not
base a stay on such speculation. In any event, even assuming the denial of a stay might come
with some of the very risks Bank Audi raises, I do not find that those risks justify a stay pending
appeal. First, Bank Audi has very little likelihood of success on the merits. Supra. Second, it is
well established that the use of the materials gathered through discovery serve the “public
interests in justice, fair play, and full disclosure,” Chevron Corp., 709 F. Supp. 2d at 310, as well
as “the truth in foreign actions,” In re Bracha Found., 2:15-mc-748-KOB, 2015 WL 6828677, at
*4 (N.D. Ala. Nov. 6, 2015). Indeed, Bank Audi’s argument that the Lebanese public is better
off if judicial orders are entered to limit the operations of a free press runs contrary to well6
established notions that the public interest is served by “a right of access to judicial documents.”
See Lohnn v. Int’l Bus. Machines Corp., 21-cv-6379 (LJL), 2022 WL 36420, at *18 (S.D.N.Y.
Jan. 4, 2022).
Conclusion
For the reasons stated above, Bank Audi’s request for a stay pending appeal is DENIED.
The Clerk of Court is respectfully directed to terminate all open motions on the docket.
SO ORDERED.
Dated: May 24, 2022
New York, New York
______________________
Vernon S. Broderick
United States District Judge
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