In re: Ex Parte Application of DNG FZE
Filing
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OPINION & ORDER re: 1 MISCELLANEOUS CASE INITIATING DOCUMENT - MOTION to Compel Michael Mulanaphy to appear for Deposition. (Filing Fee $ 49.00, Receipt Number ANYSDC-28555167) filed by DNG FZE. For the foregoing reasons, the Court denies DNG's petition. The Clerk of Court is respectfully directed to terminate the petition pending at Docket 1 and to close this case. SO ORDERED. (Signed by Judge Paul A. Engelmayer on 1/11/2024) (ks)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE EX PARTE APPLICATION OF DNG FZE FOR
AN ORDER TO OBTAIN DISCOVERY FOR USE
IN FOREIGN PROCEEDINGS PURSUANT TO
28 U.S.C. § 1782
23 Misc. 435 (PAE)
OPINION & ORDER
PAUL A. ENGELMAYER, District Judge:
On November 10, 2023, DNG FZE ("DNG"), an online retailer selling electronic goods,
filed an ex parte application with this Court seeking an order permitting discovery in connection
with an upcoming trial in Singapore under 28 U.S.C. § 1782. Dkt. 1 ("DNG Pet."). In the
Singapore action, DNG has sued 3PL, a wholly-owned and Singapore-based subsidiary of
PayPal Inc. ("PayPal"), on claims arising from 3PL's withholding of funds from DNG following
an alleged breach of PayPal's User Agreement and Acceptable Use Policy. See id at 7. DNG
here seeks to depose Michael Mulanaphy, PayPal's senior manager of special investigations,
who will serve as a fact witness at the trial, which is scheduled to occur before the Singapore
High Court next month. Notably, as multiple letters submitted to this Court reflect, see Dkts.
16-20, DNG has already been furnished an affidavit from Mulanaphy detailing his direct trial
testimony, as Singapore trial procedure requires, see Dkt. 13 at 5 & n.2. With the§ 1782
application, DNG seeks as well to depose Mulanaphy, to assist DNG in its trial preparation. See
Dkt. 15 at 4 ("DNG has made clear that it seeks to depose Mulanaphy-a central witness-as
part of its fact finding and discovery[.]").
On November 20, 2023, DNG served Mulanaphy with its application. Dkt. 7. On
November 27, 2023, this Court ordered DNG to serve PayPal as well, and set an expedited
briefing schedule. Dkt. 8. On December 11, 2023, Pay Pal and Mulanaphy filed a memorandum
oflaw in opposition to DNG's petition as well as a supporting declaration and exhibits. Dkts.
13, 14 ("Teo Deel."). On December 15, 2023, DNG filed a reply. Dkt. 15.
I.
Applicable Legal Standards
Section 1782 authorizes district courts to order discovery from third parties in the United
States for use in foreign proceedings. In relevant part, it provides as follows:
The district court of the district in which a person resides or 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 or international tribunal, including criminal
investigations conducted before formal accusation. The order may be made
pursuant to a letter rogatory issued, or request made, by a foreign or international
tribunal or upon the application of any interested person .... To the extent that the
order does not prescribe otherwise, the testimony or statement shall be taken, and
the document or other thing produced, in accordance with the Federal Rules of Civil
Procedure.
28 U.S.C. § 1782(a). The statute thus imposes three prerequisites to the issuance of a foreign
discovery order. See, e.g., In re Microsoft Corp., 428 F. Supp. 2d 188, 192 (S.D.N.Y. 2006).
First, the target must "reside" or be "found" in this District. Second, the evidence sought must
be "for use" in a foreign proceeding. Third, the application must be made by a foreign tribunal
or "any interested person."
Once those prerequisites have been satisfied, a district court has "broad discretion over
the issuance of discovery orders pursuant to § 1782." In re Edelman, 295 F.3d 171, 181 (2d Cir.
2002). In Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004), the Supreme Court
set out four factors to guide district courts in exercising this discretion:
(I) whether "the person from whom discovery is sought is a participant in the
foreign proceeding," in which event "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";
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(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 assistance";
(3) "whether the § 1782(a) request conceals an attempt to circumvent foreign proofgathering restrictions or other policies of a foreign country or the United States";
and
(4) whether the request is "unduly intrusive or burdensome."
In re de/ Valle Ruiz, 939 F.3d 520, 533-34 (2d Cir. 2019) (quoting Intel, 542 U.S. at 264-65).
These "factors are not to be applied mechanically," and a district court "should also take into
account any other pertinent issues arising from the facts of the particular dispute." Kiobel ex rel.
Samkalden v. Cravath, Swaine & Moore LLP, 895 F.3d 238,245 (2d Cir. 2018).
II.
Discussion
PayPal and Mulanaphy (collectively, "PayPal") argue that DNG's petition fails to satisfy
both the statutory factors and the discretionary Intel factors. The Court denies the application for
two independent reasons. First, DNG's sole proposed use for the deposition it seeks, to assist it
in trial preparation, is inadequate to justify an order under the "for use" requirement of Section
1782. Second, the Intel factors, considered together, support denying the application. In light of
the time-sensitivity ofDNG's application, the Court has resolved this application expeditiously.
A. "For Use"
Under Section 1782, discovery sought is "for use" in a foreign proceeding when it will be
"employed with some advantage or serve some use in the proceeding[.]" Mees v. Buiter, 793
F.3d 291,298 (2d Cir. 2015). In applying this requirement, the Second Circuit has "focused ...
on the practical ability of an applicant to place a beneficial document--or the information it
contains-before a foreign tribunal." In re Accent Delight Int'/ Ltd., 869 F.3d 121, 131 (2d Cir.
2017). The petitioner thus must establish more than just the relevance of the information sought
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to be obtained through foreign discovery; "[w]ithout some means of injecting the evidence into
the proceeding, a § 1782 applicant cannot show that it has a role in the proceeding, such that it
may 'use' the information[.]" Certain Funds, Accts., and/or Inv. Vehicles v. KPMG, L.L.P., 798
FJd 113, 120 (2d Cir. 2015).
The burden of showing a use for this testimony in the Singapore proceeding is on DNG.
See In re Kolomoisky, 19 Misc. 116, 2006 WL 2404332, at *3 (S.D.N.Y. Aug. 18, 2006) (burden
of establishing § 1782 factors is on applicant). Here, DNG has repeatedly stated that its intended
"use" for the proposed U.S. deposition ofMulanaphy would be to assist it in its trial preparation.
See DNG Pet. at 1O; Dkt. 15 at 4; Dkt. 19 at 2 ("Petitioner reiterates its position that a deposition
ofMulanaphy would enable DNG to discovery further information in preparation for the
trial[.]"). DNG does not argue that the deposition itself would be admissible in the Singapore
trial. Nor does it argue that the deposition would be taken in the service of pretrial procedures
authorized by Singapore law. On the contrary, although the Singapore courts have procedures
for seeking foreign depositions, Teo Deel.
10 & Ex. E at 1, DNG has not pursued them.
To be sure, § 1782 does not require that the U.S. discovery be shown to be admissible
before the foreign tribunal at trial or authorized by the procedures of that tribunal. Brandi-Dohrn
v. IKB Deutsche IndustriebankAG, 673 FJd 76, 82 (2d Cir. 2012). But, as reflected above, the
§ 1782 applicant must establish a practical use in the foreign proceeding for the discovery it
seeks. Here, DNG's petition and briefs do not do so as to the Mulanaphy deposition. These
merely state that DNG is eager to "discover further information in preparation for the trial," Dkt.
18, and to "help [it] prepare its case and strategy for trial," Dkt. 4 ("Wright Deel.")~ 40. DNG
has not cited case authority that a litigant's interest in acquiring more information from its
adversary in advance of a foreign proceeding, without more, satisfies the "for use" requirement.
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Therefore, although the burden to identify "some procedural mechanism" through which the
applicant would use the requested discovery in connection with the foreign action is modest,
DNG's generic recitations, which do not delineate a concrete plan to use the information it seeks,
fail to carry it here. KPMG, 798 F.3d at 122 n.11 ("The district court's demand that the Funds
identify some 'discernible procedural mechanism' for introducing the evidence they sought
simply reflects the burden on a § 1782 applicant to establish that it will have some means of
actually using the evidence in the foreign proceeding."); see also, e.g., In re Asia Mar. P. Ltd.,
253 F. Supp. 3d 701, 706-07 (S.D.N.Y. 2015) (discovery sought not "for use" in foreign
proceeding when petitioner had not adequately explained how evidence would increase chances
of success in that proceeding); In re Escallon, 323 F. Supp. 3d 552, 558-59 (S.D.N.Y. 2018)
("for use" requirement not satisfied where petitioner had not adequately explained how
information sought would be used in proceeding at issue); In re Pasta/is, No. 18 Misc. 497
(JGK), 2018 WL 6725406, at *5 (S.D.N.Y. Dec. 20, 2018) (denying§ 1782 application for
failing to meet "for use" requirement).
B.
Intel Factors
Even ifDNG's petition had met the§ 1782 statutory requirements, the Court would still
deny it, under the discretionary Intel factors, which all either disfavor granting the petition or are
neutral.
1. Participants in the Foreign Proceeding
The first Intel factor inquires whether "the person from whom discovery is sought is a
participant in the foreign proceeding." Intel, 542 U.S. at 264. "A foreign tribunal has
jurisdiction over those appearing before it, and can itself order them to produce the evidence
[sought]." Id. By contrast, "nonparticipants in the foreign proceeding may be outside the
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foreign tribunal's jurisdictional reach; hence, their evidence, available in the United States, may
be unobtainable absent§ l 782(a) aid." Id. Courts thus disfavor§ 1782 petitions that "for all
intents and purposes ... seek[] discovery from ... their opponent in the [foreign] litigation."
Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 85 (2d Cir. 2004).
Such is the case here. In seeking to depose Mulanaphy, an employee of PayPal, DNG,
for all intents and purposes seeks discovery from its opponent in the Singapore litigation.
DNG's counterarguments only lamely resist the point. DNG first argues that "participant"
should be read to refer only to the formal parties named in the foreign proceeding as opposed to
their employees and agents, then that binding precedent on the meaning of "participant" does not
exist, and then that a § 1782 petition can be granted even when the first Intel factor weighs
against the application. DNG Pet. at 11.
DNG's best argument on this element is that PayPal is the parent company of 3PL, and
courts have differentiated between parents and affiliates in evaluating the first Intel factor. See,
e.g., In re Top Matrix Holdings Ltd., No. 18 Misc. 465 (ER), 2020 WL 248716, at *5 (S.D.N.Y.
Jan. 16, 2020). But, here, Mulanaphy, who is a PayPal employee, is demonstrably a
"participant" in the Singapore proceeding-he is to testify as a key fact witness in that
proceeding. See Teo Deel., Ex. I. On the record presented, the evidence sought (pretrial
testimony from Mulanaphy) cannot be said to be "outside the foreign tribunal's jurisdictional
reach" so as to support recourse to§ 1782. Intel, 542 U.S. at 264; see also, e.g., In re
Application of the Coalition to Protect Clifton Bay, No. 14 Misc. 258 (DLC), 2014 WL 5454823,
at *3 (S.D.N.Y. Oct. 28, 2014) (fact that target of§ 1782 petition had agreed in writing to testify
before foreign tribunal weighed against petition on first Intel factor); Associacao dos
Profissionais dos Correios v. BankofN Y. Melon Corp., No. 22 Misc. 132 (RA) (KHP), 2022
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WL 4955312, at *6 (S.D.N.Y. Oct. 4, 2022), appeal dismissed sub nom., No. 22-2865, 2023 WL
3166357 (2d Cir. Mar. 28, 2023) (where petition sought evidence from U.S. parent company of
non-U.S. participant in foreign proceeding, first Intel factor weighed against granting, as the
discovery sought was largely available from participants in foreign proceeding). The first Intel
factor disfavors granting DNG's petition.
2. Receptivity of Singapore to U.S. Courts' Involvement
The second Intel factor considers "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." Intel, 542 U.S. at 264. The Second
Circuit has instructed district courts to "consider only authoritative proof that a foreign tribunal
would reject evidence obtained with the aid of section 1782," including, for example, "a forum
country's judicial, executive, or legislative declarations that specifically address the use of
evidence gathered under foreign procedures." Euromepa S.A. v. R. Esmerian, Inc., 51 F .3d 1095,
1099-100 (2d Cir. I 995).
This factor is neutral. DNG is correct that there is no authoritative proof that the
Singapore High Court would outright reject deposition testimony from Mulanaphy if offered at
trial. But DNG, in addressing this factor, disclaims any plan to seek to offer a deposition of
Mulanaphy into evidence in the Singapore proceeding. See Reply at 6 n.6. And DNG does not
concretely address Singapore's receptiveness to its intended "use" of the deposition, which is to
enhance DNG's pretrial understanding of its adversary's position.
3. End-Run Around Singapore Discovery Procedure
The third Intel factor weighs against DNG's application. It asks "whether the§ 1782(a)
request conceals an attempt to circumvent foreign proof-gathering limits or other polices of a
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foreign country of the United States." Intel, 542 U.S. at 245. Although§ 1782 does not contain
a "foreign-discoverability requirement," Mees, 793 F.3d at 303, the Second Circuit has found
significant the "difference between a§ 1782(a) request that seeks documents that cannot be
obtained in a foreign proceeding because the foreign jurisdiction does not provide a mechanism
for such discovery, and one that seeks documents that cannot be obtained because the foreign
jurisdiction prohibits the discovery of those documents." In re Accent Delight Int'/ Ltd., 791 F.
App'x 247,251 (2d Cir. 2019).
Here, as PayPal has established and DNG has not refuted, the Singapore High Court has
its own distinct procedure for securing a foreign deposition. That procedure does not entitle a
party to such a deposition as a matter of right; instead, these are permitted upon a showing that
the deposition is necessary "as a matter of justice." Teo Deel., Ex. I. Thus, although Singapore
does not appear to prohibit outrightly depositions of this kind, it imposes a standard governing
when such depositions are permitted. DNG's bid to take Mulanaphy's deposition under§ 1782,
which does not embed an analogous standard, is fairly seen as an end-run around the Singapore
High Court's procedure, which DNG has not attempted to satisfy. See, e.g., Aventis Pharma v.
Wyeth, No. 19 Misc. 70 (DAB), 2009 WL 3754191, at *1 (S.D.N.Y. Nov. 9, 2009) (attempt to
obtain through § 1782 what could have been sought in foreign tribunal under a different
procedural standard constituted end-run around those same procedural requirements); Kiobel,
895 F.3d at 245 (third Intel factor weighed against§ 1782 relief where it appeared that petitioner
sought to circumvent Netherlands' more restrictive discovery practices). It is especially fair to
put weight on this standard here, in that both parties to the Singapore litigation are sophisticated
entities who agreed to a forum-selection clause designating the Singapore courts as the site of
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any litigation. See, e.g., Aventis Pharma, 2009 WL 3754191, at *1; In re Alghanim, No. 21
Misc. 167 (LTS), 2022 WL 1423088, at *4 (S.D.N.Y. May 5, 2022) (collecting cases).
Relevant too to this factor, DNG has already received, in writing, the direct testimony of
Mulanaphy's that 3PL will offer at trial. See Dkt. 19. With DNG's having foregone the recourse
provided by Singaporean law to try to obtain his pretrial disposition, DNG's request via§ 1782
to take a U.S.-style deposition of him in the United States to enhance its fund of information
presents as a dubious attempt to get a "second bite at the apple." See, e.g., In re Escallon, 323 F.
Supp. 3d at 560 (third Intel factor weighed against petition when deposition sought through
§ 1782 was of individual who had already provided testimony in the foreign proceeding). In this
regard, it is notable, too, that DNG first made this application close to trial, in November 2023,
with the trial set to begin in February 2024. Depending on how events play out, a U.S.
deposition ofMulanaphy taken on trial's eve, far from supplying the "efficient means of
assistance to the foreign proceedings" that is the goal of§ 1782, would have potential to inject
new and destabilizing issues that could delay or complicate the trial. See, e.g., In re Hulley
Enters., Ltd, 358 F. Supp. 3d 331,351 (S.D.N.Y. 2019), aff'd sub nom. 400 F. Supp. 3d 62
(S.D.N.Y. 2019) ("While delay is not specifically listed as an Intel factor, the Second Circuit has
made clear that a request for assistance under section 1782 that is 'inexcusably untimely' would
not provide an 'efficient means of assistance to the foreign proceedings,' which is one of the
twin aims of the statute." (quoting Nascimento v. Faria, 600 F. App'x 811,812 (2d Cir. 2015)
(summary order)).
For these reasons, the Court finds the third Intel factor to weigh meaningfully against
DNG's petition.
4. Undnly Intrusive or Burdensome
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The fourth and final Intel factor inquires "whether the discovery sought is overbroad or
unduly burdensome," applying "the familiar standards of Rule 26 of the Federal Rules of Civil
Procedure." Mees, 793 F .3d at 302. That factor is either neutral or weighs lightly against
granting the § 1782 petition.
To be sure, DNG requests only a single ordinary-length deposition ofMulanaphy. And
Mulanaphy's account is presumptively relevant to the Singapore trial insofar as he is slated to
testify as a 3PL witness. At the same time, DNG is already assured of the opportunity to take his
trial testimony. And it forewent the opportunity under Singapore law to seek to justify taking, on
an orderly schedule, his pretrial deposition. In this context, there is a needlessly burdensome
quality to DNG's 11th-hour bid via§ 1782 to depose Mulanaphy following its receipt of his trial
testimony. See, e.g., Ying Kuang v. Genzyme Genetics Corp., No. 11 Civ. 06346 (AJN), 2012
WL 13059497, at *2 (S.D.N.Y. Nov. 28, 2012) (declining to allow belated attempts to depose
witnesses); US. Sec. & Exch. Comm'n v. Collector's Coffee Inc., 338 F.R.D. 309, 317-18
(S.D.N.Y. 2021) (delayed attempts to schedule deposition weighed against finding under Rule
26(b)( 1) that such discovery was "proportionate to the needs of the case").
***
The Court thus finds that none of the Intel factors favor the petition and several weigh
against it. Were the statutory factors met, the Court therefore would nonetheless exercise its
discretion to deny the § 1782 petition.
CONCLUSION
For the foregoing reasons, the Court denies DNG's petition. The Clerk of Court is
respectfully directed to terminate the petition pending at Docket 1 and to close this case.
SO ORDERED.
United States District Judge
Dated: January 11, 2024
New York, New York
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