General Electric Company v Ingeteam Inc

Filing 12

ORDER signed by Judge Rudolph T Randa on 08/16/2011 granting 1 Motion to Compel. (cc: all counsel) (Koll, J)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

IN RE SUBPOENA DUCES TECUM TO
INGETEAM, Inc.,
Case No. 11-MISC-36

DECISION AND ORDER

General Electric Company (“GE”) moves to enforce a subpoena it served on
Ingeteam, Inc. (“Ingeteam USA”) in connection with a patent infringement lawsuit in the
Northern District of Texas.

In the Texas lawsuit, GE alleges that certain models of

Mitsubishi wind turbines infringe upon a GE patent. GE seeks documents from Ingeteam
USA which relate to certain components in those wind turbines. Ingeteam USA claims that
the subpoenaed documents are in the possession of its parent corporation, Ingeteam Spain.
Rule 45 permits a party to subpoena documents that are in a third party’s “possession,
custody, or control.” Fed. R. Civ. P. 45(a)(1)(A)(iii). In deciding whether a subsidiary has
“control” over documents held by its foreign parent corporation, courts focus on the
closeness of the relationship between the entities. Flavel v. Svedala Indus., Inc., 1993 WL
580831, *4 (E.D. Wis. 1993) (citing Afros S.P.A. v. Krauss-Maffei Corp., 113 F.R.D. 127,
129 (D. Del. 1986); In re Uranium Antitrust Lit., 480 F. Supp. 1138, 1145-53 (N.D. Ill.
1979)); Appleton Papers, Inc. v. Whiting Paper Co., No. 08-C-16, 2009 WL 2408898, *2
(E.D. Wis. July 31, 2009). Specifically, courts examine a variety of factors, including (1) the
parent’s ownership share in the subsidiary or affiliated corporation, (2) whether the

corporations have interlocking management structures, (3) the degree of control exercised
by the foreign parent over the subsidiary’s directors, officers, and employees, (4) the foreign
parent’s connection to the transaction at issue, and (5) whether the foreign parent refusing
production will receive a benefit from the litigation. Afros, 113 F.R.D. at 130-32. Thus, in
the context of either Rule 34 (production of documents by party to litigation) or Rule 45
(production of documents by third-parties to litigation), relevant documents cannot be hidden
by a parent corporation overseas, even though the court does not have personal jurisdiction
over the foreign parent.1
Ingeteam USA is a wholly-owned subsidiary of Ingeteam Spain. GE’s subpoena
requests materials that describe the design and operation of the source code in Ingeteam’s
Control Converter Units and any documents relating to the use of Ingeteam’s components
to implement a zero voltage ride through feature in Mitsubishi’s wind turbines. Ingeteam
USA services, tests, and maintains these units in the United States. The converter units are
manufactured overseas by Ingeteam Spain, but there are plans for Ingeteam USA to begin
manufacturing the units in America. In marketing its wind turbine components, Ingeteam
Spain advertises Milwaukee as an “international presence.” Ingeteam USA and Ingeteam
Spain clearly collaborate on the transaction at issue – the manufacture, testing, support and
maintenance of its control system components. It would be impossible for Ingeteam USA
to service and eventually manufacture the components without access to the documents

1

Rule 34 and Rule 45 both include the phrase “possession, custody, or control.” The Federal Rules of Civil
Procedure are read in pari materia, so cases implicating either rule are relevant to the Court’s disposition. Yousuf v.
Samantar, 451 F.3d 248, 256 (D.C. Cir. 2006); Addamax Corp. v. Open Software Found., Inc., 148 F.R.D. 462, 468 (D.
Mass. 1993).

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requested by the subpoena. Finally, both Ingeteam corporations benefit from withholding
documents in connection with the Texas litigation. An injunction against Mitsubishi would
reduce the number of wind turbine components Mitsubishi might purchase from Ingeteam.
“If a non-party will directly receive the benefit of an award, then it is unjust that it can
frustrate the discovery process and the complete resolution of the issues by refusing to
furnish documents in its possession.” Afros at 131.
Ingeteam USA argues that the foregoing caselaw was superceded by the following
language in Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1427 (7th Cir. 1993): “the
fact that a party could obtain a document if it tried hard enough and maybe if it didn’t try
hard at all does not mean that the document is in its possession, custody, or control; in fact
it means the opposite.” However, Chaveriat did not deal with control in the context of an
interrelated corporate structure. Indeed, the relevant parties in Chaveriat had no legal
relationship whatsoever. The court merely observed that the plaintiffs “could no doubt have
asked NET to give it the [documents]; judging from what happened later, NET would have
complied.” Id. at 1426. Therefore, Chaveriat does not alter the general rule that a subsidiary
“need only be able to obtain the documents in question to ‘control’ them, and need not
‘control’ the parent that possesses the documents.” In re Subpoena to Huawei Tech. Co.,
Ltd., 720 F. Supp. 2d 969 (N.D. Ill. 2010).

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NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT GE’s motion to compel [D. 1] is GRANTED.
Dated at Milwaukee, Wisconsin, this 16th day of August, 2011.
BY THE COURT:

s/ Rudolph T. Randa
HON. RUDOLPH T. RANDA
U.S. District Judge

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