IN RE EX PARTE APPLICATION OF VICKERS HOLDING & FINANCE INC.

Case No. 17-mc-80028-LB.

IN RE EX PARTE APPLICATION OF VICKERS HOLDING & FINANCE INC. FOR AN ORDER TO OBTAIN DISCOVERY FOR USE IN A FOREIGN PROCEEDING.

United States District Court, N.D. California, San Francisco Division.

Editors Note
Applicable Law: 28 U.S.C. § 1331
Cause: 28 U.S.C. § 1331 Fed. Question
Nature of Suit: 890 Other Statutory Actions
Source: PACER


Attorney(s) appearing for the Case

Vickers Holding & Finance Inc., Plaintiff, represented by Oleg Stolyar , Akin Gump Strauss Hauer and Feld LLP.

Vickers Holding & Finance Inc., Plaintiff, represented by Mariya Yaralova Hutson , Akin Gump Strauss Hauer and Feld LLP.


ORDER GRANTING PETITIONER'S APPLICATION FOR AN ORDER TO CONDUCT DISCOVERY FOR USE IN A FOREIGN LEGAL PROCEEDING PURSUANT TO 28 U.S.C. § 1782

Re: ECF No. 1

LAUREL BEELER, Magistrate Judge.

INTRODUCTION

Vickers Holding filed an ex parte application under 28 U.S.C. § 1782 to take discovery for its pending lawsuit in the Netherlands against the defendants there, Jossiv Kim and Angelina Kim, who allegedly defrauded Vickers of 2 million euros.1 Section 1782 allows a district court to order a person residing or found within its district to produce documents or provide testimony for use in a foreign legal proceeding, unless the disclosure would violate a legal privilege. The court grants the application.

STATEMENT

Vickers' lawsuit in the Netherlands seeks recovery of approximately 2 million euros that Vickers lent Mr. Kim for a joint venture; the claim is that Mr. Kim diverted the money for personal use, including use by family members such as his wife, Angelina Kim.2 The evidence reveals that Ms. Kim has a Wells Fargo bank account.3 Mr. Kim founded two companies in California, one called AHK & West Appliances, and one called US DUO Design, Inc.; the allegation is that both have Wells Fargo accounts, too, and that stolen money may have been transferred to them.4

Vickers' counsel in the Netherlands is B.G. Baljet.5 He describes entities affiliated with the defendants, coconspirators who diverted and transferred the proceeds, and family members and others who may have received money.6 These are the persons and entities listed in the proposed subpoena, which seeks wire transfers and other information relating to account deposits and withdrawals within specified time periods relevant to the diversion of the funds.7

GOVERNING LAW

28 U.S.C. § 1782(a) provides:

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 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.

A litigant in a foreign action qualifies as an "interested person" under § 1782. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 256 (2004). In order to apply for discovery pursuant to § 1782, a formal proceeding in the foreign jurisdiction need not be currently pending, or even imminent. Id. at 258-59. Instead, all that is necessary is that a "dispositive ruling" by the foreign adjudicative body is "within reasonable contemplation." Id. at 259 (holding that discovery was proper under § 1782 even though the applicant's complaint against the opposing party was only in the investigative stage). An ex parte application is an acceptable method for seeking discovery pursuant to § 1782. See In re Letters Rogatory from Tokyo Dist., Tokyo, Japan, 539 F.2d 1216, 1219 (9th Cir. 1976) (holding that the subpoenaed parties may raise objections and exercise their due-process rights by moving to quash the subpoenas).

A district court has wide discretion to grant or deny discovery under § 1782. Intel, 542 U.S. at 260-61. In exercising its discretion, a district court should consider the following factors: (1) whether the "person from whom discovery is sought is a participant in the foreign proceeding"; (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"; (3) whether the request "conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States"; and (4) whether the request is "unduly intrusive or burdensome." Id. at 264-65.

A district court's discretion is to be exercised in view of the twin aims of § 1782: "providing efficient means of assistance to participants in international litigation . . . and encouraging foreign countries by example to provide similar means of assistance to our courts." Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 84 (2004). There is no requirement that the party seeking discovery establish that the information sought would be discoverable under the governing law in the foreign proceeding or that United States law would allow discovery in an analogous domestic proceeding. See Intel, 542 U.S. at 247, 261-63.

ANALYSIS

The court grants the discovery.

1. Statutory Requirements

The application satisfies the statutory requirements of § 1782. Wells Fargo is in the Northern District of California; the discovery sought is "for use" in the Netherlands lawsuit; and Vickers is an "interested person" in those proceedings.

2. Intel Factors

The discretionary Intel factors also support granting the application.

2.1 First Intel Factor: Participant in a Foreign Proceeding.

The first Intel factor asks whether the "person from whom discovery sought is a participant in the foreign proceeding." 542 U.S. at 264. If the person is a participant, "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" because "[a] foreign tribunal has jurisdiction over those appearing before it, and can itself order them to produce evidence." Id. "In contrast, nonparticipants in the foreign proceeding may be outside the foreign tribunal's jurisdictional reach; hence, their evidence, unavailable in the United States, may be unobtainable absent § 1782(a) aid." Id.

Wells Fargo is not a participant. This factor weighs in favor of granting the application.

2.2 Second Intel Factor: The Foreign Proceedings

The second Intel factor requires the court to "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." 542 U.S. at 264.

In Intel, the Court "question[ed] whether foreign governments would be offended by a domestic prescription permitting, but not requiring, judicial assistance." Id. at 243-44.

A foreign nation may limit discovery within its domain for reasons peculiar to its own legal practices, culture, or traditions; such reasons do not necessarily signal objection to aid from United States federal courts. A foreign tribunal's reluctance to order production of materials present in the United States similarly may signal no resistance to the receipt of evidence gathered pursuant to § 1782(a).

Id. at 244.

There is no information that the Netherlands court would reject information obtained through § 1782 discovery; in this situation, courts "err on the side of permitting discovery." See In re Varian Med. Sys. Int'l AG, No. 16-mc-80048-MEJ, 2016 WL 1161568, at *4 (N.D. Cal. Mar. 24, 2016).

2.3 Third Intel Factor: Evasion of Foreign Proof-Gathering Restrictions

The third Intel factor considers whether the request "conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States." 542 U.S. at 264-65. There is no evidence of this on this record.

2.4 Fourth Intel Factor: The Discovery Is Not Unduly Burdensome

The fourth Intel factor is whether the request is "unduly intrusive or burdensome." 542 U.S. at 265. At least conceptually, it is not, because it is direct evidence of diversion of funds that are the subject of the Netherlands case. After Vickers serves the discovery, it must confer with Wells Fargo's counsel to address burden issues and must comply with the procedures for resolving discovery disputes in the undersigned's standing order, which is attached.

CONCLUSION

The court grants the application for discovery. Vickers may serve the subpoena with a return date of 30 days from the date of service.

IT IS SO ORDERED.

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SANFAANCISCO DIVISION

STANDING ORDER FOR UNITED STATES MAGISTRATE JUDGE LAUREL BEELER (Effective March 15, 2017)

Parties must comply with the procedures in the Federal Rules of Civil and Criminal Procedure, the local rules, the general orders, this standing order, and the Northern District's general standing order for civil cases titled "Contents of Joint Case Management Statement." These rules and a summary of electronic filing requirements (including the procedures for emailing proposed orders to chambers) are available at http://www.cand.uscourts.gov (click "Rules" or "ECF-PACER"). A failure to comply with any of the rules may be a ground for monetary sanctions, dismissal, entry of judgment, or other appropriate sanctions.

I. CALENDAR DATES AND SCHEDULING

Motions are heard each Thursday: civil motions at 9:30 a.m. and criminal motions at 10:30 a.m. Case-management conferences are every Thursday: criminal cases at 10:30 a.m. and civil cases at 11:00 a.m. Parties must notice motions under the local rules and need not reserve a hearing date in advance if the date is available on the court's calendar (click "Calendars" at http://www.cand.uscourts.gov). Depending on its schedule, the court may reset or vacate hearings. Please call courtroom deputy Roger Moua at (415) 522-3140 with scheduling questions.

II. CHAMBERS COPIES

Under Civil Local Rule 5-1(b), parties must lodge a paper "Chambers" copy of any filing unless another format makes more sense (such as for spreadsheets, pictures, or exhibits that might be better lodged electronically). Paper copies must be printed on both sides and three-hole punched, and they must be the electronically filed copies with the PACER/ECF-generated header (with the case number, docket number, date, and ECF page number). Parties do not need to submit copies of certificates of service, certificates of interested entities or persons, consents or declinations to the court's jurisdiction, stipulations that do not require a court order (see Civil Local Rule 6-1), and notices of appearance or substitution of counsel. Please read Civil Local Rule 79-5 carefully regarding the requirements for filing documents under seal and providing copies.

III. CIVIL DISCOVERY

1. Evidence Preservation. After a party has notice of this order, it must take the steps needed to preserve information relevant to the issues in this action, including suspending any document destruction programs (including destruction programs for electronically-maintained material).

2. Production of Documents In Original Form. When searching for material under Federal Rule of Civil Procedure 26(a)(1) or after a Federal Rule of Civil Procedure 34(a) request, parties (a) must search all locations — electronic and otherwise — where responsive materials might plausibly exist, and (b) to the maximum extent feasible, produce or make available for copying and/or inspection the materials in their original form, sequence, and organization (including, for example, file folders).

3. Privilege Logs. If a party withholds material as privileged, See Fed. R. Civ. P. 26(b)(5) and 45(d)(2)(A), it must produce a privilege log that is sufficiently detailed for the opposing party to assess whether the assertion of privilege is justified. The log must be produced as quickly as possible but no later than fourteen days after its disclosures or discovery responses are due unless the parties stipulate to, or the court sets, another date. Unless the parties agree to a different logging method, privilege logs must contain the following: (a) the title and description of the document, the number of pages, and the Bates-number range; (b) the subject matter or general nature of the document (without disclosing its contents); (c) the identity and position of its author; (d) the date it was communicated (or prepared, if that is the more relevant date); (e) the identity and position of all addressees and recipients of the communication; (f) the document's present location; (g) the specific basis for the assertion that the document is privileged or protection (including a brief summary of any supporting facts); and (h) the steps taken to ensure the confidentiality of the communication, including an affirmation that no unauthorized persons received the communication.

4. Expedited Procedures for Discovery Disputes. The parties may not file formal discovery motions. Instead, and as required by the federal rules and local rules, the parties must meet and confer to try to resolve their disagreements. See Fed. R. Civ. P. 37(a)(1); Civil L. R. 37-1. Counsel may confer initially by email, letter, or telephone to try to narrow their disputes. After trying those means, lead trial counsel then must meet and confer in person to try to resolve the dispute. (If counsel are located outside of the Bay Area and cannot confer in person, lead counsel may meet and confer by telephone.) Either party may demand such a meeting with ten days' notice. If the parties cannot agree on the location, the location for meetings will alternate. The plaintiff's counsel will select the first location, defense counsel will select the second location, and so forth. If the parties do not resolve their disagreements through this procedure, lead counsel must file a joint letter brief no later than five days after lead counsels' in-person meet-and-confer. The letter brief must be filed under the Civil Events category of "Motions and Related Filings > Motions — General > Discovery Letter Brief." It may be no more than five pages (12-point font or greater, margins of no less than one inch) without leave of the court. Lead counsel for both parties must sign the letter and attest that they met and conferred in person. Each issue must be set forth in a separate section that includes 1) a statement of the unresolved issue, 2) a summary of each parties' position (with citations to supporting facts and legal authority), and 3) each party's final proposed compromise. (This process allows a side-by-side, stand-alone analysis of each disputed issue.) If the disagreement concerns specific discovery that a party has propounded, such as interrogatories, requests for production of documents, or answers or objections to such discovery, the parties must reproduce the question/request and the response in full either in the letter or, if the page limits in the letter are not sufficient, in a single joint exhibit. The court then will review the letter brief and determine whether formal briefing or future proceedings are necessary. In emergencies during discovery events such as depositions, the parties may contact the court through the court's courtroom deputy pursuant to Civil Local Rule 37-1(b) but first must send a short joint email describing the nature of the dispute to lbpo@cand.uscourts.gov.

IV. CONSENT CASES

1. In cases that are assigned to Judge Beeler for all purposes, the parties must file their written consent or declination of consent to the assignment of a United States Magistrate Judge for all purposes as soon as possible. If a party files a dispositive motion (such as a motion to dismiss or a motion for remand), the moving party must file the consent or declination simultaneously with the motion, and the party opposing the motion must file the consent or declination simultaneously with the opposition.

2. The first joint case-management conference statement in a case must contain all of the information in the Northern District's standing order titled "Contents of Joint Case Management Statement." Subsequent statements for further case-management conferences must not repeat information contained in an earlier statement and instead should report only progress or changes since the last case-management conference and any new recommendations for case management.

V. SUMMARY-JUDGMENT MOTIONS

The parties may not file separate statements of undisputed facts. See Civil L. R. 56-2. Joint statements of undisputed facts are not required but are helpful. Any joint statement must include — for each undisputed fact — citations to admissible evidence. A joint statement generally must be filed with the opening brief, and the briefs should cite to that statement. A reasonable process for drafting a joint statement is as follows: 1) two weeks before the filing date, the moving party proposes its undisputed facts, and 2) one week later, the responding party replies and the parties meet and confer about any disagreements. For oppositions, a responding party may propose additional undisputed facts to the moving party within seven days after the motion is filed and ask for a response within two business days.

IT IS SO ORDERED.

FootNotes


1. Application — ECF No. 1. Citations refer to material in the Electronic Case File ("ECF"); pinpoint citations are to the ECF-generated page numbers at the top of documents.
2. Baljet Decl. — ECF No. 2-1, ¶¶ 14, 21, 25-32.
3. Id. ¶ 38.
4. Id. ¶¶ 19-20, 38.
5. Id. ¶ 1.
6. Id. ¶¶ 8-19
7. Subpoena — ECF No. 1-2.

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