United States District Court, D. Connecticut
In re Application of LUIS JAVIER MARTINEZ SAMPEDRO for an Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding
RULING ON RESPONDENTS' MOTIONS TO QUASH AND
PETITIONER'S MOTION TO COMPEL
BOND ARTERTON, U.S.D.J.
April 20, 2018, Petitioner Luis Javier Martinez Sampedro
filed an ex parte application for leave to conduct
discovery for use in connection with a proceeding pending in
the Madrid Commercial Court No. 4 pursuant to 28 U.S.C.
§ 1782. (Pet's App. [Doc. # 1] at 1.) The Court
granted that ex parte Application, finding that Mr.
Sampedro had met the requirements of Section 1782. (Order
Granting Application [Doc. # 10] at 1.) Respondents
Contrarian Capital Management, LLC, Silver Point Capital,
L.P., and David Reganato ("the Fund Respondents")
and Respondent Norman Raul Sorensen Valdez moved separately
to quash the resulting subpoenas served by Petitioner.
(Funds' Mot. to Quash [Doc. # 23] at 1; Sorensen's
Mot. to Quash [Doc. # 29] at 1.) Petitioner then moved to
compel compliance by all Respondents with the served
subpoenas. (Mot. to Compel [Doc. # 32] at 1.) For the
following reasons, the Fund Respondents' and Mr.
Sorensen's Motions to Quash all subpoenaed discovery are
DENIED in part and GRANTED in part, and Petitioner's
Motion to Compel is DENIED without prejudice.
Luis Javier Martinez Sampedro and his brother Jose Antonio
Martinez Sampedro were previously the Vice Chairman and
Chairman of the Board of and are currently shareholders of
Codere, a Spanish Company. (Pet.'s App. at 2.)
Respondents Contrarian and Silver Point ("the
Funds") are both Codere shareholders. (Id. at
3.) Respondent Reganato is a member of Codere's Board of
Directors, appointed by Silver Point. (Id. at 4.)
Respondent Sorensen is also a member of Codere's Board of
Directors but was not appointed by the Sampedro brothers or
by the Funds. (Id.)
is presently engaged in both litigation in the Commercial
Court of Madrid, Spain (the "Spanish Litigation")
and arbitration through the International Chamber of Commerce
(the "ICC Arbitration") related to his and his
brother's statuses at Codere. (Mem. Supp. Funds' Mot.
to Quash [Doc. # 23-1] at 4-7.) Codere is the named
respondent in the Spanish Litigation. (Ex. 1 (Spanish
Complaint) to Decl. of Mercedes Fernandez [Doc. # 24-1] at
1.) All four Respondents in this action (Contrarian, Silver
Point, Reganato, and Sorensen) are among the named
respondents in the ICC Arbitration. (Ex. 3 (ICC Req. for
Arb.) to Fernandez Decl. [Doc. # 24-3] at 1.)
Fund Respondents characterize the focus of the Spanish
Litigation and the ICC Arbitration as "a discrete set of
events" which occurred at meetings on December 1, 2017
and January 12, 2018. (Funds' Mem. at 16.) Petitioner
characterizes the focus of those proceedings as including
both those meetings as well as "a longer and illegal
scheme to take control of Codere" which occurred in the
time period leading up to those meetings. (Pet.'s Mem.
[Doc. # 42] at 17.) The general question at issue in those
proceedings is the validity of the Board's removal of the
Sampedro brothers from their leadership positions at Codere.
(Pet.'s App. at 6. Funds' Mem. at 5-8.)
seeks discovery from the Respondents, all of whom are
Connecticut residents, for use in the Spanish Litigation.
(Pet. App. at 1, 3-4.)
U.S.C. § 1782 authorizes district courts to order
discovery from those within the court's jurisdiction
"for use in a proceeding in a foreign or international
tribunal... upon the application of any interested
person." District courts have broad discretion in
ordering discovery under Section 1782 but must consider its
policy goals: "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." Application of Malev Hungarian
Airlines, 964 F.2d 97, 100 (2d Cir. 1992).
must also consider several other factors, including 1)
whether "the person from whom discovery is sought is a
participant in the foreign proceeding," 2) the
"receptivity of the foreign government or the court or
agency abroad to U.S. federal-court judicial
assistance," 3) whether the application "conceals
an attempt to circumvent foreign proof-gathering restrictions
or other policies," and 4) whether the discovery request
is "unduly intrusive or burdensome." Intel
Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241,
264-265 (2004). The parties disagree about the proper
interpretation of the Intel factors and their
application to Petitioner's request for discovery.
Whether Respondents are participants in the foreign
respondents in a Section 1782 action are also
"participant[s] in the foreign proceeding," then
the need for U.S.-based discovery is "not as apparent as
it ordinarily is when evidence is sought from a
nonparticipant in the matter arising abroad."
Intel, 542 U.S. at 264. The parties debate both what
"foreign proceeding" should be considered and what
being a "participant" entails.
argues that the Spanish Litigation is the relevant
"foreign proceeding," because that is the
proceeding for which he has requested discovery from this
Court, regardless of whether he also intends to use any
discovery he obtains under Section 1782 in the ICC
Arbitration. (See Pet.'s Mem. at 2, 21.)
Respondents argue that both the Spanish Litigation and the
ICC Arbitration should be considered, suggesting that
Petitioner's application for discovery for use in the