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In re Application of Sampedro

United States District Court, D. Connecticut

October 30, 2018

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



         On 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.

         I. Background

         Petitioner 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.)

         Petitioner 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.)

         The 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.)

         Petitioner seeks discovery from the Respondents, all of whom are Connecticut residents, for use in the Spanish Litigation. (Pet. App. at 1, 3-4.)

         II. Discussion

         28 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).

         Courts 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.

         A. Intel Factors

         1. Whether Respondents are participants in the foreign proceeding(s)

         If the 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.

         Petitioner 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 Spanish ...

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