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' OBJECTION TO RULING ON
MOTION TO COMPEL RECIPROCAL DISCOVERY
JANET
BOND ARTERTON, U.S.D.J.
The
Respondents object to Magistrate Judge Spector's Ruling
denying Respondents' Motion to Compel Reciprocal
Discovery [Doc. # 84], seeking this Court's review of
that order. For the reasons that follow, the Respondents'
Objections [Doc. ## 91, 92] to that ruling are overruled.
I.
Background
The
Court assumes the parties' familiarity with the
underlying discovery disputes in this case. After finding
that Petitioner is entitled to some discovery from the
Respondents under 28 U.S.C. § 1782, (Ruling on
Resps.' Mot. to Quash and Pet.'s Mot. to Compel [Doc.
# 55]), this Court referred several discovery motions,
including the Respondents' Motion to Compel Reciprocal
Discovery [Doc. # 61], to Magistrate Judge Spector [Doc. #
68]. Judge Spector denied the Respondents' Motion for
Reciprocal Discovery, holding that although courts have
authority to order reciprocal discovery in § 1782 cases,
no such order is warranted in this case. (See Ruling
on Resps.' Mot. to Compel (“the Ruling”).)
The Fund Respondents object to Judge Spector's ruling,
and Respondent Sorensen joins that objection.
II.
Discussion
A.
Legal Standard and Standard of Review
In
granting a request for discovery under § 1782, courts
have broad discretion in deciding whether to also grant
reciprocal discovery. See Intel Corp. v. Advanced Micro
Devices, Inc., 542 U.S. 241, 262 (2004) (“When
information is sought by an ‘interested person,' a
district court could condition relief upon that
person's reciprocal exchange of information.”
(emphasis added)); Euromepa S.A. v. R. Esmerian,
Inc., 51 F.3d 1095, 1102 (2d Cir. 1995) (“if the
district court wished to insure procedural parity . . . it
could have conditioned relief upon the parties'
reciprocal exchange of information”); In re
Esses, 101 F.3d 873, 876 (2d Cir. 1996) (“Section
1782 grants district courts wide discretion to determine
whether to grant discovery and equally wide discretion to
tailor such discovery to attendant problems.”).
“Substantively, so long as the district court fashions
its order in accordance with the ‘twin aims' of
§ 1782, ‘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,' . . .
it acts within its discretion.” In re Esses,
101 F.3d 873 (quoting In re Malev Hungarian
Airlines, 964 F.2d 97, 100 (2d Cir. 1992)).
A
district court may modify or set aside a magistrate
judge's decision on “[n]ondispositive
[m]atters” only if “clearly erroneous or contrary
to law.” Fed.R.Civ.P. 72(a). Under that standard, the
reviewing court may not modify the magistrate judge's
decision “simply because we would have decided the case
differently” and instead “must ask whether, on
the entire evidence, it is left with the definite and firm
conviction that a mistake has been committed.”
Easley v. Cromartie, 532 U.S. 234, 242 (2001)
(internal quotations omitted). “Matters concerning
discovery generally are considered ‘nondispositive'
of the litigation.” Thomas E. Hoar, Inc. v. Sara
Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990). Thus
decisions of magistrate judges under § 1782 are
generally reviewed by district courts under the clearly
erroneous standard. See, e.g. In re XPO Logistics,
Inc., 2017 WL 6343689 (S.D.N.Y. 2017) (reviewing for
clear error the magistrate judge's decision to grant in
part petitioner's request for discovery under §
1782).
B.
Magistrate Judge Spector's Ruling Denying
Respondents' Motion to Compel
Judge
Spector's denial of the Respondents' Motion to Compel
acknowledged that courts have authority to grant reciprocal
discovery under § 1782 but are not required to do so,
with the question left to the discretion of the courts. The
ruling cited cases from district courts in this circuit
which, in deciding whether to grant reciprocal discovery
under § 1782, considered factors like the
respondent's ability to procure discovery abroad, whether
the respondent is a party to the foreign proceeding and,
relatedly, whether a respondent who is not a party to the
foreign proceeding has any purpose for requesting reciprocal
discovery. (Ruling at 4.)
The
Ruling also addressed the Respondents' argument that they
have a “substantial interest” in the foreign
proceedings and have tailored their request for reciprocal
discovery to “obtain evidence critical to the foreign
proceedings.” (Id.) Judge Spector found that
because the “Respondents are not parties to the Spanish
Litigation and, therefore, cannot request discovery or submit
evidence in that proceeding, ” it is therefore
“not clear how Respondents would use the reciprocal
discovery even if the Court granted the request.”
(Id.) The Ruling also declined to consider the
Respondents' possible uses of the requested reciprocal
discovery in the ICC Arbitration because that foreign
proceeding is not the one for which the underlying §
1782 discovery was granted, citing this Court's earlier
Ruling on the Respondents' Motion to Quash and the
Petitioner's Motion to Compel. (Id.)
Respondents
argue that Judge Spector's Ruling “erred in
refusing to grant reciprocal discovery” and should
therefore be modified by this Court. (Resps.' Mot. at 6.)
The Respondents acknowledge that a grant of reciprocal
discovery is discretionary, not mandatory, (see
id.), but argue that Judge Spector's decision not to
grant such discovery was nonetheless in error. The
Respondents argue that the Ruling erred by (i) ignoring the
ICC arbitration in finding that the only foreign proceeding
at issue is the Spanish Litigation; (ii) failing to consider
whether the Respondents have a “substantial
interest” in the foreign proceedings and instead
considering only whether they are
“formally-named” parties; and (iii) failing to
consider the standards for reciprocal discovery set forth in
Consorcio Minero, S.A. v. Renco Grp. Inc., 2012 WL
1059916 (S.D.N.Y 2012). (See Resps.' Mot. at
6-10.) Petitioner argues that those questions were
“committed to [Magistrate Judge Spector's]
discretion” and that Respondents have failed to show
that the Ruling contained any error at all, let alone the
sort of clear error “that would justify a
reversal” of a magistrate judge's decision on a
discovery matter. (Pet.'s Opp. to Resps.' Obj. [Doc.
# 96] at 6.)
In
support of their contention that the Ruling erred in holding
that the only foreign proceeding at issue is the Spanish
Litigation, the Respondents claim that “[r]eciprocal
discovery is meant to ensure procedural ‘parity'
for all foreign parties and in all relevant
foreign litigation.” (Resps.' Mot. at 7 (emphasis
in original).) Respondents argue that because this Court
declined to issue a protective order prohibiting Petitioner
from using any discovery obtained through § 1782 in the
ICC arbitration, (Ruling on Resps.' Mot. to Quash and
Pet.'s Mot. to Compel at 11-12), there will be no
“procedural parity” if they are not granted
reciprocal discovery for use in that arbitration.
(Id. at 7-8.) However, the Respondents cite only
Consorcio Minero in support of this argument,
offering no other authority for their assertion that
“parity” is required “for all foreign
parties and in all relevant foreign litigation.” In
light of the broad discretion granted to courts on this
question and the other district court cases cited in the
Ruling which suggest that the Respondents are not entitled to
reciprocal discovery, that Magistrate Judge Spector did not
reach the same outcome as the court in Consorcio
Minero was not clear error.
In
support of their contention that the Ruling “erred by
failing to even address” whether Respondents have a
“substantial interest” in the foreign proceedings
and finding that “it is not clear how Respondents would
use the reciprocal discovery” because they are
non-parties to the Spanish Litigation, the Respondents again
cite only Consorcio Minero. (See
Resps.' Mot. at 8.) Respondents argue that under that
case, the “correct inquiry is not whether Respondents
are formally-named ‘parties' in the Spanish
Litigation, but instead whether they have a
“substantial interest in each of the [foreign]
actions” and whether both proceedings “arise out
of the same set of facts.” (Resps.' Mot. at 8
(quoting Consorcio Minero, 2012 WL 1059916 at *4)
(alteration in original).) In contrast, the Ruling cites
cases which rely more heavily on whether a respondent
requesting reciprocal discovery is “a party to the
underlying litigation.” (Ruling at 4 (citing, inter
alia, Deposit Ins. Agency v. Leontiev, 2018 WL 3536083,
at *11 (S.D.N.Y. 2018)).) Again, in light of the broad
discretion granted ...