Tag Archives | 1782

Case of the Day: In re Application of HydroDrive Nigeria

The case of the day is In re Application of HydroDrive Nigeria, Ltd. (S.D. Tex. 2013). HydroDrive applied for issuance of a subpoena to Cal Dive International, a Texas firm, for use in two Nigerian proceedings: a defamation claim HydroDrive had brought against Saipem S.A. and Saipem Contracting Nigeria, Ltd., in the High Court in Lagos, and an investigation before the Nigerian Content Development and Monitoring Board. The decision is interesting because, unlike most § 1782 decisions, it turns to a large extent on the statutory prerequisites for the application of § 1782 rather than the discretionary Intel factors.

First and perhaps most interestingly, the judge rejected Cal Dive’s argument that the statute applied only if the documents sought are in the United States. The statute does not explicitly require this, and the judge took what I think is the sensible view that all that is required is that the person to whom the subpoena is to be directed must “reside or be found” in the United States, as the statute does expressly requires. A subpoena is a command directed to a person, not to the documents. But this point is disputed: in my post on In re Veiga, I noted the split of authority.

The parties argued about whether the NCDMB, a “body established to implement and ensure compliance with the Nigerian Oil and Gas Industry Content Development Act,” was a “tribunal” for purposes of the statute. The NCDMB conducts closed-door investigations that may lead to the filing of a lawsuit in court, and in such a case, the court would then make dispositive rulings about compliance or noncompliance with the Act. The judge read Intel to permit judicial assistance to any tribunal whose decisions could lead to a dispositive ruling. In other words, it’s not necessary that the tribunal itself be empowered to make dispositive rulings. This seems correct insofar as the statute plainly permits a subpoena in a case that is still in the investigative stages, i.e., that is not yet before any tribunal.

Cal Dive argued that the evidence sought was not “for use” in either of the Nigerian proceedings, since it was irrelevant to both. The judge first rejected the notion that “for use” was to be defined narrowly, with reference to admissibility. But he then went on to explain the potential relevance of the documents anyway—an explanation I will not repeat.

The judge undertook a brief and not particularly novel discussion of the discretionary factors, which here included a protective order suitable to protect what Cal Dive asserted was its interest in the confidential and proprietary nature of the documents.

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Paper of the Day: S.I. Strong on the Applicability of Section 1782 to International Arbitration

S.I. Strong has posted a new and highly recommended paper on SSRN titled Discovery Under 28 U.S.C. § 1782: Distinguishing International Commercial Arbitration and International Investment Arbitration. The paper is to be published in the forthcoming issue of the Stanford Journal on Complex Litigation.

I had been working on a full review of the paper, but unfortunately my day job has gotten in the way of getting the review done in a timely way. But I do want to do my part to call attention to Professor Strong’s important contribution, so please go read it!

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Case of the Day: In re Application of Pott

The case of the day is In re Application of Pott (W.D. Wash. 2013). Pott was an Argentine businessman in the seafood business. He was the co-founder of Bentinicos de Argentina, a seafood company in Argentina, and he sold it to World Capital Properties, Ltd., a Florida firm, in order to get capital needed to keep the business afloat. Pott claimed that World Capital had defrauded him “by effectuating a sham sale of BDA to a newly created entity,” Acqua Holdings, LLC, “in order to deny him contractually obligated payments, profit sharing, and a commission on the sale.”

In 2011, Pott brought a criminal claim against World Capital and BDA in Argentina. The Argentine court dismissed the claim, and its decision was affirmed on appeal. Pott intended to pursue further appeals in the criminal case. Pott applied for issuance of a subpoena to Icicle Seafoods, Inc. under 28 U.S.C. § 1782. The judge granted the application, and Icicle objected to the subpoena. Potts moved to compel. BDA sought leave to intervene in order to move to quash the subpoena; the judge permitted BDA to intervene, and BDA made a motion to quash.

BDA’s argument was that the application under § 1782 had been improvidently granted because Pott was not seeking discovery “for use in a foreign proceeding.” BDA claimed that Pott had already exhausted his appellate rights in Argentina; but the judge found that Pott had a narrow window of opportunity left to appeal further, and that even if there was only a small chance that the Argentine Supreme Court would accept his appeal, that improbability was not enough to show that the criminal case was over. Therefore, the judge found that the discovery was “for use in” the Argentine proceeding.

In the remainder of the decision, the judge weighed the Intel factors. The factors favored Pott, and the judge therefore denied the motion to quash. Points of particular note: neither party was able to do more than speculate about whether the Argentine courts would be receptive to evidence gathered in the US; BDA’s arguments about burdensomeness were undercut by the fact that Pott and Icicle had worked together cooperatively to limit the scope of the subpoena.

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