Case of the Day: In re Pinchuk

The case of the day is In re Pinchuk (S.D. Fla. 2014). The proceeding was an application under § 1782, and the question was whether the application should be consolidated with an earlier application pending in the same court.

The earlier case involved a request for leave to take discovery for use in proceedings the courts of Cyprus. The new case involved a request for leave to take discovery for use in a related arbitration before the LCIA. Victor Mikhaylovich Pinchuk was applicant in both cases: in the first case he was the only applicant; in the new case he was joined by ten others. The targets of the proposed subpoenas in both cases were Georgian American Alloys, Inc., Felman Productions LLC, Felman Trading, Inc., CC Metals and Alloys LLC, and Mordechai Korf.

Pinchuk moved to consolidate the two cases pursuant to FRCP 42(a), which permits consolidation if the two actions “involve a common question of law or fact.” That is a pretty low bar, although of course the court is not required to consolidate actions just because they meet the minimal standard of the rule.

The judge held that the two cases “do not involve common issues of law or fact sufficient to justify consolidation.” While he was not explicit, it appears the judge was not holding that he lacked the power to consolidate, since that requires the mere presence of some common issue of law or fact. Rather, he decided that the commonalities did not justify consolidation. It’s difficult to understand why this would be. The judge pointed out that the cases were pending in two foreign tribunals with different rules of discoverability, different procedures, etc. But it seems to me to be more reasonable to consider whether the two foreign proceedings arose out of the same underlying dispute. If so (and I assume they do, but the decision doesn’t say), it seems to me to be to everyone’s advantage and in the interest of judicial economy to have a single US judge handle both. That’s not to say that a single judge will make the same ruling on all of the applications, but at least consolidation can involve inconsistent rulings on questions that arise in more than one of the cases.

It won’t always be possible to consolidate multiple applications under FRCP 42, because § 1782 applications have to be brought where the target of the discovery resides or is found, and because FRCP 42 permits consolidation only of actions pending before the same court. I do want to note, however, that there is a method of consolidation when cases are pending in more than one district: consolidation in a multi-district litigation. As my prior post shows, this has happened at least once, and in cases such as the Chevron/Ecuador case, it would have made a lot of sense. Just by way of example, in the § 1782 cases, Chevron litigated a single issue regarding the work-product doctrine through three appeals in three separate courts of appeals. This could have been dealt with more efficiently by a single judge.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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