Case of the Day: Sergeeva v. Tripleton International
Posted on November 3, 2016
The case of the day is Sergeeva v. Tripleton International Ltd. (11th Cir. 2016). Sergeeva brought an action in Russia against her husband, Mikhail Leopoldovich Dubin, for a division of marital assets. Sergeeva claimed that Dubin was “concealing and dissipating” marital assets “through and with the assistance of ‘offshore companies’ around the world.”
According to the court, Dubin “dodged, delayed, and opposed” Sergeeva’s attempts to obtain discovery in various forums. In the US, Sergeeva brought a § 1782 action seeking discovery from Gabriella Pugh, who worked for Trident Corporate Services, Inc., and from Trident itself. She claimed that the discovery would show that Dubin had a beneficial interest in Tripleton, a Bahamian company. The court granted the ex parte application and authorized issuance of a subpoena. Trident objected to the subpoena, arguing, among other things, that it called from the production of documents located outside the United States and that it required Trident to obtain documents from a third party. There was an issue about sanctions—the court found Trident in contempt and ultimately entered a judgment in favor of Sergeeva for $234,000 as a sanction—that I won’t consider here.
Trident argued that § 1782 “does not reach ‘documents located in foreign countries’ because ‘American courts were not intended to serve as clearing houses for requests for information from courts and litigants all over the world.”
The court focused on the text of the statute: “To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.” It is agreed that the FRCP permit discovery of documents located outside the United States but within the possession, custody, or control of the target of the subpoena. So the plain meaning of the statute is that extraterritorial discovery is permitted. This a significant decision, because there are not very many clear cases on this point.
I think the decision is right as a matter of statutory construction, but I think it’s also helpful in avoiding difficult issues about the location of electronically stored information. I won’t say too much about this, but in 2016 I have choices about the location of servers where I store my information. The court’s decision means that it’s not necessary to ask where ESI is located or to face the problem of strategic behavior.
Trident’s next argument was that the court had erred in holding that Trident had control of the documents, i.e., the legal right to obtain them from its affiliate. The court rejected this argument, holding that the trial court had applied the correct legal standard and that its findings of fact on control, while based on circumstantial evidence, were not clearly erroneous.