Case of the Day: Furstenberg Finance v. Litai Assets


The case of the day is Furstenberg Finance SAS v. Litai Assets LLC (11th Cir. 2017). Furstenberg brought an application under § 1782 for leave to serve a subpoena on Litai for use in prospective proceedings in Luxembourg against Dr. Jean-Michael Paul. The judge granted the application, and Furstenberg issued the subpoena. Litai then moved to quash. The court denied its motion, and Litai appealed.

The interesting issue in the case is jurisdictional. Several cases have held that a decision granting or denying a § 1782 application is immediately appealable. But there are few cases on whether an order quashing the subpoena that is served after the application is granted. Of course, as a common-sense matter, a quashed subpoena has to be appealable, since it’s the last thing that happens in the 1782 case. The case is ancillary to the foreign proceeding, and so you have to ask whether the ancillary US proceeding is over, not whether the overall dispute is over. The court cited a Ninth Circuit decision I covered in 2011, In re Premises Located at 840 140th Ave. NE, Bellevue, Wash., 634 F.3d 557 (9th Cir. 2011) that applied that rationale.

What happens when a motion to quash a subpoena is denied? The orthodox answer is that the party that wants to challenge the subpoena must disobey it, be found in contempt, and then appeal from the contempt finding. So I think there is a strategic point here for targets of § 1782 applications. If you can (it’s not always possible for various reasons), consider opposing the application itself rather than waiting for the subpoena to issue and then moving to quash. That way, if you lose and you want to seek review, you don’t have to risk the contempt sanction. But as I say, this doesn’t always work, either because you don’t have notice of the ex parte proceedings, or because the application doesn’t specify the discovery that is going to be sought precisely enough to raise all the issues you would raise in a challenge to the subpoena, or for other reasons.


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