In Re Application For An Order Pursuant To 28 U.S.C. § 1782 To Conduct Discovery For Use In A Foreign Proceeding, No. 17-mc-1466 (D.D.C. Aug. 18, 2017) [click for opinion]
Petitioners, former Yukos Oil Co. shareholders, sought the court's permission to subpoena Baker Botts LLP, and Ryan E. Bull, a partner in the Washington, D.C. office of that law firm, to produce documents and appear for depositions pursuant to 28 U.S.C. § 1782. The former shareholders intended to use the discovery in an ongoing proceeding before the Court of Appeal of The Hague, in which petitioners seek to revive arbitration awards against the Russian Federation.
The basis for Petitioners' awards was Russia's purported expropriation of Yukos, by imposing fabricated tax debts that caused Yukos's bankruptcy and then transferring Yukos's assets to Rosneft and Gazprom, Russian state-owned oil and gas companies. The awards, totaling more than fifty billion dollars, were set aside by the district court of The Hague in April 2016 on grounds that the arbitral tribunal lacked jurisdiction, as Russia had not agreed to arbitrate disputes arising prior to its ratification of the relevant Energy Charter Treaty. Specifically, Petitioners sought evidence related to Russia's alleged attempts to manipulate Armenian courts and obtain favorable judgments that allegedly influenced the Dutch proceedings.
Pursuant to 28 U.S.C. § 1782(a), "[t]he district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal . . . ." Section 1782 contains three statutory requirements: (1) the person from whom discovery is sought must reside in or be found within the district; (2) the discovery must be for use in a proceeding before a foreign or international tribunal; and (3) the application must be made by a foreign or international tribunal or any interested person.
However, the court noted that it was not required to grant a § 1782 discovery request simply because it had the authority to do so. Rather, the court should exercise its discretion, informed by consideration of several factors identified by the Supreme Court in Intel Corp. v. Advanced Micro Devices, Inc.: (1) whether the person from whom discovery is sought is a participant in the foreign proceeding, in which case the need for § 1782(a) aid generally is not as apparent as when evidence is sought from a nonparticipant in the matter arising abroad; (2) the nature of the foreign tribunal, the character of the proceedings underway abroad, and the receptivity of the foreign government or the court or agency abroad to U.S. federal-court judicial assistance; (3) whether the § 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States; and (4) whether the request is unduly intrusive or burdensome.
Here, the court found that although Petitioners' application met the statutory requirements for the discovery sought, the application should nevertheless be denied as a matter of discretion. In the court's opinion the fourth factor merited particular attention. According to the court, "the relevance of the requested discovery to the Dutch appeal proceeding is tenuous and sufficiently in question, and the burdens on the respondents sufficiently onerous, to warrant denial of the [P]etitioners' request." Although Petitioners argued that the discovery could lead to evidence of the Russian Federation's manipulation of a foreign court to influence the outcome of a then-pending Yukos matter, the court believed that Petitioners failed to connect the dots between this evidence and the Dutch appeal proceeding, which involves questions of jurisdiction in no way implicating the Russian Federation's conduct. The court also considered the burden that the discovery requests would impose on Respondents, which it believed would be substantial compared to the limited usefulness of the requested discovery. Accordingly, the court denied Petitioners' request.