New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
Commercial Litigation and Arbitration
« Back to Complex Lit Blog

Orders Authorizing Subpoenas and Other Discovery under 28 U.S.C. § 1782 Are Properly Issued Ex Parte

Download PDF

In re Ex Parte Application of Société d'Etude De Réalisation et d'Exploitation pour le Traitement du Mais, ,2013 U.S. Dist. LEXIS 167219 (E.D. Pa. Nov. 22, 2013):

On November 20, 2013, Société d'Etude de Réalisation et d'Exploitation pour le Traitement du Mais ("SERETRAM") applied for an order for leave to file a subpoena on 1&1 Mail & Media Inc., formerly known as GMX Internet Services Inc. ("GMX"), pursuant to 28 U.S.C. § 1782(a), to obtain discovery here in the United States for use in an ongoing criminal proceeding in France, as well as an expected criminal proceeding in the United Kingdom, against a fraudster who allegedly used a GMX-hosted email address in furtherance of a successful scheme to abscond with €17 million of SERETRAM's funds.

In brief, according to its application: SERETRAM, a French food processing company owned 50% by General Mills Corporation, had €19 million in capital before a fraudster impersonated its Financial Director, André Yvin, in an email sent from a fraudulent address, which the fraudster claimed was Mr. Yvin's personal email address. From this fraudulent address, the fraudster emailed a SERETRAM accountant, Annie Larrouture, and instructed her that a takeover bid would soon precipitate but that it was "highly confidential" such that she should communicate about it to no one else. In a statement of particular relevance to the instant application, the fraudster directed Ms. Larrouture to contact "our legal firm" at cabinet.laborde-finance@gmx.com--as evident from the address, a GMX-hosted account. In emails that followed, the fraudster directed her to transfer, in four installments, approximately€17 million of SERETRAM's funds to a bank account. Only when another SERETRAM employee attempted to shift funds from another of SERETRAM's accounts after the fraudulent transfers overdrew the transferor account did a bank inform that SERETRAM employee of its concern that the transfers might be fraudulent, thereby opening SERETRAM's proverbial eyes to what had really occurred.  ***

SERETRAM, applying ex parte to this Court, now seeks discovery from GMX regarding the allegedly fraudulent GMX account, which the fraudster used to cast an aura of authenticity over its deception. SERETRAM wants information about the identity of the owner of the account, his or her location, and any other information that will assist in pursuing redress against or punishment of those responsible for the fraud. For the reasons that follow, SERETRAM's application will be granted as outlined below and specified in the accompanying Order. ***

The Supreme Court has interpreted § 1782 but once, in Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241,   but that decision provides most of the guideposts needed here.   The core of § 1782(a) consists of two components: (1) mandatory requirements that the applicant must meet to trigger (2) the district court's weighing of discretionary factors regarding whether to grant the application, because "[t]he statute authorizes, but does not require, a federal district court to provide assistance to a complainant . . . ." Intel, 542 U.S. at 255. So long as the district court correctly applies the law, its analysis in the discretionary second stage is reviewed for abuse of discretion. In re Chevron Corp., 633 F.3d 153, 161 (3d Cir. 2011).

Footnote 1.     The main issue that Intel does not touch upon is the propriety of the district court's proceeding on an ex parte basis. Any fair interpretation of § 1782(a)'s plain language, however, especially when made in conjunction with the purposes of the statute as discussed by the Supreme Court in Intel, should read it to encompass ex parte proceedings.   In particular, the statute provides, "The order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing." 28 U.S.C. § 1782. And even if this language is not operative, there is no reason to suspect that proceeding on an ex parte basis is improper, because GMX will have an opportunity to move to quash should it so desire. See, e.g., Gushlak v. Gushlak, 486 F. App'x 215, 217 (2d Cir. 2012) ( "[I]t is neither uncommon nor improper for district courts to grant applications made pursuant to § 1782 ex parte. The respondent's due process rights are not violated because he can later challenge any discovery request by moving to quash pursuant to Federal Rule of Civil Procedure 45(c)(3)."); In re Letters Rogatory from Tokyo Dist., Tokyo, Japan, 539 F.2d 1216, 1219 (9th Cir. 1976) ("Letters Rogatory are customarily received and appropriate action taken with respect thereto ex parte. The witnesses can and have raised objections and exercised their due process rights by motions to quash the subpoenas."); In re Ex Parte Application of Nokia Corp., No. 13-mc-80217, 2013 WL 6073457, at *2 (N.D. Cal. Nov. 8, 2013) ("It is common for parties to request and obtain orders authorizing discovery ex parte."); In re Letter of Request from Supreme Court of Hong Kong, 138 F.R.D. 27, 32 n.6 (S.D.N.Y. 1991) ("[S]uch ex parte applications are typically justified by the fact that the parties will be given adequate notice of any discovery taken pursuant to the request and will then have the opportunity to move to quash the discovery or to participate in it.").

 

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

Court’s Inherent Power to Police the Conduct of Litigants and Attorneys Extends to Persons Engaged in the Unauthorized Practice of Law Before Them

(1) Inherent Power Sanctions — Duty to Correct or Withdraw — Strategic Silence As Bad Faith — Failure to Advise Court of Absence of Diversity Jurisdiction for 15 Months for Strategic Reasons, Only “Pull[ing] Out The Diversity-Destroying Card” After Losing = “A Textbook Example of Bad Faith” — (2) Under Goodyear, The Court’s Fundamental Job Is to Decide Whether Fees Would Have Been Incurred Absent the Sanctioned Conduct — (3) Appellate Review: While Sanctions Orders Are Reviewed for Abuse of Discretion, A Finding of Bad Faith Is Reviewed for Clear Error — (4) When There Are Two Permissible Views of The Evidence, The Factfinder’s Choice Between Them Cannot Be Clearly Erroneous — (5) “A District Court Is Not Required To Consider Irrelevant Evidence” — (Good Quotes)

Criminal Spoliation Can Be A Due Process Violation — Defendant Must Show That (1) The Evidence Had Exculpatory Value Before It Was Destroyed, (2) Defendant Is Unable to Obtain Comparable Evidence by Reasonable Means, and (3) Bad Faith Failure to Preserve

1) Rule 11 Sanctions: “No First Amendment Exception to a Rule 11 Violation” — “[T]he First Amendment Covers Novel, Nonfrivolous Arguments, But Many Frivolous Arguments Are Also Novel” (Good Quotes) — Frivolous To Continue To Make Rejected Novel Arguments; (2) FRAP 38 Sanctions: District Court In Best Position to Set Sanctions, Attorney’s Fees and Costs

3 Prerequisites for Inherent Power and § 1927 Sanctions in Second Circuit: (1) Bad Faith, (2) Conduct That Is Entirely Without Color [Thus, An Ill-Motivated Colorable Position Appears to Be Protected in the Second Circuit], and (3) Improper Purpose— “To Gain A Strategic Advantage” Is An Improper Purpose — Due Process Satisfied by Opponent’s Motion and Multiple Court Conferences, After Which Target Was Allowed to Submit Additional Letters

Inherent Power Sanctions — Untimeliness as Laches — Laches Properly Applied to Deny Sanctions Motion — Note Waived Defenses to Laches

Rule 37(c)(1) Sanctions: Substantial Justification or Harmless Error (Ninth Circuit Factors) — Erie: When State Supreme Court Has Not Squarely Addressed an Issue, Circuit Must Predict How It Would Rule, Using Intermediate Appellate Decisions, Decisions from Other Jurisdictions, Statutes, Treatises And Restatements for Guidance

(1) Appellate Review of Inherent Power Sanctions (7th Circuit): Factual Findings Reviewed for Clear Error, Choice of Sanction for Abuse of Discretion — 4-Element Test for Reversal; (2) Sanctions and Class Actions: Monetary Sanctions Properly Imposed on Defendants for Improper Communications with Class Members (Represented Parties) — “[I]f The Class And The Class Opponent Are Involved In An Ongoing Business Relationship, Communications From The Class Opponent To The Class May Be Coercive” (Good Quote); (3) Monetary Sanctions under Goodyear v. Haeger: If Same Fact-Gathering Would Have Been Conducted Absent The Misconduct, No But-For Causation — But Only “Rough Justice” Required, “Not Accountant-Like Precision” (Good Quote) — Once Misconduct Is Clear, Time Spent Ferreting It Out Compensable under Goodyear; (4) Goodyear Did Not Overrule Long-Standing Rule That Courts May Impose Modest Civil Monetary Sanctions to Curb Litigation Abuse; (5) Appellate Jurisdiction Lacking Where Sanctioned Attorney Fails to File Notice of Appeal and Lawyer’s Intent to Appeal Not Apparent from Client’s Notice; (5) Rule 11 Improper Purpose — Party May Have Many Purposes for Pursuing Claim — As Long As Claim Is Supported by Good Faith Belief in the Merits, “A Parallel Reason Does Not Violate Rule 11” — To Deny A Motion for Sanctions, The District Court Need Not Address Every Argument: “Arguments Clearly Without Merit Can, And For The Sake Of Judicial Economy Should, Be Passed Over In Silence” (Good Quote); Non-Monetary Sanction on Counsel: Complete Twice The Required Amount Of Professional Responsibility Hours For Her Next Continuing Legal Education Cycle Imposed By The State Bar

(1) Spoliation: Sanctions Are Warranted Only If the Movant Establishes That A Reasonable Trier of Fact Could Find That The Destroyed Evidence Would Support A Claim Or Defense — § 1927 Sanctions: “Courts Often Refuse to Award Sanctions When Both Parties Contributed to the Waste of Judicial Resources” (Good Quote)

No Sanctions Imposed on Counsel Who Submitted A.I.-Generated Phony Cases Without Checking Them in Good Faith on The Mistaken Assumption They Had Been Provided by Highly Respected Co-Counsel Rather Than His Criminally-Convicted, Disbarred Client — No Sanctions on Client Who Had No Access to LEXIS or Westlaw to Check the Phony Cases and Submitted Them in Good Faith: “It Would Have Been Downright Irrational For Him To Provide Fake Cases For [His Lawyer] To Include In The Motion Knowing They Were Fake —

Archives
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

New York Office

© 2024 Joseph Hage Aaronson LLC  
Disclaimer | Attorney Advertising Notice | Legal Notice