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In re Application of Eurasian Natural Resources Corp. Ltd.

United States District Court, N.D. California, San Francisco Division

March 30, 2018

In re Application of EURASIAN NATURAL RESOURCES CORP., LTD., Applicant.

          ORDER GRANTING APPLICATION TO SERVE REQUEST FOR DISCOVERY FOR USE IN A FOREIGN PROCEEDING RE: ECF NO. 1

          LAUREL BEELER, UNITED STATES MAGISTRATE JUDGE.

         INTRODUCTION

         Eurasian Natural Resources Corporation, Ltd. (“ENRC”) filed an ex parte application under 28 U.S.C. § 1782 to subpoena Danny Forston, a reporter for The Sunday Times (U.K.), in connection with a contemplated lawsuit in the United Kingdom relating to the leaking to Mr. Forston of a confidential letter from ENRC's former legal counsel. Subject to certain conditions described below, the court grants ENRC's request to serve its proposed subpoena on Mr. Forston.

         STATEMENT

         ENRC, a U.K. corporation, hired the law firm Dechert LLP (“Dechert”) to conduct an investigation of alleged wrongdoing by an ENRC subsidiary.[1] This investigation was purportedly extremely sensitive, and ENRC's communications with Dechert were protected by attorney-client privilege.[2]

         On or around March 27, 2013, ENRC fired Dechert.[3] This termination was “acrimonious.”[4] On April 12, 2013, Dechert wrote ENRC a letter that contained allegations of misconduct by ENRC.[5]These allegations were based on confidential information that ENRC had provided to Dechert while Dechert was representing it and privileged legal advice that Dechert had provided to ENRC.[6]

         At some point thereafter, Dechert's letter was leaked to Danny Forston, a reporter for the U.K. newspaper The Sunday Times who lives and works in the Northern District of California.[7] On April 28, 2013, The Sunday Times published two articles written by Mr. Forston that described the letter and publicly reported confidential information about ENRC that had been included in the letter.[8]

         ENRC believes that Dechert leaked the letter, based on the fact that the letter was highly confidential and only a limited number of people had access to it and that Dechert had an apparent motive to leak the letter after it was terminated by ENRC.[9]

         ENRC seeks to take discovery of Mr. Forston. Specifically, it seeks to subpoena him to (1) produce “[a]ll documents reflecting or constituting communications with and all documents received from Dechert LLP or any of its members, employees, agents, or anyone else acting on their instructions or on their behalf, which refer or relate in any way to ENRC or any of its subsidiaries or affiliates” and “[a]ll documents describing, reflecting, or constituting communications between Dechert LLP and ENRC, and all documents constituting transmittals or containing any discussion of such communications, ” and (2) take his deposition.[10]

         ANALYSIS

         1. Governing Law

         ENRC makes its application for discovery under 28 U.S.C. § 1782(a), which provides, in relevant part:

The 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, including criminal investigations conducted before formal accusation. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court. . . . A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

         A litigant in a foreign action qualifies as an “interested person” under Section 1782. Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 256 (2004). In order to apply for discovery pursuant to Section 1782, a formal proceeding in the foreign jurisdiction need not be currently pending, or even imminent. Id. at 258-59. Instead, all that is necessary is that a “dispositive ruling” by the foreign adjudicative body is “within reasonable contemplation.” Id. at 259 (holding that discovery was proper under Section 1782 even though the applicant's complaint against the opposing party was only in the investigative stage). An ex parte application is an acceptable method for seeking discovery pursuant to Section 1782. In re Letters Rogatory from Tokyo Dist., 539 F.2d 1216, 1219 (9th Cir. 1976) (holding that the subpoenaed parties may raise objections and exercise their due process rights by bringing motions to quash the subpoenas).

         A district court has wide discretion to grant discovery under Section 1782. Intel, 542 U.S. at 260-61. In exercising its discretion, a district court should consider the following factors: (1) whether the “person from whom discovery is sought is a participant in the foreign proceeding, ” (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 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.” Id. at 264-65.

         A district court's discretion is to be exercised in view of the twin aims of Section 1782: providing efficient assistance to participants in international litigation, and encouraging foreign countries by example to provide similar assistance to our courts. Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 84 (2d Cir. 2004). There is no requirement that the party seeking discovery establish that the information sought would be discoverable under the governing law in the foreign ...


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