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Xie v. Lai

United States District Court, N.D. California

December 20, 2019

TONGGUI XIE, et al., Plaintiffs,
v.
TERRY LAI, et al., Defendants.

          ORDER ON EX PARTE APPLICATION FOR ORDER PURSUANT TO 28 U.S.C. § 1782 PERMITTING DISCOVERY FOR USE IN FOREIGN PROCEEDING RE: DKT. NO. 1

          SUSAN VAN KEULEN, UNITED STATES MAGISTRATE JUDGE

         Before the Court is the ex parte application of Tonggui Xie (“Mr. Xie”), Canphoenix Enterprises Ltd. (“Canphoenix”), Inspire Group Trites Project Corporation (“Inspire Group”), and Inspire Group Development Corporation (“Inspire Group Development”) (collectively, “Applicants”) for an order pursuant to 28 U.S.C. § 1782 authorizing service of a subpoena for documents on Google LLC (“Google”). Dkt 1. The proposed subpoena seeks all non-content email headers, including the “to” and “from” lines and the dates, from the Google email account of Terry Lai (“Mr. Lai”). Dkt. 4-1. Applicants allege that Mr. Lai is guilty of breach of contract, conspiracy, and misappropriation under Canadian law. Dkt. 1 at 2. Accordingly, the Court GRANTS the application on the conditions and for the reasons discussed below.

         I. BACKGROUND

         The following section outlines the facts as represented by Applicants. On or about November 16, 2012, Mr. Xie and Mr. Lai entered into a Joint Venture Agreement (“Agreement”). Dkt. 2 (“Xie Decl.”) ¶ 1. Mr. Xie advanced $2,000,000.00 to Mr. Lai, who, pursuant to the Agreement, was to invest that money into 0843003 B.C. Ltd. Id. ¶ ¶ 2-4. Mr. Lai failed to comply with the terms of the Agreement and instead misappropriated the money that was payable to Applicants. Id. ¶ ¶ 8-13. Applicants filed a suit against Mr. Lai in Canada and after Mr. Lai failed to comply with the British Columbia Supreme Court’s rules, Applicants sought relief by filing a Notice of Application for an order requiring Google to produce documents associated with Mr. Lai’s email account in the British Columbia Supreme Court. Dkt. 1 at 3-4; Pun Decl. ¶ 10; Dkt. 3-1, Ex. H. Applicants explained in their Notice that they feared Mr. Lai would delete the emails associated with his account and, per Google’s support, any emails that had already been deleted by Mr. Lai could not be recovered by Google. Dkt. 1 at 4; Pun Decl. ¶ ¶ 9, 11; Dkt. 3-1, Ex. H. The order was granted and Google was ordered to produce documents to an Independent Reviewing Solicitor. Dkt. 1 at 4; Pun Decl. ¶ 12; Ex. I. As a result, Applicants seek discovery of Mr. Lai’s non-content email headers from Google, without prior notice to Mr. Lai. Dkt. 4-1 at 1.

         II. LEGAL STANDARD

         A district court may order the production of documents or testimony for use in a foreign legal proceeding under 28 U.S.C. § 1782, as long as the disclosure would not violate a legal privilege. 28 U.S.C. § 1782(a); Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 249 (2004). “The order may prescribe the practice and procedure . . . for taking the testimony or statement or producing the document or other thing,” and to the extent that the order does not prescribe otherwise, the documents must be produced in accordance with the Federal Rules of Civil Procedure. 28 U.S.C. § 1782(a); In re Letters Rogatory from Tokyo Dist. Prosecutor’s Office, Tokyo, Japan, 16 F.3d 1016, 1020 (9th Cir. 1994) (emphasis added). An applicant may invoke § 1782 where: (1) the discovery is sought from a person or entity residing in the district of the court to which the application is made; (2) the discovery is for use in a proceeding before a foreign tribunal; and (3) the applicant is a foreign or international tribunal or an “interested person.” 28 U.S.C. § 1782(a).

         A district court is not required to grant an application that meets the statutory criteria, but instead retains discretion to determine what discovery, if any, should be permitted. Intel, 542 U.S. at 264. Several factors guide the Court’s decision on a Section 1782(a) request: (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 discovery requested is “unduly intrusive or burdensome.” Id. at 264–65. The party seeking discovery need not establish that the information sought would be discoverable under the governing law in the foreign proceeding or that United States law would allow discovery in an analogous domestic proceeding. Id. at 247, 261-63.

         A district court’s discretion is guided by 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). Applications made under 28 U.S.C. § 1782 are typically considered on an ex parte basis, since “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.” IPCom GmbH & Co. KG v. Apple, Inc., 61 F.Supp.3d 919, 922 (N.D. Cal. 2014) (quoting In re Republic of Ecuador, No. C-10-80225 MISC CRB (EMC), 2010 WL 3702427, at *2 (N.D. Cal. Sept. 15, 2010)) (internal quotation marks omitted). “Consequently, orders granting § 1782 applications typically only provide that discovery is ‘authorized,’ and thus the opposing party may still raise objections and exercise its due process rights by challenging the discovery after it is issued via a motion to quash, which mitigates concerns regarding any unfairness of granting the application ex parte.” In re Ex Parte Application Varian Med. Sys. Int’l AG, Applicant, No. 16-mc-80048-MEJ, 2016 WL 1161568, at *2 (N.D. Cal. Mar. 24, 2016). However, “there may be circumstances where it is appropriate for a successful § 1782 petitioner to refrain from providing notice to potential adverse parties.” In re Rivada Networks, 230 F.Supp.3d 467, 474 (E.D. Va. 2017). “In those circumstances a court may, as § 1782 permits, state that the Federal Rules of Civil Procedure do not apply.” Id.

         III. DISCUSSION

         A. Statutory Requirements

         The application satisfies the statutory requirements of Section 1782(a). First, the subpoena seeks discovery from Google, which has its principal place of business in this District. Dkt. 1 at 5. Second, Applicants request this discovery for use in a civil action that has already been filed in Canada. Id. at 5-6. Third, Applicants are the plaintiffs in the Canadian action and are thus interested persons within the meaning of the statute. Id. at 7.

         B. Intel Factors

         Although the application satisfies the statutory requirements, the Court must also determine whether judicial assistance is appropriate by considering the Intel factors.

         1. Participation of Target in ...


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