1:21-mc-00691
S.D.N.Y.Apr 8, 2022Background
- Kingstown Partners (a dissenter in a Cayman appraisal) sought discovery under 28 U.S.C. § 1782 from New York-based Blackstone, MVB, CC Capital Management (CCCM), and CC Capital Partners (CCCP) concerning the FGL–FNF merger and valuation.
- The underlying Cayman appraisal (Justice Parker) seeks fair value of FGL shares as of May 29, 2020; the Cayman court ordered broad document production from FGL on deal process, conflicts, advisors, voting agreements, and related communications.
- Kingstown subpoenaed documents (6/30/2019–4/27/2020) and corporate-record depositions on topics including fair value, agreements, incentives, conflicts, and other bidders; Kingstown excluded documents already produced by FGL.
- Respondents argued § 1782’s "for use" requirement was not met (expert deadlines passed; Cayman focus limited to fair value and excludes dissenter motives).
- The district court held the § 1782 statutory prerequisites were satisfied, applied the Intel discretionary factors, granted document discovery in large part, denied corporate representative depositions, required Kingstown to pay half of respondents’ costs going forward, and set a tight production schedule (productions to start April 25, 2022 and complete by May 2, 2022).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the § 1782 “for use” requirement is met | Kingstown: materials will be used to prepare trial, expert reports, and documentary submissions in the Cayman appraisal | Respondents: expert-report deadline passed; Cayman court focuses solely on fair value and excludes motives, so discovery is not for use | Court: "for use" satisfied; broad interpretation permits use for preparation and documentary submissions in foreign proceedings |
| Whether Intel factors support granting discovery (receptivity/participant status) | Kingstown: respondents are nonparticipants; Cayman courts are receptive to U.S. assistance; discovery will aid the Cayman appraisal | Respondents: Justice Parker is unreceptive to discovery about motives and may not rely on it | Court: Intel factors weigh in favor—nonparticipants, Cayman receptivity, no circumvention of foreign policies; Justice Parker’s rulings don’t preclude production and admissibility is for the Cayman court |
| Whether corporate-representative depositions should be allowed | Kingstown: seeks depositions to elicit testimony about documents and topics central to fair value | Respondents: depositions are burdensome and unlikely to produce unique, admissible evidence | Court: denied depositions as incremental benefit did not outweigh burden; focus on document productions given impending trial |
| Allocation of compliance costs and schedule | Kingstown: did not argue otherwise on allocation; sought prompt production | Respondents: argued burden and costs of compliance | Court: Kingstown must bear one-half of respondents’ costs from the date of order forward; parties to meet-and-confer; productions to begin April 25, 2022 and finish by May 2, 2022 |
Key Cases Cited
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) (sets discretionary factors for § 1782 requests)
- Mees v. Buiter, 793 F.3d 291 (2d Cir. 2015) (broad interpretation of § 1782 “for use” requirement)
- In re Accent Delight Int’l Ltd., 869 F.3d 121 (2d Cir. 2017) (practical ability to place documents before foreign tribunal informs “for use” analysis)
- Fund for Protection of Investment Rights in Foreign States v. Fund for Protection of Inv. Rts. in Foreign States, 5 F.4th 216 (2d Cir. 2021) (discusses § 1782 prerequisites and Intel factors)
- Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76 (2d Cir. 2012) (no statutory requirement that § 1782 materials be admissible in foreign court)
- Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir. 2004) (statute’s twin aims and broad district court discretion)
- In re Edelman, 295 F.3d 171 (2d Cir. 2002) (district courts’ broad discretion under § 1782)