363 F. Supp. 3d 361
S.D. Ill.2019Background
- Applicants (Children's Investment Fund Foundation (UK), Sir Christopher Hohn, Axon Partners) are investors in Mauritius-based IREO private equity funds and allege mismanagement and fraud by IREO principals, including misappropriation of investor assets and related harms to multiple funds.
- Applicants filed ex parte under 28 U.S.C. § 1782 for discovery from New York–based Respondents (IREO Management Subsidiary, LLC and individuals including Steven Wisch) for use in foreign proceedings: criminal complaints in India, various investor enforcement and liquidation/winding-up proceedings in Mauritius, and an LCIA arbitration in London.
- The district court initially granted the § 1782 application as revised; Respondents moved to vacate/quash and for a protective order; Applicants moved to compel and for fees; Respondent IREO sought a stay of discovery.
- Key disputed legal points included: whether the LCIA arbitration and other foreign proceedings qualify as a “foreign or international tribunal” under § 1782; whether Applicants are “interested persons”; and whether Intel discretionary factors (esp. burden/proportionality) counsel denial.
- The court found statutory prerequisites satisfied (respondents found in district; proceedings qualify as "for use" under § 1782; Applicants in relevant proceedings are interested persons at least as to some proceedings), exercised its Intel discretion in favor of discovery, denied motions to vacate/quash and to stay discovery in part, and set procedures for narrowing scope, allocation, and protective order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1782 statutory prerequisites are met (residence, "for use", interested person) | §1782 applies: Respondents found in SDNY; discovery is for use in LCIA, Mauritian proceedings, and Indian criminal investigations; Applicants are interested parties (parties/complainants) | Respondents: private arbitration is not a "tribunal"; some foreign proceedings not within reasonable contemplation or are non-judicial; some Applicants not interested persons | Court: prerequisites met — respondents found in district; LCIA and other proceedings qualify as "for use"; at least some Applicants are interested persons; parties to confer re: others |
| Whether private arbitration (LCIA) qualifies as a "foreign or international tribunal" under § 1782 | Intel and legislative history broaden "tribunal" to include arbitral/quasi-judicial forums; §1782 aid appropriate | Reliance on pre-Intel Second Circuit authority (NBC) that limited §1782 to governmental tribunals | Court: follows post-Intel reasoning and precedent (including S.D.N.Y. post-Intel decision) — LCIA is a "tribunal" for §1782 purposes; NBC not controlling here |
| Whether Intel discretionary factors (esp. intrusiveness/burden) require denial | Discovery narrowly tailored after narrowing letter; needs outweigh burden; foreign courts receptive; applicants can inject evidence into foreign proceedings | Requests are overbroad, a dragnet, duplicative, and unduly burdensome; foreign authorities could compel documents more efficiently; Wisch is a nonparty with limited relevance | Court: discretionary factors favor granting discovery; defendants failed to show particularized undue burden; ordered compliance while requiring meet-and-confer to narrow scope, protocol, and allocation of costs |
| Motions to stay discovery, motions to quash, and motions to compel/fees | Applicants seek immediate compliance and fees for delay; oppose stay given London deadline | IREO seeks partial six-month stay pending foreign-case developments and dismissal possibilities; seeks quash/protective order | Court: Denied motions to vacate/quash; denied motions to compel/for fees without prejudice to refile if noncompliance; stay granted in part only (discovery proceeds as to Children's Fund for London arbitration; stay limited as to Hohn and Axon pending meet-and-confer) |
Key Cases Cited
- Brandi-Dohrn v. IKB Deutsche Industriebank AG, 673 F.3d 76 (2d Cir.) (statutory prerequisites for §1782)
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (U.S.) (articulates discretionary factors for §1782 applications)
- Schmitz v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79 (2d Cir.) (discretionary nature of §1782 relief and twin aims of statute)
- Nat'l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184 (2d Cir.) (pre-Intel treatment of "tribunal" for §1782)
- Mees v. Buiter, 793 F.3d 291 (2d Cir.) (discusses Intel factors and burden analysis)
- Certain Funds, Accounts &/or Inv. Vehicles v. KPMG, L.L.P., 798 F.3d 113 (2d Cir.) (standing/"interested person" interpretation under §1782)
- Lancaster Factoring Co. v. Mangone, 90 F.3d 38 (2d Cir.) (use of §1782 in non-U.S. proceedings and scope of foreign proceedings)