3:23-cv-00365
M.D. La.Nov 24, 2023Background
- TRSL is Louisiana’s teachers’ retirement system and a passive limited partner in a private equity vehicle (LG Fund) that previously held an interest in Schur, an Austrian company.
- B&C bought an 80% stake in Schur in 2021 and alleges post-closing discovery of fraud by Schur executives and related parties, prompting criminal complaints in Austria and Germany.
- B&C filed multiple 28 U.S.C. § 1782 applications seeking U.S.-based discovery from LG, its personnel, and several passive LG Fund investors after limited cooperation from LG/Dees in SDNY (that SDNY order is on appeal).
- In this action B&C sought documents and a deposition from TRSL about communications with LG, due diligence or information received about Schur, knowledge of certain individuals, and any sales proceeds or profit/loss information.
- TRSL opposed, arguing the requests are irrelevant, duplicative, burdensome, amount to harassment, and not properly “for use” in the Austrian criminal investigation; TRSL asked for a stay pending the SDNY appeal.
- The magistrate judge found the § 1782 statutory requirements satisfied and, applying Intel factors, granted a narrowed subpoena: Document Requests 1–3 allowed; Requests 4–6 and a TRSL deposition denied; the stay was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1782 statutory prerequisites are met (resident/found, for use, interested person) | B&C: de minimis showing met; B&C will submit obtained evidence to Austrian prosecutor and thus it is "for use" | TRSL: requests not for use in Austrian probe; duplicative; prosecutor not seeking forfeiture; MLAT available | Met — all three statutory factors satisfied (district has authority to order discovery) |
| Whether respondent is a foreign proceeding participant (Intel factor 1) | B&C: TRSL is a nonparticipant, so U.S. assistance is appropriate; TRSL can’t be compelled by Austrian authority | TRSL: information likely duplicative of what participants/targets hold; §1782 not needed | Favors B&C — TRSL is a nonparticipant and likely beyond foreign tribunal’s reach; factor supports granting discovery |
| Whether Austrian authorities would accept U.S. court assistance / whether B&C is circumventing foreign procedures (Intel factors 2–3) | B&C: Austrian prosecutor would be receptive and B&C (an interested party/victim) can submit evidence; no exhaustion required | TRSL: Austria could obtain the info itself or via MLAT; B&C should have used Austrian procedures first | Favors B&C — no authoritative proof Austria would oppose assistance; no exhaustion requirement; not shown to be circumvention |
| Whether requests are unduly intrusive or burdensome; scope and stay request (Intel factor 4 and proportionality) | B&C: urgent need to present evidence before charging decisions; SDNY delay justifies seeking other sources | TRSL: passive investor with minimal connection; requests overbroad, seek speculative proceeds info; burdensome and harassing; stay required pending SDNY | Partial grant — discovery narrowed: permit Document Requests 1–3 (communications, info received, due diligence) but deny Requests 4–6 (sales proceeds/profits) and deny TRSL deposition; stay denied |
Key Cases Cited
- Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (establishes the four discretionary factors for § 1782 requests)
- Texas Keystone, Inc. v. Prime Natural Resources, Inc., 694 F.3d 548 (discusses § 1782 statutory prerequisites)
- Banca Pueyo SA v. Lone Star Fund IX (US), L.P., 55 F.4th 469 (Fifth Circuit discussion of Intel factors and district court discretion)
- Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d 591 (addresses concern about duplicative litigation and harassment via § 1782)
- In re Metallgesellschaft AG to Take Discovery, 121 F.3d 77 (discusses § 1782’s twin aims of assistance and comity)
- Republic of Ecuador v. Connor, 708 F.3d 651 (recognizes § 1782’s role in promoting international dispute resolution and comity)
- In re Accent Delight Int’l Ltd., 869 F.3d 121 (Second Circuit on the practical ability to inject evidence into foreign proceedings)