UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK In rе Application of BANCO BTG PACTUAL S.A., and TRAVESSIA SECURITIZADORA DE CREDITOS FINANCEIROS VIII S.A., Applicants, Pursuant to 28 U.S.C. § 1782 for Judicial Assistance in Obtaining Evidence for Use in Foreign and International Proceedings Pending in the Federative Republic of Brazil.
24 Misc. 304 (AT)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
April 9, 2025
ANALISA TORRES, District Judge
USDC SDNY DOCUMENT ELECTRONICALLY FILED DOC #: DATE FILED: 4/9/2025
ANALISA TORRES, District Judge:
On July 15, 2024, the Court granted the request of Petitioners, Banco BTG Pactual S.A. (“Banco BTG”) and Travessia Securitizadora de Creditos Financeiros VIII S.A. (“Travessia”), to obtain discovery from Admel Properties, Inc. (“Admel”) for use in two pending legal proceedings in Sao Paulo, Brazil, pursuant to
BACKGROUND
Between May 2011 and January 2013, Itau Unibanco S.A. (“Itau”) and Banco BVA S.A. (“Banco BVA”), two large Brazilian financial institutions, entered into separate loan agreements with Brazilian biofuel companies Bioverde Industria e Comercio de Biocombustiveis S/A and Bioverde Participacoes Ltda. and associated individuals and companies (together, the “Foreign Defendants”). First Pistoresi Decl. ¶¶ 3–5, ECF No. 2. Between June 2012 and April 2013, the Foreign Defendants dеfaulted on the agreements, and in 2013, Itau and Banco BVA’s bankruptcy estate initiated actions against them in Brazil, seeking a combined total of over 270
In 2014, in connection with one of the Foreign Proceedings, the Foreign Defendants executed a public instrument of debt confession in which they confessed to owing Itau money and promised to pay their debt in fixed monthly installments. First Pistoresi Decl. ¶ 12. Later that year, the Foreign Defendants breached that agreement as well. Id. ¶ 13. In June 2020, the debt originally owed to Itau was sold to Travessia, and in February 2024, the debt originally owed to Banco BVA was sold to Banco BTG. Pet. ¶ 6; First Pistoresi Decl. ¶¶ 9–10. Consequently, Travessia and Banco BTG were both substitutеd as plaintiffs in the Foreign Proceedings. First Pistoresi Decl. ¶¶ 9–10. The Foreign Proceedings remain pending. Id. ¶ 26; Second Pistoresi Decl. ¶ 14, ECF No. 28-1.
On July 1, 2024, Petitioners filed their ex parte petition (the “Petition”), seeking to obtain documentary and testimonial discovery from Admel pursuant to
By order dated July 15, 2024, the Court granted the Petition, ECF No. 5, and the following week, Petitioners served Admel with a copy of the order and a subpoena directing Admel to designate a representative to appear for a deposition and to produce several categories
Admel failed to meet that deadline, but on November 11, attorney Rodrigo Sаdi entered a notice of appearance on behalf of Admel. ECF No. 12. The Court directed Petitioners and Admel to file a joint status update regarding Admel’s compliance with the subpoena. ECF No. 13. By letter dated November 29, Admel informed the Court that it believed that settlement negotiations were ongoing in Brazil and that, if negotiations failed, Admel would move to quash Petitioners’ subpoena. ECF No. 14 ¶¶ 12–13. The Court again ordered Admel to comply with the subpoena or show cause why it should not be held in contempt. ECF No. 15. In response, Admel wrote that it should not be held in contempt because Petitioners do not seek information for use in a foreign proceeding that is “adjudicative in nature” and, as such, were never entitled to discovery under § 1782. ECF No. 16 at 1–3. Admel also apologized for its еxtensive delay—without providing a reason for the initial four months Admel took to appear in this action—and asked for leave to file a motion to quash. Id. at 3–4. Petitioners opposed Admel’s request, arguing that Admel’s objections were untimely and a further delay tactic. See generally ECF No. 19. The Court explained that it has the discretion to consider Admel’s untimely argument and directed the parties to brief the issue. ECF No. 20. Before the Court is Admel’s motion to vacate the Court’s order authorizing foreign discovery and to quash Petitioners’ subpoenа. Mot.; see Mem., ECF No. 22; Opp., ECF No. 28.
I. Legal Standard
Pursuant to
(1) whether “the person from whom discovery is sought is a participant in thе foreign proceeding,” in which case “the need for § 1782(a) aid generally is not as apparent;” (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 § 1782(a) request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States;” and (4) whether thе request is “unduly intrusive or burdensome.”
Mees, 793 F.3d at 298 (quoting Intel, 542 U.S. at 264–65).
A. Adjudicative Proceeding
Admel contends that Petitioners have failed to meet § 1782’s second statutory requirement on the grounds that the requested discovery is not for use in a proceeding before a foreign or international tribunal. Mem. at 7.
To determine whether this requirement is met, the Court considers two questions: (1) whether the foreign proceeding “is adjudicative in nature,” and (2) whether “there is actually a foreign proceeding.” Euromepa, S.A. v. R. Esmerian, Inc., 154 F.3d 24, 27 (2d Cir. 1998). The first prong is satisfied if the relevant foreign proceeding has not yet been adjudicated, that is, if the petitioner still has the “practical ability . . . to place a beneficial document—or the information it contains—before a foreign tribunal” to its “advantage.” In re Accent Delight Int‘l Ltd., 869 F.3d 121, 131–32 (2d Cir. 2017) (emphasis in original); cf. Euromepa, 154 F.3d at 28 (denying discovery under § 1782 when the merits of the foreign proceeding had already been adjudicated and an “already extant judgment [wa]s merely being enforced”). The second prong is satisfied if a proceeding is pending or imminent. Id. at 29.
Admel does not dispute that the Foreign Proceedings are pending in Brazil; the only issue, therefore, is whether they are “adjudicative in nature.” Citing In re Ibiuna Credito Gestao de Recursos Ltda., a recent case in which a court in this District denied foreign discovery requested for use in a Brazilian proceeding, Admel argues that the Foreign Proceedings are not adjudicative in nature because they are essentially “enforcement proceedings related to debt [that] already exist[s]” and involve no “merit-based issue that remains to be decided.” No. 24 Misc. 13, 2024 WL 1077559, at *7 (S.D.N.Y. Feb. 14, 2024), rep. & rec. adopted sub nom. Ibiuna Credito Gestao de Recursos Ltda. v. Goldman Sachs Grp. Inc., 2024 WL 1076940 (S.D.N.Y.
In Ibiuna, the court examined “whether a proceeding for the sole purpose of locating assets that could be used to satisfy judgments оr debts is an adjudicative proceeding as required by Section 1782.” 2024 WL 1077559, at *7. The court acknowledged the multiple cases holding that foreign proceedings brought to identify assets to satisfy judgments can qualify as adjudicative but specified that, in those cases, “the petitiоners had identified an issue that remained to be decided or a hearing that needed to be held.” Id. The court then distinguished Ibiuna, where the petitioners “identified no issue the [foreign] [c]ourt still needs to decide,” from other actions in which courts granted § 1782 petitions, including Union Fenosa Gas, S.A. v. Depository Trust Co., a case in which the fоreign court would use the requested discovery to “determine whether listed assets are executable under [foreign] law.” Id. (citing Union Fenosa Gas, S.A. v. Depository Tr. Co., No. 20 Misc. 188, 2020 WL 2793055 (S.D.N.Y. May 29, 2020)).
As Petitioners explain, the facts here are more akin to those of Union Fenosa than those of Ibiuna. First, the Foreign Proceedings do not involve “the enforcement of an existing judgment” because “they are not based on a judgment, but rather on . . . contract[s] that w[ere] freely agreed upon by the parties” and which can therefore be challenged as invalid. Second Pistoresi Decl. ¶¶ 4, 6, 10. Second, the Foreign Proсeedings involve various issues “that
B. Intel Factors
Admel argues that, even if Petitioners have satisfied their burden under § 1782, the Court should vacate or modify its order authorizing discоvery because the discovery Petitioners seek is “overbroad and unduly burdensome.” Mem. at 9 (capitalization altered).
The Court looks to the Intel factors for guidance. The first factor favors granting discovery; because Admel is not a party to the Foreign Proceedings, the Brazilian courts cannot “exercise [their] own jurisdiction to order production of the evidence.” Intel, 542 U.S. at 264 (citation omitted); see Pet. ¶ 39. The second factor also weighs in Petitioners’ favor; Brazilian courts are generally receptive to judicial assistance from U.S. federal courts, and Admel has adduced no evidence to the contrary. See Intel, 542 U.S. at 264; Pet. ¶ 41; In re Aguila Energia e Participacoes Ltda., No. 22 Misc. 228, 2023 WL 7001445, at *5 (S.D.N.Y. Aug. 22, 2023), rep. & rec. adopted sub nom. Aguila Energia e Participacoes Ltda. v. JPMorgan Chase & Co., 2024 WL 3373416 (S.D.N.Y. July 10, 2024). As does the third factor, because nothing in the record suggests that Petitioners’ request for discovery “conceals an attempt to circumvent foreign proof-
According to Admel, however, the fourth Intel factor strongly weighs in its favor because Petitioners’ request for discovery is “unduly intrusive or burdensome.” Id. at 265; see Mem. at 9. In support of this claim, Admel states that Petitioners unreasonably seek “documents and information encompassing the entire corporate and transactional history of Admel going back more than a decade,” an overbroad request considering that only Admel’s current assets are relevant to the Foreign Proceedings. Mem. at 9–10; see Pet. ¶¶ 11–14. Petitioners disagrеe, contending that the discovery requests fall within the scope of permissible discovery under the Federal Rules of Civil Procedure. Opp. at 17.
The Court agrees with Petitioners.
For the foregoing reasons, Admel’s motion to vacate the Court’s order authorizing foreign discovery and to quash Petitioners’ subpoena is DENIED. By **April 30, 2025**, Admel shall produce the subpoenaed documents and schedule a deposition with its representative. Given Admel’s excessive delay throughout the course of these proceedings, the Court will not extend this deadline absent exceptionally good cause shown.
The Clerk of Court is respectfully directed to terminate the motion at ECF No. 21.
SO ORDERED.
Dated: April 9, 2025
New York, New York
ANALISA TORRES
United States District Judge