Hulley Enters. Ltd. v. Baker Botts LLP (In re Application for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding)
Hulley Enters. Ltd. v. Baker Botts LLP (In re Application for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding)
Opinion of the Court
The petitioners, Hulley Enterprises Ltd., Yukos Universal Ltd., and Veteran *3Petroleum Ltd., seek reconsideration of the denial of their application, pursuant to
The petitioners have been embroiled in multifront litigation around the world for over a decade, arising out of the collapse of the Yukos Oil Company, of which the petitioners were majority shareholders. See Appl. Denial Order,
*4In a bold move, on June 19, 2017, the petitioners applied, pursuant to
Although the petitioners' Application met the statutory requirements for discovery sought under § 1782, the discovery demand was nonetheless denied as a matter of discretion under the factors required by Intel Corp. v. Advanced Micro Devices, Inc. ,
Undeterred, the petitioners now seek reconsideration of that decision by rehashing already rejected or unpursued arguments and contending, for the first time, that the Court must undertake a choice-of-law analysis. See Pet'rs' Mem. Supp. Mot. Reconsideration ("Pet'rs' Mem. Reconsideration") at 4, ECF No. 15-1. This Motion for Reconsideration represents merely the latest effort to drag this Court into the ongoing international litigation between the parties and related entities. For the reasons explained below, the petitioners' Motion for Reconsideration is DENIED.
I. LEGAL STANDARD
The petitioners invoke Federal Rule of Civil Procedure 59(e) as the authority *5to seek reconsideration of this Court's Order denying the requested discovery.
II. DISCUSSION
The petitioners do not argue that controlling law has changed or that new evidence became available, but only that the denial of their application for discovery was wrong for three reasons, none of which is sufficiently persuasive to disturb the Court's previous determination that the plainly significant burden triggered by the requested discovery overcomes the limited, if any, relevance of this discovery to the Dutch appellate proceeding.
First, the petitioners contend that the prior Order "was predicated on an unsupported assumption" of privilege, see Pet'rs' Mem. Reconsideration at 2, because the respondents did not precisely identify any documents that were privileged and, in the petitioners' view, thereby failed to assert any privilege at all. Id. at 4. This argument is almost farcical, given both the nature of the petitioners' discovery demands, which plainly target privileged communications and documents between the respondents *6and its long-standing client, and the respondents' declaration detailing the nature of their attorney-client relationship with Rosneft and the burdens subpoena compliance would engender. See, e.g. , Resps.' Opp'n, Attach. 1, Declaration of William H. Jeffress ("Jeffress Decl.") ¶¶ 2-3, ECF No. 11-1 (describing respondents' attorney-client relationship with Rosneft and Russian Federation); Resps.' Opp'n at 18-19 (discussing "undue burden" discovery demand would impose by requiring the respondents to prepare a privilege log covering a "broad scope of materials," which could reveal to the petitioners "strategies and internal deliberations of their adversaries," and which would require the respondents to expend significant resources to sift through a "staggering" amount of data "involv[ing] multiple languages").
For instance, the petitioners pose discovery demands for "[a]ll Documents and Communications between Baker Botts and Rosneft pertaining to" the Yukos Armenia Proceedings, including contacts with Rosneft, Rosneft's subsidiaries, and respondents' co-counsel, Prudence Legal Advisory and Counseling ("Prudence Legal"), "pertaining to the judgments...." Appl., Attach. 9, Ex. 3 to Declaration of Christopher M. Ryan ("Ryan Decl."), Subpoena Produce Docs., Information, Objects or to Permit Inspec. Premises Civ. Action (Baker Botts LLP) ("Subpoena to Baker Botts") at 7 (Request 3), ECF No. 1-9. See also, e.g. , id. at 8-9 (Request 10) (requesting "[a]ll Documents and Communications between Baker Botts and Rosneft pertaining to: (a) the relationship of the Yukos Armenia Proceedings to the decision of the Dutch courts in the Dutch Bankruptcy Proceedings; and (b) the effect the judgment(s) in the Yukos Armenia Proceedings may have on the Dutch Bankruptcy Proceedings"); Appl., Attach. 10, Ex. 4 to Ryan Decl., Subpoena Produce Docs., Information, Objects or to Permit Inspec. Premises Civ. Action (Ryan E. Bull) ("Subpoena to Ryan E. Bull") at 7 (Request 3), ECF No. 1-10 (seeking "[a]ll Documents and Communications between Mr. Bull and Rosneft pertaining to" the Yukos Armenia Proceedings, including contacts with Rosneft, Rosneft's subsidiaries, and Prudence Legal, "pertaining to the judgments ..."); id. at 9 (Request 10) (requesting "[a]ll Documents and Communications between Mr. Bull and Rosneft pertaining to" the same subcategories of information related to the Yukos Armenia Proceedings and Dutch Bankruptcy Proceedings as in the Subpoena to Baker Botts).
The petitioners' contention that error occurred by "assuming" privilege attached ignores the obvious fact that the discovery demands were framed precisely to cover such privileged communications and documents.
*7Indeed, the discovery request is predicated on the petitioners' belief that Rosneft's counsel was involved in corrupting the administration of justice in Armenian and Dutch proceedings, making counsel's communications with Rosneft and its affiliates the precise focus of the discovery. See, e.g. , Appl. at 5 (alleging "Rosneft, acting through counsel to the Russian Federation, arranged the outcome of several Yukos-related decisions"); id. at 7 (contending that, in the alleged manipulation, "Rosneft was assisted by the American legal firm Baker Botts LLP") (quoting Appl., Attach. 15, Ex. 9 to Ryan Decl., Joep Dohmen and Renée Postma, Rosneft manipulated the judicial process in the Netherlands , NRC HANDELSBAD (Nov. 24, 2016) ("NRC Article 1") at 1, ECF No. 1-15); id. (discussing role of respondent Baker Botts partner, Ryan Bull, and his associate, Izabella Sarkisyan, as well as Edward Mouradian, an Armenian attorney with Prudence Legal, in the alleged manipulation) (quoting Appl., Attach. 16, Ex. 10 to Ryan Decl. ("Ryan Decl., Ex. 10"), Joep Dohmen and Renée Postma, How Rosneft Turned Rule of Law to Its Own Advantage , NRC HANDELSBAD (Nov. 24, 2016) ("NRC Article 2") at 3, ECF No. 1-16).
Although the petitioners criticize the Court's "assumption" of privilege as unsubstantiated, the petitioners' argument is predicated on a clear misunderstanding of the law. Specifically, the petitioners repeatedly assert that the respondents "did not establish-or even argue-that any privilege might apply" to the requested documents, Pet'rs' Mem. Reconsideration at 1, apparently because the respondents did not "identify responsive documents, indicate the number of documents that may be subject to a claim of privilege, or detail the alleged 'burden' they faced-even though it was incontestably their duty to come forward with such evidence," Pet'rs' Reply Mem. Supp. Pet'rs' Mot. Reconsideration ("Pet'rs' Reply Reconsideration") at 1, ECF No. 19. In other words, the petitioners believe, absent the respondents undertaking a massive effort to produce a catalogue of privileged documents generated by over a decade of representing Rosneft, the respondents "waived" any privilege. Pet'rs' Reply Resps.' Opp'n Appl. ("Pet'rs' Reply") at 22, ECF No. 13 ("[Respondents'] failure to properly invoke privilege or demonstrate a burden in their Opposition waives their right to claim these protections.").
To the contrary, when a discovery request demands production of an attorney's records in connection with representation of a client, invocation of the protections of the attorney-client privilege and work-product doctrine may be effective without requiring a detailed privilege log. Otherwise, any objection to the scope of a discovery demand would be rendered moot because interposing that objection would trigger the very burdensome obligation to prepare a privilege log that the objection would be intended to avoid. See Dell Inc. v. Decosta ,
In sum, simply because the Court agreed with respondents about the scope and sensitivity of the requested discovery, with its concomitant cost and burdens, and made a determination on the Application without requiring a privilege log, Appl. Denial Order,
*9Second, the petitioners raise a brand new argument about the necessity of a choice-of-law analysis, contending that such an analysis would show that either Russian or Armenian law applies, and neither law would protect the requested documents. Pet'rs' Mem. Reconsideration at 4-12. Nothing about the law, however, has changed since the original briefing, which, to the extent foreign laws were considered, contained discussion only about the applicability of Dutch attorney-secrecy rules. See Pet'rs' Reply at 11-15. This choice-of-law argument is, thus, not timely raised. Patton Boggs LLP v. Chevron Corp. ,
In any event, contrary to the petitioners' argument, American law on privilege would not automatically be displaced here. "Because the jurisdictional basis for this action rests on a federal statute, federal common law governs any assertions of privilege." In re Veiga ,
The petitioners' position raises a host of thorny issues. Given the parties' disputes about the protections provided by foreign law, the Court would be drawn into legal experts' debates about the meaning and scope of the laws of at least two, and perhaps more, countries. In addition, as the respondents point out, a choice-of-law analysis would likely result in a "hybrid regime that combines narrow foreign privilege rules with broad U.S. discovery." Resps.' Opp'n Pet'rs' Mot. Reconsideration ("Resps.' Opp'n Reconsideration") at 14, ECF No. 17. Indeed, the finding urged by petitioners that no foreign attorney-client privilege law would protect the requested documents would encourage parties involved in ligation overseas to exploit the broad discovery regime available under the Federal Rules of Civil Procedure while simultaneously seeking to defeat fundamental protections for attorney-client privilege and work product guaranteed by the American legal system. See Upjohn Co. v. United States ,
*10Finally, the petitioners revive an argument previously relegated to a short footnote in their reply brief that any applicable privilege would be "undermined by the fact that the communications sought involve allegations of criminal and fraudulent activity." Pet'rs' Mem. Reconsideration at 14; Pet'rs' Reply at 18 n.6 (commenting that, as the respondents "have not formally invoked a privilege, the Petitioners cannot fully address the scope of [the crime-fraud] exception, but reserve the right to do so if the Witnesses attempt to assert a privilege in the future"). As support, the petitioners rely on "allegations of manipulation ... supported by the articles, emails, and judicial affidavit submitted with the 1782 Application." Pet'rs' Reply Reconsideration at 20; see also Pet'rs' Mem. Reconsideration at 12-13. Notably, these materials were submitted with the original Application and contain nothing new for the motion for reconsideration. In any case, on this record, the petitioners fail to establish a prima facie case for applying the crime-fraud exception.
The doctrine of the crime-fraud "[e]xception comes into play when a privileged relationship is used to further a crime, fraud, or other fundamental misconduct." In re Sealed Case ,
The petitioners' submissions here fall short of making a prima facie showing that the crime-fraud exception would apply to the respondents' assertions of privilege. Of the over 130 pages of exhibits on which the petitioners rely to make their case for the exception, including three newspaper articles, one affidavit of a former judicial officer, three email chains, and two images of alleged draft decisions with track changes, only two of the articles, from the same Dutch publication by the same authors published on the same day, make direct allegations about Baker Botts's involvement with Rosneft in any purported manipulation of the Armenian courts. See NRC Article 1 at 1; NRC Article 2 at 3. The remaining article discusses "Rosneft lawyers" without mentioning respondents, see generally Appl., Attach. 17, Ex. 11 to Ryan Decl., Catherine Belton and Michael Stott, Rosneft lawyers manipulated Yukos rulings, emails suggest , FINANCIAL TIMES (Nov. 28, 2016), ECF No. 1-17, and indisputably Rosneft employs other counsel in addition to respondents.
*11
*12* * *
The petitioners' arguments fail to demonstrate that any "clear error" occurred or "manifest injustice" resulted from the denial of their discovery demands to respondents. See Ciralsky ,
III. CONCLUSION
For the foregoing reasons, the petitioners have not shown that reconsideration of their Application for discovery, pursuant to
ORDERED that the petitioners' Motion for Reconsideration, ECF No. 15, is DENIED .
SO ORDERED.
The topics for the requested depositions and fifteen categories of requested documents are enumerated in the following sources: Appl., Attach. 7, Ex. 1 to Declaration of Christopher M. Ryan ("Ryan Decl."), Subpoena Testify Deposition Civ. Action (Baker Botts LLP), ECF No. 1-7;
In a separate matter pending in this Court, the petitioners seek confirmation of the arbitration awards, but that action has been stayed while the arbitration awards are under appellate review in the Netherlands. See Hulley ,
Further details on the relationship between the respondents and Rosneft, as well as between the respondents and the Russian Federation before 2016, are set out in the declaration of William Jeffress previously submitted in this action. See Resps.' Opp'n, Attach. 1, Declaration of William H. Jeffress ("Jeffress Decl.") ¶¶ 2-3, ECF No. 11-1.
The petitioners additionally bring the Motion for Reconsideration under Federal Rule of Civil Procedure 60(b), but because they filed the motion twenty-one days after the Court's Order of August 18, 2017, the motion is considered under Rule 59(e). See Owen-Williams v. BB & T Inv. Servs., Inc. ,
The document requests define the "Yukos Armenia Proceedings" to refer to Yukos-related decisions in the Armenian courts. Subpoena to Baker Botts at 2-3 (Definitions ¶ 12). The "Dutch Bankruptcy Proceedings" refers to cases in Dutch courts relating to Yukos's bankruptcy, and the "Dutch Set Aside Proceeding" refers to the litigation currently pending in the Court of Appeal of the Hague to review the setting aside of arbitral awards. Id. at 2 (Definitions ¶¶ 5-6).
The petitioners contend that they only "seek two narrow categories of documents" from "a discreet time period"-"(a) communications between the Respondents and specific entities relating to judgments" in Armenia and the Netherlands and "(b) ex parte communications between the Respondents and Armenian, Russian, and Dutch government officials relating to those legal proceedings," Pet'rs' Reply Reconsideration at 6-but this characterization is belied by the text of the discovery demands submitted with the original Application. Specifically, the petitioners' Application seeks fifteen categories of documents, with, as noted, specific requests for respondents' communications with their client concerning matters in which respondents were representing or assisting in representing their client in proceedings involving Yukos in both the Armenian courts and the Dutch courts. See Subpoena to Baker Botts at 6-10; Subpoena to Ryan E. Bull at 6-10; see also Resps.' Opp'n at 15-16 & n.9 (discussing "broadly intrusive" requests). With regard to the communications with foreign officials, the petitioners contend the communications would not be privileged because they involve third parties, see Pet'rs' Mem. Reconsideration at 10-12, but to the extent requests for such documents are integrated into the other broad requests, determining where exceptions may apply would only add to the burden of complying with the discovery sought.
The petitioners' reliance on People for the Ethical Treatment of Animals v. U.S. Dep't of Health & Human Servs. (PETA) ,
The crime-fraud exception also applies to work-product protection, requiring "some valid relationship between the work product under subpoena and the prima facie violation." In re Sealed Case ,
The respondents contend, largely based on the timing of the articles in connection with another Dutch proceeding involving Yukos-related entities, that the reports cited by the petitioners "were obviously based on information and arguments given to reporters by representatives of the Yukos parties." Resps.' Opp'n at 6.
These materials are provided without much context necessary for evaluating their probative value. For instance, the petitioners submitted an email purportedly from Mr. Mouradian of Prudence Legal instructing another attorney within the firm to "delete all communication" regarding the "top secret" contact with "the head of the department of prosecution Armen Nikoghosyan" about "the development of the cases," but the text provides no other detail about the "communication" at issue or, more significantly, the relationship to Baker Botts. See Ryan Decl., Ex. 10(5) (Email, dated July 17, 2010, from Edward Mouradian to Karapet Badalyan). The petitioners also cite emails from a Rosneft employee to a colleague about a "secret" scheme and "use of Armenian government officials in the scheme" that also make no reference to the respondents. See Pet'rs' Reply Reconsideration at 20 (citing emails in Ryan Decl., Ex. 10(4)(a)-(b) (Emails, dated June 21 and 24, 2010, from Elena Zavaleeva to Nikita Tolstikov)). Furthermore, petitioners cite an email from the Rosneft employee to respondent Mr. Bull asking him to review "substantiation of a possible decision of the Court of Cassation" to determine if it "answers our interests on account of the case in Holland," without additional information as to how that information would be or may have been used. See Ryan Decl., Ex. 10(9)(a)-(b) (Email, dated July 19, 2010, from Elena Zavaleeva to Edward Mouradian and Ryan Bull). Finally, regarding the track-changed documents of Court of Cassation decision drafts, see Ryan Decl., Exs. 10(7)-(8) (providing images of documents), the petitioners offer no insight into whether Armenian courts require litigants to provide draft orders in some capacity, akin to the practice in this Court. See LCvR 7(c) ("Each motion and opposition shall be accompanied by a proposed order.").
The financial ties between Judge Ghazaryan and the petitioners are discussed in an article relied on by the petitioners, see NRC Article 2 at 2 ("Ghazaryan received assistance from the Yukos camp, which is also supporting him financially."), and the petitioners do not otherwise dispute that the former judicial official is compensated by Yukos.
The petitioners ask, in the alternative, for the Court to conduct an in camera review of "the materials" but fail to specify the nature, volume, or source of such evidence. Petr's' Reply Reconsideration at 23. In camera , ex parte proceedings may be used to determine the existence of a crime-fraud exception to privilege "when such proceedings are necessary to ensure the secrecy" of ongoing proceedings. In re Grand Jury Subpoena, Judith Miller ,
Reference
- Full Case Name
- IN RE APPLICATION FOR AN ORDER PURSUANT TO 28 U.S.C. § 1782 TO CONDUCT DISCOVERY FOR USE IN A FOREIGN PROCEEDING Hulley Enterprises Ltd., Yukos Universal Ltd., and Veteran Petroleum Ltd. v. Baker Botts LLP
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