Luxshare, Ltd. v. ZF Automotive US, Inc. ( 2021 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 21a0241p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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LUXSHARE, LTD.,
│
Petitioner-Appellee, │
> No. 21-2736
│
v. │
│
ZF AUTOMOTIVE US, INC.; GERALD DEKKER; │
CHRISTOPHE MARNAT, │
Respondents-Appellants. │
┘
On Jurisdictional Show Cause Order, Motion to Stay Pending Appeal, and Motion to Expedite.
United States District Court for the Eastern District of Michigan at Detroit;
No. 2:20-mc-51245—Laurie J. Michelson, District Judge.
Decided and Filed: October 13, 2021
Before: SUTTON, Chief Judge; ROGERS and GRIFFIN, Circuit Judges.
_________________
COUNSEL
ON RESPONSE TO SHOW CAUSE ORDER AND ON MOTION FOR STAY PENDING
APPEAL: Sean M. Berkowitz, LATHAM & WATKINS LLP, Chicago, Illinois, Roman
Martinez, Tyce R. Walters, LATHAM & WATKINS LLP, Washington, D.C., for Appellants.
ON MOTION TO EXPEDITE DECISION: William R. Jansen, Michael G. Brady, WARNER
NORCROSS + JUDD LLP, Detroit, Michigan, Bradley S. Pensyl, ALLEN & OVERY LLP,
New York, New York, for Appellees.
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ORDER
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This case concerns discovery, but with an international flavor. ZF Automotive US, Inc.,
Gerald Dekker, and Christophe Marnat (collectively, “ZF US”) appeal a district court order
granting limited discovery to Luxshare, Ltd., under 28 U.S.C. § 1782. Luxshare plans to use the
No. 21-2736 Luxshare, Ltd. v. ZF Automotive US, Inc., et al. Page 2
discovery in the parties’ international arbitration. ZF US moves for a stay pending appeal,
highlighting the Supreme Court’s grant of certiorari in Servotronics v. Rolls-Royce PLC, 141 S.
Ct. 1684 (2021), as well as ZF US’s pending motion before the Supreme Court to grant an
immediate appeal on the same issues raised in Servotronics.
As a threshold issue, the clerk ordered ZF US to show cause why its appeal should not be
dismissed for lack of jurisdiction. Courts of appeals, outside of a few exceptions, have authority
to review only “final decisions” of the district courts. 28 U.S.C. § 1291. The rule is designed to
prevent “piecemeal” adjudication. Abney v. United States, 431 U.S. 651, 656 (1977). Litigants
thus cannot immediately appeal discovery orders in most cases. More specifically, we have said
that “a party served with a subpoena typically cannot appeal the denial of a motion to quash the
subpoena until [it] has resisted the subpoena and been held in contempt.” Doe v. United States,
253 F.3d 256, 261 (6th Cir. 2001).
But a § 1782 proceeding is different, as the entire dispute concerns discovery. Section
1782(a) permits a district court to order a person “to give his testimony or statement or to
produce a document or other thing for use in a proceeding in a foreign or international tribunal.”
The district court’s decision whether to order discovery—or, as here, whether to quash a
subpoena ordering discovery—conclusively resolves the subject matter of the underlying
proceeding. In the absence of “an ‘underlying’ [merits] proceeding, many of the concerns that
make us reluctant to review discovery orders on an interlocutory basis disappear.” In re
Naranjo, 768 F.3d 332, 347 (4th Cir. 2014). We thus join the steady drumbeat of our sister
circuits, which uniformly hold that orders under § 1782, including on motions to quash
subpoenas, are final, appealable orders under 28 U.S.C. § 1291. See, e.g., In re Application of
Gianoli Aldunate, 3 F.3d 54, 57 (2d Cir. 1993); Bayer AG v. Betachem, Inc., 173 F.3d 188, 189
n.1 (3d Cir. 1999); Naranjo, 768 F.3d at 346–47; Heraeus Kulzer, GmbH v. Biomet, Inc., 633
F.3d 591, 593 (7th Cir. 2011); United States v. Sealed 1, Letter of Request for Legal Assistance
from the Deputy Prosecutor Gen. of the Russian Fed’n, 235 F.3d 1200, 1203 (9th Cir. 2000)
(order); Republic of Ecuador v. For the Issuance of a Subpoena Under 28 U.S.C. § 1782(a), 735
F.3d 1179, 1183 (10th Cir. 2013); In re Application of Furstenberg Fin. SAS v. Litai Assets LLC,
877 F.3d 1031, 1033 (11th Cir. 2017).
No. 21-2736 Luxshare, Ltd. v. ZF Automotive US, Inc., et al. Page 3
Assured of our jurisdiction, we turn to the motion to stay. We consider four factors in
determining whether to grant a stay: 1) “whether the stay applicant has made a strong showing
that [it] is likely to succeed on the merits”; 2) the likelihood the “applicant will be irreparably
injured absent a stay”; 3) “whether issuance of the stay will substantially injure” other interested
parties; and 4) “where the public interest lies.” Hilton v. Braunskill, 481 U.S. 770, 776 (1987).
The first two factors “are the most critical.” Nken v. Holder, 556 U.S. 418, 434 (2009). But
while the party seeking a stay “need not always establish a high probability of success on the
merits,” the party “is still required to show, at a minimum, ‘serious questions going to the
merits.’” Mich. Coal. of Radioactive Material Users v. Griepentrog, 945 F.2d 150, 153–54 (6th
Cir. 1991) (quoting In re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th Cir. 1985)).
ZF US primarily argues that it has established a likelihood of success on appeal based on
the Supreme Court’s grant of certiorari in Servotronics, which could reach a different result from
the one our court did in Abdul Latif Jameel Transportation Co. v. FedEx Corp., 939 F.3d 710(6th Cir. 2019), about whether § 1782 applies to private arbitration. But ZF US must show
“[m]ore than a mere ‘possibility’” of success on the merits to satisfy this factor. Nken, 556 U.S.
at 434 (alteration in original); cf. Trump v. Int’l Refugee Assistance Project, 137 S. Ct. 2080,
2089 (2017) (Thomas, J., concurring in part) (acknowledging that, when a party seeks a stay
pending certiorari, the applicant must show not only “a reasonable probability that certiorari will
be granted” but also “a significant possibility that the judgment below will be reversed” (quoting
Barnes v. E-Sys., Inc. Grp. Hosp. Med. & Surgical Ins. Plan, 501 U.S. 1301, 1302 (1991)
(Scalia, J., in chambers))). The Supreme Court at any rate has since dismissed Servotronics, so
this argument falls to the side either way. ZF US’s other arguments for reversing the district
court likewise fail to meet the requisite burden at this stage.
ZF US also alleges that it will suffer irreparable harm in the absence of a stay because—
should this court find in its favor—the arbitration proceedings will likely be complete, and it will
have no remedy for the harm. But ZF US has failed to show that the minimal and
nonconfidential discovery here would constitute irreparable harm. In any event, it has not shown
the requisite likelihood of success on the merits of its appeal. See Tiger Lily, LLC v. U.S. Dep’t
of Hous. & Urb. Dev., 992 F.3d 518, 524 (6th Cir. 2021) (order) (“Given that the [movant] is
No. 21-2736 Luxshare, Ltd. v. ZF Automotive US, Inc., et al. Page 4
unlikely to succeed on the merits, we need not consider the remaining stay factors.”). If we
ultimately reverse the district court, we may mitigate any harms from the discovery as the
circumstances allow. See JSC MCC EuroChem v. Chauhan, No. 18-5890, 2018 WL 9650037, at
*2 (6th Cir. Sept. 14, 2018) (order).
Accordingly, the show cause order is withdrawn. The motion to stay pending appeal is
DENIED. The motion to expedite is DENIED AS MOOT.
ENTERED BY ORDER OF THE COURT
Deborah S. Hunt, Clerk