Anna Aleksandrovna Sergeeva v. Tripleton International Limited

Case: 15-13008 Date Filed: 08/23/2016 Page: 1 of 15
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
Nos. 15-13008 & 15-15066
________________________
D.C. Docket No. 1:13-cv-3437-LMM
ANNA ALEKSANDROVNA SERGEEVA,
a natural Person and Citizen of the Russian Federation,
Plaintiff – Appellee,
versus
TRIPLETON INTERNATIONAL LIMITED,
Defendant,
TRIDENT CORPORATE SERVICES, INC.,
Interested Party - Appellant,
GABRIELA PUGH,
Interested Party.
________________________
Appeals from the United States District Court
for the Northern District of Georgia
________________________
(August 23, 2016)
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Before JORDAN and ANDERSON Circuit Judges, and DALTON, * District Judge.
DALTON, District Judge:
In these consolidated appeals, Appellant challenges the U.S. District Court
for the Northern District of Georgia’s orders allowing discovery pursuant to Title
28, United States Code, § 1782 (Appeal No. 15-13008 (“First Appeal”)) and
imposing contempt sanctions (Appeal No. 15-15066 (“Second Appeal”)). After a
thorough review of the record and with the benefit of oral argument, we find no
error and affirm the District Court in all respects.
I.
After dissolving their sixteen-year marriage in the Russian Federation
(“Russia”), former spouses Mikhail Leopoldovich Dubin (“Ex-Husband”) and
Appellee Anna Sergeeva (“Ex-Wife”) commenced a distinct proceeding in the
Hoamvnischesky District Court of Moscow (“Moscow Court”) for division of
marital assets (“Russian Dispute”). In the Russian Dispute, Ex-Wife claimed that
Ex-Husband was concealing and dissipating marital assets through and with the
assistance of “offshore companies” around the world.
Ex-Husband dodged, delayed, and opposed Ex-Wife’s unrelenting efforts to
obtain discovery in support of her claim, and their red in tooth and claw feud
played out in countries around the world, including Cyprus, Latvia, Switzerland,
*
Honorable Roy B. Dalton, Jr., United States District Judge for the Middle District of
Florida, sitting by designation.
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the British Virgin Islands (“BVI”), the Commonwealth of the Bahamas
(“Bahamas”), and the United States of America. In the United States, Ex-Wife
sought information from Gabriella Pugh (“Ms. Pugh”) and her employer in
Atlanta, Georgia—Appellant Trident Corporate Services, Inc. (“Trident
Atlanta”)—that she expected would reveal Ex-Husband’s beneficial ownership of
Bahamian corporation, Tripleton International Limited (“Tripleton”). When met
with resistance, Ex-Wife initiated a § 1782 action in the Atlanta division of the
District Court on July 25, 2013. Ex-Wife filed substantial evidence in support of
her “Ex Parte Application for Judicial Assistance” (“Application”), including a
lengthy and detailed declaration from her attorney, Dmitry Lovyrev (“Lovyrev”).
On referral, the Magistrate Judge granted the ex parte Application and authorized
service of two subpoenas (“Ex Parte MJ Order”).
The subpoena issued to Trident Atlanta (“Subpoena”): (a) referenced
Tripleton, and other Bahamian corporations, including Guardian Nominees
(Bahamas) Limited (“Guardian Bahamas”) and Trident Corporate Services
(Bahamas) Limited (“Trident Bahamas”); (b) referenced other “Trident Trust”
entities located in Cyprus and Switzerland; (c) demanded production of documents
possessed by Trident Trust entities located outside the United States, including
Trident Bahamas; and (d) instructed Trident Atlanta to furnish all responsive
documents in its “possession, custody, or control, regardless of whether such
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documents or materials are possessed directly by [Trident Atlanta] or by any of
[Trident Atlanta’s] agents, representatives, attorneys, or their employees or
investigators.”
Trident Atlanta objected to the Subpoena on numerous grounds, including
that it sought documents located outside the United States and required “Trident
Atlanta to obtain documents from a third party.” 1 Trident Atlanta also filed
motions to vacate the Ex Parte MJ Order and to quash the Subpoena, which
motions were referred to the Magistrate Judge, who: (a) denied the motions; (b)
granted Ex-Wife’s motion to compel; and (c) required production of all documents
responsive to the Subpoena that are within the “possession, custody, or control” of
Trident Atlanta. (“MJ Production Order”). A few months later, the Magistrate
Judge also denied Trident Atlanta’s request for reconsideration of the MJ
Production Order. (“MJ Reconsideration Order”).
Ultimately, Trident Atlanta produced only twenty-three pages of documents
from its office in Atlanta, and it objected to the MJ Production and the
MJ Reconsideration Orders. On February 6, 2015, the District Court Judge
overruled Trident Atlanta’s objections and approved the orders entered by the
Magistrate Judge. (“DJ Review Order”). Several months later, the District Court
1
Ms. Pugh also resisted providing discovery, and she filed a sworn statement with the
District Court. (“Pugh Affidavit”). Nonetheless, Ms. Pugh appeared for her deposition and
provided information concerning Trident Atlanta and other Trident Trust entities. (“Pugh
Depo”).
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declined to reconsider the DJ Review Order and noted that Trident Atlanta’s
obligation to respond to the Subpoena was clear:
[Trident Atlanta] is required to respond to the [S]ubpoena as ordered
by [the Magistrate Judge] on November 22, 2013. If it does not have
the requested documents, it should say so via a discovery response
with a clear statement as to what [Trident Atlanta] has done in order
to obtain these documents. If [Trident Atlanta] cannot produce the
documents after a good faith attempt to find documents, it should say
so. Obviously, if [Trident Atlanta] does not tell the truth and does in
fact have the practical ability to obtain the documents, this Court will
order sanctions against [Trident Atlanta].
(“DJ Reconsideration Order”). Trident Atlanta then filed the First Appeal and
requested stays, which requests were denied by the District Court and by this
Court.
While the First Appeal was pending, Ex-Wife sought sanctions against
Trident Atlanta for its failure to produce documents responsive to the Subpoena.
(“Sanctions Motion”). The District Court determined that it retained jurisdiction
concerning the sanctions issue, accepted additional evidence and briefing, and
conducted an evidentiary hearing on October 6, 2015. (“2015 Hearing”). The
District Court granted the Sanctions Motion, held Trident Atlanta in contempt,
awarded Ex-Wife her attorney’s fees and costs (“Compensatory Sanction”), and
ordered Trident Atlanta to produce responsive documents or pay a sanction
(“Coercive Sanction”) of $500 a day for up to sixty days of any continued
non-compliance. (“Contempt Order”).
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In January 2016, the District Court rejected Trident Atlanta’s request for
relief from the Coercive Sanction and entered partial final judgment awarding
$234,983.58 to Ex-Wife as the Compensatory Sanction. Trident Atlanta filed its
Second Appeal, and—after consolidating the First and Second Appeals—we heard
oral argument on March 9, 2016.
II.
We apply an abuse of discretion standard in reviewing district court
decisions resolving applications for assistance pursuant to § 1782. See Lopes v.
Lopes, 180 F. App’x 874, 876–77 (11th Cir. 2006) (applying abuse of discretion
standard in appeal of order that adopted a magistrate judge’s order granting
discovery pursuant to § 1782). We also apply an abuse of discretion standard in
reviewing decisions to hold a party in civil contempt and to impose compensatory
and coercive sanctions. See F.T.C. v. Leshin, 719 F.3d 1227, 1231–32, 1239 (11th
Cir. 2013) (observing that district courts have “extremely broad and flexible
powers” in the civil contempt area). “‘A district court abuses its discretion if it
applies an incorrect legal standard, applies the law in an unreasonable or incorrect
manner, follows improper procedures in making a determination, or makes
findings of fact that are clearly erroneous.’” Id. at 1230 (quoting Thomas v. Blue
Cross & Blue Shield Ass’n, 594 F.3d 814, 821 (11th Cir. 2010)).
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III.
“Section 1782 is the product of congressional efforts, over [a] span of nearly
150 years, to provide federal-court assistance in gathering evidence for use in
foreign tribunals.” Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247
(2004). In pertinent part, § 1782 currently provides:
The district court of the district in which a person resides or is found
may order him 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 order may be made . . . upon the
application of any interested person and may direct that the testimony
or statement be given, or the document or other thing be produced,
before a person appointed by the court. . . . To the extent that the order
does not prescribe otherwise, the testimony or statement shall be
taken, and the document or other thing produced, in accordance with
the Federal Rules of Civil Procedure.
28 U.S.C. § 1782(a) (emphasis added). Examined in context, this statutory
language “authorizes, but does not require,” that district courts provide judicial
assistance to § 1782 applicants. See Intel Corp., 542 U.S. at 255, 264; United
Kingdom v. United States, 238 F.3d 1312, 1318–19 (11th Cir. 2001) (“Whether,
and to what extent, to honor a request for assistance pursuant to § 1782 [is]
committed to [the district court].”).
We have recognized four prima facie requirements that must be established
before a district court may exercise its authority under § 1782:
(1) the request must be made “by a foreign or international tribunal,”
or by “any interested person”; (2) the request must seek evidence,
whether it be the “testimony or statement” of a person or the
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production of “a document or other thing”; (3) the evidence must be
“for use in a proceeding in a foreign or international tribunal”; and (4)
the person from whom discovery is sought must reside or be found in
the district of the district court ruling on the application for assistance.
Consorcio Ecuatoriano de Telecomunicaniones S.A. v. JAS Forwarding (USA),
Inc., 747 F.3d 1262, 1269 (11th Cir. 2014) (quoting In re Clerici, 481 F.3d 1324,
1331 (11th Cir. 2007)). If these requirements are met, 2 then—upon consideration
of four factors identified by the Supreme Court (“Intel Factors”)—the district court
has discretion whether and how to grant an applicant’s § 1782 request. See id. at
1271.
The Intel Factors consider: (a) whether aid is sought to obtain discovery
from a participant in the foreign proceeding (“First Factor”); (b) “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” (“Second Factor”); (c) whether the applicant is
attempting to use § 1782 to “circumvent foreign proof-gathering restrictions or
other policies of a foreign country or the United States” (“Third Factor”); and (d)
whether the discovery requests are “unduly intrusive or burdensome” (“Fourth
Factor”).3 See Intel Corp., 542 U.S. 264–65; In re Clerici, 481 F.3d at 1334.
2
Initially, Trident Atlanta conceded all but the third prima facie requirement—which the
District Court found was satisfied. In these consolidated appeals, Trident Atlanta does not
challenge this finding.
3
Only the Third Factor is at issue in these consolidated appeals, and we reject Trident
Atlanta’s unpersuasive argument concerning this Intel Factor.
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A.
Erosion of marital bliss is blind to national identity and geographic
boundaries,4 but the marrow of Trident Atlanta’s arguments is that § 1782 is not
blind to such matters. Specifically, Trident Atlanta argues that § 1782 does not
reach “documents located in foreign countries” because “American courts were
not intended to serve as clearing houses for requests for information from courts
and litigants all over the world.” (“Extraterritoriality Argument”). Ex-Wife
counters that the Extraterritoriality Argument fails under Intel Corp. and a plain
reading of § 1782.
The Extraterritoriality Argument presents a question of first impression in
this Circuit. With no controlling law on point and a dearth of instructive decisions
from our sister Circuit Courts, the District Court rejected the Extraterritoriality
Argument. This decision—to the extent it is based on the District Court’s
construction of § 1782 or the Federal Rules of Civil Procedure—is reviewed de
4
Indeed, it is not uncommon for a § 1782 action to originate in the financial and legal
fallout of anagapesis abroad. See Glock v. Glock, Inc., 797 F.3d 1002, 1003 (11th Cir. 2015)
(noting that ex-wife filed the § 1782 proceeding to obtain discovery for use in her Austrian
divorce); Lopes, 180 F. App’x at 875 (noting that the § 1782 proceeding “began as a divorce
proceeding” in Brazil); Gushlak v. Gushlak, 486 F. App’x 215, 216 (2d Cir. 2012) (affirming
order granting § 1782 petition for discovery related to Cayman Islands divorce); London v. Does
1-4, 279 F. App’x 513, 514 (9th Cir. 2008) (affirming order granting § 1782 assistance for
discovery related to St. Martin divorce); In re Roebers, No. C12-80145 MISC, 2012 WL
2862122, at *1 (N.D. Cal. July 11, 2012) (granting renewed § 1782 application for subpoenas
related to Irish divorce); Kwon Mei Lan Mirana v. Battery Tai-Shing Corp., No. C08-80142,
2009 WL 290459, at *1 (N.D. Cal. Feb. 5, 2009) (issuing subpoenas pursuant to §1782 for
discovery concerning “actual and beneficial ownership” of assets at issue in ex-spousal support
proceeding in Hong Kong).
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novo. See In re Clerici, 481 F.3d at 1331; see also JAS Forwarding, 747 F.3d at
1268 (reviewing de novo issues of statutory interpretation); Ecuador v. Hinchee,
741 F.3d 1185, 1188 (11th Cir. 2013) (noting that we review de novo a district
court’s interpretation of the Federal Rules of Civil Procedure).
The District Court properly began its analysis with an examination of the
statutory text. The District Court noted that § 1782 “plainly says that discovery is
to be produced pursuant to the Federal Rules of Civil Procedure unless otherwise
limited” by court order. Noting that the Federal Rules of Civil Procedure
“authorize extraterritorial document productions,” the District Court concluded that
§ 1782 authorized it to require that Trident Atlanta produce documents in its
“possession, custody, and control,” even if such documents are in the possession of
one of the Bahamian Trident Trust companies.
Seeking reversal of this determination, Trident Atlanta urges us to consult
“the legislative history and principal drafter” of § 1782 and apply a “presumption
that [U.S.] law governs domestically but does not rule the world.” We decline to
adopt such a provincial view given that the statutory text authorizes production of
documents “in accordance with the Federal Rules of Civil Procedure.” See 28
U.S.C. § 1782(a); see also Weber v. Finker, 554 F.3d 1379, 1384–85 (11th Cir.
2009) (holding that district courts act well within their discretion under § 1782(a)
when they “order discovery pursuant to the Federal Rules of Civil Procedure”).
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As Trident Atlanta concedes, discovery pursuant to the Federal Rules of
Civil Procedure is broad and covers materials located outside of the United States.
Further, we note that: (1) Federal Rule of Civil Procedure 45 requires that
subpoenaed parties “produce designated documents, electronically stored
information, or tangible things in [the parties’] possession, custody, or control”
(Rule 45(a)(1)(A)(iii)); and (2) the only geographical limitation provided by Rule
45 concerns the location for the act of production—not the location of the
documents or information to be produced (Rule 45(c)(2)(A)). 5 Thus, the District
Court could require that Trident Atlanta produce responsive documents and
information located outside the United States—so long as Trident Atlanta had
possession, custody, or control of such responsive material (“Control
Requirement”).
At bottom, we agree with the District Court that the location of responsive
documents and electronically stored information—to the extent a physical location
can be discerned in this digital age—does not establish a per se bar to discovery
under § 1782. To hold otherwise would categorically restrict the discretion
Congress afforded federal courts to allow discovery under § 1782 “in accordance
with the Federal Rules of Civil Procedure.” 28 U.S.C. §1782(a). This, we cannot
5
The only other limitations under Rule 45 concerns protection of proprietary information
(Rule 45(d)(3)(B)), protection of privileged information (Rule 45(d)(3)(A)(iii)), and avoidance of
undue burden or cost (Rules 45(d) & 45(e)(1)(D)).
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do. See Stanard v. Olesen, 74 S. Ct. 768, 771 (1954) (“[I]t is for Congress, not the
courts, to write the law.”); see also Intel Corp., 542 U.S. at 255, 260–62 (rejecting
purportedly implicit “foreign-discoverability rule” that would limit the discretion
afforded district courts under § 1782); Glock, 797 F.3d at 1010 (declining to
impose a restriction unsupported by the text of §1782).
B.
Having rejected the Extraterritoriality Argument, we turn to Appellant’s
arguments concerning the Control Requirement—specifically, that the District
Court: (a) applied the wrong legal standard; and (b) made factual findings in
Ex-Wife’s favor without sufficient record evidence. (“Control Arguments”).
Employing an “extremely limited and highly deferential” standard of review, we
reject these arguments. See In re Clerici, 481 F.3d at 1331.
First, the District Court applied the correct legal standard. Relying on
SeaRock v. Stripling, 736 F.2d 650, 653–54 (11th Cir. 1984), which broadly
construed “control” for purposes of discovery as “the legal right to obtain the
documents requested upon demand,” the District Court determined that “the legal
right to obtain documents requested upon demand” may be established where
affiliated corporate entities—who claim to be providers of complimentary and
international financial services—have actually shared responsive information and
documents in the normal course of their business dealings. See id. (addressing
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whether the responding party “made a good faith effort to obtain” responsive
documents); Costa v. Kerzner Int’l Resorts, Inc., 277 F.R.D. 468, 470–71 (S.D.
Fla. 2011) (allowing discovery based on a “practical ability to obtain” responsive
documents). 6
Neither were the District Court’s factual findings clearly erroneous. The
record included a copy of correspondence authored by Ms. Pugh that seemingly
conceded Ex-Husband’s beneficial ownership of Tripleton in March 2012 (“Pugh
Correspondence”), and Trident Atlanta admitted that Trident Bahamas actually
provided Ms. Pugh with corporate information concerning Tripleton. Trident
Atlanta also concedes that: (a) it and Trident Bahamas are members of a group—
the “Trident Group”—which offers clients “international financial planning
services” through “production” and “client liaison” companies around the world;
(b) production companies in the Trident Group refer client requests to client liaison
companies for communication purposes; (c) it is a client liaison company; and (d)
Trident Bahamas is a production company.
Although Trident Atlanta denied having any “legal right” to documents or
information from other members of the Trident Group, it is apparent that client
liaison members could not possibly perform their intended functions for Trident
6
We reject Trident Atlanta’s argument that “legal right” under Searock means “legal
control.” See Sciele Pharma, Inc. v. Brookstone Pharms., LLC, No. 2011 WL 3844891, at *4
(N.D. Ga. Aug. 30, 2011) (noting that “control” is not necessarily negated by the fact that a third-
party has actual possession of responsive documents).
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Group clients absent the ability to obtain information and documents from
production company members. 7 Thus, we agree with the District Court that
significant “circumstantial evidence” established that Trident Atlanta had “control”
over responsive documents in the physical possession or custody of Trident
Bahamas. Accordingly, we AFFIRM the District Court in all respects as to the
First Appeal.
IV.
Reiterating its Extraterritoriality and Control Arguments, in the Second
Appeal, Trident Atlanta contends that the Contempt Order was improperly founded
on “unlawful orders.” We reject these rehashed arguments because—as explained
in Part III supra—the MJ Production Order and the DJ Review and
Reconsideration Orders were lawful. Trident Atlanta also argues that the Contempt
Order is unlawful because the First Appeal divested the District Court of
jurisdiction to consider the Sanctions Motion. Absent entry of a stay on appeal—
which Trident Atlanta failed to obtain here—the District Court retained jurisdiction
to enforce its orders. See Maness v. Meyers, 419 U.S. 449, 458–60 (1975). Thus,
we reject Trident Atlanta’s frivolous jurisdictional argument.
7
Upon request of the Moscow Court, another “client liaison” company in the Trident
Group—Swiss-based Trident Corporate Services AG—was able to produce documents similar to
those requested in the Subpoena.
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Finally, Trident Atlanta argues that the Contempt Order is not supported by
the evidence. We disagree. Trident Atlanta was afforded ample opportunity to
show cause why it should not be held in contempt and sanctioned; indeed, the
District Court conducted the 2015 Hearing and accepted additional evidence and
extensive legal briefing on these issues. This fulsome record evinced clear and
convincing violations of the District Court’s many orders, which violations
complemented discovery-avoidance efforts in other jurisdictions, exerted—
sometimes by shared counsel—on behalf of Ex-Husband, Tripleton, Trident
Bahamas, and other members of the Trident Group. Further, Trident Atlanta did
not establish that these violations occurred despite “all reasonable efforts to
comply” in good faith with the District Court’s Orders. Given this record, and the
District Court’s extensive experience with Trident Atlanta, its affiliated entities,
and some of their shared attorneys, we will not disturb the District Court’s finding
of bad faith. Rather, we AFFIRM the District Court in all respects as to the
Second Appeal.8
AFFIRMED.
8
In reaching this decision, we have considered the Supreme Court of the United States
recent opinion in RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090 (2016)—the subject of a
Motion for Supplemental Briefing which Appellant filed in both cases. As the Nabisco opinion
does not change our analysis, the Motions for Supplemental Briefing are DENIED.
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