Barnwell Enterprises Ltd v. Emerging Capital Partners

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
IN RE APPLICATION OF BARNWELL )
ENTERPRISES LTD AND JITENDRA )
CHHOTABHAI PATEL FOR AN ) Case No. 16-mc-2581 (RC/GMH)
ORDER PERMITTING DISCOVERY )
PURSUANT TO 18 U.S.C. § 1782 )
____________________________________)
MEMORANDUM OPINION
This matter was referred to the undersigned for full case management. Petitioners Barnwell
Enterprises Limited and Jitendra Chhotabhai Patel (collectively, “Petitioners”) have petitioned this
Court for an Order pursuant to 28 U.S.C. § 1782 permitting them to take expedited discovery from
Emerging Capital Partners (“ECP” or “Respondent”), a private equity firm manager incorporated
in the District of Columbia, to use in litigation currently pending before courts in Uganda and
Mauritius, as well as in possible proceedings that Petitioners have yet to initiate in other jurisdic-
tions. See Application for Order Permitting Discovery [Dkt. 1]. After the matter became ripe for
adjudication, the Court held a hearing to address the parties’ arguments. Upon consideration of
the parties’ filings and the entire record herein,1 the Court finds that Petitioners should be permitted
to take discovery from ECP in this jurisdiction subject to the time and subject-matter restrictions
described below.
BACKGROUND
Petitioners seek discovery from ECP in connection with pending lawsuits in Uganda and
Mauritius and “possibly other proceedings to be filed in East Africa, the United Kingdom, and
1
The relevant docket entries for the purposes of this Memorandum Opinion are: (1) Petitioners’ Memorandum in
Support (“Mot.”) [Dkt. 1-1]; (2) Respondent’s Memorandum in Response (“Resp.”) [Dkt. 8]; (3) Petitioners’ Reply
Memorandum (“Reply”) [Dkt. 9]; and (4) the Transcript of the April 25, 2017 Discovery Hearing (“TR.”) [Dkt. 13].
All citations to page numbers within a particular document are to the ECF docket page numbers for the document.
other foreign jurisdictions.” See Mot. at 4. The facts from the pending litigation—and from any
other litigation that Petitioners may bring related to this application—stem from Petitioners’ busi-
ness dealings in East Africa. To summarize, Petitioner Patel and two others founded an infrastruc-
ture construction company, Spencon International Limited (“Spencon”), in Mauritius in 1979. Id.
at 5. Petitioner Patel is also the sole shareholder of Petitioner Barnwell Enterprises Limited, a
Mauritian private investment company with a shareholding interest in Spencon. Id. at 4. As Spen-
con’s business across East Africa grew, Spencon’s original shareholders decided to increase the
company’s capital base. Id. at 5–6. Accordingly, in 2006 and 2007, ECP Africa FII Investments
LLC (“ECP Africa”), one of ECP’s investment vehicles incorporated under the laws of Mauritius,
purchased two promissory notes from Spencon for a total of fifteen million dollars that ECP Africa
could convert into Spencon common stock after the satisfaction of certain conditions. Id. at 6.
ECP, which manages dozens of investments across Africa, manages ECP Africa pursuant to con-
tract and owns less than one percent of its equity. See Resp. at 2.
In 2009, ECP Africa converted the aggregate principal amount of the promissory notes plus
interest into Spencon common stock, which amounted to approximately thirty-eight percent of
Spencon’s shares. Mot. at 6. At the same time, ECP Africa entered into a number of agreements
with the other shareholders—including a put option agreement, a shareholder’s agreement, and a
share pledge agreement—that provided ECP with the right to require Spencon’s original share-
holders to buy back all of ECP Africa’s shares in Spencon, gave ECP Africa fifty percent control
of Spencon’s board of directors, and required Spencon’s original shareholders to pledge their re-
maining shares to secure their obligations to buy back ECP Africa’s shares under the put option
agreement, respectively. Id. at 8. One of Spencon’s shareholders did not pledge his shares, which
2
resulted in those shares being dispersed between the remaining shareholders, including ECP Af-
rica. See Patel Declaration [Dkt. 1-2] at ¶ 17. Around this time, Petitioners believe that NP
Sharma, one of Spencon’s cofounders, stole approximately five million dollars from the company.
Id. at ¶ 19. Petitioners allege that ECP Africa failed to act on NP Sharma’s alleged theft, took
steps to conceal the misappropriated funds, and later worked with NP Sharma to improperly sell
off more of Spencon’s assets. See Mot. at 6, 10, 12–13.
In 2011 and 2012, following a series of setbacks between the original shareholders and
ECP Africa regarding the business and management of Spencon, a number of shareholders chal-
lenged the validity of ECP Africa’s three agreements. See Resp., Ex. A [Dkt. 8-2] at ¶ 20. ECP
Africa, in turn, exercised its put right option in February 2013 and filed a request for arbitration
with the London Court of International Arbitration (“LCIA”), the governing tribunal pursuant to
the put option agreement. Mot. at 8; Resp. at 2–3. In February 2014, the LCIA determined that
the put option agreement was valid and binding, at around which point ECP Africa exercised its
right under the share pledge agreement to transfer the original shareholders’ shares to ECP Africa
as an award for the execution of the put option agreement. See id.; see also Mot. at 9–12.
As a result of this transfer, ECP Africa accumulated approximately ninety-eight percent of
Spencon’s shareholdings. Id. at 13. After acquiring these shares, ECP Africa appointed four in-
dividuals to Spencon’s board of directors: Carolyn Campbell, Bryce Fort, Andrew Brown, and
Namita Shah. Id. at 22. These individuals are high-ranking employees of ECP, not ECP Africa,
and have been serving as directors of Spencon since early 2014. Id. at 22–23; see also Reply at
3
4–5.2 Petitioners believe that ECP Africa’s transfer of shares and its actions while managing Spen-
con afterwards were unlawful, and that these four individuals have information related to these
decisions in their possession as ECP employees. See Mot. at 12–14; see also Reply at 4–5.
Accordingly, on May 20, 2015, Petitioner Barnwell Enterprises Limited filed an action in
the Supreme Court of Mauritius, Commercial Division, against ECP Africa and several others, not
including ECP. See Exhibits to Declaration of Petitioner Patel [Dkt. 1-3] at 44–60. The original
complaint alleges that ECP Africa unlawfully misappropriated the original shareholder’s pledged
shares of Spencon in 2014 and mismanaged Spencon thereafter, and demands fifty million dollars
in damages. Id. at 54–58. In an amended complaint filed in Mauritius on January 20, 2017, how-
ever, Petitioner Barnwell Enterprises Limited focuses solely on the legality of the transfer of
shares, dropping the claim for fifty million dollars in damages and the allegations of mismanage-
ment. See Exhibit D [Dkt. 8-5] at 12–14; see also Exhibit E [Dkt. 8-6] at 2 (“[Petitioner Barnwell
Enterprises Limited] will now only canvass the legality of the transfer of the shares.”).3
Likewise, on August 30, 2016, Petitioner Patel filed an action in the High Court of Uganda
at Kampala against, among others, ECP Africa, alleging that ECP Africa fraudulently mismanaged
Spencon and its assets and employees such that the company is “in a calamitous financial condition
threatening its very existence.” Exhibits to Declaration of Petitioner Patel [Dkt. 1-3] at 65. Peti-
tioner Patel also alleges that, due to ECP Africa’s mismanagement of Spencon, ECP Africa is
liable to several banks in Uganda for any funds due to a number of personal guarantees issued in
his name on behalf of Spencon. Id. at 71. Additionally, Petitioners claim to be contemplating
2
According to Respondent’s counsel’s representations at the hearing, one of these individuals is in the United States,
two are in Kenya, and one is in France. See TR. at 93:19–94:4.
3
At the hearing in this matter, counsel for Petitioners indicated that Petitioner has the right to seek damages in the
Mauritian case if the court determines that the transfer of shares was illegal. See TR. at 11:7–12:12. In fact, according
to Petitioners’ counsel, Petitioner has moved to amend the complaint in that case to reassert damages. Id. at 20:1–
20:4.
4
bringing another action in a separate foreign jurisdiction, although no such action has been filed.
See Mot. at 14.
Presently before the Court is Petitioners’ application for discovery pursuant to section
1782, filed on December 22, 2016. See Mot. Petitioners’ application includes twenty-one discov-
ery requests seeking from Washington-based ECP—not ECP Africa—various “oral and documen-
tary (documents and communications) evidence” pertaining to the conduct described above. See
id. at 29, 39–40.4 Specifically, Petitioners request that ECP provide them with:
1. All documents and communications concerning NP Sharma’s misappropriation
of Spencon funds.
2. All documents and communications concerning payments to NP Sharma since
2014.
3. All agreements entered into NP Sharma since 2014.
4. All documents and communications concerning efforts to sell Spencon to any
third-parties between 2009 and present.
5. All documents and communications concerning the appointment of Grant Ram-
nauth, Carolyn Campbell, Namita Shah, Andrew Brown, Bryce Fort, Marc Sulli-
van, Ron Series, Andrew Ross and Steve Haswell to Spencon’s Board of Directors.
6. All documents and communications concerning payments made to directors,
managers and officers of Spencon since 2014.
7. All documents and communications concerning expenses charged to Spencon
by directors, officers and managers since 2014.
8. All documents and communications concerning bids submitted by Spencon for
new business and new contracts obtained since 2014.
9. All documents and communications concerning CRA.5
10. All documents and communications concerning the sale of Spencon assets to
CRA or any other party.
11. All documents and communications concerning Sanghani.6
12. All documents and communications concerning the Akashas.7
4
Though originally framed as a request for “oral” deposition testimony, counsel for Petitioners conceded that the
instant section 1782 application should be construed as only seeking document discovery. See TR. at 27:2–29:21.
5
CRA stands for Construction Resources Africa Limited, a corporation that Petitioners believe was created by the
current CEO and CFO of Spencon on September 8, 2016 to accept asset transfers from Spencon. See Mot. at 15, 36.
6
Sanghani refers to Manoj Sanghani, an individual that Petitioners believe received the proceeds from the sale of
Spencon’s assets after ECP Africa took control of the company in 2014. See Mot. at 16, 36.
7
The Akashas refers to the Akasha family, a Kenyan family that Petitioners claim the current ECP-Africa-appointed
CEO of Spencon identified to Petitioner Patel as a potential buyer of Spencon’s majority interests in a real estate
development company, Spedec. See Mot. at 19–20, 36.
5
13. All documents and communications concerning anti-corruption/anti-bribery
policies distributed at Spencon since 2014.
14. All documents and communications concerning KAKS and KTS.8
15. All weekly budgets reviewed by ECP Directors.
16. All documents and communications concerning other debt-collection agencies.
17. All documents and communications between GN Reddy and ECP Directors
since 2014 concerning KTS, KAKS or any other debt-collection vendors.
18. All documents and communications concerning due diligence conducted prior
to authorizing payments to KTS, KAKS or any other vendors.
19. All documents and communications with the CID9 concerning Spedec or Kasa-
rani10 and the Patels.
20. All documents and communications concerning Spencon’s interest in Spedec.
21. All documents and communications concerning Kasarani.
Id.
LEGAL STANDARD
Section 1782 of Title 28 of the United States Code authorizes a district court, in its discre-
tion, to order a person who resides or may be found in that district to provide discovery in the
United States “for use in a proceeding in a foreign or international tribunal, including criminal
investigations conducted before formal accusation.” 28 U.S.C. § 1782(a). The court “may pre-
scribe the practice and procedure, which may be in whole or part the practice and procedure of the
foreign country or the international tribunal, for taking the testimony or statement or producing
the document or thing.” Id. To the extent that the court does not order otherwise, “the testimony
or statement shall be taken, and the document or other thing produced, in accordance with the
Federal Rules of Civil Procedure.” Id.
8
KAKS refers to KAKS Limited and KTS refers to Katchung Technical Services, two third-party entities in Uganda
that Petitioners believe have worked with Spencon after ECP Africa took control of the company in 2014. See Mot.
at 17–18, 36.
9
According to Petitioners, CID stands for the Criminal Investigation Division, which Petitioners identify as the arm
of the Kenyan government responsible for investigating and bringing criminal cases. See Mot. at 19, 36.
10
According to Petitioners, Kasarani is a valuable piece of Kenyan property owned by Spedec, a real estate develop-
ment company and one of Spencon’s subsidiaries. Spencon owns fifty-one percent of Spedec and Petitioner Patel’s
son owns the remaining forty-nine percent of the company. See Mot. at 19–20, 36.
6
“[A] district court is not required to grant a [section] 1782(a) discovery application simply
because it has the authority to do so.” Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241,
264 (2004). Instead, consideration of a section 1782 petition calls for a two-step inquiry. A court
must first consider “whether it has the authority to grant the request” and, second, “whether it
should exercise its discretion to do so.” Lazaridis v. Int’l Ctr. for Missing & Exploited Children,
Inc., 760 F. Supp. 2d 109, 112 (D.D.C. 2011) (citing Norex Petroleum Ltd. v. Chubb Ins. Co. of
Canada, 384 F. Supp. 2d 45, 49 (D.D.C. 2005)). In deciding if it has such authority, a court must
determine whether the person from whom discovery is sought resides in its district, whether the
discovery sought is for use in a proceeding before a foreign or international tribunal, and whether
the application is made by a foreign or international tribunal or any interested person. Id.
If the applicant satisfies the above criteria, the court should then determine whether to ex-
ercise its discretion to grant the request “in light of the twin aims of the statute to (1) provide
efficient means of assistance to participants in international litigation and (2) encourage foreign
countries by example to provide similar means of assistance to our courts.” Id. at 114 (citing
Norex, 384 F. Supp. 2d at 49). In making this determination, there are four “factors that bear
consideration.” Intel, 542 U.S. at 264. First, “when the person from whom discovery is sought is
a participant in the foreign proceeding . . ., the need for [section] 1782(a) aid generally is not as
apparent as it ordinarily is when evidence is sought from a nonparticipant in the matter arising
abroad.” Id. As the Supreme Court explains in Intel, “nonparticipants in the foreign proceeding
may be outside the foreign tribunal’s jurisdictional reach; hence, their evidence, available in the
United States, may be unobtainable absent [section] 1782(a) aid.” Id. Second, a court presented
with a section 1782 discovery application should “take into account the nature of the foreign tri-
7
bunal, the character of the proceedings underway abroad, and the receptivity of the foreign gov-
ernment or the court or agency abroad to U.S. federal-court judicial assistance.” Id. Third, a court
should be cognizant of whether a section 1782 discovery request is a concealed “attempt to cir-
cumvent foreign proof-gathering restrictions or other policies of a foreign country or the United
States.” Id. at 265. Last, if a request is “unduly intrusive or burdensome,” a court should consider
whether to trim it or reject it entirely. Id.
“The discretionary guidelines in Intel do not command that each factor be weighed equally,
nor do they dictate whether any particular factor should take precedent.” In Matter of Application
of Leret, 51 F. Supp. 3d 66, 71 (D.D.C. 2014). These factors are merely designed to “guide” a
court tasked with adjudicating a section 1782 discovery application. See Intel, 542 U.S. at 247.
DISCUSSION
As a threshold matter, Respondent concedes that this Court has the authority to grant Peti-
tioners’ discovery request—that is, ECP concedes that it is located in this Court’s jurisdiction, that
the discovery Petitioners seeks is for use in foreign proceedings, and that Petitioners are interested
parties in those proceedings. See Resp. at 5–6; see also Norex, 384 F. Supp. 2d at 49. Accordingly,
this Court’s analysis will focus solely on whether it should exercise its discretion to grant Petition-
ers’ application. Respondent asserts that the four Intel factors counsel against granting Petitioners’
application, arguing that the discovery requests are unduly burdensome, would require the im-
proper collection of documents held abroad, are erroneously directed at ECP instead of ECP Af-
rica, reflect an effort on the part of Petitioners to subvert the procedural rules and decisions in
Mauritian court, and should be denied because Petitioners willingly submitted themselves to the
discovery rules in Uganda and Mauritius by filing suit there. See Resp. at 5–6. For the reasons
that follow, the Court concludes that the four Intel factors weigh in favor of granting Petitioners’
8
application and will permit Petitioners to seek discovery from ECP subject to certain time and
subject-matter restrictions to alleviate the burdensomeness of the requests as originally drafted.
A. The Jurisdictional Reach of the Foreign Tribunals
The first discretionary Intel factor—whether the person or entity from whom discovery is
sought is a participant in the foreign proceedings—weighs in favor of granting Petitioners’ appli-
cation. Intel, 542 U.S. at 264. ECP is not a party in the foreign proceedings; its subsidiary, ECP
Africa, is the relevant party. And while Respondent now argues that seeking discovery from ECP
in the United States is effectively the same as seeking discovery from ECP’s foreign subsidiary in
Mauritius, see Resp. at 10–12, the Court finds Respondent’s argument unavailing. ECP and ECP
Africa, as Respondent acknowledges, are distinct legal entities. See id. at 11. Indeed, ECP is a
private equity firm that manages and owns less than one percent of the equity in ECP Africa. Id.
at 2. It is incorporated in the District of Columbia, while ECP Africa is incorporated under the
laws of Mauritius. There is no evidence to support a finding that Petitioners are seeking to pierce
the corporate veil between ECP and ECP Africa here by forcing ECP to fetch documents in ECP
Africa’s possession in Mauritius to produce in the United States.11 Nor is there any reason to
believe that ECP is within the jurisdictional reach of the courts in either Mauritius or Uganda, or
that the evidence in ECP’s possession is obtainable in the proceedings there absent a section 1782
request. Intel, 542 U.S. at 264 (“A foreign tribunal has jurisdiction over those appearing before it
. . . . In contrast, nonparticipants in the foreign proceeding may be outside the foreign tribunal’s
jurisdictional reach; hence, their evidence, available in the United States, may be unobtainable
absent [section] 1782(a) aid.”); see also In re Application for an Order for Judicial Assistance in
11
To the extent that Petitioners seek discovery through ECP of documents in ECP Africa’s possession, their requests
are denied. See Kestrel Coal Pty. Ltd. v. Joy Global, Inc., 362 F.3d 401, 405 (7th Cir. 2004) (denying section 1782
application requiring “apex firm of a holding company” in the United States to import documents in the possession of
a foreign subsidiary).
9
a Foreign Proceeding in the Labor Court of Brazil, 466 F. Supp. 2d 1020, 1030–31 (N.D. Ill.
2006) (finding parent company not a participant in foreign proceeding involving wholly-owned
subsidiary where parent company was not within foreign tribunal’s jurisdiction). Accordingly, the
Court finds that ECP is not a participant in the foreign proceedings, and that this Intel factor mili-
tates in favor of granting Petitioners’ application.
B. The Nature and Receptivity of the Foreign Tribunals and Character of the
Proceedings
The next Intel factor calls for an assessment of “the nature of the foreign tribunal, the char-
acter 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.” Intel, 542 U.S. at 264. Address-
ing this last element first, Respondent contends that Petitioners’ application should be rejected
because Petitioners’ requests do not satisfy the Ugandan court’s requirement that discovery be
“relevant to the suit and essential for the resolution of the issues in dispute,” and do not comply
with the Mauritian court’s rule that discovery cannot be taken “from someone who is not a party
to the case.” Resp. at 13 (citing declarations from ECP Africa’s counsel). These representations,
however, are insufficient to warrant denial of Petitioners’ application. In order to prevail under
this prong, “[t]he party resisting discovery must point to ‘authoritative proof’ that the foreign tri-
bunal would reject the evidence sought.” In re Veiga, 746 F. Supp. 2d 8, 23–24 (D.D.C. 2010).
Courts have found such proof to exist where, for example, a representative of the foreign sovereign
or the foreign tribunal itself has made clear its opposition to the petitioner’s request. See Schmitz
v. Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 84–85 (2d Cir. 2004) (finding foreign tribunal
unreceptive after receiving “specific requests from the German Ministry of Justice and the Bonn
Prosecutor to deny” petitioners discovery request); In re Microsoft Corp., 428 F. Supp. 2d 188,
10
194 (S.D.N.Y. 2006) (denying discovery sought by petitioners over opposition brief from the for-
eign tribunal submitted to court). On the other hand, “proof resting on equivocal interpretations
of foreign policy or law generally provides an insufficient basis to deny discovery.” See In re
Application of Gemeinshcaftspraxis Dr. Med. Schottdorf, No. Civ. M19-88, 2006 WL 3844464, at
*6 (S.D.N.Y. Dec. 29, 2006).
Indeed, an analysis of the merits of ECP Africa’s counsel’s declaration regarding Ugandan
and Mauritian law would require this Court to become embroiled in exactly the kind of “legal tug-
of-war” that courts should avoid when adjudicating section 1782 applications. See In re Veiga,
746 F. Supp. 2d at 24; see also Euromepa S.A. v. R. Esmerian, Inc., 51 F.3d 1095, 1099–1100 (2d
Cir. 1995) (“[W]e do not read the statute to condone speculative forays into legal territories unfa-
miliar to federal judges. Such a costly, time-consuming, and inherently unreliable method of de-
ciding section 1782 requests cannot possibly promote the ‘twin aims’ of the statute.”); In re Ap-
plication of Caratube Int’l Oil Co., LLP, 730 F. Supp. 2d 101, 105–06 (D.D.C. 2010) (“In evalu-
ating a tribunal’s willingness, courts do not believe that an extensive examination of foreign law
regarding the existence and extent of discovery in the forum country is desirable in order to ascer-
tain the attitudes of foreign nations to outside discovery assistance.” (internal citations and quota-
tion marks omitted)). After all, as the Supreme Court and others have explained, section 1782
does not require that the material sought in the United States be discoverable—or even admissi-
ble—in the foreign tribunals. See Intel, 542 U.S. at 247 (“[Section] 1782 contains no threshold
requirement that evidence sought . . . would be discoverable under the law governing the foreign
proceeding.”); see also In re Veiga, 746 F. Supp. 2d at 18 (“[D]istrict courts need not determine
that the evidence would actually, or even probably, be admissible in the foreign proceeding.”).
Accordingly, having found no “clear and unequivocal indication that the foreign tribunal would
11
not be receptive to the evidence sought” here, the Court finds that this factor weighs in favor of
granting Petitioners’ application. Id. at 24.
The remaining inquiries relevant to this factor—the nature of the foreign tribunal and the
character of the proceedings—do not alter the Court’s analysis. This is not, for example, an in-
stance where the parties arrived at the foreign tribunals with “bargained-for expectations” based
on a deliberative process concerning the governing procedural process and discovery rules. See
In re Application of Caratube Int’l Oil Co., LLP, 730 F. Supp. 2d at 106 (finding that the nature
of tribunal counsels against granting request where petitioner chose to bring dispute before an
ICSID arbitration panel governed by mutually-agreed-upon rules).12 Nor is there any reason to
believe that the foreign proceedings here are the type that would otherwise bar Petitioners from
presenting evidence and engaging in discovery. See Lazaridis, 760 F. Supp. 2d at 115 (denying
section 1782 request where petitioner sought discovery to use in a Greek criminal investigation,
which “are left to the discretion of the Greek authorities and provide no private right of action”).
And while this section 1782 application is perhaps a bit unusual in that it involves a single appli-
cation from two Petitioners—an individual and his private investment company—to obtain dis-
covery from ECP to use in two separate but related proceedings—one brought by the individual in
Uganda and the other brought by the company in Mauritius—the Court sees no reason why the
12
Respondent’s assertion that “[t]he nature of the foreign tribunal weighs against enforcing discovery if the party
seeking the discovery had options in selecting the forum for the foreign proceeding” is a truncated characterization of
the governing caselaw. Resp. at 15 (quoting HT S.R.L. v. Velasco, 125 F. Supp. 3d 211, 223 (D.D.C. 2015)). While
true that a member of this Court has previously indicated that the nature of the tribunal weighs against granting a
section 1782 request when the petitioner has options in selecting the foreign forum, the Court elaborated on that point
in a critical way, explaining that the choice becomes important when the petitioner chooses to bring a foreign action
before an arbitration panel where the petitioner was free to negotiate and set the procedural rules for the arbitrators to
follow. See HT S.R.L., 125 F. Supp. 3d at 223; see also In re Application of Caratube Int’l Oil Co., LLP, 730 F. Supp.
2d at 106. Here, Petitioners were not given the opportunity to bring the foreign proceedings before an arbitration
panel governed by procedural rules to which they agreed. Rather, they brought suit against ECP Africa in Uganda
and Mauritius because those courts have jurisdiction to adjudicate their claims. Accordingly, the Court finds the
analysis in HT S.R.L. inapposite here.
12
dual-nature of this section 1782 application by itself counsels against granting Petitioners’ appli-
cation, particularly in light of the Court’s capacity to limit the scope of Petitioners’ discovery
requests. Accordingly, with respect to the second Intel factor, the Court finds that it weighs in
favor of granting Petitioners’ request.
C. Circumvention of Foreign Proof-Gathering Restrictions or Other Foreign Pol-
icies
The next Intel factor instructs the Court to consider whether the Petitioners’ section 1782
application “conceals an attempt to circumvent foreign proof-gathering restrictions or other poli-
cies of a foreign country or the United States.” Intel, 542 U.S. at 264–65. Respondent claims that
it does, arguing that Petitioners made the instant application in bad faith because the discovery
rules and decisions in the Ugandan and Mauritian courts prohibit the use of discovery that Peti-
tioners now seek, and because Petitioners are requesting this discovery as part of an ongoing effort
to “forc[e] ECP Africa to simultaneously defend against an onslaught of international cases with
sensational allegations” only to abandon these cases and impede progress when it comes time to
pursue the claims. See Resp. at 12–13.
With respect to Respondent’s first contention, as the Court has already explained, section
1782 does not require that the material sought be discoverable or even admissible in the foreign
proceedings. See Intel, 542 U.S. at 247; see also In re Veiga, 746 F. Supp. 2d at 18. Absent clear
and authoritative proof from a source other than ECP Africa’s lawyers that the foreign tribunals at
issue here would refuse the evidence Petitioners seek, the Court is unwilling to reject Petitioners’
application for this reason. And while at least one court has expressed reservations when adjudi-
cating a section 1782 application as to whether a petitioner is looking to “jump the gun” on dis-
covery in the underlying foreign suit, see Norex, 384 F. Supp. 2d at 54, there is no requirement in
13
the statute that a petitioner exhaust their discovery options in a foreign forum before seeking dis-
covery here. Indeed, “[c]ourts have refused to engraft a quasi-exhaustion requirement onto section
1782 that would force litigants to seek information through the foreign or international tribunal
before requesting discovery from the district court.” In re Application of Caratube Int’l Oil Co.,
LLP, 730 F. Supp. 2d at 107 (internal citations and quotation marks omitted); see also HT S.R.L.,
125 F. Supp. 3d at 225–26 (“If the material sought is discoverable in the foreign tribunal, litigants
are not required to seek discovery through the foreign tribunal prior to requesting through the
United States[.]”); In re Veiga, 746 F. Supp. 2d at 24 (“Section 1782(a) does not incorporate an
exhaustion requirement, and an applicant is not required to first seek discovery from the foreign
tribunal.”).
Likewise, Respondent’s allegations of gamesmanship on the part of Petitioners are una-
vailing. As evidence of this claim, Respondent points to Petitioner Patel’s failure to appear for
mediation sessions in Uganda and Petitioner Barnwell’s amendment to its pleadings in the Mauri-
tian case. See Resp. at 13. To the extent that the Court should consider these claims in deciding
whether to grant Petitioners’ application, the undersigned finds that the evidence provided by Re-
spondent does not establish that Petitioners “are intent on forcing ECP Africa to simultaneously
defend against an onslaught” of sensationalized international litigation while also hoping to “friv-
olously delay” that litigation. See id. at 13. What is more, Petitioners have made an initial showing
that the discovery they seek is, at least in part, not frivolous. Indeed, in their reply brief, Petitioners
allege that four employees of ECP—not ECP Africa—placed on the board of directors of Spencon
have been acting in those positions since early 2014, and provide evidence to suggest that these
employees used ECP email connected to servers in the United States to discuss and conduct busi-
ness with respect to Spencon. See Reply. at 4–6. In any event, the Court finds no reason to believe
14
that Petitioners are seeking to do anything other than obtain discovery in the possession of a non-
party located in the District of Columbia to use in foreign litigation, and thus concludes that this
factor, too, militates in favor of granting Petitioners’ application.
D. The Scope of Petitioners’ Discovery Request
The fourth and final Intel factor reminds courts that “unduly intrusive or burdensome re-
quests [made under section 1782] may be rejected or trimmed.” Intel, 542 U.S. at 265 (citing In
re Bayer AG, 146 F.3d 188, 196 (3d Cir.1998)). To that end, the Court finds that Petitioners have
proposed satisfactory limitations to the subject matter and scope of their original discovery re-
quests. Specifically, in their reply brief and at the hearing in this matter, Petitioners explained that
they are only seeking discovery related to four ECP employees—Carolyn Campbell, Andrew
Brown, Bryce Fort, and Namita Shah—in their capacity as directors of Spencon beginning on
March 7, 2014. See Reply at 4–6. Petitioners have provided support for their assertion that these
employees should have knowledge about business decisions related to Spencon and that they have
used ECP’s email servers, which are located in the United States, to communicate electronically
about ECP’s role in managing Spencon. Id. at 4–6. Indeed, at the hearing in this matter, counsel
for Respondent conceded that ECP’s email server is accessible from the United States, meaning
that ECP can search the four employees’ electronic communications from its office in this district.
See TR. at 57:20–58:6. Moreover, counsel for Respondent conceded that ECP has possession,
custody, and control of its employees’ work-related electronic communications, and that Petition-
ers’ proposed limitations to their requests rendered them more reasonable. Id. at 49:20–50:8,
92:24–93:6. Accordingly, so long as Petitioners’ discovery requests are generally limited in time
15
to seek the production of documents from March 7, 2014 and onward,13 and so long as Petitioners’
discovery requests are limited in scope to seek the production of communications and documents
related to the four identified employees in the possession, custody, and control of ECP, the Court
is satisfied that those requests are not unduly intrusive or burdensome.
Though Respondent’s counsel conceded that these temporal and subject-matter restrictions
mitigated a number of Respondent’s concerns with Petitioners’ discovery requests, he also raised
objections to the geographic reach of Petitioners’ application. As counsel for Petitioners indicated,
in addition to the four employees’ electronic communications accessible from ECP’s office in the
District of Columbia, Petitioners seek any responsive, physical documents that are in the custody,
possession, and control of ECP by way of those four employees. See Reply at 9–11; see also TR.
at 72:1–79:9. According to Respondent, however, only one of the four employees is in the United
States—two others are located in Kenya and one is a citizen of the United Kingdom living in
France. See id. at 93:19–94:4. Petitioners are thus requesting that these ECP employees, regard-
less of whether they are located in the United States or a foreign jurisdiction, gather any physical
documents in their possession as employees of ECP related to Petitioners’ application and send
them to ECP’s Washington, D.C. office for a responsiveness review. See id. at 77:13–79:9.
As another member of this Court has explained, the body of available caselaw “suggests
that [section] 1782 is not properly used to seek documents held outside the United States as a
general matter.” Norex, 384 F. Supp. 2d at 50–52 (surveying cases from Second, Seventh, and
Ninth Circuits). Since this Court’s decision in Norex, a split in authority has developed over
whether section 1782 authorizes the discovery of documents held outside the United States, albeit
13
Consistent with the parties’ representations at the hearing, and as the Court will explain more in the Order accom-
panying this Memorandum Opinion, a few of Petitioners’ discovery requests call for the production of documents
from either before or after March 2014.
16
with an abundance of authority finding no express authorization. See In re Veiga, 746 F. Supp. 2d
at 25 (comparing In re Application of Eli Lilly & Co., 2010 WL 2509133, at *4 (D. Conn. June 15,
2010) and Gemeinshcaftspraxis, 2006 WL 3844464, at *5 with In re Application of Godfrey, 526
F. Supp. 2d 417, 423 (S.D.N.Y. 2007) and In re Application of Microsoft Corp., 428 F. Supp. 2d
at 194 n.5); see also In re Ex Parte Application of Qualcomm Inc., 162 F. Supp. 3d 1029, 1036
n.43 (N.D. Cal. 2016) (collecting cases rejecting an extraterritorial application of section 1782).
Indeed, “despite [section 1782’s] unrestrictive language, there is reason to think [based on statu-
tory history] that Congress intended to reach only evidence located within the United States.” Ap-
plication of Sarrio, S.A., 119 F.3d 143, 147 (2d Cir. 1997); see also Kestrel, 362 F.3d at 404 (find-
ing “some support” for the notion that section 1782 does not permit a judge “to require evidence
to be imported from a foreign nation so that it may be handed over here and then exported”). While
neither the Supreme Court nor the D.C. Circuit has ruled definitively on this issue, every member
of this Court to address it has at least cautioned against the extraterritorial application of section
1782. See Norex, 384 F. Supp. 2d at 50–55 (“[The relevant cases] suggest that extraterritorial
application of [section] 1782 would not be in keeping with the aims of the statute, and indeed that
documents held outside the United States are beyond the statute’s intended reach.”); see also In re
Application of Thai-Lao Lignite (Thailand) Co., Ltd., 821 F. Supp. 2d 289, 297–98 (D.D.C. 2011)
(finding no precedent for a “per se bar to the discovery of documents outside of the United States,”
but noting that the foreign location of information militates against granting application); In re
Veiga, 746 F. Supp. 2d at 25 (“Even assuming there is no absolute bar to the discovery of docu-
ments located outside the United States, there is no doubt that courts may exercise their discretion
to decline to order the production of documents abroad . . . .”). This reticence to apply section
1782 to reach discovery located abroad is consistent with the Supreme Court’s implicit assumption
17
in Intel “that evidence discoverable under [section] 1782(a) would be located in the United States.”
In re Godfrey, 526 F. Supp. 2d at 423–24 (citing Intel, 542 U.S. at 260–62, 264).
To be sure, the plain language of section 1782 contains no such limitation. Indeed, it ex-
plicitly empowers this Court to allow discovery to be taken and produced “in accordance with the
Federal Rules of Civil Procedure.” 18 U.S.C. § 1782(a). And the Federal Rules governing sub-
poenas and the production of documents contain no geographical limitations with respect to where
discoverable information can be located, requiring simply that a respondent produce any relevant
documents, electronically-stored information, or tangible items in their “possession, custody, or
control[.]” See Fed. R. Civ. P. 34(a)(1), 45(a)(1)(A)(iii), 45(c)(2)(A).14 Absent an invocation of
privilege or concerns regarding proprietary information or undue burden, the relevant Federal
Rules contain no other geographic limitations regarding discoverable information. See id. at
26(b)(1), 45(d)(1) and (3), 45(e)(1)(D). Accordingly, reading section 1782 to contain a per se bar
on the discovery of material located outside the United States would impermissibly and “categor-
ically restrict the discretion Congress afforded federal courts” by enacting the statute. Sergeeva v.
Tripleton Int’l Ltd., 834 F.3d 1194, 1199–1200 (11th Cir. 2016) (“At bottom, . . . 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 [section]
1782.”); see also Intel, 542 U.S. at 260 (“If Congress had intended to impose such a sweeping
restriction on the district court’s discretion, . . . it would have included statutory language to that
effect.” (internal quotation marks and citation omitted)).
14
The only geographic limitation in Federal Rule 45, which deals with subpoenas, concerns the location of the re-
spondent’s compliance with the subpoena, not the location of any information for production. See Fed. R. Civ. P.
45(c)(1)(A).
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Thus, while the international location of documents sought in a section 1782 application
has been interpreted by other members of this Court to be a discretionary factor that weighs against
granting the petitioner’s application, the Court sees no reason to reject Petitioners’ application out
of hand here simply because it might require the production of documents currently located in
Kenya or France. Of course, to the extent that Petitioners are seeking physical documents from
ECP that are in the possession of ECP Africa and located in the jurisdiction of the Ugandan or
Mauritian courts, their application will be denied. See Intel, 542 U.S. at 264 (explaining that sec-
tion 1782 is intended to assist international litigation by suppling discovery from non-parties out-
side the foreign court’s jurisdictional reach); In re Application of RSM Production Corp. v. Noble
Energy, Inc., 195 F. Supp. 3d 899, 907 (S.D. Tex. 2016) (“[T]he court does not believe it appro-
priate to order the parent company to produce documents and deponents from the Israeli office of
its subsidiary [for use in Israeli proceedings].”). But that is not the case here. Petitioners are not
seeking to strong-arm ECP into obtaining documents from its subsidiary in Mauritius and produc-
ing those documents here, but, rather, are seeking to obtain documentary evidence directly from
ECP employees, some of whom happen to be located abroad.
Moreover, Respondent does not appear to dispute that any physical documents these four
individuals might possess as employees of ECP, regardless of where they are located, fall within
the company’s “possession, custody, or control” as contemplated by the Federal Rules of Civil
Procedure. Fed .R. Civ. P. 34(a)(1), 45(a)(1)(A)(iii). Nor could it. “Control is the test with regard
to the production of documents and is defined not only as possession, but as the legal right to
obtain the documents on demand.” Norex, 384 F. Supp. 2d at 56 (internal quotation marks and
citations omitted). It “does not require that the party have legal ownership or actual physical pos-
session of the documents at issue, but rather ‘the right, authority, or practical ability to obtain the
19
documents from a non-party to the action.’” Bush v. Ruth’s Chris Steak House, Inc., 286 F.R.D.
1, 5 (D.D.C. 2012) (quoting In re NTL, Inc. Sec. Litig., 244 F.R.D. 179, 195 (S.D.N.Y. 2007)).
Under this framework, “[c]ourts have repeatedly found that employers have control over their em-
ployees and can be required to produce documents in their employees’ possession.” Chevron
Corp. v. Salazar, 275 F.R.D. 437, 447–49 (S.D.N.Y. 2011) (collecting cases). Based on the infor-
mation offered by Petitioners, the Court thus finds that they have satisfied their burden of estab-
lishing that Respondent has control over any responsive documents in the four employees’ pos-
session. Norex, 384 F. Supp. 2d at 56 (“The burden of establishing control over the documents
sought is on the party seeking production.” (internal quotation marks and citation omitted)). The
Court also finds that the burden imposed on Respondent by requiring the four ECP employees to
search for and provide to ECP in Washington, D.C. any physical documents responsive to Peti-
tioners’ tailored discovery requests is too minor to warrant denying Petitioners’ application. Ac-
cordingly, to the extent that ECP employees Campbell, Brown, Fort, and Shah are in possession
of documents responsive to Petitioners’ discovery requests, they must provide those documents to
ECP for potential production in compliance with Petitioners’ instant application.
CONCLUSION
Based on the above, the Court will grant Petitioners section 1782 application and instruct
Respondent to comply with Petitioners’ discovery requests. Consistent with the discussion had on
the record at the April 25, 2017 hearing in this matter, the Court will impose time and subject-
matter restrictions to be explained in the Order accompanying this Memorandum Opinion.
* * * * *
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The parties are hereby advised that, under the provisions of Local Rule 72.2(b) of the
United States District Court for the District of Columbia, any party who objects to the under-
signed’s ruling must file a written objection thereto with the Clerk of this Court within 14 days of
the party’s receipt of this Memorandum Opinion and accompanying Order. The written objections
must specifically identify the portion of the Memorandum Opinion and Order to which objection
is made and the basis for such objections. See LCvR 72.2(b).
Date: July 13, 2017 ___________________________________
G. MICHAEL HARVEY
UNITED STATES MAGISTRATE JUDGE
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