In re ex parte Kleimar N.V.

220 F. Supp. 3d 517, 2016 WL 6906712, 2016 U.S. Dist. LEXIS 165297
CourtDistrict Court, S.D. New York
DecidedNovember 16, 2016
Docket16-mc-355
StatusPublished
Cited by4 cases

This text of 220 F. Supp. 3d 517 (In re ex parte Kleimar N.V.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re ex parte Kleimar N.V., 220 F. Supp. 3d 517, 2016 WL 6906712, 2016 U.S. Dist. LEXIS 165297 (S.D.N.Y. 2016).

Opinion

DECISION AND ORDER

VICTOR MARRERO, United States District Judge.

Third party Vale S.A. (“Vale”) brings this motion to vacate an ex parte order of discovery issued by the Honorable Richard [520]*520Sullivan of this Court, sitting in Part I, and to quash the subpoena duces tecum served upon Vale by Plaintiff Kleimar N.V. (“Klei-mar”). Kleimar and defendant Dalian Dongzhan Group Co. Ltd. (“Dalian”) are engaged in a series of arbitrations in London, England (the “London Arbitrations”) before the London Maritime Arbitration Association (“LMAA”). In October, Klei-mar filed an ex parte application to seek discovery in connection with the London Arbitrations. Judge Sullivan granted Klei-mar’s application and allowed Kleimar to seek discovery of Vale and certain other parties (collectively, the “Respondents”). In that order, the Court noted that the application was ex parte and stated that “should any Respondent wish to challenge the subpoena, it should file a timely motion to quash in this matter.” (Dkt. No. 4.) Kleimar subsequently served Vale S.A. with the subpoena duces tecum (“subpoena”) and Vale responded with the present motion to vacate the discovery order (“Motion to Vacate”) and motion to quash the subpoena (“Motion to Quash”). (See Dkt. No. 22.) Vale argues that: (1) Kleimar failed to satisfy the requirements of 28 U.S.C. Section 1782 (“Section 1782”) because Vale does not reside nor is found in the Southern District of New York and the London Arbitrations are not a “foreign tribunal” under Section 1782; (2) the subpoena seeks confidential commercial information; (3) the subpoena subjects Vale to an undue burden; and (4) Vale was not properly served. Vale also requests a protective order be entered that prohibits Kleimar from using any documents produced by Vale for any purpose other than the London Arbitrations.

Kleimar opposed the Motion to Vacate and the Motion to Quash and argues that: (1) Vale lacks standing to move to vacate the subpoena; (2) Vale does reside in New York, as Vale Americas, Inc. (“Vale Americas”), which is found in the Southern District of New York and is an indirect subsidiary of Vale; (3) the London Arbitrations are a foreign tribunal under Section 1782; (4) Kleimar is willing to agree to a confidentiality stipulation and/or narrow the subpoena as to mitigate Vale’s confidentiality concerns; and (5) the subpoena is not an undue burden, particularly in light of Kleimar’s willingness to work with Vale to narrow the scope of the subpoena.

For the reasons discussed below, Vale’s Motion to Vacate and Motion to Quash are DENIED.

I. DISCUSSION

A. MOTION TO VACATE

“A party generally lacks standing to challenge a subpoena issued to a third party absent a claim of privilege or a proprietary interest in the subpoenaed matter.” See U.S. v. Nachamie, 91 F.Supp.2d 552, 557 (S.D.N.Y. 2000). While neither party disputes that Vale has standing to move to quash the subpoena directed at it, Vale does not have standing to challenge discovery directed at other third parties. See, e.g., Estate of Ungar v. Palestinian Authority, 400 F.Supp.2d 541, 555 (S.D.N.Y. 2005)(granting a third party’s motion to quash regarding the subpoena directed at it, but denying its motion to quash “all other third-party subpoenas” for “lack of standing”). As Vale does not have standing to move to vacate the ex parte discovery order, its Motion to Vacate is DENIED.

B. MOTION TO QUASH

1. Legal Standard

Section 1782 provides that “[t]he 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 [521]*521document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.” 28 U.S.C. Section 1782(a).

When granting a subpoena under Section 1782 a court considers whether: “(1) the person from whom discovery is sought is a participant in the foreign proceeding; (2) the foreign tribunal might be receptive to U.S. federal court judicial assistance; (3) the Section 1782(a) request conceals an attempt to circumvent foreign proof gathering restrictions or other policies of a foreign country or of the United States; and (4) the request is unduly intrusive or burdensome.” In re Auto-Guadeloupe Investissement S.A., No. 12-mc-221, 2012 WL 4841945, at *4 (S.D.N.Y. Oct. 10, 2012) (citing Intel Corp v. Advanced Micro Devices. Inc., 542 U.S. 241, 264-265, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004)). Courts must also consider Rules 26 and 45 of the Federal Rules of Civil Procedure. See id.

2. Kleimar Satisfied Section 1782’s Requirements

Kleimar has the burden to prove that Vale resides or is found in New York for the purposes of Section 1782. See, e.g., In re Kolomoisky, No. M19-116, 2006 WL 2404332, at *3 (S.D.N.Y. Aug. 18, 2006). The Court is persuaded that Kleimar has met its burden. First, Vale trades Ameri-can Depository Receipts (“ADRs”) on the New York Stock Exchange and regularly files forms with the Security and Exchange Commission (“SEC”). In its SEC Form S-8 filing, Vale lists Vale Americas, as Vale’s agent for service and “Authorized Representative” in the United States. (See Dkt. No. 28). Second, Vale has significant ties to Vale Americas. Vale Americas is a wholly owned subsidiary of Vale Canada Ltd. (“Vale Canada”), which is a wholly owned subsidiary of Vale. Vale Americas is currently registered to do business in New York and is a defendant in an ongoing action in the- Southern District where it has not contested jurisdiction. (See id.) Third, Vale Americas is listed as an importer in North and South America for Vale’s nickel product and Vale appears to conduct systematic and regular business in the United States and New York. (See id.) The Court is persuaded that Vale has significant contacts with New York such that Vale resides or is found in New York for the purposes of Section 1782.

The Court also finds that the LMAA is a “foreign tribunal” within Section 1782. While the Second Circuit has previously excluded private foreign arbi-trations from the scope of qualifying Section 1782 proceedings, dictum of the Supreme Couit in Intel Corp v. Advanced Miro Devices. Inc., 542 U.S. 241, 258, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004), suggests the Supreme Court may consider private foreign arbitrations, in fact, within the scope of Section 1782. Compare Nat’l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184, 190 (2d Cir. 1999) with Intel, 542 U.S. at 258, 124 S.Ct. 2466. The Second Circuit has not weighed in on this issue in light of Intel. See Chevron Corp v. Berlinger, 629 F.3d 297 (2d Cir. 2011) (declining to reach whether a private arbitration qualifies under Section 1782); In re Asia Mar. Pac. Ltd., No. 15-CV-2760, — F.Supp.3d —, —, n.8, 2015 WL 5037129, at *4 n.8 (S.D.N.Y. Aug. 26, 2015).

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Bluebook (online)
220 F. Supp. 3d 517, 2016 WL 6906712, 2016 U.S. Dist. LEXIS 165297, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ex-parte-kleimar-nv-nysd-2016.