Japan Halon Co. v. Great Lakes Chemical Corp.

145 A.L.R. Fed. 749, 155 F.R.D. 626, 1993 U.S. Dist. LEXIS 20300, 1993 WL 660918
CourtDistrict Court, N.D. Indiana
DecidedMay 28, 1993
DocketNo. 4:90cv37AS
StatusPublished
Cited by8 cases

This text of 145 A.L.R. Fed. 749 (Japan Halon Co. v. Great Lakes Chemical Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Japan Halon Co. v. Great Lakes Chemical Corp., 145 A.L.R. Fed. 749, 155 F.R.D. 626, 1993 U.S. Dist. LEXIS 20300, 1993 WL 660918 (N.D. Ind. 1993).

Opinion

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

Japan Halón filed its complaint for misappropriation of trade secrets against Great Lakes in the Central District of California on February 22, 1990. Following a transfer of venue to the Northern District of Indiana, Great Lakes filed its answer and counterclaim. Japan Halón has amended its complaint to include Yuichi Iikubo as a defendant. Great Lakes has filed a motion to compel discovery of unprivileged documents from Onoda Cement and Tosoh, Japan Halon’s parent companies.

Analysis

The issue before the court is whether Japan Halón has “possession, custody or control” over the documents in question. Fed. R.Civ.P. 34 delineates the scope of production of documents between parties.1 In this [627]*627case, the defendants have requested that documents be produced, or at least their existence or nonexistence be confirmed, by nonparties, Onoda Cement and Tosoh. Rule 34 only applies to discovery between parties, but it “does not prevent discovery of the kind permitted by the rule against one who is not a party” (Charles A. Wright & Arthur R. Miller, 8 Federal Practice and Procedure § 2208 (1970). Great Lakes bases its argument for production on Japan Halon’s alleged custody or control over documents in the possession of its parent companies, which would give the plaintiff the legal right to copies of documents. Japan Halón, however, has declared that it does not have the requisite control over the documents because “Japanese law makes clear that Japan Halón has no right to broadly demand internal documents from Onoda and Tosoh” (Memorandum of Japan Halón in Opposition to Great Lakes’ Motion [“Japan Halón Memorandum”] at 2). Thus, Japan Halón has argued that international interpretation of its corporate structure and the Japanese discovery law result in the conclusion that its does not have the requisite control over documents in possession of its parent companies. In response to Japan Halon’s declaration that Japanese law does not permit compliance with Great Lakes’ discovery request, the defendants have argued that “[h]aving chosen to bring its lawsuit in the U.S. federal courts, Japan Halón is required to conduct discovery within the letter and the spirit of the Federal Rules of Civil Procedure” (Defendant’s Memorandum in Support of Motion to Compel Discovery [“Defendants’ Memorandum”] at 3).

Conversely, Japan Halón has argued that the Federal Rules of Civil Procedure cannot be applied in this case until Great Lakes has pursued its discovery request through the “traditional letters rogatory procedures prescribed by Japan’s Reciprocal Judicial Assistance Act” through consular channels (Japan Halon’s Memorandum at 3). The defendants claim that this course of action would be futile, and that Rule 34 is applicable:

“It is generally understood that a Japanese court, acting as a commissioned or assigned judge as defined by the Code of Civil Procedure, cannot issue an order to produce documents or other tangible evidence in executing letters rogatory from a foreign court. Thus, the only assistance generally given by Japanese courts is the taking of testimony of witnesses, expert witnesses and the parties.”

Defendants’ Memorandum at 18, quoting 7 Kitagawa, Doing Business is Japan § 5.05[5][d] (M.B.1992 ed.) (emphasis added). This court finds that the defendants are not required to take the path of letters rogatory prior to filing their motion to compel discovery pursuant to Fed.R.Civ.P. 34. The court also agrees with the defendants that because Japan is not a signatory to the Hague Convention on Evidence, any analysis of case law on that point is rendered moot (Defendant’s Reply in Support of Motion to Compel [“Defendant’s Reply”] at 2).

The analysis of document production under the Federal Rules of Civil Procedure is subject to a broad approach, as the “rule is to be liberally, rather than narrowly, construed, and its provisions have the force and effect of a statute” 8 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2202 (1970). Great Lakes bases its discovery request on the relationship between Japan Halón and its parent corporations:

Defendants believe — and Japan Halón does not deny — that its “parent. companies” namely Onoda Cement Co., Ltd. and Tosoh are in physical possession of documents which are 1) reasonably calculated to lead to the discovery of admissible evidence, and 2) responsive to one or more of the Defendants’ requests for discovery.

Defendants’ Memorandum in Support at 4. Further, Great Lakes argues that the close nature of the three corporate entities supports the conclusions that the documents are within the “possession, custody and control” [628]*628meaning of Fed.R.Civ.P. 34(a), even though they are in the possession of nonparties:

“A party may be required to produce documents and things that he possesses even though they belong to a third person who is not a party to the action. And if a party has possession, custody or control, he must produce documents and things even though the documents and things are themselves beyond the jurisdiction of the court.”

Defendants’ Memorandum in Support at 4-5, quoting 8 Charles A. Wright & Arthur R. Miller, 8 Federal Practice and Procedure § 2210 (1970).

The defendants also cite Afros S.P.A. v. Krauss-Maffei Corp., 113 F.R.D. 127, 129 (D.Del.1986), which defines control: “The control analysis for Rule 34 purposes does not require the party to have actual managerial power over the foreign corporation, but rather that there be close coordination between them.” Afros S.P.A. based its analysis on the test applied in In Re Uranium Antitrust Litigation, 480 F.Supp. 1138 (N.D.Ill. 1979), in which the court held that:

It is sufficient that Rio U.S. has, or once had, control over its directors, officers and employees who managed the uranium-related activities of Rio U.S. alone or of both corporations. Rio U.S. must produce all responsive documents held by those employees or former employees, even if those documents have found their way into Rio Canada files. The formalities separating the two corporations cannot be used as a screen to disguise the coordinated nature of their uranium enterprise.

In Re Uranium, 480 F.Supp. at 1153.

The same analysis applies to this case. As an alternative to its position that Great Lakes should be forced to pursue international letters rogatory through consular routes with a dim chance of success, Japan Halón advances the argument that the Japanese practice of “secondment” should prevent discovery from its parent companies:

Japan Halon’s board of directors includes four full-time directors and four part-time directors. See Haga Decl. § 5.

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145 A.L.R. Fed. 749, 155 F.R.D. 626, 1993 U.S. Dist. LEXIS 20300, 1993 WL 660918, Counsel Stack Legal Research, https://law.counselstack.com/opinion/japan-halon-co-v-great-lakes-chemical-corp-innd-1993.