United States v. Prevezon Holdings, Ltd.

320 F.R.D. 112, 96 Fed. R. Serv. 3d 1427, 2017 WL 714026, 2017 U.S. Dist. LEXIS 27364
District Court, S.D. New York·Decided February 27, 2017·No. No. 13-cv-6326 (WHP)·Published·Cited by 10 cases

Opinion

MEMORANDUM AND ORDER

WILLIAM H. PAULEY III, U.S.D.J.:

Defendants Prevezon Holdings, Ltd. and related entities (“Prevezon”) move to compel a second deposition of non-party William Browder. For the following reasons, Preve-zon’s motion is granted in part.

BACKGROUND

Despite being a non-party, William Brow-der is a fulcrum in this litigation. He is the Chief Executive Officer and co-founder of Hermitage Capital Management (“Hermitage”). According to the Government, Hermitage is at the center of an alleged fraud orchestrated by a Russian criminal organization (the “Organization”). (Second Amended Complaint (“SAC”) ¶ 18-20 (ECF No. 381).) The Second Amended Complaint alleges that the Organization obtained judgments approximating one billion dollars by way of sham lawsuits against a number of Hermitage’s companies. (SAC ¶ 19.) Those collusive money judgments were then utilized by the Organization to reap a $230 million windfall tax refund from the Russian treasury (the “Russian Treasury Fraud”). (SAC ¶ 20.) To conceal the fraud, the Organization allegedly laundered monies through a web of entities and transactions, including the purchase of Manhattan real estate, inuring to Prevezoris benefit. (See SAC ¶ 2.)

After learning of the fraud, Browder investigated and then launched a counterattack against members of the Organization he believed were behind the scheme. Over the course of several years, Browder persuaded various sovereigns, including the United States, to impose sanctions and travel restrictions on Russian officials involved in the Russian Treasury Fraud. Notably, Browder’s efforts culminated in the Magnitsky Act, the eponymous law inspired by Hermitage’s lawyer who traced the $230 million tax fraud. (See SAC ¶ 17.) Separately, Browder has shared Hermitage’s story with the main[114]*114stream media, published an account of the Russian Treasury Fraud in a memoir, and maintains a website devoted to various issues relating to Hermitage and Magnitsky.

While Browder is alleged to have supplied many of the allegations undergirding the Government’s claims in this action, he definitively entered the fray in 2015 when Preve-zon subpoenaed him for deposition. After repeatedly attempting to quash the subpoena, Judge Giiesa ordered Browder to appear for a deposition on April 15, 2015 (the “First Deposition”). (See ECF No. 252.) Although Browder produced a number of documents prior to the First Deposition, he produced more on a rolling basis thereafter. The Government also supplied Prevezon with a separate cache of Hermitage-related documents after the First Deposition. (Prevezon letter dated February 21, 2017 (“Prevezon Ltr.”), at 4 (ECF No. 561).)

Following the First Deposition, Prevezon sought a second one on the basis of “new discovery and new allegations” drawn from both Browder’s document productions subsequent to the First Deposition and the Government’s Hermitage-specific documents. (Prevezon Ltr., at 4.) On November 9, 2015, Judge Griesa ordered Browder to appear for a second deposition on November 23, 2015 (the “November 2015 Order”). (See Transcript dated November 9, 2015 (“Tr.”) (ECF No. 448).) That deposition was adjourned twice before Prevezon moved for sanctions, claiming that Browder’s refusal to appear constituted contempt of court. Judge Griesa declined to sanction Browder, but directed him to appear for deposition on December 18, 2015. (See ECF No. 490.) Thereafter, that deposition was stayed as a result of Brow-der’s motion to disqualify Prevezon’s counsel.

Any insinuation that Browder is a marginal player in this action is belied by his activist role in supplying information to the Government, his relentless media blitzkrieg, and his longstanding but unsuccessful efforts to avoid a deposition. And those activities were eclipsed by Browder’s motion to disqualify Prevezon’s counsel in December 2015, underscoring his outsized role in this litigation.

DISCUSSION

Browder opposes Prevezon’s motion to compel a second deposition on grounds that there is no good cause to justify it. (Letter dated February 23, 2017 (“Browder Ltr.”), at 1 (ECF No. 562).) He argues that this Court—to which the action was re-assigned in April 2016—should make an independent determination of whether a second deposition is warranted because Judge Grie-sa’s order lacked a proper basis. (Browder Ltr., at 1 n.l.)

“[C]ase reassignment does not put settled issues back into play. If it did, the result would be increased uncertainty and needless depletion of judicial resources.” Dandong v. Pinnacle Performance Ltd., 2012 WL 6217646, at *2 (S.D.N.Y. Dec. 3, 2012). In reconsidering a prior order, there is a “strong presumption against [ ] amendment” absent an “intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent a manifest injustice.” Bergerson v. N.Y. State Office of Mental Health, Cent. N.Y. Psychiatric Ctr., 652 F.3d 277, 288-89 (2d Cir. 2011); Dandong, 2012 WL 6217646, at *1 (“[Reconsideration of a court’s previous order is an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources” and may be reconsidered if the court “overlooked controlling decisions or factual matters that were put before it on the underlying motion.”). Judge Griesa exercised his broad discretion in ordering a second deposition. But because it is unclear whether the November 2015 Order, issued on the record during a telephonic conference among the parties, sufficiently considered certain factual matters, this Court undertakes an independent evaluation of the law and facts in resolving this motion, (gee, e.g., Tr., at 12:1-6.)

Prevezon’s request is rooted in Federal Rule of Civil Procedure 30(a)(2)(A)(ii), which provides that leave of court is required to conduct a deposition when “the deponent has already been deposed in the case.” This Court has “discretion to make a determination which is fair and equitable under all the relevant circumstances.” Ganci v. U.S. Limousine Serv., Ltd., 2011 WL 4407461, at *2 [115]*115(E.D.N.Y. Sept. 21, 2011). Rule 26(b)(2) enumerates certain factors guiding this Court’s discretion: (1) whether the second deposition of the -witness would be unnecessarily cumulative; (2) whether the party requesting the deposition has had other opportunities to obtain the same information; and (3) whether the burden of a second deposition outweighs its potential benefit. Ganci, 2011 WL 4407461, at *2.

A court may deny a second deposition even if “relevant documents are produced subsequent to the [first] deposition if the party taking the deposition either failed to request those documents in timely fashion or chose to conduct the deposition prior to the completion of document discovery.” Eaton Corp. v. Weeks, 2014 WL 700466, at *3 (E.D. Mich. Feb. 24, 2014) (citing Fresenius Med. Care Holdings, Inc. v. Roxane Labs., Inc., 2007 WL 764302, at *2 (S.D. Ohio Mar. 9, 2007)) (emphasis added). Prevezon’s decision to proceed with the First Deposition was premature in view of Browder’s representation that he could not complete his production before the deposition. (Browder Ltr., Ex. B.) Browder is certainly not faultless here, having notified Prevezon of his inability to complete document production a mere she days before the First Deposition.

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United States v. Prevezon Holdings, Ltd., 320 F.R.D. 112, 96 Fed. R. Serv. 3d 1427, 2017 WL 714026, 2017 U.S. Dist. LEXIS 27364 (S.D.N.Y. 2017).

320 F.R.D. 112 (United States v. Prevezon Holdings, Ltd.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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