Wang v. Hull

• Court: District Court, W.D. Washington
• Decided: June 18, 2020
• Docket: 2:18-cv-01220
• Status: Unknown

Opinion

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 ZHIZHENG WANG, 8 NO. C18-1220RSL Plaintiff, 9 v. ORDER DENYING PLAINTIFF’S 10 MOTION FOR SUMMARY BRUCE HULL, JUDGMENT 11 Defendant. 12 _____________________________________ 13 DECATHLON ALPHA III, L.P., 14 Intervenor Plaintiff, 15 v. 16 ZHIZHENG WANG. 17 Intervenor Defendant. 18 19

20 This matter comes before the Court on plaintiff Zhizheng Wang’s “Motion for Partial 21 Summary Judgment Against Bruce Hull,” Dkt. # 33, and defendant Bruce Hull’s “Motion to 22 23 Strike Plaintiff’s Declarations,” Dkt. # 89. Wang seeks a summary determination that Hull 24 lacked authority to sign a subordination agreement on behalf of an informal group of individuals 25 known as “the Wang Group.” Hull and/or intervenor Decathlon Alpha III, L.P., challenge 26 27 ORDER DENYING PLAINTIFF’S 1 Wang’s standing to pursue claims in the name of “the Wang Group,” argue that there are 2 disputed issues of fact regarding Hull’s authority to act, and object to consideration of any 3 evidence obtained from, or declarations signed in, the People’s Republic of China. 4 Summary judgment is appropriate when, viewing the facts in the light most favorable to 5 the nonmoving party, there is no genuine issue of material fact that would preclude the entry of 6 7 judgment as a matter of law. The party seeking summary dismissal of the case “bears the initial 8 responsibility of informing the district court of the basis for its motion” (Celotex Corp. v. 9 Catrett, 477 U.S. 317, 323 (1986)) and “citing to particular parts of materials in the record” that 10 show the absence of a genuine issue of material fact (Fed. R. Civ. P. 56(c)). Once the moving 11 party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to 12 designate “specific facts showing that there is a genuine issue for trial.” Celotex Corp., 477 U.S. 13 14 at 324. The Court will “view the evidence in the light most favorable to the nonmoving party . . . 15 and draw all reasonable inferences in that party’s favor.” Colony Cove Props., LLC v. City of 16 Carson, 888 F.3d 445, 450 (9th Cir. 2018). Although the Court must reserve for the trier of fact 17 genuine issues regarding credibility, the weight of the evidence, and legitimate inferences, the 18 “mere existence of a scintilla of evidence in support of the non-moving party’s position will be 19 20 insufficient” to avoid judgment. City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1049 (9th 21 Cir. 2014); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Factual disputes whose 22 resolution would not affect the outcome of the suit are irrelevant to the consideration of a motion 23 for summary judgment. S. Cal. Darts Ass’n v. Zaffina, 762 F.3d 921, 925 (9th Cir. 2014). In 24 other words, summary judgment should be granted where the nonmoving party fails to offer 25 evidence from which a reasonable fact finder could return a verdict in its favor. Singh v. Am. 26 27 ORDER DENYING PLAINTIFF’S 1 Honda Fin. Corp., 925 F.3d 1053, 1071 (9th Cir. 2019). 2 Having reviewed the memoranda, declarations, and exhibits submitted by the parties, 3 including the supplemental submissions filed after additional discovery was taken, and taking 4 the evidence in the light most favorable to the non-moving party, the Court finds as follows: 5 A. Authority to Sign 6 7 There is a triable issue of fact regarding Hull’s authority to sign the subordination 8 agreement. Qiqi “Denny” Wang was the acknowledged agent of “the Wang Group” when he 9 told Hull to append his signature to any documents that were necessary to close the Decathlon 10 loan. Dkt. # 33-2 at 9 (June 12, 2017, email from Denny1 to Hull stating, “If there is anything 11 that is important and needs to be signed to close the Decathlon loan, please sign that for me.”). 12 The actions of an acknowledged agent are imputed to the principal. Blake Sand & Gravel, Inc. v. 13 14 Saxon, 98 Wn. App. 218, 223 (1999) (“When an agent has actual authority to act on behalf of the 15 principal, the agent’s exercise of the authority binds the principal.”). Because there is no dispute 16 regarding Denny’s authority to act on behalf of “the Wang Group,” Wang’s argument that the 17 authorization Hull received was ineffective because it did not come directly from one or all of 18 the individuals who made up “the Wang Group” is rejected. 19 20 With regards to the scope of the authorization Denny granted to Hull, there is at least an 21 issue of fact whether it included permission to sign for Denny on behalf of “the Wang Group.” 22 There is evidence that Denny was aware that Decathlon would not close the loan unless “the 23 Wang Group” subordinated its security position, that he had discussed this requirement with 24 25 26 1 Qiqi “Denny” Wang is the son of plaintiff Zhizheng Wang. In order to avoid confusion, plaintiff is referred to as “Wang” and his son in referred to as “Denny.” 27 ORDER DENYING PLAINTIFF’S 1 Decathlon and Hull, that he had received copies of the subordination agreement prior to closing, 2 that he wanted the loan to close so that his interests in the borrower would be protected, and that 3 he expressed no surprise and raised no objection to Hull’s use of his signature when he received 4 a copy of the signed documents after closing. A reasonable fact finder could conclude that 5 Denny authorized Hull to sign documents for him personally and on behalf of “the Wang 6 7 Group” in order to close the Decathlon loan. 8 B. Standing 9 There is evidence in the record that the individuals who made up “the Wang Group” and 10 the limited liability company they created to pursue their contractual claim in state court 11 intended to transfer all rights in the cause of action to Zhizheng Wang, the named plaintiff in this 12 matter. Hull argues that the timing of some of the transfers and/or the language used therein raise 13 14 issues regarding their effectiveness, but plaintiff’s showing regarding standing is sufficient to 15 forestall entry of judgment in Hull’s favor at this point in the litigation. This determination is 16 without prejudice to a motion for summary judgment directed at the issue. 17 C. Motion to Strike2 18 In his supplemental response to Wang’s motion for summary judgment, Hull raised 19 20 objections to the submission of certain unspecified declarations because the declarants claimed 21 that they were not subject to jurisdiction in the United States and were therefore attempting to 22 avoid any penalty for perjury. Dkt. # 76 at 4. Three months after briefing on the motion for 23 summary judgment closed, Hull filed a separate motion to strike evidence obtained from, and 24 25 2 The Court has not reviewed Hull’s pending motion to compel Wang’s deposition (Dkt. # 87) 26 and has confined its analysis and ruling to the motion to strike existing declarations, exhibits, and discovery responses. 27 ORDER DENYING PLAINTIFF’S 1 declarations signed in, the People’s Republic of China on the ground that it is “improper” and 2 “ineffective” for anyone other than the Chinese government to take evidence or issue oaths in 3 China. Dkt. # 89 at 3. While the perjury objection was timely raised, the objection based on 4 Chinese law is untimely and procedurally improper. Nevertheless, because of the importance of 5 the declarations and evidence at issue, the Court has considered both objections on their merits. 6 7 1. Evidence Collected in Violation of Chinese Law 8 Hull’s objections based on violations of Chinese law conflate issues of foreign relations 9 law and admissibility. The methods and scope of discovery in federal court are governed by the 10 Federal Rules of Civil Procedure, and the admissibility of discovered evidence is governed by 11 the Federal Rules of Evidence. Hull is essentially arguing that evidence that was created or 12 collected according to the Federal Rules of Civil Procedure is nevertheless inadmissible under 13 14 the Federal Rules of Evidence if its creation or collection violated foreign law. None of the case 15 law cited supports such a proposition. 16 In some circumstances, the broad discovery authorized by the Federal Rules of Civil 17 Procedure conflicts in a meaningful way with sovereign interests, in which case the Court may 18 require the parties to use Hague Convention or other treaty procedures to acquire evidence. See 19 20 Sun Grp. U.S.A. Harmony City, Inc. v. CRRC Corp. Ltd., 2019 WL 6134958, at *1 (N.D. Cal. 21 Nov. 19, 2019); St. Jude Med. S.C., Inc. v. Janssen-Counotte, 104 F. Supp. 3d 1150, 1160 (D. 22 Or. 2015)).3 The obligation to do so is not mandatory, however. The Supreme Court has 23 24 3 The Chinese law cited by Hull provides that “[t]he request for a provision of judicial assistance shall be conducted through the channels stipulated in the international treaties concluded or acceded to 25 by the People’s Republic of China,” which interprets as a reference to the Hague Evidence Convention. 26 See Civil Procedure Law of the People’s Republic of China, Article 277 (rev. 2017); Melaleuca, Inc. v. Kot Nam Shan, 2018 WL 1952523, at *7 (D. Idaho Apr. 24, 2018) (finding that “China has indicated 27 ORDER DENYING PLAINTIFF’S 1 expressly rejected Hull’s implicit argument that the Hague Convention automatically compels a 2 U.S. court to “change its own evidence-gathering procedures” whenever evidence located abroad 3 is needed for use in U.S. litigation. Societe Nationale Industrielle Aérospatiale v. U.S. Dist. 4 Court for S. Dist. of Iowa, 482 U.S. 522, 534 (1987). The Court found that interpreting the 5 Hague Convention as the exclusive means for obtaining evidence located abroad “would 6 7 effectively subject every American court hearing a case involving a national of a contracting 8 state to the internal laws of that state. Interrogatories and document requests are staples of 9 international commercial litigation, no less than of other suits, yet a rule of exclusivity would 10 subordinate the court’s supervision of even the most routine of these pretrial proceedings to the 11 actions or, equally, to the inactions of foreign judicial authorities.” Aérospatiale, 482 U.S. at 12 539. While acknowledging that “the process of obtaining evidence in a civil-law jurisdiction is 13 14 normally conducted by a judicial officer rather than by private attorneys,” the Court declined to 15 impose a duty on U.S. courts to employ such procedures, instead recognizing that “the concept 16 of international comity requires in this context a more particularized analysis of the respective 17 interests of the foreign nation and the requesting nation . . . . We therefore decline to hold as a 18 blanket matter that comity requires resort to Hague Evidence Convention procedures without 19 20 prior scrutiny in each case of the particular facts, sovereign interests, and likelihood that resort to 21 those procedures will prove effective.” Aérospatiale, 482 U.S. at 543-44 (footnotes omitted). 22 Thus, a district court’s determination of whether to require a party seeking discovery to 23 comply with the Hague Convention procedures involves a two-step inquiry. First, the resisting 24 25 26 that taking depositions, whether voluntary or compelled . . . may, as a general matter, only be accomplished through requests to its Central Authority under the Hague Evidence Convention”). 27 ORDER DENYING PLAINTIFF’S 1 party must prove that Chinese law bars it from producing the discovery sought. EFG Bank AG v. 2 AXA Equitable Life Ins. Co., 2018 WL 1918627, at *1 (S.D.N.Y. Apr. 20, 2018). Hull has made 3 that showing. He has not, however, addressed the second step of the inquiry, namely whether the 4 particular facts of this case, including the sovereign interests at stake, warrant requiring the 5 application of the Hague Convention. Sun Grp. U.S.A. Harmony City, 2019 WL 6134958, at *1 6 7 (citing Aérospatiale, 482 U.S. at 544). 8 At issue in the motion to strike are discovery responses, declarations, and exhibits 9 produced by Wang and his witnesses while in China. In this context, Wang has not attempted to 10 use a Chinese law designed to protect its citizens from abusive or harassing litigation as a shield. 11 Rather, Hull is attempting to use the law as a sword to strike down evidence Wang has, without 12 objection, voluntarily produced. As the Supreme Court noted, “[s]ome discovery procedures are 13 14 much more ‘intrusive’ than others. . . . [and t]he exact line between reasonableness and 15 unreasonableness in each case must be drawn by the trial court, based on its knowledge of the 16 case and of the claims and interests of the parties and the governments whose statutes and 17 policies they invoke.” Aérospatiale, 482 U.S. at 545. Absent some showing that the evidence 18 produced is only marginally relevant to the issues in this case, threatens the sovereign interests 19 20 of China, and/or would likely be obtainable through the Hague Convention procedures, the 21 Court declines to require resort to those procedures.4 22 23 4 The district judge in Ji v. Jling, Inc., 2019 WL 1441130, at *6 (E.D.N.Y. Mar. 31, 2019), identified another issue to be considered when determining the reasonableness of U.S. discovery 24 procedures used abroad. Where the production of evidence or testimony places only the party seeking to use the American judicial system to enforce its rights in jeopardy under Chinese law, use of the federal 25 discovery procedures without recourse to the Hague Convention may be reasonable. If, however, 26 discovery will expose a non-consenting party to sanctions in the foreign jurisdiction, that factor will weigh in favor of invoking the more cumbersome Convention procedures. 27 ORDER DENYING PLAINTIFF’S 1 2. “Under Penalty of Perjury” 2 Hull has also challenged the admissibility of four declarations submitted by the individual 3 members of “the Wang Group” as Exhibit 9 to attorney Ellison’s supplemental declaration, Dkt. 4 # 81-9. When a matter may be supported by a sworn declaration in writing, an individual may 5 instead submit an unsworn statement that is signed as true under penalty of perjury pursuant to 6 7 28 U.S.C. § 1746. To be admissible, the statute requires that the declaration be made 8 “substantially” in the following language: “I declare (or certify, verify, or state) under penalty of 9 perjury that the foregoing is true and correct. Executed on (date).” 28 U.S.C. § 1746(2). The 10 purpose of this affirmation is to be certain “the declarant understands the legal significance of 11 the declarant’s statements and the potential for punishment if the declarant lies.” U.S. v. Bueno- 12 Vargas, 383 F.3d 1104, 1111 (9th Cir. 2004). See also In re World Trade Center Disaster 13 14 Litigation, 722 F.3d 483, 488 (2nd Cir. 2013) (omission of statement that declaration was made 15 under penalty of perjury fatal; “[i]nclusion of the language ‘under penalty of perjury’ is an 16 integral requirement of the statute for the very reason that it impresses upon the declarant the 17 specific punishment to which he or she is subjected for certifying to false statements”); 18 Nissho–Iwai American Corp. v. Kline, 845 F.2d 1300, 1306-07 (5th Cir. 1988) (purported 19 20 affidavit omitting statement that it was made under penalty of perjury and that the contents were 21 true and correct insufficient under section 1746; as drafted, the purported affidavit “allows the 22 affiant to circumvent the penalties for perjury”); Kersting v. U.S., 865 F.Supp. 669, 676 (D. 23 Haw. 1994) (declaration is sufficient under section 1746 if it “contains the phrase ‘under penalty 24 of perjury’ and states that the document is true”). The four declarations at issue contain the 25 appropriate language acknowledging penalties for perjury, but they specifically assert that the 26 27 ORDER DENYING PLAINTIFF’S 1 declarant does “not intend to submit to the personal jurisdiction of the Courts of the United 2 States.” See, e.g., Dkt. #81-9 at 1. Hull argues, without citation to case law, that the declarations 3 must be stricken. 4 Whether a person has subjected themselves to the jurisdiction of the Court is not for the 5 declarant to decide. Where a witness voluntarily inserts him- or herself into a jurisdiction to 6 7 provide testimony in a pending matter and makes false statements under penalty of perjury, 8 minimum contacts sufficient to hale the witness into Court to face penalties for those false 9 statements likely exist. The Court therefore finds that the declarations of the four individual 10 members of “the Wang Group” are not inadmissible simply because the declarants include an 11 ineffective statement denying the Court’s jurisdiction over their persons. 12 13 14 For all of the foregoing reasons, Wang’s motion for summary judgment (Dkt. # 33) and 15 Hull’s motion to strike (Dkt. # 89) are DENIED. 16 17 Dated this 18th day of June, 2020. 18 A 19 Robert S. Lasnik United States District Judge 20 21 22 23 24 25 26 27 ORDER DENYING PLAINTIFF’S