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In re Campania Chilena De Navegacion

February 6, 2004

IN THE MATTER OF THE PETITION OF CAMPANIA CHILENA DE NAVEGACION


The opinion of the court was delivered by: Pollak, Magistrate J.

ORDER

On October 24, 2003, petitioner Compania Chilena De Navegacion Interoceanica S.A. ("Compania Chilena") filed a petition for an Order to preserve evidence under Federal Rule of Civil Procedure 27 or, in the alternative, to preserve testimony for use in foreign proceedings that were then pending in Ecuador, pursuant to 28 U.S.C. § 1782. The matter was referred to the undersigned for decision.

FACTUAL BACKGROUND

Petitioner alleges that on September 11, 2003, there was a fire in the engine room of the M/V CCNI AYSEN which caused damage to the engine room and disrupted the operation of the vessel. At the time of the fire, the vessel was under charter to the petitioner through a contract with the respondent, SBT Shipping Company, Limited.

Prior to the filing of this petition on September 15, 2003, petitioner had commenced an action in Ecuador, seeking a court-ordered survey and inspection of the vessel, along with a request for the production of documents and for depositions of various crew members.

On September 16, 2003, the judge in the proceeding in Ecuador appointed a surveyor and ordered that the deposition of the captain of the vessel be taken. Thereafter, depositions were ordered to be taken of the electrician, the chief engineer, and the third engineering officer. Also ordered in the Ecuadorian proceeding was the production of an engine tube believed to be involved in the fire. Although some documents were produced and an inspection was had in compliance with the Ecuadorian court's order, the engine tube was sent back to Germany. Moreover, although petitioner was not able to take depositions of the crew members, certain witnesses were interviewed by the authorities.

While the litigation was pending before the Ecuadorian court, there were other proceedings commenced before the harbormaster in Guayaquil. The harbormaster also requested documents and witnesses. At the same time, a criminal investigation by the District Attorney's Office in Guayaquil was also apparently commenced in which certain individuals were ordered to appear to give testimony.

While these foreign proceedings were pending, and despite orders to provide evidence, the vessel left Ecuador on October 15, 2003 on its way to the United States. It was expected to arrive on October 28, 2003 and to remain here for less than 24 hours.

Anticipating that it may be subject to litigation in the United States as a result of the delay in the delivery of the cargo caused by the fire, Compania Chilena brought this petition in an effort to preserve testimony and evidence while the vessel and crew were in the United States.

DISCUSSION

As an initial matter, this Court has authority to hear and decide these discovery matters as non-dispositive matters under 28 U.S.C. § 636(b)(1)(A), where "a judge may designate a magistrate [magistrate judge] to hear and determine any pretrial matter pending before the court." See Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir.1990) (noting that "[m]atters concerning discovery generally are considered `nondispositive" ' and thus, a magistrate judge's orders regarding discovery issues are reviewed under the " `clearly erroneous or contrary to law' standard" (quoting 28 U.S.C. § 636(b)(1)(A))).

A. Rule 27 of the Federal Rule of Civil Procedure

Rule 27 of the Federal Rules of Civil Procedure provides a mechanism for perpetuating testimony before trial. The Rule states in relevant part: "A person who desires to perpetuate testimony regarding any matter that may be cognizable in any court of the United States may file a verified petition in the United States district court in the district of the residence of any expected adverse party." Fed.R.Civ.P. 27. It is within the Court's discretion to grant such discovery under certain circumstances. See In The Matter of the Application of Deiulemar Compagnia de Navegazione S.P.A. v. Pacific Eternity, S.A., 198 F.3d 473, 477 (4th Cir.1999) (citing Shore v. Acands, Inc., 644 F.2d 386, 388 (5th Cir.1981); Ash v. Cort, 512 F.2d 909, 912 (3rd Cir.1975), and noting that "[w]e review the district court's grant of a Rule 27 petition for an abuse of discretion").

In order to obtain discovery under this rule, the law provides that petitioner must show the following elements: (1) that it expects to be a party to an action that may be cognizable in any court of the United States but the action is unable to be brought presently; (2) it must set forth the subject matter of the expected action and the petitioner's interest in such an action; (3) it must present facts which the petitioner seeks to establish through the proposed testimony and the reasons for desiring to perpetuate that testimony at this time; (4) it must provide the names or description of the expected adverse parties; and (5) the ...


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