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Export-Import Bank of the United States v. Asia Pulp & Paper Co.

November 17, 2005


The opinion of the court was delivered by: James C. Francis IV United States Magistrate Judge


The defendant, Asia Pulp & Paper Company, Ltd. ("APP" or "the company"), seeks to reopen discovery, which closed on July 19, 2005, for a period of thirty to sixty days. APP argues that the extended discovery period is necessary because APP learned of relevant evidence only in the last days of discovery, and, in the case of two witnesses, had already issued subpoenas but was unable to schedule depositions before discovery closed.

This is the second round of fully briefed discovery skirmishes between the plaintiff and defendant. On May 25, 2005, each party moved to compel the other to produce documents being withheld as privileged communications; in addition, APP asked for an order requiring the plaintiff, the Export-Import Bank of the United States ("Ex-Im" or "the agency"), to improve its privilege log. On November 8, 2005, I issued a Memorandum and Order requiring Ex-Im to revise its privilege log and directing APP to disclose attorney-client communications the company shared with its financial advisors. The Memorandum and Order established a new timetable: it pushed the next litigation deadline, a due date for the submission of a summary judgment motion or pre-trial order, back sixty days to January 31, 2006.

Shortly after the close of discovery and before I issued the November 8th Memorandum and Order, APP filed this motion seeking to obtain documents identified in the last days of discovery, to depose two witnesses who had already been subpoenaed, and to subpoena and depose an official of the United States Department of State. APP's motion is granted.


The details of the underlying dispute between APP and Ex-Im are set forth in the November 8, 2005, Memorandum and Order. In brief, Ex-Im, a United States government agency that promotes American exports by backing commercial loans to oversees buyers of American products, instituted this lawsuit to recover money due from APP under several promissory notes. (Second Amended Complaint ("SAC"), ¶¶ 1,9). APP, a Singapore company, is one of the world's largest paper manufacturers. (SAC, ¶¶ 5-8,18). In March 2001, with worldwide debts approaching $14 billion, APP stopped payments on all of its loans. (Declaration of Ferry Siswojo Djongianto in opposition to Plaintiff's Motion to Compel Disclosure.) This triggered an intensive period of negotiations between APP and its worldwide creditors, including Ex-Im, to restructure APP's debt. On Oct 29, 2003, on the eve of the signing of a master restructuring agreement, Ex-Im withdrew from the negotiations and commenced this action. (Declaration of Kenneth R. Puhala in Support of Defendant's Motion to Compel and Certification of Good Faith ("Puhala Decl."), ¶¶ 5, 6).

Most of the discovery requests in APP's current application spring from information APP gleaned during depositions conducted in the last week of the discovery period, July 12 to July 19, 2005. On July 12, 2005, APP deposed Carl Leik, a former thirty-year veteran of Ex-Im, who testified that he recorded significant personal and business events in a journal, the existence of which had not previously been disclosed to APP despite APP's demand early in discovery for "[a]ll documents consisting of Charles [sic] Leik's personal files that concern the Loans, the Restructuring or APP." (Declaration of Benjamin P. Deutsch in Support of Defendant's Motion to Extend and Compel Discovery ("Deutsch Decl."), ¶ 25; Declaration of AUSA Nicole Gueron in Opposition to APP's Motion to Extend and Compel Discovery ("Gueron Decl."), Exh. 1, ¶ 20). Mr. Leik explained that he maintained the journal on a home computer and had possession of it in paper and computer form. (Deposition of Carl Leik ("Leik Dep."), attached in part as Exh. A to Deutsch Decl., at 91).

On July 14, 2005, APP deposed Shari Villarosa, a former economic section chief at the U.S. Embassy in Indonesia, to obtain information about the State Department's involvement in the debt restructuring negotiations. (Deutsch Decl., ¶¶ 6, 37; Deposition of Shari Villarosa ("Villarosa Dep."), attached in part as Exh. B to Deutsch Decl.). Ms. Villarosa was the State Department's choice of a deposition witness: APP had subpoenaed two United States ambassadors for deposition and the State Department provided Ms. Villarosa instead. (Deutsch Decl., ¶¶ 35, 37). During her deposition, Ms. Villarosa disclosed that for eight months in 2002 while she was temporarily stationed in East Timor, her deputy, William Heidt, had stepped into her shoes as chief of the economic section at the embassy. (Villarosa Dep. at 22-23). The eight months were a period during which the State Department was involved in helping Ex-Im coordinate the negotiating position of several creditor nations. (Deutsch Decl., ¶ 33).

On July 19, 2005, APP deposed Lynette Brown, a lawyer formerly at the firm of Norton Rose and Ex-Im's outside counsel in the APP negotiations. (Deutsch Decl., ¶ 53; Deposition of Lynette Brown ("Brown Dep."), attached in part as Exh. Q to Deutsch Decl.). Ms. Brown testified that she kept notes about all of her APP-related meetings (Brown Dep. at 195-96). Ex-Im contends that it alerted APP to the existence of Ms. Brown's notes in its privilege log.

According to APP, however, it did not recognize that Ms. Brown's notes were among those listed in the privilege log because the entries lacked critical identifying information. (Deutsch Decl., ¶ 53).

APP seeks to reopen discovery to compel Ex-Im to produce Mr. Leik's journals or, if Ex-Im is unable to take possession of the journals, to permit APP to subpoena Mr. Liek; to permit APP to subpoena and depose Mr. Heidt; and to compel Ex-Im either to produce Ms. Brown's notes or to revise its privilege log.

APP also asks to depose two APP bondholders about the role they played in convincing Ex-Im to take a hard line with APP during the restructuring negotiations. (Deutsch Decl., ¶ 50). APP subpoenaed the bondholders, Oaktree Capital Management LLC ("Oaktree") and Gramercy Advisors LLC ("Gramercy"), on March 3, 2005, seeking both documents and testimony. (Deutsch Decl., ¶ 48). The two bondholders, who are traders in distressed debt, are plaintiffs in a separate action against APP in New York State Supreme Court. (Deutsch Decl., ¶ 48 & n.2). They produced documents responsive to APP's subpoena at the end of May. In June, APP and the bondholders began to discuss scheduling depositions, but they did not settle on a date before the end of discovery. (Deutsch Decl., ¶ 48).


A. Carl Leik's ...

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