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In re Application of Mare Shipping Inc.

United States District Court, Second Circuit

October 22, 2013

IN RE APPLICATION OF MARE SHIPPING INC. and APOSTOLOS MANGOURAS, for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in Foreign Proceedings


P. KEVIN CASTEL, District Judge.

Mare Shipping Inc. and Apostolos Mangouras (collectively, the "Applicants") move to compel compliance with a subpoena directed to the law firm Squire Sanders LLP and one of its partners, Brian Starer (collectively, the "Respondents"). The subpoena seeks documents and deposition testimony related to Respondents' service as counsel for the Kingdom of Spain in a prior action in this district. The documents and testimony are said to relate to a proceeding pending in the Kingdom of Spain and are sought pursuant to 28 U.S.C. § 1782. Respondents oppose the motion. For reasons that will be explained below, the Applicants' motion is denied.


In November 2002, the Prestige, a Bahamian-flagged oil tanker, sank off the coast of Spain. hi 2003, the Kingdom of Spain commenced an action against the American Bureau of Shipping and other associated entities in this district. Reino De Espana v. American Bureau of Shipping , 03 Civ. 3573 (LTS). That action and the related appeals were resolved in favor of the defendants on August 29, 2012. (03 Civ. 3573 Dkt. 303.)

Separately, Spanish state attorneys brought an action against Captain Apostolos Mangouras and Mare Shipping Inc. in the Provincial Court of La Corolla, Spain. A public hearing began on October 16, 2012 and concluded on July 10, 2013. (Waters Aff. Ex. B. ¶ 5.)

On July 8, 2013, Applicants sought an order pursuant to 28 U.S.C. § 1782 to conduct discovery for use in foreign proceeding. (Dkt. 1.) Applicants allege that the testimony of three witnesses at the Spanish trial requires discovery from the law firm and one of its partners. They contend that: (1) the declaration of Captain Efstratios Kostazos in the New York action was false and contrary to his testimony in the Spanish trial; (2) Respondents coerced George Alevizos to serve as a paid expert in the New York action by threatening him with prosecution in Spain; and (3) the declaration of Jens Jorgen Thuesen in the New York action was based on misleading documents provided to him by Respondents. (Dkt. 2, Mem. in Supp. 11-21.) Respondents refute these allegations. Applicants admit that the allegedly false declarations were available to the Applicants' Spanish lawyers, who were able to use, and in Captain Kostazos' case, did use, the declarations to cross examine the witnesses during the Spanish trial. (Dkt. 20, Tr. 5.5-6.7 July 22, 2013.)

Subpoenas were authorized by the Judge presiding in Part I on July 10, 2013, and were served on Respondents and Holland & Knight LLP on July 12, 2013. (Dkt. 9-11; 16-18.) The subpoenas sought depositions of Respondents and production of documents relating to the Respondents' representation of Spain in the New York and Spanish actions, including internal firm records, memoranda, correspondence, and bills regarding the representation. (Dkt. 9-11, Ex. A.) Respondents filed objections to the subpoenas. (Dkt. 7, 8.) Holland & Knight LLP initially objected to the subpoena, but on July 19, 2013, its counsel filed a letter reporting that the firm had reached an agreement with Applicants. (Dkt. 12, 19.) Thereafter, the parties appeared before the undersigned on Applicants' motion to compel.


I. Subject Matter Jurisdiction

Respondents contend that this Court lacks subject matter jurisdiction to enforce the subpoenas because the subject of the subpoena is the Kingdom of Spain, for which they acted as counsel, and which enjoys foreign sovereign immunity. Subject to treaty and statutory exceptions, foreign states are immune from the jurisdiction of the courts of the United States under the Foreign Sovereign Immunities Act ("FSIA"). 28 U.S.C. § 1604. "FSIA immunity is immunity not only from liability, but also from the costs, in time and expense, and other disruptions attendant to litigation." EM Ltd. v. Republic of Argentina , 473 F.3d 463, 486 (2d Cir. 2007) (quoting Kelly v. Syria Shell Petroleum Dev. B.V. , 213 F.3d 841, 849 (5th Cir. 2000)).

The FSIA's definition of a foreign state includes "agencies and instrumentalities" of a foreign state. 28 U.S.C. § 1603(a). "An agency or instrumentality of a foreign state' means any entity - (1) which is a separate legal person, corporate or otherwise, and (2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and (3) which is neither a citizen of a State of the United States... nor created under the laws of any third country." 28 U.S.C. § 1603(b). The subpoena was directed to Respondents, a New York based law firm and one of its lawyers, who do not qualify as "an agency or instrumentality" of the Kingdom of Spain. Although they are separate legal persons from the Kingdom of Spain, they are not an organ of the Kingdom of Spain, nor are they majority owned by the Kingdom of Spain or any political subdivision of the Kingdom of Spain. Accordingly, they are not entitled to assert Spain's immunity.

Respondents argue that courts have quashed subpoenas served on counsel to Native American tribes on the grounds of tribal sovereign immunity. See Catskill Development, L.L.C. v. Park Place Entm't Corp. , 206 F.R.D. 78, 91 (S.D.N.Y. 2002) (affirming magistrate judge's quashing of subpoenas served on tribal counsel, who were not members of the tribe). However, this ruling is inapplicable here, because the FSIA, which governs the immunity of foreign sovereigns, does not govern tribal sovereign immunity. "After the enactment of the FSIA, the Act and not the pre-existing common law-indisputably governs the determination of whether a foreign state is entitled to sovereign immunity." Samantar v. Yousuf , 560 U.S. 305, 130 S.Ct. 2278, 2285 (2010). Because section 1603(b) of the FSIA defines an "agency or instrumentality of a foreign state" and Respondents do not meet that definition, Respondents do not enjoy foreign sovereign immunity. Thus, the Court has subject matter jurisdiction to compel compliance with the subpoenas.

II. 28 U.S.C. § 1782(a)

a. Authorization to ...

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