United States District Court, S.D. New York
OPINION & ORDER
WILLIAM H. PAULEY III, DISTRICT JUDGE
Consellior SAS (“Consellior”) moves to compel
Respondents Hamilton South and John Demsey to comply with
subpoenas and appear for depositions. South and Demsey move
to quash those subpoenas. For the reasons that follow,
Consellior's motion to compel is granted and South and
Demsey's motion to quash is denied.
motions arise out of an application to take discovery
pursuant to 28 U.S.C. § 1782 in connection with
Consellior's participation in a criminal proceeding in
the Higher District Court of Nancy, France (the “French
Proceeding”). Consellior is a privately held French
company and a minority shareholder in Baccarat SA, a French
manufacturer of crystal products. Consellior initiated the
French Proceeding by submitting a complaint to the Nancy
Public Prosecutor. The complaint alleges that six Baccarat
directors breached their fiduciary duties by improperly
approving a licensing agreement between Baccarat and Starwood
Capital Group, an American investment-management company that
owns a controlling stake in Baccarat.
seeks Respondents' testimony because they are two of the
“independent” Baccarat directors-i.e.
not controlled by Starwood-and are residents of New York.
Neither South nor Demsey has been named as a defendant in the
French Proceeding. On November 8, 2016, this Court granted
Consellior's discovery application and ordered South and
Demsey to sit for depositions in New York by January 5, 2017.
(ECF No. 4.) When neither Respondent complied, the parties
filed these cross-motions.
district court has considerable discretion as to whether to
exercise its authority to grant a discovery application under
28 U.S.C. § 1782. See In re Application of Grupo
Qumma, No. M 8-85, 2005 WL 937486, at *1 (S.D.N.Y. April
22, 2005) (“A request for discovery under § 1782
presents two inquiries: first, whether the district court is
authorized to grant the request; and second, if so, whether
the district court should exercise its discretion to do
so.”). A court with the statutory authority to grant
the application must further decide whether to exercise its
discretion “in light of the twin aims of the statute:
providing efficient means of assistance to participants in
international litigation in our federal courts and
encouraging foreign countries by example to provide similar
means of assistance to our courts.” Schmitz v.
Bernstein Liebhard & Lifshitz, LLP, 376 F.3d 79, 84
(2d Cir. 2004).
Supreme Court has identified four “factors that bear
consideration” in exercising this discretion: (1)
whether “the person from whom discovery is sought is a
participant in the foreign proceeding, ” in which case
“the need for § 1782(a) aid generally is not as
apparent”; (2) “the nature of the foreign
tribunal, the character of the proceedings underway abroad,
and the receptivity of the foreign government or the court or
agency abroad to U.S. federal-court judicial
assistance”; (3) “whether the § 1782(a)
request conceals an attempt to circumvent foreign
proof-gathering restrictions or other policies of a foreign
country or the United States”; and (4) whether the
request is “unduly intrusive or burdensome.”
Intel Corp. v. Advanced Micro Devices, Inc., 542
U.S. 241, 264-65 (2004).
the circumstances, the Intel factors weigh in favor
of Consellior's application. South and Demsey's
motion relies heavily on the argument that any testimony they
could offer would be duplicative of the evidence available to
the magistrate in the French Proceeding. Further, Respondents
argue that Consellior has not yet attempted to obtain this
discovery of directors from the French court. This attempt to
impose an exhaustion or necessity requirement on
Consellior's § 1782 application is unavailing.
See Mees v. Buiter 793 F.3d 291, 303 (2d Cir. 2015)
(holding that there is no “necessity standard or
exhaustion requirement” on the party seeking §
1782 discovery). The focus of the first Intel factor
is on “the foreign tribunal's ability to control
evidence and order production” by ordering discovery
from individuals subject to the foreign court's
jurisdiction. In re Application of OOO Promnefstroy,
No. M 19-99, 2009 WL 335608, at *5 (S.D.N.Y. Oct. 15, 2009).
It is undisputed that South and Demsey are not parties to the
French Proceeding, and that the French magistrate does not
have jurisdiction to compel their testimony. (See
Oral Argument Hearing Transcript, January 25, 2017, at
3:23-25.) Accordingly, the testimony sought by Consellior is
plainly not “within the foreign tribunal's reach,
and thus accessible absent § 1782 aid.”
Intel, 542 U.S. at 264.
as Consellior's application seeks testimony regarding the
amendment to the 2015 licensing agreement and the Baccarat
board meeting approving the agreement, the application is
neither intrusive nor unduly burdensome. This factor simply
requires that “the subject matter of the request [be]
reasonably tailored to speak to the claims and defenses
raised in the proceedings at issue.” In re
Veiga, 746 F.Supp.2d 8, 25 (D.D.C. 2010); cf. OOO
Promnefstroy, 2009 WL 3335608, at *9 (finding
petitioner's requests unduly burdensome where the
“application extend[ed] to a wide array of documents
related to tens of business entities and to all of their
affairs . . . [as well as] all of [Respondent's]
computers since 2005”). Moreover, if a judge determines
that a request is unduly burdensome, it is “far
preferable” to remedy that problem “by issuing a
closely tailored discovery order rather than by simply
denying relief outright.” Euromepa S.A. v. R.
Esmerian, Inc., 51 F.3d 1095, 1101 (2d Cir. 1995).
interests of obviating further discovery disputes and
resolving the current one, Consellior's depositions shall
conform to the following restrictions:
1. The depositions of Mr. South and Mr. Dempsey shall be
limited in duration to a maximum of two hours each, excluding
2. The depositions shall be scheduled on dates mutually
convenient to all parties ...