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In re Application for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding

United States District Court, District of Columbia

December 9, 2017

IN RE APPLICATION FOR AN ORDER PURSUANT TO 28 U.S.C. § 1782 TO CONDUCT DISCOVERY FOR USE IN A FOREIGN PROCEEDING
v.
BAKER BOTTS LLP, et al ., Respondents. HULLEY ENTERPRISES LTD., YUKOS UNIVERSAL LTD., AND VETERAN PETROLEUM LTD., Petitioners,

          MEMORANDUM OPINION AND ORDER

          Beryl A. Howell Chief Judge

         The petitioners, Hulley Enterprises Ltd., Yukos Universal Ltd., and Veteran Petroleum Ltd., seek reconsideration of the denial of their application, pursuant to 28 U.S.C. § 1782, to compel discovery from the law firm of Baker Botts LLP and a firm partner (together, “respondents”), regarding, inter alia, all communications among attorneys within the respondent firm about and with its long-standing client of over ten years, Rosneft, the world's largest publicly traded oil company, as well as Rosneft's subsidiaries, Rosneft's officers, and respondents' co-counsel in representing Rosneft, pertaining to certain proceedings in Armenian and Dutch courts involving either Rosneft or the Russian Federation. See Pet'rs' Mot. Reconsideration, ECF No. 15; In re Application for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding (“Appl. Denial Order”), Misc. No. 17-1466 (BAH), 2017 U.S. Dist. LEXIS 142969, at *1 (D.D.C. Aug. 18, 2017) (denying petitioners' Application for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding and Stmt. Supp. (“Appl.”)), ECF No. 1).[1]

         The petitioners have been embroiled in multifront litigation around the world for over a decade, arising out of the collapse of the Yukos Oil Company, of which the petitioners were majority shareholders. See Appl. Denial Order, 2017 U.S. Dist. LEXIS 142969, at *2-4 (providing background on the legal disputes). The litigation has largely concerned the Russian Federation's seizure of Yukos's assets, beginning in 2003 and culminating with Yukos's liquidation in 2007. See id. One part of this litigation is currently pending before the Court of Appeal of the Hague, where the petitioners have appealed a Dutch trial court's 2016 decision to set aside, on jurisdictional grounds, over $50 billion in arbitral awards issued to the petitioners and against the Russian Federation based on the allegations of expropriation. See id.; Hulley Enters. v. Russian Fed'n, 211 F.Supp.3d 269, 272-76 (D.D.C. 2016).[2] While the respondents do not currently represent the Russian Federation, they have represented, since 2006, Rosneft, which is majority-owned by the Russian Federation, in connection with the petitioners' “threats to enforce the . . . arbitration awards against Rosneft, ” Appl. Denial Order, 2017 U.S. Dist. LEXIS 142969, at *3 (alteration in original) (quoting Resps.' Opp'n Appl. Discovery Pursuant 28 U.S.C. § 1782 (“Resps.' Opp'n”) at 4, ECF No. 11), and other litigation brought by former Yukos executives in Armenia “to halt Rosneft's acquisition of an Armenian Yukos-related entity, Yukos CIS Investment, ” and related “legal actions in the Netherlands, British Virgin Islands, and the United Kingdom.” Id.[3]

         In a bold move, on June 19, 2017, the petitioners applied, pursuant to 28 U.S.C. § 1782, to obtain discovery for the pending Dutch appeal by deposing and compelling production of documents from respondents regarding their representation of Rosneft in the Armenian-related proceedings in 2010 and 2011. See Appl. at 4-8. Specifically, the petitioners seek evidence of the Russian Federation's attempts “to manipulate judges in the Armenian courts” at a time when, petitioners contend, “Rosneft, acting through counsel to the Russian Federation, arranged the outcome of several Yukos-related judicial decisions in Armenia” with at least one decision influencing proceedings in the Netherlands. Id. at 5. The petitioners aver that they would use the requested evidence defensively to respond “to the Russian Federation's submissions” to the Court of Appeal of the Hague alleging that the petitioners had “unclean hands” and to “allow the Dutch Appellate Court to fully and fairly assess the conduct of the Russian Federation in its dealings with foreign courts.” Id. at 4; Appl. Denial Order, 2017 U.S. Dist. LEXIS 142969, at *6-8.

         Although the petitioners' Application met the statutory requirements for discovery sought under § 1782, the discovery demand was nonetheless denied as a matter of discretion under the factors required by Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264-65 (2004). Appl. Denial Order, 2017 U.S. Dist. LEXIS 142969, at *11. The fourth of those factors- “whether the request is ‘unduly intrusive or burdensome'”-was the salient one, id. at *13 (quoting Intel, 542 U.S. at 264-65), especially when balanced against the “thin” and “tenuous” relevance and “limited usefulness” of evidence of the Russian Federation's purported manipulation of Armenian court proceedings in 2010 and 2011 to a foreign appellate proceeding focused on a jurisdictional issue relating to events occurring before and up to 2007, id. at *14-17 (citing In re Veiga, 746 F.Supp.2d 8, 19 (D.D.C. 2010)). In evaluating the intrusiveness and burdens of the requested discovery, the Court found that the plain terms of the requests targeted “sensitive attorney-client information” and thereby implicated privilege and work-product concerns, which could spawn significant collateral litigation and put at risk significant aspects of respondents' litigation strategy on behalf of their client. Id. at *14-17. Accordingly, the burden imposed by the requested discovery was determined to be “simply too significant to warrant granting the Application absent a showing that the requested discovery would be of even moderate relevance.” Id. at *17.

         Undeterred, the petitioners now seek reconsideration of that decision by rehashing already rejected or unpursued arguments and contending, for the first time, that the Court must undertake a choice-of-law analysis. See Pet'rs' Mem. Supp. Mot. Reconsideration (“Pet'rs' Mem. Reconsideration”) at 4, ECF No. 15-1. This Motion for Reconsideration represents merely the latest effort to drag this Court into the ongoing international litigation between the parties and related entities. For the reasons explained below, the petitioners' Motion for Reconsideration is DENIED.

         I. LEGAL STANDARD

         The petitioners invoke Federal Rule of Civil Procedure 59(e) as the authority to seek reconsideration of this Court's Order denying the requested discovery.[4] “Rule 59(e) permits a court to alter or amend a judgment, but it ‘may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to the entry of judgment.'” Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5 (2008) (citation omitted); see also Cohen v. Bd. of Trs. of the Univ. of the Dist. of Columbia, 819 F.3d 476, 485 (D.C. Cir. 2016) (declining to “rehash” consideration of arguments where the plaintiff failed to “raise any new arguments in support of his motion for reconsideration under Federal Rules 59(e) and 60(b)”); District of Columbia v. Doe, 611 F.3d 888, 896 (D.C. Cir. 2010) (noting that “[i]t is well settled that ‘an issue presented for the first time in a motion pursuant to Federal Rule of Civil Procedure 59(e) generally is not timely raised . . .'”) (citation omitted). This is because “Rule 59(e) motions are aimed at reconsideration, not initial consideration.” GSS Grp. Ltd v. Nat'l Port Auth., 680 F.3d 805, 812 (D.C. Cir. 2012) (quoting Doe, 611 F.3d at 896). Only extraordinary circumstances may warrant granting a Rule 59(e) motion, including “an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” Ciralsky v. CIA, 355 F.3d 661, 671 (D.C. Cir. 2004) (quoting Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996)); see also Mohammadi v. Islamic Republic of Iran, 782 F.3d 9, 17 (D.C. Cir. 2015) (“[R]econsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly.”) (alteration in original) (citation omitted); Anyanwutaku v. Moore, 151 F.3d 1053, 1057-58 (D.C. Cir. 1998).

         II. DISCUSSION

         The petitioners do not argue that controlling law has changed or that new evidence became available, but only that the denial of their application for discovery was wrong for three reasons, none of which is sufficiently persuasive to disturb the Court's previous determination that the plainly significant burden triggered by the requested discovery overcomes the limited, if any, relevance of this discovery to the Dutch appellate proceeding.

         First, the petitioners contend that the prior Order “was predicated on an unsupported assumption” of privilege, see Pet'rs' Mem. Reconsideration at 2, because the respondents did not precisely identify any documents that were privileged and, in the petitioners' view, thereby failed to assert any privilege at all. Id. at 4. This argument is almost farcical, given both the nature of the petitioners' discovery demands, which plainly target privileged communications and documents between the respondents and its long-standing client, and the respondents' declaration detailing the nature of their attorney-client relationship with Rosneft and the burdens subpoena compliance would engender. See, e.g., Resps.' Opp'n, Attach. 1, Declaration of William H. Jeffress (“Jeffress Decl.”) ¶¶ 2-3, ECF No. 11-1 (describing respondents' attorney-client relationship with Rosneft and Russian Federation); Resps.' Opp'n at 18-19 (discussing “undue burden” discovery demand would impose by requiring the respondents to prepare a privilege log covering a “broad scope of materials, ” which could reveal to the petitioners “strategies and internal deliberations of their adversaries, ” and which would require the respondents to expend significant resources to sift through a “staggering” amount of data “involv[ing] multiple languages”).

         For instance, the petitioners pose discovery demands for “[a]ll Documents and Communications between Baker Botts and Rosneft pertaining to” the Yukos Armenia Proceedings, including contacts with Rosneft, Rosneft's subsidiaries, and respondents' co-counsel, Prudence Legal Advisory and Counseling (“Prudence Legal”), “pertaining to the judgments . . . .” Appl., Attach. 9, Ex. 3 to Declaration of Christopher M. Ryan (“Ryan Decl.”), Subpoena Produce Docs., Information, Objects or to Permit Inspec. Premises Civ. Action (Baker Botts LLP) (“Subpoena to Baker Botts”) at 7 (Request 3), ECF No. 1-9. See also, e.g., id. at 8-9 (Request 10) (requesting “[a]ll Documents and Communications between Baker Botts and Rosneft pertaining to: (a) the relationship of the Yukos Armenia Proceedings to the decision of the Dutch courts in the Dutch Bankruptcy Proceedings; and (b) the effect the judgment(s) in the Yukos Armenia Proceedings may have on the Dutch Bankruptcy Proceedings”); Appl., Attach. 10, Ex. 4 to Ryan Decl., Subpoena Produce Docs., Information, Objects or to Permit Inspec. Premises Civ. Action (Ryan E. Bull) (“Subpoena to Ryan E. Bull”) at 7 (Request 3), ECF No. 1-10 (seeking “[a]ll Documents and Communications between Mr. Bull and Rosneft pertaining to” the Yukos Armenia Proceedings, including contacts with Rosneft, Rosneft's subsidiaries, and Prudence Legal, “pertaining to the judgments . . .”); id. at 9 (Request 10) (requesting “[a]ll Documents and Communications between Mr. Bull and Rosneft pertaining to” the same subcategories of information related to the Yukos Armenia Proceedings and Dutch Bankruptcy Proceedings as in the Subpoena to Baker Botts).[5] Other discovery demands by the petitioners similarly expressly target the respondents' direct communications with its co-counsel, Prudence Legal, regarding matters implicating the client's interests. See Subpoena to Baker Botts at 7 (Request 4) (requesting “[a]ny and all Documents between Baker Botts and Prudence Legal pertaining to” the Yukos Armenia Proceedings); Subpoena to Ryan E. Bull at 7-8 (Request 4) (seeking “[a]ll Documents and Communications between Mr. Bull and Prudence Legal pertaining to” the Yukos Armenia Proceedings).

         The petitioners' contention that error occurred by “assuming” privilege attached ignores the obvious fact that the discovery demands were framed precisely to cover such privileged communications and documents. Indeed, the discovery request is predicated on the petitioners' belief that Rosneft's counsel was involved in corrupting the administration of justice in Armenian and Dutch proceedings, making counsel's communications with Rosneft and its affiliates the precise focus of the discovery. See, e.g., Appl. at 5 (alleging “Rosneft, acting through counsel to the Russian Federation, arranged the outcome of several Yukos-related decisions”); id. at 7 (contending that, in the alleged manipulation, “Rosneft was assisted by the American legal firm Baker Botts LLP”) (quoting Appl., Attach. 15, Ex. 9 to Ryan Decl., Joep Dohmen and Renée Postma, Rosneft manipulated the judicial process in the Netherlands, NRC Handelsbad (Nov. 24, 2016) (“NRC Article 1”) at 1, ECF No. 1-15); id. (discussing role of respondent Baker Botts partner, Ryan Bull, and his associate, Izabella Sarkisyan, as well as Edward Mouradian, an Armenian attorney with Prudence Legal, in the alleged manipulation) (quoting Appl., Attach. 16, Ex. 10 to Ryan Decl. (“Ryan Decl., Ex. 10”), Joep Dohmen and Renée Postma, How Rosneft Turned Rule of Law to Its Own Advantage, NRC Handelsbad (Nov. 24, 2016) (“NRC Article 2”) at 3, ECF No. 1-16).

         Although the petitioners criticize the Court's “assumption” of privilege as unsubstantiated, the petitioners' argument is predicated on a clear misunderstanding of the law. Specifically, the petitioners repeatedly assert that the respondents “did not establish-or even ...


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