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In re Third Party Subpoena to Fusion GPS

United States District Court, District of Columbia

February 16, 2018

IN RE THIRD PARTY SUBPOENA TO FUSION GPS, c/o Zuckerman Spaeder LLP 1800 M Street, N.W. Washington, D.C. 20036
BUZZFEED, INC. et al, Defendants, ALEKSEJ GUBAREV, et al, Plaintiffs,



         On August 31, 2017, Fusion GPS ("Fusion") filed a motion in the United States District Court for the District of Columbia seeking to quash a third-party subpoena issued in connection with a defamation action currently pending in the United States District Court for the Southern District of Florida. On January 3, 2018, Fusion sent a letter to me asking that I consider disqualifying myself, and on January 8, 2018, 1 invited Fusion to submit formal briefing on the matter. Now before the Court is Fusion's motion for recusal, which argues that my impartiality in deciding its motion to quash might reasonably be questioned because a shareholder of one of my former clients and President Trump have purported interests in the matter. Because a reasonable person who was informed of all the surrounding facts and circumstances would not believe that such an interest exists nor that such an interest, if it existed, would create an appearance of bias, the motion for recusal will be denied.

         I. BACKGROUND

         In the underlying litigation, Aleksej Gubarev, XBT Holdings S.A., and Webzilla, Inc., (collectively, "the Plaintiffs") are suing Buzzfeed, Inc., and its editor in chief for defamation. As quoted in their complaint, their defamation claim arises out of Buzzfeed's publication of the following statement:

[Redacted] reported that over the period March-September 2016 a company called XBT/Webzilla and its affiliates had been using botnets and porn traffic to transmit viruses, plant bugs, steal data and conduct "altering operations" against the Democratic Party leadership. Entities linked to one Aleksei GUBAROV [sic] were involved and he and another hacking expert, both recruited under duress by the FSB, Seva KAPSUGOVICH, were significant players in this operation. In Prague, COHEN agreed [to] contingency plans for various scenarios to protect the operations, but in particular what was to be done in the event that Hillary CLINTON won the presidency. It was important in this event that all cash payments owed were made quickly and discreetly and that cyber and that cyber [sic] and other operators were stood down / able to go effectively to ground to cover their traces.

Mot. Quash Ex. 6 ¶ 26. This statement appeared in the last of a series of memoranda written by Christopher Steele after he was retained by Fusion to investigate Donald Trump's ties to Russia.

         Fusion is not a party to the underlying litigation, but it is the recipient of a third-party subpoena from the Plaintiffs with which it does not wish to comply. In light of Fusion's concerns about disclosing the information requested by the subpoena, the Plaintiffs in the underlying case have agreed that any information Fusion produces will be designated "Attorneys' Eyes Only, " meaning that "it will not be shared with anyone other than the lawyers working on the underlying case in Florida" and that it will not be shared with any of the parties or with lawyers working on related matters. Opp. to Mot. Quash Ex. 5. Notwithstanding that agreement, Fusion has moved to quash the subpoena. Fusion now asks that I disqualify myself from consideration of its motion to quash.


         28 U.S.C. § 455 sets forth rules governing the disqualification of federal judges. Section 455(b) lays out specific situations in which a judge must recuse himself from a matter, such as when he previously served as a lawyer in the matter in controversy, when he or a close family member has a financial interest in the matter in controversy, or when he or a sufficiently close relation is a party to the proceeding. Section 455(a) is a general catchall provision, requiring that a federal judge disqualify himself "in any proceeding in which his impartiality might reasonably be questioned." Section 455(a) calls for an objective inquiry into whether there is an appearance of impartiality, "from the perspective of a reasonable observer who is informed of all the surrounding facts and circumstances." Cheney v. United States Dist. Ct. for the Dist. of Columbia, 541 U.S. 913, 924 (2004) (mem.) (Scalia, J.); see also In re Barry, 946 F.2d 913, 914 (D, C. Cir. 1991). A judge's duty to disqualify himself where his impartiality might reasonably be questioned under § 455(a) cannot be interpreted "as implicitly eliminating a limitation explicitly set forth in § 455(b)." Liteky v. United States, 510 U.S. 540, 553 (1994).[1] In other words, a litigant cannot claim that § 455(a)'s catchall provision requires disqualification where § 455(b) addresses the scenario and does not require disqualification. Moreover, "a judge has as much an obligation not to recuse himself where there is no reason to do so as he does to recuse himself when proper." SEC v. Bilzerian, 729 F.Supp.2d 19, 22 (D.D.C.) (citing United States v, Greenspan, 26 F.3d 1001, 1005 (10th Cir. 1994)).

         III. ANALYSIS

         Notably, Fusion does not argue that any of the disqualifying circumstances enumerated in § 455(b) are present in this matter. Instead, it argues that there are two grounds on which my impartiality might reasonably be questioned under § 455(a). First, "Mikhail Fridman-the Court's recent former client-has a significant interest in the outcome of Fusion's motion to quash." Reply ISO Mot. Recuse at 1. Second, "the Court's recent former employer, President Donald Trump, also has an interest in the outcome of the motion." Id. For the reasons explained below, Fusion's recusal arguments are misguided and unpersuasive.

         A. Both Mikhail Fridman's Connection to the Court and His Alleged Interest in This Matter Are Too Attenuated to Raise Reasonable Doubt Regarding My Impartiality

         As an initial matter, Fusion is simply incorrect in characterizing Mikhail Fridman as my former client. The fact of the matter is that I do not know, have not met, and have never worked for Mr. Fridman. Nor has Fusion even alleged facts to support its description of Mr. Fridman as my former client. Rather, Fusion notes that I was previously part of the legal team providing compliance advice to VimpelCom Ltd.[2] in a Foreign Corrupt Practices Act ("FCPA") matter when I was a partner at Baker & McKenzie. Mot. Recuse at 5-6, 8. Fusion further alleges that VimpelCom "is controlled by Mikhail Fridman and he serves as a director of the company." Id. Mr. Fridman's alleged control of the company appears to be indirect: Fusion represents that he has an investment vehicle that owns 48% of the company's shares and that he has control of a foundation that owns an additional 8% of the company's shares. Mat6n.8. Mr. Fridman appears to be one often directors on VimpelCom's board, and is not the board's chairman.

         By no stretch of the imagination is VimpelCom a mere shell company serving as Mr, Fridman's alter ego. It is one of the world's largest publicly traded companies, with nearly 42, 000 employees and a market cap of $6.8 billion, and it provides telecommunications services to customers in 17 countries around the world.[3] Accordingly, my prior representation of VimpelCom should not be confused with representation of Mr. Fridman. See First Nat. City Bank v. Banco Para El Comercio Exterior de Cuba, 462 U.S. 611, 623, 629-30 (explaining that "a corporation and its shareholders are deemed separate entities for most purposes" and that a court will only "pierce the corporate veil" ...

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