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OBJECTION To Report and Recommendation
OBJECTION To Report and Recommendation
1 TABLE OF CONTENTS
2 Page
3
INTRODUCTION ..................................................................................................... 1
4
STANDARD OF REVIEW ....................................................................................... 2
5
ARGUMENT ............................................................................................................. 2
6
7 I. THE R&R DOES NOT APPLY THE INTEL FACTORS TO
NOUVEL’S REQUEST FOR DISCOVERY IN CONNECTION
8 WITH THE LUXEMBOURG LITIGATION. ............................................... 3
9 A. The first Intel factor weighs in respondents’ favor. .............................. 3
10 B. The second Intel factor is neutral at best............................................... 6
11 C. The third Intel factor weighs in respondents’ favor. ............................. 7
12 D. The fourth Intel factor weighs in respondents’ favor............................ 7
13
II. THE R&R DOES NOT APPLY THE INTEL FACTORS TO
14 NOUVEL’S REQUEST FOR DISCOVERY IN CONNECTION
WITH THE CONTEMPLATED FRENCH LITIGATION............................ 9
15
A. The first Intel factor weighs in respondents’ favor. .............................. 9
16
B. The second Intel factor is neutral at best............................................. 11
17
C. The third Intel factor weighs in respondents’ favor. ........................... 11
18
D. The fourth Intel factor weighs in respondents’ favor.......................... 12
19
20 III. IF THE COURT ADOPTS THE R&R, IT SHOULD ISSUE A STAY
PENDING AN APPEAL TO THE NINTH CIRCUIT. ................................ 13
21
CONCLUSION........................................................................................................ 14
22
23
24
25
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1 TABLE OF AUTHORITIES
2
Page(s)
3
Cases
4
Baxalta Inc. v. Genentech, Inc.,
5
2016 WL 11529803 (N.D. Cal. Aug. 9, 2016) ..................................................... 4
6
CPC Patent Tech. Pty Ltd. v. Apple, Inc.,
7 34 F.4th 801 (9th Cir. 2022) ................................................................................. 2
8
Cryolife, Inc. v. Tenaxis Med., Inc.,
9 2009 WL 88348 (N.D. Cal. Jan. 13, 2009) .......................................................... 6
10 Euromepa, S.A. v. R. Emerian Inc.,
11 51 F.3d 1095 (2d Cir. 1995) ....................................................................... 5, 6, 14
12 IJK Palm LLC v. Anholt Servs. USA, Inc.,
33 F.4th 669 (2d Cir. 2022) ...............................................................................5-6
13
14 In re Accent Delight Int’l Ltd.,
2018 WL 7473109 (S.D.N.Y. June 27, 2018) .................................................... 14
15
In re Accent Delight Int’l Ltd.,
16
791 F. App’x 247 (2d Cir. 2019) ........................................................................ 11
17
In re Alves Braga,
18 789 F. Supp. 2d 1294 (S.D. Fla. 2011)............................................................... 12
19
In re Cathode Ray Tube (CRT) Antitrust Litig.,
20 2012 WL 6878989 (N.D. Cal. Oct. 22, 2012) .................................................... 11
21 In re Cathode Ray Tube (CRT) Antitrust Litig.,
22 2013 WL 183944 (N.D. Cal. Jan. 17, 2013) ........................................................ 7
23 In re Digitechnic,
24 2007 WL 1367697 (W.D. Wash. May 8, 2007) ............................................... 4, 7
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1 INTRODUCTION
2 This § 1782 action centers on Angelina Jolie’s unlawful sale of her
3 ownership interest in Château Miraval, a French company comprising a home and
4 vineyard in the south of France. Château Miraval was jointly owned through
5 petitioner Nouvel and respondent Mondo Bongo, limited liability companies
6 controlled by Jolie and respondent Brad Pitt, respectively. In October 2021, Jolie
7 sold Nouvel to Stoli Group—a competitor of Château Miraval—in breach of rights
8 she and Nouvel owed Pitt and Mondo Bongo. Pitt never consented to the sale and
9 is now challenging its validity in California state court, with further litigation
10 pending in Luxembourg.
11 Against that backdrop, Nouvel filed an ex parte § 1782 application in this
12 Court, seeking discovery in connection with the Luxembourg proceeding as well as
13 a threatened suit in France against Château Miraval and its affiliate Miraval
14 Provence. To obtain relief, Nouvel represented to the Court that foreign procedural
15 constraints would block discovery overseas. That was not true. Nouvel has since
16 obtained preliminary orders from the French courts granting overlapping discovery.
17 After the Court authorized Nouvel’s § 1782 application, respondents moved
18 to vacate the ex parte order and quash Nouvel’s subpoenas. In briefing that motion,
19 the parties recognized that the dispute is governed by Intel Corp. v. Advanced
20 Micro Devices, Inc., 542 U.S. 241 (2004), in which the Supreme Court established
21 a four-factor analysis to guide the exercise of judicial discretion under § 1782.
22 Because the Intel analysis turns on questions of foreign procedure, including
23 whether the requested evidence is available or admissible overseas, the parties
24 submitted expert affidavits opining on Luxembourg and French law.
25 On June 8, 2022, the Honorable Charles F. Eick issued a Report and
26 Recommendation advising this Court to deny respondents’ motion to quash. ECF
27 No. 36-1 (“R&R”). But the R&R neither examines the Intel factors nor addresses
28 the relevant questions of Luxembourg and French law. Instead, it would have this
1 Court reduce Intel to a single question—whether there is any dispute of foreign law
2 between the parties. Once a petitioner meets that extremely low bar, the R&R
3 posits, liberal discovery is available.
4 That is not the law. Nor should it be. The Supreme Court’s § 1782 analysis
5 was calibrated to prevent precisely the outcome urged by the R&R—an American
6 court ordering the production of documents in service of foreign litigation, even
7 though discovery of the same documents is pending in the overseas forum.
8 Respondents respectfully ask the Court to apply the Intel factors and grant their
9 motion to quash in its entirety. In the alternative, if the Court determines to adopt
10 the R&R, respondents respectfully request a stay pending appeal.
11 STANDARD OF REVIEW
12 Because the R&R concerns a “dispositive” matter, this Court’s review is de
13 novo. Fed. R. Civ. P. 72(b)(3). See also 28 U.S.C. § 636(b)(1); CPC Patent Tech.
14 Pty Ltd. v. Apple, Inc., 34 F.4th 801, 805 (9th Cir. 2022).
15 ARGUMENT
16 This Court has “substantial discretion” to deny discovery sought under
17 § 1782. Khrapunov v. Prosyankin, 931 F.3d 922, 926 (9th Cir. 2019). In Intel, the
18 Supreme Court identified four factors to guide the exercise of that discretion,
19 instructing the finder of fact to consider: (1) whether evidence “may be outside the
20 foreign tribunal’s jurisdictional reach”; (2) “the nature of the foreign tribunal, the
21 character of the proceedings underway abroad, and the receptivity of the foreign
22 government or the court . . . to U.S. federal-court judicial assistance”; (3) whether
23 the request “conceals an attempt to circumvent foreign proof-gathering restrictions
24 or other policies of a foreign country or the United States”; and (4) whether the
25 request is “unduly intrusive or burdensome.” 542 U.S. at 264-65.
26 The R&R acknowledges this governing framework, but does not apply it.
27 The R&R instead operates under a new standard that would authorize discovery if
28 “there exists a significant likelihood that: (1) the subject discovery could lead to
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1 evidence admissible in the foreign courts; and (2) the foreign jurisdiction would not
2 regard the subject discovery as an improper circumvention of policy.” R&R at 8.
3 And in applying that novel standard, the R&R asserts that the Court need not
4 meaningfully assess issues of foreign law, on the logic that experts on foreign law
5 are inherently untrustworthy. R&R at 9 & n.5. In fact, the R&R does not discuss
6 foreign law at all. Instead, it suggests that the Court should sustain Nouvel’s
7 sweeping subpoenas on the basis of unidentified “doubt” over questions of foreign
8 discovery. Id. at 9.
9 This was error. The Court should not adopt the standard applied in the R&R,
10 which would undermine the international comity considerations that motivated the
11 enactment of § 1782 and frustrate the careful balance struck by Congress and the
12 Supreme Court. It should apply the governing Supreme Court and Ninth Circuit
13 precedent and quash Nouvel’s subpoenas.1
14 I. The R&R does not apply the Intel factors to Nouvel’s request for
15 discovery in connection with the Luxembourg litigation.
16 Nouvel’s application under § 1782 sought to skirt Luxembourg discovery
17 procedures by asking this Court to preemptively order the production of documents
18 that are available in the Luxembourg courts. The R&R would authorize this tactic
19 on the logic that the federal courts “should not” consider disputed issues of foreign
20 law under § 1782. R&R at 7.
21 Properly applied, the Intel factors weigh in favor of quashing Nouvel’s
22 subpoenas with respect to the Luxembourg action.
23 A. The first Intel factor weighs in respondents’ favor.
24 The first Intel factor asks whether the requested material is “outside the
25 foreign tribunal’s jurisdictional reach.” Intel, 542 U.S. at 264. It generally weighs
26 against discovery where the respondent is a participant in the foreign proceeding,
27 1
Nouvel’s ex parte application also violated Local Rule 7-19.1. Its counsel failed
28 to provide advance notice of its application to respondents’ counsel, who were
known to Nouvel. This supplies a separate ground for vacating the ex parte order.
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1 because a “foreign tribunal . . . can itself order [the parties] to produce evidence.”
2 Id. It also “militates against allowing § 1782 discovery when the petitioner . . . is
3 seeking discovery from a related, but technically distinct [person or] entity.” In re
4 Varian Med. Sys. Int’l AG, 2016 WL 1161568, at *4 (N.D. Cal. Mar. 24, 2016)
5 (internal quotation marks omitted). Moreover, such discovery is even less
6 appropriate where, as here, an applicant has not even “tried to obtain” the requested
7 discovery “by way of [foreign] discovery tools.” In re Digitechnic, 2007 WL
8 1367697, at *4 (W.D. Wash. May 8, 2007); see also Baxalta Inc. v. Genentech,
9 Inc., 2016 WL 11529803, at *5 (N.D. Cal. Aug. 9, 2016).
10 Nouvel seeks documents from (1) Mondo Bongo, which is a party to the
11 Luxembourg litigation, (2) Pitt, who is Mondo Bongo’s sole member, and
12 (3) Warren Grant, who is Mondo Bongo’s registered agent. Decl. of Véronique
13 Hoffeld in Support of Mot., ECF No. 18-2 ¶ 3. Were discovery authorized from
14 Mondo Bongo (but not Pitt or Grant), Nouvel would insist that Pitt and Grant serve
15 as the key document custodians for document-collection purposes.2 Accordingly,
16 because respondents are parties or effective parties to the Luxembourg litigation,
17 the first Intel factor weighs against Nouvel’s requests. See Republic of Kazakhstan
18 v. Lawler, 2020 WL 417541, at *5 (D. Ariz. Jan. 27, 2020) (first Intel factor
19 weighed against discovery where respondent was a director and officer of entity
20 that was a party to the foreign proceeding); In re Mare Shipping Inc., 2013 WL
21 5761104, at *4-5 (S.D.N.Y. Oct. 23, 2013) (same where respondent was party’s
22 representative); In re Joint Stock Co. Raiffeinsenbank, 2016 WL 6474224, at *4
23 (N.D. Cal. Nov. 2, 2016) (applying same principle where respondent was party’s
24 shareholder).
25 In support of its subpoenas, Nouvel asserted that respondents’ status as
26 parties or effective parties to the Luxembourg proceedings is irrelevant, because a
27
2
28 Nouvel concedes as much, defining Mondo Bongo to include both Pitt and Grant
in its subpoenas. See Subpoena, ECF No. 2-1 at 5 (Definition No. 2).
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1 applications under § 1782. IJK Palm LLC v. Anholt Servs. USA, Inc., 33 F.4th 669,
2 680 (2d Cir. 2022); see also In re Schlich, 893 F.3d 40, 51 (1st Cir. 2018)
3 (collecting cases and declining to adopt Euromepa).
4 And even if Euromepa set the standard, it would not favor granting Nouvel
5 discovery. As the cases cited in the R&R make clear, courts relying on Euromepa
6 find the first Intel factor neutral, at best, where parties submit competing affidavits.
7 See R&R at 7-8 (citing Siemens AG v. W. Digital Corp., 2013 WL 5947973, at *2
8 (C.D. Cal. Nov. 4, 2013) (finding first Intel factor neutral in light of competing
9 affidavits); Cryolife, Inc. v. Tenaxis Med., Inc., 2009 WL 88348, at *3 (N.D. Cal.
10 Jan. 13, 2009) (same)).
11 Nouvel is not entitled to the benefit of the “doubt” on Luxembourg law.
12 Because the record demonstrates that the requested evidence is likely within the
13 jurisdiction of the Luxembourg courts, the first Intel factor favors denial of
14 discovery with respect to the Luxembourg proceeding.
15 B. The second Intel factor is neutral at best.
16 The second Intel factor asks whether the foreign court would be “receptiv[e]”
17 to discovery obtained under § 1782. Intel, 542 U.S. at 264. The R&R does not
18 address this factor at all, save for a blanket disavowal of any obligation to “referee”
19 foreign law disputes presented in the parties’ competing expert declarations. R&R
20 at 7.
21 No such adjudication was necessary. Nouvel has failed to identify a single
22 Luxembourg case or statute that approves the use of § 1782 evidence in a
23 Luxembourg proceeding. This deficiency—apart from any issues of foreign law
24 disputed in the parties’ competing declarations—is sufficient to find that the second
25 Intel factor does not favor Nouvel. See In re Samsung Elecs. Co., 2013 WL
26 12335833, at *3 (N.D. Cal. Jan. 23, 2013).
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1 of discovery for a single transaction that occurred in 2013, when Nouvel and
2 Mondo Bongo were represented by the same advisors. As respondents argued in
3 moving to quash the subpoenas, that request is unduly burdensome for two reasons:
4 (1) Nouvel has equal access to an overwhelming majority of the documents in
5 question; and (2) documents created nine years after the transaction are likely to be
6 cumulative.
7 The R&R concludes that it is “inappropriate” to object to discovery on the
8 ground that the requested documents are “equally available” to Nouvel. R&R at 11.
9 That conclusion is contrary to Federal Rule of Civil Procedure 26, which prohibits
10 discovery that “can be obtained from some other source”—here, Nouvel itself—
11 “that is more convenient, less burdensome, or less expensive.” Fed. R. Civ. P.
12 26(b)(2)(C)(i); see also In re Qualcomm Inc., 162 F. Supp. 3d 1029, 1043 (N.D.
13 Cal. 2016) (evaluating undue burden under the fourth Intel factor by applying the
14 standards of Rule 26). It is also contrary to ample caselaw finding discovery
15 requests unduly burdensome where a § 1782 applicant has or “should already have”
16 the requested information. In re Qualcomm Inc., 162 F. Supp. 3d at 1044; In re
17 Pioneer Corp. v. Technicolor, Inc., 2018 WL 4961911, at *10 (C.D. Cal. Sept. 12,
18 2018) (discovery request was unduly burdensome where applicant “already ha[d]
19 some of the materials it sought from [respondent]”); Mees v. Buiter, 793 F.3d 291,
20 302 n.18 (2d Cir. 2015) (discovery request may be improper if applicant “already
21 possesses the materials sought in her application”).
22 The R&R also finds that nine years of discovery is not overbroad, because
23 the Luxembourg litigation concerns “the validity of the 2013 share transfer.” R&R
24 at 11. But that does not explain why respondents should be required to assume the
25 burden of reviewing documents for the decade following the transaction, and §
26 1782 precedent counsels otherwise. In re Qualcomm, 162 F. Supp. 3d at 1045
27 (subpoenas were not narrowly tailored where they required respondents “to search
28 through troves of material spanning over a decade”); In re Macquarie Bank Ltd.,
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1 2015 WL 3439103, at *9 (D. Nev. May 28, 2015) (same). In any event, at
2 minimum, the subpoena should be narrowed to cover the period before the parties’
3 dispute surfaced in 2019, to avoid a pointless and thus unduly burdensome review
4 of privileged documents.
5 II. The R&R does not apply the Intel factors to Nouvel’s request for
6 discovery in connection with the contemplated French litigation.
7 The Court should also vacate the ex parte order and quash the subpoenas
8 with respect to Nouvel’s threatened French action. It would work a significant
9 intrusion into ongoing French proceedings for Nouvel to obtain overlapping
10 discovery in the United States through § 1782, while the French courts continue to
11 review ex parte discovery orders obtained by Nouvel.
12 The R&R does not address any of that. After acknowledging that “some of
13 the discovery” sought by Nouvel in this Court “may be duplicative” of the
14 documents currently before the French courts, the R&R concludes that subpoenas
15 should nevertheless issue because the parties disagree on the scope of discovery
16 available in France. R&R at 9-10. This analysis again neglects the Supreme
17 Court’s guidance in Intel, which directs denial of discovery here.
18 A. The first Intel factor weighs in respondents’ favor.
19 Nouvel’s § 1782 application to this Court turned on two assertions: (1) the
20 French courts would not authorize the discovery it sought; and (2) it did not expect
21 to name Mondo Bongo or Pitt as parties in its threatened French action. Nouvel
22 App. at 18, 19.
23 The first ground proved false. Contrary to Nouvel’s prediction, the French
24 courts have authorized discovery from Château Miraval, its affiliate Miraval
25 Provence, and their officers and directors, pursuant to ex parte orders now under
26 review in France. Recognizing this significant grant of discovery, Nouvel asked the
27 court to narrow its subpoenas to reach only documents pertaining to the finances,
28 governance, and management of Château Miraval—documents that it had
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1 previously been blocked from obtaining by another French court. Memo. of P&A
2 in Opp. to Mot. (“Opp.”), ECF No. 31 at 17. Nouvel characterized that prior
3 decision as reflecting “French discovery limits.” Id. But the French court’s ruling
4 did not reflect an absence of “effective discovery mechanisms” overseas, as would
5 support Nouvel’s request under Intel. Matter of Lufthansa Technick AG, 2019 WL
6 331839, at *2 (W.D. Wash. Jan. 25, 2019). Instead, the French court held that
7 French corporate law prohibits Nouvel, as an indirect shareholder of Château
8 Miraval, from receiving the additional documents it seeks in this Court. See Decl.
9 of Alain Maillot in Further Support of Mot., Ex. A, ECF No. 26-2. That
10 substantive prohibition does not favor relief under § 1782. To the contrary, it
11 weighs against Nouvel on the balance of the Intel factors.
12 The second ground likewise falls flat. Although Nouvel has sought to
13 artfully exclude Pitt and Mondo Bongo from its theoretical French litigation, it is
14 irrelevant whether Nouvel plans to name either as a defendant in France. All of the
15 discovery Nouvel seeks from respondents is also “in [the] possession” of the French
16 entities it threatens to sue. In re LG Elecs. Deutschland GmbH, 2012 WL 1836283,
17 at *2 (S.D. Cal. May 21, 2012); see In re Marano, 2009 WL 482649, at *4 (N.D.
18 Cal. Feb. 25, 2009) (denying § 1782 application because there was no evidence the
19 party-opponent in the foreign litigation “[did] not possess the desired information”).
20 That is clear from the face of Nouvel’s subpoenas, which seek discovery solely
21 pertaining to Château Miraval and Miraval Provence. See In re IPC Do Nordeste,
22 LTDA, 2012 WL 4448886, at *5-6, *9 (E.D. Mich. Sept. 25, 2012) (first factor
23 weighed against applicant where “an independent review of the categories of
24 information sought in the subpoenas suggest[ed] that this information would be in
25 the possession” of the party-opponent in the foreign litigation).
26 The R&R is silent on this record and instead suggests the Court should grant
27 Nouvel discovery to avoid considering disputed issues of French law. R&R at 7.
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1 sought § 1782 relief because it “requires more information” to “properly bring and
2 to maintain” its threatened lawsuit, Nouvel App. at 10, the R&R fails to recognize
3 that Nouvel is using Ҥ 1782 to investigate whether litigation is possible in the first
4 place, putting the cart before the horse,” In re Harbour Victoria Inv. Holdings,
5 2015 WL 4040420, at *8 (citation omitted).
6 In addition, the R&R disregards respondents’ argument that a protective
7 order would not address respondents’ concerns about disclosure of their
8 confidential information to Nouvel itself—now controlled by a competitor spirits
9 company that could use respondents’ information against Château Miraval and
10 Miraval Provence. The R&R’s failure to address this argument supplies yet another
11 reason to reject the R&R and quash the subpoenas.
12 Finally, Nouvel asked the magistrate judge to construe its subpoena more
13 narrowly to address the fact that, in light of the discovery orders it had obtained in
14 France, it was seeking largely overlapping discovery in this § 1782 action. Opp. at
15 18; see also id. at 21 (“Nouvel has narrowed its requests to avoid duplicative
16 discovery while the French court considers the Article 145 orders.”); id. at 24
17 (“Nouvel . . . has narrowed its § 1782 requests to avoid overlap as much as
18 possible.”). To the extent the R&R declined to narrow the subpoenas, it should be
19 rejected. See R&R at 9-10. There can be no basis to grant Nouvel more discovery
20 than it has actually sought.3
21 III. If the Court adopts the R&R, it should issue a stay pending an appeal to
22 the Ninth Circuit.
23 If the Court follows the R&R, respondents request that the Court enter a stay
24 pending their anticipated appeal to the Ninth Circuit. See Fed. R. App. P. 8(a).
25
26
3
The R&R notes that respondents declined to withdraw their motion in its entirety
27
in reaction to the proposed narrowing, but respondents of course agreed that the
28 subpoenas should be narrowed at least to the extent volunteered by Nouvel. See
Tuffaha Decl., Ex. 3O, ECF No. 31-24 at 2.
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1 A stay is particularly appropriate here, where the R&R’s analysis was based
2 on an outdated, out-of-circuit decision—Euromepa, 51 F.3d at 1095—that conflicts
3 with well-settled Supreme Court and Ninth Circuit precedent directing district
4 courts to consider issues of foreign law in reviewing applications under § 1782.
5 See Intel, 542 U.S. at 264; Khrapunov, 931 F.3d at 925. In challenging the
6 applicability of Euromepa to Nouvel’s § 1782 application, respondents raise
7 “serious legal questions” that warrant a stay. Lair v. Bullock, 697 F.3d 1200, 1204
8 (9th Cir. 2012).
9 Absent a stay, respondents will be required to produce confidential and
10 proprietary information to aggressive competitors who now control Nouvel. And
11 because “the proverbial bell cannot be unrung,” respondents will be effectively
12 stripped of their right to appeal. In re Accent Delight Int’l, 2018 WL 7473109, at
13 *1 (S.D.N.Y. June 27, 2018). Nouvel, by contrast, would suffer no harm at all. If a
14 stay is granted, it would not be “too late for [§ 1782 discovery] to be of use” in
15 either Luxembourg, where no schedule has been formalized, or France, where the
16 action is still unfiled. In re Gorsoan Ltd., 2020 WL 4194822, at *7 (S.D.N.Y. July
17 21, 2020). Moreover, a stay would serve the public interest in “comity between
18 United States and foreign tribunals,” id. at *8, by allowing the Ninth Circuit to
19 weigh in on the delicate considerations implicated by § 1782.
20 CONCLUSION
21 For the reasons stated above, respondents respectfully object to the R&R and
22 submit that the Court should quash the subpoenas.
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