Kiobel v. Cravath, Swaine & Moore LLP

• Decision Date: 10 July 2018
• Docket Number: August Term 2017,No. 17-424-cv,17-424-cv
• Citation: 895 F.3d 238
• Parties: Esther KIOBEL, BY her Attorney-in-fact Channa SAMKALDEN, Petitioner-Appellee, v. CRAVATH, SWAINE & MOORE LLP, Respondent-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

895 F.3d 238

Esther KIOBEL, BY her Attorney-in-fact Channa SAMKALDEN, Petitioner-Appellee,

v.CRAVATH, SWAINE & MOORE LLP, Respondent-Appellant.¹

No. 17-424-cv

August Term 2017

United States Court of Appeals, Second Circuit.

Argued: September 12, 2017

Decided: July 10, 2018

RICHARD L. HERZ, (Marco Simons, Alison Borochoff-Porte, on the brief) EarthRights International, Washington, D.C., for Appellee Esther Kiobel.

NEAL KUMAR KATYAL, (Jessica L. Ellsworth, Sean Marotta, Eugene A. Sokoloff, Hogan Lovells US LLP, Washington, D.C.; Lauren A. Moskowitz, Cravath, Swaine & Moore LLP., New York, N.Y., on the brief), for Appellant Cravath, Swaine & Moore LLP.

John P. Elwood, Vinson & Elkins LLP, Washington, D.C. (Zachary Howe, Vinson & Elkins, Houston, T.X.; Kathryn Comerford Todd, Sheldon Gilbert, United States Chamber of Commerce National Chamber Litigation Center, Washington, D.C.; Amar Sarwal, Association of Corporate Counsel, Washington, D.C.), for Amicus Curiae the Chamber of Commerce of the United States of America, Association of Corporate Counsel, National Association of Manufacturers.

Joseph E. Neuhaus, Sullivan & Cromwell LLP, New York, N.Y. (Richard L. Mattiaccio, the New York City Bar Association, New York, N.Y.), for Amicus Curiae New York City Bar Association.

Before: JACOBS, CABRANES, AND WESLEY, Circuit Judges.

JACOBS, Circuit Judge:

Petitioner-Appellee Esther Kiobel filed a petition in the United States District Court for the Southern District of New York to subpoena documents under 28 U.S.C. § 1782 from Respondent-Appellant Cravath, Swaine & Moore LLP ("Cravath"), in aid of her lawsuit against Royal Dutch Shell ("Shell") in the Netherlands. Cravath is holding the documents because it represented Shell in prior litigation brought by Kiobel against Shell in that district. It was ultimately decided that United States courts lacked jurisdiction over that suit. See Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010), aff'd, 569 U.S. 108, 133 S.Ct. 1659, 185 L.Ed.2d 671 (2013).

On this appeal from the district court’s grant of Kiobel’s petition, Cravath argues (1) that the district court lacked jurisdiction under Section 1782 to grant the petition, and (2) that in any event, it was an abuse of discretion to do so.

We conclude that while the district court had jurisdiction over Kiobel’s petition, it was an abuse of discretion to grant it. As we cautioned in Application of Sarrio, S.A., 119 F.3d 143 (2d Cir. 1997), an order compelling American counsel to deliver documents that would not be discoverable abroad, and that are in counsel’s hands solely because they were sent to the United States for the purpose of American litigation, would jeopardize "the policy of promoting open communications between lawyers and their clients." Id. at 146.

I

In 2002, Kiobel and eleven other Nigerian plaintiffs brought suit in the Southern District of New York against four defendants affiliated with Shell. See Kiobel v. Royal Dutch Petroleum Co., 456 F.Supp.2d 457 (S.D.N.Y. 2006), aff'd in part, rev'd in part, 621 F.3d 111 (2d Cir. 2010), aff'd, 569 U.S. 108, 133 S.Ct. 1659, 185 L.Ed.2d 671 (2013). Kiobel invoked the district court’s jurisdiction under the Alien Tort Statute, 28 U.S.C. § 1350, and alleged that the defendants were complicit in human rights abuses in Nigeria.

For the purpose of pretrial discovery, the district court consolidated Kiobel’s case with other Alien Tort Statute cases arising out of the same events in Nigeria, the Wiwa cases. See Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88 (2d Cir. 2000). The consolidated cases generated a large volume of discovery, including depositions and documents. The discovery materials were subject to a stipulated confidentiality order entered into in the Wiwa cases, and signed by Kiobel. Most of the documents produced by Shell were marked "confidential," meaning that they were to be used "solely for purposes" of the then-pending Kiobel and Wiwa litigations. Joint App’x at 58–59, 74. The parties agreed to destroy or return each other’s confidential material not later than thirty days after the respective cases’ conclusions, and that the order would survive the end of litigation. Any de-designation of confidential documents or modification of the confidentiality order required agreement by the parties to the confidentiality order, or could be ordered by the district court. Cravath attorneys signed the stipulation in their capacity as Shell’s counsel.

After consolidation, the Wiwa cases were settled. In Kiobel, the district court dismissed some of the claims under the Alien Tort Statute for lack of subject-matter jurisdiction, and we dismissed the suit in full for lack of subject-matter jurisdiction. Kiobel, 621 F.3d at 149. The Supreme Court, observing that "all the relevant conduct took place outside the United States," affirmed on the ground "that the presumption against extraterritoriality applies to claims under the" Alien Tort Statute. Kiobel, 569 U.S. at 124, 133 S.Ct. 1659.

Years after the Supreme Court’s decision, Kiobel prepared to file suit against Shell in the Netherlands, advancing the same allegations made in her Alien Tort Statute suit. Kiobel now wants to deploy the discovery from her American litigation in her Dutch lawsuit, but is impeded by the confidentiality order which limits its use to only the U.S. Kiobel and Wiwa Alien Tort Statute cases. On October 12, 2016, Kiobel filed the pending Section 1782 petition to subpoeana Cravath and obtain "[a]ll deposition transcripts from the Kiobel and Wiwa cases," as well as "[a]ll discovery documents and communications produced to the plaintiffs by Shell and other defendants in Kiobel and the Wiwa cases." Joint App’x at 10.

Section 1782"provide[s] federal-court assistance in gathering evidence for use in foreign tribunals." Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 247, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004). The pertinent statutory text is as follows:

The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation. The order may be made ... upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court .... To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure. A person may not be compelled to give his testimony or statement or to produce a document or other thing in violation of any legally applicable privilege.

28 U.S.C. § 1782(a). Section 1782 states that a court "may order" such discovery; so even if a court has jurisdiction under the statute to grant a petition, the decision to grant it is discretionary. See In re Metallgesellschaft, 121 F.3d 77, 79 (2d Cir. 1997) ("The permissive language of § 1782 vests district courts with discretion to grant, limit, or deny discovery."); see also In re Esses, 101 F.3d 873, 875 (2d Cir. 1996) (per curiam) ("A review of a district court's decision under § 1782, therefore, has two components: the first, as a matter of law, is whether the district court erred in its interpretation of the language of the statute and, if not, the second is whether the district court's decision to grant discovery on the facts before it was in excess of its discretion.").

Kiobel argued that the documents that Cravath holds for Shell are needed to prepare her case because Dutch courts require a higher evidentiary standard at the filing stage than do U.S. courts.² Further, rather than starting discovery from scratch after over ten years in U.S. courts, access to the prior discovered materials is said to be the most efficient course of action. Kiobel did not subpoena Shell, only Cravath.

The district court agreed with Kiobel. After oral argument on December 20, 2016, the district court found that the cheapest and easiest thing to do was to grant Kiobel’s petition and get the documents from Cravath. In view of the existing confidentiality order, Kiobel was directed to represent that the documents would only be used for drafting court papers in the contemplated Dutch proceedings, not for publicity, and the parties were required to sign a new stipulation. The parties complied with the court’s directive, though Cravath advised that, under the terms of the prior stipulation, it lacked authority to de-designate documents because it was not a party to the original Alien Tort Statute suit, and Shell was not before the court.

Under the new stipulation, Shell has no right to enforce a breach of confidentiality. In the event of disputes, Cravath and Kiobel can return to the district court, but because the district court has no authority over proceedings in the foreign forum, the parties may only "request" confidential treatment for the documents in the Netherlands. Joint App’x at 241.

The district court’s subsequent opinion first concluded that it had jurisdiction to consider Kiobel’s petition. The court rejected Cravath’s argument that it was not the real party from whom discovery was sought, deeming it irrelevant because Section 1782 asks only whether the respondent resides in the district in which discovery is sought, as Cravath does. Finding that it had jurisdiction to consider Kiobel’s petition, the district court granted it because Kiobel required the documents to file suit, and it would not be burdensome for Cravath to provide them.

On appeal, Cravath challenges both the district court’s finding that it had jurisdiction and its discretionary grant of the petition. As to jurisdiction, Cravath argues, inter alia, that: the documents Kiobel seeks belong to Shell; Cravath holds them only as counsel;...