Four Pillars Enterprises v. Avery Dennison Corp., 01-55639.

• Decision Date: 24 October 2002
• Docket Number: No. 01-55639.,01-55639.
• Citation: 308 F.3d 1075
• Parties: FOUR PILLARS ENTERPRISES CO., LTD, Petitioner-Appellant, v. AVERY DENNISON CORPORATION, Respondent-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

308 F.3d 1075

FOUR PILLARS ENTERPRISES CO., LTD, Petitioner-Appellant, v. AVERY DENNISON CORPORATION, Respondent-Appellee.

No. 01-55639.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 9, 2002.

Decided October 24, 2002.

Robert L. Corbin, Corbin & Fitzgerald LLP, Los Angeles, CA; Daniel Marino, Reed Smith, LLP, Washington, DC; for the petitioner-appellant.

Dominic Surprenant, Patrick M. Shields, Quinn, Emanuel, Urquhart, Oliver & Hedges, LLP, Los Angeles, CA, for the respondent-appellee.

Appeal from the United States District Court for the Central District of California; Terry J. Hatter, Jr., Chief District Judge, Presiding. D.C. No. CV-00-11536-TJH.

Before: LAY,^* CANBY and PAEZ, Circuit Judges.

CANBY, Circuit Judge.

Appellant Four Pillars Enterprises Co., Ltd., a Taiwanese corporation, applied to the district court for a discovery order pursuant to 28 U.S.C. § 1782, which authorizes the district court to order the production of documents or testimony for use in litigation in foreign courts.¹ Four Pillars sought various documents and depositions from Avery Dennison Corporation for use in civil cases that Four Pillars was pursuing against Avery Dennison in the courts of the People's Republic of China and in the Republic of China — Taiwan. A magistrate judge granted Four Pillars the right to serve three of its document requests, but denied all the remaining requests. Four Pillars sought reconsideration, which was denied by the district court. Four Pillars now appeals. We affirm the orders of the magistrate judge and district court.

BACKGROUND

Both Four Pillars and Avery Dennison produce and sell adhesive tape and labels. Several years ago, they apparently considered a joint venture in Asia, but the relationship there-after became highly adversarial. As the court below noted, Four Pillar's request for documents "arises against the backdrop of nasty litigation between the parties concerning competing allegations of pilfered trade secrets." It is necessary to describe that litigation because a part of it supplied the reason for the magistrate judge's denial of most of Four Pillars' requests.

The Earlier Litigation

In 1997, Avery Dennison sued Four Pillars in the Northern District of Ohio, alleging theft of trade secrets and violations of RICO² in a scheme whereby Four Pillars recruited one of Avery Dennison's employees to deliver trade secrets and other confidential material to Four Pillars. The scheme was discovered by the Federal Bureau of Investigation. About sixteen months later, Four Pillars initiated civil suits against Avery Dennison in the People's Republic of China and in the Republic of China — Taiwan, claiming that Avery Dennison had misappropriated Four Pillars' trade secrets.

While the civil suits were pending, a criminal prosecution was commenced in the Northern District of Ohio, and in 1999 Four Pillars and two of its employees were convicted of attempt and conspiracy to steal Avery Dennison's trade secrets, in violation of the Economic Espionage Act of 1996, 18 U.S.C. § 1832. The convictions were affirmed on appeal. See United States v. Yang, 281 F.3d 534 (6th Cir.2002).

Meanwhile, discovery went forward in Avery Dennison's civil case in the Northern District of Ohio. There the parties agreed to, and the district court entered, a protective order that plays a major part in the present appeal. The order provided, among other things, that confidential material produced by Avery Dennison could be used by Four Pillars only in the civil suit or the criminal proceeding in the Northern District of Ohio, and that Four Pillars could not remove any of the material from the United States.

The civil action came to an end in February 2000, when the jury found in favor of Avery Dennison on trade secrets, RICO and related claims. The jury awarded $80 million in damages against Four Pillars.

Four Pillars' Requests for Production Pursuant to 28 U.S.C. § 1782

In January 2000, Four Pillars sought the assistance of the District Court for the Central District of California, under 28 U.S.C. § 1782, to compel Avery Dennison to produce certain documents for use in Four Pillars' suits in the Chinese and Taiwanese courts. The magistrate judge denied the request in June 2000. The judge ruled that the requested documents had been produced by Avery Dennison in the Ohio civil litigation and were subject to that court's protective order. In deference to that order, and in the exercise of his discretion, the magistrate judge denied the request.

Four Pillars moved for reconsideration on the ground that Avery Dennison had made an insufficient showing that it had produced all of the requested material in the Ohio litigation. The magistrate judge denied reconsideration, and Four Pillars did not appeal either the original denial or the denial of reconsideration.

While the above motion for reconsideration was pending, Four Pillars returned to the District Court for the Northern District of Ohio and moved to modify the protective order to allow the requested discovery for Chinese and Taiwanese litigation. The district court denied the motion, reasoning that Four Pillars' proven misconduct and Avery Dennison's interest in maintaining the confidentiality of the documents out-weighed Four Pillars' interest in using the documents in the foreign lawsuits. Four Pillars did not appeal this ruling.

Four Pillars subsequently returned to the Central District of California and filed what it termed a "Supplemental Petition for Judicial Assistance" under 28 U.S.C. § 1782, which is the subject of this appeal. The magistrate judge noted that the petition did not actually supplement any prior petition, and accordingly treated the application as a new proceeding. The magistrate judge found that many of the requested documents and nearly all of the requested deposition testimony had been produced in the Ohio litigation and were still subject to the protective order. Other requests essentially repeated the requests that were denied in the previous application, the denial of which had become final. The magistrate judge found, however, that requests for three categories of documents could be served because it was not clear that the material had been produced in the Ohio litigation or that the requests repeated requests denied in the previous application under 28 U.S.C. § 1782.

Four Pillars moved for reconsideration, which was denied in a brief order by the Chief Judge of the Central District. Four Pillars then filed this appeal.

STANDARD OF REVIEW

We review the district court's decision under 28 U.S.C. § 1782 for abuse of discretion. United States v. Sealed 1, Letter of Request for Legal Assistance from the Deputy Prosecutor Gen. of the Russian Fed'n, 235 F.3d 1200, 1206 (9th Cir. 2000).

DISCUSSION

The magistrate judge did not abuse his discretion in denying much of the relief sought by Four Pillars pursuant to 28 U.S.C. § 1782. Congress gave the federal district courts broad discretion to determine whether, and to what extent, to honor a request for assistance under 28 U.S.C. § 1782. Sealed 1, 235 F.3d at 1206 (finding that the fact that a district court is statutorily authorized to grant requests for formal assistance to foreign tribunals does not mean that the district court must exercise its discretion to grant such assistance); see also In re Request for Assistance from Ministry of Legal Affairs of Trin. & Tobago, 848 F.2d 1151, 1154 (11th Cir.1988) ("Congress has given the district courts broad discretion in granting judicial assistance to foreign countries.").

The Protective Order

With regard to several categories of requested documents or deposition testimony, the magistrate judge determined that those documents or that testimony had been produced in the Ohio litigation. Four Pillars contends that the showing by Avery Dennison was insufficient to establish that fact, but the magistrate judge reviewed the declarations and did not err in finding that the material had been produced in the Northern District of Ohio. With regard to the deposition testimony, the magistrate judge considered not only the similarity or identity of requests for deposition testimony, but also a declaration submitted by Avery Dennison concerning the scope of the deposition testimony in the Ohio proceeding. On the whole record, we conclude that the magistrate judge acted within his discretion in finding nearly all of the deposition testimony requested to have been produced in the Ohio litigation.

Because the documents and deposition testimony were produced in the Ohio litigation, and concern confidential material, there is little question that they were subject to that court's protective order. Four Pillars vigorously contends that the protective order should have no effect outside of the Ohio litigation, and that it should not affect a request for discovery for use in different litigation in China and Taiwan. The magistrate judge, however, was not announcing a rigid rule that a protective order of its own force precludes subsequent discovery under § 1782. It may readily be agreed that discovery in one lawsuit that is subject to a protective order may not necessarily, or even often, preclude discovery in a subsequent lawsuit (with or without a protective order issued by the new court). But the magistrate judge in granting some of the relief requested by Four Pillars and denying the rest, was exercising the broad discretion traditionally conferred upon the trial courts in such discovery matters. "Section 1782 grants district courts wide discretion... to tailor such discovery to avoid attendant problems .... If a district court is concerned that granting discovery under § 1782 will engender problems in a particular case, it is well-equipped to determine the scope and duration of that discovery." Esses v. Hanania (In re Application of Esses), 101 F.3d 873, 876 (2d Cir.1996).

Here the magistrate was presented with a set of...