In re Grupo Unidos Por El Canal S.A.
| Decision Date | 21 April 2015 |
| Docket Number | Case No. 14-mc-80277-JST (DMR) |
| Court | United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California |
| Parties | In re Application of GRUPO UNIDOS POR EL CANAL S.A., Applicant, To obtain discovery pursuant to 28 U.S.C. § 1782 |
Before the court are three motions: (1) a motion by Grupo Unidos por el Canal ("GUPC") to compel URS Corporation and URS Holdings ("URS") to provide documents to GUPC pursuant to a subpoena authorized by this court, Docket No. 11; (2) a motion to intervene pursuant to Federal Rule of Civil Procedure 24 filed by Autoridad del Canal de Panama ("ACP"), Docket No. 13; and (3) ACP's motion to quash the subpoena, Docket No. 13-1.
For the reasons set forth below, ACP's motion to intervene is granted, GUPC's motion to compel is denied, and ACP's motion to quash is granted.
GUPC is a Panama-based company, jointly owned and operated by four global construction firms. Menes Decl. [Docket No. 2] Ex. 1 at 6-7. In August 2009, GUPC's member companies entered into a contract (the "Contract") with ACP—a legal entity of the Republic of Panama—to build a new set of locks on the Panama Canal (the "Canal Project"). GUPC Section 1782 Appl. [Docket No. 1] ¶ 3; Contract [Docket No. 13-4]. GUPC was formed for the purpose of performing this work, which is ongoing.
The Contract contains an arbitration clause that provides that any dispute arising from the Canal Project shall be subject to a private arbitration venued in Miami and conducted under the Rules of Arbitration of the International Chamber of Commerce ("ICC"). Contract § 20.6(a), (e). "In addition to the [ICC] Rules, the arbitration shall be conducted according to the International Bar Association Rules on the Taking of Evidence in International Commercial Arbitration ["IBA Rules"]." Contract § 20.6(b). The Contract specifies that arbitrations "shall be decided in law (within the meaning of Panamanian law)" and the "arbitration agreement and the arbitration shall be governed by the United States Federal Arbitration Act ["FAA"], 9 U.S.C. §§ 1 et seq." Contract § 20.6(d), (f).
On December 28, 2013, GUPC and several co-claimants commenced an arbitration against ACP (the "Arbitration") pursuant to the arbitration clause of the Contract. On July 24, 2014, the parties to the Arbitration executed the "Terms of Reference," an agreement regarding the procedures and rules of the Arbitration. Hoffman Decl. Ex. G [Docket No. 13-7].
The Terms of Reference state that the Arbitration "shall be governed by: (i) the United States Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.; (ii) the ICC Rules in force as of 1st January 2012; (iii) these Terms of Reference; and (iv) the IBA Rules on the Taking of Evidence in International Commercial Arbitration . . . ." Id. at ¶ 65.
The parties also agreed to "grant the Arbitrators the power to issue procedural orders on specific procedural issues when needed," and specified that "[t]he procedural timetable will be determined by way of procedural order after consultation with the Parties." Id. at ¶¶ 67, 74.
In a procedural order dated August 11, 2014 ("Procedural Order"), the Arbitral Tribunal determined the sequence and timing of the Arbitration proceedings. Hoffman Decl. Ex. H [Docket No. 13-8]. Discovery begins on May 29, 2015 with the parties' requests for production of documents. Id. at 2. On June 16, 2015, the parties may file "[r]equests to the Arbitral Tribunal forproduction of documents if any" pursuant to paragraphs 3.4 and 3.6 of the Procedural Order." Id. Additional relevant terms from the Procedural Order will be discussed in greater detail below.
On September 30, 2014, GUPC filed an ex parte application under 28 U.S.C. § 1782, requesting that this court issue an order compelling URS to produce certain documents. GUPC Section 1782 Appl. ¶¶ 7-10. GUPC sought to obtain certain documents from URS Corporation and URS Holdings, two United States companies headquartered in San Francisco that had worked as environmental and engineering consultants to ACP in connection with the canal expansion, and that had performed an Environmental Impact Assessment, a Community Engagement Plan, and an Environmental Management Plan for the Canal Project. GUPC Section 1782 Mem. [Docket 1-1] at 2-3.
In its Section 1782 application, GUPC never noted the Miami venue of the Arbitration, instead describing it in conclusory terms as an "international arbitration." See GUPC Section 1782 Appl. ¶ 5 (); GUPC Section 1782 Mem. at 1 (), 4 ( that the request for arbitration was submitted to the ICC secretariat in Paris, and that the arbitration will be determined under Panamanian law by three arbitrators from Spain, England, and Belgium, but not noting the Miami venue of arbitration), and 6-8 (arguing that "ICC arbitration" constitutes a "proceeding in a foreign or international tribunal").
GUPC's Section 1782 application was likewise evasive about the private nature of the Arbitration.1 While the application noted that GUPC and ACP had entered into the Contract,GUPC did not mention the arbitration clause of the Contract. Nor did GUPC inform the court that it had initiated the Arbitration pursuant to the arbitration clause, instead noting simply that GUPC had "submitted a dispute with ACP regarding the Project to international arbitration under the Rules of Arbitration of the ICC."2
On October 27, 2014, the court granted the ex parte application and permitted GUPC to deliver a subpoena on URS. Order [Docket No. 10] at 3-5. The court specifically noted that ex parte applications under Section 1782 are "typically justified by the fact that the parties will be given adequate notice of any discovery taken pursuant to the request and will then have the opportunity to move to quash the discovery." Id. at 5 (quoting In re Republic of Equador, No. C-10-80255-CRB (EMC), 2010 WL 3702427, at *5 (N.D. Cal. Sept. 15, 2010)).
On November 10, 2014, GUPC served URS with a copy of this subpoena. Vasquez Decl. [Docket 11-2] Ex. A at 2-3. URS initially cooperated with GUPC by identifying and supplying responsive documents and inviting GUPC's counsel to review potentially responsive documents at URS's Oakland office. Mot. to Compel [Docket No. 11] at 2. However, on December 15, 2014, ACP sent a letter to URS saying that it had "recently been made aware of" GUPC's subpoena, and requesting that URS "refuse to permit further review" of "documents issued pursuant to that order. URS immediately informed GUPC that it could not proceed with the discovery. URS Opp'n. [Docket No. 12] at 1. At the time, GUPC's attorney was already en route to Oakland to review URS's documents. Mot. to Compel 2-3.
ACP has separate contracts with URS that are not the subject of the Arbitration (the "URS Contract"). Hoffman Decl. Ex. F. ACP contends that it has unlimited rights in and exclusiveownership of all data produced by URS as a result of the URS Contract. Id. § 14.2 (); id. § 15 (). Furthermore, ACP contends that it has a contractual right to certain confidential documents related to the Canal Project within URS's possession, and that URS may not release or distribute these documents without URS's prior explicit consent. URS Contract § 12.
On December 17, 2014, GUPC filed the motion to compel, requesting that the court order URS to comply with its subpoena and to pay the travel costs incurred when GUPC's attorney made an unproductive trip to Oakland. URS takes no position on the validity of GUPC's Section 1782 subpoena, characterizing this question as part of a "discovery dispute" between GUPC and ACP, but does oppose GUPC's request for payment of its attorney's travel costs.
On January 5, 2015, ACP filed a motion to intervene in GUPC's ex parte application for an order under 28 U.S.C. § 1782. If granted permission to intervene, ACP seeks to quash GUPC's Section 1782 subpoena on the grounds that GUPC has not actually met the statutory requirements governing the issuance of such subpoenas, and that discretionary considerations counsel against permitting the discovery requested.
Under Federal Rule of Civil Procedure 24(a), a court must grant an applicant's request for intervention in an action if: (1) the applicant's motion is timely; (2) the applicant "claims an interest relating to the property or transaction which is the subject of the underlying action"; (3) the applicant "is so situated that the disposing of the action may as a practical matter impair or impede [its] ability to protect that interest"; and (4) the applicant's interest is not adequately represented by the existing parties to the action. See Fed. R. Civ. P. 24(a); Wilderness Soc. v. U.S. Forest Serv., 630 F.3d 1173, 1177 (9th Cir. 2011) (citing Sierra Club v. EPA, 995 F.2d 1478, 1481 (9th Cir.1993)). The applicant's interest in the action must be "significantly protectable," meaningit is "is protected under some law, and . . . there is a 'relationship' between [the applicant's] legally protected interest and the plaintiff's claims." United States v. City of Los Angeles, 288 F.3d...
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