Khrapunov v. Prosyankin

• Decision Date: 24 July 2019
• Docket Number: No. 18-16254,18-16254
• Citation: 931 F.3d 922
• Parties: Ilyas KHRAPUNOV, Plaintiff-Appellee, v. Pavel PROSYANKIN; John Doe, Objectors-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

931 F.3d 922

Ilyas KHRAPUNOV, Plaintiff-Appellee,

v.Pavel PROSYANKIN; John Doe, Objectors-Appellants.

No. 18-16254

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 20, 2018 San Francisco, California

Filed July 24, 2019

MURGUIA, Circuit Judge:

28 U.S.C. § 1782 authorizes, but does not require, federal district courts to assist in the production of evidence for use in a foreign or international tribunal. Intel Corp. v. Advanced Micro Devices, Inc. , 542 U.S. 241, 247, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004). Here, the district court granted Plaintiff-Appellee Ilyas Khrapunov’s application for discovery under § 1782. However, the factual circumstances surrounding Khrapunov’s application have changed dramatically during the pendency of this appeal. We therefore vacate the decision below and remand to the district court to consider, in the first instance, whether the statutory requirements for discovery under § 1782 remain satisfied and whether, as a matter of the district court’s discretion, discovery remains appropriate.

I.

Khrapunov filed a § 1782 application in federal district court, seeking issuance of a subpoena to Google, Inc., compelling the disclosure of certain subscriber information in the company’s possession. That information, Khrapunov claimed, would aid his attempt to discharge two court orders issued against him in ongoing litigation in England.

The proceedings in England stem from Khrapunov’s alleged role in the misappropriation of billions of dollars from JSC BTA Bank, a major bank in Kazakhstan. The bank alleges that, with Khrapunov’s assistance, the bank’s prior chairman, Mukhtar Ablyazov, defrauded it of nearly $6 billion.

The bank obtained two court orders in the English litigation relevant to this appeal: an order imposing a worldwide freeze of Khrapunov’s assets, and an order permitting the bank’s attorneys to cross-examine Khrapunov concerning his assets. Khrapunov filed separate applications in the English litigation to discharge the worldwide freeze order and the cross-examination order.

In August 2017, Khrapunov filed his § 1782 application in the Northern District of California, requesting that a subpoena issue to Google. The application was assigned to a magistrate judge who granted the application, and the subpoena issued.

Appellants-Objectors Pavel Prosyankin and John Doe¹ moved to quash the subpoena. The magistrate judge declined to quash the subpoena in its entirety but did narrow its scope somewhat. Objectors then sought review by the district court. The district court denied relief, and Objectors appealed.

While these matters were pending in district court and on appeal, the proceedings in England continued.² According to a supplemental declaration provided by Objectors on appeal, in February and May 2018, Khrapunov’s attempts to discharge the two court orders against him—the asset freeze order and the cross-examination order—were denied by English courts. Khrapunov was not given permission to appeal those denials, and at least one judge found Khrapunov’s arguments to be "totally without merit." According to Objectors, this means Khrapunov’s discharge applications have "been finally determined against him, and Mr. Khrapunov cannot appeal or pursue them any further." Khrapunov does not dispute that the discharge applications have been finally decided and that his request to appeal has been denied. Instead, he argues that he retains the ability to reopen those proceedings if he discovers new evidence—like the subscriber information he seeks from Google.

Objectors argue that the English courts’ final, nonappealable denials of Khrapunov’s applications render this case moot. Alternatively, Objectors argue that the district court applied the incorrect standard in reviewing the magistrate judge’s decision and that the district court abused its discretion by failing to properly weigh the relevant factors when considering whether to grant the application under § 1782.

II.

We have jurisdiction under 28 U.S.C. § 1291. In re Premises Located at 840 140th Ave. NE, Bellevue, Wash. , 634 F.3d 557, 567 (9th Cir. 2011). We review the district court’s decision under § 1782 for abuse of discretion. Four Pillars Enters. Co., Ltd. v. Avery Dennison Corp. , 308 F.3d 1075, 1078 (9th Cir. 2002).

III.

Section 1782 provides:

[t]he district court of the district in which a person resides or is found may order him to ... produce a document or other thing for use in a proceeding in a foreign or international tribunal .... The order may be made ... upon the application of any interested person[.]

28 U.S.C. § 1782(a). Section 1782 ’s statutory language has been distilled to permit district courts to authorize discovery where three general requirements are satisfied: (1) the person from whom the discovery is sought "resides or is found" in the district of the district court where the application is made; (2) the discovery is "for use in a proceeding in a foreign or international tribunal"; and (3) the application is made by a foreign or international tribunal or "any interested person." See 28 U.S.C. § 1782(a) ; see also Brandi-Dohrn v. IKB Deutsche Industriebank AG , 673 F.3d 76, 80 (2d Cir. 2012) ; In re Clerici , 481 F.3d 1324, 1331–32 (11th Cir. 2007).

In this case, the second statutory requirement—that the discovery be for use in a foreign "proceeding"—is called into doubt by the developments in the English litigation. In Intel , the Supreme Court explained that a foreign proceeding need not be "pending" or even "imminent" when the discovery is sought. 542 U.S. at 258–59, 124 S.Ct. 2466. So long as a future proceeding is "within reasonable contemplation," it satisfies the statute’s requirement. Id . at 259, 124 S.Ct. 2466. Intel , however, did not address the situation here: where the "proceeding" for which the discovery was initially sought has concluded.

In a case decided before Intel , the Second Circuit addressed—in a situation almost identical to that present here—whether the possibility of reopening an already completed foreign proceeding could satisfy § 1782 ’s requirement. See Euromepa, S.A. v. R. Esmerian, Inc ., 154 F.3d 24, 29 (2d Cir. 1998). That court concluded that the possibility of reopening proceedings could not satisfy § 1782, holding:

Section 1782 is designed to provide discovery in aid of foreign litigation, not to provide discovery to justify the reopening of already completed foreign litigation. The motion to reopen the proceedings in the French Court of Appeal thus cannot serve as a predicate foreign proceeding for the Petition.

Id.

Although the Euromepa decision cited the "imminence" standard the Supreme Court rejected in Intel , see id ., we are nevertheless convinced that Euromepa would come out the same way under Intel ’s "reasonable contemplation" standard. Although § 1782 authorizes discovery in a "broad range" of circumstances, Intel , 542 U.S. at 259, 124 S.Ct. 2466, those circumstances are not without some limit. Cf. id. ("[W]e hold that § 1782(a) requires only that a dispositive ruling by the Commission, reviewable by the European courts, be within reasonable contemplation.") (emphasis added). As a general matter, the mere possibility that discovery might permit already concluded foreign proceedings to be reopened likely approaches that limit.

We have recognized that district courts "are in the best position to review the details of a § 1782 request and to determine whether judicial assistance is justified." Four Pillars , 308 F.3d at 1080 (alteration incorporated). In this case, in light of the developments in the English litigation, we conclude that some additional fact-finding about the nature of the English "proceeding" is necessary—about the discovery sought and its relationship to the possibility of reopening the English proceedings; about the standard Khrapunov must satisfy to reopen those proceedings; about the relative likelihood of satisfying that standard; and about whether the discovery sought will actually assist Khrapunov in satisfying that standard. We leave to the district court to determine, in light of these facts, whether the statutory requirements of § 1782 remain satisfied.

Additionally, even where an applicant satisfies § 1782 ’s statutory prerequisites, the district court still retains substantial discretion to permit or deny the requested discovery. Intel , 542 U.S. at 264–65, 124 S.Ct. 2466. The developments in the English litigation are relevant to the discretionary factors courts consider when evaluating § 1782 applications, as well. See id ., 542 U.S. at 264–65, 124 S.Ct. 2466. In particular, the English courts’ willingness to proceed to judgment without the benefit of the evidence Khrapunov sought,³ and the courts’ treatment of Khrapunov’s claims (including one judge’s conclusion that Khrapunov’s position was "totally without merit"), likely bear on both the "character of the proceedings underway abroad" and the "receptivity" of the English courts "to U.S. federal-court judicial assistance." In re Premises Located at 840 140th Ave. , 634 F.3d at 563 (quoting Intel , 542 U.S. at 264–65, 124 S.Ct. 2466 ). On remand, it may be appropriate for the district court to reevaluate these discretionary factors, as well, in deciding whether discovery remains appropriate in this case.

The dissent suggests our decision will require district courts, in evaluating § 1782 applications, to adjudicate each new procedural development in the foreign case. But not all procedural developments are created equally, and we trust that district court judges will be able to separate the insignificant from the significant, mere delay tactics from events of consequence. After all, "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." Four Pillars , 308 F.3d at 1078.

Considering the substantial discretion reserved to the district courts, see Intel , ...