BERYL A. HOWELL, Chief Judge
The petitioners, Hulley Enterprises Ltd., Yukos Universal Ltd., and Veteran
The petitioners have been embroiled in multifront litigation around the world for over a decade, arising out of the collapse of the Yukos Oil Company, of which the petitioners were majority shareholders. See Appl. Denial Order, 2017 WL 3708028, at *1, 2017 U.S. Dist. LEXIS 142969, at *2-4 (providing background on the legal disputes). The litigation has largely concerned the Russian Federation's seizure of Yukos's assets, beginning in 2003 and culminating with Yukos's liquidation in 2007. See id. One part of this litigation is currently pending before the Court of Appeal of the Hague, where the petitioners have appealed a Dutch trial court's 2016 decision to set aside, on jurisdictional grounds, over $50 billion in arbitral awards issued to the petitioners and against the Russian Federation based on the allegations of expropriation. See id.; Hulley Enters. v. Russian Fed'n, 211 F.Supp.3d 269, 272-76 (D.D.C. 2016).
Although the petitioners' Application met the statutory requirements for discovery sought under § 1782, the discovery demand was nonetheless denied as a matter of discretion under the factors required by Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264-65, 124 S.Ct. 2466, 159 L.Ed.2d 355 (2004). Appl. Denial Order, 2017 WL 3708028, at *3, 2017 U.S. Dist. LEXIS 142969, at *11. The fourth of those factors — "whether the request is `unduly intrusive or burdensome'" — was the salient one, id. at *4, 2017 U.S. Dist. LEXIS 142969, at *13 (quoting Intel, 542 U.S. at 264-65, 124 S.Ct. 2466), especially when balanced against the "thin" and "tenuous" relevance and "limited usefulness" of evidence of the Russian Federation's purported manipulation of Armenian court proceedings in 2010 and 2011 to a foreign appellate proceeding focused on a jurisdictional issue relating to events occurring before and up to 2007, id. at *4-5, 2017 U.S. Dist. LEXIS 142969, at *14-17 (citing In re Veiga, 746 F.Supp.2d 8, 19 (D.D.C. 2010)). In evaluating the intrusiveness and burdens of the requested discovery, the Court found that the plain terms of the requests targeted "sensitive attorney-client information" and thereby implicated privilege and work-product concerns, which could spawn significant collateral litigation and put at risk significant aspects of respondents' litigation strategy on behalf of their client. Id. at *4-5, 2017 U.S. Dist. LEXIS 142969, at *14-17. Accordingly, the burden imposed by the requested discovery was determined to be "simply too significant to warrant granting the Application absent a showing that the requested discovery would be of even moderate relevance." Id. at *5, 2017 U.S. Dist. LEXIS 142969, at *17.
Undeterred, the petitioners now seek reconsideration of that decision by rehashing already rejected or unpursued arguments and contending, for the first time, that the Court must undertake a choice-of-law analysis. See Pet'rs' Mem. Supp. Mot. Reconsideration ("Pet'rs' Mem. Reconsideration") at 4, ECF No. 15-1. This Motion for Reconsideration represents merely the latest effort to drag this Court into the ongoing international litigation between the parties and related entities. For the reasons explained below, the petitioners' Motion for Reconsideration is DENIED.
The petitioners invoke Federal Rule of Civil Procedure 59(e) as the authority
The petitioners do not argue that controlling law has changed or that new evidence became available, but only that the denial of their application for discovery was wrong for three reasons, none of which is sufficiently persuasive to disturb the Court's previous determination that the plainly significant burden triggered by the requested discovery overcomes the limited, if any, relevance of this discovery to the Dutch appellate proceeding.
First, the petitioners contend that the prior Order "was predicated on an unsupported assumption" of privilege, see Pet'rs' Mem. Reconsideration at 2, because the respondents did not precisely identify any documents that were privileged and, in the petitioners' view, thereby failed to assert any privilege at all. Id. at 4. This argument is almost farcical, given both the nature of the petitioners' discovery demands, which plainly target privileged communications and documents between the respondents
For instance, the petitioners pose discovery demands for "[a]ll Documents and Communications between Baker Botts and Rosneft pertaining to" the Yukos Armenia Proceedings, including contacts with Rosneft, Rosneft's subsidiaries, and respondents' co-counsel, Prudence Legal Advisory and Counseling ("Prudence Legal"), "pertaining to the judgments...." Appl., Attach. 9, Ex. 3 to Declaration of Christopher M. Ryan ("Ryan Decl."), Subpoena Produce Docs., Information, Objects or to Permit Inspec. Premises Civ. Action (Baker Botts LLP) ("Subpoena to Baker Botts") at 7 (Request 3), ECF No. 1-9. See also, e.g., id. at 8-9 (Request 10) (requesting "[a]ll Documents and Communications between Baker Botts and Rosneft pertaining to: (a) the relationship of the Yukos Armenia Proceedings to the decision of the Dutch courts in the Dutch Bankruptcy Proceedings; and (b) the effect the judgment(s) in the Yukos Armenia Proceedings may have on the Dutch Bankruptcy Proceedings"); Appl., Attach. 10, Ex. 4 to Ryan Decl., Subpoena Produce Docs., Information, Objects or to Permit Inspec. Premises Civ. Action (Ryan E. Bull) ("Subpoena to Ryan E. Bull") at 7 (Request 3), ECF No. 1-10 (seeking "[a]ll Documents and Communications between Mr. Bull and Rosneft pertaining to" the Yukos Armenia Proceedings, including contacts with Rosneft, Rosneft's subsidiaries, and Prudence Legal, "pertaining to the judgments ..."); id. at 9 (Request 10) (requesting "[a]ll Documents and Communications between Mr. Bull and Rosneft pertaining to" the same subcategories of information related to the Yukos Armenia Proceedings and Dutch Bankruptcy Proceedings as in the Subpoena to Baker Botts).
The petitioners' contention that error occurred by "assuming" privilege attached ignores the obvious fact that the discovery demands were framed precisely to cover such privileged communications and documents.
Although the petitioners criticize the Court's "assumption" of privilege as unsubstantiated, the petitioners' argument is predicated on a clear misunderstanding of the law. Specifically, the petitioners repeatedly assert that the respondents "did not establish — or even argue — that any privilege might apply" to the requested documents, Pet'rs' Mem. Reconsideration at 1, apparently because the respondents did not "identify responsive documents, indicate the number of documents that may be subject to a claim of privilege, or detail the alleged `burden' they faced — even though it was incontestably their duty to come forward with such evidence," Pet'rs' Reply Mem. Supp. Pet'rs' Mot. Reconsideration ("Pet'rs' Reply Reconsideration") at 1, ECF No. 19. In other words, the petitioners believe, absent the respondents undertaking a massive effort to produce a catalogue of privileged documents generated by over a decade of representing Rosneft, the respondents "waived" any privilege. Pet'rs' Reply Resps.' Opp'n Appl. ("Pet'rs' Reply") at 22, ECF No. 13 ("[Respondents'] failure to properly invoke privilege or demonstrate a burden in their Opposition waives their right to claim these protections.").
To the contrary, when a discovery request demands production of an attorney's records in connection with representation of a client, invocation of the protections of the attorney-client privilege and work-product doctrine may be effective without requiring a detailed privilege log. Otherwise, any objection to the scope of a discovery demand would be rendered moot because interposing that objection would trigger the very burdensome obligation to prepare a privilege log that the objection would be intended to avoid. See Dell Inc. v. Decosta, 233 F.Supp.3d 1, 3-4 (D.D.C. 2017) (concurring with defendants that document requests "served on prior counsel" were "overbroad and unduly burdensome" since compliance "would impose an undue and disproportionate burden on Defendants to prepare a privilege log of the thousands of documents that Defendants could reasonably be expected to `possess' after a decade of [client] representation but most of which would be protected by the attorney-client privilege or attorney work-product doctrine"); Prism Techs., LLC v. Adobe Sys., No. 8:10CV220, 2011 WL 5523389, 2011 U.S. Dist. LEXIS 131321 (D. Neb. Nov. 14, 2011) (adopting "assumption[]" used by other courts "that limit[s] the necessity to create such `privilege logs' of communications between a party and counsel in cases where attorney-client
In sum, simply because the Court agreed with respondents about the scope and sensitivity of the requested discovery, with its concomitant cost and burdens, and made a determination on the Application without requiring a privilege log, Appl. Denial Order, 2017 WL 3708028, at *5, 2017 U.S. Dist. LEXIS 142969, at *17, does not mean it either misunderstood or missed some consideration requiring modification of the Order.
In any event, contrary to the petitioners' argument, American law on privilege would not automatically be displaced here. "Because the jurisdictional basis for this action rests on a federal statute, federal common law governs any assertions of privilege." In re Veiga, 746 F.Supp.2d 27, 32 (D.D.C. 2010). Although "the protections afforded by § 1782(a) also extend to privileges recognized by foreign law," such foreign privileges "only [apply] in certain narrow and circumscribed circumstances." Id. The petitioners believe such circumstances exist here since the requested discovery targets respondents' communications with their client regarding foreign litigation and, further, that if the law of either Russia or Armenia applied, communications with the attorneys in these countries would not be protected because the respondents are not registered as "advokats" in Russia or "advocates" in Armenia. Pet'rs' Mem. Reconsideration at 6-9. In the petitioners' view, countries where the litigation occurred have stronger interests than the United States, notwithstanding that the requested discovery targets the records, communications and work of U.S. counsel.
The petitioners' position raises a host of thorny issues. Given the parties' disputes about the protections provided by foreign law, the Court would be drawn into legal experts' debates about the meaning and scope of the laws of at least two, and perhaps more, countries. In addition, as the respondents point out, a choice-of-law analysis would likely result in a "hybrid regime that combines narrow foreign privilege rules with broad U.S. discovery." Resps.' Opp'n Pet'rs' Mot. Reconsideration ("Resps.' Opp'n Reconsideration") at 14, ECF No. 17. Indeed, the finding urged by petitioners that no foreign attorney-client privilege law would protect the requested documents would encourage parties involved in ligation overseas to exploit the broad discovery regime available under the Federal Rules of Civil Procedure while simultaneously seeking to defeat fundamental protections for attorney-client privilege and work product guaranteed by the American legal system. See Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981) (emphasizing importance of attorney-client privilege because of its purpose "to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice"). This result would be particularly problematic for public policy reasons, including that a hybrid regime would "reach results" on privilege and discovery issues that "no affected jurisdiction would reach on its own." Resps.' Opp'n Reconsideration at 14. These issues of foreign privilege laws need not be addressed now on reconsideration, however, because they were not previously raised.
The doctrine of the crime-fraud "[e]xception comes into play when a privileged relationship is used to further a crime, fraud, or other fundamental misconduct." In re Sealed Case, 676 F.2d 793, 807 (1982).
The petitioners' submissions here fall short of making a prima facie showing that the crime-fraud exception would apply to the respondents' assertions of privilege. Of the over 130 pages of exhibits on which the petitioners rely to make their case for the exception, including three newspaper articles, one affidavit of a former judicial officer, three email chains, and two images of alleged draft decisions with track changes, only two of the articles, from the same Dutch publication by the same authors published on the same day, make direct allegations about Baker Botts's involvement with Rosneft in any purported manipulation of the Armenian courts. See NRC Article 1 at 1; NRC Article 2 at 3. The remaining article discusses "Rosneft lawyers" without mentioning respondents, see generally Appl., Attach. 17, Ex. 11 to Ryan Decl., Catherine Belton and Michael Stott, Rosneft lawyers manipulated Yukos rulings, emails suggest, FINANCIAL TIMES (Nov. 28, 2016), ECF No. 1-17, and indisputably Rosneft employs other counsel in addition to respondents.
The petitioners' arguments fail to demonstrate that any "clear error" occurred or "manifest injustice" resulted from the denial of their discovery demands to respondents. See Ciralsky, 355 F.3d at 671; Firestone, 76 F.3d at 1208. Instead, the prior assessment correctly concluded that the discovery requests pose an extraordinary burden on the respondents and the Court to identify and resolve the inevitable privilege and work-product issues, since the requests target a decade-long attorney-client relationship and, as such, also pose a significant risk of revealing litigation strategy in ongoing proceedings. Appl. Denial Order, 2017 WL 3708028, at *5, 2017 U.S. Dist. LEXIS 142969, at *13-17. Those burdens and risks are not warranted given that the petitioners have failed to show "that the requested discovery would be of even moderate relevance" in the Dutch appellate proceeding. Id. at *5, 2017 U.S. Dist. LEXIS 142969, at *17.
For the foregoing reasons, the petitioners have not shown that reconsideration of their Application for discovery, pursuant to 28 U.S.C. § 1782, is warranted. Accordingly, it is hereby