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Khrapunov v. Prosyankin

United States Court of Appeals, Ninth Circuit

July 24, 2019

Ilyas Khrapunov, Plaintiff-Appellee,
v.
Pavel Prosyankin; John Doe, Objectors-Appellants.

          Argued and Submitted December 20, 2018 San Francisco, California

          Appeal from the United States District Court No. 4:17-mc-80107-HSG for the Northern District of California Haywood S. Gilliam, Jr., District Judge, Presiding

          Michael L. Freedman (argued), Cara E. Trapani, and Jeffrey L. Bornstein, Rosen Bien Galvan & Grunfeld LLP, San Francisco, California, for Objectors-Appellants.

          Matthew C. Dirkes (argued) and Martha Boersch, Boersch Shapiro LLP, Oakland, California, for Plaintiff-Appellee.

          Before: Consuelo M. Callahan, N. Randy Smith, and Mary H. Murguia, Circuit Judges.

         SUMMARY [*]

         Discovery

         The panel vacated the district court's grant of an application under 28 U.S.C. § 1782 for discovery of evidence for use in a foreign tribunal and remanded for further proceedings.

         The district court denied objectors relief from a magistrate judge's order granting plaintiff's application for issuance of a subpoena to Google, Inc., compelling the disclosure of certain subscriber information in the company's possession. That information, plaintiff claimed, would aid his attempt to discharge two court orders issued against him in ongoing litigation in England. In the English proceeding, a Kazakhstan bank, alleging that it had been defrauded, had obtained a worldwide asset freeze order and cross-examination order against plaintiff.

         English courts subsequently denied plaintiff's attempts to discharge the two orders. The panel concluded that these developments in the English litigation called into doubt the statutory requirement of § 1782 that the discovery be for use in a foreign "proceeding." The panel therefore vacated the district court's judgment and remanded for further proceedings.

         Concurring in the judgment and dissenting, Judge Callahan wrote that the action was not moot, and she would hold that a ruling resolving objections to a subpoena issued under § 1782 is dispositive, and thus, absent consent by the parties to a magistrate judge having general jurisdiction, such a matter must be determined de novo by a district court judge.

         Concurring, Judge N.R. Smith wrote that the dissent was an advisory opinion.

          OPINION

          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 (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 Doe[1]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 ...


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