We were a bit slow on the draw on this one. You may have already read about it in Law360. But it's significant enough that I think we should post about it anyway.
Last month, in Vestolit GmbH v. Shell Chemical LP, C.A. No. 24-1401-CFC (D. Del.), two applicants filed a 28 U.S.C. § 1782 application seeking leave to serve subpoenas on a company in the United States to get discovery related to a foreign proceeding.
The application itself referred only to subpoenas against the company, but the proposed order incorporated a subpoena against an individual, who was not mentioned in the application itself.
The Court rejected the application, at least initially, and issued a show cause order for the attorneys involved to show cause for why they did not violate the rules of professional conduct, and for the parties to show cause for why the application should not be denied entirely.
What Happened?
The applicants filed their § 1782 application, a proposed order, a memorandum in support, and a declaration that attached three subpoenas. The three subpoenas included:
- A document subpoena to a company
- A 30(b)(6) deposition subpoena to the company
- A personal subpoena directed to an individual, who is the president of the company
The application did not mention the subpoena directed to the individual. The proposed order did include the individual subpoena, but only by incorporation. It asked the Court to grant leave for the applicants to serve "the subpoenas . . . attached to the Declaration . . . as Exhibits 1-3," without mentioning who those subpoenas were directed to.
That did not go over well with the Court:
I will not, at least not today, grant the Application in any respect because of the Application's request for leave for Vestolit and Celanese to serve the subpoena attached as Exhibit 3 to Mr. Gidley's declaration . . . . That subpoena is not directed to Shell Corporation. Rather, it is directed to, and seeks the deposition of, Marla Kline. (Mr. Gidley states in his declaration that Ms. Kline is Shell Chemical's President . . . .) I have no way of knowing if Ms. Kline resides or can be found in Delaware. The Application never mentions Ms. Kline. . . . The proposed order submitted with the Application also does not refer to Ms. Kline by name or title and states that "Shell Chemical LP shall produce the requested documents and testimony[.]" . . . The twenty-page memorandum of law Vestolit and Celanese submitted in support of the Application mentions Ms. Kline twice, but says nothing about her residency and says nothing that suggests that Ms. Kline can be found in Delaware.
The Court explained why the application was deficient:
I should not have had to read Exhibit 3 of Mr. Gidley's declaration to learn that Vestolit and Celanese wanted me to authorize them to depose Ms. Kline. I should not have been presented with an ex parte Application that purports to seek discovery solely "from Shell Chemical," when it in fact seeks discovery from Shell Chemical and from Marla Kline. And because the Application seeks discovery from Ms. Kline, I should not have been told in Vestolit and Celanese's briefing that "the Application" "easily" and "readily" satisfies "§ 1782's first statutory condition" based solely on Shell Chemical's status as a Delaware limited partnership. Finally, and in light of these failures, I should not have been presented with an order to sign that does not mention Ms. Kline and states that "Shell Chemical LP shall produce the requested documents and testimony," but that, had I signed it, would have authorized Vestolit and Celanese to serve a subpoena on Ms. Kline for deposition testimony.
It raised whether the applicants' submission violated of the rules of professional conduct in light of its ex parte nature:
A lawyer's duty of candor to the Court is most critical when the lawyer is asking the Court to issue an order based on ex parte submissions. The lawyers who practice in this Court are bound by the Model Rules of Professional Conduct. . . . Under Model Rule 3.3(d), "[i]n an ex parte proceeding, a lawyer shall inform the tribunal of all material facts known to the lawyer that will enable the tribunal to make an informed decision, whether or not the facts are adverse." Model Rules of Prof 1. Conduct R. 3.3(d) (italics added).
The Court ordered each of the seven attorneys appearing on the papers to show cause on why they did not violate Model Rule 3.3(d):
On or before January 28, 2025, each of the seven lawyers whose name appears on the Application . . . and on the memorandum filed in support of the Application . . . shall show cause why that lawyer should not be deemed to have violated Model Rule 3.3(d). In each show-cause submission, the lawyer shall explain how that lawyer contributed to the Application and supporting memorandum and how much time that lawyer spent making that contribution.
The applicants were also ordered to show cause why their § 1782 application should not be denied entirely.
Last week, the attorneys and applicants filed their individual responses. They generally apologized, explained their roles in drafting the application, and stated how much time they had spent.
The applicants and four of the seven attorneys included a sentence saying they assumed the individual could be found in Delaware for the purposes of § 1782, along the lines of:
I assumed that Ms. Kline, as an officer of Shell Chemical LP, could be found in the District of Delaware for purposes of § 1782 based on my experience that entities organized under Delaware law have the ability to make their officers available for testimony in Delaware.
My count of the combined total time spent on the application is 95.3 hours, with each attorney spending between .8 and 31 hours on the application and related research.
The applicants' 20-page show-cause submission includes argument for both why the subpoena to the individual is proper (relying on a Second Circuit case) and why, even if it weren't, the omission of the individual subpoena from the papers should not be support denial of the entire application.
The Court has not yet responded, but I expect we'll have an update when it does.
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