Sequor Law Wins Precedent-Setting Appeal in the 9^th Circuit: 

No Pre-Existing Limits on the Use of § 1782 Discovery

On behalf of its client, Novalpina GP, Sequor Law prevailed in the US Court of Appeals for the 9th Circuit against an attempt to curb use of discovery obtained pursuant to 28 U.S.C. § 1782. This statute allows litigants in foreign proceedings or reasonably contemplated foreign proceedings to petition federal courts for evidence for use in those proceedings. In the case of Novalpina GP, an intervening party argued that the use of the discovery obtained by Novalpina GP should be limited to the two proceedings identified in the original petition filed with the Court. Sequor Law partner Tara J. Plochocki argued on behalf of Novalpina GP that, by statute, there are no limitations on the use of 1782 discovery unless the district court expressly orders otherwise. The 9^th Circuit agreed, issuing a 28-page published opinion on this issue of first impression. This is an important victory for 1782 petitioners who discover after production that that the information would be useful in other proceedings by other persons.

Sequor Law is especially gratified by this victory because the 9^th Circuit did not need to reach a holding of such broad applicability. In this case, Novalpina GP had already negotiated an agreed protective order allowing "Interested Persons" to use the documents in litigation "relating to the events described in the petition." Once the documents were used in other proceedings, the intervening parties claimed that they and the District Court had been "misled" by Novalpina GP and the plain language of the agreed protective order. The 9^th Circuit dismissed this contention, observing that "although [Intervenor] may not have understood the potential scope of document use under 1782, the court itself always did." This decision reaffirms that § 1782 is intended to be an expansive and powerful tool for litigants, now, officially, without any limitations. 

Court Rules that Petitioner May Use § 1782 Discovery to File

a U.S. Lawsuit Without Commencing a Foreign Proceeding

The U.S. District Court for the Southern District of Florida ruled in favor of Sequor Law clients, Petitioners Dailane Investments Limited and Michael Maillis, in holding that they could use the discovery they obtained via § 1782 in a U.S. lawsuit against the same U.S. entity that provided the discovery. In this action, Dailane and Maillis filed a Petition for § 1782 seeking discovery from Respondents HIG Capital LLC and Sami Mnaymneh, its CEO. At the request of the Respondents, they entered into an agreement concerning the protection of confidential information. In that agreement, Petitioners negotiated the right to use the discovery in a U.S. proceeding if they learned of a new cause of action. The discovery showed, to Petitioners’ surprise, that the Respondents were the architects of the breach of fiduciary duty that was intended to be filed in a lawsuit in Luxembourg courts. Although Respondents tried to argue that § 1782 required the eventual filing of a proceeding in a foreign tribunal, the Court disagreed. Sequor Law argued that the law only requires that the foreign proceeding be in reasonable contemplation at the time of filing the § 1782 Petition, after which the only limitations on the use of discovery are those in any agreement between the parties. The Magistrate Judge agreed and the District Court affirmed. Petitioners’ U.S. lawsuit against HIG Capital and Mr. Mnaymneh, filed by Sequor Law, is now underway in the South District of Florida. It is the first to challenge self-dealing by a private equity fund in a continuation fund transaction. In this case, at HIG Capital’s and its CEO’s direction, HIG Europe manipulated the price of a Maillis company to sell it to another HIG Europe fund for an artificially low price, breach its fiduciary duty and causing significant losses to Dailane Investments Limited.