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In re Application of Polymer Solutions International, Inc.

United States District Court, D. Maryland

March 18, 2019




         Presently pending and ready for resolution in this case, brought under 28 U.S.C. § 1782, is the multi-faceted motion to intervene, to vacate the ex parte order granting the section 1782 application pursuant to rule 59(e), to quash the subpoena directed to Joseph M. Mischler and for protective order, or alternatively for a stay pending appeal. (ECF No. 15). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, the motion will be granted in part and denied in part.

         I. Background

         On June 22, 2018, Polymer Solutions International, Inc. (“Polymer”) filed, ex parte, an application under 28 U.S.C. § 1782 to take discovery from Joseph M. Mischler (“Mr. Mischler”).[1] (ECF No. 1). The following facts were set forth in Polymer's application.

         In 2011, Polymer entered into a contract (“the contract”) with CPA Global Limited (“CPA”).[2] (ECF No. 1-5). Under the terms of the contract, CPA was responsible for maintaining Polymer's portfolio of patents by paying periodic fees and overseeing compliance with administrative requirements in the respective countries where Polymer maintains patents. (ECF No. 1-5). For each patent renewal, Polymer agreed to reimburse CPA for all renewal costs and provide CPA a flat fee as compensation. (ECF No. 1-5, at 5, 8-9). Additionally, the contract stated that “[t]hese conditions and any contract made under them shall be governed by and construed in accordance with [Isle of] Jersey law and the courts of [the Isle of] Jersey shall have exclusive jurisdiction.” (ECF No. 1-3, at 10).

         In 2017, after learning about two pending lawsuits against CPA for overcharging clients, Polymer demanded records “of the itemized disbursement costs paid by CPA Global to renew Polymer Solutions' patents.” (ECF No. 1-1, at 7; ECF No. 1-8). CPA's response indicated that, given additional time to comply, CPA would respond to Polymer's request for itemized records in due course. (ECF No. 1-9, at 1). Polymer's legal representatives replied to CPA on February 12, 2018, granting CPA an extension of time to provide the requested itemized records and indicating Polymer's intent to pursue legal proceedings if CPA failed to comply. (ECF No. 1-10, at 3). CPA declined to provide the requested records, alleging that they were already provided over the course of the companies' business relationship. (ECF No. 1-11, at 2).

         Polymer sought discovery from Joseph M. Mischler (“Mr. Mischler”) by filing the aforementioned application to take discovery under 28 U.S.C. § 1782. (ECF No. 1). Mr. Mischler was formerly employed as CPA's Executive Vice President of Sales and Marketing for the Americas. (ECF No. 1-1, at 14). He purportedly confirmed that he has relevant knowledge, but that he would only disclose the information if he is subpoenaed. Id.

         II. Procedural Background

         The court issued an order granting Polymer's application and authorizing Polymer to serve Mr. Mischler a subpoena pursuant to 28 U.S.C. § 1782 on June 27, 2018. (ECF No. 9). On June 28, 2018, Polymer issued Mr. Mischler a subpoena to testify at a deposition on July 15, 2018. (ECF 10-3, at 2). CPA filed an emergency motion to intervene on July 13, 2018, asking the court to approve CPA's intervention as of right under Fed.R.Civ.P. 24(a) and quash the subpoena issued to Mr. Mischler or, alternatively, provide a stay and protective order delaying Mr. Mischler's deposition.[3] (ECF No. 10, at 12). The court approved a joint stipulation on July 13, 2018, resulting in termination of CPA's emergency motion to intervene. (ECF Nos. 11 & 12). In the stipulation, Polymer agreed to withdraw the June 28, 2018 subpoena, issue a new subpoena with a July 23, 2018 deposition date, and stay the deposition pending CPA's potential filing of a motion for relief from the court's order granting Polymer's § 1782 application. (ECF No. 11, at 2-3).

         CPA filed a motion to intervene on July 23, 2018, asking the court to approve CPA's intervention as of right under Fed.R.Civ.P. 24(a), vacate the order granting Polymer's § 1782 application and quash the subpoena directed to Mr. Mischler or, alternatively, provide a stay and protective order delaying Mr. Mischler's deposition.[4] (ECF No. 15). Polymer filed a response in opposition on August 6, 2018 (ECF No. 16), and CPA replied on August 20, 2018 (ECF No. 17).

         III. Intervention

         CPA moves to intervene as of right pursuant to Fed.R.Civ.P. 24(a). (ECF No. 15-1, at 11). CPA argues that (1) CPA is interested because the information sought in the § 1782 application could be used against it, and (2) the ex parte nature of Polymer's § 1782 application permits CPA to intervene and seek vacatur of the court's June 27, 2018 order. (ECF No. 15-1, at 11-12).

         Federal Rule of Civil Procedure 24(a)(2) provides for intervention as of right:

On timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest.

In Pennsylvania Nat. Mut. Cas. Ins. Co. v. Perlberg, 268 F.R.D. 218, 224-25 (D.Md. 2010), Judge Blake noted:

“[T]o intervene as of right, a movant must show: (1) timely application; (2) an interest in the subject matter of the underlying action; (3) that a denial of the motion to intervene would impair or impede the movant's ability to protect its interest; and (4) that the movant's interest is not adequately represented by the existing parties to the litigation. Houston Gen. Ins. Co. v. Moore, 193 F.3d 838, 839 (4th Cir. 1999). “A party moving for intervention under 24(a) bears the burden of establishing a right to intervene, and must do so by satisfying all four requirements.” U.S. ex rel. MPA Const., Inc. v. XL Specialty Ins. Co., 349 F.Supp.2d 934, 937 (D.Md. 2004) (citing In re Richman, 104 F.3d 654, 658 (4th Cir. 1997)).

         CPA satisfies all four requirements for intervention as of right. First, the motion to intervene is timely because it was filed shortly after CPA received notice of Polymer's approved § 1782 application. Second, CPA has a significantly protectable interest in the subject matter of this case because Polymer's § 1782 application seeks to access information about CPA's billing practices and fee structure and that information could potentially be used in litigation against CPA. See, e.g., JLS, Inc. v. Pub. Serv. Comm'n of W. Virginia, 321 Fed.App'x 286, 289 (4th Cir. 2009) (“Rule 24 does not specify what type of interest a party must have to intervene as a matter of right, but the Supreme Court has recognized that “‘what is obviously meant . . . is a significantly protectable interest.'” (quoting Teague v. Bakker, 931 F.2d 259, 261 (4th Cir. 1991)). Third, denying CPA's motion to intervene would allow the deposition of Mr. Mischler to proceed without affording CPA an opportunity to provide evidence of why the court should have denied Polymer's § 1782 application. Finally, CPA has demonstrated that its interests may not adequately be represented by the existing parties to the litigation because no party represented CPA's interest when the § 1782 application was originally filed. Id. (noting that an intervenor's burden in showing that the existing parties will not adequately represent its interests is “minimal” and the intervenor need only show that “representation of his interest may be inadequate”) (emphasis added) (internal citations and quotation marks omitted).

         Additionally, other courts have recognized a party's right to intervene where the information sought by its opponent under a § 1782 application may be used against them. In re Rivada Networks, 230 F.Supp.3d 467, 472 (E.D.Va. 2017) (“It is well-settled that a part[y] against whom the requested information will be used . . . has standing to challenge the issuance of § 1782 subpoenas under the Rules of Civil Procedure and under the statute itself.”) (internal quotation marks omitted). Because CPA demonstrated eligibility to intervene as of right, it is unnecessary to consider CPA's additional request to intervene by permission.

         IV. Motion to Vacate

         CPA moves to vacate the June 27, 2018 order granting Polymer's ex parte request to subpoena Mr. Mischler. (ECF No. 15). CPA invokes Fed.R.Civ.P. 59(e), but argues that the heightened standard governing Rule 59(e) motions should not apply here because “CPA had no prior opportunity to oppose Polymer's [§] 1782 Application.” (ECF No. 15-1, at 19). A motion to vacate under Rule 59(e) may be granted “(1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice.” Pacific Ins. Co. v. American Nat. Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998). “However, reconsideration of a judgment after its entry is an extraordinary remedy which should be used sparingly.” Grounds for Amendment or Alteration of Judgment, 11 Fed. Prac. & Proc. Civ. § 2810.1 (3d ed.).

         CPA's motion to vacate is eligible for consideration because the motion was timely filed and provides the court with new evidence. Fed.R.Civ.P. 59(e) (“A motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment.”) The court's June 27, 2018 order was granted ex parte, and based primarily on the evidence provided in Polymer's § 1782 application. CPA's unawareness of the § 1782 application qualifies as “a legitimate justification for not presenting the evidence” at an earlier time. Small v. Hunt, 98 F.3d 789, 798 (4thCir. 1996).

         Finally, CPA bears the burden of demonstrating that Polymer fails to meet the statutory and discretionary standards required of a § 1782 application. See In re Bayer AG, 146 F.3d 188, 196 (3d Cir. 1998), as amended (July 23, 1998) (“Inasmuch as relevant evidence is presumptively discoverable under § 1782, the burden of demonstrating offense to the foreign jurisdiction, or any other facts warranting the denial of a particular application, should rest with the party opposing the application.”); Heraeus Kulzer, GmbH v. Biomet, Inc., 633 F.3d at 597 (7th Cir. 2011) (“Once a [§] 1782 applicant demonstrates a need for extensive discovery for aid in a foreign lawsuit, the burden shifts to the opposing litigant to demonstrate, by more than angry rhetoric, that allowing the discovery sought (or a truncated version of it) would disserve the statutory objectives.”).

         A. ...

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