and i can sure both parties we will look at the record in toto the last case of the morning may come forward please section seven hundred eighty two and in particular to section seven eight hundred eighty to allow for discovery when there's no pending civil action there's no pending criminal action there's no contemplated civil action and there's no there's no pending criminal investigation all there is is a contemplated police report or some type of a complaint to be made to a public prosecutor's try to get that prosecutor not even to ability to file a civil claim and there's no ongoing foreign criminal investigation which is the situation here and i want to highlight the consequences of an affirmative this decision if that's what the court were to do in that case shareholders and minority shareholders all around the world who would have no basis to file any civil claims against their companies in their own countries could come to the united states and file a section seven hundred eighty two action seeking discovery under the guise that they wanted to file a criminal complaint against one of the members of the board of directors in the foreign countries the floodgates of seven hundred eighty two are already open and they should not be open wider i'd like to cover a couple of the key facts in the case because i think they're important to understanding that the framework of the applicants consist of one minority shareholder of company based in luxemburg called asher own portfolio the allegation is that one of the board one of the members of the board of directors dr john marshall paul has an undisclosed secret ownership interest in a company that services a p c a p c has been advised of this allegation and has considered it and has submitted a declaration from the chairman of his board of directors think stating there is no merit to this allegation so the alleged victim of the crime which is the company is not the shareholders the alleged victim of the crime is not the applicant seeking discovery and in fact is opposing discovery now the controlling standard in this case which we don't agree with but we're not going to argue today as is from the consortium decision which states that you have to have reliable indications of the likelihood the proceedings will be instituted within a reasonable time and the facts of consortium are important because in that case the applicant was the victim it was the company that had been embezzled from and the applicant came forth with rock solid evidence they've conducted an audit and they submitted a declaration based upon personal knowledge of the wrongdoing that happened in that case they had a right to file a civil claim immediately and they were going to do so and if the civil claims exceeded then they could file a direct criminal action in your argument is that their minority shareholders they have no say they have no rights to file a civil action i thought they were claiming some direct injuries and regards to reputation at their rights to file claims as my marriage nor any shareholders are less than the rights of the corporation itself let me explain that just him briefly in terms of just this pure civil claim i think they've admitted they don't have the right for that reason plus they've released every year at the yearly shareholders meeting they sign a release of all claims but they do claim that they can file a some type of complaint with the luxemburg public prosecutor and there's three different types of complaint and one and two of them they don't have any right to participate will and they don't control if the prosecutor starts and starts an investigation enunciation yet the third one they do claim that they have a right to actually cause the public prosecutor to start an investigation by filing a criminal complaint with a demand for civil damages as i understand they claim they are participants and they have appellate rights if he refuses to go forward that's the claim your honor and there's a couple of variations on that too because it they claim that their damages again they're not claiming financial damages they're claiming moral damages and we've addressed that saying that that's not sufficient under luxemburg law number one and number two it's even logically inconsistent because they're claiming the moral damages being associated with this company a b c once is held to be criminally liable which hasn't happened yet which they're trying to dig up evidence to cause to happen so they're trying to cause their own moral damage in the future that's number one but number two the appellate rights what they're talking about is when you file a one of these claims you're not finally given a court you're filing with a public prosecutor in the public prosecutor has to go through steps before the prosecutor can file a claim and it has to go up to a different chambers if they don't proceed you can go to a chambers in the chambers and say well no you should go you should go and you should consider proceeding further and is to challenge if the public prosecutor decides not to file a claim so none of this is even getting to a proceeding it's all discretionary with the public prosecutor's if they even choose to go forward does that ok getting back to the consortium case i highlighted how strong the facts were there because this case is just the opposite the company has not come forward with any claim and the company is in fact fighting it  it's important to know and the standard is you have to look for reliable indications right and in this case the dispute is about a contract that was a entered in two thousand and nine that's when the conflict allegedly rose one of the applicants mr bowen a was on the board then when he claims he discovered this conflict he resigned luxemburg law says when you resign from a board you have to disclose any knowledge of wrongdoing he said there was none and then after that the reason he resigned is he wanted to buy more shares a nationally which he did he increased to share holdings and after that he brought dr john michel paul into his company furstenberg and brought him in  compliance officer so you know to now say that dr paul had a conflict of interest six years later it doesn't make sense mr khalfan who he got the email he sent an e mail  hey eric please confirm that we resigned out of out of protest for dr paul well mr caliph and also when he resigned in disclose any wrongdoing and within three months later give a proxy to dr paul to vote in any way he wanted because i trust him completely and so if you're looking at reliable indications for for the day what is happening here is the really going to be a claim because that's what it comes down to is it really reasonably contemplated and you have to look at it you have to get into the merits a little bit you have to read the evidence presented to make a decision and what's going on here in the background is born five years later after dr paul and mr bone a and mr battalion have had a ton of other businesses together they have a falling out and they litigation erupts between them and mr boehner a is trying to extract a settlement and he admits this in his declaration we say that he's trying to get dr paul to buy his shares back at a market price and dr paul is refusing and the that what it is you know they have their own disputes contract with the tie management fees are dependent on keeping dr paul's entity remaining on board right now the tie has been as a number of other clients as well so the in miami ties management fees are affected by dr paul's entity remaining employed is that a fair statement i think i think maybe isn't that the whole allegation right so it's right thing isn't that he alleged conflict i think one of the allegations is there is a suspicious clause in the thai service an agreement and the clause says that the thai charge case that clause was fully disclosed it was actually voted upon it approved by by some of the people and the african side and the whole negotiation of the contract was it was mr paul recused himself he didn't have anything to do with it he let the other board members negotiate it and they've explained the reason and it's a benefit to ash and it's a benefit to the applicants to have that clause and the reason that the type provides a reduced rate ok i don't think we have an issue on appeal do we the scope of the subpoena as i understand it you've already produced some documents is that correct yes your honor and about one thousand ten thousand what have you produced so far in terms of volume of documents we have produced as we produced the let me just address it this way that what they're asking for and that's not what i asked you ok two weeks ago which i don't know the volume was probably was another two or three hundred pages ok so much so and you all are still of contesting all of that for the district court yes so the scope really here is not what the issue is on appeal disagree with virtually everything that was just said this is a simple case the judge bloom got correct and it is one where this circuit has ruled time and again as have the other circuits two the problem is it's a very fine line between getting not too involved in trying to figure out one is it possible to have this criminal proceeding with civil damages and whether there's anything  nefarious going on that would trigger somebody want being able to bring one of these things so it's a fine line he says that you can't bring this civil action with this criminal action with s a right of appeal but it is not a direct action in which they are party in the same way the first two actions would be the participation aspect is a little sketchy  the summary i'm going to explain why judge boom got it right that even if it was a done to nation this would qualify for seven hundred eighty two but you don't you're right you don't need to get there because the first two actions clearly do this is where the applicants are a party and what they're saying is that no you they basically are saying we have a motion to dismiss you don't have a right to bring it our criminal law expert who's the chair was at the time the chair of the luxembourg bar association is saying you absolutely do there is no dispute here that under the luxemburg law there is a cause as to whether damages are direct or individual but our clients have suffered reputational and moral damages that are se distinct from the company's damages and that's the hurdle it's no different than consideration here you might think it's silly oh twenty million dollar contract is somehow more is made valid by a dollar consideration that's the rule in luxembourg when they entered into type contract that had this thing that ok you're going to get a good rate as long as you ploy this other car company with more dr coles and bob is that the point or dr paul step back about this little relationship at the time in two thousand and nine when he was on the board the crime in luxemburg by the way is the mere fact that this was an undisclosed ownership relationship that's the whole point w closed that dr paul was involved with this corporation who under this clause in the law tie contracts said they'd keep that corporation him in employed and you get the lower rate it wasn't disclosed and it's now denied see that's the thing the ownership of the connection was obviously there but there expressly denying what's being alleged here which is the secret and concealed ownership of paul now going back to these first these first two direct actions which is absolutely crucial they're saying we have a motion to dismiss our criminal experts saying it's it's a frivolous motion to dismiss the bar here is so low they've submitted treatises and a case law from their own interested expert saying you can't you need to have these two you can't have these direct damages as the basis and we're saying it's agre but we have other damages and it's these very other entanglements that occupy about seventy five percent of their reply brief that form the basis for those reputational and emotion and moral damages they can't have it both ways they can't argue that dr paul and the applicants have been involved in all of these other business ventures together and then come back and say oh you have nothing outside the harm of an ordinary shareholder that's the difference between this case and the cases they cited in may and then like the made off case that you have enough documents to get an f evidence to go forward right now if the if the applicants wanted to they could go forward however they have stated under oath that within forty five days of the close of this discovery which is ongoing and which may be the subject of contempt for seedings next week that they will immediately file this action unless and this is this is the reliable indications the evidence produced and the testimony wholly vindicates mr pawle which is so you're looking for  n evidence if you i don't get this if you think you have enough documents and all you're doing is looking for exoneration why not file the proceeding and then then you have an easy case for getting disc more discovery and as i understand it there's no limitation you don't have to give all your evidence the first day we want to make sure that the case goes forward and it's that simple all right the evidence is there any is the reliable indications we have an export member and a former actor on administrator what we would like is to present the testimony and the documents in latoya's possession a florida company and its florida president to the prosecutor so that this case does go forward that's what this is about this is about but just in that case in that sense it's no different than consortium it's the same case they were looking to later file criminal action and that is what the appellant's refused to accept is that the act the filing of those two first two proceedings where the applicants are a party that is the proceeding it's not that the state prosecutor after the magistrate judge after that has to go then convince the prosecutor to get to go forward seven hundred eighty two was amended in one thousand nine hundred ninety six to make this investigative proceeding the proceeding for which seven hundred eighty two governments and that's why this is a standard case that's why attorneys fees were awarded once and that's why attorneys fees of been awarded again this is a straight forward case under circumstances where little guy has engaged in a eighteen month campaign to try to avoid this coming out and yes a p c the company is denying the claim that doesn't make it untrue and that doesn't that presupposes the merits one thing i would like to get into in fact is the breach the burden of proof and the and the standard of review here we have no dispute that the standard of review in terms of interpret ing the seven hundred eighty two statute is do novo but judge blum the district court has made a series an entire host of credibility and factual determinations concerning the strength of the allegations that issue as well as the credibility of the parties in terms of actually bringing this case forward and those  factual conclusions are reviewed under the higher abuse of discretion and clear error standards i would like to for a minute get into the issue of this denunciation there is no dispute between the parties that the third form of action a denunciation is available what they say is that proceeding does not qualify as a proceeding under seven hundred eighty two that's judge bloom found it found differently she said it does and she's right because a denunciation is a proceeding there is a right of appeal and it's not opening up the floodgates in luxemburg the system is different when you file a denunciation it's before a prosecutor who is a member of the judiciary not the executive branch that's the expert testimony that you are seeing in these in the record and because of that it's the natural extension of intel in fact that's what judge breyer said in his dissent in intel because he didn't like the decision but everybody knew what intel meant he said some countries allow a private citizen to ask the court to review a criminal prosecutor's decision to prosecute on the majority's reason that foreign private citizen could ask an american court to help a citizen obtain information he saw go back it was two thousand and thirteen that dr paul claimed he had potential conflict of interest and didn't want to be involved in the contract approval so was this term in the when did this terminal that tie contract come in it was in originally and now i still can't say under under there isn't any was it in there before two thousand and thirteen undisclosed yes and but the the crime here is that the money the seventy percent of these fees millions and millions of dollars that is purportedly being paid to a third party even if it's a third party managed are known by his best friend that is totally different then it going into his pocket that is a crime and it's a serious crime the notion that a prosecutor is not going to inform somebody of the decision is ludicrous this is  publicly traded luxemburg company in a serious case when they say they have a motion to dismiss what we would call a motion to dismiss the two direct actions for which he says i'm not going to even argue that these two direct actions don't qualify they're just saying we can't file the direct actions we have competing declarations judge bloom got that point right again which she said is i'm well as a whole bunch of second circuit precedent is that the predicting the outcome of merits defenses under foreign law which is what they're asking this court to do is inherently unreliable and in fact counter to the scope of the seven hundred eighty two process now i don't think there's any question that there's a floor obviously you can't say anything you can't just willy nilly say i'm going to file a proceeding but this case is so far above became a consultant in luxemburg that's where all the rest of the litigation is the first and berg entities are intertwined and and wound up with paul that's where these distinct damages come from i soon as you have to stink this damages you are open for the first two proceedings where there is no dispute in this room that the seventy two is absolutely warranted and justified as soon as you are there and we have them easily we have them easily i would just like to read from their declaration from mr grosse's declaration in this case it is krieger to me that applicants can allege material financial reputation moral damages in relation to the allegations against paul these will include not merely act of purchasing selling the shares that's what they're saying but their reputation will damage becomes with their association with paul in other companies from him luck in luxemburg in london there's a web of twenty companies in which they're involved and in the hedge fund world who you associate with matters and they didn't know until months before this seventy needed to application was filed that paul had engaged in these serious wrongful conduct and when they did learn it they acted immediately the last point i'd like to open for two minutes is appellate jurisdiction this court asked us to brief and i think we've presented some arguments as to why this quit the church diction may be lacking the only one point i'd like to raise here today since that briefing judge bloom has issued a second order or a second motion order on the motion compel which this court has they've now appealed that order so now are there to final orders is that even possible the there are fireworks below to say the least that's the only point i would make on appellate jurisdiction is it even possible to have two final orders at the same time i think my co counsel my opposing counsel may address it in summary the allegations are strong they're stronger than they were by the way in the o'keefe case which i know you decided judge hall where the allegations were about defamation and it was one person saying the person had said swear words here we have two member to form a board of directors me one form a board of director and the former administrator all saying the same thing and we're not making it up that's what they're trying to say you're creating your own harm this was a badly kept secret that our applicants figured out in two thousand and fifteen and took immediate action as a result what is ruled on and the second order you're talking about is that just going to be late in november this year this year ok your time has expired thank you i think councils are going to have jurisdiction absolutely are it's often the case that after a final judgment is entered that there are further proceedings be further discovery in execution things of that sort and so that doesn't divest the court of jurisdiction by any means what's happening here is that what the applicants are seeking does not exist there is no secret ownership so there's nothing there's no documents to produce showing it and they're moving to compel i mean this is from our perspective i recognise they believe they have a right to do this but from our perspective this is pure harassment but i want to address it and the merits of this appeal something which i think is very significant counsel in response to a question stated that this provision was not in the agreement in two thousand and nine and in fact that's absolutely wrong and that's a key issue and if you turn to  the record on appeal tabel levon thirty one thirty two thirty three it's the declaration of the chairman of the board of ashura who specifies that this provision was in the agreement in two thousand and nine that dr paul at that stage had recused himself from protists a painting in the contract negotiation and that mr bowen a one of the applicants here and mr calvin the guy in the email saw the provision and signed it and we have their signatures here on the board minutes and so that's the that's the problem we face in these proceedings is somebody comes in and cements declarations that are just not accurate and then the judge will issue an order allowing them to dig into your electronic data and depose your people and it's incredibly intrusive incredibly expensive and near and innocent third party being dragged into a dispute and people in a foreign country that's why you have to have limits on this statu statute that says he can the world but going back to the real critical issue in this case is the court has to put limits on this there has to be clear guidelines as to when something like this can be pursued and it's that was a case where there was an ongoing criminal and i trust investigation by the european union that was due to korea adjudicatory in nature and there was appellate rights in nature and that's why that provided the basis for saying that you can you can seek evidence and these circumstances and since then the courts have expanded that broadly to let the parties do it in situations like this where they haven't filed where there is no i'm going case but the party claims an intention to file one and i agree that's not the issue before this court to change the law and this day because here we're all were concerned with this  standard and the reliable indications and i think if you look at this evidence if you really read these declarations you'll see that there are numerous people from ashur own that are disinterested who have submitted decorations with documents showing that this stuff was all disclosed and that the applicants themselves not only saw it but signed it and agreed to it saying disclosed from the first time i contract yes in two thousand everybody knew everybody is ok other people negotiated the contract without involvement from dr paul that's exactly the way it's supposed to be done thank you your time has expired the case is submitted the court will be in recess