Court Opinion

ID: 9841331
Source: CourtListenerOpinion
Date Created: 2023-09-21 23:01:00.022051+00
Date Added: 2024-06-11T08:48:45.317687
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

 DORALEH CONTAINER TERMINAL SA,

                       Petitioner,
                                                    Misc. Action No. 23-83 (BAH)
                       v.
                                                    Judge Beryl A. Howell
 REPUBLIC OF DJIBOUTI,

                       Respondent.

                         MEMORANDUM OPINION AND ORDER

       Respondent Republic of Djibouti (“Djibouti”) seeks to quash subpoenas served by

petitioner Doraleh Container Terminal SA (“DCT”) on ten non-party banks in connection with

DCT’s post-judgment discovery efforts in Doraleh Container Terminal SA v. Republic of

Djibouti, No. 20-cv-2571 (D.D.C.). See Resp.’s Mot. Quash, ECF No. 1; Resp.’s Mem. Supp.

Mot. Quash (“Resp.’s Mem.”), ECF No. 3. DCT opposes the motion to quash and cross-moves

for its attorneys’ fees and costs incurred defending against Djibouti’s motion. See Pet.’s Opp’n

Resp.’s Mot. Quash & Mem. Supp. Cross-Mot. Sanctions (“Pet.’s Mem.”), ECF No. 16; Pet.’s

Cross-Mot. Sanctions, ECF No. 17. For the reasons below, both motions are denied.

I.     BACKGROUND

       The factual and procedural history of the underlying dispute are detailed in this Court’s

prior opinions. See Doraleh Container Terminal SA v. Republic of Djibouti (Doraleh I), No. 20-

cv-2571 (TFH), 2023 WL 2016934, at *1–3 (D.D.C. Feb. 15, 2023) (confirming arbitration

awards to DCT); Mem. Op. & Order (Doraleh II), No. 20-cv-2571 (BAH), ECF No. 57 (Apr. 24,

2023) (denying Djibouti’s motion to stay execution of judgment without requiring posting of

supersedeas bond). As relevant here, on February 17, 2023, judgment was entered in favor of

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DCT, confirming two foreign arbitration awards issued in 2019 by the London Court of

International Arbitration against Djibouti, totaling approximately $541 million. See Doraleh I,

2023 WL 2016934, at *1; Doraleh II at 1, No. 20-cv-2571, ECF No. 57. On February 24, 2023,

Djibouti appealed that ruling to the D.C. Circuit, where the appeal remains pending. See Notice

of Appeal to D.C. Cir. Ct., No. 20-cv-2571, ECF No. 48.

         Meanwhile, Djibouti moved to stay execution of the judgment and post-judgment

discovery without requiring the posting of a supersedeas bond. See Resp.’s Mot. Stay, No. 20-

cv-2571, ECF No. 50. This motion was denied since “Djibouti has not demonstrated that

[DCT’s] interest in ultimate recovery would be adequately protected absent a bond, and thus is

not entitled to an exception from the usual requirement that a supersedeas bond be posted to

secure a stay.” Doraleh II at 2, No. 20-cv-2571, ECF No. 57. At the same time, “Djibouti

remains free to secure a stay in this matter by posting a bond, pursuant to Federal Rule of Civil

Procedure 62(b).” Id. at 6.

         Since then, Djibouti has not sought to secure a stay of execution of the judgment or post-

judgment discovery, and DCT has thus proceeded with its post-judgment discovery efforts. As

part of these efforts, DCT served subpoenas on ten non-party banks, seeking SWIFT messages

received or transmitted through the banks’ portals or stored in the banks’ databases that reflect

transactions of at least $25,000 USD, between July 1, 2012, and the date of the search, and that

contain in its “message field” any keyword on a list attached by DCT to the subpoenas. See, e.g.,

Barclays Bank Subpoena at 9–24, Exhibit A-1 of Decl. of Matthew M. Madden Supp. Resp.’s

Mot. Quash, ECF No. 4-1.1 The list of keywords—338 different people or entities that are

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         The parties disagree over whether nine or ten subpoenas have been served, see Resp.’s Mem. at 1; Pet.’s
Mem. at 8, but the subpoenas are the same in all material respects, and thus this dispute is immaterial to the analysis
of the parties’ pending motions.

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allegedly related to Djibouti and its government—spans 15 pages and is broken down into

several categories: Chinese Government Organizations (12); Chinese State Owned Companies

(22); Companies in the Port/Shipping Sector (15); Djibouti Government Organizations (67);

Djibouti Judiciary (18); Djibouti State Owned Companies (58); Private Companies/Individuals

Linked to China in Djibouti (5); Private Companies/Individuals Linked to Djibouti President

(140); and Others (1). See id.; Resp.’s Mem. at 13. The banks have not sought to quash these

subpoenas in court and have, in fact, “begun responding” and “cooperat[ing] with DCT to tailor

the subpoenas to maximize relevance and minimize burden.” Pet.’s Mem. at 22. By contrast,

Djibouti seeks to quash the subpoenas. See Resp.’s Mem. at 1. DCT, in turn, opposes Djibouti’s

motion to quash and cross-moves for its attorneys’ fees and costs incurred responding to the

motion. See Pet.’s Mem. at 25.

II.    DISCUSSION

       Although Djibouti has standing to move to quash the subpoenas and its motion is timely,

Djibouti fails to persuade that the subpoenas should be quashed. The subpoenas seek SWIFT

messages of at least $25,000 USD, during an eleven-year period when the litigation, the

arbitration, and the allegations that led to the dispute occurred, and that refer to any of 338

entities or individuals related to Djibouti. The subpoenas are proportional to and in aid of DCT’s

attempts to enforce a $541 million judgment and are therefore permitted by Federal Rules of

Civil Procedure 26 and 69. For these reasons, explained more fully below, Djibouti’s motion to

quash is denied.

       DCT’s cross-motion for fees is likewise denied. Federal Rule of Civil Procedure 37(a)

does not apply here, where DCT has not moved “for an order compelling disclosure or

discovery.” Fed. R. Civ. P. 37(a). Inherent power sanctions are also inappropriate because DCT

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not only has failed to prove, by clear and convincing evidence, that Djibouti’s timely motion to

quash was filed in bad faith, but also has raised several questionable arguments of its own about

the motion’s timeliness and Djibouti’s standing. These motions are discussed in turn.

       A.      Motion to Quash

       DCT raises two threshold objections to Djibouti’s motion to quash as to standing and

timeliness that are easily dispatched and addressed before proceeding to consider the merits of

the motion. See Bauer v. Marmara, 774 F.3d 1026, 1031–32 (D.C. Cir. 2014) (explaining that

standing is “a threshold jurisdictional requirement,” and that a court cannot assume a plaintiff

has standing and turn straight to the merits).

               1.      Standing

       “Ordinarily, a party does not have standing to challenge a subpoena issued to a nonparty

unless the party claims some personal right or privilege in the information sought by the

subpoena.” United States v. Idema, 118 F. App’x 740, 744 (4th Cir. 2005); see also Langford v.

Chrysler Motors Corp., 513 F.2d 1121, 1126 (2d Cir. 1975) (similar); Progressive Emu Inc. v.

Nutrition & Fitness Inc., 785 F. App’x 622, 630 (11th Cir. 2019) (similar); see also TransUnion

LLC v. Ramirez, 141 S. Ct. 2190, 2208 (2021) (“[P]laintiffs must demonstrate standing for each

claim that they press and for each form of relief that they seek.”). Recognizing this principle,

DCT nonetheless argues that Djibouti, as only a judgment creditor, does not have “a sufficient

privacy or confidentiality interest” to bring this motion because “a judgment creditor’s ‘general

desire to thwart disclosure of information by a non-party is simply not an interest sufficient to

create standing.’” Pet.’s Mem. at 12–14 (quoting Chevron Corp. v. Donzinger, 325 F. Supp. 3d

371, 387 (S.D.N.Y. 2018)). DCT severely undersells Djibouti’s interest in the information

sought by the subpoenas. Djibouti clearly has a personal interest in its confidential financial

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information and that of its government officials, judges, and agencies—information that the

subpoenas undoubtedly seek. See Resp.’s Opp’n Pet.’s Cross-Mot. Sanctions & Reply Supp.

Resp.’s Mot. Quash at 5–6 (“Resp.’s Reply”), ECF No. 19; Resp.’s Mem. at 11. Djibouti has

standing to protect this interest by moving to quash. See Khouj v. Darui, 248 F.R.D. 729, 732

n.6 (D.D.C. 2008) (recognizing “a legitimate interest in protecting [one’s] own private financial

information”); Est. of Ungar v. Palestinian Auth., 332 F. App’x 643, 645 (2d Cir. 2009)

(concluding that party “claiming a privilege regarding the material sought in the subpoena” had

standing to challenge the subpoena served on non-party as overbroad).

               2.      Timeliness

       Federal Rule of Civil Procedure 45 permits a court to quash a subpoena “[o]n timely

motion.” Fed. R. Civ. P. 45(d)(3). “Timely” is neither defined in the rule nor discussed in the

advisory committee notes, and the D.C. Circuit has yet to offer guidance on the word’s meaning

in the context of this rule. Courts are split on whether a motion to quash must be filed before the

time specified in the subpoena for compliance to be “timely.” See U.S. ex rel. Pogue v. Diabetes

Treatment Ctrs. of Am., Inc., 238 F. Supp. 2d 270, 278 (D.D.C. 2002) (collecting cases).

Nonetheless, a motion to quash filed before the time specified in the subpoena for compliance is

generally accepted as timely. See, e.g., id.; Nguyen v. Faunhofer-Gesellschaft Zur Forderung

der Angewandten Forschung E.V., No. 21-mc-14, 2021 WL 5800741, at *2 (D.D.C. Dec. 7,

2021). Djibouti’s motion, which was filed on August 9, 2023, before the subpoenas’ return date

of August 17, 2023, is thus “timely” under Rule 45(d)(3).

       Relying on Rule 45(d)(2), DCT argues that Djibouti’s motion is untimely. See Pet.’s

Mem. at 10–11. By its own terms, Rule 45(d)(2) applies only to “[a] person commanded to

produce documents.” Fed. R. Civ. P. 45(d)(2). Because the banks—not Djibouti—are the

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“person[s] commanded to produce documents,” Rule 45(d)(2) is inapplicable to Djibouti’s

motion.

                 3.     Merits

          “[L]egal victors may engage in broad post-judgment discovery,” Amduso v. Republic of

Sudan, 288 F. Supp. 3d 90, 94 (D.D.C. 2017), and “[t]he rules governing discovery in post[-

]judgment execution proceedings are quite permissive,” Republic of Argentina v. NML Cap.,

Ltd., 573 U.S. 134, 138 (2014). Pursuant to Federal Rule of Civil Procedure 69, a judgment

creditor may seek discovery “[i]n aid of the judgment or execution” “from any person” as

provided by the federal rules and state law. Fed. R. Civ. P. 69(a)(2); see also Fed. R. Civ. P.

26(b)(1) (“Parties may obtain discovery regarding any nonprivileged matter that is relevant to

any party’s claim or defense and proportional to the needs of the case.”). In fact, the Supreme

Court has authorized “sweeping” post-judgment discovery against foreign sovereigns, including

in the form of subpoenas to non-party banks. NML Cap., 573 U.S. at 146; see also EM Ltd. v.

Republic of Argentina, 695 F.3d 201, 207 (2d Cir. 2012) (“It is not uncommon to seek asset

discovery from third parties, including banks, that possess information pertaining to the

judgment debtor’s assets.”), aff’d, 573 U.S. 134. The Supreme Court explained the reason for

allowing broad subpoenas that seek information about a foreign sovereign’s worldwide assets:

the judgment creditor “does not yet know what property [the foreign sovereign] has and where it

is, let alone whether it is executable under the relevant jurisdiction’s law.” NML Cap., 573 U.S.

at 144.

          Despite these expansive principles, Djibouti contends that the subpoenas should be

quashed for two reasons. First, it argues that the subpoenas are “patently overbroad” because

they require the production of eleven years’ worth of SWIFT messages that contain any of 338

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keywords, subject to “two other undemanding criteria.” Resp.’s Mem. at 11–13. Djibouti’s

characterization of the subpoenas is not entirely fair by ignoring other limitations built into the

requests for records. The subpoenas are limited to SWIFT transfers of at least $25,000 USD,

which is hardly an “undemanding” limitation, for example. Notably, the bank subpoena-

recipients have, according to DCT, “begun responding” and “cooperat[ing] with DCT to tailor

the subpoenas to maximize relevance and minimize burden.” Pet.’s Mem. at 22.

       In any case, the subpoenas are within the realm of what Rules 26 and 69 permit for post-

judgment discovery. Djibouti’s complaint that the scope of the eleven-year period of 2012 to

2023 for requested information is unreasonable because DCT filed its petition to confirm the

arbitration awards in September 2020, is entirely misguided. Resp.’s Mem. at 12. The $541

million judgment corresponds to damages, legal costs, unpaid royalties, legal fees, and interest

awarded to DCT after five years of arbitration as a result of the tribunal’s conclusion that

Djibouti breached the Concession Agreement that the parties entered in October 2006 and that

was ratified by the Djibouti Parliament in December 2006. See Doraleh I, 2023 WL 2016934, at

*1–2. Djibouti’s reliance on the large list of individuals and entities about whom DCT seeks

information is also unavailing because SWIFT transfers of at least $25,000 USD involving these

individuals are “relevant” and “in aid of” DCT’s attempts to collect the $541 million judgment

against Djibouti. See Fed. R. Civ. P. 69(a)(2); Fed. R. Civ. P. 26(b)(1). The relevance of SWIFT

transfers related to Djibouti government or state-owned institutions is self-explanatory, and

information about Chinese government or state-owned institutions is relevant here, where the

dispute that led to the arbitrations arose from “Djibouti awarding DCT’s concession rights to

Chinese state-owned companies.” Pet.’s Mem. at 21. Djibouti has thus not carried its burden of

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demonstrating that the subpoenas are overbroad in light of DCT’s attempts to enforce a $541

million judgment against Djibouti.

       Second, Djibouti argues that only DCT—and thus only DCT’s provisional administrator,

and not its counsel at Quinn Emanuel—had the authority to serve these subpoenas. Resp.’s

Mem. 7–11. Djibouti has raised this argument before. In opposing DCT’s petition to confirm

the arbitration awards, for example, Djibouti argued that counsel at Quinn Emanuel did not have

authority to seek confirmation of the awards without the provisional administrator’s permission

because 9 U.S.C. § 207 allows only a “party to the arbitration” to petition the court for

confirmation. Doraleh I, 2023 WL 2016934, at *4 (citing Resp.’s Opp’n Pet. to Confirm at 9,

11–12, No. 20-cv-2571, ECF No. 37). Rejecting this argument, the Court explained:

       DCT is named on the record in both the London Arbitration and this suit. In both
       proceedings, DCT is represented by Quinn Emanuel. And as noted in DCT’s
       briefing, the same board that authorized the arbitration authorized this ancillary
       proceeding seeking to enforce the Awards. Under any reasonable reading of the
       statute, DCT was a party to the underlying arbitration, and is therefore able to bring
       suit under § 207.

Id. at *5 (citations omitted and alterations in original accepted). Djibouti, in addition, “had the

opportunity to object to [DCT’s] status as a party in th[e] arbitration” and was, in fact,

specifically invited by the arbitral tribunal “to comment on DCT’s authority” but “declined to

respond.” Id.

       As a technical matter, law of the case and preclusion may not apply. See In re Subpoena

Duces Tecum Issued to Commodity Future Trading Comm’n WD Energy Servs. Inc., 439 F.3d

740, 749 (D.C. Cir. 2006) (“A subpoena enforcement action is technically a different case.”

(citation omitted and alteration in original accepted)). Nonetheless, the reasoning in Doraleh I,

coupled with Djibouti’s acknowledgment that its pending appeal bears on this question of

authority, is informative and persuasive. See Resp.’s Mem. Stay J. at 11 & n.5, No. 20-cv-2571,

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ECF No. 50 (explaining that “each new, post-judgment legal action taken” would “raise anew the

complex question of the petitioner’s legal authority” and recognizing that the pending appeal

would get rid of this “litigation burden”). In this post-judgment discovery dispute, as with the

London arbitration and the petition to confirm the arbitration awards, DCT is represented by

Quinn Emanuel. Quinn Emanuel has authority to serve these subpoenas in an effort to enforce

the judgment it won for its client.

       Djibouti has made no secret that it wants to halt all proceedings by DCT to identify and

recover assets to apply to the judgment pending appeal, but this is a problem of Djibouti’s own

creation. As this Court has made clear, “Djibouti remains free to secure a stay in this matter by

posting a bond, pursuant to Federal Rule of Civil Procedure 62(b).” See Doraleh II at 6, No. 20-

cv-2571, ECF No. 57. Rather than posting bond, Djibouti now attempts to delay discovery to

which DCT is entitled by moving to quash, seemingly in a disguised attempt to again stay

discovery without posting bond, a “bald request” that has already been rejected. See id. at 5–6.

Djibouti’s motion to quash is denied.

       B.      Cross-Motion for Fees

       In its cross-motion, DCT seeks the attorneys’ fees and costs incurred to litigate Djibouti’s

motion to quash. See Pet.’s Mem. at 22–24. DCT contends it is entitled to reimbursement of

such fees and costs under Federal Rule of Civil Procedure 37(a), which provides that a court

must, under certain circumstances, order a party “whose conduct necessitated” a “motion for an

order compelling disclosure or discovery” to “pay the movant’s reasonable expenses incurred in

making the motion” “[i]f the motion is granted—or if the disclosure or required discovery is

provided after the action was filed.” Fed. R. Civ. P. 37(a)(5)(A). DCT, however, fails to explain

why Rule 37(a) applies here, where DCT has not moved to compel and thus has not incurred

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expenses in “making the motion,” and disclosure of the discovery at issue is entirely out of

Djibouti’s hands.

       Alternatively, DCT requests that the Court exercise its “inherent power” to impose

sanctions. Pet.’s Mem. at 22–23 n.4. To be sure, “courts have an inherent power at common law

to ‘protect their institutional integrity and to guard against abuses of the judicial process with

contempt citations, fines, awards of attorneys’ fees, and such other orders and sanctions as they

find necessary.’” Parsi v. Daioleslam, 778 F.3d 116, 176 (D.C. Cir. 2015) (quoting Shepherd v.

Am. Broad. Cos., 62 F.3d 1469, 1472 (D.C. Cir. 1995)) (citing Chambers v. NASCO, Inc., 501

U.S. 32, 44 (1991)). “[I]nherent power sanctions,” however, are “fundamentally penal,” and thus

“exercise of a court’s power to impose” these sanctions requires a finding of “bad faith by clear

and convincing evidence.” Id. at 177 (citation omitted). DCT argues that Djibouti acted in bad

faith because it “knew when it brought the instant motion that its arguments were frivolous.”

Pet.’s Mem. at 23. Specifically, DCT allegedly “advised” Djibouti that its motion to quash was

untimely, that it did not have standing to bring the motion, and that the motion sought to

relitigate an issue it already lost on before. Id. at 23 & n.4. For the reasons explained above, the

clear and convincing standard required to impose inherent power sanctions has not been met

here, where Djibouti filed a timely motion to quash and had standing to challenge the subpoenas

as overbroad. Djibouti is nonetheless cautioned that further attempts to delay post-judgment

discovery may result in sanctions in the future.

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III.   CONCLUSION AND ORDER

       For the foregoing reasons, it is hereby:

       ORDERED that respondent Republic of Djibouti’s Motion to Quash Non-Party

Subpoenas, ECF No. 1, is DENIED; and it is further

       ORDERED that petitioner Doraleh Container Terminal SA’s Cross-Motion for

Sanctions, ECF No. 17, is DENIED; and it is further

       ORDERED that the Clerk of Court shall close this case.

       SO ORDERED.

       Date: September 21, 2023

                                                       BERYL A. HOWELL
                                                       United States District Judge

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