Opinion
A-23-CV-56-DII-ML
09-05-2023
IN RE APPLICATION OF CFE INTERNATIONAL LLC, Petitioner, v. ANTAEUS GROUP, LLC, Respondent.
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
MARK LANE, UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE UNITED STATES DISTRICT JUDGE:
Applicant CFE International LLC (“CFEi”) again comes to this Court seeking expansive document and deposition discovery from Respondent Antaeus Group LLC (“Antaeus”) and Respondent Arbor Glen Consulting, LLC (“Arbor Glen” and, together with Antaeus, “Respondents”), pursuant to 28 U.S.C. § 1782, purportedly in aid of an ongoing Mexican criminal investigation concerning the award of certain natural gas contracts to a third party (the “Mexican Investigation”). In re Application of CFE Int'l LLC v. Antaeus Grp. LLC, No. 1:23-cv-00056-DII-ML (“Antaeus II”), Dkt. #1; In re Application of CFE Int'l LLC v. Arbor Glen Consulting, LLC, No. 1:23-cv-00057-DII-ML (“Arbor Glen II”), Dkt. #1. CFEi issued these renewed § 1782 applications (the “Applications”) following this Court's order quashing CFEi's first set of similar subpoenas last year. See generally CFE Int'l LLC v. Antaeus Grp. LLC, Nos. 1:22-cv-00365-DII-ML & 1:22-cv-00429-DII-ML, 2022 WL 17731821 (W.D. Tex. Aug. 26, 2022), accepted & adopted as stated in CFE Int'l LLC v. Antaeus Grp. LLC, 2022 WL 19569581 (W.D. Tex. Dec. 6, 2022). This Report and Recommendation concerns Respondents' Motions to Quash Subpoenas Issued Pursuant to 28 U.S.C. § 1782 and, in the Alternative, Motions for a Protective Order. Antaeus II, Dkt. #31; Arbor Glen II, Dkt. #26.
Then-presiding District Judge Lee Yeakel referred Respondents' motions to quash to the undersigned for a Report and Recommendation as to the merits pursuant to 28 U.S.C. § 636(b), Rule 72 of the Federal Rules of Civil Procedure, and Rule 1 of Appendix C of the Local Rules of the United States District Court for the Western District of Texas. See Dkt. #17, in Antaeus II; Dkt. #17, in Arbor Glen II.
For the reasons set forth below, the court submits this Report and Recommendation to the District Judge, recommending that the District Court grants Respondents' motions to quash and vacates the previous orders granting the Applications.
Because the issues are identical, the undersigned treats the motions in the two cases together and will file an identical Report and Recommendation in each case.
I. Background
The relevant parties and background facts have already been summarized in the first iteration of these proceedings. See CFE Int'l, 2022 WL 17731821 at *1-4. These facts are incorporated here by reference. CFEi had initiated those first proceedings by filing ex parte applications pursuant to 28 U.S.C. § 1782 seeking discovery from Antaeus and Arbor Glen in aid of the Mexican Investigation. In re Ex Parte Application of CFE Int'l LLC v. Antaeus Grp. LLC, No. 1:22-cv-00365-DII-ML (W.D. Tex.) (“Antaeus I”), Dkt. #1; In re Ex Parte Application of CFE Int'l LLC v. Arbor Glen Consulting, LLC, No. 1:22-cv-00429-DII-ML (W.D. Tex.) (“Arbor Glen I”), Dkt. #1. The court initially granted the Applications. Antaeus I, Dkt. #20; Arbor Glen I, Dkt. #12. After full briefing on Respondents' motions to quash, the parties appeared for oral argument on August 17, 2022, and the undersigned issued a Report and Recommendation on August 26, 2022, concluding the subpoenas should be quashed. See generally CFE Int'l, 2022 WL 17731821. United States District Judge Yeakel subsequently entered an Order for the District Court on December 6, 2023, adopting the Report and Recommendation in large part and “agree[ing] . . . that consideration of the non-exhaustive Intel factors and the circumstances at issue support[ed] quashing the subpoenas at issue.” CFE Int'l, 2022 WL 19569581 at *3. CFEi did not move to alter or amend the District Court's Order, or otherwise move for reconsideration. See FED. R. CIV. P. 59(e); Banca Pueyo SA v. Lone Star Fund IX (US), L.P., 55 F.4th 469, 472 (5th Cir. 2022). Nor did CFEi appeal. FED. R. APP. P. 4(a). The time to take either action has passed.
Javier Gutierrez Becerril (“Gutierrez”) is a former executive of CFE (Comision Federal de Electricidad, Mexico's state-owned electric utility, of which CFEi is the wholly owned subsidiary and trading arm) and former Chief Operating Officer of CFEi. Jose Guadalupe Valdez García (“Valdez García”) is another former CFE employee.
On January 18, 2023, CFEi filed another set of applications pursuant to 28 U.S.C. § 1782, again seeking discovery from Antaeus and Arbor Glen in aid of the same Mexican Investigation. Antaeus II, Dkt. #1; Arbor Glen II, Dkt. #1. The court granted the Applications on January 27, 2023 (Arbor Glen II) and February 9, 2023 (Antaeus II). Antaeus II, Dkt. #27; Arbor Glen II, Dkt. #18. The Applications seek substantially similar testimonial and documentary discovery as the initial applications, although CFEi claims to have narrowed its requests and proposed a more robust protective order. In support of its renewed applications, CFEi also offered what it alleges to be certain “new” facts and circumstances that have developed since Antaeus I and Arbor Glen I, including: (1) a letter dated December 14, 2022 from the prosecutor in charge of the Mexican investigation-written at CFEi's request-stating that “her office has ‘decided to pursue criminal action against' Gutierrez and Valdez Garcia,[3] because ‘the investigative file' established that an ‘act has been committed stipulated in law as a crime,'” and that her office would be willing to review documents resulting from the § 1782 discovery (the “FGR Letter”); (2) a draft Antaeus investor presentation from April 2013 that refers to Gutierrez as a “principal”; and (3) the substantive completion of the arbitration between CFEi and WhiteWater Midstream, LLC (“WhiteWater”).
On March 13, 2023, Respondents moved to quash the Subpoenas on res judicata grounds based on the preclusive effect of the District Court's prior judgment or, in the alternative, for CFEI's failure to satisfy the statutory and/or discretionary requirements for § 1782 discovery. Antaeus II, Dkt. #31; Arbor Glen II, Dkt. #26. After full briefing, Antaeus II, Dkt. #34-35; Arbor Glen II, Dkt. #29-30, the parties appeared for oral argument on August 1, 2023.
II. Applicable Law
A. Res Judicata and Collateral Estoppel
Res judicata ensures “the finality of judgments and thereby conserves judicial resources and protects litigants from multiple lawsuits.” United States v. Shanbaum, 10 F.3d 305, 310 (5th Cir. 1994) (citation omitted). The umbrella doctrine of “res judicata” encompasses two separate but closely related preclusive doctrines: (1) true res judicata (or “claim preclusion”), and (2) collateral estoppel (or “issue preclusion”). Houston Pro. Towing Ass'n v. City of Houston, 812 F.3d 443, 447 (5th Cir. 2016) (citing Comer v. Murphy Oil USA, Inc., 718 F.3d 460, 466-67 (5th Cir. 2013)). True res judicata “bars the litigation of claims that either have been litigated or should have been raised in an earlier suit,” whereas collateral estoppel “precludes relitigation of only those issues actually litigated in the original action, whether or not the second suit is based on the same cause of action.” Id. at 447 (citations omitted).
Specifically, under res judicata, “a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Id. (quoting Allen v. McCurry, 449 U.S. 90, 94 (1980)). In short, it “prevents a later suit . . . from collaterally attacking a prior judgment by a court of competent jurisdiction.” Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398, 401 (5th Cir. 2009) (citation omitted). Res judicata precludes a subsequent action when four elements are satisfied: “(1) the parties are identical or in privity; (2) the judgment in the prior action was rendered by a court of competent jurisdiction; (3) the prior action was concluded by a final judgment on the merits; and (4) the same claim or cause of action was involved in both actions.” Houston Pro. Towing, 812 F.3d at 447 (quoting Comer, 718 F.3d at 467).
Collateral estoppel similarly “promotes the interests of judicial economy by treating specific issues of fact or law that are validly and necessarily determined between two parties as final and conclusive.” Shanbaum, 10 F.3d at 311. “Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation.” Montana v. United States, 440 U.S. 147, 153 (1979) (citations omitted); see also, e.g., Lehigh Portland Cement Co. v. Swope, 455 F.2d 638, 638-39 (5th Cir. 1972) (affirming dismissal of successive proceedings when “the exact issues [had] already been determined adversely” to plaintiff on motion to quash or modify subpoena duces tecum). Collateral estoppel precludes a party from re-litigating an issue when four conditions are met: (1) “the issue under consideration in a subsequent action must be identical to the issue litigated in a prior action,” (2) “the issue must have been fully and vigorously litigated in the prior action,” (3) “the issue must have been necessary to support the judgment in the prior case,” and (4) “there must be no special circumstance that would render preclusion inappropriate or unfair.” Shanbaum, 10 F.3d at 311 (citing Universal Am. Barge Corp. v. J-Chem, Inc., 946 F.2d 1131, 1136 (5th Cir. 1991)).
B. Section 1782(a) Discovery
28 U.S.C. § 1782(a) authorizes U.S. courts to order discovery in aid of foreign proceedings only where an applicant shows that the requested materials are “for use in a proceeding before a foreign or international tribunal.” In re Request for Jud. Assistance from the Consumer Ct. of Istanbul in Istanbul, Turkey, No. 1:21-mc-476-RP, 2021 WL 6750936, at *1 (W.D. Tex. June 11, 2021) (quoting Tex. Keystone, Inc. v. Prime Nat. Res., Inc., 694 F.3d 548, 553 (5th Cir. 2012)). This threshold showing merely “authorizes, but does not require” the court to permit discovery, which is wholly discretionary. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241, 264-66 (2004). In Intel, the Supreme Court identified four non-exhaustive factors to guide courts' exercise of that discretion: (1) whether the person from whom discovery is sought is a participant in the foreign proceeding; (2) the nature and character of the foreign proceeding and the receptivity of the foreign government, court, or agency to federal-court judicial assistance; (3) whether the request conceals an attempt to circumvent foreign proof-gathering restrictions or other policies of a foreign country or the United States; and (4) whether the requests are unduly intrusive or burdensome. See id. at 264-65.
III. Discussion
A. Res Judicata Precludes CFEi's Renewed Subpoenas
This court already considered CFEi's requests for § 1782 discovery from Antaeus and Arbor Glen and concluded in a final, appealable order that CFEi was not entitled to such discovery. See generally CFE Int'l, 2022 WL 19569581. The “preclusive effect” of that “prior federal court judgment is controlled by federal res judicata rules.” Ellis v. Amex Life Ins. Co., 211 F.3d 935, 937 (5th Cir. 2000). Whether construed as a matter of true res judicata or collateral estoppel, the preclusive effect of the District Court's Final Judgment der in Antaeus I and Arbor Glen I precludes CFEi's second sets of subpoenas.
1. Res Judicata (Claim Preclusion)
All four elements of res judicata are satisfied here. The first two elements are undisputed: (1) these proceedings involve the same parties as Antaeus I (CFEi and Antaeus) and Arbor Glen I (CFEi and Arbor Glen), and (2) the judgment in Antaeus I and Arbor Glen I was rendered by a court of competent jurisdiction.
As to the third element, both Antaeus I and Arbor Glen I were concluded by a final judgment on the merits. The District Court's December 6, 2022 Order conclusively resolved the merits of CFEi's first applications. CFEi did not appeal that Order, which thus constitutes a final judgment on the merits. See In re Paige, 610 F.3d 865, 871 (5th Cir. 2010) (“[I]t is beyond doubt that the bankruptcy court's March 28, 2007 Memorandum Opinion and Order constituted a final judgment on the merits because it was not appealed from.”); id. (citing Royal Ins. Co. of Am. v. Quinn-L Cap. Corp., 960 F.2d 1286, 1293 (5th Cir.1992), for the proposition that “an unappealed order is a final judgment on the merits for res judicata purposes”); see also In re Application of Furstenberg Fin. SAS v. Litai Assets LLC, 877 F.3d 1031, 1033 (11th Cir. 2017) (“We conclude that an order denying a motion to quash a subpoena is a final, appealable order in proceedings brought under § 1782.”); In re Accent Delight Int'l Ltd., 869 F.3d 121, 128 (2d Cir. 2017) (“Orders granting (or denying) applications for discovery under Section 1782 are considered final adjudications ....”).
As to the fourth element, these proceedings involve the same claims or causes of action as Antaeus I and Arbor Glen I. CFEi once again seeks § 1782 discovery from Antaeus and Arbor Glen, purportedly in aid of the same Mexican Investigation that CFEi invoked in Antaeus I and Arbor Glen I to support its first requests for such discovery from those same parties. The Applications thus satisfy the “transactional test” that the Fifth Circuit uses to determine whether two suits involve the same claim or cause of action. That transactional test “focuses on whether the two cases ‘are based on “the same nucleus of operative facts,”'” which is “to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.” Houston Pro. Towing, 812 F.3d at 447 (citations omitted); see also, e.g., Pittard v. CitiMorgage, Inc., No. SA-21-CV-01114-JKP, 2022 WL 686464, at *6 (W.D. Tex. Mar. 8, 2022) (“The doctrine of res judicata contemplates courts' adjudication on the merits shall be final, and therefore, courts shall not adjudicate successive actions arising out of the same transaction. Consequently, the doctrine bars all causes of action and defenses that were or could have been advanced in a prior action based upon the same operative facts.”) (citing Nilsen v. City of Moss Point, Miss., 701 F.2d 556, 563 (5th Cir. 1983)).
CFEi presents a handful of what it claims to be “new” or changed facts or circumstances that it asserts are sufficient to avoid res judicata and permit its new requests to proceed, but none is persuasive. The Fifth Circuit requires “significant changes” to justify an exception to res judicata. See Houston Pro. Towing, 812 F.3d at 449 (“[T]he critical question is not whether any facts or law have changed . . ., but whether there have been any significant changes-whether the factual and legal basis undergirding [the claim] has changed.”) (emphasis in original); Wilson v. Lynaugh, 878 F.2d 846, 851 (5th Cir. 1989) (“In order for new facts to constitute a new cause of action and thus allow a claim to be relitigated, those facts must be both ‘significant' and create ‘new legal conditions.'”) (citation omitted). CFEi presents three arguably “new” facts: (1) the FGR Letter, (2) the draft Antaeus investor presentation from April 2013, and (3) the substantive completion of the WhiteWater arbitration. These factual developments do not change the nucleus of operative facts.
• The FGR Letter provides no meaningful update or new information. The letter merely confirms that the Mexican Investigation remains ongoing (as it was in Antaeus I and Arbor Glen I) and assures that the Mexican authorities will, as in any
criminal proceeding, consider evidence they are offered (which was never in doubt). No part of the prior decision involved these issues.
• The draft Antaeus investor presentation from April 2013 is neither new nor significant. Even if CFEi did not possess or could not have obtained a copy of this presentation during Antaeus I, it offers no material new information and, at most, is simply cumulative evidence in support of the same allegations and arguments CFEi made in Antaeus I.
• The substantive completion of the WhiteWater arbitration is irrelevant because the court did not rely on the precise status of the arbitration in Antaeus I and the update does not constitute a significant change.
CFEi also suggests that the circumstances have changed because the Applications request a purportedly narrower universe of discovery than its prior requests and CFEi is now willing to enter into a more robust protective order. But neither the scope of CFEi's requests nor the protections it may be willing to agree to in a potential protective order has any bearing on res judicata. That is because “‘[m]aking a determination of whether the same nucleus of operative facts is present' revolves around ‘the factual predicate of the claims asserted.'” In re Paige, 610 F.3d 865, 872 (5th Cir. 2010) (alteration and emphasis in original) (citations omitted). “‘[T]he type of relief requested, substantive theories advanced, or types of rights asserted' is not controlling for purposes of the transactional test.” Id. at 873 (quoting United States v. Davenport, 484 F.3d 321, 326 (5th Cir. 2007)); see also, e.g., Matter of Howe, 913 F.2d 1138, 1144 n.10 (5th Cir. 1990) (“A party may not avoid the preclusive [e]ffect of res judicata by asserting a new theory or a different remedy. The nucleus of facts defines the claim rather than the legal theory posed or recovery sought.”) (citation omitted). “This is true even where ‘several legal theories depend on different shadings of the facts, or would emphasize different elements of the facts, or would call for different measures of liability.'” In re Paige, 610 F.3d at 873 (quoting Restatement (Second) of Judgments § 24 cmt. c (Am. L. Inst. 1982)). Accordingly, the precise breadth of discovery CFEi seeks, and the degree of protections it may be willing to agree to, are immaterial to the res judicata analysis. “[B]ecause the two actions under consideration are based on ‘the same nucleus of operative facts,' the current and the earlier proceedings arise from the same cause of action,” id. (citation omitted), and res judicata precludes CFEi's attempted do-over.
The court recognizes that CFEi has pointed to dicta from a footnote in Tiberi v. CIGNA Insurance Co., 40 F.3d 110 (5th Cir. 1994), that remarked: “An order quashing a subpoena apparently has no res judicata effect on a later, narrower subpoena.” Id. at 112 n.5 (citing Ariel v. Jones, 693 F.2d 1058, 1060 n.2 (11th Cir. 1982)). Tiberi, however, was not a § 1782 case and says nothing about res judicata's effect in that context. This is significant because, in an ordinary “discovery matter, the discovery sought is part of an ongoing civil case in that same federal court for monetary damages, injunctive relief, or the like.” CPC Pat. Techs. Pty Ltd. v. Apple, Inc., 34 F.4th 801, 808 (9th Cir. 2022). A § 1782 application, however, is “a ‘freestanding subpoena request' that ‘[is] filed on its own and not in conjunction with' another federal lawsuit.'” Id. (citations omitted). “A ruling on such a request necessarily disposes of ‘the ultimate relief sought' in the federal case.'” Id. (citation omitted); see also, e.g., Tex. Keystone, Inc. v. Prime Nat. Res., Inc., 694 F.3d 548, 554 (5th Cir. 2012) (“[Section] 1782 does not establish a standard for discovery. Instead, it provides for a threshold determination of whether to allow foreign litigants to enjoy discovery in U.S. courts in accordance with federal rules.”) (alteration in original) (citation omitted); In re Caceres, No. 1:19-mc-00405-KS-RHW, 2020 WL 2523120, at *4 (S.D.Miss. May 18, 2020) (“a ruling on [a § 1782 application] is dispositive insofar as the proceedings in the federal district court are concerned”). Accordingly, the court concludes that Tiberi's dicta is neither binding nor persuasive in this context, and does not prohibit the ordinary, straightforward application of res judicata principles, which preclude CFEi's second § 1782 Applications.
2. Collateral Estoppel (Issue Preclusion)
For similar reasons, collateral estoppel also precludes the Applications. First, the question raised in these proceedings-whether the court should exercise its discretion to grant CFEi's request for § 1782 discovery from Antaeus and Arbor Glen in aid of the Mexican Investigation- is identical to the issue the parties already litigated, and this Court already resolved, in Antaeus I and Arbor Glen I. Second, the same parties in these proceedings fully and vigorously litigated that issue in the prior proceedings. Third, as the District Court's December 6, 2023 Order itself makes clear, determining whether to exercise its discretion was necessary to support the District Court's final judgment in those proceedings-in fact, the entire proceeding turned on that question. See CFE Int'l, 2022 WL 19569581 at *3 (“[A] district court is not required to grant a § 1782(a) discovery application simply because it has the authority to do so.”) (quoting Intel, 542 U.S. at 264); see also Valero Energy Corp. v. United States, Nos. SA-06-CV-1065-XR, SA-08-CV-114-XR, & SA-08-MC-149-XR, 2010 WL 1424281, at *5-7 (W.D. Tex. Apr. 7, 2010) (applying collateral estoppel in successive proceedings regarding propriety of amended summonses because, inter alia, the “district court's evaluation of the Powell factors was necessary to the outcome of the previous case as it is here”). Fourth, there are no special circumstances that might render preclusion inappropriate or unfair; to the contrary, it would be inappropriate and unfair to allow CFEi to use back-to-back applications in collateral proceedings to attempt to procure different results on issues the District Court already resolved. Indeed, CFEi took the position at oral argument that it should be permitted to repeatedly re-file subpoenas and re-litigate these same questions. See Aug. 1, 2023 Hr'g Tr. at 23:14-20. That cannot be the case.
B. CFEi Fails to Satisfy 28 U.S.C. § 1782's Threshold Statutory Requirements
Even if res judicata does not apply, the undersigned recommends that the Applications be quashed because CFEi fails to satisfy § 1782's threshold statutory requirements. A U.S. District Court may order § 1782 discovery if three conditions are met: (1) the person or entity from whom discovery is sought resides in or can be found in the court's district; (2) the application is made by a foreign or international tribunal or “any interested person;” and (3) the discovery is “for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.” 28 U.S.C. § 1782(a). The parties continue to dispute whether CFEi has demonstrated the third element: that the discovery sought will be “use[d] in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.” Id.
The court acknowledges that Judge Yeakel previously determined that CFEi had met its burden to show that the discovery CFEi sought in Antaeus I and Arbor Glen I was “for use” in the Mexican Investigation, agreeing with CFEi that the “evidence related to the award of the Waha Connector Agreements in 2016 is relevant to the Anti-Corruption Prosecutor of the Mexican Attorney General's Office's investigation into those contracts.” CFE Int'l, 2022 WL 19569581 at *2. The undersigned reached a contrary conclusion before and, having reconsidered the issue, again respectfully disagrees. In the prior proceedings, the undersigned concluded that CFEi had not carried its burden to demonstrate that the discovery sought was “for use” in the Mexican Investigation because, inter alia, nothing in the record indicated that a dispositive ruling was within reasonable contemplation (as required by the Supreme Court in Intel), CFEi's requested discovery extended far beyond the transactions at issue in the Mexican Investigation, and CFEi refused to agree to a protective order that would limit its ability to use the discovery for purposes other than the Mexican Investigation. See CFE Int'l, 2022 WL 17731821 at *5-7.
Even taking into account Judge Yeakel's prior ruling, these circumstances are all equally- or even more acutely-true today. The Mexican Investigation still has not meaningfully progressed, further suggesting that no criminal action may ever commence, and no dispositive ruling is within reasonable contemplation. A magistrate judge in the U.S. District Court for the District of Massachusetts recently reached the same conclusion in evaluating a similar § 1782 application by CFEi for discovery from WhiteWater's first major investor, Denham Capital Management LP, concluding that CFEi failed to satisfy the statutory requirements for § 1782 discovery because “the Mexican criminal investigation is not, and may never be, in a stage where judicial proceedings are even under reasonable contemplation.” CFE Int'l LLC v. Denham Cap. Mgmt. LP, 2023 WL 2988745, at *7 (D. Mass. Mar. 6, 2023). The United States District Court Judge in that case, Chief Judge Saylor IV, agreed “that the statutory requirement that the material must be intended for use in a proceeding before a ‘foreign or international tribunal' has not been satisfied.” Elec. Order, CFE Int'l LLC v. Denham Cap. Mgmt. LP, No. 1:22-mc-91355-FDS (D. Mass. Aug 18., 2023), ECF No. 79. CFEi also continues to seek expansive discovery from Antaeus and Arbor Glen related to far more than just the Waha Connector Agreements that are the subject of the Mexican Investigation, and CFEi continues to refuse to agree to a protective order that would appropriately limit its (and its attorneys) use of discovery materials. Moreover, CFEi also has now served third-party subpoenas requesting similar discovery from Antaeus and Arbor Glen in connection with related, ongoing civil litigation against Gutierrez and Turrent. CFE Int'l LLC v. Turrent Schnaas et al., No. 4:22-cv-03385 (S.D. Tex.). All of this continues to suggest that CFEi's true intent in this matter is not primarily to aid law enforcement in the Mexican Investigation, but to gather information and documents for its own unspecified alternative purposes. Cf. In re Application of the Gov't of Lao People's Democratic Republic, No. 1:15-MC-00018, 2016 WL 1389764, at *7-9 (D. N. Mar. I. Apr. 7, 2016) (quashing § 1782 subpoena in part due to indicia of applicant's ulterior motive); In re Accent Delight Int'l Ltd., 869 F.3d 121, 135 (2d Cir. 2017) (evidence that parties instituted sham litigation as a cover to obtain § 1782 discovery for use in other proceedings “might support denying the Section 1782 application altogether”) (citing Intel, 542 U.S. at 265); Lazaridis v. Int'l Ctr. for Missing & Exploited Child., Inc., 760 F.Supp.2d 109, 215 (D.D.C. 2011) (denying § 1782 discovery where applicant's “wide-ranging request suggests that [he] is seeking information more for his general use than for use by the Greek tribunals in their investigation or prosecution of specific criminal acts”).
The court therefore recommends finding that CFEi has failed to carry its burden to establish that the discovery CFEi seeks is “for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation,” 28 U.S.C. § 1782(a), and cannot satisfy the threshold statutory requirements for § 1782 discovery.
C. The Discretionary Factors Also Weigh Decisively Against CFEi
Even if the statutory requirements were satisfied, the court would still deny the Applications and quash CFEi's subpoenas as a matter of sound discretion. See Intel, 542 U.S. at 264 (“a district court is not required to grant a § 1782(a) discovery application simply because it has the authority to do so”); see also In re Application of RSM Prod. Corp. v. Noble Energy, Inc., 195 F.Supp.3d 899, 902 (S.D. Tex. 2016) (citing Intel, 542 U.S. at 264). Considering CFEi's revised discovery requests continue to cover the essentially the same categories of broad testimonial and documentary discovery as its first set of requests, and none of the allegedly “new” or changed facts or circumstances are significant, the Applications are materially the same and the analysis of these factors will yield the same result as before; the court therefore refers to and incorporates its prior analysis of the four Intel factors. CFE Int'l, 2022 WL 17731821 at *7-9.
IV. Recommendation
For the reasons stated above, the undersigned RECOMMENDS that the District Court GRANT Respondents' motions to quash (Antaeus II, ECF No. 31; Arbor Glen II, ECF No. 33), VACATE the prior orders granting CFEi's Applications (Antaeus II, ECF No. 27; Arbor Glen II, ECF No. 18), and CLOSE these cases.
V. Objections
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battles v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Services Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc).