Opinion
4:22-cv-01623-YGR
03-13-2024
EMMA CUADRADO, as Trustee of the DANIEL V. TIERNEY 2011 TRUST, and SERENITY INVESTMENTS LLC, Plaintiffs, v. SUN HUNG KAI STRATEGIC CAPITAL LIMITED, Defendant SUN HUNG KAI STRATEGIC CAPITAL LIMITED, Third-Party Plaintiff, v. ORRICK, HERRINGTON & SUTCLIFFE LLP and SCENIC ADVISEMENT, INC., Third-Party Defendants.
Mark C. Goodman BAKER & McKENZIE LLP Benjamin W. Turner
Mark C. Goodman
BAKER & McKENZIE LLP
Benjamin W. Turner
(Removed from Santa Clara County Superior Court on March 15, 2022, Complaint filed November 29, 2021)
LISA J. CISNEROS, MAGISTRATE JUDGE
LETTER OF REQUEST: REQUEST FOR INTERNATIONAL JUDICIAL ASSISTANCE PURSUANT TO THE HAGUE CONVENTION OF 18 MARCH 1970 ON THE TAKING OF EVIDENCE ABROAD IN CIVIL OR COMMERCIAL MATTERS RE OLIVER PAN
HON. YVONNE GONZALEZ ROGERS. JUDGE
TO THE APPROPRIATE JUDICIAL AUTHORITY OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA:
The United State District Court, Northern District of California (“Requesting Court”) presents its compliments to the Registrar of the High Court of the Hong Kong Special Administrative Region of the People's Republic of China (via the Chief Secretary for Administration of the Hong Kong Special Administrative Region Government) and respectfully requests international judicial assistance to obtain testimonial evidence on the topics set forth in Schedule A, and to obtain the documents set forth in Schedule B, from a non-party individual, Oliver Pan, located in Hong Kong. The requested testimony and documents are to be used in a civil action proceeding before the Requesting Court, and are directly relevant to the issues to be determined and / or material and necessary to establishing the live allegation of facts. The Requesting Court requests the assistance described herein as necessary in the interests of justice.
Sender
The Honorable Judge Yvonne Gonzalez Rogers, Judge of the United States District Court for the Northern District of California, Oakland Courthouse, Courtroom 1 - 4th Floor 1301 Clay Street, Oakland, CA 94612, USA
Central Authority of the requested State
The Registrar of the High Court 38 Queensway Hong Kong China Chief Secretary for Administration Hong Kong Special Administrative Region Government Room 321, 3/F, East Wing Central Government Offices 2 Tim Mei Avenue Admiralty Hong Kong, China
Persons to whom the executed request is to be returned
Mark C. Goodman BAKER & McKENZIE LLP Two Embarcadero Center, 11th Floor San Francisco, CA 94111 Telephone: +1 415 576 3000 Benjamin W. Turner BAKER & MCKENZIE LLP 10250 Constellation Blvd., Suite 1850 Los Angeles, California 90067
Telephone: +1 310 201 4728
Specification of the date by which the requesting authority requires receipt of the response to the Letter of Request
A response is requested by March 15, 2024 or as soon as practicable.
Reason for urgency
The requested discovery is directly relevant to the issues to be determined and / or material and necessary to establishing the live allegation of facts in the above referenced litigation and to assist Plaintiffs in prosecuting their claims against the defendant through the presentation of evidence at trial. Expedient treatment of this request will allow the Requesting Court and any jury empaneled for a trial in this matter to make an informed decision on the merits of the litigation, taking all relevant facts into account.
In conformity with Article 3 of the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the “Hague Evidence Convention”), Federal Rule of Civil Procedure 28(b) and 28 U.S.C.A. 1781(b), the undersigned authority respectfully has the honor to submit the following request: Requesting Judicial Authority (Article 3, a)
The Honorable Judge Yvonne Gonzalez Rogers, Judge of the United States District Court for the Northern District of California, Oakland Courthouse, Courtroom 1 - 4th Floor 1301 Clay Street, Oakland, CA 94612, USA
To the competent Authority of (Article 3, a)
The Hong Kong Special Administrative Region of the People's Republic of China
Names of the case and any identifying number
Daniel V. Tierney 2011 Trust et al LLC v. Sun Hung Kai Strategic Capital Limited, Case No. 4:22-cv-01623-YGR (N.D. Cal.)
Names and addresses of the parties and their representatives (including representatives in the requested State) (Article 3, b)
Plaintiffs
Emma Cuadrado, as Trustee for the Daniel V. Tierney 2011 Trust, and Serenity Investments LLC
Representatives
Plaintiffs are represented by: Mark C. Goodman mark.goodman@bakermckenzie.com BAKER & McKENZIE LLP Two Embarcadero Center, 11th Floor San Francisco, CA 94111 Telephone: +1 415 576 3000 Facsimile: +1 415 576 3099 Benjamin W. Turner ben.turner@b akerm ckenzie.com BAKER & MCKENZIE LLP 10250 Constellation Blvd., Suite 1850 Los Angeles, CA 90067 Telephone: +1 310 201 4728 Facsimile: +1 310 201 4721
Defendant
SUN HUNG KAI STRATEGIC CAPITAL LIMITED
Representatives
Defendant is represented by: Hung G. Ta Alexander H. Hu HGT LAW 250 Park Avenue, 7th Floor New York, NY 10177 hta@hgtlaw.com alex@hgtlaw.com
Other parties
Scenic Advisement, Inc. Attorneys for Scenic Advisement, Inc. Edward S. Zusman Alan Patrick Smith MARKUN ZUSMAN & COMPTON LLP 465 California Street, Suite 401 San Francisco, California 94104 ezusman@mzclaw.com rsmith@mzclaw.com Orrick, Herrington & Sutcliffe LLP Attorneys for Orrick, Herrington & Sutcliffe LLP Joseph P. McMonigle John B. Sullivan LONG & LEVIT LLP 465 California Street, Suite 500 San Francisco, California 94104 jmcmonigle@longlevit.com jsullivan@longlevit.com
Nature of the proceedings and summary of alleged facts (Article 3, c)
This is a civil action alleging conversion and wrongful receipt of property under California law. The wrongfully obtained and retained property was Plaintiffs' shares in SoFi Technologies, Inc.
Summary of complaint
This is a civil case being litigated in the Requesting Court. As set forth in the operative pleading, the litigation arises from the defendant's wrongful possession and conversion of Plaintiffs' shares in Social Finance, Inc. (“SoFi”) that rightfully belonged to Plaintiffs. (FAC at ¶ 1.) In 2017, Plaintiffs entered into an agreement to sell to the defendant for $1.6 million 101,640 shares of their Series E Preferred shares in SoFi. (Id. at ¶¶ 8-9.) In September 2017, after the share purchase agreement was signed, but before the defendant paid for the shares, the defendant
requested that the transaction be put on hold, claiming it was reconsidering the transaction. (Id. at ¶ 10.) Without ever informing Plaintiffs, the defendant received Plaintiffs' SoFi shares after it had put the transaction on hold and then kept the shares after cancelling the transaction. (Id. at ¶ 13.) The FAC further alleges that, one month before SoFi went public, the defendant executed and submitted to SoFi an Affidavit of Lost Stock Certificate under penalty of perjury, whereby it falsely represented that it was the owner of Plaintiffs' shares and requested that SoFi issue the SPAC shares to the defendant for various lots of SoFi shares, including Plaintiffs' shares. (Id. at ¶¶ 19-20.) The FAC further alleges that the defendant refused to return the shares until Plaintiffs had to commence the litigation and after the shares had significantly decreased in value. (Id. at ¶¶ 23-26.) The defendant's conduct deprived Plaintiffs of the opportunity to sell their shares at a higher price during the period that the defendant wrongfully possessed the shares. (Id. at ¶¶ 26, 35, 43.) These acts and circumstances have caused Plaintiffs to incur substantial damages. (Id.)
Summary of defense and cross-claims
In defense against Plaintiffs, the defendant contends, inter alia, that the defendant's receipt and continued possession of the SoFi shares was inadvertent. The defendant also filed cross claims against Orrick, Herrington & Sutcliffe LLP and Scenic Advisements, Inc. and blamed those entities for the defendant's receipt of the SoFi shares.
Other necessary information or documents
A protective order governing the production and disclosure of confidential information in connection with this legal proceeding is attached to Schedules A and B as Exhibit 1. Thus, any confidential documents or testimony provided in this proceeding would be protected from disclosure to the public pursuant to the terms of the Protective Order.
Evidence to be obtained or other judicial act to be performed (Article 3d)
To prosecute their claims that the defendant knowingly and wrongfully obtained, possessed and used Plaintiffs' shares in SoFi, including that the defendant knew that it possessed and retained the shares without ever having paid for them, Plaintiffs seek testimony and documents from Mr. Pan described in the attached Schedules A and B.
Mr. Pan is a Senior Manager at Norton Appraisals Limited, a Hong Kong-based valuation firm that the defendant retained to provide valuation opinions for the SoFi shares held by the defendant. In 2018, Norton Appraisals and Mr. Pan alerted the defendant to the fact that it had 101,640 Series E shares that were not on the defendant's books. The discrepancy identified by Mr. Pan and Norton Appraisals matched exactly the 101,640 Series E SoFi shares for which the defendant was to pay Plaintiffs $1.6 million pursuant to a share purchase agreement that the defendant cancelled. Plaintiffs contend that, despite being alerted to this discrepancy, the defendant did nothing to rectify the discrepancy or to return or pay for the shares. Instead, Plaintiffs contend, the defendant did not have Norton Appraisals value those shares - because the defendant had not paid for them and did not own them -keeping concealed the fact that the defendant held the shares. Norton Appraisals and Mr. Pan conducted several additional appraisals that did not include Plaintiffs' shares even though the defendant and Norton Appraisals knew those shares were being held by the defendant. In 2021, shortly before SoFi went public and the defendant wanted to sell its SoFi holdings, Norton Appraisals conducted a valuation that did include the 101,640 Series E shares that belonged to Plaintiffs, even though Norton Appraisals knew those shares had been held by the defendant since 2018, and the defendant included the value of those shares in its stated holdings of SoFi shares. Plaintiffs attempted to obtain information relating to these issues by asking Mr. Pan to voluntarily produce documents and sit for deposition. Mr. Pan declined. The Requesting Court has determined that there are sufficient grounds to obtain testimonial and documentary evidence sought through this Letter of Request, as the evidence sought is directly relevant to the issues to be determined by this Court and / or material and necessary to establishing the live allegation of facts, and such evidence cannot be secured elsewhere or otherwise without the intervention of the appropriate judicial authorities in Hong Kong.
Purpose of the evidence or judicial act sought
Because Mr. Pan is outside the subpoena power of the Requesting Court and cannot be subpoenaed to appear as a witness in the
litigation, the testimony and documents sought by this Letter of Request will be used in the litigation, including at any trial of the matter. Plaintiffs seek this discovery on the basis of their good faith belief, premised on information obtained in discovery in the litigation, that Mr. Pan possesses unique documents and other information concerning this dispute; specifically, concerning Mr. Pan's discovery of the discrepancy between the number of SoFi shares the defendant rightfully possessed and the 101,640 additional Series E shares that the defendant actually possessed and the defendant's reaction to that discrepancy and instructions to Norton Appraisals relating to the same. The requested testimony and documents described in detail in Schedules A and B are relevant to: (1) Plaintiffs' claims that the defendant engaged in willful, knowing misconduct; (2) the defendant's alleged scienter, intent and motive; (3) the veracity of the defendant's representations to Plaintiffs that the defendant did not possess Plaintiffs' shares; (4) the reasons the defendant first admitted it had the shares, then denied it had the shares but then was able to return the shares after this suit was filed; and (5) the defendant's defenses that it conducted a diligent good faith investigation into this matter and that its continued possession of the shares was merely “inadvertent.”
Identity and address of any person to be examined (Article 3, e)
Oliver Pan working as Associate Director of Norton Appraisals Limited with operating office address at Unit E, 21/F, Seabright Plaza, 9-23 Shell Street, North Point, Hong Kong .
Questions to be put to the persons to be examined or statement of the subject matter about which they are to be examined (Article 3, f)
See Schedule A.
Documents or other property to be inspected (Article 3, g)
See Schedule B.
Any requirement that the evidence be given on oath or affirmation and any special form to be used (Article 3, h)
The Requesting Court respectfully requests that the examination be conducted under oath.
Special methods or procedure to be followed (e.g., oral or in writing, verbatim, transcript or summary, cross-examination, etc.) (Article 3, i) and 9)
The Requesting Court respectfully requests that the Registrar of the High Court direct Mr. Pan to appear before an examiner for examination on or before March 15, 2024. The Requesting Court further respectfully
requests that: (1) the examination be taken orally; (2) the examination be taken before a stenographer and videographer selected by Plaintiffs; (3) the videographer be permitted to record the examination by audiovisual means; (4) the stenographer be allowed to record a verbatim transcript of the examination; (5) the examination be conducted in English, or, if necessary, with the assistance of an interpreter selected by Plaintiffs; (6) if the examination is conducted through an interpreter, verbatim transcripts of the proceeding in both English and Chinese may be permitted; (7) the witness be examined for no more than seven hours of testimony; (8) the witness be examined as soon as possible; and (9) the above-mentioned U.S. counsel for Plaintiffs, and Hong Kong counsel for Plaintiffs, be permitted to participate in the examinations by attending the testimony of the witnesses either in person or by videolink and be permitted to examine, cross-examine and reexamine the witness. In the event that the evidence cannot be taken according to some or all of the procedures described above, the Requesting Court asks that it be taken in such manner as provided by the laws of Hong Kong for the formal taking of testimonial evidence. Costs incurred in relation to the deposition examination (court reporter, video recorder, simultaneous translation) shall borne by Plaintiffs.
The Requesting Court requests that Mr. Pan produce the documents listed in Schedule B at least five days prior to his examination.
Request for notification of the time and place for the execution of the Request and identity and address of any person to be notified (Article 7)
The Requesting Court respectfully requests that you notify the Court, the representatives of the parties as indicated above, the witness from whom evidence is requested as indicated above; and such other persons as you deem proper.
Request for attendance or participation of judicial personnel of the requesting authority at the execution of the Letter of Request (Article 8)
No judicial personnel of the requesting authority will attend or participate in the deposition.
Specification of privilege or duty to refuse to give evidence under the law of the State of origin (Article 11, b)
Under the laws of the United States, a witness has the right to refuse to give evidence if to do so would disclose a privileged communication between the witness and his or her attorney that was communicated specifically for the purpose of obtaining legal advice and which privilege has not been waived. United States law also recognizes a right against criminal self-
incrimination. Other rights to not disclose information, rights not applicable here, also exist, such as communications between doctors and patients, husband and wife, and clergy and penitent. Certain limited immunities are also recognized outside the strict definition of privilege, such as the limited protection of work product created by attorneys during or in anticipation of litigation.
The fees and costs incurred which are reimbursable under the second paragraph of Article 14 or under Article 26 of the Convention will be borne by
Plaintiffs will bear the reimbursable costs associated with this request in accordance with the provisions of the Hague Evidence Convention.