[00:00:09] Speaker 00:
Mr. Diskant, right?

[00:00:11] Speaker 00:
Yes.

[00:00:11] Speaker 00:
Good morning, Your Honors.

[00:00:12] Speaker 02:
May it please the Court.

[00:00:13] Speaker 02:
I'd like to reserve two minutes for rebuttal, if I may.

[00:00:17] Speaker 02:
My name is Edward Diskant.

[00:00:18] Speaker 02:
I represent Interveners Trejo Asset Management and Trejo Noel GP.

[00:00:23] Speaker 02:
Your Honors, this case comes before you from what we would submit as a clear-cut abuse of Section 1782 and discovery obtained pursuant to 1782.

[00:00:32] Speaker 02:
And despite the fact that the District Court was presented with evidence of conduct

[00:00:37] Speaker 02:
that virtually every circuit court to look at it has said warrants judicial intervention, the district court failed to take any action whatsoever.

[00:00:45] Speaker 02:
I understand the facts here are a little bit complicated, and so I thought it might be helpful to just set the stage for that abuse by presenting to you what we presented to the district court, which is that the... Before you do that, will you keep this in mind?

[00:00:58] Speaker 00:
Under our interpretation of Rule 60B2,

[00:01:02] Speaker 00:
new evidence is only evidence that existed at the time of the original judgment.

[00:01:06] Speaker 00:
I think your new evidence maybe doesn't qualify.

[00:01:10] Speaker 00:
Can you address that, please?

[00:01:11] Speaker 02:
Absolutely, Your Honor, and I think there are two different ways of thinking that.

[00:01:15] Speaker 02:
The first is that one of the arguments we made at the time that the petition was filed was that we assumed Petitioner was going to do exactly what it did, which is use it in proceedings

[00:01:27] Speaker 02:
other than the two it had identified in the petition.

[00:01:30] Speaker 02:
So our position was that the events that happened afterwards provided evidence to support the claim we had made beforehand, which does fit within the context of 60B.

[00:01:40] Speaker 00:
But doesn't that actually buttress the idea that that evidence existed at the time of the original filing?

[00:01:48] Speaker 02:
was unavailable to us because the only way that we could have developed it was to directly inquire of our adversary, which of course we couldn't do.

[00:01:56] Speaker 02:
And that's why through due diligence we couldn't discover it.

[00:01:59] Speaker 02:
But there's a second reason I think the court can get to the same point, which is that in this court's decision in Kripunov, which admittedly was not directly in the context of a motion for reconsideration, this court directed a district court to reconsider the factors applicable to a 1782 proceeding

[00:02:15] Speaker 02:
where the facts surrounding the petition had materially changed.

[00:02:19] Speaker 02:
That's effectively exactly what we asked the district court to do here, which is to say that the facts surrounding the grant of the petition had materially changed and we wanted the district court to reconsider its grant in light of that.

[00:02:32] Speaker 01:
Let me ask you this.

[00:02:34] Speaker 01:
You were concerned before the court ruled that the evidence would be disclosed and shared with other parties.

[00:02:42] Speaker 01:
Correct.

[00:02:43] Speaker 01:
Then you entered into a protective order.

[00:02:45] Speaker 01:
You had a chance to fix it then.

[00:02:48] Speaker 02:
So I'm glad you raised that.

[00:02:50] Speaker 02:
We should talk about the second issue, which is the protective order.

[00:02:53] Speaker 02:
As interveners, Treo Asset Management and Treo NoLGP were not invited by the parties and did not participate in the negotiation of the protective order.

[00:03:02] Speaker 02:
With that said, we saw the protective order when it was entered, and we believe that it was sufficient to capture what we understood to be petitioners' representation to the court.

[00:03:12] Speaker 02:
The language of the protective order is a little bit ambiguous, but as respondents noted below, they also believe that the protective order would operate in a fundamentally different way.

[00:03:24] Speaker 02:
The district court didn't reject those claims.

[00:03:27] Speaker 02:
She just said she didn't care.

[00:03:28] Speaker 02:
You're sophisticated.

[00:03:29] Speaker 02:
It's not my problem.

[00:03:30] Speaker 02:
And I would respectfully submit that has absolutely nothing to do with whether or not good cause existed to modify the protective order.

[00:03:38] Speaker 01:
But Toreo had nothing to do with that protective order.

[00:03:40] Speaker 02:
What's that?

[00:03:40] Speaker 01:
Toreo had nothing to do with it.

[00:03:42] Speaker 02:
It had no input.

[00:03:43] Speaker 02:
That's exactly right, Your Honor.

[00:03:44] Speaker 02:
There is no evidence to the contrary in the record.

[00:03:46] Speaker 02:
And to the contrary, respondents submitted a declaration in which respondent, the state of Oregon, talked about the manner in which the protective order was negotiated between respondent

[00:03:56] Speaker 02:
in Petitioner and moreover respondents put in an affidavit before the district court talking about how certain changes were made by Petitioner and clearly misunderstood by a respondent.

[00:04:09] Speaker 00:
I thought that the protective order was negotiated on Trejo's part.

[00:04:14] Speaker 02:
So in part, Your Honor, it was negotiated on behalf of the fund, the fund's confidential information, which is whom Treo represents.

[00:04:23] Speaker 02:
But because Treo is not a party to the proceedings, Treo is not invited to the meet and confer sessions back and forth.

[00:04:28] Speaker 00:
I understand that.

[00:04:29] Speaker 00:
But you're smart people.

[00:04:29] Speaker 00:
You probably communicated with the lawyers that were negotiating this, right?

[00:04:33] Speaker 02:
So Your Honor, we certainly took a look at the draft protective order when it was posted on the docket.

[00:04:37] Speaker 02:
But again, I want to make very clear that both interveners and respondents

[00:04:42] Speaker 02:
misconstrued a provision the petitioner had changed.

[00:04:45] Speaker 02:
And in fairness to us, there is ambiguity in the provision.

[00:04:49] Speaker 02:
The provision in question talks about the universe of people that documents can be shared with and creates a broader category of persons.

[00:04:57] Speaker 02:
The understanding at the time was those broader category of persons were people who would need to have access to the documents because, for example,

[00:05:05] Speaker 02:
they were witnesses, and we need to put in witness statements.

[00:05:08] Speaker 02:
And by the way, that is one of the things that petitioner relied on.

[00:05:11] Speaker 02:
That is fundamentally different than giving documents to a witness and saying, hey, witness, you're being sued in a different country in a different matter that we're not a party to.

[00:05:20] Speaker 02:
You can use these documents there, too.

[00:05:22] Speaker 02:
No one from either respondents or petitioner understood that to be what the protective order allowed.

[00:05:28] Speaker 00:
Again, my point is this.

[00:05:29] Speaker 00:
You're sophisticated lawyers.

[00:05:31] Speaker 00:
The protective order was intended for the benefit of trail.

[00:05:36] Speaker 00:
Your lawyers talked to your people representing yourself before the court, basically in crafting protective order.

[00:05:45] Speaker 00:
You saw it, undoubtedly had some input in it.

[00:05:48] Speaker 00:
The fact that it didn't contain everything you wanted doesn't change the fact that this was not a virgin document about which you knew nothing, right?

[00:05:55] Speaker 02:
There is nothing in the record that suggests Trejo had an opportunity to review it before it was posted in the docket, Your Honor.

[00:06:01] Speaker 02:
And there is evidence in the record that suggests that respondent who negotiated with Petitioner shared the same misunderstanding that Trejo had, which is to say, even had Trejo had the discussions Your Honor is contemplating, Trejo would have landed in the same place, which is the same misunderstanding.

[00:06:18] Speaker 02:
But there's a second fundamental problem with this argument that Petitioner has advanced, which is there is nothing in the law of this court

[00:06:23] Speaker 02:
that suggests a good faith misunderstanding by one party negates good cause to modify a protective order.

[00:06:29] Speaker 02:
The whole purpose of the protective order, the findings in entering the protective order, was that documents being produced here contained confidential information of the fund.

[00:06:39] Speaker 02:
Nothing about that finding has changed.

[00:06:41] Speaker 02:
And so I would submit that the inquiry the district court should have engaged in is whether the protective order is sufficient to meet that purpose.

[00:06:48] Speaker 02:
Both respondent and petitioner told, excuse me, both respondent and intervener

[00:06:52] Speaker 02:
told the district court the answer to that question was no.

[00:06:54] Speaker 02:
And to be very clear, the district court never made a contrary finding.

[00:06:58] Speaker 02:
That's the real error here.

[00:06:59] Speaker 01:
Well, I'm kind of confused because if that's really what was intended, and you have lawyers, I'm sure we're very good lawyers, negotiating this document, how did they not get it right?

[00:07:10] Speaker 02:
Your Honor, there is an affidavit in the record from counsel for respondents who are the ones negotiating the protective order.

[00:07:17] Speaker 02:
indicating that they didn't understand the nuance I just laid out for your honor, which is that documents could be shared with these interested parties.

[00:07:27] Speaker 02:
for purposes of witness statements, for example, for purposes of preparing someone for testimony.

[00:07:32] Speaker 02:
That is fundamentally different than giving it to them and saying, you've been sued in a different country and unrelated litigation.

[00:07:38] Speaker 02:
You can use these documents there.

[00:07:40] Speaker 02:
No one from respondents understood as much.

[00:07:42] Speaker 02:
There is no evidence to the contrary.

[00:07:44] Speaker 02:
And so again, the question is, why wouldn't the district court take action under those facts to modify the protective order?

[00:07:50] Speaker 02:
The modification that Trejo sought is what, in standard commercial litigation terms, is commonplace.

[00:07:56] Speaker 02:
the party receiving the documents can use them itself for purposes of the litigation in which it was produced.

[00:08:02] Speaker 02:
That's in virtually every protective order, and that's the modification that was sought.

[00:08:06] Speaker 00:
It was not some sort of- One of the things that you allege is that the district court abused its discretion in finding that it was not misled.

[00:08:13] Speaker 00:
I find that unique, because in the district court, the best judge of whether it was misled?

[00:08:19] Speaker 02:
So, Your Honor, I do want to reserve time, but I also want to answer your question.

[00:08:21] Speaker 02:
May I answer your question?

[00:08:24] Speaker 02:
So, Your Honor, I think the answer to that is that the District Court, with great respect, didn't take seriously or meaningfully engage with the evidence that Trejo presented.

[00:08:32] Speaker 02:
The District Court made findings in denying the motion for reconsideration that are very difficult to reconcile with the record.

[00:08:38] Speaker 02:
For example, the district court made the finding that in granting the petition, it didn't limit the use of documents to two particular proceedings.

[00:08:45] Speaker 02:
But that's doubly wrong.

[00:08:46] Speaker 02:
First, in the initial order granting the petition, the district court, as it was required to, made a series of specific findings both under the statute and under Intel that were laser-focused on the two proceedings.

[00:08:59] Speaker 02:
It could not have made those findings had it considered the broader range of litigations here.

[00:09:03] Speaker 02:
That's the first error.

[00:09:04] Speaker 02:
The second error is the district court then entered a protective order, which, you know, irrespective of how you read it, imposes some limitations on the manner in which documents were being produced.

[00:09:14] Speaker 02:
And so therefore, it was not the case that the district court had never considered imposing limitations with respect to the manner in which the documents would be used.

[00:09:22] Speaker 00:
Okay.

[00:09:22] Speaker 00:
You have very little time left, but you have something.

[00:09:24] Speaker 00:
Do you want to save that?

[00:09:25] Speaker 02:
No, I'd like to save my two minutes if I could.

[00:09:26] Speaker 00:
Okay.

[00:09:27] Speaker 02:
Very good.

[00:09:29] Speaker 00:
All right.

[00:09:30] Speaker 00:
So now, Ms.

[00:09:32] Speaker 00:
did you say Pachacki?

[00:09:34] Speaker 03:
I'm sorry, I probably got that wrong.

[00:09:50] Speaker 03:
that what the district court found to be an entirely unambiguous protective order allowed exactly what it was used for.

[00:09:58] Speaker 03:
That is, we acted in reliance on a protective order that expressly permitted the use of documents in proceedings that related to the events described in the petition filed in support of 1782 evidence.

[00:10:14] Speaker 03:
It allowed us to give those documents to other interested parties, and it did so in a completely open way.

[00:10:23] Speaker 03:
Treyo had multiple opportunities to object to this protective order.

[00:10:28] Speaker 03:
In fact... Well, let me ask you this.

[00:10:29] Speaker 01:
When the protective order is being negotiated, did Treyo exhibit its concerns that it's exhibiting here in court today?

[00:10:38] Speaker 03:
Treyo did not, to my knowledge, appear on the email chains.

[00:10:44] Speaker 03:
I have no knowledge, and there's nothing in the record to show that Treyo didn't receive drafts on the back end of the negotiations.

[00:10:52] Speaker 03:
I have no knowledge about whether Oregon shared those drafts with Treyo.

[00:10:56] Speaker 03:
What we do know is that when the stipulated order was filed, the district court rejected it and said, you haven't shown me good cause.

[00:11:04] Speaker 03:
That resulted in Oregon filing an unopposed motion for a protective order that noted that TREO had expressly requested Oregon to take steps to protect confidential information that may be included in the production.

[00:11:19] Speaker 03:
That's at 271 of the record.

[00:11:22] Speaker 03:
Now, the only good cause offered for the protective order at all was that there may be confidential information in the production that should not be disclosed to the public.

[00:11:34] Speaker 03:
You will note that nowhere in the record has anyone claimed that any confidential information, whether Trejo's or Oregon's, has been disclosed to the public.

[00:11:46] Speaker 03:
That is, the purpose of the protective order?

[00:11:50] Speaker 03:
is being met.

[00:11:52] Speaker 03:
Everything's being protected.

[00:11:54] Speaker 03:
None of the proceedings in which this information has been used are open to the public.

[00:11:58] Speaker 03:
Luxembourg has a different system.

[00:12:00] Speaker 03:
The UK has a different system.

[00:12:02] Speaker 03:
So the protective order's being complied with.

[00:12:05] Speaker 03:
No one's argued to the contrary.

[00:12:07] Speaker 03:
What's happened is that TREO has

[00:12:10] Speaker 03:
used evidence, its new evidence of an intent to abuse the statute is merely evidence of our compliance with an agreed protective order.

[00:12:23] Speaker 03:
That doesn't suffice under Rule 60B as Your Honor observed in arguing with my opponent.

[00:12:31] Speaker 00:
Let me ask you this, it's slightly different.

[00:12:34] Speaker 00:
As you know the Southern District of New York recently granted a

[00:12:37] Speaker 00:
A partial grant of trails motion to quash your 1782 petition to kill a contemplated future fraud claim.

[00:12:47] Speaker 00:
What role, if any, should that play in our deliberations?

[00:12:51] Speaker 03:
None whatsoever, your honor.

[00:12:53] Speaker 03:
We believe, with all due respect to the Southern District of New York, that that decision was incorrect.

[00:13:00] Speaker 03:
What the court observed there is ambiguity and ambivalence really about whether our initial application showed a commitment to file the fraud claim.

[00:13:11] Speaker 03:
What that declaration said is that we will file the claim.

[00:13:14] Speaker 03:
There was no ambivalence at all.

[00:13:17] Speaker 03:
The court also cited the fact that we had not filed the fraud claim for which we applied for evidence.

[00:13:25] Speaker 03:
in the 19 months in the no motion of quash was pending as evidence that we were not going to file it.

[00:13:31] Speaker 03:
I have problems with that logic, but unlike our opponents, we don't have endless resources to appeal every adverse decision.

[00:13:39] Speaker 03:
What we have done is decided not to appeal.

[00:13:42] Speaker 03:
I can say that the court could take judicial notice than the underlying proceedings of this case.

[00:13:48] Speaker 03:
This case was just closed last Wednesday at docket entry in 94.

[00:13:53] Speaker 03:
Ten days ago, we completed discovery in this matter.

[00:13:56] Speaker 03:
We took the deposition of Mr. Michael Langdon.

[00:13:59] Speaker 03:
We rush ordered the transcript and the fraud claim.

[00:14:02] Speaker 03:
We will prove the Southern District wrong because the fraud claim will be filed shortly.

[00:14:07] Speaker 00:
What actual use of the organ discovery have you used, excuse me, made in the veto right litigation?

[00:14:14] Speaker 03:
In the veto right litigation, I believe that in terms of what has been filed, there have been documents put on the record, maybe two documents put on the record.

[00:14:26] Speaker 03:
Right now, that litigation, I believe, is yet to reach the merits.

[00:14:29] Speaker 03:
And so in assessing whether documents are for use in a 1782 proceeding, the question is not whether the documents are admissible, but whether they can be used in preparation of the case.

[00:14:40] Speaker 03:
So when that case proceeds to the merits, there is plenty of evidence in the document production that we've received that will help us.

[00:14:48] Speaker 03:
For instance, the Master Luxco case, that's the veto right litigation.

[00:14:53] Speaker 03:
It accuses my client of improperly changing the bylaws to require unanimity among shareholders.

[00:15:01] Speaker 03:
He said that that was a fraud.

[00:15:04] Speaker 03:
Evidence suggests, as we've long suspected, that Trail and others knew about that amendment and ratified it two times.

[00:15:13] Speaker 03:
It also suggested that the amendment was made for purposes that were useful to Trail.

[00:15:19] Speaker 03:
That is, if there was unanimity required,

[00:15:23] Speaker 03:
that our creditors could not then call in loans saying you were required to maintain continuity of control.

[00:15:32] Speaker 03:
There is a confidentiality order in place, so I don't want to disclose the underlying evidence, but there are documents that show that the unanimity clause was in fact useful.

[00:15:43] Speaker 03:
So on the merits, when we get to that briefing, the documents will be used extensively in the master lexical litigation.

[00:15:54] Speaker 03:
I did want to say a word about standing.

[00:15:58] Speaker 03:
I think TREO has made vague references to its own confidential information in its opening briefing and a little bit on the motion to stay.

[00:16:09] Speaker 03:
TREO has yet to adduce any evidence that its own confidential information is indeed at stake.

[00:16:16] Speaker 03:
The cases it cited in its reply brief are inapposite.

[00:16:20] Speaker 03:
One of them was from the Sixth Circuit and it concerned a gerrymandering case.

[00:16:24] Speaker 03:
And in that case, the court said, you have a protective order in place.

[00:16:28] Speaker 03:
There's nothing to worry about.

[00:16:30] Speaker 03:
Just as we do here.

[00:16:32] Speaker 03:
In another case, it was the 100 record case.

[00:16:36] Speaker 03:
That was about a case where an individual was required to supply information to the government that would have been discoverable via FOIA.

[00:16:45] Speaker 03:
That is about public disclosure.

[00:16:47] Speaker 03:
Again, irrelevant here.

[00:16:48] Speaker 03:
And then the third case, harm from public disclosure, it was concerning misappropriation of confidential information.

[00:16:58] Speaker 03:
And Trejo alleges that that's on all fours here.

[00:17:01] Speaker 03:
It's not.

[00:17:02] Speaker 03:
In that case, the harm from the misappropriation of information was $235 million in damages from stock manipulation.

[00:17:11] Speaker 03:
So there are no cases at all where

[00:17:16] Speaker 03:
Disclosure of confidential information subject to a protective order, really because it's used against you, gives you standing to claim harm.

[00:17:25] Speaker 03:
So TREO is not induced in injury anywhere.

[00:17:28] Speaker 03:
It says that it has standing to challenge the lawfulness of the 1782 order.

[00:17:35] Speaker 03:
That is true at the outset, but as the district court's opinion makes clear, Trejo's problem is not with this ruling, it's with the original ruling.

[00:17:44] Speaker 03:
It never sought a limitation on the use of the documents.

[00:17:47] Speaker 03:
It's very normal in 1782 litigation at the outset to say, we are concerned that the documents might be used elsewhere, there's a party to the foreign litigation that you're seeking the discovery from here, you should impose that kind of limitation in the order.

[00:18:04] Speaker 03:
That wasn't done here.

[00:18:05] Speaker 03:
The district court understood what it was doing and it provided a fulsome record, adducing its thorough understanding.

[00:18:15] Speaker 03:
TREO indicates that the district court applied the wrong legal standard.

[00:18:20] Speaker 03:
I just want to say a word about that.

[00:18:23] Speaker 03:
TREO, in its underlying briefing, I believe that is at 146 and 147 of the record and 151 and 152,

[00:18:34] Speaker 03:
talks about introducing evidence that would change the result of the case.

[00:18:40] Speaker 03:
And in so doing, it was talking about the motion for reconsideration standard, prong two.

[00:18:46] Speaker 03:
I'm showing you evidence that is the misuse of the documents based on the agreed order that would have changed your decision at the beginning, Your Honor.

[00:18:55] Speaker 03:
What the court cited in its opinion where it got to the motion for reconsideration was page 1009 of Glock.

[00:19:02] Speaker 03:
And in that part of Glock, the court had said, if you come up with some kind of subterfuge, some kind of evidence that a petitioner is seeking 1782 for the wrong reason, well, that's a reason not to grant the 1782 in the first place.

[00:19:19] Speaker 03:
And if you have evidence of that kind of chicanery, you should bring it to our attention.

[00:19:25] Speaker 03:
So what the court was saying below was that you haven't given me the evidence that would have changed the result of my decision.

[00:19:33] Speaker 03:
The court wasn't confused.

[00:19:34] Speaker 03:
The court cited the proper motion for reconsideration standard at the outset.

[00:19:38] Speaker 03:
So without finding any evidence that the court had

[00:19:44] Speaker 03:
reached an illogical or implausible or conclusion that where there are no inferences in the record, we encourage you to affirm.

[00:19:54] Speaker 00:
Your time is up.

[00:19:55] Speaker 00:
Do my colleagues have additional questions?

[00:19:57] Speaker 00:
Thanks.

[00:19:57] Speaker 00:
Very well.

[00:19:58] Speaker 00:
Thank you.

[00:19:58] Speaker 00:
Okay, counsel, you have a little rebuttal time.

[00:20:00] Speaker 02:
Thank you, Your Honor.

[00:20:01] Speaker 02:
I just want to briefly make a couple of points.

[00:20:03] Speaker 02:
On the issue of standing, I know you didn't ask any questions of me, but I think Ninth Circuit law is very clear that a party against whom the documents are going to be used has standing to challenge the abuses, which is both of the issues before you.

[00:20:15] Speaker 02:
You had asked Judge Smith questions about the use of confidential documents.

[00:20:19] Speaker 02:
There have been numerous uses of documents that were designated confidential under the protective order.

[00:20:24] Speaker 02:
Their designation has never been challenged.

[00:20:26] Speaker 02:
That is the use that is at issue here.

[00:20:28] Speaker 02:
You asked about the SDNY proceedings.

[00:20:30] Speaker 02:
The SDNY proceedings, I would submit, highlight the lack of attention, with all due respect, the District Court in Oregon gave to this, because the District Court in the Southern District wrote a 68-page opinion in which he parsed these issues much more carefully and limited relief far more than the District Court did in Oregon.

[00:20:47] Speaker 02:
And the last thing I wanted to note is I would submit to you that this issue of timing of whether or not TREO should have raised its hand and raised objections is a red herring.

[00:20:55] Speaker 02:
Because if TREO had done this the first time that the protective order hit the docket, the objections would have been the same from the other side.

[00:21:02] Speaker 02:
The question is what the district court would have done to resolve them.

[00:21:04] Speaker 02:
And assuming the district court had shown the same lack of concern for these issues then, we would be back before you on an appeal of the protective order as opposed to an appeal to modify the protective order.

[00:21:14] Speaker 02:
The question is whether good cause exists to modify it and I submit to you it did.

[00:21:17] Speaker 02:
Very well.

[00:21:18] Speaker 02:
Other questions about my colleagues?

[00:21:20] Speaker 01:
I have one last question.

[00:21:22] Speaker 01:
I'm trying to understand, are you looking for an order that would claw back the documents given to the third party or you just want to have them protected prospectively?

[00:21:31] Speaker 02:
So, Your Honor, I think it depends on which of our motions you grant.

[00:21:34] Speaker 02:
If you grant the motion to modify the protective order, we would ask them to be modified prospectively.

[00:21:39] Speaker 02:
If you granted the motion for reconsideration or depending on how the protective order was modified, they might need to be clawed back.

[00:21:45] Speaker 01:
All right.

[00:21:45] Speaker 01:
Thank you.

[00:21:46] Speaker 00:
Thank you.

[00:21:46] Speaker 00:
Thanks to both counsel for your argument.

[00:21:49] Speaker 00:
The case of Noval Pena Capital Partners versus Trio Asset Management is submitted.